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Dow hitting record highs, thanks to Goldman and JPM

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http://www.wsj.com/articles/the-four-companies-that-sent-the-dow-to-19000-1479904324

So the expected trump meltdown has lead to a boom. Don't quite understand it myself, once he gets in I doubt much at all will change. I'm tempted to short it now. What do others think? I guess the boom could last for many months.

 

Surely these banks will be dragged down soon enough the next time there is a rumble in the eurozone or similar?

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Old saying - The market always remains crazy longer than you remain solvent.

If im taking positions in equities i like to buy. By shorting you are taking a position against the government and the banksters. They have a printng press you dont. Best to play on their side.

Edited by GreenDevil

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5 minutes ago, GreenDevil said:

By shorting you are taking a position against the government and the banksters. They have a printng press you dont. Best to play on their side.

Better to buy gold. Take a position against the printing press but measure on the number of ounces you have, not paper money valuation.

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2 minutes ago, Errol said:

Better to buy gold. Take a position against the printing press but measure on the number of ounces you have, not paper money valuation.

Gold  - I am looking to buy back somewhere around 1150-1050. 

Equities - im holding for dow 20k and ftse 10k... Its a bubble you know.

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Sell everything, says David Stockman, and get out of the casino while you still can.

http://www.cnbc.com/2016/11/22/david-stockman-doubles-down-on-his-sell-everything-call.html

Quote

The Trump rally raged on this week with all major U.S. indexes hitting record highs, but despite the historic run, David Stockman is doubling down on his call for investors to sell everything.

"This 5 percent eruption is meaningless. It's some robo machine trying to tag new highs," Stockman said Tuesday on CNBC's "Fast Money," in a dismissal of the S&P 500 rally.

"I see a recession coming down the pike in 2017. The stock market is going to go down and it's going to stay down long and hard because, for the first time in 25 years, there's nothing to bail it out."

This echoed the initial call Stockman made Nov. 3, when he urged investors to sell stocks and bonds before the presidential election.

However, since the Nov. 8 election, the Dow Jones industrial average has gained 4 percent en route to surpassing 19,000. Additionally, the S&P 500 and Nasdaq also hit record highs in the same time period, gaining 3 percent and 4 percent, respectively.

Yet Stockman, who was director of the Office of Management and Budget under President Ronald Reagan, reaffirmed that markets are heading for disaster.

"My call stands. Sell the stocks, sell the bonds, get out of the casino," Stockman explained to CNBC in an off-camera interview. "Bonds have already cratered by nearly $2 trillion worldwide and have miles to go. This isn't a rotation into stocks, either. It's the greatest sucker's rally ever."

Stockman, author of "Trumped: A Nation on the Brink of Ruin... And How to Bring It Back," lamented that there will be no Trump stimulus or Reagan-style boom. He further added that he expects "an unprecedented fiscal bloodbath" resulting from the $20 trillion worth of debt that the U.S. currently has on the books.

"This isn't Ronald Reagan with a clean $1 trillion balance sheet and with a fluke GOP and a Southern Democratic coalition that only materialized because he got shot," Stockman said in reference to John Hinkley Jr. attempting to assassinate Reagan in Washington, D.C., in 1981. "Nor is it LBJ in 1965 with a thundering electoral mandate and a massive congressional majority for the Great Society."

On the contrary, Stockman, who initially predicted that Trump would win the election, added that Washington will be in chaos by June. This is because he anticipates ongoing disruptions from the tea party, which Stockman doesn't foresee as allowing additional deficit increases.

Furthermore, Stockman doesn't believe that Trump can pass a bipartisan stimulus plan without capitulating on his promise to repeal and replace Obamacare. Additionally, Stockman cast serious doubt over Trump's ability to enact a meaningful tax cut or to develop a major infrastructure program. If so, Stockman believes that could very well trigger a civil war within the Republican Party.

"So when the recession hits this summer, the Fed will be out of dry powder and fiscal policy will be paralyzed," concluded Stockman. "This time the market will crash and stay crashed."

 

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16 minutes ago, Kiwi Toast said:

Navarro (Trump's economic advisor) said the Dow will reach 25,000 during Trump's first term.

Entirely possible with all the money printing going on (and to come).

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He argued that Trump's cut to corporation tax, the repatriation of overseas funds and the $1tr infrastructure would be the main factors.

 

Money printing, business as usual and banking corruption would be a sad alternative reason for Dow 25,000!

Edited by Kiwi Toast

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7 minutes ago, Nickos said:

The 20k Dow I can believe, the FTSE is another matter entirely. I'll be amazed if it gets to 8K in the next 12 months.

I think I prolly agree with you :)

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1 hour ago, zugzwang said:

Sell everything, says David Stockman, and get out of the casino while you still can.

http://www.cnbc.com/2016/11/22/david-stockman-doubles-down-on-his-sell-everything-call.html

 

Said exactly the same nearly 4 years ago (Apr 2013). Follow him at your (financial) peril.

Not sure why anyone would sell bonds (especially long end of curve) after they've cratered 15%. Outliers are high probability mean reversion trades.

http://blogs.wsj.com/marketbeat/2013/04/01/skeptics-scoff-at-david-stockmans-doomsday-scenario/

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Could be a trump setup. Gun the indices until he takes control and then dump, double effect, nice juicy, safer shorts from a higher peak and overt political statement made that the financiers are still in control.

 

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16 hours ago, Kiwi Toast said:

Navarro (Trump's economic advisor) said the Dow will reach 25,000 during Trump's first term.

That's only 5% inflation a year, very modest.

This has been moved to the financial markets forum, that gets about one post a month? Great, thanks for killing this thread. No wonder the forum is getting deader by the day.

 

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Where did you get 5% per year from?

It requires a little over 7% per year over 4 years.

From 18500 (approx. level before and after the election): 7% gives 24250

From 19000 (current level after a two week Trump rally): 7% gives 24900

Dow Jones dividend yield is approximately 3%, so that would be an annualised return of 10%.

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3 hours ago, Kiwi Toast said:

Where did you get 5% per year from?

It requires a little over 7% per year over 4 years.

From 18500 (approx. level before and after the election): 7% gives 24250

From 19000 (current level after a two week Trump rally): 7% gives 24900

Dow Jones dividend yield is approximately 3%, so that would be an annualised return of 10%.

I'm a BTL landlord with a vast portobello, so naturally I have great numeric skills.

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