Economy & Investments

Mike Galiga: Black Monday Cometh Again

One crucial task of the agile trader is keeping up with market-moving news. One little event anywhere in the world can throw gasoline on the hottest bullish fire OR send it plunging like a barrel over Niagara. In fact, in this ever-more-connected world, hot news- good or bad- may be the biggest catalyst for short-term gains or losses- bigger than traditional fuel like earnings reports, new product announcements and perhaps even FED decisions. Every day I’m consuming headlines like most people consume air. It’s a relentless global hunt for new, short-term profit opportunities that (sometimes distant) world events are presenting to stock & options traders.

To these well-seasoned, “been there and done that” eyes, the pile of evidence in support of the forecasts I’ve been sharing with you keeps building. And note: I work d*mn hard to keep subjectivity & bias out of such reviews, striving very hard to avoid the terrible amateur trap of seeing only what I want to see. I know compromising one’s objectivity is a massive killer of any good trading discipline, so I probably look for counterpoint harder than I look for point.

Nevertheless, I see it unfolding more & more… like the old tv shows & movie prop crystal balls going from smoky & foggy to an ever-clearer picture. Markets are predictable. Markets repeat events again and again and are driven by the same catalysts again and again. The trick to convert market smoke & fog to clarity or even near-certainty is knowing where to look, recognizing the patterns of the past and weaving that with the group sentiment of the present. Big volatility is coming… probably more than we’ve ever seen before. It’s going to be a wildly exciting ride to my medium-term forecast target of DOW 30K. Knowing when to profit on the big bull plays AND, perhaps more importantly, when to profit (not run & hide) on the big bear slides and you can make a fortune… FAST.

Haven’t we seen this movie before?

Yes! Yes we have. During the 1980s, we saw a similar boom in stock values with investors getting hyped up on the apparent record growth rally in the markets. And it was welcomed news after a dismal environment of stagflation with mortgage interest rates in the stratosphere.

But what happened toward the end of that movie? We experienced one of the worst stock market corrections in our nation’s history, second only to the crash that preceded the Great Depression. We remember that day as Black Monday when the Dow Jones dropped nearly 25% in a single day. That crash was precipitated by some market trends that are eerily similar to what we’re seeing today. You might be thinking, “Such as?..”

The Dow’s explosive growth had risen to over 2,700 that summer (remember when DOW 2,700 was a sky high measure of market success?), having closed at its height to a gain of 44% over the previous year. Similarly, we saw the crash presiged by unrest in OPEC with a bust in the oil markets of 50% the previous year. And of course there was unrest in the Middle East and elsewhere, which made market prices highly volatile.

Looking back at those events today, it’s a classic version needing to see the (catalyst) news in all of the right places… and separating noise from the news that would make- or shake- the markets. Does any of that sound familiar? It should because we have much the same conditions setting up here- in late 2017. And that’s why I perked up to the headline that trumpeted David Stockman’s criticism of President Trump’s new tax reform package.

Stockman was the Director of the Office of Management and Budget under the Reagan administration. So he knows what a Black Monday scenario looks like… because HE WAS THERE. And he’s doing the craziest of crazy things in modern politics: he’s calling a spade a spade. That’s something almost no other public figure dares to do: say what he REALLY foresees instead of spinning some almost canned PR message hoping the herd will keep right on ignoring reality. Just ignore that spade. Just keep throwing your money into the same pot. Just keep kicking that can a little further down the road. Oh boy! Haven’t we all seen this movie too many times before?

In a recent CNBC piece, Stockman is quoted with a prediction of as much as a 70% drop in stock prices. SEVENTY PERCENT! If that actually plays out, the DOW would be much closer to that record back in 1987 than the record in 2017. Take a moment and do the math yourself. Where is the DOW today? Multiple that by 0.3. Look at that result. Think about that result. Impossible? Where was it just about 10 years ago when we had the last market meltdown? Is the result and that reality really so far apart one could see it as an impossibility now?

Stockman explained that the economy sees a major correction around every eight years, give or take. It’s been more than that since the Great Recession. He detailed, “There is a correction every seven to eight years, and they tend to be anywhere from 40 to 70 percent. If you have to work for a living, get out of the casino because it’s a dangerous place.”

In the interview he explained the factors that might be creating an inevitable drop in the market. He goes on, “This is a bubble created by the Fed. We’re heading for higher yields. We are heading for a huge reset of pricing in the risk markets that’s been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they’re telling you that they’re done.”

