Insiders are selling stock like it’s 2007 

Source: CNN Business

“The leaders of Corporate America are cashing in their chips as doubts grow about the sustainability of the longest bull market in American history. Corporate insiders have sold an average of $600 million of stock per day in August, according to TrimTabs Investment Research, which tracks stock market liquidity. August is on track to be the fifth month of the year in which insider selling tops $10 billion. The only other times that has happened was 2006 and 2007, the period before the last bear market in stocks, TrimTabs said. Investors often view insider buying and selling – transactions performed by top executives, leading shareholders and directors – as a signal of confidence…The acceleration of insiders heading for the exits could indicate concern about the challenges ahead, especially as the US-China trade war threatens to set off a recession. ‘It signals a lack of confidence,’ said Winston Chua, an analyst at TrimTabs. ‘When insiders sell, it’s a sign they believe valuations are high and it’s a good time to be outside the market.’ Recession fears have ignited a burst of market volatility over the past year, punctuated by the worst December since the Great Depression.”

 

Central Banks Are Losing Ability to Reverse Downturns 

Source: Dalio/Bloomberg

“Ray Dalio thinks the ability of central banks to reverse an economic downturn is coming to an end as the global economy enters what he says are the late stages of the long-term debt cycle. ‘Interest rates get so low that lowering them enough to stimulate growth doesn’t work well,’ the billionaire founder of investment management firm Bridgewater Associates wrote in an essay published on LinkedIn on Wednesday. Money printing and buying financial assets won’t work either, Dalio said, as it doesn’t produce adequate credit in the real economy and creates the need for large budget deficits and then their monetization….U.S. President Donald Trump on Wednesday renewed criticism of the Federal Reserve, saying in a tweet that it had ‘no clue.’ Earlier this month, he said the bank needed to cut rates by at least 100 basis points.”

 

July Pending Home Sales Plunge Back Into Contraction 

Source: Zero Hedge

“Pending home sales tumbled 2.5% MoM in July (notably below the expectation of 0.0%) and stumbled back into contraction year-over-year. Pending Home Sales retreated back into contraction YoY (by 0.3%)…’Super-low mortgage rates have not yet consistently pulled buyers back into the market,’ Lawrence Yun, NAR’s chief economist, said in a statement. ‘Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.’ Pending home sales are often considered a leading indicator of existing-home purchases and a measure of the health of the residential real estate market in coming months.”

 

Gold prices up; silver still running on rocket fuel 

Source: Kitco

“Gold prices are modestly higher in early U.S. trading Thursday, but silver continues to power ahead with sharp gains to hit another more-than-two-year high overnight. Safe-haven demand and technical buying continue to be featured in both metals….A slightly weaker than expected U.S. gross domestic product report also landed in the camp of the precious metals market bulls. The second estimate of second-quarter GDP was up 2.0%, year-on-year, versus up 2.1% in the initial reading. However, the 2.0% print was right in line with market expectations….Risk appetite suddenly up-ticked overnight when news reports hit the wires that Chinese government officials have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump’s assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations. Still, there are enough concerns on the geopolitical front to keep the safe-haven metals supported. Civil unrest in Hong Kong, the Brexit matter that will heat up this fall, and slowing global economic growth are all still front-burner issues for traders and investors….Technically, the gold bulls have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $1,600.00.”

 

UBS Says It’s Staying Long Gold as Price Now Destined for $1,600 

Source: Yahoo Finance

“Gold will extend its winning ways as the U.S.-China standoff harms growth, risking a deeper slowdown and inviting more central-bank easing, according to UBS Group AG, which jacked up price forecasts with a prediction the precious metal may hit $1,600 within three months. ‘The trade war between the U.S. and China has escalated to a new level,’ Giovanni Staunovo and Wayne Gordon, analysts at the wealth-management unit, said in a report received on Monday. ‘Gold has demonstrated its safe-haven qualities and we stay long the metal, a trade we initiated in mid-May.’ UBS has a six-month forecast of $1,600 and 12-month view of $1,650. Previously, both the half-year and 12-month outlooks were set at $1,500. Futures pared gains in an abrupt move on Monday after earlier rallying as much as 1.8% to $1,565 an ounce, the highest since 2013.”

