by Daniel Drew
David Stockman’s Contra Corner
Numbers and false advertising have a long history: 4.9% unemployment, 2.5% GDP growth, 72 virgins. Now we can add the Wilshire 5000 to the list.
What started with good intentions ended with embarrassment as American economic dynamism collapsed in a cascade of falling profit margins, financial engineering, labor devaluation, and lopsided “free trade” agreements. In 1974, Wilshire Associates created the Wilshire 5000, an index of 5,000 stocks that represented nearly the entire stock market. As new companies went public, the index expanded over the years, reaching a peak of 7,562 on July 31, 1998. Since then, the number of companies has been cut in half to 3,607 as of March 31, 2016. Wilshire notes, “The last time the Wilshire 5000 actually contained 5,000 or more companies was December 29, 2005.”
For those that already have, Mark Carney is the gift that keeps on giving. Borrowed imprudently and struggling to make those interest payments ? Worry not; the Bank of England has your back. For those that don’t have, the Bank of England is taking away your chance of ever realistically saving anything, now that interest rates have been driven down to new historic lows of 0.25%, and may go lower yet. For the asset-rich, for the 1%, for property speculators, and for zombie companies and banks, Carney is your man. For the asset poor, or for savers, or pensioners, or insurance companies, or pension funds, the Bank of England has morphed from being anti-inflationary fireman to monetary arsonist.
Dear Reader,
The price of gold was down about fifteen Federal Reserve Notes this week. The price of silver was down sixty-two copper-plated zinc pennies. Is the Federal Reserve Note a suitable instrument with which to measure gold? Can one really use debased pennies—which aren’t even made of the base metal copper any more—to measure the value of gold? We don’t know. We just work here. Quick, buy some silver, we hear it’s going to $100!
Dear Friend of GATA and Gold:
Analysis
Good Day… And a Marvelous Monday to you! I survived infusion confusion, and even got to celebrate a little Saturday night with friends at our neighboring City Park, listening to Steve Ewing of the Urge, entertaining us! David Bowe greets me this morning with his song: Waiting For The Man… My beloved Cardinals are fading and it looks like the playoffs are not going to be a part of their autumn… UGH! And the Rams left us, so no pro football for us this fall, I guess it’s all up to my Missouri Tigers to have a great football season…
Although many are confused by these markets, there is a simple explanation for every strange thing going on right now: The United States is rapidly devolving into a Third World country.
The greatest bullfighter of all time, Manolete, was gored to death by a Miura bull, an event that left Spain in a state of shock in 1947. Many contemporary hedge fund managers can probably relate.
The Next President’s Debt Burden
Getting out of the hot Florida summers has become a priority. What better way than to take to the upper Midwest. I visited 5 states I hadn’t been to before in my quest to visit all 57 states. Caught up with Captain Capitalism and got an update on A–hole Consulting. Business is booming. Visited Mall of America, what an awful amazing place. Then off to Mount Rushmore. It looks much bigger on TV. After visiting those states, MI, SD, ND, WY and MT, it was off to the Sprott Resource Conference in Vancouver BC. I flew into Seattle and was promptly harassed while crossing the border, par for the course. The conference was an upbeat affair with many of our sponsor companies in attendance. A record number of individuals attended as well. Great to see the sector come back. One place that’s not coming back is NYC. Commissioner Bratton just stepped down and Washington Square Park has turned into an open air drug emporium and homeless shelter. Thank you comrade deBlasio!
People who buy and sell goods are traders. You buy goods at one price and you sell them at another–hopefully higher price and the difference between the two is your margin or profit. Mike will help you uncover the products with the highest profit that are Amazon hot sellers. It doesn’t matter how many people are selling it on Amazon, what matters is how much you can get it for. Mike is a master at sourcing goods at the lowest possible prices. Of course there’s Alibaba.com, but that’s barely scratching the surface. Mike’s been to China and has Product Sourcing Agents there and all over the world. It’s amazing the profit margin on the most mundane items. Cellphone cases are a great example. You see them selling for $29.95, but you purchase them for a fraction of the price, if you know where to get them. There’s a world of highly discounted items if you know where to look. Finding hot selling Amazon items is another area that Mike has mastered. Mike is now selling wine aerators. He can get extremely high quality examples for just $2.80 each (with gift case/bag and filter) and he’ll sell it for around $39.99 each. Cost of goods sold is just 7%! This is how the early trading companies in China did it and how you’ll do it too.
David Fischer returns for another installment…
The strong payrolls number on Friday of this past week sent silver reeling lower as the metal, which has been trading as a safe haven of late and not a risk trade ( it is constantly morphing back and forth between the two), took its cues from gold and of course, the surging US Dollar.
Maybe the “smart money” knows the real numbers are now so far from the central planners’ rigged statistics that the carefully constructed narrative of “recovery” is doomed to an unwelcome intrusion of reality.
Just as there’s a scheme to pay old investors with new investors money (aka a Ponzi.) There’s another part of the scheme that rarely gets talked about: i.e.,The narrative that fuels the scheme to begin with.
The markets have opened quietly Sunday evening, continuing their recent, respective trends with mincing steps. The dollar is up, bullion has inched lower, T-Bonds are down and crude is in a dirge. The big news event of the week will be retail sales data due out Friday, and mortgage applications on Wednesday morning. With nothing coming from the Fed, however, we’ll get to see how stocks, bonds and commodities act ‘on their own’. My guess is that it will be a pretty dull week. The Dow, which settled Friday at 18543, will have a shot at 19061, but that would be the very best I could see, and I doubt whether the blue chip average will be able to sustain that altitude for long if it gets there.