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Bigworld, Looking at the potential for a big market drop before the election -
In addition to ongoing geopolitical lunacy (Ukraine and Middle East) being the trigger for a stock market rout, you mentioned the potential for Trump being assassinated by the Deep State in the lead up to the election. While anything is possible, I'm figuring this is not too likely since instead, they can just fix the election. A bigger risk could be for an extreme faction within the Neocons to try to remove Harris from the race. The mainstream Neocons probably wouldn't risk doing this, but there are some ultra extreme factions within the broader Neocons, so who knows. To them Iran's nuclear program is such a massive existential threat, and there isn't much time left, so they are extremely desperate. Since another Dem administration is unlikely to carry out the 'US bombs Iran' scenario, any more than the previous Biden or Obama was, the Neocons will need a Rep administration in office to have any hope for getting 'US bombs Iran'.
So the dominant globalist faction (Trilaterals, Bilderberg) wants Harris, while the much smaller Neocon faction wants Trump. So a major disagreement between warring globalist factions. Anyway, this is one possibility for a major stock market plunge in the weeks ahead. Let's hope not, but just when you think the world can't get any crazier, it does. I remember how crazy things became in 1968, and 2024 is arguably much riskier due to the Ukraine WW 3 lunacy. Anyway, it will be good to at least have the election over.
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Bigworld, With the Energy sector, it's 3.5% of the S+P 500, but I also have a few individual stocks - CVX and OXY. Buffett has been loading up on OXY for some time, so I have a small position even though it has a lousy chart and high debt.
OXY is more sensitive to the oil price, but they also are a leader in the area of 'carbon capture'. While carbon capture seems like an idiotic waste of time, it turns out that it's also commonly used to - 'enhance oil recovery by injecting carbon dioxide into a legacy oil reservoirs to increase pressure and raise production rates'. OXY and CVX are leaders in carbon capture, so this may be part of the appeal for Buffett -
Occidental - >>> What Is Carbon Capture and Storage?
Motley Fool
By Matthew DiLallo
May 23, 2024
https://www.fool.com/terms/c/carbon-capture-and-storage/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=7e55019b-8b30-4cb6-ab10-9be59d85310d
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Full article - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174954661
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Bigworld, Another reason to expect more near / mid term upside in stocks is that the Nasdaq is still way below its all time high. The S+P 500 and DJIA have put in new highs, but the Nasdaq still needs another ~ 700 points. Also, its RSI is only 59 right now. Anyway, not the time for a mega bearish bet imo. You might get lucky, but better to wait until the stock market is really over-extended to put the odds in your favor. RSI needs to at least be 70, but not there yet -
S+P 500 -- 62.9
DJIA ------- 66.8
Nasdaq --- 59.5
Russell --- 60.6
While the RSI for these hadn't reached 70 right before the August stock swoon, they were all well over 70 before the big July market plunge. With a $95 K mega bet, best to put all the odds in your favor if possible.
Another risk-limiting idea for a VIX trade would be to use the 1X ETF (VIXY) instead of the Ultra VIX (UVXY). The VIXY has plenty of upside (up 93% in early August stock plunge, vrs 145% for UVXY). These VIX plays are far more volatile than even the 3X short S+P 500 ETF (SPXU), which was only up 20% during that early August market plunge. But what goes up huge will also drop huge if you mistime the trade, and there's also the erosion problem, which means you can't stay in these enhanced short ETFs for very many weeks. Just look at their longer term charts -- a steady down down down over time.
Anyway, GL with it, but odds are much better by just going long the SPY after the market has has a big drop. That's what I did in early Aug when the RSI hit oversold (30), and the market bounced back to produce some nice gains.
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Bigworld, Since the VIX moves inversely to the SPY, I would just follow the SPY's technical signals for the buy and sell points. To get the best odds, wait until the SPY is overbought on the RSI, which is anything over 70. The RSI is currently only 63.7, so there could be more near term upside before we get a sizable pullback.
Lots of unknowns and news flow that could tank the market, but with the election only 6 weeks away, the mainstream media will likely downplay all negative news to help the incumbent Dem Party. In addition, the Fed will likely step in with PPT as needed to prevent a sharp selloff. If something huge happens like Trump of Harris being assassinated, or the Ukraine war going nuclear, etc, the market will obviously crumble, but lesser negative news events will continue to be ignored / downplayed.
Another point is that it's a lot safer to bet on the long side of the SPY than the short side, because if your timing is wrong you just wait for the long term uptrend to bail you out. Trying to bet against a long term uptrend is dangerous since the broader trend works against you. If I was going to do active trading, I'd wait for the next sizable S+P 500 selloff that sends the RSI to 30-40 range, and then pile in on the long side for the recovery.
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gfp: Uranium based investments should be a cornerstone of any portfolio. Energy in general should be 10 - 15% of a portfolio. I have that and I don't pay attention to the sort term noise. Energy IS the economy. Without it we're riding horses and living off whatever we can grow ourselves. With the heightened potential for all out war in the Middle East you should probably be adding XOM (3.3% yield), CVX (4.4% yield), and OXY (1.7% yield).
GFP: The downside looks limited based on the last several years of charts. With the election, potential wars, a silent recession happening, and seasonality I think that volatility is more likely to rise from now until October. The VIX is already starting out at a higher level that having stocks near all time highs would predict. There is a underlying fear in the markets. For good reason. Any trigger could start a sharp sell off. And it can happen quickly. I will be vigilant. If we enter a period of a melt-up in stocks and the VIX drops to the 14's then I might abandon my play. But it's a calculated risk. I think the potential upside dwarfs the potential downside in holding through October.
Bigworld, Looks like the nuclear utility sector is zooming once again, after this Microsoft / CEG announcement (below). The utility sector in general has been on fire all year, and I've been waiting for a pullback, but it never seems to come. Utilities are also beneficiaries of the falling % rates, so the sector has been red hot, which is unusual for the staid and stodgy utilities.
The nuclear ETFs had a sizable pullback this year (URA, URNM, NLR), but now might be getting back on track. The only nuclear related stock I currently have is BWXT, which has been doing well, but I may put a little in the nuclear ETFs. I've been skeptical of the US nuclear sector, but I guess if Microsoft is jumping in, investors might as well have some exposure.
>>> Microsoft goes nuclear to power AI data centers
Yahoo Finance
by Julie Hyman and Josh Lipton
September 20, 2024
https://finance.yahoo.com/video/microsoft-goes-nuclear-power-ai-204151380.html
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Full Article - https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175120200
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>>> US to award $3B to 25 projects for battery manufacturing sector
Reuters
by David Shepardson
September 20, 2024
https://finance.yahoo.com/news/us-award-3-billion-25-090344990.html
The US Energy Department said Friday it plans to award $3 billion to 25 battery manufacturing sector projects in 14 states as the Biden administration works to shift the supply chain away from China.
The projects will increase domestic production of advanced batteries and battery materials and follows the adoption of US EV tax credit rules to shift battery production and critical minerals away from China.
The awards fund battery-grade processed critical minerals, components, battery manufacturing, and recycling, and will generate $16 billion in total investment for the projects and support 12,000 production and construction jobs, the department said.
"Mineral security is essential for climate security," said White House climate adviser Ali Zaidi. "This sets us up to lead on the next generation of battery technologies - from solid state to other new chemistries."
Albemarle is set to receive $67 million for a project in North Carolina to produce commercial quantities of anode material for next-generation lithium-ion batteries, while Honeywell is set to receive $126.6 million to build a commercial-scale facility in Louisiana to produce a key electrolyte salt needed for lithium batteries.
DOE plans to award Dow $100 million to produce battery-grade carbonate solvents for lithium-ion battery electrolytes, while Clarios Circular Solutions, which is partnering with SK ON and Cosmo Chemical, is set to receive $150 million for a project in South Carolina to recycle lithium-ion battery production scrap materials from SK ON, the battery unit of SK Innovation.
