Economy Collapse! Retail Apocalypse! Market Crash!

This so called great economy is not result of the market but credit. Then you add personal debt, car debt, college debt, entitlement obligations, etc... and tax revenue coming in at $3.4T. The federal government was budgeting $2.4T around 2006 and now its $4.4T. This doesn't include local and state debt for the existing 23million public employees and 22 million of them retired who taxpayers are paying basically cadle to grave.

#source GIPHY

Another example is retail sector. I think in reality the retail sector is in worse shape today than it was in 2008 during the financial crisis. A soaring budget and trade deficits, rising interest rates, higher inflation, a falling U.S. Dollar a trade war and a slowing economy all causing lower earnings. It’s all related to Fed policy. Let's see how much longer Powell along with others can pretend all is well.

Another reason people are shopping on the Internet is that the average American shopper is broke. They can barely afford to buy the stuff that they’re buying. In fact, most people are buying stuff that they can’t afford. They’re just buying anyway and they’re using a credit card…Retailing is a shrinking market because Americans’ pocketbooks are shrinking, their paychecks are shrinking.

#source unknown

“This is not a war we can win. A decline in imports will force us to rely on our own production to meet all of our consumption. But we no longer make…”said Peter Schiff

With Trump’s recent announcement of broad tariffs on imported steel and aluminum, he launched what could be the first salvo of an all-out global trade war. Seemingly itching for a fight, he gleefully tweeted that “Trade wars are good, and easy to win.” I believe He is wrong! While this “benefit” has also placed a cost on domestic industries, I don’t believe that Trump has any idea how a trade war can reduce current American living standards.

In his mind tariffs are just a means to take back what we have foolishly given away. As Trump explained via Twitter “ When we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big.” But does a country with a trade deficit really subsidize the country with the surplus? Or is it the other way around? It’s helpful to remember that a tariff is essentially a tax that will be paid by domestic consumers.

It’s not like American producers will keep prices where they are and simply manufacture more steel to make up for the lost imports. Instead, prices will likely rise to almost the same level as the taxed imported products. Profits at American steel companies will increase, but production probably won’t.

#source unknown

When it comes to today’s stock market Im definitely the worrying investor type, look at the shrinking spread between the yields on junk bonds and comparable Treasurys. Stock market is nothing compared to bond market. Bond Morley decides what direction everything goes especially stock market. This spread is currently 3.5% or so. Which means that junk bond investors on average be paid a yield of just 3.5 percentage points more than if they had instead invested in Treasurys of the same.

That’s not much compensation for the considerably higher risk investment.The junk bonds are called “junk” because they are much more riskier just as stocks are.The average high-yield spread over the last 20 years has been 5.7 percentage points. And it often spells economic trouble when the spread drops to levels where it stands today. The record low for the spread came in the summer of 2007, when it dropped to 2.4 percentage points before the famous crash.

And remember:

“Crypto will follow stock market, whether you like it or not”