This Week in Barrons – 7-10-2016:
“Who’s
the banana republic now?” … Bernie Sanders
Mr. Comey (Director of the
FBI):
Welcome to Amerika – the
next banana republic. Amerika used to be
a place where you’d get a fair shake, a trial, and where your financial or
power ranking made no difference. On July
5th 2016, that all formally changed because you (Mr. Comey) told us
that it was okay when ‘some people’ break the law.
Factually, Mr. Comey:
-
Hillary said under
oath, many times that there were NO classified e-mails on her servers. BUT according to you: “From the group of
30,000 e-mails returned to the State Department, 110 e-mails in 52 e-mail
chains have been determined to contain classified information at the time they
were sent or received. Eight of those chains contained information that was Top
Secret at the time they were sent; 36 chains contained Secret information at
the time; and eight contained Confidential information.” I
guess Hillary lied.
-
Hillary also
said (under oath) that she had turned over ALL of the e-mails. BUT according to you: “We also discovered
several thousand work-related e-mails that were not in the group of 30,000 that
were returned by Secretary Clinton. We
found those additional e-mails in a variety of ways. With respect to the thousands of e-mails we
found that were not among those produced to State, agencies have concluded that
three of those were classified at the time they were sent or received, one at
the Secret level and two at the Confidential level.” I
guess Hillary lied – again.
-
Then you went on
to say: “There is evidence that Secretary
Clinton was extremely careless in her handling of very sensitive, highly
classified information. She also used
her personal e-mail extensively while outside the United States, including
sending and receiving work-related e-mails in the territory of sophisticated
adversaries. Given that combination of factors, we assess it is possible that
hostile actors gained access to Secretary Clinton's e-mail account.”
Mr. Comey, let me get this
straight:
-
Hillary said (under
oath) that there were NO classified emails on her servers, but you found 110 of
them.
-
Hillary said (under
oath) that she had given the FBI ALL of her emails, but you found 2,000 additional
emails.
-
You said that it
was very possible that people hostile to the U.S. hacked into her personal email
account, and saw all 110 classified emails.
-
And although you
found evidence of violations of statues regarding the handling of classified
information, your judgment was to bring NO CHARGES against her. You did this fully knowing that EVERY Amerikan
with a single firing brain cell would say: "Are you kidding me? Most people would be crucified for much less.”
-
You then went on
to say: “To be clear, this is not to
suggest that in similar circumstances, a person who engaged in this activity
would face no consequences. To the contrary, those individuals are often
subject to security or administrative sanctions.”
OMG. So yes she’s guilty, but because she's #Crooked
Hillary, you were instructed to look the other way. The excuse that you’re using is that she
exhibited gross negligence surrounding the highest level of state secrets, but
did so in such an offhand fashion that she shouldn’t be prosecuted. So Mr. Comey this begs the question: If she's
so careless that she might have let Russians, Chinese, and Ukrainians hack her
emails containing state secrets – Is she truly FIT to run this country?
Honestly, I don't believe
it had anything to do with being extremely careless or grossly negligent. I think #Crooked Hillary figured that by
having control over her own private email server, no one would be able to find
the shady deals she was doing through the Clinton Foundation – because private
email servers are NOT subject to Freedom of Information requests.
Mr. Comey if this was you
or I – we’d be rotting in Guantanamo for the rest of our lives. But this is #Crooked Hillary and she gets a
pass because the whole political process is corrupt. And people wonder
why Donald Trump is doing so well. It’s such a breath of fresh air when Mr.
Trump comes on TV and tells us: “The whole process is rigged!" – and
he was proven right once again on July 5th.
Mr. Comey, both Hillary
and Bill Clinton have looked into the cameras and have sworn on a stack of
Bibles: "I did not have, receive or send classified email from my private
server." But on July 5th you confirmed just the
opposite. I think the worst thing about
being lied to, is knowing that you’re not worthy of being told the truth. Mr. Comey, if you’re wondering why Dallas
happened, you need look no further than your July 5th ruling
because: “Mistrust is the sure forerunner
of hatred” … Margaret of Valois.
