- Here’s your second chance if you laughed when we said Obamacare repeal was toast
- “New month, new market”: The calendar flips, but will traders flip out?
- 2% inflation isn’t good enough for the Fed anymore
- Red states join the green revolution on medical marijuana
- The end of the “Mining Zombie Apocalypse”
- Trump trade adviser’s short bet on Treasuries… a refreshingly honest politician… “the biggest scandal of all”… and more!
So the president isn’t giving up on Obamacare repeal after all?
OK, so that tweet yesterday would indicate he’s determined to come up with a bill that would bring nearly all Republicans on board.
Thus did the president go golfing yesterday with Sen. Rand Paul (R-Kentucky) — the man who infamously labeled the first attempt at repeal-and-replace “Obamacare Lite.”
But wait! The president also did an interview with the Financial Times, in which he once again blamed the House Freedom Caucus for deep-sixing the first attempt. “If we don’t get what we want, we will make a deal with the Democrats.”
To underscore the point, a senior White House aide hit out at one of the more vocal Freedom Caucus members, Rep. Justin Amash (R-Michigan).
Hmmm… At the tender age of 36, Amash has already survived some bruising primary fights, to the point that last year no one dared take him on. And in the general election last November, Amash’s margin of victory was 22 percentage points; Trump carried the district by only 10.
What to make of it all? Who knows? The Wall Street Journal threw up its hands and reached the only conclusion possible: “It is unclear whether Mr. Trump’s latest tweet was meant to demonstrate a shift in political strategy toward smoothing over differences between the Republican Party’s conservative and establishment blocs.”
We have no idea whether the president is crazy, or crazy like a fox. All we know is what we’ve been telling you all year…
“If you trust the incoming president and Congress to ‘repeal and replace’ Obamacare without making matters worse or raising your costs… well, besta luck.” (Jan. 3)
“Don’t wait for the president and Congress to free you from Obamacare. You could be waiting a very long time.” (Feb. 1)
“‘It will take the GOP a full year or even more to get a heavily diluted version of Obamacare Lite to Trump’s desk for signature,’ says David Stockman.” (March 7)
And that was all before the humiliating climb-down of March 24, in which Trump and House Speaker Paul Ryan agreed to pull the Obamacare reform bill from consideration because the Republican votes weren’t there.
If you didn’t pay heed to our message before, maybe you’d want to start now? Even with Obamacare still in place, you can take your health care choices into your own hands: It’s still not too late to legally opt out of Obamacare… and save up to $11,172 in health care costs. Click here to get started.
To the markets… where the new month is beginning with a retreat into the safety trade.
All the major U.S. stock indexes are in the red. The Dow is back below 20,600. The S&P 500 has shed half a percent.
Hot money is flowing into Treasuries, pushing yields down; the 10-year yield is sinking toward six-week lows at 2.34%. And gold is benefiting from the safety trade, too; the bid has reclaimed the $1,250 level for the third time in the last 10 days.
The big economic number of the day is the ISM Manufacturing Survey. At 57.2, the number is down a touch from the month before, but still far above the 50 dividing line between an expanding factory sector and a contracting one. But we caution that the ISM is yet another sentiment survey… and there continues to be a divide between “soft data” like the ISM and “hard data” like factory orders, which continue to disappoint.
So far, 2017 has been a tale of “new month, new market,” says Jonas Elmerraji of our trading desk.
“The end of December marked a swing low for stocks, kicking off a modest uptrend in January,” says Jonas. “That uptrend accelerated at the beginning of February and peaked at the end of the calendar month. And a correction initiated on March 1.”
Jonas won’t venture a guess about how April will shake out — as a trend follower, he says that’s a pointless exercise. “But it’s worth thinking about what’s causing these mini-trends to hit the calendar months so cleanly,” he says. “It’s people. There’s a lot of emotional bias in this market right now.”
As Jonas pointed out here a few days ago, there’s a lot of top-calling right now among market pundits. That’s rarely a sign of an actual market top; a top usually occurs when the pundits are giddy and think the market still has nowhere to go but up.
Now that the Federal Reserve is close to achieving its 2% inflation target… it might be looking to aim higher.
As noted here on Friday, “core PCE,” the Fed’s preferred inflation measure, has been in the 1.7–1.8% range for the last six months. We haven’t had a stretch like that since mid-2014.
This morning’s Wall Street Journal is giving front-page play to a story that says “central banks are talking about alternatives to the target, many of which involve the option of letting inflation rise above 2%, either permanently or for a time.”
Think about that for a moment: For years, it’s been policy that the purchasing power of the dollars you hold in your pocket should depreciate by 18% every decade. And now we’re being told that’s not enough!
The reason, the eggheads tell us, is that interest rates have been so low for so long since the Panic of 2008.
Fed economists recently issued a paper that suggests, as the Journal paraphrases it, “U.S. policymakers could let inflation exceed 2% for a time after recessions to give the economy more room to grow and more time to recover lost ground during a downturn.”
Whelp… It only reinforces what Jim Rickards has been telling us for years. The global elites want inflation, and they’re determined to get inflation… one way or another.
“Conservative states are joining what has historically been a liberal policy,” says a story in the Washington Examiner about marijuana legalization.
The Examiner counts 16 states where lawmakers are considering medical marijuana bills. “The states considering legalizing medical marijuana include Iowa, Indiana, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia and Wisconsin.”
Says Tennessee State Sen. Steven Dickerson — a Republican and doctor who treats patients with chronic pain — “I am committed to the proposition that cannabis can help with pain and other conditions and has a better side-effect profile than many of the medications we are currently using.”
