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Why Oil Prices Can’t Bounce Very High; Expect Deflation Instead

Economists have given us a model of how prices and quantities of goods are supposed to interact. Figure 1. From Wikipedia: The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product. Unfortunately, this model is woefully inadequate. It sort of works, until it doesn’t. If there is too little a product, higher prices […]

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The Dow Closes At A Record High For The 9th Straight Time But Experts Warn That A Stock Market Crash Could Be Imminent

The bigger they come, the harder they fall.  On Monday, the Dow Jones Industrial Average closed at a record high for the ninth straight session.  It has been a remarkable run, but many experts are pointing out that big trouble is brewing under the surface.  As you will see below, 79 components of the S&P 500 have already dropped more than 20 percent below their 52-week highs, and it is mostly just a handful of high flying tech stocks that are still propping up the market at this point.  Over the past several weeks, I have been documenting so many […]

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Handout Nation: Combined Enrollment In America’s 4 Largest Safety Net Programs Hits A Record High Of 236 Million

Margaret Thatcher once said that the problem with socialism “is that eventually you run out of other people’s money”.  As you will see below, the combined enrollment in America’s four largest safety net programs has reached a staggering 236 million.  Of course that doesn’t mean that 236 million people are getting benefits from the government each month because there is overlap between the various programs.  For example, many Americans that are on Medicaid are also on food stamps, and many Americans that are on Medicare are also on Social Security.  But even accounting for that, most experts estimate that the […]

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One Approach to High Healthcare Costs

In 2015, I thought my healthcare renewal statement was wrong. The premium for my shrinking family of three (two adults and one child) was increasing by more than 30%, to $ 1,454 per month. My earnings place me out of the subsidy bracket, so these are real dollars out of our budget. There were plenty of insurance companies to choose from. Shrinking availability was not a problem. It was just breathtakingly expensive. Or so I thought. In 2016, my premium jumped to $ 1,733 per month. The galling part is that I had no control. I’d kept tabs for years. […]

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Do Buyers Of Options Benefit From High Volatility?

Search “options and volatility” in Google and you’ll get a dozen websites that say the same thing: option buyers want high volatility and option sellers want low volatility. Oddly enough, this old and relied upon rule of thumb isn’t completely correct. In reality, as an option trade plays out, trend has a far more powerful effect than volatility on final P&L. There are four scenarios that can occur before an option expires: Low Vol, Low Trend Low Vol, High Trend High Vol, Low Trend High Vol, High Trend The charts below illustrate the P&L of a long put in each […]

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A New Dow High?

While the global bond markets have begun to correct their 35 year bull market, the major U.S. stock indices, including the Dow, NASDAQ, Russell and S&P, have rallied nicely. Official U. S. national debt is approximately $ 20 trillion as of December 2016, and has approximately doubled every 8 years at a 9% compounded rate for over a century.        Year         Official Debt 2016          $ 20 trillion 2024          $ 40 trillion 2032          $ 80 trillion 2040        $ 160 trillion […]

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Generation Snowflake: Percentage Of Young Adults Living With Their Parents Hasn’t Been This High Since 1940

Have we failed this generation of young adults by not equipping them to be able to handle the harsh realities of the real world?  According to the Wall Street Journal, the percentage of Americans in the 18 to 34-year-old age bracket that are currently living with their parents hasn’t been this high in 75 years.  At this point nearly 40 percent of our young adults in that age range are living at home, and many are concerned that this could have some alarming implications for the future of our nation. In the United States today, more than 60 million people […]

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Fed Recommits to Propping Up Markets; Michael Pento Discusses Low Yields and High Inflation

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason. Coming up we’ll hear from Michael Pento of Pento Portfolio Strategies and author of the book The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael explains who’s behind the latest stock market rally, the truth about the economy’s health despite what the labor and payroll reports are telling us, and how he views gold as a must-have asset in the current and future environment. Don’t miss an exclusive interview with Michael Pento – coming up after this week’s market udpate. Precious metals markets […]

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Gold and Silver Race Toward 2-Year Highs – How High?

Guest post from  James Cordelaine Silver’s Going Crazy Too Everyone knew gold would skyrocket in the aftermath of Brexit. As much as sophisticated investors and TV talking heads love to either ignore or pooh-pooh the precious metal when things are looking bright on the paper side, the minute the news goes sideways their rush to gold makes Black Friday at Walmart look like a Zen and peaceful still-life. Two reserve currencies, the British pound and the euro, are suddenly looking like twin deer in the headlights of an economic Mack truck. The pound will be down for the count for the […]

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Think the Market Will Reach a New High? Here’s Why We Don’t

Stocks are once again rallying after another “mini crash” at the start of the year. We’ve had three of these things since October 2014 without much to show for it. As Adam warned Boom & Bust readers earlier this week, stocks have basically gone nowhere for a year and a half. After the first crash in late 2014, stocks were able to eke out a new high into May of last year. But since then, stocks have failed to make new highs despite strong attempts like this one. Ten months without a new high. That’s only happened at 11 other […]

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