Currently most US production scrap is exported by material traders to be processed, mostly in China, DOE said.
DOE plans a $225 million award for production of lithium carbonate by SWA Lithium, jointly owned by Standard Lithium and Equinor, using Direct Lithium Extraction (DLE) technology. DOE also plans to award $225 million to TerraVolta Resources to produce lithium from brine using DLE.
Revex Technologies, a partnership co-founded by Lundin Mining, is set to receive $145 million for three Michigan facilities to turn waste from the only operating US primary nickel mine to yield domestic nickel production for at least 462,000 EV batteries yearly.
DOE plans to award $166 million to South32 Hermosa in Patagonia, Arizona for the mining of high purity manganese sulfate monohydrate (HPMSM) for electric vehicle battery chemistries. Currently over 96% of HPMSM is made in China.
DOE also plans to award $166.1 million for another HPMSM project in Louisiana for Element 25 from manganese ore sourced from an Element 25 mine in Western Australia.
Group14 Technologies is to receive $200 million to develop a US-based silane manufacturing plant in Moses Lake, Washington. The largest source of silane today is China, a material needed for silicon batteries.
Birla Carbon is set to receive $150 million for next-generation synthetic graphite that will not use material from China.
DOE previously awarded $1.82 billion to 14 projects. DOE said the projects selected must complete negotiations and an environmental review before they are awarde
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Bigworld, Trading the VIX can't be easy or everyone would be rich from doing it. With only 3 months to retirement, better to be conservative imo, since it won't be easy to replace lost money.
TA / chart-wise, if I was trying to trade the VIX, I would wait for it to come down to the 200 MA (on the $VIX chart). That's where the VIX bottomed in mid Aug and again in late Aug. The $VIX is currently at 16.10, and the 200 MA is 14.76, so the odds are VIX has somewhat further to fall. Another reason to wait is that the S+P 500 hasn't reached overbought yet (RSI of 70 or more), but is only 63. An external jolt to the market is always possible, but barring that, I'm figuring we get some additional upside before the next pullback.
But short term trading is always a crapshoot. Better to just buy / hold and let it ride for the long haul. Looking at the 10-15 year SPY chart shows that hanging tight and just riding the long term uptrend has been the right strategy. And over the long haul, stocks are actually very good inflation hedges. Much of the rise in stocks over time is actually because the stock prices are measured in dollars. So a barrel of oil has doubled, an ounce of gold has doubled, a share of Coca Cola stock has doubled, etc. So stocks, gold and commodities are all inflation hedges since their price goes up as the purchasing power of the dollar goes down. Stocks also pay dividends, and as companies get larger, earnings increase, etc. So they provide the inflation hedge aspect, the growth / higher earnings over time, plus the dividends, and thus have long term returns well above the inflation rate. Now if only they wouldn't GYRATE so much, lol..
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gfp: You know I like to gamble a little. My over allocation to gold, silver, natural resources and mining stocks is really starting to bear fruit. I think that should continue so I thought that UVXY was a calculated bet. One other factor is that the Deep State really wants to take out Trump by any means necessary. God forbid they succeed, but if they did before the election I think there would be a huge sell off in all markets. With these VIX plays they tend to spike over short periods of time. So if you are watching the markets on a wash out day you can sell when VIX upward momentum is stalling and then immediately buy an Inverse VIX ETN like SVXY. So taking 2 bites out of the volatility apple. Because the VIX spikes typically don't last but a day or two, then volatility fades as the Plunge Protection Team gets to work.
Bigworld, >> UVXY <<
4000 shares is a $95 K bet, yikes. A sizable stock market drop between now and the election is possible, but if the 'powers that be' want the incumbent Dem Party to win, then the Fed and media will presumably do everything they can to maintain market buoyancy in the lead up to the election, and also downplay or ignore any negative geopolitical events. So betting against that seems risky.
But on the other hand, the fact that the Neocon faction wants a Trump victory (to make possible the 'US bombs Iran' scenario next year), who knows what they (Neocons) might do to torpedo Harris / Dems. The Neocons are desperate, since Iran will soon have nukes, so presumably nothing is off the table. The more mainstream Neocons might not do it, but their extreme fringe elements might resort to anything.
Concerning the VIX plays, the erosion phenomenon is the main problem, although over a 6 week period that won't matter. Too bad investors can't just buy the VIX itself, since it would be easy to get rich by buying when it gets under 15, and selling when the inevitable spike occurs, and then repeat the process. But the erosion of the VIX ETFs makes that impossible.
Another strategy with VIX would be to take advantage of the erosion by simultaneously shorting both the short and long VIX ETFs. They would cancel each other out, but you would capture the erosion amount of each and really clean up. Unfortunately they don't allow shorting of the VIX ETFs, otherwise we could all be mega rich :o)
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gfp: I'm not sure the economy and perhaps even the country will go on as it has been. I think a reckoning is coming sooner. In fact my newest market venture has been accumulating 4,000 shares of UVXY which is a 2X bet on a rising VIX. It is meant only as a 6 week hold, or less if we get a big spike in the VIX as happened in early August when it spiked to about $65. I bought in at an average of @ $23.70. With the markets at all time highs, the election turmoil, the Fed's actions and the seasonality for market carnage and I think it was worth a bet that Volatility will rise if not spike with a sudden sell off. We'll see what happens.
>>> John Paulson Warns Of Equity Market Exit <<<
>>> Elon Musk Says Warren Buffett Is Positioning For Kamala Harris Win With His $277B Cash Pile As Pro-Trumper John Paulson Warns Of Equity Market Exit
Benzinga
by Shanthi Rexaline
September 19, 2024
https://finance.yahoo.com/news/elon-musk-says-warren-buffett-115429227.html
While Vice President Kamala Harris surges ahead in polls against her Republican rival Donald Trump, she hasn’t found much traction in the business and investing world. Hedge fund manager John Paulson, the founder of New York-based investment firm Paulson & Co. said on Tuesday in a media appearance that he would pull his money off the market in the eventuality of a Harris win, while Tesla CEO Elon Musk flagged something even more ominous.
Chalk & Cheese: The market timing and investor timing will depend on who the president is, said Paulson in an interview with conservative media outlet Fox News. Paulson is a pro-Trumper and a Republican donor, and the ex-president reciprocates the sentiment. In March, a Bloomberg report said Trump was considering the hedge fund manager for the role of Treasury Secretary.
“If Harris was elected [I] would pull my money from the market. I’d go into cash, and I’d go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets,” he told Fox News.
Paulson is known for his profitable bet against the subprime mortgage in 2007.
While Trump wants to extend the 2017 tax cuts implemented during his term in office, Harris was planning to allow them to expire, he said, adding that the latter seeks to raise the corporate tax rate from 21% to 28% and the capital gains tax from 20% to 28%.
The vice president has also proposed a 25% tax on unrealized gains for people having a net worth of $100 million or more, Paulson said. If implemented it would cause “mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession,” he added.
Musk Chimes In: When Mario Nawfal, who hosts shows and Twitter Spaces, shared the Fox News clipping of Paulson’s interview, Musk said, “[Warren] Buffett is already preparing for this outcome.”
Musk, who has publicly pledged allegiance to Trump after the first assassination attempt against the former president in a Pennsylvania campaign rally, apparently referred to Berkshire Hathaway, the firm led by Buffett, divesting large positions in some of its key holdings.
Berkshire sold 115 million Apple shares in the first quarter and followed up the sales of another 390 million shares in the second quarter. At the end of June, the firm still owned 400 million Apple shares despite the disposals. At Berkshire’s annual shareholder meeting held in May, the investment guru said the decision to sell the firm’s biggest holding Apple was to raise cash to foot the federal tax bill and also in line with his intention to hold more cash during times of uncertainty.
The company’s cash position at the end of the June quarter was a massive $277 billion.
