This Week in Barrons – 5-29-2016:
It’s Memorial Day … Coming to
a Theatre Near You
This Memorial Day there
are some incredible, global situations converging.
-
Venezuela: All
of the U.S. news outlets have done an excellent job of downplaying the horror
that is going on inside that country. The
country is in melt down mode. On a
regular basis 5,000 people will storm a grocery store because they heard that
there might be ‘bread’ inside. Remember
those Wal-Mart videos showing maniacal shoppers trampling people to death on
Black Friday over a flat screen TV? Image
ten times the number of shoppers, hungry from 3 days of starvation, all hearing
that a bread truck is coming. That’s
Venezuela.
-
The Middle East: A
place where it’s common to experience a car bombing, a hostage taking, an ISIS
strike, and of course a modern passenger jet falling from the sky – all in a
single day.
-
Europe: The ECU
is still clinging to its 17-nation experiment.
It’s bankrupt, rudderless, and being over-run by migrants. They are still printing 85B Euros a month to
keep these 17 zombie economies alive.
And have $8T sitting in banks accounts, in a dozen countries, earning
negative interest.
-
Russia: Amazing
in its calmness as the U.S. and NATO continue to move bases closer to its
border.
-
China: Continues
to build military bases on islands that they have created.
And just when you think
that it can’t get any weirder, on the main stage we have Donald and
Hillary. First off, if any of us did
what Hillary did with her e-mail server, we would all be in orange jumpsuits by
now. [https://www.youtube.com/watch?v=-dY77j6uBHI] I think all of the current political drama is
a part of a much larger theatre than: ‘Real Estate Mogul’ versus ‘Lifetime Bureaucrat/Liar’. Presidential politics are planned years in
advance – with the people simply buying tickets in November. But this election is different. I mean: Where did Donald Trump come from? Am I to believe that he was just hanging out on
a golf course and one day decided to ‘Give this President thing a shot’? Am I to believe that Donald "Art of the
Deal" Trump decided to put his life on parade for millions to criticize,
run around the country giving speeches – all on a whim? Donald preaches:
‘Negotiate from a position of strength.’
So there is NO WAY Donald entered this race without some form of
assurance that he could win.
After all, Trump gets more
media coverage than Hillary and Bernie combined. Media normally costs money, but The Donald has
gotten billions of it, for free. Normally when the media disagrees with
someone they just shut them down by cancelling interviews and erasing news
spots. The media can make you go away by
ignoring you, except if you’re Donald Trump.
Why would the global
elites want Donald Trump in the White House? Surely his stance on everything from building
a wall, making Iran pay, and his views on Muslim terrorists – fly in the face
of globalization? I think the reason The
Donald is there is due to his bankruptcy expertise. I've been talking about a monetary reset for
a few years now, and The Donald is The King of bankruptcies. I know this is convoluted, but what if the
plan is to have a global monetary reset and discharge all debts. You would want someone at the top you can
trust, who is NOT a banker – and someone that could guide J.Q. Public through a
really tough patch. Trump would be the perfect pick.
If there is a monetary
reset, and the U.S. loses it’s grasp on its global currency reserve status –
all ‘heck’ will break loose. J.Q. Public
will not listen to a career politician or a banker. But J.Q. Public may be ‘okay’ with The
Donald. Trump talks like a regular Joe –
rough around the edges. He's not political,
but rather tells you his opinion. He's
been in business, and knows how to work systems. I'm starting to believe that Donald Trump is
actually the elite’s pick for President, because something ugly is coming and Donald
has the history to work through it.
All I can say is: “Get out
the Popcorn”, because these next few months are going to be quite a show.
The Market:
Factually:
-
Today, 78% of
the eligible workforce between the ages of 25 and 54 is working – versus 82% in
2000. That 4% difference equates to 6M
fewer jobs, with a rapidly increasing number being taken over by technology.
-
For the first
time in 130 years, MORE men aged 18 to 34 are living at home than co-habiting.
-
Donald Trump
wants to bring back all of the jobs lost to overseas workers, because he knows
that job retraining won't work as well in the future.
-
Commodity prices
have fallen 55% since 2015 – the same margin they fell during the global
financial crisis.
-
This week was
the 17th week in a row of stock market institutional selling.
-
As oil flirts
with $50/barrel – most of the oil tanker ships around the world lay parked and full
of oil. From Singapore to the U.S., oil
companies are using tanker ships as storage, because there's no place else to
put it.
-
The Chinese
devalued their Yuan again – taking it back to 2011 lows.
-
The overall
manufacturing conditions are the weakest since October 2009.
