Maher's Digital World

Financial news and stock markets.

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #230 on: September 10, 2019, 05:22 PM »
Tonight, I'm going to talk about the overvaluation of the US markets with the analysis of John Early, who is an independent advisor. He's talking about a super Bubble.

According to Early, the United States probably reached the high-water mark of its economic place in the world in the early 1950s with close to half the world's GDP and perhaps 80% of the wealth. Since then, the U.S. economy has mostly grown slower than the world. In dollar terms, 2018 U.S. GDP was about 23.9% of the world's GDP. In purchasing power parity ("PPP") terms, we are about 15.2% and China is the largest economy at 19.2%. The US share of global stock market capitalization is around 43%. With a much smaller share of the world's economic pie and faster growth abroad, 43% of the stock market pie is not justified.

Since reaching about a 20-year low in U.S. stock market relative performance in June 2008, the U.S. market has outperformed the rest of the world by about 173% or about 7.5% a year. During this 11-year stock market romp, the US economy held on to its dollar share of the pie, but declined from the 17.6% PPP share in 2008.

Using Morgan Stanley Capital International data ("MSCI") for the 43 developed and emerging stock markets and a valuation measure comparable to the PEses above, the U.S. is the most richly/overvalued stock market in the world.

Using monthly data, he thinks that model valuation suggests the market has already peaked and will trend down through September 2021 and then have a brief sharp advance to July 2022, before resuming a downtrend.

And he states "If we are in a super-bubble, as I believe, and the conviction the U.S. is a safe haven changes, it's possible the U.S. (SPY) could be the worst-performing country in the next year or two. I believe America is headed for an economic and political crisis. The euphoria of elites pulling trillions of extra dollars out of businesses as personal income and bidding asset prices above historical levels will precipitate a crisis. Yet, I expect the U.S. stock market performance will be closer to the middle of the pack in the next year or two. The following countries will likely have larger declines: Thailand (THD), Austria (EWO), Italy (EWI), New Zealand (ENZL), China (MCHI), Japan (EWJ), Sweden (EWD), Taiwan (EWT), Indonesia (EIDO) and Turkey (TUR)."

And here is a link for another article where he's talking about profit collapse...
Latest data shows he could be right:

In this context, I advise you to be cautious with stocks. I also advise you to take advantage of the recent gold stocks pullback to buy some of them. I still have a target at 70$ for Agnico Eagle mines for example.
« Last Edit: September 10, 2019, 05:28 PM by scarface »

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #231 on: September 12, 2019, 08:09 AM »
Today, I'm going to give you a brief overview of the financial markets.

European Central Bank President Mario Draghi said on Thursday that the euro zone economy was in a period of “protracted” economic weakness, with inflation staying low and the balance of risks tilted towards the downside.
He cut interest rates further into negative territory. The euro skidded below $1.10.

In this context, Newmont Goldcorp, Agnico and Barrick Gold are up 3% in premarket.
The markets are up and yet I still advise you to be cautious and essentially bearish since we are entering an era without growth.
« Last Edit: September 12, 2019, 08:11 AM by scarface »

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #232 on: September 15, 2019, 01:23 PM »
Tomorrow, the opening of the stock markets is likely to be tumultuous. The events in Saudi Arabia could cause a stock market crash indeed. If all the oil production of Saudi Arabia were to cease, it would be a shock for the world economy.
And yet, some countries would not be affected much. It's the case for Palestine, which is subject to an embargo. Few people have cars in this country, and the economy is not based on complex logistics but on local farmers. Unlike Palestine, the United States or the European countries would be busted without oil.

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #233 on: September 20, 2019, 09:16 AM »
Today, I'm going to give you an alternative strategy for the financial markets.

The cac 40 is close to 5700 points. Like the s&p 500, it is near its records. Gold is at 1501$ per ounce.
While I think gold still has some upside potential, I believe the markets are becoming expensive. In the cac40 for example, the luxury sector is particularly expensive since LVMH and Hermes are very pricey. If you want to play against the cac 40, I recommend the bx4, an inverse ETF for market bears.

As far as the American markets are concerned, The ProShares UltraShort Financials ETF, created in 2007, aims to return two times the inverse daily performance of the DJ Global United States (All) / Financials Index. The fund offers a play against major U.S. banking, insurance, real estate and investment companies, such as Bank of America Corporation (BAC) and Berkshire Hathaway Inc.
« Last Edit: September 20, 2019, 09:19 AM by scarface »

Re: Financial news and stock markets.
« Reply #234 on: September 22, 2019, 06:00 AM »
Today, I'm going to talk about the future of cash.

