This is a syndicated repost courtesy of The Daily Reckoning. To view original, click here. Reposted with permission. David Stockman joined Fox Business on Varney & Co. to discuss why he believes the current markets are setting up investors for a big drop. Asked for an explanation regarding his call that the S&P 500 faces a 35% fall and whether the market was seeing the start, Stockman fired away at his logic and reasoning. ‘I think it will happen any day. Because we’re a country that’s out of control.’ Varney, quick to draw conclusion noted that the economist had been making such claims for years. Stockman rebutted, ‘I could have said that in February 2000 and the market dropped by sixty percent. I could have said that in November 2007 and the market crashed. I am old enough to remember October 1987.’
David Stockman joined Bloomberg Markets to discuss President Donald Trump’s latest budget projections. After the White House and current Office of Management and Budget director Mick Mulvaney released various statements on the budget proposal viability conversations already began within the GOP and Congress. When prompted by host David Gura over his thoughts, even reflecting on former Treasury Secretary Summers comments that the budget is ludicrously optimistic, David Stockman did not mince words speaking on Washington.
This post was published at Zero Hedge on Jun 15, 2017.
This is part I of a 3-part series introducing Plunger’s ‘Trade of the Year’. This section gives a review of the oil price from 1946 to present explaining the essential forces which powered its price through various bull and bear markets. It explains how we ended up where we are today in the oil market. Part II will explore the macro forces driving today’s economy which lays the groundwork for introducing my trade of the year in part III. To acquire a broader view of oils path over the past century I highly recommend the following resources on the oil market. Daniel Yergin’s ‘The Prize’ is an in-depth review of the history of oil up to the First Gulf war. It is indispensable in understanding the growth of the industry. Other books provide entertaining color to the industry by reviewing the swashbuckling nature of the early players who formed the industry as independents. I recommend ‘The Big Rich’ by Bryan Burrough and JP Getty’s autobiography ‘The Way I See It’. Finally, David Stockman’s ‘The Great Deformation’ is essential reading as it corrects all the false economic narratives of the past which have been masquerading as truth.
This post was published at GoldSeek on 17 April 2017.
The following video was published by ChrisMartensondotcom on Oct 2, 2016 David Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider’s insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does. In his upcoming book, Trumped! A Nation on the Brink of Ruin…And How to Bring it Back, Stockman lays out how we have devolved from a free market economy into a managed one that operates for the benefit of a privileged few. And when trouble arises, these few are bailed out at the expense of the public good. Stockman brings us his report of what 30 years of politics, degenerative crony capitalism and ‘bubble finance’ have finally wrought. The upheaval and crossroads represented by Donald Trump’s candidacy spell economic disaster or resurgence, depending on the steps America chooses to take from here.
Former Reagan Budget Director David Stockman joins today’s Liberty Report to talk about his upcoming book, ‘Trumped: A Nation on the Brink of Ruin… And How to Bring it Back.’ What are Stockman’s suggestions on foreign and monetary policy and would they help?
It’s hard to imagine a better endorsement of Donald Trump’s economic policies – whatever they may be, whenever he finds the time to explain them – than the recent endorsement of Hillary Clinton by former Goldman Sachs CEO and U. S. Treasury Secretary Hank Paulson. As the man in charge of the biggest explosion of corporate welfare in world history – the ‘TARP’ bailouts, he defined himself as a sworn enemy of capitalism and a socialist when it comes to the capital markets. Socializing billions of dollars in investment bank, insurance company, and automobile industry losses with taxpayer dollars qualifies Paulson as deserving of the S-word label. As such, Hillary Clinton may well have found a new political and financial soulmate. Paulson began his career and cut his political teeth with some of the sleaziest and most disastrous political hacks in American history – first as a Pentagon assistant to the secretary of defense from 1970-1972, then as a Nixon administration assistant to John Ehrlichman, the convicted Watergate felon. Such sterling credentials earned him a position at Goldman Sachs, where he presumably mastered the political dirty trick skills that he must have learned from Ehrlichman and the rest to eventually claw his way up to the CEO position. Paulson and Hillary Clinton might as well be cloned twins when it comes to using their positions of political power to line the pockets of the wealthiest people in America in return for kickbacks and political support. As the chief corporate welfare czar during the Bush administration, a first order of business was the $180 billion bailout of the insurance company AIG, ninety percent of which was totally solvent, as documented by David Stockman in his book, The Great Deformation(p. 6). Rather than allowing a healthy free-market purge of AIG’s bad assets, Paulson showered the company with taxpayer dollars in a totally unnecessary bailout.