Perhaps worse than that is this other somewhat quiet discussion about unwinding the FED balance sheet. While that could mean a lot of things, I suspect a massive big buyer- perhaps the default buyer that has thrown much of the money at this market to drive it up to these incredible records is now wanting to STOP BUYING and start selling. What happens to any market when enthusiastic buyers become sellers? Only one thing happens there. You can count on it.

If that sounds familiar, it should. It’s essentially what I’ve been saying for months now. The prices of major stocks are hitting records every week which is creating artificial paper wealth that isn’t backed up by anything tangible. I really don’t think it’s the traditional buyers doing all this buying to push the markets higher & higher. I increasingly think it’s mostly ONE buyer- a holy mother of all buyers if you will- and even “she” has now formally communicated that “she” wants to wind down “her” purchasing and flip into selling off some of “her” holdings. Where does that go? Where is the only place that can go?

Yet market records are being realized almost on a weekly basis… and touted hard in every way they can be heard. The herd doesn’t (maybe can’t) listen that attentively… or doesn’t remember the past or recognize how the past repeats again and again… until… in hindsight, the “shoulda, coulda, wish I hads” are flying near the tail end of a swift crunch… or crash. The herd may hear a little bit of such warnings before the event… but fall prey to the much louder allure of “another record day…” perhaps throwing even more money into the pot to try to capitalize on the endless record days that are certainly going to come after this one. How often has ANY stock market gone up and up and up indefinitely? Exactly. “But it’s different this time.” Watch out!

Many people may discount this warning as just another conspiracy theory. Others will freak out and start pulling their investment dollars from the market. But the smart money sees such scenarios as opportunities. Agile investors will make the most of bull & bear by taking advantage of the tools that make money on BOTH. A great tool is also a dirt-cheap one: options. A call option buyer is making a relatively cheap, leveraged bet on a rising stock or market. A put option buyer is making a comparably cheap, leveraged bet on a falling stock or market. A shrewd & agile investor will buy & close call & put options interchangeably… like one is just as good as the other (and it is when used at the right time and in the right way).

Most investors & traders only see the markets through a singular (always bullish) lens. In other words, the only way they see to make money is on the rising side: buy a stock, stock moves bullishly, sell the stock & book a profit. There’s almost a dependency on a perpetual bull market for most people. However, the few that make the MOST money investing & trading work the other side too. They are not OUT doing nothing when the bull cedes the stage. A roaring bear is just as lucrative- often even more in many cases- when one is positioned to make money on such a move.

Do you know how? Do you have a good feel for vehicles like call & put options and how to use them to make money as this market rises AND when it’s falling too? Maybe you think you know a little but are not confident you know enough to actually put such knowledge to good- and profitable- use? If any of that resonates for you, speak up… right now. Email me at Mike@MikeGaliga.com. My team & I are hard at work developing some major new goodies to help individual investors just like you take full advantage of the wild volatility rapidly approaching all of us. Email me letting me know you want to learn and you’ll be the first I alert when our work is ready to be utilized. Don’t be a “shoulda, coulda, wish I had” ever again. My team & I are here to help. Let us.

Read More...

Politics

Pence Leaves Colts Game After 49ers Kneel During Anthem

Vice President Mike Pence just poured gasoline on the national anthem fire this weekend after walking out on the 49ers versus Colts game.

In the pregame show, the 49ers took a knee during the anthem, and it was more than Pence could stomach. He tweeted later, “I left today’s Colts game because @POTUS and I will not dignify any event that disrespects our soldiers, our Flag, or our National Anthem.”

Up to now, this was a fight between the NFL and Trump.

But Pence escalated the situation and brightened the spotlight on the issue.

What’s more, Pence has a fairly ironclad reputation as, more or less, a Boy Scout.

Which lends all the more weight to the plight of discontented NFL fans.

Here’s more from Daily Signal…

Vice President Mike Pence left an NFL game Sunday after around 20 players took a knee during the national anthem.

Pence departed the Indianapolis Colts game when the San Francisco 49ers’ players knelt during the playing of the “Star Spangled Banner.” The vice president, following in the footsteps of President Donald Trump, criticized the players for their disrespect on Twitter.

He concluded his posts with a simple statement: “I stand with President Trump, I stand with our soldiers, and I will always stand for our flag and our national anthem.”

Read More...

Issues

George Soros, NFL Players Union Best of Pals Against Trump

This week the NFL hit new lows with its core fan base down 31% and a fall from grace as Americans’ number one sport.

That might explain why players are mysteriously no longer taking a knee during the national anthem.

But the NFL’s long nightmare isn’t over yet.

Its tanking viewership numbers and lost advertisers will likely continue after it was revealed this week that the NFL Players Association, the official union for all players, is cozy in bed with a gaggle of liberal groups, including George Soros.