Many countries have become cashless. It's the case in Sweden and Palestine. shadow.97 and Maher can confirm it.
It's also the case in the United Kingdom: Royal Mint Makes No New 1p, 2p or £2 Coins, As Britons Ditch Cash.

For the first time in decades the Royal Mint has struck no new 1p, 2p, or £2 coins, reflecting changes in the way Britons pay for goods and services.

2018-19 was the first year since 1972 no new 1p coins have entered circulation and the first year since 1984 there are no new 2p coins. The Royal Mint also issued no new £2 coins.

The Royal Mint releases new coins under instruction from the Treasury, which responds to demand from banks and Post Offices. In a typical year, it issues around 100 million new 1p coins.

But last year, it found there were already enough of these denominations in circulation. That’s more than 11 billion 1p coins, around 2.5 billion 2p coins, and 494 million £2 coins.

Although billions of copper coins will continue to roll around in our bags and fall between couch cushions, their future is in question. Last year Chancellor Philip Hammond announced in his spring statement that the Treasury would be reviewing cash and digital payments and the use of coins. It said it didn’t make economic sense to expensively produce coins and notes that were used infrequently.

The Treasury found that 60% of copper coins are used for just one transaction, before being stowed away, in wallets or piggy banks, or lost.

But after a media campaign and protests from charities, which rely on bucket collections, the government affirmed that it had had no plans to scrap 1p and 2p coins.

Sweden for some odd reason decided to make all old currency unusable forcing you get them replaced. They now look more like Euros.

I don't like cash when it comes to using it, I do prefer the privacy of it however.

When I was 13~15 I always had the equivalent of 2€ in my pocket so I could get a few pieces of toast if the school lunch was horrible. It wasn't that often luckily.
Other than that, I've essentially always used contactless payment on Visa/Mastercard Debit for small purchases (I.e Vending machines). Chip+pin for purchases in stores. and paypal/swish(Enter someones phone number,verify with 8pin long code and then it will send the money, very popular and exists in a few countries in europe). Only reason I had cash was when I got it from someone else as payment. And I usually just deposited that and used my card.

I'm also not a fan of credit cards, loans, and invoices. I'm very happy I havn't had to deal with Cheques though.
Currently got 2debit cards connected to 1 bank, and another debit card connected to another bank. And then a third bank for investments/stocks etc.

I'm a big fan of Swish and would recommend you getting it, once it is available for you.

We actually spoke about coins not long ago at work, we came to the conclusion that we would most likely not pick up a 20cent from the floor as it just isnt worth the effort.

Wikipedia article for swish:

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #235 on: September 22, 2019, 01:26 PM »
Sweden for some odd reason decided to make all old currency unusable forcing you get them replaced. They now look more like Euros.
Sweden is probably one of the world's first cashless societes. Maybe there will be no more money at all in a few years.

Yesterday, I took a photo in Clermont Ferrand. You can see some climate activists as well as some yellow jackets.

Who is responsible for this? Is it Donald Tramp? Is it the caliph of Islam? or the Chinese?
We are probably all responsible for that. A computer requires electricity and therefore it is polluting. Are we ready to stop everything like World trade, the internet, the exploitation of oil, coal-fired power stations?
While Demonstrating is easy,  addressing these issues would probably require structural changes in our societies. For the moment these demonstrations are peaceful, but I'm afraid these protests might be a harbinger of future conflicts.
« Last Edit: September 22, 2019, 03:49 PM by scarface »

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #236 on: September 22, 2019, 03:59 PM »
I found another interesting article. Despite its title, I find it pretty optimistic...
In this article, Dave Pollard explains "why Economic Collapse Will Precede Climate Collapse".
It's pretty optimistic in the sense that it's not climate change that will trigger an economic collapse.

It’s encouraging to see that the terms “climate crisis” and even “climate collapse”, which even five years ago were ridiculed as doomerism, are now considered perfectly reasonable descriptions of our current state. That doesn’t mean there is any consensus on how to address it, or any widespread willingness to change our lifestyle to match this new worldview. And it certainly doesn’t mean that climate collapse can be avoided or significantly mitigated. Still, it’s a start.

Lost in this new awareness, however, is that our global industrial economy is once again teetering on the edge of what will be a long drawn-out but ultimately permanent collapse. That’s a concern because if the more pervasive effects of economic collapse come first, there’s a good chance climate collapse will once again be ignored as our attention focuses on the more immediate existential crisis of economic suffering.

