Marxism, Buffett, Dalio, Stalin & The Bottom

Marxism, Buffett, Dalio, Stalin & The Bottom

As always, the Democrats just can’t stand the fact that Trump might take credit for helping people and have blocked and relief package. Democrats claimed in true Marxist fashion in the Senate that the GOP’s push to set aside $425 billion for loans to help select companies and industries, dubbing it a “slush fund” for the Treasury to direct as it sees fit. They said the bill is tilted toward corporations instead of working people. What they fail to even address is that those working people rely upon small businesses the Democrats hate so much which provides 70% of their employment.

Small businesses have been ordered to close down. They cannot pay employees and nobody has suspended their rents. The destruction of small businesses will be devastating to the economy and this is all about playing politics. I am saddened.

The closing for March, if down from last Friday may spark more serious liquidation as Hedge Funds dump everything and some may more to suspend withdrawals as is taking place in European bond funds. The Solus Alternative Asset Management LP, Hedge Fund, known for its investment in retail chain Toys “R” Us, informed its investors that it is shutting its flagship fund and will restrict redemption’s as it works to sell off holdings.

Even Warren Buffett’s Berkshire Hathaway may have lost more than $70 billion on its 10 biggest investments. This type of decline shows that the buy-and-hold strategy fails in a serious market correction. Ray Dalio, who will go down in history for his proclamation that “cash is trash” on January 21, 2020, has lost probably more than $4 trillion in Bridgewater.

Where the 2007-2009 Crash took out Lehman Brothers and Bear Stearns, this time we will see Hedge Funds go down in flames. This undermines liquidity and makes the market vulnerable because market-makers pull back just to survive. 

We are headed into a Global Recession which could become even worse than the Great Depression. Here’s why?

This time we have politicians taking advice from the medical industry. The medical people who do not understand that you cannot shut down the economy on this grand scale because of the devastation is insurmountable to people, their jobs, and wiping out their pensions. This economic shut down on such a massive scale is far worse than if the Corona death toll was even 8%.

Never before has the economy been crashing with such speed for this is orchestrated by people who only look at how diseases spread and not how the economy contracts.

See the source image

Yes, it is true that if we all stayed home we can even beat the common cold. But the post-coronavirus world is going to be far more damaging to the future than any of these people understand.

To have the Democrats playing politics in the middle of the is just insane.

Liquidity is collapsing everywhere. Bank failures rose after the 1929 crash because liquidity failure with a declining velocity = less money with even less money moving around the economy = recession and potential depression.

A monthly closing on Oil below $20.50 will warn of the economic recession ahead as people stay home and this command of quarantine and social distancing may undermine the very cooperation which is the foundation of civilization. 

If people are afraid to interact and suspect everyone, that is precisely the atmosphere created by Stalin during the Communist era.  We are voluntarily limiting and quickly losing all rights including the freedom of assembly. Even Twitter has shut down those who dissent against the coronavirus and this is calling into question our freedom of speech as well.

InterAnalyst will help guide everyone out of this time of insecurity and political misdirection via selfish ignorance.

Look at the chart below:

Finding The Bottom

As the markets find the bottom, it will be laced with volatility and insecurity with the media frightening you to the point of insecurity. this is not done for YOU as an InterAnalyst member. It is done for those Buy and Holders who never exited at the top and now have been scared into submission. 

However, as an InterAnalyst member,  you recognize that it likely will become the best entry point of your life! Yes, insecurity will be there but you know the stock market is going nowhere!

The stock market never lies and it always returns when there is “blood in the street” and the bottom arrives.

Thus, follow the guideline to a risky to safe entry back into the coming slingshot move.

Step One: Wealth Maximizer Pro (Daily Charts)

When the Daily chart delivers a green signal, jump for joy, then choose to enter a position or wait to see if the daily signal is holding for a few days for stability. If we are at or close to a bottom, volatility will be very high so prepare for it if you choose to trade it.

