CT Journals
Back Stories (click title for full report)
September 16, 2020
Top HHS spokesman accuses CDC staffers of ‘sedition’ over coronavirus: report
“The top spokesman at Health and Human Services accused scientists at the Centers for Disease Control and Prevention of “sedition” for their response to the coronavirus pandemic and warned people to buy guns and ammo because an insurrection led by Democrats could start on Inauguration Day if President Trump refuses to “stand down,” according to a report Monday.”
Health and Human Services Spokesman Michael Caputo
Photo by Mark Wilson/Getty Images
The outside world: Is there help for the markets (aka the new economy) coming from congress? ” Morgan Stanley No Longer Sees A Fiscal Stimulus Deal Before The Election
Contrary Thinking Starts Here
September 6, 2020
Back Stories 9/7/20
Stupid is Knowing the truth, seeing the truth, but still believing the lies. Everyone knows the MARKETS is a bubble. Yet, the market is never wrong when it comes to your P&L
Warning Flashes As Corporate Execs Dump Most Stocks Since 2015
The S&P500 hit an all-time high price earlier this week, with a forward P/E multiple surpassing the dot com peak of 27x, printing at 27.02x. These mind-numbing valuations (before Thursday’s panic sell) have been met with intense insider selling as corporate executives dump billions of dollars worth of their stock into unsuspecting Robinhood traders.
Data compiled for the Financial Times by Smart Insider shows insider selling by 1,042 chief executives, chief financial officers and company directors in Aug. was the highest dollar amount since Nov. 2015. The total number of execs disposing of their stock as valuations, in some cases, surged beyond dot com levels, was the highest since Aug. 2018.
The insider selling frenzy has been happening as only a handful of technology stocks push overall main equity indexes to record or near-record forward P/Es. The optics of insiders selling in force is not a good one, indicating these business elites don’t believe in today’s rich valuations as the economic recovery stalls.
For some historical context, after insiders dumped billions of dollars worth of stock in Nov. 2015, the S&P500 tumbled nearly 14% over 65 days into a low in late Jan.-Feb. 2016.
“Insiders at Nasdaq 100 index companies are harvesting a once-in-a-millennium bonanza,” said Vincent Deluard, a macro strategist for StoneX.
Insiders are suggesting that current valuations aren’t just rich, but the latest rally in stocks this summer is not sustainable, rather it could be viewed as a blowoff top.
The above is only the tip of the iceberg, it will become worse as the election day gets closer. Why, because many of the Fangs will be broken up from Facebook to Google based on Anti-Trust Laws. That UNCERTAINTY will bring the house of cards down.
Great and Many Thanks,
Jack F. Cahn, CMT
Contrary Thinker since 1989,
Copyright 1989-2020
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR
25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889
— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.
— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice, at any time.
–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options
August 31, 2020
Back Stories 8/31/20
Stupid is Knowing the truth, seeing the truth, but still believing the lies. Everyone knows the MARKETS is a bubble. Yet, the market is never wrong when it comes to your P&L
Here is what I see
“It’s All One Big Trade”
Click here to view the original web page at “It’s All One Big Trade”
“According to BofA’s Jared Woodard, the crowded trades – growth vs. value, large vs. small, US vs. EAFE, market cap vs. equal-weight, USD vs. EM FX, Treasury bonds – stay crowded because there is no alternative in a world of shrinking returns on capital.”
“…Meanwhile, the Fed keeps injecting more and more liquidity even as growth is scarcer and scarcer. As a result of this maximum liquidity in a world of scarce growth. the Fed has created an ever-larger series of asset bubbles.”
“…And when real interest rates are negative as they are now, there is every incentive to chase low-probability, high-impact upside according to Woodard. In short, any vehicle with a chance at large returns becomes a cheap call option.”
Just two examples: in 2020 investors are once again pouring cash into “blank check” IPOs or Special Purpose Acquisition Companies, just as they did in the summer of 2007. As we first discussed several weeks ago, SPACs have no operations but simply raise funds for undetermined future acquisitions. At the same time, one bitcoin costs more than $11,000. That’s more than the average US household makes in two months.
“…today a record 79% of the S&P 500 offers dividends greater than the 10-year Treasury yield.”
Contrary Thinker sees their conclusion as being the problem with the “got to be in it to win it” point of view:
“In summary, “stagnant GDP, deepening inequality, and the threat of policy failure make us bullish on the things we don’t want to buy (growth, large caps, US) and bearish on the things we want to own (value, small caps, EAFE) because, without an economic transformation, any reversal in the ranks of market winners & losers can only last a season.”
Going into 2018 along with geopolitical risk Contrary Thinker envisioned a major constitutional risk. Here are a headline and content from my January 18, 2018 letter. It also fits into the 45-year cycle publicized in a recent MarketMap. But it is gaining more traction from the press today.
The Constitutional Crisis of Trump Undermining the Election
Those of us who blogged right through to the end of George W. Bush’s presidency had already heard enough from John Yoo, thank you, before he decided to become a volunteer legal defender of President Trump. If you aren’t familiar with Yoo, his Wikipedia page is accurate and gets straight to the point.
Yoo is upset that some conservative intellectuals have been harshly critical of Trump’s suggestion that perhaps the presidential election should be delayed:
Donald Trump’s tweet last week that the possibility of mail-in voter fraud might justify postponing the November elections renewed claims that his presidency is a threat to the Constitution. Conservative commentator Henry Olsen, often a stout defender of the administration, wrote in his Washington Post column that the tweet “is the single most anti-democratic statement any sitting president has ever made.” Steven Calabresi, a conservative Northwestern law professor and co-founder of the Federalist Society, declared in the New York Times that “this latest tweet is fascistic and is itself grounds for the president’s immediate impeachment again.”
But Yoo assures us that threatening to do something unconstitutional is not problematic if you lack the constitutional power to justify the threat. This is like saying that robbing a bank is not possible because robbing banks is against the law. The Constitution is there to deter and punish, but it cannot prevent unconstitutional acts.
We know from the Roman example (of which the Founding Fathers were acutely aware) that ordinary venality can be as dangerous to a republic as grandiose political ambition; and, as it turns out, in our own case that kind of thing is sufficiently destructive without our having to imagine Trump as an aspiring Caesar. This isn’t an opera, and it does not have to be operatic.”
The above is only the tip of the iceberg, it will become worse are the election day gets closer.
Great and Many Thanks,
Jack F. Cahn, CMT
Contrary Thinker since 1989,
Copyright 1989-2020
Contrary Thinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA
92264 USA. 760-459-4681 OR
25/1 Poinsettia Court Mooloolaba, QLD Australia 4557 614-2811-9889
— Contrary Thinker does not assume the risk of its clients trading futures and offers no warranties expressed or implied. The opinions expressed here are my own and grounded in sources I believe to be reliable but not guaranteed.
— Pricing is subject to change without notice. My indicators and strategies can be withdrawn for private use without notice, at any time.
–Trading futures and options involve the risk of loss. Please consider carefully whether futures or options are appropriate for your financial situation. Use only risk capital when trading futures or options
