Posts By Lee Adler

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Here’s Why “Boffo” Jobs Numbers Should Worry You

The BLS reported blowout jobs numbers on Friday. The headline number rose 304,000. That is the seasonally adjusted (SA) artistic impressionism version. We here at Sure Money like the actual numbers, not seasonally adjusted (NSA). It’s easy to see the trend visually, and we can quantify by comparing the month to month trend with the same month in the past 10 years. We can add a check of the momentum of the annual rate of change. 

January is always the biggest month for job losses as holiday workers get laid off. This January was no exception, as 2.98 million jobs disappeared. How that turned into a gain of 304,000 is one of the great mysteries of seasonal adjustment. The 304,000 number blew out economists’ estimates and looks absolutely boffo.  However, the number wasn’t appreciably different than anything that has been going on for the past 7 years, as you can see below.

Look at this chart and see why the Fed’s new policy is still a de facto autopilot.

The post Here’s Why “Boffo” Jobs Numbers Should Worry You appeared first on Lee Adler’s Sure Money.

Powell Became Neville Chamberlain When Trump and Wall Street Threatened

Twenty years after the end of the War to End All Wars on the European continent, the British government was terrified at the thought of going to war with Germany again. Hitler had become increasingly aggressive. He had already annexed Austria when he declared his intention to invade Czechoslovakia and annex the German speaking Sudetenland, on October 1, 1938.

Unprepared to counter Nazi aggression militarily, and aware of the anxiety of the British people at the mere thought of another war, British Prime Minister Neville Chamberlain decided on a policy of appeasement to keep Hitler at bay.

On September 30, 1938, Chamberlain returned from a meeting with Hitler in Munich in which he simply capitulated to German threats. He agreed to allow Germany to annex the Sudetenland. He declared to a wildly cheering crowd of his Conservative Party supporters gathered in front of 10 Downing Street:

My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honour. I believe it is peace for our time. We thank you from the bottom of our hearts. Go home and get a nice quiet sleep.

Meanwhile, a throng of 15,000 protested the capitulation in Trafalgar Square. The leader of the Labor Party suggested that the piece of paper that Chamberlain waved to his adoring crowds was “torn from the pages of Mein Kampf,” Hitler’s manifesto.  

Hitler marched into the Sudetenland unopposed. A year later he invaded Poland, and Britain and France declared war against Germany. The critics were right. Chamberlain’s capitulation was useless. It barely delayed the inevitable. But it did buy time for the United Kingdom, a crucial year to prepare for war, a war for which the nation was woefully unprepared in October 1938.

What the heck does that have to do with the new FOMC statement? Click here to find out just that, and why it’s so important to you as an investor.

The post Trump and Wall Street Threatened and Powell Became Chamberlain for Peace In Our Time appeared first on Lee Adler’s Sure Money.

This Chart Shows Exactly Where The Cash Came From for the Rally and Why That’s a Problem

If ever there was a chart that graphically illustrates where the money came from the fueled the post Christmas rally, I think I just found it. I’ll show it to you, but first give you a brief story about why it’s important.

Every month I update the data on Treasury auction investor class allotments. Pretty dry, right? Not at all. It’s actually quite fascinating. This data gives us a wealth of information on total Treasury auction supply and who’s buying it. Treasury supply is one of the key determinants of the direction of stock prices. The more Treasury supply there is, the more cash is diverted to Treasuries and away from stocks.

The data shows us the trend of total supply every month. It also shows which class of investors are providing the demand, and how the demand from each of those classes is trending. That’s important too. Knowing who’s buying how much can also give us big clues about what to expect for stock prices.  

Something very unusual came up on the charts for December.  It stuck out like a sore thumb. And it gave us visual proof of just where the money came from the drive the post Christmas stock market rally. More importantly it raises a warning about what comes after. 

Click here to see the chart, and a clear explanation of what it means for us as investors and traders

The post This Chart Shows Exactly Where The Cash Came From for the Rally and Why That’s a Problem appeared first on Lee Adler’s Sure Money.

Here’s Why The End of The Government Shutdown Renders Fed Sweet Talk Impotent

There’s a Fed meeting this week. Will we see actual follow through on all those Valentines the Fed’s talking heads sent to the stock market the past couple of weeks? Spooked by the December selloff, former tough guy, Chairman Pow! has morphed into Mr. Milquetoast lately. He and his minions have been tossing love bouquets […]

The post Here’s Why The End of The Government Shutdown Renders Fed Sweet Talk Impotent appeared first on Lee Adler’s Sure Money.

