Esquire just published a piece it headlined:
His reasons for being down on stocks (and the U.S. economy) include:
+ China is not just slowing, it’s “crashing.” He writes, “China is as worrisome as the U.S. housing market was in 2007.”
+ Oil. “The bad news is not just the sudden evaporation of revenue for the oil producers (Russia, Venezuela and the Middle East) it’s the worldwide bank panic that is already setting in as those who gave money to exploration projects start to realize they’re never going to recoup their investments.”
+ “56% of the S&P 500’s 72% gain from 2012 through 2014 came from PE-multiple expansion — meaning investors were willing to pay more for a dollar of earnings than they had previously.”
+ In the real world, here in the U.S. signs of a deepening recession are already forcing a reevaluation. One of my favorite little-known indicators for the “real economy” comes from bankruptcy attorneys. Lots of high profile retail bankruptcies are coming.
+ The sudden defaults on subprime auto loans. The general default rate for all subprime auto loans jumped from 11.3% to 12.3% — “exactly the kind of ‘can’t pay my bills’ which triggered the housing collapse.”
That’s the gist. If you want to read the entire piece, click End of The World.
MarketWatch (part of the Wall Street Journal sent out a piece this morning:
The pros aren’t loving this market, but why let that stop you?
For what it’s worth, a mere 38% of money managers in Barron’s latest Big Money poll are bullish about the state of all things market. And this is a group, in general, that tends to put a smile on everything. At least for the whales they’re perpetually trying to land.
Yet here we are, at one of the least optimistic readings in the poll’s 20-year history.
What’s more, two-thirds of respondent say stocks are facing a 10%-plus drop at some point in the next year, a move likely precipitated by bad earnings. In that regard, now would be as good a time as any. It’s a huge week for reports. Really bad reports, if Microsoft is any indication.
Our call of the day is every bit as doubtful that this “convictionless 7-year bull market” can hold up. He says the only thing holding this thing together are the “price insensitive participants, i.e. corporate treasury departments and the Fed’s cronies” (more on that below).
While a tough stretch may be on the way in May, we still have a few days left of April to navigate, and considering the packed calendar of data, Fed news and earnings, those “May tears” might come early. The market, however, is dropping hints of that this morning.
As you know, I’m not optimistic on the market, and recommend a minimum investment in it. I hate to intone “Cash is King.” But it makes sense today. Maybe the market will get cheap one day. But that day is not today.
The joy of real estate syndications. On Friday I wrote a piece “Investment conclusions form a two-day trip south.” It summed up my thinking on today’s investment alternatives. It resonated well with readers. If you missed it, click here.
Eye in the Sky is a really good movie.
My favorite line comes at the end of the movie. it’s spoken by Alan Rickman,
who played the lieutenant general, and, at the end of the movie, said, “Never tell a soldier that he does not know the cost of war.“
The alarming cost of drugs. Here’s one solution.
I’m on Medicare. I pay extra insurance for stuff Medicare doesn’t cover and for drugs. I will admit to not being smart enough to understand any of the bills or paperwork which I’m sent. Some tell me I may have to pay $xxx dollars for stuff they didn’t cover. But I ignore everything they write and nothing happens. That’s tip one. Ignore every piece of paper they send you.
My eye doctor gave me two eye drops. I paid $37 for the first batch. Then $37 for the second batch. Now $65 for the third batch. When I asked my pharmacy “Why,” they said one of my two eye drops got “re-classified,” which means AARP/UnitedHealth won’t pay for it anymore. No one knows why they re-classified my eye drops. And no one cares.
The ONLY solution to the alarming cost of drugs is Costco. They charge much less than anyone on the planet.
The good news: You don’t have to be a Costco member: Just say you want to visit the pharmacy, they’ll let you in.
The insanity about my AARP/United Health drug plans is severalfold:
+ Were I on a cheaper plan, they would have cover more of my eye drops. You read right. Cheaper is more.
+ If I cancel my drug insurance, Medicare will get mad and bill me more than the cost of my plan.
+ AARP said they would send me paperwork to let me sign up for the cheaper drug plan that covers more of my eye drops, but they lied. They didn’t send anything. Surprise. Surprise.
Koch Says Clinton May Be Better President Than 2016 Republicans. This is a remarkable piece from Bloomberg.com:
Billionaire political donor Charles Koch said Democrat Hillary Clinton may make a better president than any of the Republicans vying for the job and derided the rhetoric of Donald Trump and Ted Cruz.
The chairman and chief executive officer of Koch Industries Inc., in an interview with ABC’s “This Week” broadcast Sunday, also criticized “a tax code that subsidizes the wealthy.” This year’s Republican candidates, now whittled down to Trump, Cruz, and Ohio Governor John Kasich, have failed to win his backing because they aren’t addressing that issue, he said.
Charles Koch and his brother David, whose combined net worth is $106 billion according to the Bloomberg Billionaires Index, have spent hundreds of millions of dollars supporting Republicans whose platforms are consistent with their small-government views. Charles Koch took issue with the idea that the size of their donations give him and his brother “control” of the party’s agenda.
“If I controlled the Republican Party, we wouldn’t have a two-tiered system. We wouldn’t have a tax code that subsidizes the wealthy,” Koch said. ‘We have this corporate welfare that benefits established companies and makes it very difficult for somebody to get started.”
Koch said the U.S. has to “get rid of all” tax breaks. “I don’t hear any of the Republican candidates talking about this two-tiered system and getting rid of it. So that’s why we haven’t supported any of them,” he said.
You can read the rest of the article here.
Yiddish Curses for Republican Jews
+ May you sell everything and retire to Florida just as global warming makes it uninhabitable.
+ May you live to such a ripe old age that the only people who visit you are Mormon missionaries.
+ May your son be elected President, and may you have no idea what you did with his birth certificate.
+ May your insurance company decide constipation is a pre-existing condition.
+ May you feast every day on chopped liver with onions, baked carp with horseradish, braised meat with vegetable stew, latkes, and may every bite of it be contaminated with E. Coli, because someone gutted the E.P.A.
+ May you have a rare disease and need an operation that only one surgeon in the entire world can perform. And may that surgeon be unable to perform it because he doesn’t take your insurance. And may that surgeon be your son.
Harry Newton who wrote about the ills of Prilosec here and is now checking what’s the alternative: probably more exercise, eat earlier, skip certain foods (pepper, chili, etc.). More about solutions for long-term heartburn tomorrow, maybe.
Let’s see, since I last read “cash is king” on here I am up about 30 percent in equities. If I’d been in cash I’d be up .00000001 percent, if that. Cash is NOT king you moron. Not when it pays ZERO. Even IF you believe a stock crash is coming – and since we’ve had crashes in 2001 and 2008, the law of averages says one is NOT coming – but even if it is there are other investments, gold, real estate, some bonds, that may be king. But a zero return investment is NEVER king. I can’t wait for Trump to be elected and send you back to Australia.
You haven’t been reading my column recently. It would be nice if you shared some of your favorite stocks with the readers.
In USA, all news likes to talk bad about China. In fact, China is doing quite well. They are quickly transferring to consumer economy. If you visited Shanghai, you will see what I mean. They don’t want to be cheap slaves of America forever. As for oil, gas price is increasing these days.