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April 10, 2017

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Happy Holidays!

December 18, 2018

As you read the first paragraph of this post, realize that over the last 20 months we have, in fact, incrementally de-risked and yes, are sitting on piles of cash and US Treasury bills. Blaine is entertaining and informative, take your time over the Holidays and enjoy this post                                                                                                      -Doug

 

If you have de-risked your portfolios and piled up some tall stacks of cash as risks have risen in the market, then you deserve an enjoyable holiday break. In fact, take a long one because there is nothing to suggest that there are many investable catalysts are on the horizon. 

  • Oil prices below $50

  • POTUS has worst week of his Presidency

  • A Federal judge in Texas hits Obamacare—making the previously investable Healthcare sector less investable

  • Retail stocks enter a bear market suggesting future signs of stress in 2019 as more retailers hit the wall and close stores

  • The junk bond market has been closed to all new business for the month of December

  • The S&P 500 makes a new 2018 low

Is there a dove anywhere? Well yes, we could get a dove toss or two midweek as the Fed meets to discuss their policies. The market expects another 25bp Fed Funds rate hike but their comments surrounding the global economy and markets since the last meeting will be more important. If the market gets some dovish signals, then the market could take a break from going down for a few days until the market returns to worrying about the naughty list above.

 

So what would be my #1 pick of an investable catalyst that would get me to buy stocks and risky credits? How about this dream Christmas POTUS tweet…

 

"Navarro & Ross have resigned. I was wrong on tariffs. I am eliminating ALL taxes on U.S. imports and exports. FIRE UP THE U.S. ECONOMIC ENGINE!!! Happy Holidays and Merry Christmas! "           @unrealDonald

 

Enjoy your downtime over the holidays and don't hold your breath...

 

Last week, most assets lost value excep for the U.S. Dollar and Bonds…


(12/14/2018)

Sell complacency, buy fear…

 


(@OddStats)

An incredible and detailed long read on the meltdown at GE…Bad news still built in.

 

The GE teams started offering discounted turbine upgrades to customers in exchange for extending the length of contracts to as far out as 2050. Executives scoured existing contracts for ways to change underlying assumptions, such as the frequency of overhauls, to boost their profitability.

GE Power even sold its receivables—the bills its customers owed over time—to GE Capital to generate short-term cash flow. The unit gave customers discounts on their service contracts, lowering their overall value, in exchange for renegotiations that let the company bill the customers sooner.

The accounting maneuvers were legal, if aggressive, GE executives assured one another. But it also meant that the profits were mostly on paper. Rarely was a new dollar of profit flowing in the door.

Bolze’s team was operating in a tradition that stretched at least as far back as the glory days of Jack Welch, but the scale of the aggressive contract accounting was far bigger.

(WSJ)

 

Walt dumps Facebook and Instagram…

 

 

Time to ask yourself if Facebook has made your life and the world a better place. 


 

What an epic one-year collapse…
 

(WSJ/Daily Shot)

Which ones will:

1. Go public and be successful (think Amazon)
2. Go public and really wish they didn’t (think Snapchat)
3. Go public and go straight to the glue factory (think Pets.com)

 

 

Finally, the tweet of the week…

 

 

 

 

 
 


 

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