 

Democrats rooting for recession 

Source: Moore/Washington Times

“Last week I gave a talk to high-wealth investors in San Francisco – not exactly an audience of left-wing activists – and people kept asking me the question of the day: ‘Will there be a recession?’ My reply: I would never say never, but I don’t see a recession in 2020…Many people frowned. One woman shouted at me: ‘I want a recession so we can get rid of Trump.’ I said to her as nicely as possible that even if you don’t like the president, you don’t want to root against America. Do you really want millions of people to lose their jobs? Do you really want people to earn less money? That doesn’t sound very patriotic or compassionate. The woman crossed her arms and scoffed. Now I get it that San Fran is the epicenter of Anti-Trump Derangement Syndrome and so maybe I shouldn’t have been surprised. But now we see Democratic leaders and the ‘unbiased’ media openly rooting for a recession. The drumbeat for an economic contraction has been nonstop for the last two weeks. All of this negativity has made Democrats appear to be so bloodthirsty for power that they want American workers to suffer so they can reclaim the crown.”

 

Monetary Policy Won’t Solve the Next Financial Crisis 

Source: Bonner/Bonner And Partners

“We offer another bold prediction. Before 2030, U.S. deficits will hit $2 trillion per year and total federal debt will go over $40 trillion. Here’s why. Sometime in the months ahead, a stock market crash and a recession are inevitable. This will not be met with grace and courage, but will cause an unseemly panic on both ends of the Washington-Wall Street corridor. Faced with the third debt crisis of the century, the feds will follow the script of the previous two. But in 2001 and in 2008, the Fed had at least 500 basis points (5%) it could trim from its key lending rate. This next time, it will be lucky to have 100 basis points. Remember, when you are in a funny-money debt trap, you only have two choices: you add more funny money… or the fake boom dies….The Fed will print the money. Congress will spend it. Deficits will double. And debt will expand to more than $40 trillion….U.S. stocks are up 26 times since 1980… and now, corporations spend 100% of their free cash flow buying their own shares. All of this cheap, fake money has practically obliterated the two things capitalism most needs: real savings (aka capital)… and honest prices. And so, the hounds of Hell run wild – greed, corruption, lies, and claptrap. And if there is any real capital or integrity left, surely it is in hiding.”

 

Cities Are Saying ‘No’ to 5G, Citing Health, Aesthetics – and FCC Bullying 

Source: Wall Street Journal

“Billed as the key to the future – of telecommunications, of global competition, of innovation and even of municipal infrastructure – 5G has instead become a bone of contention. In addition to upgrading existing towers, it will require an estimated half-million new towers and small-cell sites on utility poles, lampposts and buildings. Experts also anticipate a long rollout period, potentially of a decade or more. Most cities want 5G, but they don’t want to be told how, when and at what cost. Rules the FCC has already passed, meant to expedite 5G’s rollout, might well be creating acrimony that serves to do the exact opposite. ‘My personal reason for doing this is I believe that humanity is threatened,’ says Sandi Maurer, a member of the activist group EMF Safety Network, which lobbies to reduce people’s exposure to electromagnetic fields. Partly as a result of such activism, many towns in Marin County, Calif., have passed ordinances or resolutions that limit 5G cell sites in residential areas. But since then, the FCC has rolled out its 5G Fast plan requiring cities and states to approve new 5G antennas within 60 or 90 days. It also limits what government leaders can charge carriers for the real estate on which the new infrastructure will hang – be it a utility pole, streetlight or even building facade….City leaders say their power to zone and regulate infrastructure is being abridged. More than 90 cities and counties have joined together in a lawsuit, currently before the Ninth Circuit Court of Appeals, arguing that the FCC has overstepped its authority. A decision could happen as early as in the spring, but it could also take much longer….The health argument is hard to take to court because the FCC has sole discretion over whether the emissions of an electronic device are safe, a right unquestioned by any current court cases or pending federal legislation.”

 

Young Americans embrace socialism, even among Miami Cubans 

Source: ABC News

“Andy Vila’s mother remembers her son as a bright, rebellious child who enjoyed Harry Potter books and dressing up as the U.S. president. But when he began to embrace the same ideology his family had fled in socialist Cuba, she pleaded in vain for him to stop his political activism. At 21, Vila is part of a wave of young Americans openly supporting socialism, even among Miami’s staunchly anti-left Cubans. Although the definition of the ideology varies widely, it is making particular inroads among millennials and Generation Z voters, who are expected to make up 37% of the 2020 U.S. electorate, according to the Pew Research Center. While more than half of Americans rejected socialism in a recent Gallup poll, 43% surveyed said some version of it would be good for the country. That sentiment was held by 58% of respondents ages 18 to 34, compared with just 36% of those 55 and older….Americans who came of age during the last recession often embrace a larger government role in social policy. They cite stagnant wages, student loan debt and a decrease in employer-sponsored health insurance and pensions, according to University of California-Irvine political sociologist Edwin Amenta. Younger Americans are less threatened by socialism than older generations, who might associate it with Soviet or Chinese rule, he said. ‘Today’s socialism for younger people means the Canadian health system and the Swedish welfare state,’ Amenta said.”

