Tag: stock market

Ep. 530 – January 2021 Jobs Report
The Kapital News
The Kapital News
Ep. 530 - January 2021 Jobs Report
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The official unemployment rate in January fell to 6.3 percent after seeing an increase of 49,000 jobs. Unfortunately, however, the main driver for the decrease to the unemployment rate is people leaving the labor force. This is likely the result of the following options: fewer jobs are available and thus people become discouraged, or the government checks are having behavioral effects and people are growing complacent with these funds. The Kapital News believes it is more so a function of job availability and the long-term unemployed. There is chronic and structural unemployment and underemployment throughout the economy. We continue to witness weekly jobless claims north of 700k, which is higher than during the depths of the GFC. Those figures for the GFC were for a few short weeks, around 650k. The 700k and above has been occurring for almost a year now. What is worse, is that politicians, and policymakers continue to call for more spending. If everything was getting better, then there would be no reason for additional fiscal and monetary measures.

Looking deeper into the report, permanent job losers remains around 3.5 million, which has not been seen since 2013, following the effects of the GFC. The labor force participation rate also remains stubbornly low at 61.4 percent. This is a level not seen since 1976 and went as low as 60.2 percent in April of 2020. The latter being a level last witnessed in 1973. Further, with respect to the employment-population ratio, at 57.5 percent, another level that was last seen in 1983 following a back-to-back recession. This figure hit a low of 51.3 percent in April of 2020. These figures addressed herein, in conjunction with the high weekly initial jobless claims data, continue to point to a weak jobs market. Printing presses may be able to print currency, but they cannot print jobs. Throwing trillions of dollars into the system will give the appearance of an economic rebound, but it is a mirage. It is short-lived. And it will ultimately make things much worse as we move ahead. Updates for the December and November jobs reports were revised lower by a combined (-159,000). Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Markets #Inflation #Gold #Silver #Spending #EndTheFed #USA #Liberty #Revolution #bananarepublic #FireCongress #Recession #Depression #Bailouts

Ep. 529 – Jobs Slide, Market Highs
The Kapital News
The Kapital News
Ep. 529 - Jobs Slide, Market Highs
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While the initial jobless claims figure came in better than expected, 779,000 remains stubbornly high. This is still well north of the 650,000 figure seen during the depths of the GFC. Since the restrictions and lockdowns, we have not seen a weekly jobless claims figure below 700,000 – almost a full year ago. This has been truly destructive and devastating. For the week ending 16 January, 17.8 million Americans continue to claim some form of unemployment insurance.

Despite these dizzying jobless numbers, the stock market’s major indexes all hit new closing highs. This has become par for the course with a deteriorating jobs markets and yet equity markets continue to rally. Just last week, amidst the trading frenzy in a handful of stocks, we also witnessed the worst week for Wall Street since last October. Yet fast forward only one week, and we are at new all-time highs. The equity markets remain well disconnected from the underlying economy. This is a central banker’s world for the time being and liquidity rules the roost. There will come a day of reckoning due to market forces that are greater than all central banks and governments, and when this occurs, it will be truly devastating and historical.

Speaking of liquidity, the Federal Reserve’s balance sheet remains near all-time highs around $7.4 trillion. The Kapital News believes this figure will near or exceed $10 trillion by the end of this year. M1 money stock hit a new all-time high and now stands at $6.9 trillion, representing a week-over-week increase of nearly $150 billion. Perhaps this is the accelerant for the markets moving higher? M2 saw a slight reduction week-over-week, but remains well within all-time highs that were hit last week.

Lastly, government regulators joined forces today to discuss last week’s market mayhem in GameStop Corp, AMC Entertainment, and others to determine its cause and if necessary take action. What these actions will be is for anyone to guess, but it should be understood that the authorities are more likely than not going to implement some sort of action. Treasury Secretary, Janet Yellen, needed to receive a waiver from the Treasury Department’s ethics office, due to the fact that Secretary Yellen received $700,000 from hedge fund Citadel LLC, for a speaking engagement, following her departure from the Federal Reserve. Citadel is front and center with last week’s episode as they are one of the largest customers of online brokerage and trading app, Robinhood. This is the fox running the henhouse and then once the hens go missing, the fox and his buddies conduct the investigation. Our markets are broken and have been for quite awhile and the policy measures underway now and the regulations about to come down the pike, are not the solutions. In fact, they are a major part of the problem. The January jobs report will be released tomorrow morning. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Markets #Debt #Inflation #Gold #Silver #USA #Liberty #Revolution #bananarepublic #EndTheFed #Recession #Depression #Bailouts #Protests #FireCongress