The NFLPA has for some time been donating money to groups like Planned Parenthood, pro-Amnesty groups, and the Open Society Foundation, founded by none other than Soros himself.

There’s really no need for further evidence of a profound disconnect between the NFL and its fan base.

But dollars speak volumes, and the NFL’s loss of tens of millions will force them to change or die.

Here’s more from American Mirror…

Follow the money to find the truth, and in this case, it leads squarely to the doorstep of George Soros and other radical far-left advocacy groups.

And as it turns out, the Colin Kaepernick-inspired national anthem protests may not have been such an organic, grassroots uprising after all.

The NFL Players Association (NFLPA) doesn’t appear to be on the same political page as many of its fans, so its no wonder they would rather keep the lid on the causes it supports.

That lid was popped open on Friday by 2ndVote, a conservative watchdog organization for corporate activism.

The National Football League Players Association has recently financially supported a veritable “who’s who” list of far-left organizations, from Planned Parenthood to organizations protesting the deportation of illegal immigrants, among many others.

One such recipient is none other than the Open Society Foundation, chaired by billionaire George Soros.

2ndVote has found the NFLPA provides financial support to Soros’ Center for Community Change Action, the social justice arm of the organization, which, according to the Washington Free Beacon, “has been involved in direct action against President Donald Trump and Republicans before and after the November elections.”

The NFLPA has been donating to several far-left and anti-trump causes dating back to at least 2013.

Soros has a long history of funding some of the most radical and far-left causes in the United States.

Read More...

Politics

ICE Director to California: Get Ready for ‘At-large Arrests’

On Friday, California Gov. Jerry Brown signed into law a measure that disallows state and local police from cooperating with federal ICE officials in enforcing federal immigration law.

What’s more, the new law gives safe haven to illegal immigrants, whether criminal or not.

That move has put ICE in a position of no compromise.

ICE Director Thomas Homan explained in a statement on Friday that agents are left with no option but to conduct large-scale raids in California to compensate for the lack of support from state officials.

That also means that far more arrests will be made in lieu of local ‘arrest-and-hold’ policies that otherwise would detain illegal immigrants prior to transferring them to federal custody.

It’s a powder keg waiting to explode.

Here’s more from The Hill…

The country’s top immigration cop said Friday his agents “will have no choice” but to conduct workplace and neighborhood immigration raids in light of California’s new sanctuary law.

Immigration and Customs Enforcement (ICE) Acting Director Thomas Homan said in a statement Friday that California Gov. Jerry Brown’s (D) decision to sign the law, SB54, would “undermine public safety and hinder ICE from performing its federally mandated mission.”

Under California’s new law, state and local police will have major restrictions in how and when they can collaborate with federal agents on immigration investigations and arrests.

One notable provision in the law is it prohibits so-called immigration holds, requests from ICE to local authorities to hold a prisoner or detainee longer than the constitutionally mandated period.

Opponents say a hold, also known as a detainer, constitutes a violation of a detainee’s constitutional rights, and their enforcement puts local authorities at risk of liability.

Supporters, chief among them Homan and Attorney General Jeff Sessions, say detainers are necessary so arrests of dangerous immigrants can be made in the confines of jails and prisons.

“ICE will have no choice but to conduct at-large arrests in local neighborhoods and at work sites, which will inevitably result in additional collateral arrests, instead of focusing on arrests at jails and prisons where transfers are safer for ICE officers and the community,” Homan warned.

Read More...

Issues

Antifa Group Plans Nationwide ‘Deface Columbus Day’

Antifa is still on the rampage against the latest perceived injustice du jour.

And with Monday’s holiday celebrating Christopher Columbus and Antifa in need of more salacious news coverage, why not?

An Antifa affiliate in NYC called Revolutionary Abolitionist Movement made a veiled announcement this week that appears to be a coordinated plan either to pull down or deface all Columbus statues in the city.

The irony is clearly lost on the wayward youngsters at RAM who’ve forgotten that the American Revolution which led the way in the world for the constitutional protection of free speech was made possible both by the brave expeditions of Columbus and by the human rights espoused by the Christianity he boldly proclaimed.

Antifa is neither keen on fascism nor actual history.

Here’s more from PJ Media…

Violent left-wing anarchists have announced a nationwide campaign to deface Christopher Columbus statues this coming Monday.

Five Christopher Columbus statues have already been vandalized in New York City in recent weeks, according to Far Left Watch. In one case last month, vandals defaced a “larger-than-life” statue of Columbus in Central Park, leaving blood-red paint on his hands, and scrawled, “Hate will not be tolerated” and “#SomethingsComing” on its pedestal.