And it is very likely that the first dominoes of global economic collapse are, as a recent NYT article highlighted (sadly, behind a NYT paywall), about to fall. And the reasons for this are even more complex and even less understood than the reasons for climate collapse. Here are a few of them:

1 This economy is built on faith in perpetual growth: faith that rapid and accelerating economic ‘growth’ can and will somehow continue indefinitely, so that investments in the future will continue to make sense. If that faith is shattered — if people begin to doubt that investing now in stocks, bonds, loans, real estate, commodities, and businesses will not yield a positive return commensurate with the risk in the intervening period — then the market value of those goods and securities will crumble, in some cases (like with stocks) to zero. No one will pay money for common stocks, which are the riskiest and lowest-ranking (in the case of insolvency or bankruptcy) securities, unless they believe that the present value (discounted at a rate that reflects the risk of the return being lower than expected) of future cash flows (dividends and sales proceeds) from that investment exceeds the current price. That means the price is hugely vulnerable to changes in perceived future cash flows (profit increases) and to perceived risk. There have been many recessions and depressions precipitated by nothing more than just such a change in perception. And to some extent that change in perception is self-fulfilling.
2 Economic growth is dependent on ever-accelerating amounts of debt. The economy needs people to continue to consume at ever-increasing rates, which requires most of us to borrow more and more money so we have it to spend. If citizens were to (wisely) decide to repay their debts and live within their means, it would collapse the already-leveraged money supply and bring down the economy. Unfortunately for most citizens, they don’t have the luxury to hold the line on new debts, let alone repay the existing ones. The same thing would happen, incidentally, if the banks decided to become more careful (responsible) about their lending, instead of their current practice of hard-selling gullible customers on incurring additional debts they can’t afford, at usurious repayment rates, and lending money recklessly on the strength of the ‘value’ of wildly-overpriced collateral, or simply to generate more profits and commissions.

3 Governments and banks are deliberately suppressing interest rates far below current rates of inflation. They are doing this to encourage ever-more borrowing and spending, and to force investors out of bond and other ‘fixed income’ investments into stocks (and real estate), so that the illusion of perpetual increases in stock (and real estate) values (necessary to prevent economic collapse) is continued. This is now hugely difficult to do: Interest rates in most places are near or even below zero, a nightmarish situation for those on fixed incomes, and for pension fund managers prohibited from investing all their funds in stocks. This means that, to avoid the wrath of investors and plunging values, fund managers have to buy extremely-high-risk ‘junk’ and ‘near-junk’ bonds to get any return at all, and have to take higher and higher risks on stock investments. It means listed companies are buying back their own stock to make the remaining shares more valuable on a per-share basis, because they simply can’t keep generating more and more profits-per-share any other way. It means that banks have to furiously fight anti-usury laws that would block them from charging 29% interest on credit card balances while they’re paying the same customers 0.5% on their ‘savings’ accounts — without usurious interest rates on such loans to the poor, they could not generate the needed double-digit increases in profits every year to keep their shares from collapsing and to avoid insolvency and bankruptcy. This ‘tax on the poor’ is a large part of the reason net worth for the vast majority of citizens is now negative and declining, while essentially all wealth accrues to the 1% (tax cuts for the rich also contribute to this). As income and wealth disparity soars, it tears at the very social fabric our economy is supposed to be supporting.

4 Most citizens are now a few months’ income away from bankruptcy, homelessness, and even hunger. Secure full-time jobs with benefits have disappeared by the millions (they’re too ‘expensive’ for profit-obsessed corporations to offer), leaving most citizens no choice but to work multiple low-paying, insecure jobs, perpetually caught in the two-income trap. While life expectancy has flat-lined, healthy life-years for the poor have fallen due largely to poor diets (they are too busy working to have time to cook healthy food), chronic anxiety and stress, and decreasing access to essential health care (whose costs continue to skyrocket year after year), leading to more and more people who are unable to participate in the labour force and hence dependent on other family members, or rendered homeless. And the population is aging rapidly, facing accelerating health-care costs and sick days, and mostly unable to even think of retiring before they die.

5 Our economy is totally dependent on inexpensive, affordable fossil-fuel energy, water, minerals, construction materials and other resources. The claims that economic growth stems from innovation, efficiency, ‘consolidation’, globalization, and ‘economies of scale’ are complete bunk. All of the growth in our industrial economy over the past century has been due to one factor: the use of cheap energy and resources. Many studies have confirmed there is an almost perfect correlation between energy production (and consumption) per capita and GDP per capita, whether measured over time or between countries. Over that century, cheap fossil-fuel energy constitutes an amazingly-consistent 80+% of that energy, and there is abundant evidence that the only thing that will change that is if (when) available fossil-fuel resources become too expensive for consumers to afford (eg if there is an economic collapse). There is likewise an almost perfect correlation between total energy production (and consumption), total GDP, total stock market value, total world population, total world imports & exports, total resource consumption, and total CO2e emissions. They have all risen, and will all fall, in lock-step.