Even when the Trump administration was giving conflicting signals over recreational marijuana a few weeks ago, it was clear that it wouldn’t stand in the way of states when it comes to medical cannabis.
[Ed. note: Congrats to readers of Technology Profits Confidential who signed up for “penny pot stock” recommendations last year. Ray Blanco’s marquee pick is up 150%, and on Friday he recommended readers sell half their position to lock in their gains.
You missed out? Don’t worry; Ray also issued a new cannabis-themed recommendation on Friday. For access, look here.]
“It’s a sign that the Mining Zombie Apocalypse of the past five years is truly ending,” says Byron King, our resident geologist who does the company-level research for Rickards’ Gold Speculator.
Last week two gold mining giants, Barrick and Goldcorp, struck a 50/50 joint venture to develop substantial deposits in Chile’s high-and-dry Atacama Desert.
“Two big guys in mining are laying their corporate credibility, and sprinkling their holy water, so to speak, onto nearly undeveloped mining patch,” says Byron. “This area is in the heart of the Maricunga gold belt, one of the world’s largest undeveloped gold districts.
“This deal puts a world-class level of new gold-silver-copper resource onto the global development table — tens of millions of ounces of gold-silver, and billions of pounds of copper. It all comes after several years of investment drought — the Mining Zombie Apocalypse — when most miners were cutting budgets and shedding assets due to low gold prices.”
More important to Rickards’ Gold Speculator readers, “The deal sets a new bar for future merger and acquisition (M&A) activity within the mining space,” says Byron. “We may soon see more of this M&A action with the juniors.”
Go figure: One of the president’s top advisers is “short” Uncle Sam.
On Friday, the White House released financial disclosure forms for many of Trump’s top aides. Nothing really stood out for us, except one thing: National Trade Council director Peter Navarro holds a position of at least $15,000 in an ETF called the UltraShort Lehman 20+ (TBT).
That’s an “inverse leveraged” ETF: If the price of long-dated Treasury bonds craters, say, 10%, the price of TBT hypothetically rises 20%. (It will rarely be that much, but the “decay” of leveraged ETFs is another story.)
We’re seldom in accord with the people at ThinkProgress, but they’re onto something when they point out that “while theoretically his holdings could create a financial incentive for Navarro to recommend policies that are harmful to the stability of U.S. Treasury securities as part of Trump’s economic team, at the very least, it could indicate just how little faith he has in Trump’s ability to make ‘make America great again.’”
Then again, Navarro’s holdings are totally in keeping with Trump’s campaign chatter last year about a default on U.S. Treasuries.
“You go back and say, hey guess what, the economy just crashed. I’m going to give you back half,” he said on CBS This Morning. We don’t believe him for a minute… even though a default is the only sensible thing to do.
Of course, the rejoinder is that “If we default, no one will lend to us again for decades!”
Yes, that’s the point. It would force our spendthrift politicians and feckless central bankers to get their act together. Well, we can dream…
“After Thursday’s exposé about the ‘failure’ to disclose vulnerabilities to U.S. high-tech companies,” a reader writes, “it is refreshing to find an honest politician.
“I speak of Catherine Pugh, mayor of Baltimore, who has admitted that after a four-year absence, red light and speed cameras will again operate in Charm City. The reason: to patch a gaping hole in the city’s budget that she has admitted is the result of a structural deficit. I have yet to hear anyone mention that it might be done for public safety.
“While the truth is nice to hear, the more troubling aspect of this entire charade is the absence of any discussion about fixing the underlying reasons for the structural nature of the deficit Baltimore faces. I guess we can’t fix everything at once.”
The 5: Pensions? Nah, that’s way too hard compared with switching the red-light cameras back on.
And yes, they’re about revenue generation, not accident prevention. Otherwise, you wouldn’t have some cities (we’re lookin’ at you, Chicago) shortening their yellow lights so as to nab more cars in the intersection when the light turns red. Never mind that such a practice encourages people to slam the brakes on a yellow, causing more rear-end crashes…
On the topic of online sales tax, a reader writes: “Nevada’s sales and use tax is very specific. Goods and services are taxed for those items sold within the confines of Nevada or items used in Nevada.
“Sounds like we should let Amazon know how we feel about their state sales tax capitulation. I’ve placed my last order.
“Love The 5!”
“What’s the biggest scandal of all?” a reader writes, keying off an ad he saw in The 5 “I’m reading it!
“I’m reading news that informs me of where I can spend my money on more subscriptions. Spending money to find out where to spend even more to get informed….. Scam!”
The 5: From Day One — and we’re coming up on 10 years this month — The 5 has sought to get past the noise that passes for most financial “news.” We do so drawing on the uniquely profitable insights of the Agora Financial editors.
Of course, we’d be delighted if you saw something in The 5 that spurred you to subscribe to a new newsletter or trading advisory in addition to whatever you’re reading already. But as we said when we welcomed a boatload of new readers last year, that’s not the yardstick by which we measure our success. Ultimately, we succeed if at the end of each episode of The 5…
- you learn at least one interesting thing you didn’t know before
- you decide to come back the next day.
By the way, your email came into us flagged as “SUSPECTED SPAM.” Just sayin’…
The 5 Min. Forecast
P.S. Here’s what inspired the reader’s “biggest scandal” riff…
Our team recently uncovered what they consider the biggest Obama “scandal” ever.
It has to do with a secret that he and the Pentagon kept hidden at 9800 Savage Rd., Fort Meade, Maryland, for his ENTIRE presidency.
You won’t want to miss THIS.
The CIA spends billions of dollars to keep scandalous stories under wraps. So we wouldn’t be surprised if they wanted this page taken down immediately.
Click here for the shocking truth.