Downside Support Zones

STOCKS AND INDEXES BREAKING BELOW SHORT TERM SUPPORT LEVELS

The following stocks and indexes are breaking below June lows and forming the old HEAD AND SHOLDRES TOPPING FORMATION: DJI,S&P, FTSE,DJT,RUT WFC, JPM. Expect more rebounds. However if April lows are broken, abandon all hope.

The following indexes are pointing the way down and have gone stright down all year; HSI and other China indexes FXI and  DSM. Then there are the Banks all in free fall DB, HSI, CS, JPM, BNP. and EEM EMERGING MARKETS,

Goldman Sacks is now calling for GDP growth below 2% in 2019. How will get out of a recession? Stimulate the economy: Reduce intrest rates? No, theyare already low. How about a tax cut? No, just did that. How about the Fed buying bonds? No, the already have $4.5 trillion. We are out of bullets!

DOW INDUSTRIAL AVERAGE  FUTURE  LONG TERM SUPPORT ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets THESE NOW BECOME SUPPORT ZONES

 

Resistance and future support Resistance and future support Resistance and  future support Resistance and future  support  

Resistance

14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
7,728 7,728 7,728 7,728 7,728
X138.2% X150% X161.8% X 100% X 61.8%
2,752 3,864 4,776 7,728 12,503
14,198 14,198 14,198 14,198 14,198
17,150 18,062 18,974 21,926 26,701

S&P 500 INDEX

DOWNSIDE SUPPORT ZONES

1st Resistanc and Future Support Zones 2nd  3rd  4th  5th 
1,576 1,576 1,576 1,576 1,576
-666 -666 -666 -666 -666
=910 910 910 910 910
X38.2% X50% X61.8% X 100% X1 61.8%
126 455 562 910 1,472
+1,576 1,576 1,576 1,576 1,576
=1,702 2,031 2,132 2,486 3,044

 

Should the S&P break above its old 2000 and 2007 double top of 1,576 the upside potential would be a Fibonacci Resistance points of 1,702, 2,031, 2,132, 2,486 and 3,044. As with the Dow, this would indicate a new series of Bull Market could be beginning. It would also mean that we have somehow solved our economic and environmental problems. Now that I think about it, this seems a more unlikely scenario than the Bearish Downside scenario. However, what will be, it is not for the future for be to see, but obey.

NASDAQ COMPOSITE INDEX

DOWNSIDE SUPPORT ZONES

1st Resistance 2nd Resistance 3rd Resistance 4th Resistance 5th Resistance
2,861 2,861 2,861 2,861 2,861
-1,268 1,268 1,268 1,268 1,268
=1,593 1,593 1,593 1,593 1,593
X38.2% X50% X61.8% X 100% X1 61.8%
608 797 984 1,593 2,577
+2,861 2,861 2,861 2,861 2,861
=3,469 3,658 3,845 4,454

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

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THE INVESTMENT STRATEGY LETTER #723

Election Blues: The consensus is that the upcoming election will be important. However, as far as the economy and the stock markets are concerned, I don’t think so. In my opinion, with either Republicans or Democrats, the economy is going to slow down and huge US and worldwide debt could lead to another 2008 collapse of the stock markets on a worldwide basis. We are on a ship that has already sailed.

A Slowing Economy: The Fed’s Open Market Committee forecasts as of 9/26/2018 are for 2018 to be up 3.1% , up only slightly from 2017 +2.6%, in spite of a 2ed quarter surge brought on by a $1.5 trillion tax cut to the wealthy. Statistics so far indicate that 80% of the tax saving are being used for non-productive use, such as stock buybacks .The Fed’s forecast for GDP growth 2019 is +2.5% and for 2020 +2%. In other words, expect an economic slowdown. Meanwhile, the US budget deficit is forecast to go up 17% to $779 billion and in 2020 to $1 trillion. (This is the end of the myth that the Republicans are fiscally conservative). This will bring US total debt in 2018 to $21.48 trillion up $1.58 trillion from 2017. The Fed funds rate is now at 2.25% and is projected to go up to 3.5% in the next year. Higher interest rates are already slowing the housing market as Startups are down 12.3% and New home sales down 5.3%.

