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CGTS WEDNESDAY: FED TREMBLES, SHAKES, CUT RATES; FREE MONEY FOR EVERYONE?

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byMichael Clark

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CGTS WEDNESDAY: FED TREMBLES, SHAKES, CUT RATES; FREE MONEY FOR EVERYONE?

Jul. 31, 2019 10:46 PM ET•WKHS, SNAP, GASXComment!

Summary

FED FREE MONEY.

WKHS; SNAP Is it too late to get in?

GASX: how resistance becomes support.

This is a picture of what?

Of a market throwing a tantrum when the FED said the wrong thing? Not enough FREE MONEY for everyone?

Free money for investors. One has to like that.

And apparently Kamala Harris "won" last night's Democratic Debate -- even though she was not in last night's debate -- by promising to give away the most FREE MONEY (no such thing) to EVERYONE. When John Delaney objected, he was shouted down by Elizabeth Warren "What's the point in running for President if we can't promise things we can't deliver....?" (Friendly wave and smile.)

Joe Biden wants to “triple the amount of money we spend for Title I schools” ($32 billion) create “universal pre-K” ($26 billion), provide “free community college” ($6 billion per year) and double the number of psychologists and social workers in schools ($14 billion) — $78 billion total.

That’s a lot, but much less than what Kamala Harris would spend.

She too wants to “make community college free” ($6 billion), but she’d add debt-free “four-year public college” ($80.1 billion), “increase government’s investment in childcare” dramatically ($60 billion) and “give the average public school teacher a $13,000 raise” ($31.5 billion) for a total of $177 billion.

Pete Buttigieg rarely says what his proposals would cost, but he at least seems to want to spend less than Harris.

He touts “free college for low- and middle-income students” and would give teachers more money. Assuming his plan is like Harris’, that brings his education total to $87 billion.

Elizabeth Warren would spend much more.

“You’ll be debt-free!” she tells students. Taxpayers, unfortunately, will be deeper in debt, since she would “forgive” most existing student debt and make public college tuition-free ($125 billion).

She also wants a “Universal Child Care and Early Learning Act” ($70 billion).

These big-ticket items put her in the first place so far.

But wait! Bernie Sanders would spend even more.

He’d completely “eliminate student debt,” “make public colleges and universities tuition-free” and provide universal daycare and pre-K. That totals $280 billion, so Sanders “wins” in education spending.

I assumed the self-described socialist would be the biggest spender, but he’s got lots of competition!

Let’s look at health care spending.

Harris, Sanders and Warren all propose “Medicare for All,” including for people here illegally.

Sanders goes further, saying, “Under our plan, people go to any doctor they want.” He admits it will cost between $3 trillion and $4 trillion per year, about what the government now spends on everything. How will he pay for that? Well, somehow the rich will pay. Or Martians. Somebody.

Sanders, Harris, and Warren all said they’d ban private health insurance — although Harris now says she’d let private companies sell “Medicare plans” that “adhere to strict Medicare requirements on costs and benefits.” She also claims her “Medicare for All” will be cheaper than Sanders’ version, but as of now, there is no independently calculated cost.

When it comes to the environment, all Democratic candidates but Biden say they support the Green New Deal, which Republicans say would cost $93 trillion. For our ranking, I went with the lowest estimate we could find: An economist who likes the idea says it will cost around $500 billion a year.

Welfare? Harris would increase benefits and have the government pay your rent if it’s over 30% of your income ($94 billion), and Friday she offered $75 billion to black colleges and minority entrepreneurs.

Warren wants to spend more ($50 billion) on housing.

Sanders would increase food stamps for kids ($10.8 billion), boost Social Security benefits ($19 billion) and guarantee everyone a government job ($158 billion), for a total of $187.8 billion.

Does the American populace really believe that everything is free? The Female Principle seems to believe this. They are setting themselves up for a resounding NO again at the ballot box.

Not if some states have their way, you might say. If you can't win the vote, see if you can FIX IT.

Stocks?

Some of our LONGS at the very top of this list: LSCC, WKHS, MRCY. VIX? UGAZ? Let me check my notes.

VIX closed a shortsale.

Our LONG position in (SHORT) NAT GAS has had a bumpy start.

Support at 52.646. Why would there be support at the very place the BULLS lost a former skirmish to the BEARS? "Resistance, once broken, becomes support.'"

Here is a classic article discussing this trench-warfare view of investing. From 2015.

Bulls and bears are locked in an all-out war over the stock market

See how RESISTANCE at 30.319 in 2019 became SUPPORT later in the year.

The MOMO HIGH made in Oct 2018 later became SUPPORT around 29.877 in early December.

Here is a point in 2018 when a MOMO HIGH of 33.283 did provide support for falling (or in this case RISING) NAT GAS prices -- but see how such support ultimately (like the Maginot Line) could not hold, falling further.

I guess the FED discussion of a "One and Out" IR cut disturbed the stock market and also supported the DOLLAR. And this is bullish for NAT GAS and GOLD in what way?

COUNT1 CHANGES (WEEKLY):

BTC-USD HAS given us a BUY SIGNAL, PROP1 TR.

GBTC has NOT given us a BUY SIGNAL YET.

Best,

We are waiting for a PROP1 TR pullback for readiers to get it to WKHS. None so far.

SNAP has edged back. We think it is probably going higher from here.

Is SNAP the NEXT FACEBOOK? Some say yes; some say no.

5 Reasons Why Snapchat Is the New Facebook

MJC, CGTS

Disclosure: I am/we are long GBTC, GTC-USD, AAPL, WKHS, SNAP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclosure: I am/we are long GBTC, BTC-USD, AAPL, MU, WKHS, SNAP.