But of that day and that hour knoweth no man, no, not the angels which are in heaven, neither the Son, but the Father.

– Mark 13:32

BALTIMORE – Again, not much movement in the U.S. stock market.

All eyes were on U.S. politics.

The Ides of March came… and yea, went… with poor Marco Rubio out of the race…

Yes, it was “Goodbye, Rubio Tuesday”… leaving Donald Trump and Hillary Clinton way ahead of the pack in the race to win their parties’ nominations.

Meanwhile, a dear reader wrote in to complain that the Dow was up some 1,500 points since he acted on our gloomy view… and sold out of the market.

But we hold to our opinion: This ship is sinking.

As an investor, you face two kinds of risk: the risk of missing out on gains and the risk of taking losses.

It’s up to you whether you continue to bet on rising U.S. stocks. But our view is you will be glad you got out when you did.

Death Sentence

We all live under a death sentence. Markets… societies… and our very lives must follow an unstoppable pattern.

We breathe in… and then we breathe out. We are born… and every mother’s son ever born from the beginning of time until today is programmed for death. Every ship ever built is destined for the bottom of the sea… or the scrap yard.

Up, down… in, out… expansion, contraction. Hey, don’t blame us! We didn’t invent it. That’s just the way it is. And since that is the way it is: Vive la mort!

We don’t necessarily want it. But since it is inevitable, we will look forward to it, like a pair of new boots yearning for mud.

There are times to go forward… and times to back up. There are times to buy. And there are times to refrain from embracing stocks.

This is one of those times.

The Fed has stood pat on rates since December. But the Japanese, the Chinese, and the Europeans have continued to try to goose up their economies with increasingly crackpot monetary policies.

Much of the money thus created has found its way into U.S. markets… which probably explains the refusal of the Dow to go down.

Day of Reckoning

It could be, of course, that we are totally wrong… and that some trend is in place we don’t recognize.

Stock markets are said to “discount the future.” Maybe they see something we don’t.

Or maybe they are simply preparing for a more spectacular day of reckoning by drawing more mom-and-pop investors into deeper water; as always, we wait to find out.

Still, it looks as though the bull market that began in the U.S. in March 2009 is over. And the contraction is not limited to the stock market.

Our economy, our society, and our body politic are all closing up… looking inward… turning their backs on the wider world.

Yes, we are connecting the dots. It is not just the world of money that contracts and expands. The economy breathes, too… and so does our political world.

Why is Donald J. Trump running so strongly in the Republican primaries?

Why is National Front leader Marine Le Pen doing so well in France?

How did Jeremy Corbyn – otherwise a nobody – become the leader of the second-largest party in Britain?

Why is world trade plunging?

Why are inflation expectations running at about 1% for the next decade… despite the biggest increase in central bank balance sheets – the monetary footings of the entire system – in history?

Why are growth rates in Europe, Japan, and the U.S. at their lowest levels since World War II?

And why is $7 trillion of government debt – about one-third of all issuance – now trading at sub-zero yields?

Warning Shot

“Economists fire warning shot on risks of negative interest rates,” reported the Financial Times in a front-page story last week.

“Japan’s negative interest backfire…” it added, again on the front page, two days later.

Why?

Because we are breathing out. Borders are tightening up. Barriers are erected. The “globalism” heralded by New York Times columnist Thomas Friedman and others as a solution to all the world’s problems is giving way to “nationalism.”

The expansive EZ money world of the last 30 years is losing air.

Yesterday brought news that consumer savings from the lower price of oil is NOT leading to greater consumer spending… not even in autos. Bloomberg:

U.S. retail sales dropped in February and the prior month’s gain was revised to a decline, calling into question the narrative that bigger gains in consumer spending would propel economic growth at the start of 2016.

The decrease in purchases, which included auto dealers, department stores, and furniture outlets, showed Americans were salting away money saved at the gas pump amid volatile financial markets. The disappointing reading on the biggest part of the economy comes as Fed officials meet to gauge whether growth is strong enough to eventually warrant another increase in interest rates.

“We’re seeing higher rents, higher healthcare expenses, so that may be offsetting a lot of the benefit of lower gasoline prices,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida.

The New Subprime

While current spending slacks off, past spending continues to rattle its chains. Newsmax:

Delinquencies on subprime auto debt packaged into securities reached a high not seen since October 1996, as late payments continued to worsen in February, according to Fitch Ratings.

The number of car borrowers who were more than 60 days late on their bills in February rose 11.6% from the same period a year ago, bringing the delinquency rate to 5.16%, Fitch wrote Monday in a report. During the financial crisis delinquencies peaked at 5.04%, Fitch wrote.

You’ll recall that when we left you yesterday, we promised a look at a deeper malaise. This is it. It is not just the threat of a  bear market on Wall Street. Not just a grumpy mood of the voters threatening the Establishment.

It is something bigger… deeper… something unstoppable…

More dots tomorrow…


Regards,

Signature

Bill

Market Insight


BY CHRIS LOWE, EDITOR AT LARGE


 

It’s not just negative-yielding bonds that are spreading like wildfire.

