Our Montrealanalyst.com comment: “Wall Street On Parade” is a very informative site that brings out some very informative insights that too few people are aware of. “Why Wall Street Should Be Viewed as a Major National Threat”                                                                         By Pam Martens and Russ Martens,   The day before the 4th of July, when most Americans were hustling about preparing for family barbecues, the New York Times finally decided to publish an editorial warning about Wall Street’s potential threat to the nation. Unfortunately, it did so with the kind of timidity we see regularly from cowed or compromised Wall Street banking regulators. The editorial writers noted that: “It’s entirely possible that the system is more fragile than the Fed’s stress tests indicate,” and they called for “heightened vigilance of derivatives in particular” without providing any detailed data.  A more accurate assessment of the situation would have been this: There is only one industry in the United States that has twice in a period of less than 100 years brought about a devastating economic crisis in the country. Wild speculation coupled with poor regulation of mega Wall Street banks brought about the Great Depression in the 1930s, leading to massive job losses, bank failures, poverty and economic misery for tens of millions of innocent Americans. The precise […]

This is a “must invest “market? That is what we have today. The vast majority of the stock market’s volume is done by institutions and professional trading desks. They must participate and continue to invest despite overvalued prices. Yes, they must invest in order to compete.  If they do not perform to their clients’ satisfaction, the clients move their accounts to another money manager. Bottom line is that they cannot hold large cash positons and must invest …..despite very high prices. By avoiding what would be normal interim corrections of 15% to 25% over the last four years , the stock market has moved to a valuation level that every time in the past has been followed by a brutal bear market. The stock market is now carrying a value of approximately 140% of Gross Domestic Product….just as in 2000 and in 2007,  both times it led to brutal declines. Also,  the insider selling of the personal shares by the officers and directors (insiders) over the last year is near the highest selling rate in history. Last week saw over $428,000,000 of the officers and directors selling some of their personally owned shares in the companies where they work; it was nineteen times the amount the officers and directors bought of their own companies’ shares.  The world’s central banks have been buying stocks which until recently was not done. Since January 2017, they have bought approximately $1.3 TRILLION in publicly traded stocks. This is an enormous amount of buying power […]

Zerohedge.com is an excellent and informative site.

       UBS Financial Services has an excellent daily market commentary for clients with the views and outlook of long time New York Stock Exchange veteran Art Cashin. Last week Art included the opinions of Dr. Lacy Hunt and Brian Reynolds. We agree totally with every point they make. Art’s comments as follows: ” While not quite as incredible as the separate but simultaneous conception of Calculus by Isaac Newton and Gottfried Leibniz in the 17th century, I was amazed to see two parallel, virtually identical concepts of the basis for this 8 year rally from the Great Recession bottom in March of 2009.  These concepts come from Dr. Lacy Hunt and Brian Reynolds at New Albion Partners.  Dr. Hunt spoke at John Mauldin’s Strategic Investment Conference.  Luckily for us, the brilliant Steve Blumenthal participated in the conference and took copious notes of most of the presentations.  Here are Steve’s notes on Dr. Hunt’s segment on the stock rally. 

WE SAID IT HERE ON MAY 31 ON THIS SITE  “BLATANT MANIPULATION IN THE GOLD MARKET…EXPECT IT TO OCCUR AGAIN.”  AND IT CERTAINLY DID OCCUR AGAIN TODAY.

Blatant Manipulation in the Gold market…expect it to occur again.

The old age and the elevated valuation of stock market averages are causing concerns that the bull trend may be nearing its end and that a bad turn is imminent. While we recognize that skittishness can bring about market corrections when valuation metrics are ahead of themselves, secular bear trends are only firmly in place when recession risks are very high. Investors often misjudge what is going on. When the situation is too abstract, people tend to go along with the general consensus as it is socially acceptable and expected of them.

We cannot tell the future but we try anyway. It seems to us that the stock market is as vulnerable to a more than 20% downside as it has ever been. The true P/E ratios for some of the leading stocks are at nose bleed levels, insiders who as officers and directors are the most informed of all have been selling at one of the highest rates ever. Last week they sold $456 million of their own personally held shares. Moreover the value of all stocks is now minimally at approximately 126% of Gross Domestic Product which at these levels in the past has led to the most brutal of bear markets.

                                                                “OVERNING INSTITUTE”                                                      It’s happened several times in just the last few years. With so many systems severely underfunded, it’s likely that more government employees will to be blindsided.  

The normal 20% or so stock market corrections to be followed by rallies up again would have given investors and institutions opportunities to invest when stocks are “on sale” never occurred. So we now have a stock market that is by all fundamental value gauges at least 20% over where is should be. Too high a percentage of stocks have been purchased while they were overvalued and at the very high end of their price ranges and valuation levels. Note that we now have a market that at every time it has sold at these levels has been followed by a brutal bear market. Despite ongoing and regular manipulation and central bank intervention and supportive buying, bear markets will occur. Investment in stocks when they are far above their proper value happens all the time as recommendations by the brokerage houses must continue despite overvalued price levels.           Think back to the internet stocks and techs that were crushed then think back to 2008. Today, there are many quality companies that are selling at far too high prices in view of expected earnings and sales. It is not the companies themselves but the prices that too many investors have paid for them. We recognize that the majority of recommended stocks are profitable and may offer solid long term potential, the problem is not investing in these stocks but investing when their prices are too high. Numerous excellent and undervalued stocks can be found today. Yet most […]