Month: March 2019

A powerful winter storm is forecasted “to intensify explosively” in the southwest US on Tuesday into Wednesday, unleashing a wide array of life-threatening weather hazards for tens of millions of Americans, reported Axios.

The impact area is expected from North Texas through the Dakotas and Minnesota is expected to be hit the hardest. The storm will likely qualify as a meteorological “bomb” — short for bombogenesis, which describes storms whose central pressure drops 24 millibars in 24 hours. The lower the pressure and the quicker it drops, the more powerful the storm. This could be one for the record books.

“A strong storm is poised to rapidly develop across the Plains this week, meeting “bomb” criteria (deepening of 24mb or more in 24 hours).

This will spread heavy rains, thunderstorms, and flooding risks into the central Plains into Wednesday, then spread snow into the Dakotas later Wednesday into Wednesday night.

This storm is particularly strong for this time of year in this part of the world. Data suggests this storm will be the strongest (via minimum central pressure) storm since at least 1979 to impact the central Plains. With a central pressure equivalent to that of a category 2 hurricane, wind, rain, and snow will all be threats.

This will spark heightened wind generation in the southern Plains, and combined with melting snowpack, offer significant flooding risks across the northern Plains and Upper Midwest. This will halt any progress farmers were making toward fieldwork in this part of the country,” Meteorologist and owner of Empire Weather LLC., Ed Vallee.

The bombogenesis will detonate over Central Plains and bring almost every weather hazard possible at once. Severe thunderstorms are expected to hit south Texas to eastern Nebraska on Wednesday, which includes the potential for tornadoes.

• Meanwhile, in the plains of eastern Colorado and parts of Nebraska and Kansas, rain, freezing rain, sleet and heavy snow are forecast as the storm intensifies. Some areas may pick up more than a foot of snow as wind gusts to 70 miles per hour lead to blizzard conditions. The closures of entire interstates, including I-70 in Colorado, is possible.

• Blizzard warnings have been posted from northeastern Colorado into southeastern Wyoming, as well as Nebraska and southwest South Dakota.

• As the storm spins northeastward, it’s predicted to bring heavy rain on top of a deep snowpack in the Upper Midwest, with the potential for severe flooding in some areas.

• Because of the storm’s low air pressure, it will generate a huge and powerful wind field as air rushes toward the storm center. High wind watches cover a vast region from South Texas to Iowa, and wind gusts of up to 70 miles per hour are possible in the hardest-hit regions, the National Weather Service warns.

The storm will affect the entire Central Plains, from the U.S.-Mexico border to the U.S.-Canadian border. Axios notes that it’s highly unusual to see a low-pressure system intensify so rapidly over land, since these type of storms are more common over tropical oceans. 

via ZeroHedge News https://ift.tt/2u6ZGos Tyler Durden

Authored by Mac Slavo via SHTFplan.com,

Jeremy Grantham, a market investor who is credited with predicting the 2000 and 2008 downturns, said that other investors should get used to more lackluster returns in the stock market in the next 20 years.  Grantham says that the poor returns will “break a lot of hearts.”

Grantham told CNBC that after a century of handsome gains investors should get inured to lackluster returns in the stock market for the next two decades, according to Market Watch. 

“In the last 100 years, we’re used to delivering perhaps 6%, but the United States’ market will be delivering real returns of about 2% or 3% on average over next 20 years,” the value investor and co-founder of Boston-based asset manager GMO told CNBC in a rare interview.

In spite of the stock market’s plunge in the latter portion of 2018, Grantham believes his prediction is correct because he views the market as still pricey.

“This is not incredibly painful, but it’s going to break a lot of hearts when we’re right,” Grantham was quoted as saying.

Grantham has been predicting a meltdown in stocks since last year. He has even said that not even the recent go-slow reversal by the Federal Reserve on rate increases and the European Central Bank’s decision to roll out a fresh batch of bank stimulus will push stocks significantly higher.

“You can’t get blood out of a stone,” he told the network.

Other economists have warned that when the economy finally collapses this next time,the central bankers and the government will be unable to save anyone.

“This will be limping along; three steps down, two steps back. It’s not a typical experience,” Grantham, who is famous for calling the last two major bubbles in the market, told CNBC’s Wilfred Frost. 

“I was really hoping there would be a magnificent bubble ending to this, as there had been to the three great recent experiences,” he said. “It doesn’t look like it will and, therefore, you’re going to have a decline of a different nature.”

This is not great news for those who have a lot of faith in the current economy.

Over the past five years, the S&P 500 index has produced a compound annual growth rate of 8.1%, the Dow Jones Industrial Average has boasted a CAGR of 9.1%, while the Nasdaq Composite Index has registered a compound return of 11.4% over the same period, according to FactSet data. –Market Watch

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Today at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast open to investors and casual listeners, titled enticingly ‘Highway to Hell’, and which we assume will discuss either Brexit, the US-China trade deal, the long-term US debt picture or how this, latest asset bubble finally ends.

Readers can register and follow it live at this address, or clicking on the image below

As usual, we will grab and highlight the most interesting charts from Gundlach’s presentation as they come in.

 

via ZeroHedge News https://ift.tt/2VO2Olc Tyler Durden

Here’s the most important chart in the world this week…

Who is right? Bonds of course!!

