Overheard in a Wall Street bar...

[Bill Bonner's Diary]( Overheard in a Wall Street Bar… By Bill Bonner, Chairman, Bonner & Partners [Bill Bonner] GUALFIN, ARGENTINA – Friday evening after the bell rang on the New York Stock Exchange, traders and analysts, sell side and buy side, 2018 quants and deep value dinosaurs, million-dollar-a-year partners as well as the order takers and clerks, all got on their trains and into taxis and autos for the ride home. Some retired to neighborhood bars, as they usually do, to discuss the week’s events. Bartenders must have known that something was wrong. Their patrons did not spend as freely as they had the week before. Their spirits were not as high. They seemed subdued. Recommended Link [Your “profit window” is closing]( [image]( On several days every year, investors have the chance to make 30X MORE money than on any other days. These “windows” open like clockwork, in a highly predictable way. But they don’t stay open for very long. [Click here to learn more]( -- Setting Off a Sh*tstorm “It’s just another opportunity,” said O’Brien, from a short-term corporate finance desk at Wells Fargo. “If there’s one thing we’ve learned over the last 30 years, it’s ‘buy the dip.’” O’Brien is only 29 years old. He must have begun learning while still in the womb. “I’m not so sure,” said Moroni from Blackstone’s private equity research unit. “Did you see that China is talking about cutting back on buying our bonds? This wild man in the White House is stirring up trouble. And he doesn’t know where it will lead.” “Yeah, and now the Fed’s against us, too,” added Schultz, recently promoted to Bank of America’s lead macro analyst on European equities. “I listened to [Fed chief, Jerome] Powell on Wednesday. He’s telling us that he still has our backs… but he’s going right ahead with more QT [quantitative tightening… reducing the Fed’s holding of bonds]. I know what’s going to happen: He or those clowns in Washington will set off a sh*tstorm. Then, they’ll change course. But it could be too late.” “Yeah…” Moroni spoke again, “…at some point, all this bullsh*t doesn’t work anymore.” Recommended Link [NASA Secret Helps Military Man Retire at 43]( [image]( For 81 years, America’s had a secret weapon in the space race… Headquartered a thousand miles away from the Kennedy Space Center, a little-known NASA lab is home to PhDs, rocket scientists, and four-star generals. They’ve spearheaded our most historic missions: Voyager, Pioneer, Galileo. And now, there’s been an incredible twist to the story. In short: Thanks to the same scientists that put man on the moon, you can get into the market’s biggest, fastest windfalls… [Before they rocket up. Click here now to continue reading]( -- Vainglorious Crank The three men were rehearsing a conversation that went on in many different forms in many different places over the weekend. Everyone sees, more or less, the same dots: The Fed has reversed 30-plus years of money expansion… …the federal government is headed towards bigger budgets, bigger deficits… and a $40-plus trillion debt… …housing is softening… consumer spending is falling… …the bull market on Wall Street is getting long in the tooth; it’s now the second-longest ever… …Team Trump is recklessly putting up trade barriers… wantonly annoying allies… swatting at hornets’ nests… stepping on rakes… getting fly strips stuck in its hair. There are warmongers in the State Department (Mike Pompeo)… …war criminals at the CIA (Gina Haspel)… …a vainglorious crank (John Bolton, one of the chief promoters of America’s disastrous second Iraq war) as national security advisor… …and an incompetent hack (Kudlow) as economic advisor. Former television personality Larry Kudlow has been wrong about every major economic and financial event for the last quarter century. Kudlow, just before the 2008–2009 crisis: “There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). Goldilocks is alive and well. The Bush boom is alive and well.” Recommended Link [Scientist Studying Ancient Bacteria Stumbles Upon the Key To DNA]( [image]( Now the technology is moving faster than ever. In April, a small company could announce it cured a specific type of lung cancer… This announcement could rapidly grow this tiny industry 35,000%! To see the best way to play this milestone news… [Click here]( -- Horror Week And now… “Horror Week for the Dow…” says Bloomberg [see market insight below]. What next? Barron’s interviewed Stephanie Pomboy, founder of MacroMavens: In January, the savings rate went from 2.5% to 3.2% in one month – a massive increase… Total retail numbers have done nothing but go down. We’ve seen the biggest increase in food and energy outlays since 2011, accounting for 30% of the increase in consumer spending in the past six months, up from 11% in the two years prior. Consumers have had to draw down whatever savings they amassed after the crisis and run up credit-card debt to keep up with the basic necessities of life. After the crisis, total savings rose from $440 billion to $1.4 trillion. Now it’s back to $400 billion. Consumers have basically taken every penny they socked away and spent it. Households are borrowing 90 cents for every incremental dollar they spend, up from 40 cents four years ago. Household debt service costs are expected to increase by $75 billion this year – almost completely offsetting any gains from the tax cut. Pomboy also points to a $4 trillion pension deficit – public and private. Pension funds hold stocks; rising stock prices ease deficit problems. Falling stock prices make them worse. She thinks pension systems will begin to blow up if stocks go down just 15%. The Dow is already down 12% since January 26. Quantitative easing drove investors into stocks and bonds, she points out. Quantitative tightening should drive them into gold… and cash. Back in the bar in Lower Manhattan: “What? So you’re saying we should sell out… and hold cash?” asked Moroni. “I don’t know what the hell to do,” answered O’Brien. “Let’s just see what happens…” Stay tuned… Regards, [signature] Bill MARKET INSIGHT: DOW STUMBLES By Joe Withrow, Head of Research, Bonner & Partners [Joe Withrow] The Dow Jones suffered its worst two-month performance in years. That’s the story of today’s chart, which tracks the Dow going back to December 2015. [Chart] As you can see from the chart, the Dow hit a record high of 26,616 on January 26. But it’s fallen nearly 12% since then – in just 40 trading days. The last time the Dow performed this poorly was December 2015, when it fell 11% in 15 trading days. – Joe Withrow FEATURED READS [Trade War Escalates]( Nick Giambruno reported [on Friday]( the U.S. and China could be in the early innings of an all-out economic war. As details of new Chinese tariffs roll out, that future is looking more and more like a reality. [Facebook’s Other Privacy Scandal]( been a hard few weeks for the social media giant. News broke that data from millions of users had been unlawfully collected. Now, Facebook may be facing another PR problem. [What Will Trigger the Next Crash]( Joe Withrow showed above, U.S. stocks are on a shaky footing. And Dan Denning, Bill’s coauthor on The Bill Bonner Letter, says things will only get worse. [Here’s why.]( MAILBAG In the mailbag, Bill’s [explanation for the state of West Baltimore]( draws praise… Whatever you are breathing, eating, or smoking, keep it up. Your best article. Thanks. – Laszlo K. That’s how you help the poor in America, not just in Baltimore, and they will become successful tax payers! – Franz M. “How the Feds Turned West Baltimore Into a Sh*thole” is one of your best ever. I’ll use it in my next Sunday school lesson, and in all of my political thinking/writing. – Dan E. Surprised you did not cite the current out-of-wedlock birth rate for whites in poverty areas! And also, the role of the Kushner companies in maintaining the high quality of life in urban Baltimore. – Bill S. As a medical rep in the early ‘70s, I routinely drove on some of those streets to get to Lutheran and Hopkins. They were a little dicey then, but I would avoid them like the plague today. – Tom C. Capital punishment is like any other: only really effective if swift and certain. And we know it is neither. In the U.S., marriage is penalized in so many ways. Look at the difference in taxes for two people filing two single returns versus married couples filing jointly. – Joan K. The nightmare/tragedy of Baltimore was the defining experience of my life, above all and no doubt. Little did I realize in the late summer of ‘74, as I made my way into town on the old National Road, US-40, coming smack-dab into the area you describe, with no warning and coming from the heartland, that I was seeing, and preparing to live, the high cost of vote-buying. There is no other explanation for the country having put blacks back in chains a second time, only this time, the chains were (and still are) invisible. I lasted 1 and 3/4 years. I was fortunate to be able to leave. Most aren’t so fortunate. – Paul M. My mother, who is one of your neighbors in Nicaragua, turned me onto your writings. I agree with your solution to West Baltimore, but unfortunately, neither the liberal left nor the conservative right will ever allow that to happen. Someday, the Common Sense Party will emerge; we will all be hanged as heretics, but we will emerge. Keep up the musing. – Aaron W. You hit the proverbial nail on the head. When “good ole LBJ” and Congress started the “Great Society,” a downward spiral started. Unfortunately, it had two very disastrous outcomes: - The monies taken from the Social Security system would never be returned (no one even entertained an economic downturn); - Individual incentive and responsibilities were pushed aside. To continuously throw money at a problem that has proven to have negative results is not logical, nor a solution to the problem. But there are some in Congress who want to control people, and this is the only way they can get votes. This country was not meant to be a “cradle-to-grave” government. We are, however, one of the most charitable in the world, despite what the Vatican spews out. The people of this country were taken care of before the “Great Society” debacle, without government intrusion. I agree with you that the government should just get out and let responsibilities and self-worth return. – Rich K. The point is understood, but win-win is, to put it bluntly, simplistic nonsense. Such situations exist, but they are rare. Georg Hegel, back in the early 19th century, was already writing about the capitalist “rabble” (die Pöbel) that was already festering as free enterprise took hold. Then came Marx – say what you will about him (and, no, I am no Marxist) – where the problem was monstrous. American, English, and European robber barons exploited workers, and it continued until labor laws got passed. Your ugly government took action. Rockefellers shot union organizers with no recourse to law. Bakers worked 18 hours a day in New York City for starvation wages, with the Supreme Court authorizing the situation as “freedom of contract.” All win-lose. Families, no doubt, were intact because there were no divorce laws. The problem is not just government, but the intractable human animal. Those who succeed are normally unprincipled and ruthless scum who throw a few table crumbs to the masses. When America offshored its jobs to China (yes, it was all planned via greed and other motives), serious poverty was there for the asking, as the good-paying jobs went with the offshoring. You assume a possible paradise, but it is just simplistic nonsense. The human animal cannot be saved, which is why religions promise salvation in the afterlife. I have no easy solutions, but anarchy-capitalism isn’t going to get it done. – Stefan B. Truer words were never written, sir. It’s the same in rural America, where I live. The family dynamic is almost nowhere to be seen. I feel sorry for these babies being born. I think you should add a fixture to our system of handouts, and that is that the women have to be on birth control. Not sterilized, but just on controlled birthing. Once they have the capacity to remove themselves from any poverty-driven government aid, they then are able to enjoy the wonder of having children. I have found that these women and men don’t even look at children as the wonder that they are, but rather as a job or just more money they receive each month. There lies the shame and core problem. Most have no idea that West Baltimore exists, or rural communities that are complete dens of inequity. Shame, shame on us for allowing it. Our favorite excuse, or at least mine, is that “I’m just too busy.” Or is it because I just don’t have the capacity to care? Hmmm, help me decide. – Loci P. IN CASE YOU MISSED IT… Most crypto traders spend their day wondering if the crypto market will rebound. But Jeff Brown, Bill’s top technology analyst, hardly even thinks about it. That’s because Jeff has found a better way to invest in cryptos – by betting on the technology behind bitcoin. [See how he does it here.]( [image]( [Bonner and Partners]( © Bonner & Partners 55 NE 5th Avenue, Suite 100, Delray Beach, FL 33483 [www.bonnerandpartners.com]( This e-mail was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Customer Service Bonner & Partners welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact us, call Toll Free: (800) 681-1765, International: (443) 353-4462, Mon-Fri: 9am-7pm or email us [here](mailto:feedback@bonnerandpartners.com). Having trouble getting your e-mails? Add us to your address book. Get Instructions [here]( © 2018 Bonner & Partners, 55 NE 5th Avenue Suite 100, Delray Beach, FL 33483, USA. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from the publisher. 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