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David Stockman Sounds The Alarm – Fiscal Bloodbath and Market Crash to Occur “Between August and November”

May 22, 2017

David Stockman Sounds The Alarm – Fiscal Bloodbath and Market Crash to Occur “Between August and November”

As time goes on, it’s becoming abundantly clear that Trump isn’t going to be able to prevent a major financial crisis in this country. Depending on your beliefs, that’s either because he’s inept in some way, or because he’s being hamstrung by a political system that’s determined to keep our nation on the same unsustainable path. Whatever the case may be, it seems that there is no way that we can change course at this point. We’re headed for a financial crisis, and it’s going to happen sooner rather than later.

That’s also the opinion of David Stockman, a former Congressman and director of the Office of Management and Budget under Ronald Reagan. In this interview with USA Watchdog, he reveals why the market rally that broke out after the last election, “was the greatest sucker’s rally we have ever seen.” He also explains why the economy could go off the rails this year, after our government endures a major budgetary crisis.

Earlier this month our government avoided a shutdown, because Trump decided to sign Congress’s $1.2 trillion spending bill. In effect, he postponed a serious fight with Congress for later this year.

On May 2nd he tweeted “Our country needs a good ‘shutdown’ in September to fix mess!” So clearly, next time he’s going to be a lot less compromising in his efforts to change the budget. That’s going to spawn a fight over the budget between Trump and both political parities, and according to Stockman, that’s when the next wave of our financial collapse is going to arrive.

…click on the above link to read the rest of the article…

“Look Ma, No Hands!”

May 17, 2017

The Deep State is escalating its war on President Trump but the Wall Street partiers apparently couldn’t care less. When the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of “look ma, no hands!”

It’s hard to imagine what more will be needed to ignite an eruption of fear and panic in the casino amidst Wall Street’s record and wholly irrational state of somnolence.

After all, the Fed is sidelined and out of dry powder. The Red Ponzi is tottering. The U.S. retail sector is descending into an apocalypse. The giant auto bubble is fracturing. The Trump Stimulus is dead in the water, and Washington is heading for an extended stretch of complete dysfunction and acrimonious combat.

And if that isn’t that enough to upset the applecart — there are a lot more headwinds coming down the pike.

But the point is the insane governance process in Washington, which is completely unhinged, is combined with a level of insane complacency on Wall Street. Which is literally off the charts.

It would be one thing if our current fantastically inflated financial markets were reflective of a gusher of private sector growth, investment and productivity. That is, something like a new gilded age of invention and raw capitalist energy like occurred in the 1880s or 1920s.

The opposite is more likely the case, however. We have a mutant outbreak of financialization, debt, falsified financial prices and biblical levels of speculation and money shuffling — artificial economic conditions which are absolutely dependent upon agencies of the state.

Without treasury bailouts and endless central bank credit infusions, today’s massive financial bubbles would have splattered long ago.

…click on the above link to read the rest of the article…

Hurricane Bearing Down on the Casino

May 12, 2017

Hurricane Bearing Down on the Casino

[Urgent Note: The nation’s future and a massive retail apocalypse hang in the balance as Trump pushes beyond his first 100 days. That’s why I’m on a mission to send my new book TRUMPED! A Nation on the Brink of Ruin… and How to Bring It Back to every American who responds, absolutely free. Click here for more details.]

Yesterday I said the Donald was absolutely right in canning the insufferable James Comey, but that he has also has stepped on a terminal political land-mine. And he did.

That’s because the entire Russian meddling and collusion narrative is a ridiculous, evidence-free attempt to re-litigate the last election. And now that the powers that be have all the justification they need. And what is already an irrational witch-hunt will be quickly turned into a scorched-earth assault on a sitting president.

I have no idea how this will play out, but as a youthful witness to history back in 1973-1974 I observed Tricky Dick’s demise in daily slow motion. But the most memorable part of the saga was how incredibly invincible Nixon seemed in early 1973.