I'm ashamed of what Amerika
has become. Welcome to Amerika – land of
the free and home of the brave – as long as your last name is Clinton. The first casualty of any war is truth, and
it is most often killed long before the first shots are fired.
The Market:
In the grand scheme of things, equity market internals are precariously balanced and
unfortunately deteriorating.
-
Global currency
wars continue. BrExit has led to a
31-year low in the British Pound, and 40% of the world’s bonds have negative
yields. These currency wars are having
pronounced effects on corporate earnings and domestic unrest.
-
Global yields have
accelerated downward. Corporations are
embracing financial engineering and M&A over capital investments.
-
Real assets like gold,
real estate, and collectibles are inflating.
-
Interest Rates remain
the #1 variable. Low inflation and GDP
growth means that interest rates will remain lower for longer.
Earnings are a
clear function of low global GDP growth.
Earnings estimates are being revised downward for the 4th
consecutive quarter, and revenue estimates are fairing even worse.
-
Investor psychology
NOT fundamentals are driving PE (price to earnings) ratios. TINA (there is no alternative) has resulted
in grossly inflated PE’s and valuations.
U.S. economic growth
continues to muddle along at a sub-2% rate, and President Obama will have the
distinction of being the first President in history (240 years) to never have
at least one year of 3% GDP growth. Corporate
earnings have now fallen for four consecutive quarters. Precious metals (the hottest market on the
planet) continue to be in a bull market.
JLA is looking for an additional $300 to $400 move to $1,700 per ounce
by the end of this year. Many economists
have gone back to the original Bretton Woods calculation – and using that same
formula – have predicted the fair value for gold to be over $5,000 per ounce. And finally, negative rates punish all savers,
pension plans and insurance companies, while rewarding debtors in the belief
that zero or negative rates foster growth. Negative rates do NOT foster growth but rather
force risk taking and the overvaluation of nearly all assets. Lower rates:
-
Increase the
value of a corporation’s discounted cash flows – forcing stock prices higher.
-
But lower rates often
mean lower earnings. Negative rates are demonstrating
that there is a limit to how much lower rates actually stimulate growth, and
there may be a tipping point where lower rates actually suppress growth.
On Friday, we ended the
day with the S&P just a couple points shy of a new all time high. The reason for such a massive move was Friday’s
Non-Farm Payroll report. According to
the talking heads, we gained 287,000 jobs in June. But did we really create 287K jobs in June,
after only creating 11,000 in May? When
you examine the report:
-
The BLS's
‘Birth/Death Model’ added 92K (fake) jobs to the report – lowering the total to
195K.
-
44K of those
jobs were Verizon workers returning from being on strike – lowering the total
to 151K.
-
And then we find
that 90% of the remaining job gains went to people working part-time and 55
years old or over. Can you say: “Welcome
to Wal-Mart”?
-
So we created
15K real jobs in June – which is consistent with the 11K we created in May.
Are we going to see new
highs? It sure looks like it. If we close over 2130, can we just buy into it
and hope for more? I think we can if
order flow by the Central Banks is with us.
However, we’re in a really bizarre time. If we break out over 2130, I wouldn't be terribly
fast to jump on that trade because the possibility of a head fake is high. Please be careful out there!
TIPS:
Currently the actual movement
of the market is higher than what implied volatility is pricing. That means in the short term – you should be
buying directionally biased trades rather than selling spreads for premium
purposes. I think the market is
dramatically underpricing volatility, and therefore you can’t make much money
‘selling’ undervalued products.
The trades I like in this
market continue to be in the precious metals arena. I’m keeping it fairly simple by being:
-
Long various
mining stocks and their respective call options: AG, AUY, CDE, FFMGF, FSM, NGD,
PAAS, and PGLC, and
-
Long Gold (GLD) and
Silver (SLV).
To follow me on Twitter.com and on StockTwits.com to get my daily thoughts
aand trades – my handle is: taylorpamm.
Please be safe out there!
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