David Stockman, former director of the Office of Management and Budget, discusses what’s at stake for the United States in the battle for the White House between Donald Trump and Hilary Clinton. He speaks on “Bloomberg -GO’.”
‘Like champagne, bull markets remove inhibitions.’ -James Grant My readings over the last several weeks have consisted primarily of David Stockman and Jim Grant – two sane voices in the insane financial world. Each have contributed wondrous thoughts and reflections on the nature of 21st century finance, which is primarily a story of the ‘corruption of capitalism’ (to use Stockman’s phrase) and the rise of bubble finance. This tragedy of course, is a result of the slow and pernicious takedown of free markets, especially in the area most people refuse to look: money and banking. The consequences of the financialization of the world, which began to manifest as ‘fiat money’ was disconnected to its underlying commodity (gold) in the 1970′s, eventually led to a corruption of financial culture – not only the culture of Wall Street itself, but also down to the way Main Street treated its relationship with savings and ‘investments.’ There was a catastrophic shift in the mentality of the people as the Fed moved forward to an era of what David Stockman calls ‘Prosperity Management.’ The middle class in America forgot all about the importance of savings and frugality and instead bought into the lie that one’s future would be ‘taken care of’ if only it threw its money into the stock market. An important mechanism for the allocation of scarce resources into productive investments, the stock market is a vital piece of a free market capitalist economy. But when the United States government decided that money, credit, and interest rates would be controlled and managed solely by the whims of the central planners, no longer having anything to do with the multi-century long underlying commodity of gold, the stock market quickly became a betting center – a gambling house.
In an editorial in the print edition of Reason, Matt Welch takes me to task for ‘celebrating’ the candidacy of Donald Trump, who he calls a ‘false prophet of anti-interventionism.’ Reason’s editor cites one of my more hopeful predictions about the beneficial consequences of the Trump Effect on American politics: ”If Trump gets the Republican nomination the neocons are through as a viable political force on the Right,’ Antiwar.com’s Justin Raimondo enthused at the end of February. ‘And if Trump actually wins the White House, the military-industrial complex is finished, along with the globalists who dominate foreign policy circles in Washington.” Welch goes on to cite similar expressions of deep satisfaction at the sight of the neocons’ hysterical panic coming from former Reagan administration budget director David Stockman and my old friend Pat Buchanan. And he even professes to see how ‘it’s not hard to see how the paleo crowd wound up here,’ pointing to Trump’s evisceration of the Brothers Bush and his delightfully true description of how George W. Bush and his neocon advisors lied us into war. And then there’s this: ‘Foreign policy, militarism, and even tear-jerking paeans to politicians who govern during crises – in other words, about 90 percent of the content at the 2004 Republican National Convention – were no longer safe political spaces for the GOP. Donald Trump is taking a battering ram to one of the Republican Party’s core identities, and not a moment too soon.’