US Debt: Meanwhile US corporate debt of the S&P 500 index has tripled since 2010 to one and a half times annual earnings. This is near the historical peaks of the last 30 years, which were followed by recessions. In addition many companies have gone private since 2008 and are beyond regulatory oversight. As reported in the 9/10/18 NYT, many of these firms were purchased by private equity firms and that these investments “have debt at six times higher than their annual earnings – or twice the level that a public rating agency would consider as high risk or junk.”

The Federal Reserve still has $$$$Four and a half trillion dollars of bonds (acquired during a period of quantitative easing since 2008) to sell back to the marketplace (quantitative tightening) and the  banks  now own $350 trillion in derivatives ($65 Trillion in 2008). This is like a bomb ready to go off.

World Debt: At the same time the US is recklessly plunging itself into debt, global financial markets have tripled over the last three decades so that in 2008, they were 347% of the world’s GDP, and now stand at 360% of worldwide GDP.  In the last ten years the world’s largest Central Banks have expanded their balance sheets from $5 trillion to $17 trillion in order to promote the recovery. Much of this newly printed easy money has bolstered the financial markets. China has printed the most money of any nation to bolster its state companies, which would not otherwise qualify as a good loan. What happens if interest rates rise so that the expense is so large that more debt cannot be issued, as it cannot be paid back?

Crash! While the US markets have gone down a little, at the time of this writing 10/26/18, the Hang Seng index has fallen this year from 33,484 to 24,589, Emerging market EEM shares have fallen from 52.08 to 38.14, the German DAX from 13,596 to 11,051.Deutsche Bank, (Trumps bank and the stock I have called the canary in the coal mine) has fallen to new lows to 9.60 from 20.23 this year and from 144.52 in 2008. Will these markets pull the US market down or will the US markets pull the rest of the world up. In the past I would have bet on the US markets pulling the rest of the markets up. Not now! Don’t be fooled by ‘dead cat’ bounces.

Middle Class Stress: We are faced with what seems like an endless cycle of gluttony, inequality, dishonesty, bigotry, intolerance, theocracy and authoritarianism. We are being ‘distracted’ by the President’s (kleptocratic) daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor. We have taken our eye off the ball as 80 people own 50% of the world’s wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1%. The Middle class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tipping point, where all boats will sink.

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

 

 

FUTURE SUPPORT ZONES

DOW JONES INDUSTRIAL AVERAGE  UPSIDE RESISTANCE  and FUTURE  SUPPORT ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets

 

Resistance and future support Resistance and future support Resistance and  future support Resistance and future  support  

Resistance

14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
7,728 7,728 7,728 7,728 7,728
X138.2% X150% X161.8% X 100% X 61.8%
2,752 3,864 4,776 7,728 12,503
14,198 14,198 14,198 14,198 14,198
17,150 18,062 18,974 21,926 26,701

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Three Letters to the press

Three  letters recently published in the Summit Daily News

Congratulations on your editorial on August 16 entitled ‘President Trump, the enemy isn’t us.’ We will remain the land of the free, as long as we are the home of the brave. Thanks for being brave. I am confident that truth will, in the long run, prevail.

Also, thank you for publishing various views in your Columns and Letters, including mine. Like most Americans, I love this country with my whole heat and soul.  I look forward a time when as a nation, we can come together again and when the judgment, mistakes and limitations of the past can be replaced by compassion and understanding. We have got to change, from fear to hope. We must choose peace over war, mercy over violence, understanding over righteousness, forgiveness over punishment, gratefulness over ingratitude, the virtuous over the unethical, compassion over intolerance, openheartedness over judgment, humility over pride, love over hate, joy over anger, community over selfishness and generosity over greed. We have got to shift our priorities, from the battlefield of war to human dignity and our ‘common good.’ We have to be aware of our potential, both individually and as a great nation. We have to change from stressing our differences, to opening up to our connectedness.

We will be better together!

Carl M. Birkelbach

To be Together Again!