The Buffet-run investment holding company has also been trimming its stake in Bank of America Corp. (NYSE:BAC), another of its core portfolio stocks.
The Berkshire chairman and CEO vouches for value investing – an investment strategy of betting on quality stocks that trade well below their intrinsic value. He rarely invests in techs, which qualify as growth stocks. Musk, for his part, has been sending feelers to Berkshire and Buffett via his social media posts regarding investing in his flagship electric-vehicle company.
Since Buffett is regarded as a model investor known for his risk-averse strategies, any decision to reduce his equity holdings could negatively impact sentiment toward stocks.
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Bigworld, >> too late to jump out of the pot <<
Yes, I'm figuring that within 5 years things could really start to crumble due to the exponential debt bomb. If the debt rises by 2 trillion per year, that puts us at $45 trillion, and $2 tril per year is probably conservative. It's increasingly obvious that we are heading for a train wreck.
They might be able to slow it down somewhat and extend the day of reckoning, but the real problem lies in our debt based money system, in which the money supply is 'lent' into existence, thus creating instant debt. It didn't have to be that way, since the US Govt has the ability to create its own money with no debt attached. But once the privately owned Federal Reserve cartel was in place (1913), the US government borrows its money supply from the Federal Reserve, at interest. It took over a century, but it was inevitable that the accumulated debt would eventually swamp the system.
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GFP: I can't post it but Rinear said this morning that this rate drop is going to trigger another wave of stronger inflation within 3-6 months. So I figure my mining and precious metal over allocation will do pretty well. The debt burden being what it is the Fed will try to suppress short term rates to keep the interest payments near $1 Trillion a year. This might lead to higher rates on the long end. The bond market is the key. It underpins the entire world economy. According to the World Debt Report of 2024 there is $315 TRILLION Dollars worth of public and private debt awash in the world. What are the chances that even a portion of that ever gets paid back? Governments will inflate it away. It boils the frogs (the taxpayers) slowly until it's too late to jump out of the pot.
Bigworld, >> PRN basis <<
That sounds like a great idea. Being retired is great initially, but eventually you miss the social aspects of working, as well as the income. Since you are working from home, the social aspects won't be a factor, but an extra $30 K will always be welcome. Plus $6000 / mo in SS on top of everything else, and you'll be 'cruising' :o)
Thanks for the Rinear update. He should start following Timiraos to get the direct line to Fed policy guidance. I had never heard of Timiraos until Rickards mentioned him a few years years ago. He said the Fed has long had a designated leaker, and it's widely known on Wall Street. The Fed provides indirect policy guidance to minimize shocks / surprises to the financial markets. I was assuming a 1/4 point cut until seeing Timiraos' surprise article update yesterday. It appears Powell himself was not sure until the last few days.
Well, stock futures are now up pretty nice, so it looks like investors are getting over the 1/2 point shock. Now if the election and geopolitical lunacy doesn't explode too much, maybe the market can have a chance to elevate for a while (?) Could be wishful thinking, but it would be nice.
Fwiw, I upped the stock allocation from 27% to 30% last Friday afternoon (Friday the 13th, yikes), so that's about it for me. Some decent gains have been building up, but this time I'll only take profits on the S+P 500 portion, and let the individual stocks ride for the 'long term'. Just saying 'long term' gives me the willies, but I figure if things really start to fall apart I can unload the S+P 500 portion and use that to buy the inverse ETF (SH) to hedge the remaining long term stocks. Sounds like a plan, but will probably need to get a few bear markets under my belt before it can become the 'new normal', lol.
The poster 'Bar' has been buy / hold for numerous decades, and said that after a while you get used to the volatility. I'm going to try to at least stay long with the 15% allocation until the lead up to the 'debt bomb', so 5, 7, 10 years (?) Time will tell I guess. I'll be 70 next March, so might not be around when the debt bomb arrives anyway.
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gfp: My strategy is that I'm going to continue to work on a PRN basis, probably every other weekend and on call (if available) when someone calls in sick. Weekends are usually not that busy and they pay a shift differential for weekends. Without a lot of commitment I can easily pull in $30 K a year in extra income, and my wife and I will collect about $6 K a month in SS. With no rent or mortgage, low property taxes, moderate utility bills and no debt we can live on $8700 a month. I figure I can probably work on this type of limited basis and still have plenty of time for east coast travel. At some point we'll get a parabolic rally in precious metals. There is too much debt in the world, not just in the USA. Governments will rely on money printing. They have no other acceptable choice. It's to like they are ever going to go back to spending restraints. SO at some point the miners are going to rally. At some point in that rally I will begin to sell into strength. And with that cash I'll pretty much buy income producing stocks and ETFs. I already have positions in Enbridge, ET, XOM, RIO, URA. Even SIL and SILJ pay some dividend income. I should buy some Verizon. It's got a pretty nice dividend. I'm not totally averse to bonds if the yield is high enough to justify the dollar devaluation risk. But I wouldn't buy 5% bonds when I think real inflation is higher than that. Screw the statistics put out by our corrupt, lying government. They haven't told the truth about anything in decades.
Rinear's Comments on the Rate Hike Announcement:
*****************************************************************************************
Financial Intelligence Report
The Newsletter for people willing to take control of their financial future
Part 1: General Commentary
Part 2: Market Commentary
WRONG!
Today was of course day two of the FOMC, and their decision on monetary policy. Let me just "copy and paste" what I told my Insiders members as the statement was released and during Powell's question and answer period.
WOW. I got it totally wrong.
I've been predicting what the fed is going to do, for almost 30 years. My track record is pretty darned good. But I had absolutely NO feeling that they were going to do a 50. I said several times they'd do 25.
My reasoning has worked for 95% of those 30 years. If in June the Fed didn't cut, saying they wanted more proof of lowering inflation. He said then that he was looking at the job market, but he said it was holding up fairly well. He denied thinking of 50 in July at Jackson hole. So, why go from "nothing" to a 50? ESPECIALLY with only 50 days before a Presidential election?? Political much??? 25 would have made sense in all this, but no... they did 50.
Well, they're scared that the economy is worse than we've been led to believe.
The immediate reaction was a monster pop higher which makes sense as they're all high fivin' and blowing party kazoos. Then all the air came out and from up 300 the DOW almost went red, same with the S&P and NASDAQ. Then a few minutes later they clawed their way back up quite a bit, but nowhere near that first initial pop.
As Powell started taking questions, the DOW actually dipped red. He disappointed them a bit by saying this isn't a rate cutting schedule, it's going to be a meeting by meeting decision and if they need to go slower they will. They didn't like that much. But with a little more double speak, they bounced right back up.
Any stock that is interest rate sensitive, went up. HD went up on hopes of more home renovations. Solar companies went up on hopes of more sales paid over time. Housing popped higher, etc. The smaller cap companies that live and die via credit like the Russell 2000 gained very well.
The question now becomes one of economic strength. Is the market going to sleep on this tonight and say to itself " only ONE major bank was calling for a 50. Everyone else was at 25. And these guys cut 50 ahead of a contentious election? Maybe something's wrong here?"
We shall see. Powell's still talking, so I'll end this.
I'm not buying this, I'll be patient.
So, yeah. The market popped, dropped, wobbled, sprinted, faded, gyrated and did all manner of contortions. By 3:10 ALL three major indexes were red, with only the Russell hanging onto green. Lots and lots of crosscurrents.
I can't say I'm "shocked" they did 50, they've done goofy things before. So it's not shock. I'm simply surprised, considering all I just mentioned above.
What the market has to work out is the question...do we continue to buy stocks, because rates coming down is bullish, OR, considering how high the market is already, can valuations sustain this?
This isn't your daddy's market. This is a twisted, algo driven, Fed driven, rigged, overdone freakshow. Because of that, the idea of the market simply going higher and higher is NOT out of the question. Should it? not really. Can it? You bet.
