Trade War Threat Sends Commodities Cliff Diving

These charts for corn and crude oil are symbolic of what commodity prices are doing under the threat of a trade war.

Corn Collapses

I was shocked this morning to see that the price of corn had dropped 10 cents. That's a huge drop!

Crude Continues to Ramp Up

Gas prices will soon begin to reflect the higher price of crude oil. We have now hit a higher price that the high hit in mid-May.

Climbing Crude Oil

This isn't going to be good for the economy. Crude oil is up five of the past six days.

Crude Oil Climbs Sharply

I was quite shocked at how sharply the price of crude oil climbed Friday. I understand that OPEC was unable to agree on production increases.

Bloomberg: "Equities in Denial"

Bloomberg writer Richard Breslow this morning expressed a rather sanguine assessment of the current equity markets, despite price strength.

Fed Has Barely Begun to Reduce Its Balance Sheet

I was stunned when I saw this chart. After all that we've been told that the Federal Reserve has reduced its balance sheet and begun to normalize, this chart shows that it hasn't happened.

Plunging Corn

I'm looking forward to being able to take advantage of this drop in the price of corn.

The Smart Money Is Running for the Exits

One of the signs of a maturing bubble that is showing froth and may be about to burst is that the really big money of professional investors runs for the exits. They see trouble ahead, and they quietly exit the markets so as to preserve their capital when the market collapses.

Crude Oil Peaks -- for Now!

On May 24, the Russians and Saudis announced that they would soon increase oil production. Since then, the price of crude oil has reversed, and the price has declined significantly. And we have seen a more recent decline in the price of gasoline. 

Unemployment at 3.8%, But Adults Not In Labor Force Hits Record High

Once again, I find it interesting that the BLS announced that unemployment had reached an 18-year low of 3.8%. But at the same time, the BLS announced on the same day that the number of American adults not in the labor force hit a new all-time record high of 95.9 million! That's the highest in American history! Ouch!

Shiller PE at High Levels

Crude Oil Going Sky High

Crude oil price rocketed more than $2 per barrel today. And this evening, it was up another 55 cents just minutes ago. We must prepare for even higher gasoline prices. Ouch!

Something That Doesn't Add Up!

This morning, I saw two articles on the same website. One indicates that we have hit a new record number of Social Security recipients in the United States:

And this headline indicating that we have hit a new record number of American adults not in the workforce:

That figure was just 94 million in July of 2016.
And yet we're also being told that the unemployment rate has dropped to just 3.9%!

The numbers don't add up! But worse than that, they are unsustainable! We now have so many people receiving government assistance in the US that a disaster is inevitable!

Tumbling Treasuries As Stocks Climb Sharply Higher

A perceived "de-escalation" of tensions with Russia in Syria is sending stocks sharply higher, and US Treasuries sharply lower today. Wall St is happy today! The Dow was up 350 points as I wrote this.

Hints That Market May Be Reaching Top

I couldn't help noticing this morning that these two headlines hinted at a potential for the current asset markets to be reaching their zeniths. I also noticed another headline, which is not posted here, that real estate refinance loans are sliding downward.

Corn Collapses Back to Multi-Year Lows

What a great buying opportunity for me!

Debt Growth Fuels the Everything Bubble

Fuzzy Math

The US today has 95.4 million American adults not in the workforce. That's about 40% of the adult population. That's more than the number of adults working and paying taxes! But the Bureau of Labor Statistics tells us that we have only 4.1% unemployment.
Screen capture from the BLS' own website:

Someone is lying and doctoring the data!

Smart Money Quietly Exiting the Market

A similar phenomenon occurred during the spring of 2017, but no stock sell-off occurred. Historically, such smart money sell-offs are a bad omen.

Stock Valuations Continue to Rise to New Highs

This image of a margin-adjusted CAPE, provided by Hussman Funds, shows that stocks continue to reach new highs of excessive valuation.

Still Another Record High

"Oh, but this time is different," they say. Nope! That language is actually an expression of a bubble mentality! It is, itself, proof of a bubble. And every bubble in history has ultimately burst. There has yet to be an exception. This one will too!

This Bubble Gonna Burst

Stocks Straight Up Since Mid August

Despite an upwardly-revised GDP forecast, the overall economic data hasn't improved noticeably. This looks more and more bubbly each day. The S&P 500 has closed higher 26 of the past 32 days. We have seen 43 new all-time record highs this year.