In the July 21 article by Michael Reagan (son of Ronald Reagan), he asserted that Democrats went “nuts” with glee when our President “screwed up.” Not so! It would be better for ‘our’ nation, if the Republican Party could be Great Again! Once Ronald Reagan (voted for him twice) stood up to the Russians and said “Mr. Gorbachev, tear down this wall!” Once, conservative Republicans, during the Clinton years, created a budget surplus. Now a Republican Congress has passed a tax plan, benefiting corporations and the top 1%, that has created a $1.5 trillion budget deficit, just to get some temporary growth in the economy. Once Republicans were for family values, now they separate families from their children. Once, Republicans were for strong alliances with our friends. Now they demonize our friends while praising dictators that are no more than gangsters. Once Republicans, in bipartisan cooperation, passed the Fresh Air and Water Act, (Nixon), The Voting Rights Act,  Dodd Frank reforms protecting us from a 2008 type financial fiasco, immigration reform, gun reforms and civil rights protection. Now Republicans are driven only by ‘donor power,’ no matter what the public thinks.  Once we had diplomacy and civility, now we have Tweets and over 3,000 documented lies. I haven’t left the Republican Party, they left me.

It is unfortunate for our country that 87% of Republicans approve of our president’s actions. They have hitched themselves to the star of an unscrupulous personality that pulls us apart as a nation. Instead, we have to be aware of our potential, both individually and as a great nation. A new era of globalization, multiculturalism, automation and a carbon free economy is descending on us. We must address these challenges, as opportunities. It will be Great, to be ‘Together Again!’

Keeping the conversation going

In a letter published July 28, Garnett Payne asserts that “We cannot afford the radical left wing socialist agenda of free pre-K, free college, free health care,…etc. ” I disagree! We cannot afford ‘not’ to address these issues, while allowing huge tax cuts to corporations and the wealthy and creating a $1.5 trillion deficit, just to get a temporary jump in our economy.

The American Dream is quickly fading for many and so is the prospect that our children will be better off than us. Many cannot afford health care, are paid a wage that cannot provide for their families and many cannot afford college for their children or have a huge college debt. Every day 6,000 people are being evicted from their homes. This is why? Between 1980 and 2017, all of the income growth has gone to the top 1%. One family, the Walton’s earn more income each year, than the bottom 40%, or 130 million Americans. With productivity up, there have been little increase in working wages and yet CEO pay has gone up from 65 times, to 250 to 500 times the average worker’s pay.  Small businesses and entrepreneurs, who employ 80% of the nation’s people, are being squeezed out of business by unfair advantages given to Large corporations and Big banks. According to a recent Pew Research report the United States, as ranked against other nations, is 70th in health care, 44th in math scores, 39th in basic education, 34th in access to clean water, 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate (21%) among industrialized nations.  That’s one in every five of our children living in poverty!  As great nation, we must be better than that.

You say you wish to open up a dialogue. However, while you say you are a fiscal conservative, your party has taken a far right turn toward libertarianism, that only helps the rich while declaring anything for the ‘common good’ as Socialism.  Socialism is when the government controls everything, including industrial production. Democrats are merely asking to create a level playing field of opportunity that promotes the general welfare for the benefit of the entire nation.

Carl M. Birkelbach

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

FOLLOW THE FLOW

THE FLOW

I am resting, on the beach, out of the river’s flow

It still flows, but without me

On the beach, Mondays and Sundays are the same

In the flow, I was painfully tossed about

There I cried out in a voice almost moaning

Who am I and where am I going

On the beach, there is stillness and peace

 

I have been here once or twice before

But only for a while, then tossed back in the flow

Where I become immobilized, without control

Battered and disabled by ambition, now I see

Into the flow and over a cliff in a waterfall

In painful agony I cried out, yes I can

Yes I can do what, control the flow?

 

You only control the flow in your dreams

The flow controls you, not the other way around

On the beach, I can just watch the flow

Danger! I can feel the flow pulling me back in

Stay calm, take a deep breath

The flows movement is temporal, stillness is reality

I have come a long way to achieve this beach

 

Out of the frozen tundra I have come

How long can I stay in a state of grace on the beach?

This is what it is like to live without stress

Maybe I can just dip a toe into the flow

Oops! I am being swept up by the current

Ambition and desire are sucking me back in

No, rise above, Rise above, Rise above!