I'm going to remain cautious here for a bit. There's so many things going on besides our stupid rate cycle. Did you see what's happened in Lebanon with the pagers and hand held radio's blowing up? Did you see the huge ammo depot in Russia get blown up by Ukrainian drone swarms? What about another MK-Ultra, CIA patsy that wanted to kill Trump on the Golf course? Rumor has it that explosives were found in Long Island where he's campaigning next.
Lot's to chew on folks. Let's take it slow.
Bigworld, I remember you saying that you are planning to retire at the end of the year? That sounds great. Just curious if you have any portfolio adjustments planned to enhance portfolio income during retirement?
I figure you won't be putting too much into bonds, and instead will opt for high yielding energy stocks, pipelines, maybe REITS (?)
Bonds should do pretty well during the period of falling % rates, between the high coupon rate plus the capital gains as % fall. Bonds and a lot of the interest rate sensitive sectors (utilities, REITS, etc) have already taken off strong in anticipation of the Fed cuts, especially over the last 6 months. With bonds, I filled up the 40% bond allocation over the past year, but only laddered out 3 years, so once that's over, the proceeds will need to be reinvested. I would have gone out longer, 5-7 years, but am concerned about the 'Debt Bomb' as we get closer to 2028-30, so I stopped the bond ladder at late 2027.
In the Energy and pipeline sectors, I see Enbridge has a 6.6% dividend, TRP is 6%, and Chevron is 4.5%. In the mining sector, RIO is paying 6.9%, and the uranium ETF (URA) is at 6.6%.
Anyway, just curious about your overall strategy on the 'income' side going forward. Thanks :o)
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Bigworld, Well, looks like accurate guidance from Timiraos once again.
Bottom-line, if Powell is getting more concerned about recession, it's ultimately best for him to match Fed policy with his outlook, even though it might upset the financial markets initially.
On the other hand, it's possible that Powell may have caved in to political pressures (?), and the Deep State's desire to ward off any hint of economic slowdown prior to the election.
Either way though, it's good to see them declaring victory over inflation, at least for now. Falling interest rates should provide a good tailwind for the stock and bond markets for several years, barring any geopolitical landmines going off.
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Bigworld, It sounds like the size of the Fed's rate cut tomorrow may be a close call, based on Nick Timiraos' most recent WSJ article. He is the unofficial Fed mouthpiece who is charged with providing Fed guidance to Wall Street. The basic guidance can usually be gleaned from the title of his articles. He issued an update to his previous article today, which is somewhat unusual since he normally doesn't put out anything right before or during the actual Fed meetings. Here's the updated article's title -
>>> Fed Prepares to Lower Rates, With Size of First Cut in Doubt
The central bank usually prefers to move in increments of a quarter point. This time, it’s complicated.
https://www.wsj.com/news/author/nick-timiraos
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So looks like the odds of a 1/2 point cut tomorrow have increased. Not sure how the financial markets would take a 1/2 point cut, since it could signal Fed concern over a recession have increased significantly. The Fed doesn't like to do policy changes so close to an election, so a 1/2 point tomorrow suggests that their hand is being forced by stronger recessionary signals than were previously expected. So the market tanks tomorrow afternoon (?) Guess we'll find out.
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>>> Hezbollah hit by a wave of exploding pagers and blames Israel. At least 9 dead, thousands injured
Associated Press
by BASSEM MROUE, ABBY SEWELL and KAREEM CHEHAYEB
September 17, 2024
https://www.yahoo.com/news/dozens-wounded-pagers-detonate-lebanon-135542720.html
BEIRUT (AP) — Pagers used by hundreds of members of the militant group Hezbollah exploded near simultaneously in Lebanon and Syria on Tuesday, killing at least nine people — including an 8-year-old girl — and wounding several thousand, officials said. Hezbollah and the Lebanese government blamed Israel for what appeared to be a sophisticated, remote attack.
Among those wounded was Iran’s ambassador to Lebanon. The mysterious explosions came amid rising tensions between Israel and Iran-backed Hezbollah, which have exchanged fire across the Israel-Lebanon border since the Oct. 7 attack by Hamas that sparked the war in Gaza.
The pagers that blew up had apparently been acquired by Hezbollah after the group’s leader ordered members in February to stop using cellphones, warning they could be tracked by Israeli intelligence. A Hezbollah official told The Associated Press the pagers were a new brand, but declined to say how long they had been in use.
At about 3:30 p.m. local time on Tuesday, as people shopped for groceries, sat in cafes or drove cars and motorcycles in the afternoon traffic, the pagers in their hands or pockets started heating up and then exploding — leaving blood-splattered scenes and panicking bystanders.
It appeared that many of those hit were members of Hezbollah, but it was not immediately clear if others also carried the pagers.
The blasts were mainly in areas where the group has a strong presence, particularly a southern Beirut suburb and in the Beqaa region of eastern Lebanon, as well as in Damascus, according to Lebanese security officials and a Hezbollah official. The Hezbollah official spoke on condition of anonymity because he was not authorized to talk to the press.
The Israeli military declined to comment. The explosions came hours after Israel’s internal security agency said it had foiled an attempt by Hezbollah to kill a former senior Israeli security official using a planted explosive device that could be remotely detonated.
State Department spokesman Matthew Miller said the United States “was not aware of this incident in advance” and was not involved. “At this point, we’re gathering information,” he said.
Experts said the pager explosions pointed to a long-planned operation, possibly carried out by infiltrating the supply chain and rigging the devices with explosives before they were delivered to Lebanon.
Whatever the means, it targeted an extraordinary breadth of people with hundreds of small explosions — wherever the pager carrier happened to be — that left some maimed.
One online video showed a man picking through produce at a grocery store when the bag he was carrying at his hip explodes, sending him sprawling to the ground and bystanders running.
At overwhelmed hospitals, wounded were rushed in on stretchers, some with missing hands, faces partly blown away or gaping holes at their hips and legs, according to AP photographers. On a main road in central Beirut, a car door was splattered with blood and the windshield cracked.
Lebanon’s health minister, Firas Abiad, told Qatar's Al Jazeera network at least nine people were killed, including an 8-year-old girl, and some 2,750 were wounded — 200 of them critically — by the explosions. Most had injuries in the face, hand, or around the abdomen.
It appeared eight of the dead belonged to Hezbollah. The group issued a statement confirming at least two members were killed in the pager bombings. One of them was the son of a Hezbollah member in parliament, according to the Hezbollah official who spoke anonymously. The group later issued announcements that six other members were killed Tuesday, though it did not specify how.
“We hold the Israeli enemy fully responsible for this criminal aggression that also targeted civilians,” Hezbollah said, adding that Israel will “for sure get its just punishment.”
Iranian state-run IRNA news agency said that the country’s ambassador, Mojtaba Amani, was superficially wounded by an exploding pager and was being treated at a hospital.
Previously, Hezbollah leader Hassan Nasrallah had warned the group’s members not to carry cellphones, saying they could be used by Israel to track and target them.
Sean Moorhouse, a former British Army officer and explosive ordnance disposal expert, said videos of the blasts suggested a small explosive charge — as small as a pencil eraser — had been placed into the devices. They would have had to have been rigged prior to delivery, very likely by Mossad, Israel’s foreign intelligence agency, he said.
Elijah J. Magnier, a Brussels-based senior political risk analyst, said he spoke with Hezbollah members who had examined pagers that failed to explode. What triggered the blasts, he said, appeared to be an error message sent to all the devices that caused them to vibrate, forcing the user to click on the buttons to stop the vibration. The combination detonated a small amount of explosives hidden inside and ensured that the user was present when the blast went off, he said.
Israel has a long history of carrying out deadly operations well beyond its borders. This year, separate Israeli airstrikes in Beirut killed Saleh Arouri, a senior Hamas official, and a top Hezbollah commander. A mysterious explosion in Iran, also blamed on Israel, killed Ismail Haniyeh, Hamas’ supreme leader.