Ep. 528 – Inflation Nation
The Kapital News
The Kapital News
Ep. 528 - Inflation Nation
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With central banks and governments around the world putting the pedal to the metal with currency creation, spending, and borrowing, they are sure to ignite the effects of inflation. The increase in money supply is inflation by definition. The subsequent increase in financial asset prices and consumer prices are the effects of inflation – monetary and fiscal policies. We know as a matter of policy, that such inflation is to make its way into financial asset prices, which we have been witnessing with equity prices at record valuation levels, and housing prices at all-time highs. The hope with such a policy is that with higher prices, profits can be taken and thus spent into the real economy to generate growth. This is a false narrative and only has marginal benefits at best that are short-term and come at a cost. So on a net-net basis, this translates into a drag on current and future economic growth. True growth does not simply come from spending, but rather production and investment. If economic growth could come from a printing press, then the likes of Venezuela, Argentina, Lebanon, Iran, Zimbabwe, Turkey, and others would be the envy of the world. But they are not, because money printing is not a solution. In fact, such actions are a major part of the problem and will only make matters worse.

An increase in consumer prices and commodity prices is also underway. If this trend continues, then a vicious cycle will occur. As commodity prices rise, these prices will be passed on to consumers, and in this environment, we will have stagflation – inflation with a stagnant economy. Another interesting occurrence that may well happen will be with respect to the bond market and yields. If yields continue to rise, this will put upward pressure on borrowing costs for other loans such as mortgages, as well as the national debt. The Federal Reserve is attempting to keep rates low to “stimulate” the economy. But if yields are rising, then the Fed will have to print (inflate) even more currency to go into the bond market to buy US debt across the yield curve in order to suppress the rising yields. In effect, this translates into the Fed fighting inflation with more inflation. See the problem? Because the rising yields reflect the ensuing inflation as opposed to any real economic growth. We continue to see one metric after the next slow down or roll over, and several hundred thousand Americans are filing initial jobless claims on a weekly basis as we approach the one year anniversary of restrictions and lockdowns. So where is the economic growth? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Markets #USA #bananarepublic #EndTheFed #Liberty #Debt #Gold #Silver #Recession #Depression #Stagflation

Ep. 527 – A Central Banker’s World
The Kapital News
The Kapital News
Ep. 527 - A Central Banker's World
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It is a central banker’s world and we are the lucky ones to be living in it (sarcasm). If you find yourself reading an article on a particular central banker or central bank then you will know all too well how these figures and institutions are praised as opposed to scrutinized. You will also notice a trend of these figures gaining more power in politics. Janet Yellen for one, was the former Chair of the Federal Reserve, and is now the Treasury Secretary. And with the collapsing government coalition in Italy, the Italian President is tapping the shoulder of Mario Draghi, the former President of the European Central Bank for assistance. If Mr. Draghi’s efforts are successful in pulling together a coalition, then he may very well find himself as the next Prime Minister of Italy.

Last week we highlighted the meetings at the World Economic Forum and talks of “The Great Reset.” We also highlighted the global economic projections by the IMF. Is it just coincidental that the same people who are invited to the WEF and serve as members on panel discussions and as keynote speakers, are also people in positions of power to move these types of agendas forward? The recent market volatility has of course caught the attention of politicians and regulators alike and we can be all but certain that more laws and regulations will be placed on the markets and the people. Recent market activity and movements on social media platforms were not organic. Rather, these were sinister ploys to achieving an end – and we are going to find out soon what that is. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Markets #Liberty #EndTheFed #Revolution #Debt #Inflation #bananarepublic #Gold #Silver #USA #Protests

Ep. 525 – Weekly Wrap Up
The Kapital News
The Kapital News
Ep. 525 - Weekly Wrap Up
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Another wild week in politics and the markets as the “GameStop” et al frenzy continues onward. Yesterday, the Department of Labor informed us that another 847,000 Americans filed for initial jobless claims during the prior week. There was also an upward revision to last week’s figures, which now stands at 914,000. All in for all programs gives us nearly 18.3 million Americans claiming benefits. Roughly speaking, this translates into an unemployment rate of nearly 13 percent, which is much higher than the official stats. A slight decrease was witnessed with respect to the Federal Reserve’s balance sheet and M1 money stock, both of which hit record highs last week. However, M2 money stock continued its ascent and hit a new all-time high at $19.56 trillion. The Fed concluded their first FOMC meeting of the year and remain on guard to do what it takes to lend support to the economy. The Fed continues to make calls for further fiscal policy measures from the Congress and is an advocate for everyone getting vaccinated against Covid-19. Despite the dovish stance from the Fed, the markets suffered their worst week since October. This may very well be a typical market correction in the making, which is usually defined as a drop in prices from recent highs of 10 percent. Or, perhaps this is the start of a bigger sell-off. Time will tell, but on a valuations front, the stock market is at or near all-time highs across several metrics. Earlier discussion this week focused on “The Great Reset” and the IMF’s world economic outlook, so be sure to check out those podcasts as well. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Markets #Fraud #Jobs #Liberty #Revolution #Justice #Inflation #Gold #Silver #USA #Debt #EndTheFed #bananarepublic #FireCongress