Step Two: Wealth Maximizer (Weekly Charts)

When the Daily is followed by a Weekly green signal you know that the economy is attempting to settle and gain strength.

You should begin to feel a bit more secure. Entering a bullish position here is a bit less risky because the weekly signal has some economic strength attached rather than pure daily volatility. You can even wait another week to see if it develops more strength.

Step Three: The Wealth Preserver (Monthly Charts)

Once the Green signal has elevated from the Daily to the Weekly and the Weekly has moved into a second or third week of a bullish trend, you may select to beat the green monthly Wealth Preserver signal by entering a bullish position before month end.

If you look at The Wealth Preserver chart above, ask yourself whether you remember the days or weeks Just prior to the bottom green signals in 2003 and 2008?  NOPE, right. You don’t remember them, but what you would have remembered is getting in after preserving your money at the prior top, before the full devastating decline those bear markets delivered.

The same is true now. 

So, the bottom is going to come. You must be patient, it will arrive, it always does!

Enter in when you feel most comfortable, but recognize that the Wealth Preserver has proven to be deadly accurate at economic turning points.

The phrase to be true: “Better Safe, than Sorry!” 

Obviously, entry at any point has its risks, but as you look closely at The Wealth Preserver chart above, making a move using the monthly charts is rarely a poor decision…ESPECIALLY OFF THE BOTTOM.

This time it is coming with a slingshot.

The Virus Peak & Stock Market Bottom

The Virus Peak & Stock Market Bottom

I cannot make any claims about the virus itself and this post is the reaction of major stock markets. A good explanation I’ve found on epidemics and exponential growth is this one on YouTube which I recommend watching if you are not already up to speed.

Looking at the current situation it appears that the market has room to fall further as the economic fallout continues and the virus spreads.

If the virus starts to slow down, it won’t be long before stocks find a bottom given the huge amount of stimulus that central banks are providing.

The most important thing is that we need to see the number of new daily cases start to flatten out.

Currently the virus is spreading at an exponential rate and that is causing businesses and services around the world to enter lock-down.

That has dire consequences for company profits.

Exponential Growth

To summarize some of the information in the mentioned video above, exponential growth means that as you go from one day to the next you have to multiply by some constant.

In the case of coronavirus, daily cases have been increasing by about 1.15 to 1.25 times the previous day’s cases. This results in an exponential curve with the number of new cases increasing on a daily basis. In fact, a virus provides a textbook example of exponential growth since what causes new cases are existing cases. However, there comes a time when exponential growth has to slow down.

For example, as millions of people become sick there are fewer people that can be infected so the rate of new cases must decrease. Likewise, measures such as hand washing and limiting gatherings also have the effect of reducing the spread.

So an exponential curve will eventually level out at an inflection point and turn into what’s called a logistics curve. At this point the number of new cases each day levels out and then starts decreasing. We have already seen this happen in China and now it is happening in South Korea too.

 New cases in China leveling out. Source: John Hopkins University.

Growth Factor = No. New Cases Today / No. New Cases Yesterday

A value over 1 indicates that we are still on the exponential part of the curve and there may be higher magnitudes of new cases ahead of us. In other words the growth is not slowing down.

This is the case right now in the USA and Europe. Whereas a value of 1 means that growth is leveling out and a value under 1 means new cases are decreasing.

Taking China as an example, the coronavirus spread began at an exponential rate which has gradually leveled off thanks to drastic shutdown measures.

With new cases appearing to have peaked the country has been able to get back to work and reboot its economy. Meanwhile, the United States and Europe have only just started to see new cases increase, indicating that they are likely to be near the beginning of the exponential curve.

What does all this mean for the stock market now?

I think we need to see the growth rate of new cases in the US and Europe start to level off before we can put in a major stock market bottom. So we need to see the daily growth rate drop to one or below and then stay there, perhaps for a week or so.

Once that happens I think we will see a bottom in stocks and a significant relief rally thanks to the huge amount of stimulus that is being provided by central banks.