Newsmax Finance Insider and former U. S. Office of Management and Budget Director David Stockman claims that the Federal Reserve is ‘lost’ and needs to resign because the central bank has pushed the nation to the brink of economic collapse. ‘What they’ve essentially done is create another huge bubble and they’re about ready to be repudiated because the bubble’s gonna collapse at the very time that we’re heading into the next recession,’ he recently told Bloomberg television. ‘I think the Fed is completely lost,’ he told Bloomberg television. ‘You can’t have seven years of zero-cost money without creating huge distortions in the financial market,’ he said. ‘The world economy is deflating and shrinking,’ theNewsmax Finance Insider said. ‘Look at all the numbers: business sales are down five percent from their peak; inventories relative to sales are at recession levels; and capex orders are down 10% from a year and a half ago,’ he said. ‘Everywhere you look in the U. S. economy, there is weakness, except for the phony numbers put out by the BOS [Bureau of Statistics],’ he alleged.
Former U.S. Office of Management and Budget Director David Stockman discusses Donald Trump’s role against the Washington and Wall Street establishment and why no president can save the U.S. economy. He spoke on “Bloomberg Markets.”
It’s good to no longer be a lone voice in the wilderness. This latest commentary on the insane overvaluation of Amazon stock comes from Bill Bonner of Agora Research by way of the Acting Man blog: Every AMZN bear has been made to look like an idiot – but that may soon change. As David Stockman recently pointed out, those who actually take the time to properly analyze its slippery accounting and business model (not the dead fish employed by the sell-side, obviously) cannot help but conclude that it is a giant Ponzi scheme – and the danger that this realization will penetrate the ‘market mind’ is increasing. It remains a ‘river of no returns’ – although consumers have every reason to love it. Investors buying it today pay 830 times net earnings for the stock – and said net earnings actually look somewhat dubious upon closer inspection. Interestingly, a lot of AMZN critics still insist on describing AMZN as company that generates ‘cash flow.’ But, as my AMAZON dot CON report details, the metric being describe as ‘cash flow’ comes from Bezos’ own quarterly earnings presentations in which he references ‘free cash flow.’
David Stockman: ‘We’re headed for a very severe monetary crisis and period of great instability – the very opposite of what has been experienced for the last six or seven years, when these markets have been effectively tranquilized by the central banks and their massive quantitative easing and intrusion into financial markets… David Stockman continues: ‘But it’s going to change because we’re reaching the point where they (central banks) are out of dry powder. I don’t think the central banks have infinite power. I don’t think they can keep interest rates suppressed forever if confidence is lost. Remember, there are trillions of dollars of bonds out there. There is something like $225 trillion of total debt in the world (public and private), and $90 trillion of that is traded in one form or another. They (central banks) are not going to be able to control markets indefinitely if people who are on leverage start to lose confidence in the regime and reduce their positions and liquidate their portfolios. Who is going to buy it? If the central banks go back in in an even greater way with quantitative easing, particularly the Fed, I think it will scare the world to death and it will be totally counterproductive.
A government shutdown would force Congress to address fiscal issues before they reach unmanageable levels, a former Reagan administration official contended Wednesday. ‘We’re on the fiscal Titanic and we’re going to hit something hard and immovable one of these days,’ said David Stockman, director of the Office of Management and Budget from 1981 to 1985, in a CNBC ‘Closing Bell’ interview. The House of Representatives and Senate on Wednesday passed a last-minute stopgap spending bill that will keep the federal government open through Dec. 11 pending President Barack Obama’s signature. But another budget battle will likely ensue then, as Congress remains divided over federal funding for women’s health organization Planned Parenthood.
David Stockman is not a fan of the Fed. In fact he claims that the Fed is on a ‘jihad’ against retirees and savers. The former Reagan budget director and author of ‘The Great Deformation: The Corruption of Capitalism in America’ visited Yahoo Finance ahead of the Fed announcement to discuss his predictions and the potential impact of today’s interest rate decision. ’80 months of zero interest rates is downright crazy and it hasn’t helped the Main Street economy because we’re at peak debt,’ he says. Businesses in the U. S. are $12 trillion in debt. That’s $2 trillion more than before the crisis, but ‘all of it has gone into financial engineering – stock buybacks, mergers and acquisitions and so forth,’ according to Stockman. ‘The jig is up; [the Fed] needs to get on with the business of allowing interest rates to find some normalized level.’