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Gregor Samsa

Gregor Samsa

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Articles by Gregor Samsa

Black Monday, 1987: Inside The U.S. Treasury

11 days ago

By Liam McPherson

The following exchange took place between President Reagan and reporters after the market close on Black Monday, October 19, 1987.  After visiting the First Lady in the hospital, President Reagan returned to the White House just after the market lost over 20 percent of its value on the day.
Q: What about the market? Tomorrow will it go down again?President Reagan:  I don’t know. You tell me.
Q: Is the market your fault?President Reagan: Is it my fault? For what, taking cookies to my wife?
Q: Reaganomics?
President Reagan:  I just told you. Good Lord, we reduced the deficit over last year by $70 billion. And all the other things I’ve told you about the economy are as solid as I told you. So, no, I have no more knowledge of why it took place than you have.

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Investing In The Economy Of The Future – Follow-Up

14 days ago

By Carol K. 
Readers may recall my post about the need to be invested in the stocks and ETFs focusing on the future economy. Sectors such as genomics, artificial intelligence, robotics, 5G technologies, and the Internet of Things (IoT).
We presented options among the best performing ETFs invested in these spaces, and I went with the ARK Invest family of actively-managed ETFs.  ARK utilizes an active management strategy because it doesn’t track an index and selects the best-positioned companies in their respective niches.
Skin In The Game
Putting my money where my mouth is, I invested in five of these ETFs in early-to-mid August.  Since, the returns have been spectacular.  Consistent with my market view (see my Monday post),  I’ve taken profits on most of the positions.  My mantra

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WOTD: Trumpery

16 days ago

WOTD:  Word for the Day
You can’t make this stuff up.
Trumpery.  Real word.
Can the definition be more apropos to what we see and experience every day?
Hat tip: Chris Cuomo

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QOTD: Only Buy Stocks That Go Up

17 days ago

QOTD = Quote of the Day
Will Rodgers was way ahead of his time.   
His quote defines the group think of today’s marginal buyer with the qualification that stocks always go up.  Well, at least, most of the time as the holding period time horizon expands.

Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it. – Will Rodgers

The Corner Solution End Game

Mr. Rodgers lived and suffered the consequences of the Fed’s grand failure to provide liquidity to failing banks – even the solvent ones — in 1931-32 that caused the U.S. money supply to contract 25 percent and put the “Great” in the Great Depression. 

Now the Fed has swung to the other extreme and seemingly provides liquidity to

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Investing During Periods of Uncertainty & Turmoil

18 days ago

By Carol K.
In this post, I’m not going to talk politics or speculate on which Party wins or deserves to win the Presidency or control of Congress come January 2021. There are plenty of political pundits offering their take on the coming U.S. election, and if you’re like me, you’re exhausted by the non-stop negativity and political games.  The purpose of this piece is to instill a sense of calm and help self-directed investors survive what we at GMM anticipate will be an epic political storm in the coming months.
Political Risk
While there is always increased market volatility around the time of presidential elections, we anticipate unprecedented nastiness, litigiousness, perhaps civil unrest, the likes of which we have never seen in the United States.  If one has remotely been

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The Great Misread: Secular Lower Prices In Semiconductors

22 days ago

Just a quick note on what we believe has been one of the largest factors, along with globalization to the disinflationary forces over the past 30 years. That is the secular decline in the price of semiconductor prices.  Semiconductors are the basic building block of today’s economy, as was oil during the industrial revolution.
Semiconductor Prices
The price of semiconductors and other electronic components has been declining for more than 30 years as illustrated in the monthly year-on-year price changes in the chart below.

Stunningly,  320 of the 368 months since January 1990 or 87.0 percent of the observations, the price of semiconductor and other electronic components have experienced negative year-on-year growth.
Deflation, no.  Relative price changes, yes, brought on mainly by

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Meine Fox News: Senicide, The Final Solution?

23 days ago

Good, God!
We have been writing for ten years about the coming “Clash of Generations” but we never, ever, in our wildest imagination believed it would result in an “elderly are expendable” vibe.  Senicide. 