Nixon started his second term, in fact, with a massive electoral landslide, strong public opinion polls and a completely functioning government and cabinet.

Even more importantly, he was still basking in the afterglow of his smashing 1972 foreign policy successes in negotiating detente and the anti-ballistic missile (ABM) treaty with Brezhnev and then the historic opening to China on his Beijing trip.

So I’ll take the unders from anyone who gives the Donald even the 19 months that Nixon survived.

…click on the above link to read the rest of the article…

The Anything President And The Everything Bubble

April 20, 2017

The Anything President And The Everything Bubble

[Ed. Note: To see exactly what this former Reagan insider has to say about Trump and the fiscal threats from politics and the debt ceiling, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back to any American willing to listen – before it is too late. To learn how to get your free copy CLICK HERE.]

The lemmings were running hard towards the cliffs yesterday. Despite a renewed burst of bombs and drones careening into the already rubble-strewn wastelands of Afghanistan, Yemen, Syria and Iraq.

Or the outbreak of cold war style nuclear brinksmanship on the Korean peninsula — what one commentator properly called a Cuban missile crisis in slow motion.

Likewise, forget that the vacationing Congress is set to return on April 25 to an endless sequence of shoutdowns, showdowns and shutdowns on continuing resolutions and debt ceiling increases.

That is, it will be struggling to keep the fiscal lights on in the Imperial City, not enacting the Donald’s DBA (dead before arrival) fantasy about making the American economy great again.

Indeed, while the Donald has been out huffing and puffing in his new role as global Spanker-in-Chief, the domestic front has turned from bad to worse. His economic policy machinery has now been seized entirely by the Vampire Squid’s latest chieftains in the White House — Gary Cohn, Steve Mnuchin and Jared Kushner.

I am quite confident that none of these three has ever voted Republican in their life or have even the foggiest idea of how to craft a fiscal plan and tax program that could coalesce the warring GOP factions from the hardline Freedom Caucus to the moderate Tuesday Group.

…click on the above link to read the rest of the article…

Stockman: We’re Borrowing Our Way to Economic Disaster

April 18, 2017

Stockman: We’re Borrowing Our Way to Economic Disaster

David Stockman joined the Fox Business and the show Mornings with Maria to discuss the tax reform highlights for the current White House and GOP platform and what he views as a real threat of economic disaster in the U.S. During the discussion Stockman highlights what to expect from a border adjustment tax possibility, the creation of jobs and the impact on Wall Street in the age of Donald Trump.

Stockman takes to point the cause of tax reform in the current White House. He begins the segment noting, “I think the border adjustment tax will come out of the retailers margin – and it should. We do need revenue. We need to have a consumption tax, or a value added tax or a border adjustment tax – so that we may reduce taxation on wages and income. We desperately need more jobs in this country. If you keep taxing the payroll at 15.5%, which we’re doing today, you’re not going to encourage the creation of jobs. You’re going to take what jobs there are and impact the take-home pay of those jobs.”

David Stockman was then asked about his read on Donald Trump’s border tax proposals and the possibility of what the President described as a ‘reciprocal tax.’ “He has no idea what he’s talking about. He’s making it up as he goes along. Donald Trump is a tourist in the Imperial City of Washington D.C. He’s flipping, flopping and making it up as he goes.”

“The border adjustment tax, or a value added tax is the way to get at the problem he’s talking about. Every other country in the world has a value added tax. You take it off the exports and put it on the imports.

…click on the above link to read the rest of the article…

Reagan Adviser: Why Trump Won’t Cut Taxes

April 2, 2017

Reagan Adviser: Why Trump Won’t Cut Taxes

The mules of Wall Street were back at it again, buying the dips after the overnight whoosh downward in the futures market. Apparently, it will take an actual two-by-four between the eyes to break a habit that has been working for 96 months now since the March 2009 post-crisis bottom.