Israel has killed Hamas militants in the past with booby-trapped cellphones and it’s widely believed to have been behind the Stuxnet computer virus attack on Iran’s nuclear program in 2010.
The pager bombings also likely stoke Hezbollah's worries about vulnerabilities in security and communications, as Israeli officials are threatening to escalate their monthslong conflict. The near daily exchanges of fire between Israel and Hezbollah have killed hundreds in Lebanon and several dozen in Israel, and have displaced tens of thousands on both sides of the border.
Jeanine Hennis-Plasschaert, the U.N. special coordinator for Lebanon, deplored the attack and warned that it marks “an extremely concerning escalation in what is an already unacceptably volatile context.”
On Tuesday, Israel said that halting Hezbollah’s attacks in the north to allow residents to return to their homes is now an official war goal. Israeli Defense Minister Gallant said this week the focus of the conflict is shifting from Gaza to Israel’s north and that time is running out for a diplomatic solution with Hezbollah, saying “the trajectory is clear.”
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Turkey considers joining BRICS. This would be the first NATO member to do so -
>>> Turkey's 'balancing act' with BRICS may stoke NATO fears, but the West needn't be too worried, analysts say
Business Insider
by Rebecca Rommen
https://www.msn.com/en-us/news/world/turkey-s-balancing-act-with-brics-may-stoke-nato-fears-but-the-west-needn-t-be-too-worried-analysts-say/ar-AA1qBXAC?ocid=BingHp01&cvid=92911539566d4f97bdef8bdcb3b2987a&ei=25
A spokesperson for Turkey's ruling party said that a process was "underway" for Turkey to join BRICS.
The current BRICS bloc of emerging-market nations includes countries such as Russia, China, and Iran.
Turkey would be the first NATO country to join the group.
Earlier this month, a spokesperson for Turkey's ruling AK Party said that a process was "underway" for Turkey to join the BRICS group of emerging-market nations.
"Our president has stated at various times that we want to be a member (of BRICS)... Our request on this issue is clear. This process is underway in this framework, but there is no concrete development on this," Omer Celik told reporters in Ankara, the Turkish capital, per Reuters.
The BRICS group, named after members Brazil, Russia, India, China, and South Africa, was formed to challenge the political and economic power of developed Western nations.
Since its first informal meetings in 2006, when it was known as just BRIC, the bloc has grown to include Ethiopia, Iran, Egypt, and the United Arab Emirates. Saudi Arabia was also invited to join, but a Saudi official said in January it had yet to do so.
Should Turkey now join the bloc, it would become its first NATO member and EU candidate, potentially complicating ties with the West and raising questions over Turkey's commitment to the military alliance.
Turkey's relationship with NATO has already come under strain due to the country's continued ties with Russia in the wake of the latter's invasion of Ukraine, as well as its efforts to seek improved relations with China.
Such moves seem to reflect Turkish President Tayyip Erdogan's desire to establish the country's independence through shifting foreign policy. He now appears to be seeking to maintain what experts have dubbed a "balancing act" between its relations with the West, Russia, and China.
"Turkey is seeking alternatives. It does not want to leave its NATO membership. It does not want to shed its European aspirations. But it wants to diversify its set of alliances, hedge its bets, so to speak," Asli Aydintasbas, a visiting fellow in the Center on the United States and Europe at the Brookings Institution, told France 24. "It no longer sees its NATO membership to be the sole identity, its sole foreign policy orientation."
Aydintasbas said that Erdogan saw successful strategy as having "a foot in different camps," adding that he wanted to "be able to play off the West against Russia, the West against China."
"I think that he has come to skillfully play this geopolitical act," she said, but noted that he had sometimes pushed his "geopolitical balancing" too far.
One particular flash point came when Turkey acquired the Russian S-400 air-defense system in 2019, instead of NATO-made equivalents.
In 2020, the US said it had repeatedly made it clear to Turkey that the purchase of the S-400 system "would endanger the security of U.S. military technology and personnel and provide substantial funds to Russia's defense sector, as well as Russian access to the Turkish armed forces and defense industry."
Turkey's decision to push ahead with the deal eventually led to it being kicked out of the US's F-35 program, as well as a number of US sanctions.
Nevertheless, Bulent Aliriza, a senior associate of the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies (CSIS), told BI that he did not think that BRICS was "going to compete with NATO and with Turkey's other Western links."
"But it is a statement of, I would say, unhappiness with some aspects of their relationship with the West," he said. "Even if Turkey does join BRICS, I do not believe it is going to lead to a fundamental redefinition of Turkey's relationship with the West."
Yusuf Can, the Coordinator for the Middle East Program at the Wilson Center, has also argued that Turkey's "strategic diversification should not alarm NATO allies," saying that they "could benefit from a partner" in such circles.
"Understanding and collaborating with Turkey's perspective can enhance US and NATO relations with Turkey, irrespective of potential administrative changes in Ankara," Can wrote in an article for the Wilson Center.
Can noted that an improved US-Turkey partnership could also help secure crucial strategic regions, such as the Black Sea — which has been at the center of the Russia-Ukraine war.
"Economically, strengthened US-Turkey relations can benefit the EU by fostering investments in new trade routes," Can added.
Aliriza agreed that the West could find a way to benefit from the situation.
Speaking about Turkey's potential BRICS membership, Aliriza told BI: "It doesn't necessarily have to become a problem for the West, but it can, in fact, benefit the West if Turkey and its Western partners can have an open and honest dialogue about how to move forward."
"It still remains a member of the Council of Europe. Most of its trade is still with the West. And in terms of investment, although there's been a lot of speculation that there might be Chinese investment in Turkey, most of the foreign investment in Turkey, either FDI or short-term funds coming in seeking profit from high interest rates, has come from the West," he said.
For its part, the US has remained relatively quiet following the news that Turkey's BRICS ambitions may be inching forward, which Aydintasbas said was likely a savvy move aimed at avoiding a public dispute.
"Washington is keeping quiet," she told France 24. "It does not want a public, high-profile spat with Turkey, and it knows that President Erdogan is unpredictable."
The BRICS group is set to hold a summit in Kazan, Russia, from October 22 to 24.
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Bigworld, Looking at our own 'solvency strategies' to survive the coming storm, if the risk is a dollar crisis, and the 'window' is 5 years, a logical strategy would be to gradually transition out of bonds and into hard assets like real estate, land, gold, silver, etc. You are already positioned that way, and that's the direction I'll be going over the next period of years.
I'd like to get more on the real estate / land side, but am not that well suited to those (too lazy, and also getting too old). There are always REITS, though these move with the stock market, so are vulnerable to a crash. For land there are several farmland REITS (LAND, FPI), but these have been on a roller coaster ride, and will also crash when the stock market does. Your solution of a semi-rural property with land is another option, but requires a lot of upkeep for a 70 year old. I live in a condo, and have considered getting a another one to rent out, but being a landlord doesn't seem too appealing. I'm just a lazy lug when it comes to maintaining real estate.
Putting too much in the metals also has problems. Buying energy plays seems like an idea, but those are even more volatile than the stock market, and can be cyclical with the economy. Sectors like water, lumber, will also crash with the broader market.
Anyway, still a 'work in progress'. Real estate has already zoomed, probably up 50% in the last several years, so no great bargains there. Buying some undeveloped land seems risky, requires considerable knowledge, and has become treacherous due to increased land use restrictions that should only get more strict over time.
Bottom line though, if the dollar is destined to really crumble in the next 5-10 years, transitioning out of bonds and into hard assets would be the logical strategy to keep from getting wiped out. Having too much in 'financial assets' like stock and bonds, probably not a great idea.
