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  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    LMH: Whatever the cause, it is not emanating from the U.S. or Europe. It is an emerging market centric matter that extends beyond China and includes investors re-evaluating whether EM countries will actually contribute anywhere near to world GDP at the levels previously thought. The problems include the smashing of EM currencies, debt issues particularly in China, the impact on Asian nations flowing from further devaluations of the Yuan, etc.
    Aug 27, 2015. 09:17 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    LMH: I do not believe that the brokers release margin call data. They have been quoted as saying that margin calls did go out earlier this week, but declined to provide any details.

    http://bit.ly/1F12RLk

    The person who receives one can put up more cash/securities or reduce their debt by selling securities already owned by them.

    I blame the HFT boys for the wild opening on Monday. Margin calls may have exacerbated the decline some, but those are washed out by now except for those leveraged players who are shorting derivative contracts that are going the wrong way from them.

    The crude oil price spurt today may have been enhanced by short covering. Maybe that was due to the inventory report or reports that several OPEC members along with Russia wanted to do something about production.

    Crude Oil Prices Fall Due to Inventory Data
    http://bit.ly/1F12wIF

    Some OPEC Members and Russia Angle:
    http://reut.rs/1F12wIL

    If OPEC and Russia agreed to reign in production, and I would not put that in a more probable than not scenario, then that could catch a lot of people leaning the wrong way with magnified exposure through futures and options contracts.
    Aug 27, 2015. 09:10 PM | Likes Like |Link to Comment
  • Update For Closed End Fund Basket As Of 8/27/15 [View instapost]
    The next update will be in my Bond and Preferred Stock Basket Strategy.

    I will not be discussing in that update a buy today of ERPPRC, a busted convertible preferred stock issued by EPR.

    I believe that the shares were purchased at $21.98.

    I do not want to take the time to explain it. If anyone wants to due DD on it, it has a current coupon of 5.875% on a $25 par value which would generate a 6.44% yield according to Marketwatch at today's closing price of $22.31:

    EPR Properties 5.75% Cum. Conv. Pfd. Series C
    http://on.mktw.net/1MR...

    When doing DD on a preferred stock, the prospectus has to be consulted on the material terms. IMO, the investor has to know the company too in order to make a judgment on the credit risk issue. That requires at a minimum reviewing earnings reports and other original source material including the annual report and the various types of material information found at the company's website.

    I have bought and sold at least one other EPR preferred stocks.

    I discuss one fixed coupon, non-convertible preferred purchase here:

    Monday, March 17, 2014
    1. Bought 50 EPRPRF at $22.5-Roth IRA
    http://bit.ly/1r7FqeJ

    It is at least conceivable that the conversion price referenced in the ERPPRC prospectus would make this one more valuable at some distant point in time.

    Prospectus:
    http://1.usa.gov/1MRKDCs

    I have sold out of the common shares twice within the past year or so, selling the pops and buying the dips. I have been waiting for a decline below $50 before buying some back. I am barely interested in the EPR common and will limit myself to 30 share purchases.

    The common share price almost fell below $50 earlier this week:

    http://yhoo.it/1MRKDCu

    I try to maintain discipline about my re-entry points, particularly when the market is turbulent and the future direction is dicey, far from clear and bearing more risk as reflected in the recent volatility data. Complacency was certainly upended starting last Friday.
    Aug 27, 2015. 09:01 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    LMH: An abrupt turn both up and down for no reason suggests HFTs that control about 50% of the trading volume.

    "High-frequency trading accounted for 49 percent of Monday's total trade volume of 14.2 billion shares, according to TABB Group. Average daily trade volume month-to-date is 7.5 billion shares, with high-frequency trading accounting for 49 percent."
    http://cnb.cx/1UbIGRW

    High-Frequency Trading: 'Circuit Breaker' Remedy Aimed At Avoiding Flash Crash Debacles Caused Market Mayhem In Sell-Off
    http://bit.ly/1F0YRKK