We think it is plain as day, however, that we are in a new ball game that the “stimulus-blinded” mules don’t see coming at all. To wit, they have been juiced for eight years running by the Keynesian apparatchiks at the Fed who needed permission from exactly no one to run the printing presses full tilt or to rescue the market with a new round of QE or an extension of ZIRP whenever the indices began to wobble.

But now, even the money printers have made it clear in no uncertain terms that they are done for this cycle, anyway, and that they will be belatedly but consistently raising interest rates for what ought to be a truly scary reason.

That is, the denizens of the Eccles Building have finally realized that they have not outlawed the business cycle after all and need to raise rates toward 2-3% so that they have headroom to “cut” the next time the economy slides into the ditch.

In effect, the Fed is saying to Wall Street: “Price in” a recession because we are!

After all, our monetary central planners are not reluctantly allowing interest rates to lift off the zero bound because they have become converts to the cause of honest price discovery—-nor are they fixing to liberate money rates, debt yields, and the prices of stocks and other financial assets to clear on the free market.

…click on the above link to read the rest of the article…

Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up

March 2, 2017

Strange That The Same Point In Time For The Economic Crisis Keeps Coming Up

This video was produced by X22 Report

Netherlands is making a move to leave the EU. Theresa May is worried that a Scottish Referendum vote will happen at the same time as the Article 50 vote. Former IMF chief sentenced to jail in Spain. The EU says no bail-ins at this time because it would hurt the creditors. Maine drops 9,000 from Food Stamp roll says people need to look for jobs. Pending home sales tumble. Durable goods decline. David Stockman says it will begin on March 15 and the economy will really go down hill in the summer and the fall will be a disaster.

Stockman to Trump: It’s the Economy, Stupid

February 9, 2017

Stockman to Trump: It’s the Economy, Stupid

In a recent appearance on CNN, David Stockman suggested that Trump might best spend some time actually addressing economic issues instead of the administration’s travel ban for immigrants from Middle Eastern countries, which Stockman called “a giant misfire.”

Pointing out that Americans are far, far more likely to be struck by lightning than killed by a terrorist, Stockman asserted that it was really Trump’s opposition to Obamacare and other government regulation that got him elected. Employing the 1992 Clinton Campaign motto of “it’s the economy, stupid,” Stockman noted “Trump was elected because flyover America is hurting economically. The voters of Racine, Wisconsin and Johnstown, Pennsylvania are imperiled not because of some refugees, they’re imperiled because their jobs have all been disappearing for decades. The problem is far more the Federal Reserve, Janet Yellen, the bubbles they’re creating on Wall Street…”

Stockman went on suggest that the Trump Administration is showing decreased interest in “draining the swamp” employing a phrase Trump used when he claimed he would greatly cut federal power in Washington. Instead of doing that, Stockman contends, Trump is merely filling the swamp with ” “other creatures that will build up homeland security, border control, more money for defense, more money for spying and national security.”

Stockman might also have pointed out that the travel ban itself illustrates how the ban has nothing to do with national security given that Saudi Arabia and Egypt are not on the list of blocked countries, even though Saudi Arabia and Egypt were the two countries most closely linked ot 9/11. Moreover, the perpetrators of the 2015 San Bernardino shootings had been radicalized in Saudi Arabia and traveled there before the killings. Indeed, Trump’s list seems to be more accurately described as a list of Saudi enemies, including Saudi Arabia’s most bitter enemies Iran and Syria. Also on the list is Yemen, which is currently subject to a vicious war and starvation campaign launched by Saudi Arabia’s dictators.

…click on the above link to read the rest of the article…

Impoverished by Too Much Money

October 23, 2016

Impoverished by Too Much Money

Shipping Decline

BALTIMORE – “It’s over!” Raúl Ilargi Meijer, a regular contributor to David Stockman’s Contra Corner newsletter, explains that the “entire model our societies have been based on for at least as long as we ourselves have lived is over!”

Global corporate defaults are at the highest level since the peak of the financial crisis – click to enlarge.

Meijer again:

“That’s why there’s Trump. There is no growth. There hasn’t been any real growth for years. All there is left are empty, hollow, sunshiny S&P 500 stock market numbers propped up with ultra-cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all, there’s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.