The word “senicide” — meaning the deliberate murder of the elderly — is less well known, though of older provenance. According to the Oxford English Dictionary, it was first used by the Victorian explorer Sir Henry Hamilton Johnston. “The ancient Sardi of Sardinia,” he wrote in 1889, “regarded it as a sacred . . . duty for the young to kill their old relations.” – Boston Globe 

Who would have ever believed it would also have the implicit support of the President of the United States, the oldest ever to sit in the Oval Office nearing the end of his first term. Ronald Reagan was

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Epic Landslide And Blue Tsunami Coming

24 days ago

You Heard It Here First

We suspect a Blue 1980-ish outcome in the popular vote where Trump wins around 41 percent of the popular vote (close to where he is currently polling), which is about the same percentage as President Carter won, but wins a bit more than the six states than Carter did in the electoral college. – Global Macro Monitor, April 13

Tax Selling?If markets were efficient, there should be massive tax selling or front running of the almost doubling of the capital gains tax for the stock ownership class that is coming in a Biden Administration. Not the case. so far, as markets have been nationalized and do not reflect even a speck fundamental value.

The Wall Street cheerleaders always find a way spin everything bullish because their bonus depends on it.

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Living Like A Climate Refugee

29 days ago

Cue Tom Petty.
Never thought I would live like a climate refugee but here I am again couch surfing trying to put together a Plan B as the family is staying at the Hyatt in another  city.  Four freaking straight years of this, you’d think a trend is developing.
I’ve joined an elite club, where the last two homes I lived have been destroyed by violent wildfires.
Wake Up World
Wake up world, Rome is burning.  Think of your children and grandchildren’s future.
No worries though, the stock market is rocking, no?
Was it Groucho that once said, “Bull markets are the opium of the people?”  Or was that some German dude, a Jerry Garcia, Grateful Dead look alike?
Wherever you live, wherever you hide, however you delude yourself, climate change is coming for you.  Ignorance and denial, or “the

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California Burning 4.0

September 28, 2020

This is getting old.
The following is a photo on the side the hill close to our house late Sunday night. Heard huge explosions of propane tanks exploding when I evacuated.
Giving it 50/50 our house made it.  Had a convo just yesterday with Carol K. that our house would almost certainly burn down within next five years.
Hope and praying everyone is out safe and nobody is injured.

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Understanding America’s Political Divide And Existential Crisis

September 27, 2020

This a must view video, folks, if you really want to understand what ails and divides America politically, and why Trump’s base sticks with him.
I had a great discussion today with Carol K., GMM’s crack stock picker about what is it that really divides America.   Not only is she financially astute but a pretty damn good political scientist.
Much what she said sounded exactly like the Harvard professor I heard early in the day in an interview with CNN’s Michael Smerconish.

Harvard professor Michael Sandel discusses his theory that credentialism is the last acceptable form of prejudice in today’s society, and how that relates to President Trump’s political rise.  – CNN

Working-Class Resentment And Meritocratic Hubris
In a nutshell, it is resentment by many of America’s

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QOTD: Soros on Market Volatility

September 24, 2020

QOTD:  Quote of the Day
This quote is always in the back of my mind, especially when volatility kicks up in an overvalued and what has been a one-way market as the “newbie geniuses” begin to mock investing legends, such as Warren Buffet  as “dinosaurs.”
The newbies are almost always the last to the party and a contrarian signal of a market top.    As we say, “know they marginal buyer.”    The only thing we find interesting for the back book is stocks, with growing and sustainable dividends.
Short term volatility is greatest at turning points and diminishes as a trend becomes established. By the time all the participants have adjusted, the rules of the game will change again. – George Soros

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Art Cashin Is Pure Gold

September 24, 2020

When Art Cashin speaks, we listen.  He is the best in the business and such a great man.  If you are going to listen to any of the market pundits,  Art is your guy.   So great to see him back.
Here’s a little taste of “fine Art” from earlier today as he opines on the current state of the momentum market.
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Euro Banks: Dead Men Walking

September 23, 2020

These charts are hard to take.   Have you ever seen such dead money investments?
Here’s to hoping that if Jamie Dimon becomes Secretary of Treasury in a Biden Administration — a huge stretch given the rising power of the Democratic left — he never allows negative interest rate policy NIRP (yes, we get it, it’s theoretically the Fed’s job).
Look what NIRP has wrought, or should we say rot in Europe.