Death Through Debt Approaches

One More Can-Kicking!

Crude Gets Clobbered

Bullish Bonds Spell Worry

Bonds don't rise this sharply, and interest rates plunge similarly, unless there are concerns in the financial markets. Note the last candle at the far right. That sharp buying binge for bonds is indicative of grave worry in the financial markets because investors are running for cover by buying bonds, which they consider to be the safest investment available.

End-Of-Month Rally for Corn

So is this just a temporary situation, a short-covering rally, a dead cat bounce, or has Harvey created a corn supply crisis? Stay tuned!

Cliff-Diving Corn

I'm amazed this morning that even with the plunging price of corn over the past two months, the price of corn is down sharply today also. Here is today's chart:

And here is the trend chart over the past two months:

Morose Economic Data Sends Stocks Tumbling

The Dow was down 251 points with just minutes left in the trading session today.

Sniff, Sniff! Smells Like a Bubble to Me!

This headline from Marketwatch today sure smells like a classic bubble!

War Drums? Imagine The Real Thing!

If you think today's stock market plunge was bad, imagine what would happen if war actually happened! We wiped out about a month's worth of gains today!

Sure Looks Like a BUbble

This image, from Dr. John Hussman's weekly market analysis, suggests that this stock market bubble is just getting bigger and bigger. The Dow finished up 9 days in a row today, even though it was already at record highs. Of course, the nature of a bubble is that the vast majority of market participants don't recognize it as such. If they did, extreme prices wouldn't be moving from one extreme to even greater ones.
In the image, the red line is the calculation of a log-period bubble base on the formulas of Dr. Didier Sornette. This bubble matches his calculations perfectly. It is a flawless example of a financial bubble.

Corn Prices Crushed

Corn prices today dropped below support to multi-month lows. These are the lowest prices of this year!

Both Hard and Soft Data Show Weakness!

Ouch!

Central Bankers Still Printing Money With Little Restraint

Debt Disaster Coming

Economic Data Stalls As S&P Continues Near Record Highs

How long can this continue? There seems to be a dismissiveness on Wall St of the economic data, even as the S&P 500 continues near a new record high this morning. Even the Fed's own data is showing weakness! This divergence will eventually close, and when it does, history suggests that it will be UG-LY!

Ominous Sign Stocks Have Peaked

Margin debt suggests that the stock market has topped out. It is a reliable leading indicator that points at a subsequent decline on a consistent basis.

Mark Hulbert on Marketwatch said this morning that "...margin debt typically peaks in advance of the stock market itself. In 2007, for example, margin debt peaked in July, three months before the bull market topping out in October. As Wolf Richter of the Wolf Street investment blog bluntly put it: Margin debt “has a bone-chilling habit of peaking right around the time stocks crash.”

A word to the wise is sufficient! 

Ouch! Fed's Own Labor Market Indicator Declines 7 of 8 Months!

Nevertheless, stocks are higher today1 What a bubble!

Dollar Destruction

Central Bankers Make Bubbles Much Worse

"...Recessions are a normal condition to a market economy as they are regulating any excess, bankrupting the weakest players or those with the highest leverage. However, one of the mandates of central banking is to fight a process (business cycles) that occurs "naturally". The interference of central banks such as the Federal Reserve appear to be exaggerating the amplitude of bubbles and the manias that fuel them. It could be argued that business cycles are being replaced by phases of booms and busts, which are still displaying a cyclic behavior, but subject to much more volatility. Although manias and bubbles have taken place many times before in history under very specific circumstances (Tulip Mania, South Sea Company, Mississippi Company, etc.), central banks appear to make matters worst by providing too much credit and being unable or unwilling to stop the process with things are getting out of control (massive borrowing). Instead of economic stability regulated by market forces, monetary intervention creates long term instability for the sake of short term stability."
--Professor Dr. Jean-Paul Rodrigue, Hofstra University

When Is a Bubble Not a Bubble?

Answer: When it's driven by central banker yield-seeking speculation!

Stock Valuations At Bubble Levels

The outcome of years of yield-seeking speculation induced by central banks is that investors across the globe have now locked in zero prospective total returns in virtually in every asset class for the coming decade... We actually view this period as the extended top-formation of the third speculative bubble in the past 16 years, not as a representative sample of things to come. -- Dr. John Hussman, PhD, August 15, 2016

Dollar Devastation