 

Here, I am above the flow, even above the beach

Here, the veil of Maya and Neith are finally lifted

Here, I am connected to a collective spiritual experience

Here, I have arrived at fulfillment

Here, time ceases to flow with the flow

Here, movement and stillness have no meaning

Here above the flow, we are One

 

Wow! Look at that river flow

The flow is turning wheels and the wheels are churning lives

It is just a game, but people think it’s real

In the flow there is no rest, there is no winning

There is only the flow, ever onward

But from here above, it looks so silly

Being above, is even better than on the beach

 

So many are in the flow, some as tears

If I were to return, it would be different for me now

The new me, would be eager to teach what I have learned

Should I take another trip down the rapids?

Maybe I should try and reach higher instead?

Actually, Here there is no higher

Here, salvation is  self evident

 

The sirens of the flow beckon me back

Why? To make the world a better place?

Maybe I can ease the burden of others?

There are no easy answers, but I can help, I can try

This time I am better prepared to enter the flow

This time I have seen it from above, I understand

Look out. Here I come again!

CARL M BIRKELBACH

THREE DISTOPIAN MOVIES

THREE DYSTOPIAN MOVIES

My last post was about three dystopian books, but how about three dystopian movies? Rollerball introduces us to what it will be like when corporations are allowed to operate without regulations and without boarders.  The Citizens United ruling by the Supreme Court, says corporations are ‘people.’ If that is true they are sociopaths  that only look out for their own interests. The Handmaid’s Tale, gives us an idea what the US would look like under a Christian fundamentalist dominated government. The Alfa white males dominate. In Elysium. the earth and its multitudes are destined to perish in pollution, drought and rising seas while the oligarchy live above in orbit.

Rollerball. 1975 movie called Rollerball. It stars James Caan as the sports hero Jonathan, Maude Adams as his ex-wife and John Houseman as Mr. Bartholomew, a high-level executive of the Energy Corporation. The film takes place in 2018, where the word is run as a global corporate state. The Energy Corporation is a global energy monopoly based in Houston, which controls access to all transportation, housing, communication and food on a global basis. Energy Corporation sponsors Jonathan’s team. Jonathan’s wife, Maud Adams was taken away from Jonathan by a corporate executive, which simply exerted his power and took her. The game Rollerball is a substitute for all team sports and for warfare. It is designed to bring euphoria to the masses. While the purpose of the sport is entertainment, Mr. Bartholomew, describes it as having a “distinct social purpose”: to show the futility of individual effort. In order to defeat the individual star Jonathan, The Energy Corporation simply changes the rules, so that Rollerball soon degrades into senseless violence, which nullifies any individual effort with humiliation. In the movie Jonathan emerges victorious against the Big Corporation.  This seems unlikely!”

Handmaid’s Tale, a 1985 book and now a TV Special, The Handmaid’s Tale, a work of  fiction by Canadian author Margaret Atwood. The novel is set in a near-future in New England, in a totalitarian theocracy, which has overthrown the United States government. The Handmaid’s Tale is set in the Republic of Gilead, a theocratic military dictatorship formed within the borders of what was formerly the United States of America. It begins with a staged attack that kills the President and most of Congress with a Christian fundamentalist revolutionary uprising, called the “Sons of Jacob”.   The revolution suspends the United States Constitution, under the pretext of restoring order. The new regime, the Republic of Gilead, forms a new militarized hierarchical regime, based on Old Testament-inspired social and religious fanaticism, which creates newly created social classes, with only the elite ruling. In this society, human rights are severely limited and women’s rights are even more curtailed, as women are forbidden to read. The story is told in the first person by a woman called Offred. The character is one of a class of women kept by the ruling class for reproductive purposes and known as ‘handmaids’.”

Elysium. The 2013 film offers deliberate social commentary, which explores political and sociological themes such as immigration, overpopulationhealth careworker exploitation, the justice system, and social class issues. In 2154, Earth  most of the earth’s citizens live in poverty, on the edge of starvation, and with little technology and medical care. The rich and powerful live on Elysium — a gigantic space habitat located in Earth’s orbit. Elysium is technologically advanced with some of its technology including Med-Bays: medical machines that can cure all diseases, reverse the aging process, and regenerate new body parts. A long-running feud exists between the wealthy residents of Elysium and the citizens of Earth. The earth and its multitudes are destined to perish in pollution, drought and rising seas.”