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Bigworld, >> Something is going to break <<
Yes, and the question is the timeline --> how long until the unraveling happens? For investors, this will be key to a strategy that can 'dodge the bullet' and allow us to remain solvent. I figure the main factors will be the US debt bomb, and the new gold-linked BRICS currency.
With the US debt, Rickards points out that there is a tipping point / threshold at which the gradual exodus out of the dollar system becomes a flood. I picked $50 trillion, but a lot will depend on when the new gold-linked BRICS currency becomes available, and how fast it gains traction globally.
I'm figuring that within 5 years we are in big trouble, since by then the US debt will hit 50 trillion, and the BRICS currency should be available for countries to jump into as they flee the crumbling US dollar. Countries are already shifting into gold, but if the BRICS currency really gets rolling as an alternative, the dollar crisis isn't too far off. That's probably why the 'powers that be' are risking WW 3 / nuclear war in their attempts to weaken Russia. So the US / West finance oligarchy is moving into desperation mode.
Most of the emerging countries are clamoring to join BRICS, and a big risk for the US is that eventually Europe will also want to peel off and join BRICS. Historically an empire in decline will launch wars to weaken its rivals, but nuclear weapons have made all out war impossible. The current foreign policy establishment seems to be ignoring that lesson from the Cold War. There's also been a big drop off in the competence level of these people, compared to the Kissinger / Cold War days, and the rise of the Neocon faction hasn't helped.
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gfp: One would have to think that our incompetent and corrupt Federal government has kicked the can down the road just about as far as they can. They have flooded the world with fiat Dollars and kept things afloat so far. But the divestiture of Dollar by the BRICS, the unprecedented level of debt, the huge interest expenses we are already incurring, etc. and I think the economic headwinds are strongly against us. We're in a Fourth Turning. Something is going to break. The historical cycles predict it. How it will transpire we can't be sure of. But something is brewing.
Bigworld, That Jain sale of Berkshire stock was in the $140 mil range, so the motivation to sell was obviously not for a new house or yacht, etc. It was well over 1/2 of his entire Berkshire holdings, so something has to be up. And it coincides with Buffett's own huge stock dumps over the past year, so a bad sign.
I figure a key motivation for Buffett's giant Apple sale was for diversification, since he had something like 40% of Berkshire's stock portfolio in Apple. With the big Bank of America sale, Buffett had been expressing concern over the US banking system since last year. The fact that he hasn't reinvested the proceeds into other stocks, but is piling into T-Bills, indicates there are few compelling bargains out there.
The expiration of the Trump tax cuts is approaching, so that's likely a factor. And if Harris is elected they could be changing the capital gains taxes, in addition to the corporate tax rate. Bottom line, it's ominous to see Buffett and Jain dumping stocks and raising cash in such a big way.
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>>> A Record $1.2 Trillion Interest Payments Are Blowing Up The Federal Budget
Investopedia
by Diccon Hyatt
September 13, 2024
https://finance.yahoo.com/news/record-1-2-trillion-interest-194844790.html
Key Takeaways
The U.S. government will spend a record $1.2 trillion on interest payments in 2024, the highest amount ever recorded.
Interest payments are driven by a combination of deficit spending, especially during the pandemic, and the Federal Reserve's campaign of anti-inflation interest rate hikes.
The trajectory of the deficit could be influenced by the election.
While both Democrats and Republicans propose new tax cuts and spending that could push up the deficit, Vice President Kamala Harris has proposed tax increases on the wealthy and corporations, to offset them.
The U.S. government is on track to spend more than $1 trillion on interest payments this year, surpassing military spending for the first time in history.
Interest payments on the national debt (held by the public in the form of Treasury securities) will cost the government $1.2 trillion in the government's fiscal year ending in October, the Treasury Department said in a monthly report on the budget. Net interest outlays are the third costliest item in the budget behind Social Security and Medicare benefits.
Economists have grown increasingly concerned about the potential impact of those payments on the U.S. economy. Interest payments took up 2.4% of the entire U.S. gross domestic product in 2023, and The Congressional Budget Office estimates that could swell to 3.9% over the next 10 years.
Why Is The Government Paying So Much Interest?
Two major factors have driven those payments skyward. First, the government spent trillions to support households and the economy during the pandemic, paying for it by borrowing rather than raising taxes. Second, the Federal Reserve raised interest rates starting in 2022 to fight inflation, which pushed up how much the government owes for that debt.
Although the Fed is set to gradually lower those interest rates starting next week, the pressure on the budget is likely to keep ratcheting up in the years to come.
The results of the presidential election could have a major impact on the trajectory of the budget deficit. Both former President Donald Trump and Vice President Kamala Harris have proposed tax cuts and new spending that could push up the budget deficit. Harris has also proposed offsetting those new costs with tax increases on the wealthy and corporations. Trump has proposed heavy tariffs on foreign goods, but mainstream economists are skeptical those would bring in much revenue compared to the impact of the tax cuts.
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Bigworld, >> intent on starting WW3 <<
It sure seems that way, but what would be the motivation be for wanting WW 3? Assuming the Western globalists haven't gone completely nuts, or are driven by some crazed apocalyptic beliefs, the likely explanation is a combination of desperation, arrogance, incompetence, and the 'slippery slope'.
The US / Western globalists have watched their global hegemony slipping fast, challenged by the rapidly expanding BRICS juggernaut, and the US / West's own dire 'debt bomb' financial situation. So our illustrious leaders went to work trying to undermine Russia and China, but the tit for tat has gotten dangerously out of hand, and now risks WW 3.
This strategy with Russia looks like a variation on the 1980s approach that used the war in Afghanistan to weaken the Soviet Union. But unlike today, that 1980s approach was part of a well designed overall strategy. First, Kissinger's China policy expanded the wedge between Russia and China. Then came Brzezinski's plan to foment Muslim ethnic instability in the southern Soviet Union, and then get the Soviets into a long grinding no-win war in Afghanistan, with the US funding the insurgents (Taliban, Al-Qaeda, etc) The Soviet Union was already in a weak economic state after decades of communism, and the 10 year war in Afghanistan helped bleed them dry. Meanwhile, Reagan launched into a huge arms race, with the 15 carrier navy, land based missiles, space defense shield, etc, and Gorbachev threw in the towel.
Anyway, this seemed to be the basic strategy with the Ukraine war --> wear down and weaken Russia, foment regime change that removes Putin, etc, but it hasn't worked. The US with its 35 trillion exponential debt bomb is merely accelerating its own demise, so a complete policy reversal is needed. But the current foreign policy wing has invested so much in their failed strategy, they are unable to extricate themselves and change course. Imo this is the main reason to bring back Trump --> as an outsider he can quickly end the Ukraine war and get us off this slippery slope to WW 3. Trump has his faults, but avoiding WW 3 takes precedence over everything else. Under Harris we get the same incompetent boobs that are currently running foreign policy.
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gfp; We're so overdue for a crash. And the globalist world puppet masters seem intent on starting WW3 with calls to allow long distance missile strikes against Russia which would certainly escalate matters. Putin is aware that the Ukranian military lacks the equipment and know how to target such munitions and that it would be NATO military personnel directing the attacks. Putin could retaliate by leveling NATO headquarters in Brussels with hypersonic missiles.
gfp: I didn't watch. I can't stomach the woman. To quote one of my favorite movies, "Matewan", "I wouldn't piss on her if her heart was on fire." From what I read the moderators were 100% in the tank for "Heels Up: Harris. Even CNN criticized ABC over it.
GFP: Jain might have other motives for selling his personal stake. Buffett selling Berkshire Hathaway holding and raising so much cash to me is a signal that a big correction or deep bear market is coming our way. I'm anxious to see how gold, silver and the miners do this coming week. The rally on Thursday and Friday in that space was the best 2 day performance I've seen in years. CDE is one of my largest individual stock holdings. It was up over 20% which is a huge move for an established miner not being taken over by a bigger fish. For some time now I've been tracking the miners and the metals in general and we're seeing a series of higher lows on pullbacks and higher highs on rallies. That's a good sign.