How To Invest and Protect Your Capital for the Long Term, But Trade For The Short Term

With the market gyrating wildly I thought it would be a good idea to remember the big picture. Back in September of 2017 I first told you to start gradually reducing your exposure to stocks with the goal of ultimately getting to 60-70% cash by January of 2018. As last year went on, the signs were getting more bearish and I suggested going to as much as 80% or even 100% cash by mid July.

Those warnings were a little early, but then the market started to break in October. From there we saw a huge plunge until Christmas Eve, and then the spectacular rally since then.

My mantra since the middle of last year has been to stay out of the market. Don’t chase it, and keep buying and rolling short term T-bills, because interest rates will go higher. The underlying trends of money destruction and massive US government debt issuance virtually assure that.

Has anything changed, and what should we do? Click here to find out.

The post How To Invest and Protect Your Capital for the Long Term, But Trade For The Short Term appeared first on Lee Adler’s Sure Money.

Here’s The Double Whammy That Will Crash The Housing Industry

Yesterday we looked at a few of the signs of impending doom in the US housing market. Today, we’ll dig a little deeper into the data for a few, more revealing, morsels that reveal a double whammy that will crush the housing industry and homebuilding stocks.

I’ll also follow up on a recommendation I made back in October to take advantage of this setup. Is it still a short? Can we get in now? Get out, or hold?

Let’s take a look and I’ll give you the answers.

The post Here’s The Double Whammy That Will Crash The Housing Industry appeared first on Lee Adler’s Sure Money.

I’ve Seen Bubbles and I’ve Seen Pain

Here’s something that I can almost guarantee to you.

You live in a house or an apartment.

Am I right?

And the likelihood is that you either own or rent that abode, unless you’re living at Mom and Dad’s, or you kids’ house. Which is great. Having the whole extended family under one roof is a time-honored tradition in some cultures. We housed my in-laws for several years and loved it.

But even if you are in an extended family home, I bet that you’re still interested in the real estate market. The single-family home market just might be America’s greatest spectator and participation sport.  

I was in the real estate business for much of my life, and I was an analyst for much of that time. I worked as a commercial real estate appraiser in South Florida for 15 years. Back in the late 80s and early 90s I appraised a bunch of big, failed projects. One of them was a giant high rise condo project in downtown West Palm Beach. It was one of the earliest failed projects of someone we all know. A big bank got stuck with a whole lot of condos that it could only sell for huge discounts to cost.

I know what can happen when bubbles burst. I’ve been there, boots on the ground. I wrote a bit about my history in the biz here. Oh, I’ve seen bubbles and I’ve seen pain.   

With the latest release of the NAR’s monthly “existing” home sales data showing some serious weakening, I thought this would be a good time for an update.

I sounded the alarm for you back in early October when I wrote:

The housing market is rolling over.

And it will get worse as mortgage rates and house price inflation continue to rise.

Contrary to popular belief, initially this will make little difference to a booming US economy because housing stopped being a major economic driver after the last bubble collapsed.

But ultimately it will matter, big time.

When prices decline, the financial system will again be in crisis.

Millions of mortgages will be under water again. Homeowners will either walk away from their mortgages, or be foreclosed. The losses will ripple throughout the financial system and markets, just as they did 10 years ago. And taxpayers will be forced, yet again, to pay for the bailouts of Fannie and Freddie, because this time, we own them.

Ultimately, another housing collapse would trigger the Fed to reverse policy, but that’s still many months away. The Fed will continue to tighten the screws until well after the new crisis becomes apparent. Powell affirmed as much at his press conference when he said that the Fed won’t lower interest rates until there’s a sustained financial decline. And we should well remember just how long it took Bernanke to even acknowledge there was a problem.

So how long do we have? That’s hard to say. But here’s a little clue:

Transaction volume seizes up prior to price decline.

Now here’s the housing news you need, and what to do about it

The post I’ve Seen Bubbles and I’ve Seen Pain appeared first on Lee Adler’s Sure Money.