 

old breaches $1,550 mark for first time in over 6 years on trade jitters 

Source: Reuters

“Gold prices jumped more than 1% to surpass the $1,550 per ounce mark for the first time in more than six years on Monday as investors flocked to safe haven assets driven by the heightened U.S.-China trade dispute….’This is all about the trade tensions and the related risk of global slowdown or even a global recession that is driving investors to safe-havens,’ said Julius Baer analyst Carsten Menke. ‘There is doubt in markets about these trade talks, so benefit of doubt or the leap of faith is not provided by financial markets anymore when it comes to the trade topic, which will be supportive for gold.’ Washington announced last week an additional duty on $550 billion in targeted Chinese goods, hours after China had unveiled retaliatory tariffs on $75 billion worth of U.S. products. However, U.S. President Donald Trump on Monday said China had contacted Washington overnight to say it wanted to return to the negotiating table….Meanwhile, Federal Reserve Chairman Jerome Powell on Friday said the U.S. central bank will “act as appropriate” to keep the economy healthy, although he stopped short of committing to rapid-fire rate cuts. The markets are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of next year.”

 

Americans Have Shifted Dramatically on What Values Matter Most 

Source: Wall Street Journal

“The values that Americans say define the national character are changing, as younger generations rate patriotism, religion and having children as less important to them than did young people two decades ago, a new Wall Street Journal/NBC News survey finds. The poll is the latest sign of difficulties the 2020 presidential candidates will likely face in crafting a unifying message for a country divided over personal principles and views of an increasingly diverse society. Some 61% in the new survey cited patriotism as very important to them, down 9 percentage points from 1998, while 50% cited religion, down 12 points. Some 43% placed a high value on having children, down 16 points from 1998. Views varied sharply by age. Among people 55 and older, for example, nearly 80% said patriotism was very important, compared with 42% of those ages 18-38 – the millennial generation and older members of Gen-Z. Two-thirds of the older group cited religion as very important, compared with fewer than one-third of the younger group. ‘There’s an emerging America where issues like children, religion and patriotism are far less important. And in America, it’s the emerging generation that calls the shots about where the country is headed,’ said Republican pollster Bill McInturff, who conducted the survey with Democratic pollster Jeff Horwitt….Generational differences on personal values were most pronounced among Democrats. In fact, the views of Democrats over age 50 were more in line with those of younger Republicans than with younger members of their own party.”

 

Fake News Can Lead to False Memories 

Source: Psychological Science

“Voters may form false memories after seeing fabricated news stories, especially if those stories align with their political beliefs, according to research in Psychological Science. The research was conducted in the week preceding the 2018 referendum on legalizing abortion in Ireland, but the researchers suggest that fake news is likely to have similar effects in other political contexts, including the US presidential race in 2020. ‘In highly emotional, partisan political contests, such as the 2020 US Presidential election, voters may ‘remember’ entirely fabricated news stories,’ says lead author Gillian Murphy of University College Cork. ‘In particular, they are likely to ‘remember’ scandals that reflect poorly on the opposing candidate.’ The study is novel because it examines misinformation and false memories in relation to a real-world referendum, Murphy explains. She and her colleagues, including APS Past President Elizabeth Loftus of the University of California, Irvine, recruited 3,140 eligible voters online and asked them whether and how they planned to vote in the referendum. Next, the experimenters presented each participant with six news reports, two of which were made-up stories that depicted campaigners on either side of the issue engaging in illegal or inflammatory behavior. After reading each story, participants were asked if they had heard about the event depicted in the story previously; if so, they reported whether they had specific memories about it….Nearly half of the respondents reported a memory for at least one of the made-up events; many of them recalled rich details about a fabricated news story. ‘People will act on their fake memories, and it is often hard to convince them that fake news is fake,’ Loftus says. ‘With the growing ability to make news incredibly convincing, how are we going to help people avoid being misled?'”

 

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