>> The Votes and Who Counts Them <<
-- Joseph Stalin - It's Not Who Votes That Counts, It's Who Counts The Votes
>>> The Votes and Who Counts Them
“The world is a dangerous place to live — not because of the people who are evil but because of the people who don’t do anything about it.” —Albert Einstein
James Howard Kunstler
Sep 09, 2024
https://jameshowardkunstler.substack.com/p/the-votes-and-who-counts-them
When The New York Times tells you that the United States Constitution is a threat to democracy — As it did on the front page of its August 31 edition — you know that you are in thrall to exceedingly subtle minds. The Times only employs persons, both birthing and other, of the subtlest minds. You can tell because they are credentialed by our country’s finest institutions of educational credentialing.
They come to The Times fully equipped with the armamentarium of advanced, progressive, innovative, nuanced, cutting-edge modes of understanding our world — which, you’ll agree, is a pretty goshdurned complex place, and rather niggardly in yielding its secret workings. Hence, The Times has concluded that the Constitution is flawed, perhaps fatally, because it allowed for the election of Donald Trump once, and now, possibly, a second time:
"It’s no surprise, then, that liberals charge Trump with being a menace to the Constitution. But his presidency and the prospect of his re-election have also generated another, very different, argument: that Trump owes his political ascent to the Constitution, making him a beneficiary of a document that is essentially antidemocratic and, in this day and age, increasingly dysfunctional.”
The Constitution does not stipulate a particular election day, but subsequent US law established the first Tuesday after the first Monday in November as the day for federal elections (the states can establish their own election dates for state and local offices). This changed beginning in the year 2000, when Oregon legislated to conduct all elections by mail-in ballot and other states followed with alterations to voting methods beyond a single election day. The Covid-19 pandemic prompted states to permanently relax rules on absentee ballots and expand mail-in voting, under guidance from the federal agencies such as the CDC, while the CARES Act of 2020 provided emergency funding to implement procedures for mail-in voting in order to reduce in-person voting that might enable the spread of Covid-19.
All of that followed orderly legislative procedure. The result was widespread ballot fraud, especially in crucial swing voting districts, much of it arrant. Contrary to official narratives out of the “Joe Biden” administration and the salient organs of corporate news, the allegations of widespread fraud were not “baseless” nor were they “conspiracy theories.” Subtle minds schooled in nuanced, cutting-age modes of analysis agreed to ignore documentary evidence of ballot fraud because it disfavored their preferred candidate, “Joe Biden.” Subtler judicial minds subsequently dismissed challenges to official tallies.
Other shenanigans such as the $400-million that Mark Zuckerberg (Meta and Facebook) injected into swing districts for “election administration and voter turn-out,” via his Center for Tech and Civic Life (CTCL), was not adjudicated in any court. The upshot of the “Zuckerbucks” prank was that polling offiicials in many precincts were replaced by Democratic Party activists who ended up counting the votes. The Federal Election Commission (after “Joe Biden” became president) decided that under federal campaign finance law, the contributions were not seen as illegal — though the “Zuckerbucks” scandal did lead to legislative reform in several states.
You might suppose in the years since the 2020 election that opportunity would be seized to materially correct the weaknesses of mail-in ballots, early voting, ballot “harvesting” practices, giant “balloting centers,” and the use of vote-tallying machines (Dominion, etc.) with modems allowing for Internet hackery. The best and simplest reform would be a return to paper ballots cast only on one election day, with voter ID and proof of citizenship (accomplished prior in voter registration), conducted in smaller, distributed precinct polling places that make hand-counting of ballots practical. Alas, this was too difficult for Congress, while the subtle, nuanced, cutting-edge minds working in news media were not interested in such straightforward reform and did not advocate for it.
Rather, the news media advocated for further laxity in voting rules. And so, now they are actually arguing about whether it is desirable for non-citizens to vote. The “Joe Biden” administration allowed at least 10-million people to enter the country illegally since 2021 and have gotten a million or more of them registered to vote via motor-voter laws — automatic registration when an illegal alien gets a driver’s license, and ditto when they apply for various social services. Alejandro Mayorkas’s Department of Homeland Security has shrewdly distributed large numbers of these illegal aliens into swing districts of states crucial to the Democratic Party’s election chances.
The inquiring mind is prompted to wonder whether it is the US Constitution that is a “menace to democracy” or the Democratic Party. Mr. Trump is issuing communiqués on “X” (Twitter) that his party is paying special attention to voting fraud in the current election, with imputations of very severe punishment to cheaters and fraudsters. You might think that the Kamala Harris campaign would declare likewise. I expect Mr. Trump will put the proposition to her in their Tuesday debate.
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>>> Gold skyrockets as stars align for Fed rate cuts
Reuters
September 13, 2024
by Anushree Ashish Mukherjee and Swati Verma
https://finance.yahoo.com/news/gold-rallies-record-high-us-032818493.html
(Reuters) - Gold prices powered higher on Friday, beating record levels, as a boost in bullish momentum fueled by optimism that the U.S. Federal Reserve is on the brink of trimming interest rates was catalyzed by fund inflows and a drop in the dollar.
Spot gold was trading at record levels, up 0.9% at $2,582.04 per ounce by 1:45 pm ET (1745 GMT).
U.S. gold futures settled 1.2% higher to $2,610.70.
Gold market bulls are locking in bullion prices surging to fresh records, with a milestone of $3,000 per ounce coming into focus, fired up by monetary easing by major central banks and a tight U.S. presidential election race.
The stars are aligned in favour of the gold and silver market bulls as the European Central Bank lowered its main interest rate this week, the Fed is likely to lower it next week and tame U.S. inflation data, Jim Wyckoff, senior market analyst at Kitco Metals, said.
Markets fully price a rate cut next week, with a 57% chance of 25-bps U.S. rate cut and a 43% chance of a 50-bps cut, the CME FedWatch tool showed. This would be Fed's first rate cut since 2020.
"The market is still expecting the Fed to cut interest rates by around 100 basis points by the end of the year, i.e. rates would have to be cut by 50 basis points at one of the two remaining meetings after September," Commerzbank analysts said.
"It is therefore likely due to these aggressive interest rate cut expectations for the coming months that the gold price is rising."
Further driving interest in bullion, the dollar fell on Friday to its lowest level this year against the Japanese yen. [USD/]
Global physically backed gold exchange-traded funds saw a fourth consecutive month of inflows in August, the World Gold Council said last week.
Holdings of the world's largest gold-backed ETF SPDR Gold Trust were at their highest levels since early January on Thursday. [GOL/ETF]
From the technical point of view, the Relative Strength Index currently at 69 suggests that the gold price is approaching the "overbought" territory, starting at 70.[TECH/C]
Palladium rose 2% to $1,067.43 and has surged about 17% so far this week.
Spot silver rose 2.3% to $30.61 and platinum added 2.4% to $1,000.57.
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Bigworld, I'm wondering if the miners are starting to play catch up with bullion in earnest? They've lagged a lot, but have the 'leverage' aspect to their bottom line earnings as bullion rises, so could really fly at some point. Might be starting?
Looking at the broader S+P 500, from a TA perspective it needs to put in a new high in this move in order to re-confirm the longer term uptrend. The high was in July, and the August move fell slightly short, so a new high now would allay any fear of a market roll over. I figure 5700 would do the trick.
With the DJIA, it already beat the July high in August, so is less of a worry TA-wise. But if we get into a recession, the industrials would be vulnerable due to their cyclicality.
Chart-wise, the Nasdaq is currently the worst of the 3 main indices in the near term, and needs to at least get above the Aug high (18000). Then will come the July high ~ 18,650, which might take a while. Seeing so much emphasis on one stock (NVDA) and sector (AI) likely contributed to Buffett reducing exposure to the market.