*  * *

China had yet another National Team inspired buying-panic in the afternoon session to rescue stocks into the green…

 

FTSE outperformed ahead of the Brexit vote but EU markets were broadly lower today…

 

US markets were divergent once again with Dow (and Transports) lower but Nasdaq and S&P higher… (A weak close dragged small caps down to unch)…

 

Futures show the excitement once again at the cash open…

 

But Boeing’s dead-cat-bounce from yesterday’s cash session has well and truly died…(Boeing accounted for -160 points of the Dow’s 100 point loss)

 

Once again a dramatic short-squeeze dragged stocks higher…

 

Credit and VIX compressed further…

 

Treasury Yields tumbled dramatically on the day – completely ignoring the equity market gains…

 

With 30Y Yields breaking back below 3.00% (and 10Y < 2.60% - see top chart)

 

The Dollar Index tumbled for the 3rd day back below the 97.00 level…

 

Of course, all eyes were on Cable as the “meaningful vote” on Brexit…

 

The weak dollar provided support for commodities broadly, but silver outperformed on the day…

 

Gold jumped back above $1300…

 

Finally, we reflect on the sudden panic bid that has occurred in Nasdaq stocks in recent days. With Nasdaq earnings plunging to their lowest since July 2018, we wonder what magic hockey-stick these so-called investors are seeing…

 

via ZeroHedge News https://ift.tt/2NZ7Ok9 Tyler Durden

Via SaraCarter.com,

Rahm Emanuel, the Chicago Mayor warned the Democrats that they might be in danger of self-destructing if they continue to push socialist ideals and go after green deals and medicare for all.

In an oped for The Atlantic he said:

“Earth to Democrats: Republicans are telling you something when they gleefully schedule votes on proposals like the Green New Deal, Medicare for all, and a 70 percent marginal tax rate.

When they’re more eager to vote on the Democratic agenda than we are, we should take a step back and ask ourselves whether we’re inadvertently letting the political battle play out on their turf rather than our own.

If Trump’s only hope for winning a second term turns on his ability to paint us as socialists, we shouldn’t play to type.”

Rahm Emanuel seem to be very concerned of the ideas that some of the Democrat stars and presidential contenders are pushing these days, here are few of them:

• Slavery reparations

• Green New Deal

• Medicare for All

• Free college tuition

• A 70 percent tax rate on income over $10 million

• Break up Amazon, Facebook and Google

Click here to read in full Rahm Emanuel’s article in The Atlantic…

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One can’t say they didn’t warn you:

• On December 23, with the S&P points away from a bear market, Steve Mnuchin called the Plunge Protection Team, i.e. President’s Working Group on capital markets, with one clear message – stop the plunge.
• On December 25, Trump pulled an Obama, and told Americans to buy stocks: “We have companies, the greatest in the world, and they’re doing really well,” the president told reporters at the White House on Christmas Day. “They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.” (Pension funds heard him loud and clear, unleashing the biggest stock buying spree in history the very next day).
• On January 4, just two weeks after Fed Chair Powell hiked rates by 25bps and said the Fed’s balance sheet was on “autopilot”, and tightening would continue, the former Carlyle lawyer, sitting between Bernanke and Yellen capitulated, and for the first time said that the Fed would be patient, effectively ending the Fed’s rate hike posture.

What transpired since then is nothing short of breathtaking, with the S&P rebounding from the mid-2,300 to 2,800 (a level it has so far failed to breach decisively) in what Goldman last week dubbed “one of the sharpest rallies in history.” Indeed, as shown below, the rolling 67-day price return of the S&P is the 3rd fastest rally this century, perhaps ever. In other words, there are bear market rallies and then there are bear market rallies, and what we have just experienced was, according to Goldman, “the sharpest rally since the global financial crisis recovery, and sharp valuation re-rating alongside negative earnings revisions”…

… one which was accompanied by one of the largest declines in realized vol since 1928.

Now, thanks to Bank of America, we present yet another perspective on what has effectively been a bear market rally – because even though the S&P closed -19.8% from its Sept 20 all time highs on Dec 24, it did dip below the critical -20% level intraday.

According to BofA’s equity derivative research team headed by Benjamin Bowler, in the 50 days since the bottom of the Q4 selloff (when SPX dropped 19.8% from peak to trough on 24-Dec), the S&P has recovered 16.7% and is still about 6.4% below the last peak. To BofA, this – as Goldman first noted last week – “is indeed a sharp recovery, and the rebound is faster than other “draw ups” following similar-sized selloffs.”

Putting the move in context, BofA plotted the path of SPX recoveries from the 5 historical drawdowns of ~20% since 1928 (the last three months have come following a 19.8% drawdown on a closing basis). After 50 days, the SPX was ~10.7% from the last peak on average (compared to 6.4% today). In comparison, the fastest recovery was from the Aug-98 trough (was only 4.3% below the peak after 50 days and fully recovered in 60 days) while the slowest was from the Oct-57 trough (was still 18.2% below the peak after 50 days and didn’t fully recover for 223 days).

Interestingly, the Aug-98 event was one of the early scenarios when the Fed cut rates to fight market weakness. It is worth noting that while the Fed has not cut rates – yet – in the most recent bear market rally, the catalyst for the rally was the Fed’s reversal from a hawkish tightening bias to a dovish one, where the Fed said it would adjust the shrinking of its balance sheet and would be “patient” about future rate hikes. In other words, the two fastest bear market rebounds in history were both the result of direct Fed intervention. It goes without saying that while the 1998 rally persisted for several years, it eventually culminated in the dot com bubble and the first Fed-induced bubble burst.

How and when the current bear market rally (and bubble) ends, is still unknown.

via ZeroHedge News https://ift.tt/2XUo3U8 Tyler Durden