Dow Posts 200 Point Gain on More Dreadful News

Dow Soars 553 Points Despite News of Record Decline in Profits

And despite this awful news, stocks soared once again and shrugged off the bad news to reach another high.
I laughed when one commenter at the end of the article said this:
"Who needs an economy when we have central blankity-bankers who can create unlimited "digital dollars" (Powell's term) to artificially boost the stock market bubble via infinite amounts of helicopter money? "

Where's the Logic in This?

This morning, these are the main headlines for economic news:

2.4 Million Americans Lost Their Jobs In the Past Week

1.6 Million Homeowners Defaulted On Their Mortgages In April

The Dow Rose At Open After Being Down All Night

Go Figure! 

Debt Is Exploding Worldwide

And this is truly frightening! On the US Debt Clock website, at the top right corner, is a link called Debt Clock Time Machine. This link gives the viewer the amount of US debt for a specific time frame, both in the past and the future. When I clicked on the link to calculate the amount of US debt for the year 2024 -- less than four years from now -- is showing that based upon our current spending, we will have $43.6 trillion of debt. That is truly unsustainable!

Note: Update -- Two days after I posted this figure, it was updated to $44.1 trillion. It's rising even higher!

Fiscal Disaster This Way Comes!

I was shocked to see this headline just minutes ago!

Let's do the math on that! $1 trillion for one month X 12 months equals $12 trillion of spending for the year!
Even the deficit looks like a coming disaster! $738 billion for one month X 12 months equals a prospective deficit of $8.856 trillion of new debt for one year! That's more than 6 times the previous annual record! That ensures an eventual disaster!
Is is any wonder that the Dow futures are down 650 points as I post this?
And yet House Democrats are expected to pass another stimulus package today for an additional $3 trillion of spending! It guarantees a fiscal calamity!

Don't Try Telling Stock Traders This!

This article on Marketwatch today suggests that the economic rebound will not be a v-shaped recovery, but don't tell that to stock market traders today. After being down 200 points, the Dow has gone positive for the day.

Reality Only Gets Worse As Unemployment Skyrockets

Over the weekend, "Standard Chartered bank has calculated that adjustments to the headline unemployment rate push the effective number of unemployed to 42 million and the effective UR rate to 25.5%, higher even than the U-6 underemployment rate of 22.8%. Worse, if one treats underemployed in line with the U-6 methodology, the true April unemployment number would rise to an mindblowing 27.5%."
That's ugly beyond description!

A New Record That Is Dismal, At Best

Zero Hedge today has an interesting article that is frightening, even as it is record-setting. Here is the headline:

Here is a brief quote that explains it:
"...there was one especially scary aspect of today's jobs report that has not gotten enough publicity, namely that as BofA writes, the employment to population ratio plunged to a record low, with only 51.3% of the population working. Inversely, this means that in April, 49% of the US population was not working." 

I shudder to think what could be coming! 

Dow Rises 300 Points on Awful News

These two headlines from the business news website Cheddar this morning express the sentiment that these are troubling times despite that markets are dismissive of risk.

No Rhyme, Reason, or Logic In These Markets

Over the past decade, we have lost all perception of risk or reality in these markets. That doesn't reduce risk; it increases it!

Where's the logic in this? Recession Begins, Stocks Rise 650 Points

Our Contrarian Market -- In Two Headlines

Both of these articles are on Marketwatch this afternoon. Something seems a little askew and contrary between markets and reality. 

Stocks Soar On Nothing But Hope

These two stories were the major ones today. Just the hope of a cure for the COVID-19 coronavirus sent the Dow to a close up more than 700 points, despite that the manufacturer of the hoped-for cure, Gilead, indicated that data is not yet sufficient to expect a cure.

Meanwhile, the market ignored economic bad news today that is the worst since World War II:

Interestingly, Mark Hulbert Agrees

Hulbert expects the bottom in August of this year, and he summarizes in his article this way:
"When the bear market does finally hit its low, you are unlikely to even be asking whether the bear has breathed his last. You’re more likely at that point to have given up on equities altogether, throwing in the towel and cautioning anyone who would listen that any rally attempt is nothing but a bear-market trap to lure gullible bulls."

Top-Notch Investor Says Worst Is Yet to Come for Covid-19

In an article today on Marketwatch, investor Mark Spitznagel tells us that things are going to get much worse for stocks due to the coronavirus. He should know, since he recently achieved a 4,144% return in the month of March. He clearly stated also that the stock market is in a bubble, and that if the Covid-19 pandemic doesn't pop the bubble, something else WILL.
Look out beloooow!

It's Going to Get Worse As Unemployment Explodes Higher

Marketwatch has an excellent article this morning that explains what is likely coming soon. "BofA sees between 16 and 20 million job losses, which could send the unemployment rate, which stands at 3.5% as of February’s report, surging within a few months to 15.6%, which would by far outstrip the unemployment rate during the 2007-09 recession." 
Surprisingly, stocks are higher for the day, but showing signs of trending lower as I write this. Look out belooooow!

Fed Desperation Is Here

Corn Rebounds

Corn Crashes Despite New Trade Agreement With China

As details of the new trade agreement are released, markets are showing disappointment. Hence, grain prices are crashing!

If This Isn't a Bubble, What Is?

One of the attributes of a financial bubble is that they are never recognized as such until AFTER they pop!
So when will this one pop? Predicting the future is for prophets (with a "ph"), not profits (with an "f"). The important thing is to have an exit strategy, not to predict a "when will it happen" future.