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Bigworld, Thanks for the Kunstler and Rinear updates. With the debate, I only watched bit and pieces, but didn't think Harris came off very well. But not surprisingly, the media spin machine kicked in with a glowing appraisal, lol. Figures, but Harris was basically invisible to news coverage the last 4 years, so I guess any exposure that isn't disastrous is considered a plus.
I thought the woman doing the questioning (Linsey Davis) was way more intelligent and articulate than Harris, so why not make her President? The Dem convention last month demonstrated that delegates and the democratic process don't matter, and if they are going to fix the election anyway, why not upgrade to a higher IQ candidate?
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Bigworld, Looking at Buffett's aggressive stock selling this year -
Beyond the stock market being overvalued, the likelihood of higher tax rates coming next year from the Harris administration may have been the clincher. Same with Ajit Jain, who is 72 and has been passed over as Buffett's chosen successor in favor of the younger Greg Abel (who is 62). He is sitting on huge gains from his Berkshire holdings, so might as well take the profits now and get the lower tax rate.
That's one explanation, but Buffett and Jain may also be privy to other info, or they see big problems likely for the banking sector, a repeat of last year's regional bank crisis, a coming recession, etc. Who knows, but the bottom line is it's a bad sign to see these guys aggressively bailing.
Big insider selling also happened in spring / summer of 1929, when numerous Wall St insiders got out of the market. We now know the Oct 1929 crash was triggered deliberately by suddenly calling in all the margin loans. The idea was to consolidate the US banking industry under Fed control, since most smaller banks were not part of the Federal Reserve System. But today it seems unlikely that they want to deliberately induce a crisis. On the contrary, they will be increasingly hard pressed to hold together the dollar reserve system in the face of - 1) the rising BRICS juggernaut and - 2) the worsening US Debt Bomb. So a deliberate crisis doesn't seem likely, but an unwanted unraveling will be a growing risk. But with the Fed now going dovish, that should reduce the stresses within the financial system, at least in the near / mid term.
I guess we'll see what happens. Fwiw, on the stock side I'm sitting with a 27% allocation (15% individual stocks, 12% in S+P 500). It's easy to bail on the S+P 500 portion, so that will be first to go if things start to unravel.
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gfp: Buffett and his group are very plugged into the Powers That Be. They know something.
gfp: Nothing notable from Rinear. He's mostly day trading the Indexes. He never holds them overnight. He's extremely cautious right now. Which is the correct stance to be in. Anything can happen.
gfp: The Feds are pumping printed cash into the economy as fast as they can. (Article to follow.) To juice the economy and avoid a recession until after the rigged election.
Bigworld, Another bearish factor for stocks is the growing reality that regardless of who wins the election, things are going to suck. If Harris wins, we are stuck with the same disastrous crew of 'Team B' incompetents running domestic and foreign policy. If Trump wins, the media and most of the 'powers that be' will go into permanent freak out mode, with another impeachment attempt starting even before inauguration day. The vibe in the US will be even more toxic and dysfunctional (if that's possible).
Also on the 'Trump wins' side will be the large tariffs he intends to levy on most imports. This will raise prices and inflation, and thus interfere with the Fed's easing plans. Getting % rates down is essential for delaying the Debt Bomb crisis (50 trillion tipping point). Another risk with broad tariffs is a repeat of the Smoot Hawley debacle of the 1930s, which deepened and prolonged the Great Depression.
Ending the Ukraine war is more than enough for me to vote for Trump, but it's becoming apparent that we're in for a rough time regardless of who wins the election. Harris at least doesn't have the Biden blackmail aspect (VP payola) that Zelensky is using to keep US aid flowing to Ukraine. But without a change in the foreign policy wing, these incompetents like Blinken will continue bumbling right into WW 3. So Trump is probably the only realistic way to extricate ourselves from Ukraine, and as I see that's Job #1 and everything else is secondary. The current path likely leads to WW 3, which is what Kissinger was warning about prior to his death last year.
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Bigworld, When combined with Buffett's big stock sales this year, this new development (below) could be ominous -
>>> Berkshire Hathaway’s Jain Sells Over Half of Class A Shares
Bloomberg
by Alexandre Rajbhandari
September 12, 2024
https://finance.yahoo.com/news/berkshire-hathaway-jain-sells-over-143854442.html
(Bloomberg) -- Berkshire Hathaway Inc.’s vice chair of insurance operations, Ajit Jain, sold $139 million worth of his Class A shares in Warren Buffett’s conglomerate.
Jain, one of Buffett’s top lieutenants, disposed of 200 of the Class A shares for about $695,418 each, according to a regulatory filing Wednesday. The disposal means the longterm executive is left with control of 166 such shares, 61 of which he directly owns...
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Full article -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175076974
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Shiller P/E ratio - >>> The Oracle of Omaha's $56 billion silent warning foreshadows potential trouble for Wall Street
https://finance.yahoo.com/news/warren-buffetts-56-billion-silent-092100169.html
Although Warren Buffett has consistently shied away from offering negative takes on the U.S. economy and/or stock market during his nearly six-decade tenure as CEO of Berkshire Hathaway, $56 billion of net-equity security sales over an 18-month stretch speaks volumes without the Oracle of Omaha having to say a word.
The culprit for this consistent net-selling activity looks to be a historically pricey stock market and the irrational behavior of some of its participants.
In Buffett's annual letter to shareholders that was released in February, he had this to say about the "casino-like behavior" he wants no part of:
Though the stock market is massively larger than it was in our early years, today's active participants are neither more emotionally stable nor better taught than I was in school. For whatever reasons, markets now exhibit far more casino-like behaviors than they did when I was young. The casino now resides in many homes and daily tempts the occupants.
At the end of the day, Warren Buffett and his team want a fair deal on a great business, and they aren't willing to waiver from this ideal. As the S&P 500's Shiller price-to-earnings (P/E) ratio shows, there simply aren't many good deals at the moment.
The Shiller P/E ratio, which is also known as the cyclical adjusted price-to-earnings ratio (CAPE ratio), is based on average inflation-adjusted earnings from the last 10 years. This differs from the traditional P/E ratio which only examines trailing-12-month earnings. The beauty of the Shiller P/E averaging earnings over a 10-year period is that it minimizes the impact of one-off events (e.g., the COVID-19 lockdowns).
As of the closing bell on May 3, the S&P 500's Shiller P/E stood at 34.05. This is nearly double its average reading of 17.11 when back-tested to 1871, and it's the third-highest reading during a bull market in over 150 years.
Perhaps the bigger concern is what's historically followed the five previous instances where the Shiller P/E ratio surpassed 30 during a bull market rally. Following all five prior instances, the S&P 500 or Dow Jones Industrial Average went on to lose between 20% and 89% of their respective value. Though the Shiller P/E ratio isn't a timing tool -- i.e., stocks can stay pricey for multiple quarters, if not years -- readings above 30 tend to be a precursor to big moves lower in the stock market.
The lack of desire by Buffett and his team to buy stocks during an 18-month stretch suggests they expect valuations to contract.
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Bigworld, Anything new from Rinear? Thanks.
Buffett's big selling activity this year makes you wonder what it is that he sees coming? He sold over half of the huge Apple position, and also a large part of the Bank of America position. Berkshire's cash hoard has zoomed to a massive $277 billion. Some observers are pointing to an increase in tax rates as a key motivation for Buffett to take profits now, but he might also be expecting a big market decline, recession, crisis of some kind? In the aftermath of the regional bank crisis last year, Buffett talked about having less faith in the US banking system, and then this year he's been unloading Bank of America stock.
You also have to wonder what happens after the election is over? The 'powers that be' have been motivated to keep things buoyant in the lead up to the election, but after Nov 5th, that motivation may be greatly reduced. Then there is the deteriorating geopolitical side, which the media has been largely ignoring.
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