Ep. 524 – GameStop = Game Over?
The Kapital News
The Kapital News
Ep. 524 - GameStop = Game Over?
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With the continued market frenzy and pandemonium occurring again today in the likes of GameStop, Bed, Bath, and Beyond, AMC Entertainment, and BlackBerry, it is time to step back and gain a better understanding as to what is really going on. The media and social media narrative is that a bunch of “little guys” on message boards are banding together to take down the “big guys” (a couple hedge funds). While the narrative plays very well and there is no doubt that there are separate rules between the smalls and the bigs, this does not mean that two wrongs make a right. The Kapital News discusses on a near daily basis the amount of market rigging and manipulation that takes place and talk about all of the fines and deferred prosecution agreements that are given to the major banks whom engaged in such fraud. Of course if anyone else engaged in such behavior, they would be locked up and they would throw away the key. So, this makes the narrative compelling and allows people to justify the current actions that are underway with respect to these stocks. An eye for an eye is not the solution. In fact, this is likely going to cause more short and long-term damage to the markets and society at large.

What is failing to be understood by many on these message boards, is that going after a hedge fund, does not mean that they are only going to do financial damage to the managers alone. What they fail to grasp, is the fact that these funds on many occasions are managing money for the little guy through pension funds, university endowments, hospital chains, non-profits, and charities et cetera. There is going to be collateral damage and the group mostly likely to the suffer the greatest losses is ironically going to be the little guys.

The Kapital News is gravely concerned with these actions on both sides of the trade as well as with the brokerage houses that halted trading on these stocks today with respect to the buy side. This seems more likely that this is a pump and dump scheme, which is illegal, as opposed to some sort of organic uprising of new day-traders against hedge funds. Unfortunately, most of these little guys, do not understand financial statements and fundamental analysis. So how is one to believe that all of a sudden they go after a company that is heavily shorted by a couple of hedge funds, and prove somewhat successful in hurting the hedge funds’ position – at least momentarily? Furthermore, what does not pass the smell test is the fact that we have some strange bedfellows in Congress right now with the likes of AOC, Ted Cruz, Elizabeth Warren, and Maxine Waters joining forces to investigate what is going on in this matter.

So let us understand something, for years there has been open and blatant market manipulation, tweets from the former President, massive amounts of money printing from the Federal Reserve and spending from the Congress juicing asset prices, deferred prosecution agreements being handed out like candy to the largest financial firms on the planet, and now all of a sudden these politicians are concerned with market manipulation? This does not pass the smell test. Something is afoot. The Kapital News suspects that there will be a concerted effort in Congress to clamp down further on the markets. This will likely pertain to financial institutions as well as to the individual investor. So be careful what you wish for, because this is not just a story about David v Goliath. Oh no, there is much more underway and it is not going to be for the best. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Fraud #Markets #Debt #Liberty #EndTheFed #USA #Revolution #Justice #Inflation #Gold #Silver #bananarepublic #FireCongress

Ep. 523 – The Fed Is Trapped!
The Kapital News
The Kapital News
Ep. 523 - The Fed Is Trapped!
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The Federal Reserve concluded their first FOMC meeting of the year and they kept the Fed Funds Rate unchanged at 0-25 basis points. This was in line with market expectations. However, the markets were more centrally focused on forward guidance coming from the Fed. During his afternoon press conference, Fed Chairman, Jay Powell, gave another horrendous performance. It is typical for him to dodge some of the tougher questions, but today he even did a run around with respect to the softball inquiries.

Furthermore, as far as The Kapital News is concerned, Mr. Powell admitted today that the Fed is trapped and out of ammunition. He was citing how asset prices have been rising recently due to the optimism surrounding the vaccine rollout and future rounds of fiscal spending. This is ridiculous. While these news headlines on these topics may help contribute to the rise in asset prices, the main culprit is the printing press and global liquidity. It was only recently in previous conferences that Mr. Powell readily admitted that asset prices were rising due to monetary policies. In fact, when quantitative easing, QE, was first unleashed onto the scene, it was open knowledge that its purpose was to juice asset prices in order to generate a wealth effect.