It is because of this stimulus that we will see the slingshot. Importantly, though, I don’t think we need to see growth rates level off for the whole world.

It would be enough to see growth rates in the US and Europe start to slow for a bottom to be put in.
That’s because these areas (plus China) account for the vast majority of global GDP.

To keep on track of this I am using the coronavirus dashboard developed by John Hopkins University which seems to provide the most up to date and reliable figures that I’ve found. The dashboard provides the latest statistics on new cases which can then be used to calculate growth rates. 

For example, new cases outside China was 100.5k on Monday March 15th, higher than the previous day’s 81.7k cases and higher than the 75.1k cases on Saturday, a growth factor of 2.8.

Analyzing these numbers it doesn’t seem all that surprising that 10% drop in US stocks that day coincided with a huge daily growth rate of 2.8 times (this is for locations outside Mainland China).

Final Thoughts

Ultimately, virus growth rates and the stock market are linked and so long as the curve is exponential the markets are going to struggle.

Stock markets are likely to rally every time the virus looks to have been defeated, even when it’s not.

The data isn’t entirely accurate so there is likely to be some false starts. It’s also possible that the market will be able to lead a flattening in the virus whether it is caused by luck, government intervention or some other reason.

But eventually the market will get it right, it always does.

That being said, when stocks are up and the exponential curve has leveled off, review your Daily, then your Weekly charts with signals for Green Light Trade Signals because that will mean we are close to a bottom, or the bottom may be in!

Credit: Mr. Marwood, thank you for your research.

Trump Outmanuvers Xi – 5 US Stock Indexes Set To Explode Higher

Trump Outmanuvers Xi – 5 US Stock Indexes Set To Explode Higher

Trump Outmanuvers Xi

China has *already* lost the trade war with the U.S. but they just haven’t realized it yet.
For reference, look at what has happened recently with Mexico and U.S.  Mexico capitulated.
Just wait for China to realize that they will no longer be calling the shots in their trade with the U.S.
Here are recent moves:
The Trump Administration’s decision to reimpose sanctions on the Iranian oil trade has dramatically reduced Iranian crude exports – but it hasn’t stopped some of the U.S.’s largest economic rivals from accepting shipments of Iranian crude, according to several media investigations. Not only has China continued to import Iranian crude, so have several other Asian and Mediterranean countries, according to data from several tanker tracking services studied by the New York Times and other media organizations. Per the NYT, in April 2018, before Trump withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day. One year later, that figure was at one million. And in June, after the end of the exceptions or waivers, ships in Iranian ports loaded about 500,000 barrels per day, according to Reid I’Anson, an energy economist at Kpler, a company tracking seaborne commodities.

Below are satellite images of some of these tankers docking at Chinese ports.
Last week, the Treasury Department sanctioned Chinese oil trader Zhuhai Zhenrong for buying oil from Iran. The decision was intended to send a message to other Chinese firms, and anyone else buying Iranian oil who also hoped to do business with the U.S.Related: China Unlikely To Slap Retaliatory Tariff On U.S. Crude Oil“Any entity considering evading our restrictions, particularly related to Iranian petrochemicals, should take this message seriously,” said one official. “We recently sanctioned Zhuhai Zhenrong…for knowingly engaging in a significant transaction for the purchase or acquisition of crude oil from Iran. This action underscores our commitment to enforcement.”But targeting CNPC would be an especially serious escalation at a time when tensions between the U.S. and China are nearing a breaking point. Even as satellite data and imagery suggest that the tankers linked to Bank of Kunlun are employing tactics including turning off tracking devices and changing their names. Any U.S. decision to target CNPC would mark a significant escalation given the company’s status as China’s largest oil producer. Its publicly listed arm, PetroChina, has operations in the U.S. and secondary shares listed in New York, in addition to partnerships with international energy companies such as Ineos. Bank of Kunlun said it was “not involved in the crude oil import business” and denied having “violated any laws or regulations.” But people in Washington familiar with the activities of the bank said it was viewed by the U.S. as a “bad actor.” “Bank of Kunlun has always been the sacrificial lamb for CNPC and, more broadly, for the Chinese government,” said one former senior U.S. intelligence official. “It is a bank that the Chinese government recognizes as expendable in some sense.”And cracking down on the Bank of Kunlun would come with certain risks that might impede the U.S.’s agenda, particularly when it comes to North Korea.”China is not going to do the U.S. any favors,” said Dennis Wilder, a former top CIA, and White House official. “This is the price you pay strategically. You cannot tell China, on the one hand, to be aligned with you on Iran and North Korea and at the same time decide you’re going to retard or destroy some of their corporations.”After all, Beijing has made clear that it has no problem being Iran’s most important lifeline during an extremely difficult time.