Today’s chart looks at the range of yields on bonds issued by governments in developed countries.

 

While almost $7 trillion in global government debt now carries a negative yield, another roughly $9 trillion yields between 0% and 1%.

About another $6 trillion yields between 1% and 2%.

Less than $3 trillion in government debt yields 2% or more.


Featured Reads

Negative Interest Rates Backfire in Japan
The Bank of Japan hoped negative interest rates would encourage people to stop saving and invest in stocks or buy goods. But instead, they are moving into cash to protect their savings.

New Report: The War on Cash Can’t Be Stopped
Europe is about to abolish the €500 note. Politicians claim it will reduce criminality. But reality is that it’s all part of the wider War on Cash. And a new report says it can’t be stopped.

Gold Stocks Are Screaming “Buy Right Now”
Gold has exploded higher this year, hitting its highest level since February 2015. But one leading gold expert explains why there could be a lot more upside to come.


Mailbag

Following Bill’s recent issues on Donald Trump (catch up here and here), the emails keep pouring in from readers…

Theme song: “You can’t always get what you want, you can’t always get what you want…”

Trump on the stump: “Let me tell you something. Our country is going to hell. I will do such a great job you won’t even believe it. Look, here is the story. We are going to win, win, win! Nobody is going to mess with us. We are going to have a wall, and Mexico is going to pay for it. I do this stuff so well. I was like this great student. I know so many people. I love you all, by the way, I love you all. We are going to make great trade deals. I know words. I have the best words. I am the most conservative. Let me just tell you. We don’t win anymore. We are going to start winning. We will make America great again! Kasich is a baby. It’s ‘Kay-sick-ick-ick-ick.’ Lying Ted. He holds up the Bible and he lies. Nasty little Marco. Very nasty, very nasty. Bernie, our communist friend.”

Theme song: “You can’t always get what you want. You can’t always get what you want…”

– James H.

 

TRUMP is more like George Washington, working to SAVE AMERICA!

– Peter L.

 

Trump, like Caesar, Still Rides High” encapsulates all there is to say respecting this (eh) “USA presidential candidate.” I could GAG FROM LAUGHING over this bizarre farce – a “populist” bombastic billionaire-sans-clue (Trump) vs. a prospective “felon” (Clinton).

That’s IT? That’s ALL America has on offer for PRESIDENT?

– Robert L.

Horrid the way the media is ganging up on Trump and letting so many untruths go by as “news.” I find it very easy to understand where The Donald is coming from.

He wants to make the U.S. great again. He has said it many times. I understand this because I have felt shame for my county for many different things – from unwanted war to crumbling infrastructure.

Trump wants us to have our rights. The right to free speech, in which he indulges himself. The right to bear arms. The right to defend ourselves when attacked.

He knows he has something to offer our country. He has incredible “closing” skills. He understands finance, especially large numbers. He can work with other countries and get better deals for us.

He isn’t in it for power; he is recognized as a power. He isn’t in it for money; he could make more money on his own. He is in it because he believes that he can help our country improve its economy, and thus the quality of life.

– Pat K.

I’m not a Trump fan, but the Republican “establishment” arm of the Deep State owes it to its registered voters at the Republican convention to play by the rules if there is a contested convention.

Then if Mr. Trump is truly the shrewd negotiator he claims to be, we’ll see how well he manages the delegate acquisition game. If the “establishment” rigs the game, they’ll simply be electing Hillary Clinton due to the split they’ll create in the party.

– Doug L.

Interesting to see how the GOP rank and file are voting in support of Trump while the GOP Establishment is trying to dump the man… and yet did they not want earlier on a pledge from him that he would not dump the GOP and run on his own ticket?

And (I am not finished yet) this situation tells me very clearly that the GOP Establishment clearly does not believe in democracy within the GOP. This is a party that may rule (yes rule, not govern) the U.S – a party that does not accept real democracy?

– Lyndon B.

One of your readers loves the way Mr. Drumpf [the original German spelling of the Trump family name] is stirring the pot. The Germans and Italians loved the Mr. Schicklgruber [the original surname of Adolf Hitler’s father]. And Mussolini stirred the pot… threw out the World War I apologists… made the trains run on time… provided, most of all, a voice for the anger in the citizenry.

They loved all that stirrin’… but only for a while. To answer one of your questions: What Mr. Trump wants is according to several astrologers posting online, to be noticed, and put on a pedestal. If that pedestal, as with so many sideshow despots he comes after, proves to be anchored in blood, it will of course be someone else’s fault.

It’s always someone else’s fault.

– James L.

Although most of the political attention is being focused on Trump, there is no shortage of opinions about Hillary Clinton. Do you have a personal story about the presumptive Democratic candidate for president?

Write to us at [email protected] and let us know what you think.


In Case You Missed It…

The publisher at Agora Financial took to the streets of Baltimore to demonstrate how easy his newest investment strategy is.

In this entertaining video, he shows two people with absolutely no investing experience how to make $127 in the market in less than three minutes.

Watch it here.