CLASSIC DYSTOPIAN BOOKS

Following are 3 classic dystopian books that under current conditions are worth reading again. 1984 has class hierarchy  of 2% upper class, 13% Middle class and 85% poor  becoming a reality and asks the question can 2+2=5  Brave New World The common good has fallen away to ‘winners take all’ attitude. Governments are protecting the privileged and the rest are considered outsiders. Fahrenheit 451 has the masses being distracted by entertainment of virtual reality technology and drugged out on opiates. A fanciest dictatorship orders all books banned and to be burnt because he says, they cause unhappiness and mental illness because of conflicting opinions.

1984 by George Orwell

In 1984, London is a grim city in the totalitarian state of Oceania where Big Brother is always watching you and the Thought Police can practically read your mind. Winston Smith is a man in grave danger for the simple reason that his memory still functions. Drawn into a forbidden love affair, Winston finds the courage to join a secret revolutionary organization called The Brotherhood, dedicated to the destruction of the Party. Together with his beloved Julia, he hazards his life in a deadly match against the powers that be.

The class hierarchy of Oceania has three levels:

  • (I) the upper-class Inner Party, the elite ruling minority, who make up 2% of the population.
  • (II) the middle-class Outer Party, who make up 13% of the population.
  • (III) the lower-class Proletariat, who make up 85% of the population and represent the uneducated working class.

As the government, the Party controls the population with four ministries:

  • The Ministry of Peacedeals with war and defense.
  • The Ministry of Plentydeals with economic affairs (rationing and starvation).
  • The Ministry of Lovedeals with law and order (torture and brainwashing).
  • The Ministry of Truthdeals with news, entertainment, education and art (propaganda).
  • The Thought Police  stamps out anyone who does not fully conform to their regime and constant surveillance, through devices such as (Telescreens two-way televisions. (Watch out for Google ‘alexa’)

Nineteen Eighty-Four popularized the adjective Orwellian, which describes official deception, secret surveillance, brazenly misleading terminology, and manipulation of recorded history by a totalitarian or authoritarian state.

There are some similarities between now and 1984:  1) The US has been in constant war since 1776 (except for 36 years). 2) After 3000 lies documented by the New York Times ‘alternative truth’ has entered our vocabulary. 2+2 does not equal 5 as Winston Smith finally believed! 3) China, Russia, North Korea and the Saudi Arabia (remember the oil embargo) are now our friends and Canada, France and the rest of G6 are now our enemies. 4) With Presidential authoritarianism and worldwide fascism, George Orwell’s 1984 is taking on a new life with extraordinary relevance and renewed popularity. 5) The class hierarchy of 1984 of 2% upper class, 13% Middle class and 85% poor is becoming a reality. Though the year 1984 now exists in the past, Orwell’s novel remains an urgent call for the individual willing to speak truth to power.

“Orwell saw, to his credit, that the act of falsifying reality is only secondarily a way of changing perceptions. It is, above all, a way of asserting power.”—The New Yorker

“Who controls the past controls the future. Who controls the present controls the past.”
― George Orwell1984

Brave New World  by  Aldous Huxley

Published in 1932, it propounds that economic chaos and unemployment will cause a radical reaction in the form of an international scientific empire that manufactures its citizens in the laboratory on a eugenic basis, without the need for human intercourse.

The World State is built upon the principles of Henry Ford‘s assembly line: mass production, homogeneity, predictability, and consumption of disposable consumer goods. While the World State lacks any supernatural-based religions, Ford himself is revered as the creator of their society but not as a deity, and characters celebrate Ford Day and swear oaths by his name (e.g., “By Ford!”). The novel’s Gregorian calendar year is AD 2540, but it is referred to in the book as AF 632 (After Ford)

From birth, members of every class are indoctrinated by recorded voices repeating slogans while they sleep (called “hypnopædia” in the book) to believe their own class is superior, but that the other classes perform needed functions. Any residual unhappiness is resolved by his society’s methods of keeping its citizens peaceful, which includes their constant consumption of a soothing drug called soma.

This books relevance to today is the drinking of the common ‘kool-aide’ of Corporate indoctrination “If it good for the corporation it must be good for the nation’ Formerly ‘What’s good for General Motors is good for the country. The common good has fallen away to a ‘winners take all’ attitude. Governments are protecting the privileged and the rest are considered outsiders.