-
Deutsche Bank paid
$400M in fines for ‘Equity Trading Fraud’.
-
25 U.S. Non-Financial
companies – control over HALF of the total amount of cash held by all U.S. Non-Financial
corporations. What makes these companies so different is that they all
are technology companies that generate significant cash flow over-seas.
Memorial
Day is “a day on which those who died in active military service are remembered.” My
father served in WWII, and earned a purple heart. When Vietnam came around I was too young, and
the war ended just as I turned 18. But I lost two older friends in that
affair. For them and the millions like
them I say Thank You. Enjoy this holiday
weekend, and a heartfelt tip of the cap to all of you that have served and
continue to serve.
On the other hand, often the
reason those brave souls were sent to fight these wars boiled down to nothing more
than pure greed. Smedley Darlington Butler (July 30, 1881 - June 21, 1940) was a Major
General in the United States Marine Corps – the highest rank authorized at that
time. At the time of his death he was the
most decorated Marine in U.S. history, and one of only two people EVER to earn
two Medals of Honor. After his military
career had ended, Smedley wrote a book titled: "War is a
Racket". In it he said:
-
“WAR is a
racket. It always has been. It
is: possibly the oldest, easily the most profitable, and surely the most
vicious of rackets. It is the only racket
in which the profits are collected in dollars and the losses in lives.”
-
“A racket is
best described as something that is not what it seems to the majority of the
people. Only a small "inside"
group knows what it is about. It is conducted
for the benefit of the very few, at the expense of the very many.”
-
In World War I,
at least 21,000 new millionaires and billionaires were made in the U.S. How
many of these war millionaires shouldered a rifle or dug a trench? How many of them knew what it meant to go
hungry in a rat-infested dugout? How
many of them spent sleepless, frightened nights, ducking shells, shrapnel and
machine gun bullets? How many of them
parried a bayonet, or were wounded in battle?”
-
"I spent
over thirty-three years in active military service as a member of this
country's most agile military force, the Marine Corps. I spent most of my time being a high-class muscle
man for Big Business, for Wall Street and for the Bankers. In short, I was a gangster for capitalism."
-
“I helped
make Mexico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place
for the National City Bank boys. I
helped in the raping of half a dozen Central American republics for the benefit
of Wall Street. I helped purify
Nicaragua for the international banking house of Brown Brothers in 1909-1912. I brought light to the Dominican Republic for
American sugar interests in 1916. And in
China I helped to see to it that Standard Oil went its way unmolested.”
And there (in a nutshell)
is why Memorial Day shreds me emotionally. I have an incredible and deep respect for our
fighting crew, and a deep disgust for the greed at the top of the food chain
that orders the wars to take place. Smedley’s ideal was simple: "There are
only two reasons to send our youngsters to war. One is in defense of our homes. The other is in
the defense of our Bill of Rights. Every other reason is a racket, pure and
simple."
For
those of you needing a patriotic refresher: [https://www.youtube.com/watch?v=YaxGNQE5ZLA]
In terms of the market
itself, after a couple of monster up days earlier this week, we ended Friday
with the S&P basically at 2100 (2099.6).
That was certainly a well-done ‘work of art’ by our Central Bankers. You see, on April 20, we closed with the
S&P at 2102. The market then traded
sideways and down, hitting a low of 2025 on May 19. Since then it has been steadily up, and we're basically
back at that April high. Do the economic
fundamentals warrant a move back up to these levels? Heck no.
But fundamentals went out with ‘my father’s Oldsmobile’, and today it's
all about keeping the market up at all costs.
Our Central Bankers have engineered
a ‘stick save’ from the edge of a nasty looking cliff, and now everyone is
breathing a sigh of relief. Is that it? Do we just go up from here, and make all time
new highs? It's possible. With just 35 more points to go for an all time
high, they might as well give it a shot. But, I think it is more probable that they run
into resistance here, and start mildly selling-off around mid-week.
Enjoy the holiday with
your friends and family. If you have the
time, send a good thought along to all who have served and are serving. Thank them for keeping us safe.
TIPS:
I am:
-
Long various
mining stocks: AG, AUY, CDE, FFMGF, FSM, NGD, and PAAS,
-
Long AMZN June 3
/ 705 Calls,
-
Long MA June 3 /
96 Calls,
-
Long TSLA June 3
/ 220 Calls,
-
Long TLT June /
128 Calls,
-
And Long an oil
supplier: REN.
To follow me on Twitter.com and on StockTwits.com to get my daily thoughts
and trades – my handle is: taylorpamm.
Please be safe out there!
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