What is coming appears to be a coordinated campaign to destroy monuments all across the country on Columbus Day.

The NYC-based antifa group Revolutionary Abolitionist Movement (RAM) made the announcement on Thursday, September 21, calling on antifa groups nationwide to “decorate” their neighborhoods.

According to Far Left Watch, RAM is “an extremely militant group that advocates for the violent redistribution of property” and for “the abolition of gender.”

Read More...

Issues

Legacy No More: Trump Nixes Obama’s HHS Mandate

You may recall landmark Supreme Court cases in recent months like Hobby Lobby and Little Sisters of the Poor in which the Court ruled that Obamacare cannot force organizations to engage in actions concerning health care that violates their religious beliefs.

But many of those organizations were still entangled in court actions against the Department of Justice.

That is until yesterday when the Trump administration delivered on a promise to end the draconian rule known as the HHS mandate which forced all organizations to offer contraceptives as a part of their health plans even if it violated their religious tenets.

The administration essentially expanded Obama’s exemptions to include religious and moral objectors.

Practically it neuters the entire mandate since the exemption is so broadly written.

Obama’s legacy is quickly unraveling.

Here’s more from the Hill…

The Trump administration on Friday rolled back an ObamaCare requirement that employers include birth control coverage in their health insurance plans.

Under highly anticipated rules published Friday, any for-profit or non-profit employer or insurer can stop following the birth control mandate on moral and religious grounds.

The changes also let publicly traded companies obtain a religious exemption but not a moral one.

The rules take effect immediately.

ObamaCare mandated that employers offer health insurance that covers birth control without a co-pay, with exemptions for houses of worship and some companies.

According to senior HHS officials on a press call Friday, employers will not have to file anything with the government to stop offering the birth control coverage; instead, they simply have to notify their employees of the decision.

The move could potentially impact millions of Americans who now receive birth control with no co-payments.

Read More...

Issues

FBI: Las Vegas Shooter May Not Have Acted Alone

In the days since the Las Vegas massacre at the hands of crazed gunman Stephen Paddock, more statements and indications have surfaced that suggest this may not have been the act of a lone wolf.

First came claims by ISIS that this was an act of jihad.

These initially were dismissed as terrorists simply attempting to use the event as an opportunity for free media.

But since that time, mounting evidence has suggested that Paddock could not have conducted the extensive, international planning by himself.

The FBI has admitted that the scope of its investigation has crossed US borders.

And now ISIS is claiming to have converted Paddock six months ago.

If there’s any truth to this, it turns the whole story on its head.

Here’s more from PJ Media…

Did Las Vegas mass killer Stephen Paddock act alone?

Statements made by authorities investigating Sunday’s horrific shooting are increasingly indicating they don’t believe he was a “lone wolf” actor.

Both Las Vegas Sheriff Joe Lombardo and representatives from the FBI gave indications they are looking for other possible suspects.

Read More...

Economy & Investments

Records Galore: Are We Inside Another Stock Bubble?

It’s a been a long recovery since the Great Recession in 2008 when the housing market came crashing down and the world’s economy with it.

And from the looks of it, we’ve come roaring back and erased those losses with new market records on an almost weekly basis.

But now economists and investing experts are increasingly wondering aloud — and even warning — that things may be eerily like they were just prior to Black Monday.

Or perhaps in the Roaring Twenties in the lead up to the Great Depression.

Housing prices are soaring high, the Dow and other indexes are booming and investors seem almost blindly exuberant.

Does this mean we’re in another bubble? Some experts say yes, and that that bubble must inevitably pop…possibly soon.

Here’s more from the Economist…

N HIS classic, “The Intelligent Investor”, first published in 1949, Benjamin Graham, a Wall Street sage, distilled what he called his secret of sound investment into three words: “margin of safety”. The price paid for a stock or a bond should allow for human error, bad luck or, indeed, many things going wrong at once. In a troubled world of trade tiffs and nuclear braggadocio, such advice should be especially worth heeding. Yet rarely have so many asset classes—from stocks to bonds to property to bitcoins—exhibited such a sense of invulnerability.

Dear assets are hardly the product of euphoria. No one would mistake the bloodless run-up in global stockmarkets, credit and property over the past eight years for a reprise of the “roaring 20s”, or even an echo of the dotcom mania of the late 1990s. Yet only at the peak of those two bubbles has America’s S&P 500 been higher as a multiple of earnings measured over a ten-year cycle. Rarely have creditors demanded so little insurance against default, even on the riskiest “junk” bonds. And rarely have property prices around the world towered so high. American house prices have bounced back since the financial crisis and are above their long-term average relative to rents. Those in Britain are well above it. And in Canada and Australia, they are in the stratosphere. Add to this the craze for exotica, such as cryptocurrencies (see Free exchange), and the world is in the throes of a bull market in everything.