Hitler’s ‘master race’ is definitely implied. The biological techniques used to control the populace in Brave New World did not include genetic engineering because Huxley wrote the book before the structure of DNA was known. Now the upper class has access for it’s children through superior education and personal contacts. However, if you can afford it ,why not enhance the embryo?

-“If you want a vision of the future, imagine a boot stamping on a human face forever.”  George Orwell

 

Fahrenheit 451 by Ray Bradbury

A new movie based on the 1953 on the book of the same name by Ray Bradbury is now on HBO. It is a good reminder of what can happens when a fanciest dictatorship orders all books banned and to be burnt because he says, they cause unhappiness and mental illness because of conflicting opinions. All is fake-news except that which comes from the dictator. There was no objection by the populous as their entertainment requirements required only a short visual attention span and have no interest in in-depth media investigative reporting or in reading of literature. The masses were being distracted by entertainment of virtual reality technology and drugged out on opiates.

The term ‘Bonfire of the vanities,’ refers to the bonfire on February, 7 1497, when supporters of the Dominican friar Girolamo Savonarola collected and publicly burned thousands of objects such as cosmetics, art, and books in Florence, Italy, More recently we have had Nazi book burning, Joseph Stalin’s ‘Great Purge, Mao’s ‘Red Guard’ and many attempts in the US to censorship, including in 1987, when the Florida Panama City School Board banned Fahrenheit 451 from their library. Hopefully, the message of this book and movie is a preventer of a dystopian future and not a predictor.

“Who controls the past controls the future. Who controls the present controls the past.”
― George Orwell1984

Carl M Birkelbach 6/9/2018

 

THE INVESTMENT STRATEGY LETTER #722

500 days

Only Modest Growth: After 500 days of the Trump administration, they are bragging about a booming economy and a record low employment rate. However, looking a little closer at these statistics, first quarter growth was only at about 2% (about the same as before Trump) and the unemployment rate had already fallen to about 4% (now 3.8%). This modest growth is in spite of a massive simulative $1.5 trillion tax cut to the very rich and corporations. However, statistics so far indicate that 80% of the tax saving are being used for non-productive use, such as stock buybacks.

Trump Popularity has Grown: After 500 days on the job President Trump popularity has grown to above 40%. However, we see a polarized country if we look at recent statistics more closely.  In a recent Gallup poll reported in the New York Times today; when asked  the question “Overall, what kind of moral leadership do you think President Trump provides?”  72% of Republicans said “Strong,’ compared to 37% of Independents and at only 8% of Democrats. The polarization is even more evident of those who consider Trump’s moral leadership as ‘Weak’; 13% of Republicans, 69% of the Independents and 91% of the Democrats.

Trump’s distractions ignore the Big Picture: It seems the more the Democratic criticize Trump, the more his base dig in their feet.  Are we are being ‘distracted’ by President Trump’s  daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor? We have taken our eye off the ball, as 80 people own 40% of the world’s wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1% The Middle Class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tipping point, where all boats will sink. This means the stock market. 

We will probably soon face a Constitutional Crisis as The President will resist the outcome of the Muller Investigation. It won’t be pretty!

Let’s stop concentrating on Trump’s distracting antics and look at the Big Picture!  (The Democrats would be smart to never mention Trumps name again and just mention what needs to be fixed.)

The Big Picture: (Things we need to fix)