These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But they could always ever only pull the curtain of [The Wizard of] Oz over people’s eyes for so long, and it’s no longer so long. That’s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It’s over. What has driven us for all our lives has lost both its direction and its energy.”

None of this will come as a surprise for Diary regulars. We know nothing makes people poorer faster than too much “money.”

The feds provided the economy with an almost unlimited quantity of credit-based funny money. The money was phony. But it bought real resources. And then, with no need to think carefully about how the capital was put to use, the resources were wasted.

Corporate defaults are running at their fastest pace since 2009. Nine out of 10 households have lost income. And tax receipts for the last quarter fell from the same quarter in 2015.

…click on the above link to read the rest of the article…

Chart Of The Day: This Is What Happens When There Is Even A Hint That The ECB Will Stop Buying Bonds

October 8, 2016

Chart Of The Day: This Is What Happens When There Is Even A Hint That The ECB Will Stop Buying Bonds

Portugal’s bond yields continue to rise as the rating agency DBRS prepares to deliver its rating verdict. It’s the last rating agency that still has Portugal’s debt at an investment-grade level. If the downgrade takes place, Portugal’s debt will no longer qualify for the ECB’s securities purchase program (QE).

Stanley Fischer’s Novel Idea: “We’d Be Better Off With A Price For Using Money”

October 1, 2016

Stanley Fischer’s Novel Idea: “We’d Be Better Off With A Price For Using Money”

The end game of central bank lunacy is surely near. Even the Fed heads appear to be mumbling bits and pieces of truth in public.

Former Philly Fed President Charles Plosser, for example, told Bloomberg TV this morning that central bankers “wring their hands all the time,” are very “concerned about credibility,” and are “pretty good at conjuring up reasons not to act.”

Having screwed up his mutinous courage, he then let loose with words that haven’t been heard from a central banker in decades, if ever:

The Fed “shouldn’t be afraid a recession might come,” he exclaimed, “there’s a real problem here”.

Then again, Plosser recently retired and perhaps it wasn’t all that voluntary. By contrast, Stanley Fischer is in line to takeover the joint, and perhaps soon.

That’s because Janet Yellen is surely finished whether the Donald wins or loses. Her dithering and double-talk have become a laughingstock even in the Wall Street casino.

So you might have thought the good professor from MIT—-by way of the IMF and Bank Of Israel—– would be carefully parsing his words. Instead, he was apparently moved during a speech to economics students to confess that he is more or less flummoxed by his own policies:

WASHINGTON—Federal Reserve Vice Chairman Stanley Fischer on Tuesday expressed frustration with ultralow interest rates, saying they should rise over time.

“It bothers me, it really bothers me,” he said when asked about low rates at an event for economics students at Howard University in Washington…….I don’t like it, but I don’t want to raise the interest rate too much. I think we should at some point. I don’t know when,” he said. “The interest rate I believe is not at zero at a normal level and it should be [normal] at some point, not immediately.”

…click on the above link to read the rest of the article…

Chart Of The Day: The LBO Up North——-Canada’s Household Debt Ratio Goes Parabolic

September 23, 2016

Chart Of The Day: The LBO Up North——-Canada’s Household Debt Ratio Goes Parabolic

canada-household-debt-to-income-ratio-2016-q2

Stock & Bond Bubbles Much Worse Than 1929-David Stockman

September 17, 2016

Stock & Bond Bubbles Much Worse Than 1929-David Stockman

Economic expert and best-selling author David Stockman offers a dire view of the deep financial trouble America faces in his new book titled “Trumped!” Stockman warns, “I think we are on the very edge, but what is different this time and makes it scarier . . . is I believe the central banks that ruled the roost have gone from one extreme to the next and done unfathomable things like negative interest rates on $13 trillion of bonds around the world, monetization of the debt, and bond purchases that are staggering such as $90 billion a month in Europe. . . . So, this time, as the phrase goes, they went all in. They have violated every principle of sound money and sustainable finance that mankind has ever learned about over many centuries. They have taken us to the edge, but they are out of dry powder. I think it’s pretty obvious that they can’t go any deeper with subzero interest rates, or negative interest rates. . . . If they tried this in the United States, I think there would be a huge political uprising. . . . They are out of dry powder and out of tools, and therefore, the financial markets of the world are more vulnerable, maybe even more so than in 1929. You are talking about a bond bubble like never before imagined or conceived, and the stock market is the same way as well as derivatives.”

