iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
18,725 Blog Posts

The Trump Who Cried Wolf; Cramer, Faber Get Bearish on the Economy — Trash Fed

Pay attention to the market very carefully. Like I said earlier, the bulls have two magic bullets in the chamber left.

1. Trump-China deal.
2. Fed pause

Aside from that, the market will run up or lower on earnings.

Here’s Trump trying to defy the laws of nature that say “MARKETS DO NOT BOTTOM ON FRIDAY’S” talking nonsense about a Chinese trade deal. This, my friends, was done on purpose to move markets.

“China wants to make a deal,” Trump said, adding that the tarrifs the United States imposed on a range of Chinese products have put pressure on that country to agree to a trade pact.

“I think we’ll have a deal. We’ll find out very soon,” he said.

Eventually, he has to make a deal. These press releases are going to be faded soon and markets will get tired of the talk and actually punish stocks whenever the President talks. That’s what happened in 2008.

If you sense frustration in my tone, you’d be correct. About 5 mins before that statement, I bought SOXS — based on several factors, one of which is white candles and how they lead to more white candles.

Observe.

Without an outlier news event, SOXS should trade sharply higher next week.

Bear in mind, the economy is the issue here — not this other stuff. It’s noise. Pay attention to what Cramer and Faber say in the clip below. Really listen to it and understand that you might be early if you’re bearish on markets now — but you might be correct if we’re heading towards a very fast slowdown.

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8 comments

  1. numbersgame

    Long AAPL to $197, long MU, short NFLX, long DIS to $120, short XLF

    The last one is a short-term hedge, but I’ll probably develop it into a longer-term position. Note the GE weakness today – it is still a major company, and its biggest issue is **liquidity**. I think the focus on Tech is over, and it seems liek the next shoe-to-drop is the triple whammy of reduced risk/liquidity + rising rates + Brexit chaos. The financails will get hit by this, but I may go after a short HYG position instead if I see it bounce next week (lloking for a better entry point)

    Have a good weekend

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  2. soupbone

    everytime I see Cramer with the two dudes I think NHL and Don Cherry.

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  3. natehois

    How much of this pullback is a result of oil tanking?
    PUN INTENDED.

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  4. J Adabese (your pen pal)
    J Adabese (your pen pal)

    Here are the things that stuck out to me from the dialogue between Faber and Cramer.

    1) On Fed getting closer to neutral, if the Fed were actually doing its homework, they would see via home builders, mixed retail, that they should be neutral NOW. Fed is lagging.

    2) Powell admitted a few days ago that they have get more data dependent. Cramer stated several times that their thinking is too ideological.

    3) Cramer has been negative on what he sees coming for businesses for approx 6 weeks and Faber is just now starting to hear the same thing from others. Faber is now starting to agree with Cramer.

    4) Cramer’s contacts have said to him on the subject of Fed tightening “why don’t you say something!!” (on air). So here he is doing it. He and others in business see a problem developing faster than the Fed realizes. Same thing happened in 2007.

    5) Faber remarked that there is a question as to how much business confidence is being shaken by the potential trade war. Faber is hearing this now from others including investors who, by the way, think that the trade war might not itself cause the pull back, but that a pullback might be caused by the self fulfilling fear alone.

    6) The global slowdown has trashed other markets. US is not an island.

    7) Right now consumer isn’t suffering, but tariffs are indeed shaping decisions made by US companies.

    8) Fed’s Clarida says there is nothing in the markets that gives them any signal that they should pause in Dec. Cramer says that he is wrong based on rate of oil decline, baltic freight decline, $AMAT decline (which is part of the new economy), home builders decline, Autos, retailers, services decline.

    9) The Fed thinks that by raising slowly, they are being prudent. Cramer states, “They aren’t being prudent, they’re fooling themselves, they are being rash, they’re not being careful.”

    I agree with Cramer 100%. A Fed rate hike might be a dagger through the heart for US markets.

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    • numbersgame

      This is a very investor-centric PoV.

      Which one doesn’t belong:
      1) Near-Generational low unemployment
      2) recent stock market ATH
      3) Near Generational low interest rates

      Low-interest rates are the US economy’s opiod crisis: it helped the patient during sickness (’08-’09), but the liquidity dose was too high for, for too long and now investors’ are addicted and don’t know waht normal is anymore.

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  5. Po Pimp

    On #7, I’ve heard from several people that are building / renovating houses that their contractors have already warned them costs are going up around 25% at the first of the year. That’s not good.

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  6. irma vep

    I agree about the magic bullets.

    …. I am perpetually waiting
    for the fleeing lovers on the Grecian Urn
    to catch each other up at last
    and embrace
    and I am awaiting
    perpetually and forever
    a renaissance of wonder. – Lawrence Ferlinghetti

    https://www.poetryfoundation.org/poems/42869/i-am-waiting-56d22183d718a

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