Therefore, one can conclude that the reason for the change in tune, is for the purpose of damage control. If stocks no longer keep climbing, then it must be because the vaccine does not work and/or the Congress cannot get its act together. Setting up a convenient excuse that it is not the Fed’s fault, but something else. While it is true that the printing press can print US dollars, it cannot print jobs, solvency, and sustainable business plans. If printing money was the cure, then the likes of Venezuela, Argentina, Zimbabwe, Turkey, and Iran would be the kings of the hill. But they are not. And the reason, is because printing money does not create wealth as it is not true production. This is a morphine high, and once it wears off, the pain is going to be excruciating. A prime example of this as of late pertains to the meteoric rise in the share price of GameStop and AMC Theaters. This type of behavior does not happen in a well functioning market. These are not the first two stocks that this has happened to and they are likely not the last either. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Liberty #USA #Inflation #Markets #Gold #Silver #Recession #Depression #Revolution #bananarepublic #EndTheFed #FireCongress

Ep. 522 – IMF World Economic Outlook
The Kapital News
The Kapital News
Ep. 522 - IMF World Economic Outlook
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The International Monetary Fund (IMF), released their world economic outlook (WEO), report and are predicting global GDP growth for 2021 at 5.5 percent. This is slightly higher than their previous forecast. Most of the increase is due to the optimism surrounding the release and adoption of the Covid-19 vaccines. While the report does highlight other concerns and uncertainties, the IMF is apparently giving more weight to the potential positive outcomes.

The IMF has been and remains a strong vocal advocate for a collective and coordinated global effort to adopt “stimulus” spending. Of course, from a basic mathematical approach, GDP is calculated by adding government spending, investment, consumption, and net exports. If government spending increases exponentially, which has been the case in many countries, then GDP will either rise or at least not decline as severely as it otherwise would have minus the spending measures. What this does not take into consideration, however, is that debt does not equal growth. In fact, in many countries, the added debt loads will become a net-net drag to real economic growth. The US for example is currently running a $28 trillion national debt. At current rates, this number will balloon to over $49 trillion just four years from now! Meanwhile, GDP is only expected to increase by some $3 trillion. This is a debt-to-growth ratio of 7-to-1! This is completely irrational and unsustainable, yet this is what is happening. Furthermore, most of this additional spending is taking the form of transfer payments as opposed to prudent long-term investments. This is just asking for a major inflationary event to occur – and The Kapital News would argue that it is already well underway.

Later this week, we will be discussing the Federal Reserve’s FOMC meeting and their decisions; initial jobless claims, updates to the Fed’s balance sheet, M1 and M2 money stock; and a continuation of our conversations with respect to “The Great Reset,” the IMF’s outlook, and perhaps, China’s President Xi mentioning a new cold war. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #IMF #Debt #Bailouts #Liberty #Revolution #bananarepublic #USA #EndTheFed #Jobs #Inflation #FireCongress

Ep. 521 – The Great Reset
The Kapital News
The Kapital News
Ep. 521 - The Great Reset
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Something tells us that we will be seeing “The Great Reset,” more and more over the coming months as 2021 is now underway. It is something that has been discussed since last year during the pandemic and is becoming more mainstream by the day. The theme of this year’s World Economic Forum summit, in Davos, Switzerland, is The Great Reset and it reads like another utopia. While it is big on bullet points and general ideas, it is short on details. However, the devil is in the details and The Kapital News is concerned that the same people who led us into this economic, political, and social quagmire, are not the ones fit to get us out of it and to rebuild from it. Even within the article(s) we cover during today’s discussion, there are contradictions as to what the “right” policies should look like. These contradictions and hypocrisies will become the common theme amongst these “ideas” and the people advocating on their behalf. So in short, it is nothing new.

Another key phrase that is likely to gain some traction is “stakeholder capitalism.” While this too may sound good on paper, it is really nothing more than an attempt to centrally plan and control governments, economies, societies, and the environment. The author and authors of The Great Reset fail to understand, as so many do, that if what they say and write is really what they want, then they should know there is already a system that can achieve such growth, innovation, opportunity, and collaboration, and it is called free-market capitalism! Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Liberty #Markets #USA #Revolution #Inflation #Recession #Depression #Gold #Silver #Jobs #EndTheFed #bananarepublic #FireCongress

Ep. 520 – Weekly Wrap Up
The Kapital News
The Kapital News
Ep. 520 - Weekly Wrap Up
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An outgoing Trump administration, an incoming Biden administration, executive orders, another 900k Americans file jobless claims, all-time highs hit in the markets, the Fed’s balance sheet, and in M1 and M2 money stock. We also learned that the impeachment process will be continuing, however, there will be a slight delay as it will not begin until the week of 8 February. Just because there is a new administration in office, does not mean that all of the political division has gone away or that it will go away. Most likely, it will be quite the contrary. There will be more spending, more money printing, and more politics to be played. The end result is a declining nation that is going the way of a banana republic. The solution is freedom and the restoration of our constitution and free-market capitalism. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Liberty #Jobs #Markets #FireCongress #bananarepublic #EndTheFed #Inflation #Gold #Silver #Debt #Bailouts #Protests #USA #Recession #Depression #Revolution