Source: The Market Ear
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Industrial Output – The Winners and Losers

September 23, 2020

Industrial Production (IP) rose for its fourth consecutive month after March and April’s sharp contraction (Chart 1)
IP remains 7.6 percent below its December 2019 level (Chart 1)
Durable Manufacturing output was up 0.7 percent in August, led by Computers and Aerospace products (Chart 2)
Computer & Electronic Products (CEP) continue to significantly outperform all other sectors in industrial manufacturing with production up 5.5 percent y/y and 2.3 percent even during the Great Lockdown (Chart 2 & 3)
Semiconductor output grew 6.7 percent y/y in August compared to 1.8 percent for the same period in 2019 (Chart 2 & 4)
Output growth slowed significantly in August compared to June and July, which is consistent with our view the global economic rebound has plateaued and is in a

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Life Is Unfair

September 22, 2020

“…there is always inequity in life. Some men are killed in a war and some men are wounded, and some men never leave the country, and some men are stationed in the Antarctic and some are stationed in San Francisco. It’s very hard in the military or personal life to assure complete equality. Life is unfair.”  –“President’s News Conference of March 21, 1962 (107),” Public Papers of the Presidents: John F. Kennedy, 1962.

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The Taiwan Strait Getting Hot, Hot, Hot…2.0

September 21, 2020

We originally posted the following in October 2018 after President Trump threw Montenegro, then the newest member of NATO under the bus a few months earlier. We suspected POTUS’ loose lips would someday sink ships, at least metaphorically, if not literally.

The Taiwan Strait Getting Hot, Hot, Hot…

Posted on October 21, 2018 by macromon

We posted the following in July after President Trump threw Montenegro under the bus.

Taiwan may be about to get hot, hot, hot in the next year after last night’s Commander in Chief’s ambiguous message on defense treaties.  – GMM

One of GMM‘s most excellent followers, who we very much like and respect, responded with this:

This whole article is a science-fiction of oh, this could happen, and oh that could happen…. And we could be

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O, How We Love Technical Analysis

September 14, 2020

You know what they say,
If you stare at the sky long enough, you will see pink elephants. 
We don’t see pink elephants but rather trade setups, among other things,  and have discovered a failproof trade.
After studying many patterns of rainbows and lightning strikes, we present the Double Rainbow Resistance Short.   Sell or short when the index hits the rainbow resistance on its second try and fails to breakout.   You gotta be quick, however.
Maybe, even more important, we found a new weapon or monetary tool for the Fed’s quiver, Time Reversal, but it doesn’t appear to work in propping up this asset market, especially when the index is in a Tree Pattern.

Mercado socialismo is so boring, and such an inconsistent space where professing capitalists are really closet central planners —

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Q3 GDP Growth Set For 30% But No V-Shaped Recovery

September 14, 2020

The Atlanta Fed’s GDPNow estimate for Q3 GDP growth is currently running at 30.8 percent on an annualized basis (6.9 percent quarter-on-quarter), which will shatter by a wide margin the prior highest print on record of 16.7 percent registered in Q1 1950.

Source: Custer Consulting Group

No V-Shaped Recovery

Even with such robust Q3 growth, the economy will only have recovered around 60 percent of its Q1 & Q2 losses, and real output will still be 4 percent below its Q4 2019 level.

Economy In A Holding Pattern

The easy money has been made and the heavy lifting to get the economy “back to even” on a sustained basis may take a year or two or three.

Short-term growth will now largely depend on concerns over a second wave of the pandemic and a new stimulus

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A COVID Fear Gauge & Real-Time Economic Indicator

September 13, 2020

After giving some thought to our last post on Air Travel. we constructed our own chart with the data, which is pretty damn interesting, informative, and depressing.  We have also added the Bloomberg chart on the collapse of international travel in July.
Theses two charts illustrate how the air travel industry has been decimated by the COVID crisis.

96 Percent Year-on-Year Decline In Passenger Count On April 16
On March 1, 2020, for example, the TSA screened about as many passengers and crew members as the same weekday in 2019.   Air travel then soon collapsed as fear of the coronavirus gripped the nation, and within 46 days, on April 16, passenger screenings reached its nadir of only 3.6 percent of the 2019 level, or down a stunning 96 percent.  April 16 also marked the bottom in

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