Read more…

Read More...

Issues

Gun Control? Chicago Accounts for 10% of US Gun Deaths

There are many angles to take in the debate against gun control to prove how completely illogical it is.

But one has just presented itself as quite possibly the best we’ve ever seen.

And it’s just a single number.

In the wake of the Las Vegas shooting, liberals are jumping on the perennial bandwagon calling for more gun control.

Just as they did after Orlando and Sandy Hook and so on and so on.

But what would the country look like if liberals got their way with onerous gun-grabbing?

Well, just ask former Obama Chief of Staff Rahm Emanuel, Mayor of Chicago.

The Windy City has some of the most draconian gun control laws in the nation, so clearly, it’s one of the safest cities in the country, right?

Not so much.

According to a study by non-profit Gun Violence Archive, Chicago accounts for fully 10% of US deaths by mass-shooting.

GVA defines mass-shooting as victims of four or more in a single gun violence event.

So here’s the back-of-the-envelope math: Chicago makes up just .8% of the total US population, yet it accounts for a tenth of mass shootings.

Hmm.

How’s that gun regulation working out for you, Rahm?

Here’s more from DailyCaller…

Chicago accounted for approximately 10 percent of mass shootings during a 17-month period in the U.S., according to data analyzed by The Daily Caller News Foundation.

The New York Times Editorial Board created a graphic depicting the total amount of mass shootings committed between June 12, 2016 (the Pulse Nightclub attack) and Oct. 1, 2017 (the Las Vegas massacre), based on data from the Gun Violence Archive.

The Gun Violence Archive, a nonprofit that tracks gun violence in America, defines mass shooting as incidents where “FOUR or more shot and/or killed in a single event, at the same general time and location  not including the shooter.”

TheDCNF examined the number of mass shootings committed per city in that 17-month period, and found that Chicago made up about 10 percent of those incidents. Of the 521 mass shootings committed, approximately 53 occurred in the city of Chicago.

Chicago, on average, represented about 11 percent of total mass shootings in the country each month. The city, racked by gang violence, sees about three mass shootings per month, according to the data.

The city accounted for 19 percent of mass shootings in June 2016 alone, experiencing six mass shootings out of the 31 that occurred in entire country for that month. Chicago saw an average of about three mass shootings per month between July 2016 and October 2016, while the mass shootings climbed during November 2016 and December 2016.

Read More...

International

Bigger than Brexit: Catalonia Could Split from Spain Next Week

News of the Las Vegas shooting over the weekend obscured the bombshell headlines across the Atlantic that will have far-reaching ripple effects.

Catalonia, a province within the dominion of Spain held a referendum on independence, in defiance of government orders to cease and desist.

Amid violent clashes with EU police who shut down more than 100 polling location, Catalans voted overwhelmingly to declare independence from Spain.

Now reports are surfacing that Catalan leaders will formally declare independence next week.

It’s a turn of events very similar to what happened in the lead-up to the American revolution.

What’s more, after the European Union was rocked by the Brexit vote, Europe’s already faltering economy will likely fall further as rumors of civil war abound.

Here’s more from Reuters…

Catalonia will move on Monday to declare independence from Spain, a regional government source said, as the European Union nation nears a rupture that threatens the foundations of its young democracy and has unnerved financial markets.

Pro-independence parties which control the regional parliament have asked for a debate and vote on Monday on declaring independence, the source said. A declaration should follow this vote, although it is unclear when.

Catalan President Carles Puigdemont earlier told the BBC that his government would ask the region’s parliament to declare independence after tallying votes from last weekend’s referendum, which Madrid says was illegal.

“This will probably finish once we get all the votes in from abroad at the end of the week and therefore we shall probably act over the weekend or early next week,” he said in remarks published on Wednesday.

The constitutional crisis in Spain, the euro zone’s fourth-biggest economy, has shaken the common currency and hit Spanish stocks and bonds, sharply raising Madrid’s borrowing costs.

On Wednesday, the Ibex stock index, fell below 10,000 points for the first time since March 2015 as bank stocks tumbled. In a sign of the nervous public mood, Catalonia’s biggest bank, Caixabank, and Spain’s economy minister had earlier sought to assure bank customers that their deposits were safe.

Read More...