When economic crises are local, or when there are ways to re-jump-start the economy by correcting the underlying causes that led to the recession or depression, there are levers that can be used to intervene and restore the economy to health. But we used up the last of our available levers in 2008, and we are once again at the tipping point, and this time we are looking at a permanent and global economic collapse. We are finally going to have to face that our perpetual-growth, high-resource use, environmentally-ruinous, debt-faith-dependent economy was never sustainable, and was destined to collapse sooner or later. We will soon (probably in fits and starts over the next three decades or so) be forced to return to a radically relocalized, low-tech economy of sufficiency. It will not be a graceful transition.

In short, while climate collapse will render centralized, high-tech, high-energy use civilization unsustainable, and make much (and possibly all) of the planet uninhabitable, economic collapse will likely make our lives radically different, and will do so well before climate collapse weighs in with full force.

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #237 on: September 24, 2019, 11:55 AM »
Tonight, I'm going to give you a brief overview of the stock markets.

In the US, it seems there is a market downturn. The s&p 500 is now down 1%.
Dow Turned Lower After Trump Criticized China's Trade Policies: stocks reversed direction and headed down after Trump criticized China's trade policies in a speech before the United Nations.

 Trump delivered his third address to the United Nations General Assembly in New York Tuesday, during which he criticized China, threatening to tighten sanctions on Iran, and said every nation has the "absolute right" to protect its borders.
"Not only has China declined to adopt promised reforms," Trump said, "it has embraced an economic model, dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale."
The harsh comments followed Mnuchin's earlier announcement that he and U.S. Trade Representative Robert Lighthizer would meet with Chinese Vice Premier Liu He for trade negotiations.
"It's actually, I think, it's not next week, but the following week we'll be having those talks," Mnuchin said in an interview with Fox Business Network. The Treasury secretary said some progress was made in deputy-level talks last week.

Note that the meeting between Trump and Greta Thunberg turned out to be bumpy:
Thunberg, the Swedish climate activist, fixed Trump with a steady stare as he arrived at the UN to attend a meeting on religious freedom.
Despite expectations that President Donald Trump would snub a day-long United Nations summit on climate change, he made a surprise visit Monday morning and stayed for less than 15 minutes.
While the president’s unexpected appearance might have been lauded by climate activists, many were not satisfied with his brief participation.
Finally, President Donald Trump mocked 16-year-old climate activist Greta Thunberg on Twitter late Monday.
Posting a fatalistic statement the Swedish teen had made earlier Monday at the United Nations’ special meeting on climate change, Trump tweeted: “She seems like a very happy young girl looking forward to a bright and wonderful future. So nice to see!“

if Maher and humbert are looking at this picture, they must be thinking it's certainly the movie poster for the latest opus of the horror movie "the Exorcist". Actually, it's Greta Thunberg at the UN meeting.

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #238 on: September 24, 2019, 04:24 PM »
Tonight, Wall Street slid as push for Trump impeachment gains ground.

U.S. stocks fell in volatile trade on Tuesday, giving the S&P 500 its biggest daily drop in a month, as a push by some Democrats for the impeachment of U.S. President Donald Trump gained momentum.

Bloomberg reports that PredictIt, a prediction market for political and financial events, is now giving President Trump a 42 percent chance of being impeached by the end of the year in light of allegations that he pressured Ukrainian President Volodymyr Zelensky to investigate former Vice President Joe Biden's son in exchange for military aid.

The Dow Jones Industrial Average fell 141.68 points, or 0.53%, to 26,808.31, the S&P 500 lost 25.15 points, or 0.84%, to 2,966.63 and the Nasdaq Composite dropped 118.84 points, or 1.46%, to 7,993.63.

Note that my message about alternative strategies was very timely indeed.
I bought some short ETF on the s&p 500 a few days ago. I think the US markets are going to keep sliding since there are too many uncertainties. We could see a s&p 500 at 2900 points or below pretty soon if there is noise.

In this context, gold is still going up.
« Last Edit: September 24, 2019, 04:26 PM by scarface »

Offline scarface

  • *****
  • 2009
Re: Financial news and stock markets.
« Reply #239 on: September 25, 2019, 05:50 AM »
A quick insight into the markets...
The cac 40 is currently crumbling, losing 1.5%. It seems the bears are back.