The market looks uneasy to me as sector rotation causes
many stocks to lose momentum.
The Catholic Church elected a new American -born Pope ... but
do not forget .... the Catholic Church was the largest enabler of
illegal immigration into the U.S. and the new Pope was one of the
instigators.
The political and legal winds are blowing against the Trump and
DOGE efforts to cut waste and spending on many useless and
frivolous government programs.
Attempts to cut regulations are finding institutions and
politicians that benefit from their complexity trying to maintain
the status quo from both sides of the aisle.
Of course, the effect of tariffs on the
economy is worrisome to politicians but they refuse to acknowledge
it was
their votes that have placed the United
States in a perilous financial position.
One must wonder the effect of continued
opposition and manipulation of the courts will eventually have on
the Trump administration efforts to reduce the deficit.
The tariff negotiation gambit is leading to
all types of economic paradoxes as nations react to the threats.
Politicians talk about a $36 trillion debt
when in actuality the true GAAP debt is over 3 times that amount
using a 7% discount factor.
According to Treasury's own documents as of September 30, 2024,
the potential GAAP debt was in excess of $220 trillion.
When the economy is running less than $25
trillion yearly, it does not take an idiot to see the eventual
problem. As Minsky said, it only takes one grain of sand ...
It is not surprising to me that Trump and
Musk wonder if there is any encumbered gold left in Fort Knox. The
movements of physical gold from London and into China, Japan and
India the last few months must be concerning to the London gold
exchange.
During the past week we've seen a significant
reduction in investors' faith in the economy. Efforts to rebound
led by the PPT have seen selling overcome those efforts the next
day.
Our screens are finding very few quality
stocks and the trading portfolio has taken a position in gold
stocks but we remain over 50% in cash.
We expect that the economy will find it
difficult to move higher in the second quarter.
Remember -- "Only purchasing power counts!"
By any reasonable measure, this market is
dangerous.
Be careful ....
To review the latest FlowChart, click
here.