The Government Shutdown Is Still Bullish So Here’s What To Do

The stock market has been on an amazing tear since December 26. The government shutdown (GSD) began December 22. Coincidence? No. I told you about the belated epiphany I had about this back on January 11:

But there’s one other thing that is bullish in the short run, and you’ll never believe what it is!

That short term factor is the government shutdown. That’s right. It’s bullish. Forgive me for telling you this only now, but unfortunately, it just dawned on me. I’ve been speculating about it for a week or so, but now the data confirms my suspicions.

This rally isn’t business as usual. It’s not about what the media is telling you: that the economy is fine, inflation is low, and the Fed will not raise interest rates as much as originally feared.

One thing is the same about this market, though. And that’s the underlying principle that drives all markets. The market has moved, as always, because of money. It’s pretty simple. When there’s not enough money around, the market declines. When there’s a surplus, the market rises.

Until December 22, there wasn’t enough money around. But then, something changed.

Since December 26, a tidal wave of money has sent the market surfing higher. That money isn’t coming from the usual source, the Fed and its fellow central banks. They’re going the other way.  

Nope. This time it’s coming from the US Treasury. And this time is also different because the people controlling the money dynamics aren’t motivated by long term economic factors. They are motivated by politics. That makes this a whole different kind of ballgame than the one we usually play.

Here’s what it’s about, and what you can do to profit from it

The post The Government Shutdown Is Still Bullish So Here’s What To Do appeared first on Lee Adler’s Sure Money.

Tax Data Shows That The Latest Market “Narrative” is Really a “Myth”

There’s a special report that I look forward to on the 8th business day of the month. This month, that was the 11th. Only this month, it wasn’t there. It’s the Monthly Treasury Statement for the preceding month from the US Treasury.

We love that data because it’s raw, unadulterated, and unmanipulated. It gives us an inside look at critical sectors of the US economy. It covers the entire month, not just a snapshot on a given day, and it’s only 8 days old when they give it to us.

Even better is the end of month Daily Treasury Statement, which is released the day after the month ends. I’ve been accumulating that data for years. Not only is it pure unmanipulated reality, it’s real time.

I issue a detailed monthly report about key line items, like withholding, non-withheld, corporate and excise taxes. And I’m always happy to pull a juicy tidbit from that report for you every so often.

Then around the middle of the month, I report on the Monthly Treasury Statement. The monthly data provides additional details on Social Security versus income tax withheld, and in the categories of Excise taxes. Those are like Federal sales taxes on numerous items, like guns, alcohol, your phone bill, tobacco,  as well as the better known levies on  aviation, and gas at the pump.

It’s great data and I was looking forward to finding and reporting something interesting for you. But alas, this month it’s nowhere to be found. The government shutdown has delayed it. I guess  we’ll just have to go without for now.

But that’s the nice thing about the Daily Treasury Statement. They’re still publishing it and we need not wait until the end of the month. And boy does it have an interesting story to tell this month.

A chart of the data shows that the current market narrative is really a myth! Click here to see for yourself.

The post Tax Data Shows That The Latest Market “Narrative” is Really a “Myth” appeared first on Lee Adler’s Sure Money.

This Chart Shows The Bad News That Bankers Are More In LaLa Land Than 2000 Or 2007

You’ve seen all the headline news stories about the Fed changing its tone in recent weeks. The Fed is going to pause rate hikes. And it will think about slowing the pace of balance sheet “normalization,” if the market seems to need it. As you know, normalization is just a euphemism for shrinking its balance sheet and draining money from the banking system. And that is assuredly something frightful. The Fed is now doing its darndest to make it seem less so.

Along with the Fed suddenly singing soothing lullabies to the market we’ve all heard the sweet talk from the US Treasury about calling in the bankers and the PPT, all of whom cheerily profess to love you and caring about you and your investments. It’s all about feeling good.

Whether they were really manipulating the market or not, I would hope that you have no doubt that the manipulators were doing their best to manipulate you and your fellow investors over the past few weeks. But what about all those soothing words? Do they matter? Or is it true that money talks, and you know what walks?

Well here’s something for you to look at that should concern you. It suggests that bankers have all too quickly forgotten the lessons of the past, and that once again they have their heads up their… cloud servers.  Yeah, that’s it, cloud servers. 

I mean, you should see their behavior. In fact you will see it because I’m going to share a picture of it with you. I just found a little history that is very disturbing indeed in terms of what it teaches about the present.

Click here to see what it is

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