Trump Outmanuvers Xi – US Stock Market Set To Explode Higher

Make no mistake about it, Xi capitulated quietly in private discussions with Trump and that is why Trump delayed additional Tariffs. Now when China fully capitulates within the next few months, the US Stock Markets will explode higher.
Contributors: ZeroHedge & InterAnalyst
USA, China, And The S&P500 Index

USA, China, And The S&P500 Index

USA, China, And The S&P500 Index

The Chinese government has now demonstrated an ability to control the S&P500 Index, even at the risk of Chinese domestic capital flight.

While each side in this trade war/currency war/cold war faces unique pressure, there is no doubt, you would think, that the U.S. might be able to sustain for longer a period of sub-optimal reality. After all, the Chinese economy now grows at the slowest pace in 27 years, and that’s if one trusts their data. The U.S. president faces the prospect of reelection (or not) in November of 2020. A deal must not only work in the long run, but it must also appear beneficial at the time of the agreement. The Chinese president prepares for the 70th anniversary of the Communist regime’s victory over Nationalist forces in October. He must appear to be strong and must appear to be in control. That implements an increased regimen of tariffs by President Trump by a deadline of September 1st a sticky situation. White House Economic Adviser Larry Kudlow speaks of “planning for the Chinese team to come here in September.” How much give do you think there will be in September with the Communist Party’s big shindig planned for the very next month?

Do you know what provoked the current USA market big selloff?

The PBOC (China’s central bank) allowed the yuan to fall to more than a 7 to 1 exchange rate versus the US dollar. You also know what caused short sellers to cover their positions on Tuesday. The PBOC stabilized that same yuan. Understand just how dangerous that is, and for the most part, the financial media missed it; USA China Can Affect The S&P500 Index. The Chinese government ahead of these scheduled meetings, ahead of their high-level event and during (albeit early) a U.S. national campaign season, has now demonstrated an ability to control the S&P500 index, even at the risk of Chinese domestic capital flight. This is not just flying a strategic bomber over an uninhabited island, or a Coast Guard cutter sailing through the Straight of Taiwan, this is a threat that must be countered in some way.

Do you know that the US represents only about 20% of the total trade picture for China?

Trump is working off of the old-school ideas of trade that have not been updated in universities since the Great Depression. A 12% correction down to the 24000 in the Dow Jones Industrial stock index will give Trump something to think about. If I were Trump’s Democratic opponent, I would be hitting him over the head with his nonsense over China. They have pulled back on buying agricultural products and that is driving a stake in the heart of Trump territory as well. He is sacrificing the commodity sector for what? Manufacturing? Sorry. That train left the station a long time ago.

Trump needs to understand that whichever Democratic candidate he faces, his trade war with China is going to be a major issue. Without a correction in the US share market of 10%-12%, any hope of a settlement of this trade dispute is unlikely to be forthcoming until after January 2020. If Trump is smart, he should be postponing the imposition of any new tariff for they do not work! Negotiating in Asia is entirely different from that in the USA, Europe, or even Australia/New Zealand. This semblance of stability will most likely recharge global risk sentiment and revive investor appetite for global stocks, although not necessarily emerging-markets.

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