Juggling Dynamite

An aging and indebted world spending less, and a soaring greenback, have taken both boots to multinational sales and earnings trends since 2011. While stock prices always recognize such realities eventually, this cycle central banks have managed to inspire an unusually long period of willful blindness among participants.

Down just 11% since last July, the S&P 500 has levitated in a world of HFT dreaming even as other global markets have increasingly hit the skids. Far from getting off easy however, the S&P 500 now has the distinction of being one of the most precariously perched markets in the world today.   This chart of sales growth (in blue) versus the price of the S&P (in black) since 2000 paints the picture well.  See: Earnings take a dark turn as profits warnings, sales misses mount.

And of course, as shown next below, all the borrowing/buy back tricks the past 4 years, have only made the overshoot in share prices (black) versus earnings growth (in blue) even worse.

Trying to stop people from using solar energy for their own empowerment and financial betterment is a fool’s game that will serve to drive more families and businesses off conventional grids and on to self-sufficient home stored power systems.  Utility companies can either embrace evolution or be increasingly rendered superfluous. See this Bloomberg article:  Musk vs Buffett: who owns the sun.

First, NV Energy deployed its lobbyists to limit the total amount of energy homeowners and small businesses were allowed to generate to 3 percent of peak capacity for all utilities. Then it expertly argued its case before regulators, who rewrote the rules for net-metering customers. In December it scored a major win: Nevada’s Public Utilities Commission (PUC) imposed rules that not only make it more expensive to go solar, but also make it uneconomical for those who’ve already signed up. Similar regulatory skirmishes are playing out in dozens of other states, but no other has gone as far as Nevada to undermine homeowners who’ve already installed solar arrays.

All this has enraged independent, free-market, and environmentally conscious Nevadans:…“If it goes totally haywire, I’m going to look at batteries,” he says. “I’d love to just go off the grid totally, and tell them to f— off.”

As the market awaits another nonsensical, much hyped dispatch from the US central bank, it is always entertaining to watch Faber and and Stockman deliver some antidote to the ‘how do we play this?’ on-air personalities.

Gloom, Boom & Doom Report author, Marc Faber argues that central bank policy intervention and slowing commodities demand in China have contributed to a low-growth environment globally. He said that China’s economic influence has increased “dramatically,” with the world’s second-largest economy contributing to both boom and bust in natural resource–producing nations.  Here is a direct video link.

David Stockman did an energetic summary in this segment on the latest market conditions and the possibility for a recession. Here is a direct video link.