Nothing much happening in the markets. Up, down, up…
As near as we can tell, we are still in a bull market, but one that is weakening.
On Wednesday, we showed you how our short-term indicator has turned very negative. And the US stock market looks very dangerous. In addition to near-zero growth in the first quarter, there are more and more alarming signals coming our way…
McDonald’s is closing 700 stores….
Major retailers are closing some 6,000 outlets altogether….
Retail investors’ margin debt is at record highs….
America’s non-oil trade deficit hit a new record high in March….
World trade is going soft; China’s containerized trade index just hit a multi-year low…
The bond market seems on the edge of panic, with German Bund yields up 30% in just a matter of hours yesterday and 12 times in the last 20 days…
Spending on non-durables has been this punky only twice in the last 60 years
According to Challenger, Gray & Christmas – the oldest executive outplacement and career transitioning firm in the US – over 200,000 jobs have been cut so far this year, more than a third of them due to plunging oil prices.
Fracking boom? Goodbye to all that!
Meanwhile, back at the ranch…
Elizabeth’s English class has turned into a lovefest. The girls, aged 7 to 12, are sure that Elizabeth is the finest example of womanhood on the planet. They are determined to model their lives after her.
At least, that is how it looks to her husband. The girls come over, even when there are no classes. They follow her around. They offer to help her in the kitchen. They write her notes, telling her how much they idolize her.
“I don’t know how I’m going to be able to leave them,” says the star teacher.
But time is running out here at the ranch. In one more week, we will pack our bags and move on. Argentina allows non-citizens only 90 days in the country, before they are in violation of its tourist visa rules. Our 90 days are up soon.
“I don’t know what to do. The girls are making so much progress. But it’s going to come to a halt. Then, when we come back next year, we’ll have to start all over again.”
Elizabeth is not the only one to regret moving on. Your editor is just beginning to get the hang of things. He can ride a horse without falling off. He can run the cows through the manga without being a drag on the rest of the gaucho team. He has come to understand the budget… and has an idea of how to stop the red ink.
Still, there are places to go and people to see. He has a job to do and he cannot do it by staying out in the middle of nowhere… no matter how much the middle of nowhere may appeal to him.
“Yes, well, that’s us and our lives,” says Elizabeth. “But what about the girls? It doesn’t seem fair to them. I’ve started something. It seems to be important to them. Because it opens up the world. They live in houses without plumbing, without heat, without chimneys to let the smoke out and with dirt floors. And when I give them these books… I can see their eyes light up. They’re seeing another way of living. I don’t want to think about those eyes going dark.”
The girls know that we are leaving soon.
Mili is the youngest. Seven years old. Very cute. With big eyes and a big smile. Yesterday, she came to my office after her class.
“Do you know who I am?” she asked.
“Yes, of course,” we bluffed, not really sure whether she was one of the Diaz girls or one of Juanita’s daughters. It turned out, she was neither. She is Veronica and Javier’s daughter.
“Do you know my name?”
“No,” we had to admit. We were now on the defense, outflanked by a seven-year-old. Then, we were staggered.
“My name is Mili.”
She raised her cheek, a signal for us to kiss her. Then, she passed a note with a heart drawn on it. Here is what it said:
I am Mili.
I hope you have a good time and much luck [after you leave].
When I see you at the door, I am very proud. And I want to say hello to you. I am happy that you are here.
At the bottom of the note was another heart, with “Mili” written inside.
It’s Time to Make the Politicians Pay YOU
|by Chris Hunter, Editor-in-Chief, Bonner & Partners|
Publisher’s Note: Today is the last day of Market Insight editor Chris Hunter’s vacation. For the final installment of this week’s special Market Insight series, we’re sharing an interesting excerpt from the April issue of Bonner & Partners Platinum. It’s a piece about how media companies are likely to be the biggest winners in the 2016 presidential race.
The May issue was published yesterday, but the following piece remains a timely commentary on what to expect as the race heats up.
In 2008, Barack Obama changed the presidential campaign game forever.
To win the White House, he knew he’d need “money to get out the message.” A lot of it. So he set out to raise as much, and spend as much, as possible. The only thing standing in his way was, of all things, a federal aid program. (Yes. There is, perhaps, a little irony in what follows.)
So Barack Obama exercised his freedom of choice. He chose to decline any public financing for his campaign and the spending limits that came with it. He was the only major-party candidate, since the public campaign financing system was first established in 1971, ever to have chosen such freedom.
We all know how that turned out. Barack Obama won the White House in 2008 and, in the process, completely redefined the money-raising game for big US politics.
For the 2008 presidential campaign alone, candidates spent a combined $631 million on media. In 2012, they spent over $764 million. It was a 21% increase, just over the course of a single election cycle. To put this in perspective, Kraft Food Groups and H.J. Heinz spent $583 million on advertising in 2014 (combined they would be the world’s fifth-largest food and beverage company).
For the coming 2016 race, there is zero question candidates will be spending even more. With no incumbent, the White House is open. And there’s going to be a nasty and expensive fight for it.
That means the candidates’ advertising budgets will be among the largest in the world.
The upcoming run for the White House will break, by far, every spending and fundraising record there is. We could see two candidates raise over $1 billion, when not even one candidate has ever accomplished the feat.
There are only a handful of companies positioned in the way of this astounding rush of money. And they will see huge profits as it begins to flow their way in the coming quarters.
By the time the winner is announced in November of 2016, I expect presidential campaigns alone to spend far in excess of $1 billion on TV, radio and Internet advertising. A 50% increase over 2012 spending is not out of the question.
Editors’ Note: Regardless of how the race for the White House unfolds, there will be one sure winner: the media. With the largest campaign spending effort in history just gearing up, media companies should be awash in Republican and Democratic dollars for the next year and a half.
Next week is going to be a busy one with updates for B&P Investor Network andBuilding Wealth on tap. Paid-up subscribers should keep an eye on their inbox to get the latest and greatest from Bonner & Partners.