    Since I was looking at the turn, it seem to start in the VIX market and then quickly spilled over in the S & P 500. It was like a switch was turned on to reverse the uptrend in a nano second. That is not coming from investors and funds who make decisions based on fundamental criteria about the worth of a particular company. I would bet that one or more of the HFTs plugged into the exchange computers made out like bandits engineering the reversal around noon C.S.T. and then the reversal of the downturn into the close. Can I prove it? No, and I can only say that the quickness of the turns are circumstantial evidence pointing toward market manipulation. The VIX turn was at 1:13 EST with the other turn orchestrated at 3:06 E.S.T.
    Aug 27, 2015. 08:39 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    The VIX closed today at 26.1.

    http://yhoo.it/wTYfKS?s=^VIX

    While I have to add that day to the count, based on the long standing rules, I will exercise the limited discretion that I have by requiring 8 days for a TE rather than 7. All of those days must have readings over 26 after having two over 30 already. A return to steady movement below 20 before those 8 days are registered will eliminate all of the days over 26. That would be the first time for that to happen. As I mentioned in several comments above, once there is high elevation in the VIX after a multi-year Stable Vix Pattern, there has always been a Trigger Event. Each one was obvious under the totality of circumstances in addition to the high 26+ readings in the VIX over at least 7-10 days. Those circumstances included multiple confirmations of the August 2007 Trigger Event, the longevity of the October/November 1997 TE as well as the subsequent inability of the market to find stability, and the TE event itself in April 1987 along with the multiple 20-25 readings that preceded and followed that TE (using the volatility for the S & P 100, the only one in existence at that time)

    The action today smelled to high heaven of market manipulation by the HFTs. That is one reason for requiring 8 days. The other is the DJIA volatility index closed below 26:

    DJIA VOLATILITY (^VXD)
    25.51 Down 4.10(13.85%) 4:14PM EDT
    http://yhoo.it/1s7yH47

    At around noon, the VIX had fallen to around 24.7 before the usual suspects took it back to 30. The S & P 500 by that time the VIX came close to 30 had just about given up all its gains for the day falling to 1942 vs. the previous close at 1940.51. The S & P 500 closed the day at 1987.66, near its high for today, but the VIX could only briefly recover to below 26 before being taken back up slightly over 26 at the close. It is like there was some pervert out there knowing that I had to count 26 or higher.

    I did do some limited buying of income securities today, including two that I will mention later today when I update my CEF portfolio.
    Aug 27, 2015. 04:55 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    I have come out of my foxhole and started to nibble earlier this morning. The VIX has indeed declined below 26 as I predicted in my last comment. I view that as a positive sign.

    CBOE Volatility Index
    25.37
    Change
    -4.95 -16.33%
    Aug 27, 2015 11:33 a.m
    http://on.mktw.net/1Jo...
    Aug 27, 2015. 12:49 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    I may do some minor buying today. I have been in my foxhole waiting for incoming.

    The GDP report was good: 3.7% real GDP growth vs. 3.2% consensus estimate. Nominal GDP was up 5.9%. "Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.4 percent in the second quarter, compared with an increase of 2.5 percent in the first."

    http://1.usa.gov/1JocIyQ

    Continuing claims for unemployment are consistent with an improving jobs market:

    http://1.usa.gov/1PhIBfN

    Chart: 4-Week Moving Average of Initial Claim
    http://bit.ly/1O5y462

    I suspect that the VIX will close below 26 today, and a reading below 26 is not included in the TE count. I will wait until I see some VIX data this morning and whether the positive opening looks like it will hold.

    Aug 27, 2015. 09:34 AM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    LMH: You may want to read my summary post about the Model.

    Vix Asset Allocation Model http://seekingalpha.co...

    That post is basically a regurgitation here of an earlier May 2009 Post which summarized posts from October 2008/November 2008 that some were having trouble grasping. I started writing public posts in October 2008 and the Model was among the first subjects discussed along with trust certificates.

    I am dragging and dropping here from the SA regurgitation:

    Start of quote:

    "This model is based on historical patterns and is obvious once an investor opens a long term VIX Chart and knows the stock market history between 1990 and now: VOLATILITY S&P 500 Index Chart

    There are two Main Patterns:

    1. Stable Vix Pattern: Continuous Movement in the Vix below 20, an investable bull market in stocks.

    2. Unstable Vix Pattern: A Whipsaw Pattern Movement in the VIX at levels above 20, a far more riskier market for the individual investor, most likely what most people would call a bear market, or a Transition Phase from a bull to a bear market.

    Each Main Pattern is divided into Two Phases:

    Phase 1 STABLE VIX PATTERN: Mostly moving in a range from 15 to 20

    Phase 2 STABLE VIX PATTERN: Mostly moving in a range of 10 to 15

    Phase 1 Unstable Vix Pattern: Whipsaw Movement in the VIX mostly in the 20 to 30 range with temporary movements below 20 and above 30, mostly descriptive of an ongoing bear market with periodic rallies, and also descriptive of a Transition Phase from Bull to Bear.

    Phase 2 Unstable Vix Pattern: Catastrophic Bear Market marked by a decisive break in a Phase 1 movement by a major burst into the 40s followed by even more elevated levels in the VIX."

    End of quote
    Aug 27, 2015. 09:16 AM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    LMH: The Unstable Pattern has historically lasted for several years. The pattern is broken down into two phases.

    In one phase, most of the VIX movement will be a whipsaw pattern between 20 to 30 with temporary spurts below 20 and above 30. The Stable Vix Pattern is not formed until the VIX has continuous movement below 20 for three months with minor blips over 20 allowed without restarting the count (any of those numbers do not count toward the 3 months) You can see that pattern repeat, for example, after the August 2007 TE through most of September 2008.

    The catastrophic pattern is shown by what happened starting in late September 2008:

    http://yhoo.it/1PzwtVS

    The move up into the low 30s between 9/15/2008 through 9/26/2008 was very worrisome in context but still consistent with that first phase of spurts into the low 30s, following by a movement back down into the low to mid 20s and possibly even below 20 for a short period. I call that Phase 1 of the Unstable VIX Pattern.

    In Phase 2, which may or may not happen during the Unstable VIX Pattern, the VIX breaks decisively out of that prior pattern with a jolt into the 40s and beyond. Hard to say in advance how high it will go, but that is just bad news for those who are long stocks.

    Oct 27, 2008 80.06
    Oct 24, 2008 79.13
    Oct 23, 2008 67.80
    Oct 22, 2008 69.65
    Oct 21, 2008 53.11
    Oct 20, 2008 52.97
    Oct 17, 2008 70.33
    Oct 16, 2008 67.61
    Oct 15, 2008 69.25
    Oct 14, 2008 55.13
    Oct 13, 2008 54.99
    Oct 10, 2008 69.95
    Oct 9, 2008 63.92
    Oct 8, 2008 57.53
    Oct 7, 2008 53.68
    Oct 6, 2008 52.05
    Oct 3, 2008 45.14
    Oct 2, 2008 45.26
    Oct 1, 2008 39.81
    Sep 30, 2008 39.39
    Sep 29, 2008 46.72 (look at the leap; that is important)
    Sep 26, 2008 34.74

    S & P 500

    9/12/2008 1,249.05
    10/27/2008 848.92
    Down 32%

    The trauma associated with those types of elevated readings will require at least a year to heal. In that case, which hopefully will not occur again for many, many years, the SPX would not recover back to 1249 until December 2010, but was back to 1100 on 10/2/11 after the 2011 summer correction.

    SPX was at a closing high over 1565 in October 1987 as the market recovered for a brief period after the August 2007 Trigger Event, occurring as the the VIX returned from elevated levels and printed a few numbers below 20 before resuming its whipsaw motion characteristic of the Phase 1 Unstable Vix Pattern, a tradable pattern for frequent buying and selling of indexes and hedges. That pattern has invariably left the buy and hold SPX investor worse off, usually over a several year period, made worse after making an adjustment for inflation and any taxes on dividends, etc.
    Aug 26, 2015. 10:53 PM | Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    A Credit Suisse report titled "Could China Cause a Second-Round Shock?" is worth a read:

    http://bit.ly/1NVl4iH

    One sentence added some useful information in my big picture type of analysis:

    "In fact, the past three quarters (including an estimate for the second quarter) have had the weakest nominal global GDP growth in at least the past 20 years, excluding the recessions in 2001 and 2008."

    I thought the article was a balanced account of the current problems.
    Aug 26, 2015. 08:13 PM | 1 Like Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    N: There are a number of Deflationists here at SA.

    It apparently does not matter to them that the only annual deflation number since 1955 was an understandable -.4% back in 2009.

    This table of CPI increases is important for a variety of reasons:

    http://bit.ly/1DZtZuy

    A precondition of a long term secular bull market in stocks is an expectation of low inflation.

    Problematic inflation is the primary enemy of both stocks and bonds as shown by the 1966 to 1982 period.

    In the 1950 to 1966 bull market, there were periods of really low annual inflation numbers and even a deflation number of -.3% in 1955. There were 11 CPI numbers between 1% to 2% with a majority of those between 1.5% to 2%. That was the dominant trend.

    Investors living through that era would not have had any long term inflation concerns. Intermediate term interest rates were higher than now but otherwise subdued and relatively constant within a range. That is an ideal environment for stocks even with an occasional -.3% or a +0.3%.

    The same dominant trend in low inflation numbers has been prevailing for several years now. Maybe we will have a slight negative number by year end due to the commodity price decline. I suspect that we will end up a tad.

    CPI has been abnormally low due to what are most likely temporary conditions relating to a parabolic rise in the USD and the decline in commodity prices. Those conditions generally do not last for a long time.

    The more important numbers are the underlying inflation numbers. Core CPI or the core PCE price index capture those trends as does the Median CPI number.

    "Over the last 12 months, the median CPI rose 2.3%"

    http://bit.ly/1CxqQFF

    The last annual CORE CPI was 1.8%:
    http://bit.ly/1bce5im

    We could easily see CPI go over 2% next year with a modest recovery in commodity prices, particularly crude and natural gas prices.

    The chart at that preceding link shows a very well behaved core CPI number.

    The existence of low inflation expectations is also highlighted by the break-even spreads of the 5, 10 and 20 year TIPs.

    The 10 Year TIP break-even is near 1.5%, the average annual CPI forecasted by the market over the next ten years.

    http://bit.ly/1j3ZRRL

    That kind of low inflation/low interest rate environment still needs positive forces to power the bull long term and those forces must necessarily be more dominant than the negative ones that are always lurking around. Sometimes, perma bears need to look really hard for them and then bolt to something else when the negative ones turn positive.

    The accumulation of consumer debt starting in 1985 was one of the secular forces that powered that earlier bull market (1982-2000), as the large indebted class borrowed and spent increasing sums. That was also the seed that turned into the fiascos in 2000-2008.

    The two most important charts relating to the Consumer Age of Leverage (1985-2007) are a combination of these two:

    Household Debt Service Payments as a Percent of Disposable Personal Income
    http://bit.ly/1kld3X8

    Households Credit Market Liability to Disposable Personal Income
    http://bit.ly/1NVcro4

    Look how steady that last chart was between 1963 to 1985 and then the zoom skyward. Spending borrowed money works as a juice for GDP growth until the spigot is turned off and the piper has to be paid.

    It is also important to keep in mind that there is also a large class in the U.S. that has no debt. About 1/3rd of homes are owned free and clear. So those debt numbers are really much worse given the inclusion of the large Savings Class in them. Debt for those in debt probably exceeded 200% of disposable income by 2007 with far higher debt service payment ratio than shown in that first chart.

    Households will reach debt saturation with no recourse other than defaults and bankruptcies. Governments who issue more and more debt in their own currencies can go on and on much longer before hitting the same wall. It is not a question IMO of whether the U.S. government will hit that wall going 200 miles an hour. The only question is when. My best guess at the moment is 15 to 25 years.

    Federal Debt: Total Public Debt
    http://bit.ly/1zWAonk

    Note that the number was less than 1 trillion in 1979 since the founding of the country, when Alexander Hamilton was Secretary of the Treasury. He was killed in a duel with the Vice President in 1804:

    http://bit.ly/1K4vwqz
    Aug 26, 2015. 06:48 PM | 1 Like Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    N: As I mention below, I do not require that all days be over 30. An investor can change the model however they wish.

    If I get two prints over 30, then that shortens the time span from 8-10 days to 7 or 8.

    I give myself some leeway, as I discuss below since I personally do not want to terminate the Stable Vix Pattern too soon, particularly if the VIX starts to zoom back down. All the money in SPX is made during that pattern.

    I could have a Trigger Event with 10 days in the 26 to 30 area, but I would then need a significant number of the days in the 28-30 range. So near 30 with a bunch of days, coming out of a multi-year Stable Vix Pattern of continuous movement below 20, would be sufficient for me provided my other condition is met, a break 5+% below the SPX moving average line which has been satisfied already.

    All of the prior TE's have had at least two prints over 30 and we have already had that happen. So that would be a good requirement to have.
    Aug 26, 2015. 04:56 PM | 1 Like Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    The gyrations in the markets (all markets) remind me of the good ole days back in October 2008.

    A few gut wrenching down days in stocks, where almost nothing went up, would be followed by a day or two when just about nothing went down.

    The USD can not make up its mind whether it needs to go up against the CHF and EUR or down. Forget about those "commodity" currencies like the CAD or AUD. They are in a big time rut looking like some bottomless pit.

    Until today, I thought that everything that I owned was in an inexorable path to zero.

    What strikes me, and I view it as exceedingly irrational, is that market may have found its sea legs when Dudley seemed to take a .25% rate hike off the table in September.

    http://bit.ly/1NV2vLm

    Cramer and other talking heads believe that the fate of the world's financial system depended on the FED staying at zero for the foreseeable future. That is what I call group think and is viewed as extremely bizarre and more than a lit bit nuts here at HQ.

    I did note earlier that the discount rate did not get to zero during the Great Depression and has been at zero since December 2008. Maybe I missed something, but I do not think the conditions are now similar to then.

    Today marked day 4 of the count toward a possible Trigger Event formation.

    VOLATILITY S&P 500 (^VIX)
    30.32 Down 5.70(15.82%) 4:14PM EDT
    http://yhoo.it/1NV2vLo

    There is still time for the market to simmer down. When that Model was designed many moons ago, I did not want to be too quick terminating a Stable Vix Pattern since all the money is made in the SPX during those periods. The Unstable Vix Pattern is a go nowhere pattern until it resolves itself.

    This mechanical model has always required at least 7 or 8 elevated days to end the Stable Vix Pattern with a Trigger Event, when there are two days above 30 in the VIX. I leave myself that extra day just in the case the VIX is starting to descend significantly and I want more time before I pull that plug.

    Another consideration is the time frame for the recovery period. The bulls do not give up easily. They have in the past rallied and taken the market to higher levels than prevailing before the Trigger Event before the Unstable Pattern cuts that short with another spurt up into elevated levels in a roller coaster ride that deposits the investor at the starting point usually after several years of generating motion sickness.

    In the past, the VIX has returned to below 20 in 2 or 3 more months. The duration of that move below 20 would be brief before there was another spike back over 20. The August 2007 TE was followed by a rally in late September and October before there was another spike in November, an another rally (much shorter this time), followed by another VIX spike in January 2008, and so on until the bad event came around. That was a typical whipsaw movement characteristic of an Unstable Vix Pattern. It has been tradable in the past, both as to buying and selling indexes and hedges.

    That sequence can be followed using the historical VIX and SPX prices available at YF:

    http://yhoo.it/1NV2xD8

    http://yhoo.it/1NV2vLu

    Perhaps, this time will be different. It would be relevant to see a continuous movement back below 20 starting within the next two weeks which could call into question this very unique spike that we have witnessed on 8/21-8/26 with a drift down today. We have not seen that kind of spike without a clear cut Trigger Event occurring in the past. So, I remain in a wait and see posture.

    Bespoke had some interesting data on that previous point:

    The Stock Market Hasn't Had a Selloff Like This One in Over 75 Years
    http://bloom.bg/1NV2w1K

    Crude is still in the crapper as are other commodities. China's problems have not been solved.

    Bloomberg Commodity Index:
    BCOM:IND
    http://bloom.bg/1NV2w1L

    Chart: iShares S&P GSCI Commodity-Indexed Trust (GSG)
    http://yhoo.it/1NV2xTo#{"showSma":true,"smaC...
    Aug 26, 2015. 04:40 PM | 3 Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    Just to add some perspective, the current stock market correction is not as bad yet as the one in the 2011 summer.

    Yet, even after a decline of almost 20%, the bull market reasserted itself as the dominant trend with SPX going from around 1099.23 (10/3/11) to almost 2134 earlier this year. That is one of the longest periods in stock market history without a 10% correction that generally occur with regularity:

    http://bit.ly/1A8YjV9

    The average duration of a 10%-15% correction is 115 days.

    15% or more: 216 days

    20% or more: 338 days

    The key question is whether the long term secular forces that power long term bull and bear markets have changed from one to another.

    IMO, the weight of the evidence supports the characterization of the U.S. stock market as being in a long term secular bull trend and that has not changed. Those trends do not change simply because the market declines into a cyclical bear market as it did in October 1987, followed by 3 or so years of churn or even the economy falling into a recession or two that can occur in both long term bull and bear markets. There was a recession in 1990 for example during the 1982-2000 long term secular bull market.

    This kind of analysis focuses on just the large macro forces that underlie long term bull and bear markets and consequently attempts to remove from consideration shorter term noise and data points.
    Aug 26, 2015. 10:23 AM | 2 Likes Like |Link to Comment
  • Update On Portfolio Management And Positioning As Of 8/18/15 [View instapost]
    RD: I have a few observations.

    China may or may not muddle through.

    IMO, the change in the consensus perception is that China will not be contributing to worldwide GDP growth at anywhere near the levels previously anticipated by the market. The declining consumption of commodities is probably the most important blow back for Brazil as shown in the Vale stock chart:

    http://yhoo.it/1K1Qoi2#{"showSma":true,"smaC...

    At one level, China's stock market decline is predictable as a collapse of a recently formed dangerous parabola. Those kind of price spikes are divorced from fundamentals and have a tendency to collapse upon themselves. They will create a host of problems and may negatively impact the economy through a variety of mechanisms, including the loss of consumer purchasing power and confidence. Fear and uncertainty have a way of sending humans into a foxhole.

    On another level, the EM stock charts reveal the pattern of a long term secular bear market.

    I would focus on the VWO chart for the big picture here:

    http://yhoo.it/1K1Qoi4#{"showSma":true,"smaC...

    VWO closed yesterday at $32.63. Back in 2010 I bought shares at $48.93:

    Wednesday, November 10, 2010
    1. Sold 101+ of the stock ETF DTD at 45.46 and Bought 100 of the ETF VWO at 48.93 on Monday
    http://bit.ly/1K1Qoi6

    A few weeks later, I sold that 100 share lot over $50.

    The up and down movement, sometimes at extreme levels, which goes nowhere over a long period of time, is the characteristic chart pattern of a long term bear market of uncertain duration.

    When I look at the EWZ chart, I see a dangerous parabola forming starting in 2004 with the price going from around $14 to $100.

    http://yhoo.it/1K1Qoi8#{"showSma":true,"smaC...

    I am not that familiar with Brazil. But, I doubt that there was any fundamental justification for that price spike so I will call it a dangerous parabola, similar in some respects to Japanese stocks in the late 1980s and to the U.S. in the late 1990s.

    What is shown thereafter? The chart after the collapse of the parabola is consistent with a long term secular bear market of unknown duration.

    I would make two other general observations. Brazil is not Argentina or Venezuela but leans in that direction. One seemingly perpetual problem in several L.A. nations is that the political class (and the people they pander to) destroys opportunities for economic advancement. The second is that China's economy is now too big, and the debt too large, to manufacture growth through spending borrowed money to build unnecessary projects.

    As to the U.S., the economy looks okay to me, but I interpret several market signals that suggest that the near future will be an economic downturn. The stock market advance this morning is of course the same type of move as yesterday morning. If the Dark Force causes another decline by day's end, then the buy-the-dip crowd will have fewer members tomorrow.
    Aug 26, 2015. 09:49 AM | Likes Like |Link to Comment
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