All this financial malfeasance and engineering was fantastic for the one percent, but everybody else got the shaft. For example, Stockman points out in “Trumped!” the last 30 years “The top 1%’s wealth has grown by 300%, and the top “Forbes 400” wealthiest people in the world had their wealth grow by a staggering 1,000%.” Meanwhile, the “bottom 90% of Americans have seen their wealth steadily deteriorate.”

…click on the above link to read the rest of the article…

It Won’t Be Long Now—-The End Game Of Central Banking Is Nigh

September 10, 2016

It Won’t Be Long Now—-The End Game Of Central Banking Is Nigh

My new book will be published next Tuesday. Preorders for the e-Book version will be available in this space beginning later this week.

As I previously indicated, the book is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.

In this context, it delves into the good and bad of the Trump campaign and platform, while, to use a spoiler alert, praising it with faint damn!

As Contra Corner readers recognize the only consistent way forward for America at this late stage of the game is a return to free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.

Unfortunately, that is not about to happen any time soon—–even if by some miracle Donald Trump is elected President.

But what the book does claim is that the tide is turning against the failed Wall Street/Washington bipartisan consensus. I call this insurrection the “revolt of the rubes” in Flyover America.

This uprising against the rule of the financial and political elites has counterparts abroad among those who voted for Brexit in the UK, against Merkel in the recent German elections in her home state, and among the growing tide of anti-Brussels sentiment reflected in polls throughout the EC.

Needless to say, the political upheaval now underway is largely an inchoate reaction to the policy failures and arrogant pretensions of the establishment rulers. Like Donald Trump himself, it does not reflect a coherent programmatic alternative.

But my contention is that liberation from our current ruinous policy regime has to start somewhere—and that’s why the Trump candidacy is so important. He represents a raw insurgency of attack, derision, impertinence and repudiation.

…click on the above link to read the rest of the article…

The Myth Of ‘Morning In America’—–How The Public Debt Went From $1 Trillion to $35 Trillion in Four Decades, Part 1

September 2, 2016

The Myth Of ‘Morning In America’—–How The Public Debt Went From $1 Trillion to $35 Trillion in Four Decades, Part 1

I have finished my book on the upheaval represented by the Trump candidacy and movement. It will be published soon, and is an exploration of how 30 years of Bubble Finance policies at the Fed, feckless interventions abroad and mushrooming Big government and debt at home have brought America to its current ruinous condition.

It also delves into the good and bad of the Trump campaign and platform and outlines a more consistent way forward based on free markets, fiscal rectitude, sound money, constitutional liberty, non-intervention abroad, minimalist government at home and decentralized political rule.

In order to complete the manuscript on a timely basis, I will not be doing daily posts for the next week or two. Instead, I will post excerpts from the book that crystalize its key themes and which also relate to the on-going gong show in the presidential campaigns and in the financial and economic arenas. Another of these is included below.

I am also working with my partners at Agora Financial on a new version of Contra Corner. More information on that will be coming soon.

Trumped Final

………One of the great virtues of the Trump candidacy is The Donald’s propensity to lob wild pitches—knowingly or not—at the sacred cows of Imperial Washington, thereby exposing the tissue of hypocrisy and can’t, which surrounds them.

But within the herd of revered ruminants none is slathered in more hypocrisy than the federal budget and official Washington’s unctuous professions of devotion to safeguarding the “full faith and credit of the United States.”

…click on the above link to read the rest of the article…

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