What No One Is Telling You: How IPO Unicorns Are Made

Risky IPOs, overvalued tech unicorns, and a world without recessions are all in vogue these days as investors make the classic bull assumption that tomorrow will always mirror yesterday.

With the Fed sending more steroids into the longest (and most hated) business cycle on record, one can't blame investors for forgetting about bears and dreaming about unicorns.

But more informed investors may want to have a look under the hood of the mutual funds they hold, for there might be a number of unsavory unicorns wreaking havoc on their money.

So shorten your stirrups, it's a nasty ride... Read more »

The Fed Just Gave You a Buy Signal for These Three Securities

Last week, the Fed rolled out the money printers yet again, to engage in a $60 billion monthly bailout of the Treasury market - specifically in the short-duration (six months or less) T-Bill space.

Annualized, this money-printing adds up to another $720 billion in fiat money creation and nosebleed-level deficit financing.

Holy cow... here we go again. Pure desperation mode at the Fed - and a golden opportunity for those who see right through it.

Let's discuss...

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German Lessons – Dire Warnings from Overseas

Things are falling apart across the Atlantic, and the implications for U.S. investors are now loud and clear.

As an American who grew up on baseball, yet was educated and employed (partly) in Germany with a residence today in France, I suppose it's fair to say I have a global perspective as to both the realities and stereotypes of certain cultural and financial nuances.

As for Germany, well, it conjures up a great deal of stereotypes and ideas, both fair and unfair. I won't defend or address those here.

However, what most of us on both sides of the Atlantic (including the French...) can agree upon is that Germany has a uniquely strong passion for disciplined spending, thrifty saving, and currency risk sensitivity.

This land of Max Weber, along with blunt speak economists like Ludwig von Mises or Walter Eucken, is all too aware (remember Weimar) of what happens when wheel barrels of worthless money are rolled out to solve chronic debt problems.

In short (kurz gesagt): It doesn't work.

Here's why... Read more »

The Ticking Time Bomb that Almost No One Sees Coming

There are just not enough dollars today to meet the fantastic array of nuanced and complex dollar demand in both U.S. and global markets.

This means big, big trouble ahead - and hence money printing at full speed.

How do we know? Well, we've seen this movie before-in fact, we're part of the system that wrote the script.
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Grim Week Bodes Poorly for Your Pocketbook – What to Do Now

Welcome back to What's Happening Now, following a grim week for investors, especially those hanging on for that last evasive yet entirely possible "melt-up" in stocks to come should the Fed print more dollars out of thin air.

Beyond (and more important than) the impeachment proceedings launched in the U.S. last week, China trade negotiations fell off track again as new U.S. threats to contain even passive investing in China, along with Chinese company listings on U.S. Exchanges, were floated.

A resolution of the trade war would send markets temporarily much higher; as of today, however, such a resolution remains elusive.

In the meantime, U.S. manufacturing data continued to plummet... to below breakeven.

And on the Central Bank front, necessary Fed repo rescues alarmed the U.S. as chaos at the European Central Bank mounted.

In short, a lot is going on and not much of it is objectively good, though further Fed "stimulus" could easily buy us more time and highs.

Let's discuss...

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The Ongoing Repo Question – More Proof of a Rigged to Fail Market

In the wake of last week's repo market panic, I realized that there is much more to be said about its implications - and what it all means for you and your money.

First, let's be clear that the repo market is not the bond market, but rather a clever little corner of the market casino designed to allow major banks and a few other non-bank and quasi-government entities to make short-term (often overnight) loans on an as-needed basis.

With this in mind, many readers have naturally asked why the big banks, so flush with post-2008 reserves, would ever need such "loans."

Additionally, other readers, those admittedly new to the variant and rigged mechanizations between D.C. and Wall Street, have been pondering what all of this sudden (and narrow) repo noise has to do with their own money and the broader risks facing the markets.

Well, the answers will likely tick you off.

As to the first question, you are correct to ponder why the big banks, so flush with reserves, need a repo market's overnight loans at all.

In fact, the blunt truth of the matter is they don't.

Here's why, and here's what's really happening

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What Low Rates Do to Your Favorite Stocks

The relationship between low rates and inflated stock prices is dangerous, and that danger is likely impacting your money.

As market veterans who've seen this movie before, we'd like to make this point stick with another source of entertaining fiction - Netflix.

The company's taken on a frankly disturbing amount of debt, something that even a market darling FAANG stock isn't safe from.

Here's why you should keep an eye on this debt drama... Read more »