  • A new study predicts that up to a third of all American jobs will be lost to automation within the next 13 years. A new era of globalization, multiculturalism, multiracialism, automation and a carbon free economy is descending on us. We must address these challenges, as an opportunity!
  • Between 1980 and 2017, most of the income growth has gone to the top 1%. This process has transferred approximately $1 trillion a year from the bottom 90% of income earners, to the top 1%. This is unsustainable and all boats will sink.
  • The US has the highest ‘poverty rate’ among developed nations at 16% and 21% for children. That’s 1 out of five children living in poverty!
  • The US ranks 44th in Health Care and has the highest infant mortality rate among developed nations.  All the industrialized nations have universal healthcare for their citizens, so can we!
  • The US ranks 35th in meeting basic human needs
  • The US ranks 19th in basic education and 40th in math skills, 25th in science and 24th in reading skills. We need to level the playing field by offering our children a first-rate education.
  • In the US there are 6,000 families being evicted every day.
  • Over 50,000 people die of overdose every year.
  • The Pentagon has said that they are defenseless against ‘climate change’ and it “presents a clear and present danger” to the country. Rising seas and drought will change the world. The Departments of the Environment has been gutted. We have withdrawn for The Paris environmental agreement.
  • Our infrastructure is dangerously deteriorating!
  • Putin will stop at nothing to maintain his totalitarian system, including cyber attacks on us. He has plans to hack our bank accounts, to undermine our media and influence our elections.
  • With student debt above $1.3 trillion dollars, our young graduates have become indentured servants to their debt. In addition, Middle-Class consumers have taken on almost $1 trillion in credit card debt, while ‘Big Banks’ charge exorbitant interest rates of 15% to 25%. The Department of Consumer protection has been gutted.
  • The public is saddened by the treatment of DOCA and the treatment of those seeking asylum, as children are separated and 1,500 children are missing. This divides America. We need to pass a reasonable immigration bill!
  • Expect a Trade War.  The Smoot–Hawley Tariff signed into law on June 17, 1930 raised US tariffs on over 20,000 imported goods and reduced our export by 80% by 1932.
  • The top 1% and large corporations, through Citizens United and their lobbyists have exploited of the political system and have formed an oligarchy that has built up powerful defenses against competition and income equality. Thus, we are quickly becoming ‘The Land of Only the Privileged’. Repeal Citizens United!
  • We need to correct the Gerrymandering of voting districts.  Gerrymandering is the manipulation of voting boundaries favoring one party over the other. With a database, politicians can create a district where they can predict the voting behavior of each potential district. This must be corrected.
  • We need to set term limits for our Senators, Congressmen and for the Supreme Court, for the same reason we have a two term limit for the Presidency; power tends to corrupt.
  • We need to bring back the Glass Stiegel Act. Without it, banks can act unethically between their banking and Investment Banking functions.
  • We need to expand the Voting Rights Act, to make it easier for citizens to register and to vote.
  • We now have many people working at a minimum wage of $7.50 an hour, making them virtually slave labor. We need to set the minimum wage at $15.
  • We need to pass legislation to regulate automatic weapons, recognize global warming and regulate our banks so as to prevent them from getting the world into another financial crisis.

Don’t give up hope: as Churchill said, “You can always count on Americans to do the right thing – after they’ve tried everything else.”

 ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

THE INVESTMENT STRATEGY LETTER #721

Books that address OUR New Challenges:

With the fall of the Berlin wall in 1991 and the end of the Soviet Union, the consensus though in the US was that capitalism and the western concept of the market place had won. As last, humanity was moving toward the “Omega Point’ of philosopher/monk Pierre Teilhard de Chardin where enlightenment, reason and civility would prevail.

Instead, we face which seems like an endless cycle of greed, inequality, dishonesty, bigotry, intolerance, theocracy and authoritarianism. We are being ‘distracted’ by President Trump’s (kleptocrats) daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor. We have taken our eye off the ball as 80 people own 50% of the worlds wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1% The Middle class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tripping point, where all boats will sink.

Watch the stock of Deutsche Bank to see what the stock market will do. The bank has laundered Russian oligarchy  money and Trump owes the bank (maybe) $200 billion. Today they announced they are  cutting 10,000 jobs. This year the stocks is down from $20 a share to a new low $11.18 a share. Follow the money!

While some of these problems are systemic, there are two outside influences that have conspired to change our governing process. 1) One side comes from the far-left of the Koch brothers and their Cato Institute and the Mercer family and their now defunct Cambridge Analytic and their associates that have plans to subvert the will of the democratic majority and tilt the playing field forever in favor of the rich and powerful. 2) The other influence comes from the totalitarianism and the oligarchy of Russia and other authoritarian governments that are leaning to the far right, where fascism is winning over individualism and equality. Everything Russia does is to undermine Western (demonic) structures and government, so their form of government of gross inequality appears preferable to their people. Russia’s Putin has hacked our bank accounts, undermined our media with fake news and influence our elections. Whether we know it or not, our country is under attack and so is Europe (Italy)!

As long as there are no current policies to deal with automation, globalization and the two outside influence  of oligarchy and fascism and the other issues raised by the books listed below, there appears to be an unstable environment for the stock market. 

New books that I have just read and that I highly recommend:

Democracy in Chains by Nancy MacLean explains in detail how the Koch brothers and the Mercers are executing  a plan to divide us through our fear of multiculturalism and racial differences.The Road to Unfreedom by Robert Snyder which explains how Putin is executing a plan to have us loose faith in our institutions (Presidency, the rule of law, the safety of our identity and our financial information) though cyber attacks. Can Democracy Survive Global Capitalism by Robert Kuttner describes how Fascism is winning through out the world and how the US oligarchy and corporations have captured the machinery of the government to promote it.

Three books that I have just read which hope for a positive outcome: Hope in the Dark by Rebecca Solnit; Enlightenment Now by Steven Pinker and  The Soul of America by Jon Meacham; While the American story has not always—or even often—been heroic, we have been sustained by a belief in progress even in the gloomiest of times., “The good news is that we have come through such darkness before”—as, time and again, Lincoln’s better angels have found a way to prevail.

Also books I am reading now  Evicted: Poverty and Profit in the America City by Matthew Desmond (6,500 evictions every day!); How Democracies Die by Steven Levitsky; The Common Good by Robert Reich;

Just Published:: War vs Peace by Ronan Farrow: tells how diplomacy of the state department is being replaced by military policy; Us vs Them by Ian Bremmer: Tells how we are being distracted from solutions of automation and globalization.  Tailspin by Steven Brill. How the aristocracy and oligarchy are perpetuating a ‘take it all ‘ policy that will make our economic system dysfunctional.

A novel: Ready Player One by Ernest Cline that presents a virtual reality world of the future, (Also a movie)

Carl M. Birkelbach

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

New Books

New books that I have just read that I highly recommend: 

Fear by Bob Woodward. New Yorker Magazine said about the book, ‘The real crime is already in plain sight” Democracy is getting crushed and the ultimate outcome, unlike Nixon, will not be pretty. Democracy in Chains by Nancy MacLean explains in detail of how the Koch brothers and the Mercers are executing  a plan to divide the US through our fear of immigration, multiculturalism and racial differences.The Road to Unfreedom by Robert Snyder which explains how Putin is executing a plan to have us loose faith in our institutions ( the Presidency, the rule of law, NATO, NAFTA, the safety of our identity and our financial information) though cyber attacks. Can Democracy Survive Global Capitalism by Robert Kuttner describes how Fascism is winning throughout the world and how the US oligarchy and corporations have captured the machinery of the government to promote it.  Yes we still Can by Dan Pheiffer, tells a story of Russia and Trump influencing the Republican Party for an upcoming constitutional crisis. War vs Peace by Ronan Farrow:that tells how diplomacy of the state department is being replaced by military policy; Us vs Them by Ian Bremmer: tells how we are being distracted from solutions of automation and globalization by political rhetoric.  Tailspin by Steven Brill tells how the aristocracy and oligarchy are perpetuating a take it all attitude, that will make our economic system dis-functional. A novel: Ready Player One by Ernest Cline that presents a virtual reality world of the future run by a Google type corporate conglomerate. Evicted:Poverty and Profit in the America City by Matthew Desmond;6,000 people are evicted every day! How Democracies Die by Steven Levitsky; How we are headed for a economic and political disaster.The Common Good by Robert Reich, an attempt to see the value of a progressive political policy to solve inequality.

Three books that I have just read with a positive attitude:Hope in the Dark by Rebecca Solnit;Talks about maintaining a positive mental attitude. Enlightenment Now by Steven Pinker tells about how the macro world is a much better place than ever before and The Soul of America by Jon Meacham; While the American story has not always—or even often—been heroic, we have been sustained by a belief in progress even in the gloomiest of times., “The good news is that we have come through such darkness before”—as, time and again, Lincoln’s better angels have found a way to prevail. I doubt it, but lets pray for solutions. I believe the world is now at a tipping point and is moving toward  destruction (nuclear or autocratic oligarchy)  or a new era of opportunity and enlightenment for the common good.

We are at the crossroads!

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach