Smart money is selling

What the sentiment indicator below suggests is consistent with the big money index is showing. While the market is still quite resilient with any bit of dips being eagerly bought up, the upside seems also quite limited when big money is retreating. No one knows what will trigger a waterfall crash but the risk is certainly not low in this kind of setting. Be careful and trade appropriately. 

by SentimenTrader:

You wouldn't know it by the last couple of days, Friday in particular, but the past few months have been dominated by late-day selling pressure.

The Cumulative Last Hour indicator looks at the last hour of trading in the S&P 500 fund, SPY. If the fund rises during that hour, then the indicator adds 1 to the running total. If it drops, then it subtracts 1.

Recent months have seen a continual erosion in the indicator, to the point where it's at the lowest level in 6 years. When stocks have been persistent hitting new highs while the Last Hour indicator was plumbing new lows, it has been a warning sign.

What may be especially notable about the current behavior is just how persistent the selling has been during the last hour. Over the past 3 months, the indicator has dropped 5%, which doesn't sound like a lot, but it's the biggest drop in 25 years. 

Gold is able to beat the stock market most of the time

It has been really a few months of grave frustration for gold/silver holders, so much so that I have got a few rather "depressing" notes from friends and I'm also asked to weigh in on the precious metals.  

I think their frustration with gold is that they treat it as an investment with a high expectation for a timely return but it is actually more of a store of value, a real money. For that, the long term holder should not be worried at all for its daily fluctuations. The fundamental reasons for holding gold and silver? With countries, especially the U.S., printing money as fast as possible, ballooning the debt and devaluing their paper-based currencies, gold is the only real money that will last and keep up with inflation over time! 

Let me also share some interesting historical performance data for gold vs stocks. If we look at the past 60 years of history, gold has beautifully outperformed the stocks market most of the time. 

The only time period in which stocks beat gold was during the Tech Bubble: the single largest stock market bubble of all time. Every other time period saw gold outperform stocks by a wide margin. In fact, stocks only just caught up to gold after trailing it for the better part of the last 15 years!

So, if you are thinking about investing for the LONG TERM, as in "I'm buying gold and likely will not ever sell," then yes, it's almost always a good time to buy gold. 

But it does not mean it will just keep going up everyday. It is notoriously cyclic and goes up and down in alteration. After hitting all time highs a few months ago, it is very reasonable to see it take a rest for a while before going up again. I think we are at the eve of its next explosion to the upside, although I cannot tell you the exact moment. No one can but I firmly believe it is coming, probably soon!

Death by Taxes...

Death by Taxes...
The Democrats Are Threatening Our Economy's Livelihood
By Trish Regan

Washington, D.C. is convinced that the latest $1.9 trillion stimulus bill just wasn't enough, with Joe Biden and Kamala Harris clamoring for even trillions more in spending. These measures will most likely lead to inflation, taxes, and debt.

Now's the time that we as citizens need to hold our lawmakers accountable.

This American economy is still the world's best, and we need to preserve and protect it while we still can... for our livelihoods and those of our children.

The Dems seem content to take from anyone who's producing capital, only to redistribute said wealth – well, the term for that is socialism. And socialist policies ultimately prevent people from realizing their full economic potential...

The most vibrant opportunity is capitalism with political freedom, i.e., America at its peak. But Biden wants socialism that nearly creeps into communism – and with cancel culture amok and the Left's attempt to tear down our history, this is a dangerous place for our country to be.

On the American Consequences podcast this week, I sat down with economist and returning guest Stephen Moore, co-founder of the Committee to Unleash Prosperity. Stephen is equally concerned about the country's economic health... and believes thriving states could lead the way, not Washington, D.C.

Indebted to the Democrats

Dems are flexing their political muscles right now (so much for unity) – legislatively steamrolling to demolish the GOP with seemingly no concern over what we're doing to our nation's finances.

On top of the $1.9 trillion that's already in effect, Biden and Harris now clamor for maybe $4 trillion more, which, as we've warned, will lead to raising individual, corporate, and capital gains taxes.

What's the danger of all this proposed tax legislation? The money will leave the U.S. and head to Germany, Japan, and China... Is this a meta pyramid scheme – taxing all this Fed-injected money? Will we witness any real economic growth in its wake?

According to Stephen, "This is a tax plan that puts America last."

Stephen says that instead of trillions of dollars injected by the Fed, the injection of millions of vaccines will prove the best stimulus for America's economy, expediting the reopening of our country's businesses.

At this point, America's $28 trillion national debt has eclipsed our gross domestic product. Since China owns $2 trillion of our debt, future higher interest rates and taxes will ostensibly funnel money to the Red Dragon.

Inflate-Gate

Even though Stephen is optimistic about the second half of 2021 with mass business reopenings and Americans returning to work (he anticipates 5% to 7% economic growth), he worries about 2022.

I've sounded the inflation alarm for some time. While Stephen fundamentally agrees that prices will rise, he doesn't think it'll be runaway inflation a la the '70s. But he does agree with 20th-century economics luminary Milton Friedman: "We have too many dollars chasing too few goods."

We don't have a corresponding goods and services output increase to match all this injected money. At this moment, energy and food prices are already surging. (Pay attention the next time you're at Exxon or Safeway filling up on gas or groceries.)

Listen to Stephen's lead market indicators for rising prices.

Taxation With No Representation

As we've said before, the Democrats never met a tax they didn't like.

Their considered wealth tax would hit citizens making between $400,000 and $4 billion – that's quite a range. And just as the stimulus bills gave money to many Americans who didn't need it, Sen. Elizabeth Warren's proposed wealth tax could penalize people who aren't even part of the much maligned 1%. These are well-off Americans, sure, but many own, run, or invest in small businesses, and taxing them deters job creation and growth.

As Stephen says, "Democrats love jobs but hate employers."

We need an economic system that makes the poor richer, not the rich poorer. And the real oligarchs – Zuckerberg, Bezos, Musk – will find loopholes, sheltering their money in tax havens and shell companies if taxation reaches new highs.

The real casualties will be the small-business owners and the ever-dwindling middle class. And with capital gains taxes over a million, how will you incentivize entrepreneurs to invest in new companies?

The new tax on inherited wealth is up 40% with a $3.5 million threshold – the dream is to pass your business along to your children, not have your kids sell your life's work to stave off the IRS. The pulse of America is the family business and the Left's letting us bleed out economically.

According to IRS research, the wealthy pay more in taxes when the economy grows naturally... as they expand their businesses, hire more employees, and make more capital. But the Dems want to steer us into a place where we're shrinking the economy until they've reduced us to blood-lusting piranhas in a fiscal fishbowl.

The Disunited States of America

America, comprised of 50 states, represents 50 showcases in governance. And Stephen claims we should not take our cues from Capitol Hill right now, but rather on the exemplar states leading the charge. Florida, Texas, and Tennessee are thriving... with citizens free to live, work, and pay no income tax.

Meanwhile, crestfallen Californians (and their businesses) bemoan the recall-threatened Gavin Newsom. And the New York nightmare features criminal incompetence from Andrew Cuomo and his team, as people there have lost their financial livelihoods.

On the anniversary of the COVID pandemic, we still have some states that haven't fully opened their businesses and schools. The lockdowns were a failed cultural and economic experiment... They didn't reduce death rates or infection levels, and yet the Fauci progressive parade marches on (double-masked).

These dire economic warnings intertwine with the Left trampling on free speech and keeping the culture wars ablaze. They want to muzzle us right now because they don't want us to point out their wealth power-grab, hiked taxes, hemorrhaging debt, and the welfare state's expansion. And wait until their socialist agenda metastasizes into their ultimate dream: to cancel capitalism.

There's an ideological price paid for all of this, and the Left is losing America right now. It's time we find ourselves again because the direction our country's economy is going isn't sustainable.

Stephen reminded me of the classic political maxim, "A government that's big enough to give you everything you want is big enough to take everything you've got."

Wake up, please!

在美国，是谁在威胁亚裔的安全？

Isaiah 萧笙客 2 days ago

上周二（3月16日）下午我和太太带三个小孩的去运动了一个小时，回到办公桌时已是4点了。Teams上显示有一个我的经理来的未接电话。在家办公期间大家都期望你不论什么都秒回，这下倒好，从我经理打电话到现在都有40分钟了。

 

我忐忑不安地回电给她。她声音中夹杂着不安，"Isaiah, 你还好吧" 这句没头没脑的话把我给问蒙了。

 

我的经理是一个中年白人女性，原来是我的同事，后面被提升成我们部门的经理。出生于夏威夷的她说话喜欢直来直去，所以她声音中的不安让我心里很没底。

 

我强做镇定 "I am good, what is going on?"  她说你听说亚特兰大的枪击案吗？一个白人男杀了8个人，大部分的受害者都是亚裔女性。

她说非常抱歉听到这件惨案，并重申她坚决反对任何种族歧视的立场。我说我对这件事情一无所知，但是非常感谢她的关心。

 

现在美国一发生恐袭，每个族裔都在心里默默祈祷，希望凶手不是他们族裔的。白人的压力尤其大，因为民主党天天告诉他们白人有原罪。

 

为什么亚裔近期屡屡受攻击？来自加州的民主党议员刘云平（Ted Lieu）认为是川普的错，理由是去年川普叫新冠病毒"China Virus"。

 

听起来有点道理？如果是这样的话，去年发生对亚裔的袭击应该比今年多，因为去年川普在台上，而今年拜登是总统（1月20号后）。可事实上大部分对亚裔的攻击发生在今年川普卸任后。

这里先看一下受害者的特征（图片来自网络）

 亚裔，女性，老年人，共性是身体比较弱小，自卫和反击能力都较差。

 

再看一下施暴者的照片（图片也来自网络）

看起来不像川普的支持者，倒像是零元购的主。

 

再看一下发生袭击的地点，

我看到的袭击的地点都在民主党治下的深蓝州，而共和党把控的红州如德州，犹他州则没有报道有针对亚裔的袭击。

 

有人可能说红州亚裔人太少，可德州有一百五十万亚裔人口，比纽约州的一百二十万亚裔人口还多。川普现在所居住的佛罗里达州有70万亚裔人口，但也没有报道亚裔被袭事件。

 

我认为这次亚裔被袭击的根本原因在于民主党在2020 和2021 年推出的政策如保释金制度改革和削减警察经费使得犯罪成本在亚裔集中的大城市迅速降低，而弱小的群体如亚裔老人和妇女变成了这些政策的牺牲品。

保释金制度改革

美国的司法传统是，为了保证嫌犯会出庭接受审判，法官会要求嫌犯付一定金额的保释金。如果嫌犯按时出庭，保释金可以退还，否则将会被没收。

民主党认为穷人没钱付保释金，所以穷人更有可能被关在监狱里，这样不公平。2020初，纽约，三藩市，波士顿，费城陆续推出保释金改革。

 

纽约州长Andrew Cuomo签署的保释金改革于2020元月一日生效。根据这个法案，涉及大部分轻罪和部分重罪（400多种）包括过失杀人，在学校内卖毒品的嫌犯都不用交任何保释金就可以离开警局。

这个新法的直接后果就是犯罪成本降低到零，警察上午抓人，下午就得放，嫌犯这个门进来，那个门就出去了。

一个典型的例子就是Tiffany Harris。 她在纽约布鲁克林区的Crown Heights 看到素不相识的三个正统犹太（Orthodox Jew）妇女，上去就是给人家几个大耳光，同时破口大骂"Fuck you, Jews" "我操你这个犹太猪"。她被警察抓了后，第二天就放了，第三天她又在Prospect Heights 攻击另外一名妇女，警察又抓又放。仅仅过了一天她就又攻击一名社工！下面这张照片显示她知道新的保释法让警察对她束手无策。

2020年一月，三藩市的新上任的district attorney Chelsa Boudin推出了有史以来最激进的保释金政策。不论嫌犯被控何罪，法官无权要求任何保释金！只有对凶杀类的嫌犯才能在出庭前进行关押，其他嫌犯一律当场放人。

 

DEFUND THE POLICE（削减警察经费）

去年夏天George Floyd之死引爆了BLM黑命贵运动，民主党的第一反应就是先跪了： 

第二个动作就是DEFUND THE POLICE 削减警察经费 

2020年7月1日，洛杉矶市宣布削减警察局的经费1点五亿美金。并将警力削减至12年来的最低水平，偌大一个洛杉矶警察数量不足1万人。

 

2020年7月31日，三藩市长宣布削减警察局的经费1点2亿美金。这部分资金将被用于解决黑人社区的不平等问题！

 

2020 八月10日，纽约市政府宣布削减警察经费高达十亿美金！！！

一时间，各大城市的警察变成了公务员鄙视链的最低端，能干的警察跳槽，工龄够了的提前退休，实在走不了的就在岗位上磨洋工。

 

民主党这几个操作下来，把纽约，三藩市，洛杉矶，波士顿等深蓝区成功变成罪犯和非法移民的天堂。以纽约为例，2020年的盗窃案比上年增加了43%！有钱人大批逃离纽约，而犯罪分子则想尽办法要般到纽约去。

不幸的是，这几个城市都是亚裔聚集的地方，亚裔人口比例分别为：三藩市（35%）、纽约市（12%）、洛杉矶（11%）、波士顿（10%）。

 

亚裔在美国被称为模范种族，在收入，住房，教育方面都名列前茅。可是在参政议政方面还有待提高。以华裔来说，迄今为至，只出了一个华裔州长（骆家辉），参议院方面，迄今还没有一位是华裔。

 

更重要的是，亚裔传统上是民主党的票仓。根据NBCNews 去年十一月份的大选调查显示全美有63%的亚裔选民支持拜登，而只有31%的亚裔选民支持川普，这个差别在深蓝州的更明显，很可能是8比2.

 

民主党的政策如取消保释金，削减警察经费直接威胁亚裔社区的安全，加上去年他们强推的prop16 赤裸裸地歧视亚裔。为了我们的利益，为了这个国家的未来，我们一定不能再选民主党！ 

这次亚裔的百万大游行是个好的开端，但我们不能总是等到自己的切身利益受到损害时才去游行。

 

一般人在中国对政治的参与很少（因为制度不同），可能因为惯性，我们这些一代移民到了美国对政治也不关心。民主国家的好处显而易见，但弊端是如果普通人不参与，利益集团就会利用他们的资源把他们的人安插在政府的每个角落。

 

柏拉图有句话"好人对政治漠不关心的后果就是被恶人所统治"。去年大选暴露了美国民主制度的软肋，民主党勾结主流媒体和高科技公司，在疫情的掩护下，利用邮寄选票大规模舞弊，活生生把一个接近老年痴呆的人送入的白宫。

 

民主党和主流媒体利用一切机会（包括这次对亚裔的袭击）扩大种族之间冲突，而不是在政策方面寻找合理的方法提升社区的安全，促进种族之间的和谐。

 

亚裔大部分是相信法律与秩序（Law & Order）的，我们一定要积极参加基层政府的选举，确保我们选上去的官员倡导Law & Oder, 而不是天天喊着Black Lives Matter。而且我们要有分辨力，不要轻易被民主党和主流媒体所操纵。

令人欣慰的是，少数民族开始认识到今天的民主党代表着跨国公司和大财团的利益，而不是代表中产阶级的利益。2020大选结果显示民主党在黑人的支持率比上届选举下降了2个百分点，在亚裔的支持率下降了5个百分点，在西裔的支持率下降了9个百分点！

This indicator is now giving a warning for stocks

"The market will likely decline further today but we are very close to the end of this short term decline. S&P will have a strong support around 3850ish. If you are fortunate enough to have shot the market in the past few days then this is a point you probably better take a profit. I think the market may likely start to bounce back as soon as by the end of today or tomorrow."

This was the message I posted to my chat group this morning before opening. Of course I was wrong, timing-wise again by a few hours, but this time I underestimated the market's urge to rebound. It actually started to bounce back before noon and carried out the strength till the end of the day!  Here is what the market did today: S&P plunged 36 points to $3853 shortly after the opening😨 but miraculously shot up nearly 60 points from its intraday low and closed the day by 20 points higher. Really fainting😇. So in my trading Family, we did take nice profits from the short trades placed in the past few days, including an overnight income trade, and nearly precisely at the bottom today we opened a long position to anticipate the rebound. So far so good!✌💪

Considering all the short-term momentum indicators, I think the market (S&P) will be moving up towards 3940ish in the next few sessions but likely in a choppy fashion. But by no means we are totally out of the woods already. Longer term there are still concerning signs flashing out there. Below are just two warnings!  

by SentimentTrader:

One of the major developments we've been watching for since there was overwhelming evidence of excessive optimism is weakening internals.

That can take any number of forms, and for the most part, we haven't really seen it until very recently.

One of the clearest ways to look for this is the net percentage of securities on the NYSE that reach 52-week highs versus 52-week lows. After the surge in new highs in early March, there was a minor divergence as those figures weakened even as the S&P 500 made a new high, but it wasn't major.

More concerning is that by Tuesday, there were more 52-week lows than 52-week highs. We don't care that it was caused by a fall in SPACs or any other excuse - there's always something.

The reason we shouldn't expect a protracted divergence this time is simply how far stocks have traveled. Across all the major equity indexes, and throwing in over-the-counter stocks just because they have seen such a tremendous surge of interest, the median stock is up more than 100% from its lows.

Then the big money (institutions) is flowing out of the market for now, which is often the leading indicator to the market direction.  

PS: While I cannot share my specific trading ideas outside my DW Family, I do post some important messages from time to time about market conditions and trends in advance in my chat groups. If you also want to get such messages, you can join my SafeChat group. My WC group has been partially blocked from adding new members. 

I have registered as 深山老林 at SafeChat (SC) (You need to download the SafeChat app first) and have set up a new SC chat group. I'm gradually shifting our major social media interactions to SC instead of WC. If you'd like to join my group, sign up a free SC account easily and search for me and connect me as friends.  For friends sharing similar conservatism views, let's come together to form a better chatting group that won't be constantly disturbed and harassed by the insane radical censorship! 

Only comparable to the time just before the Great Depression...

Penny stock trading rose 20 times in the past year. Here is a publication from the New York Times: Penny Stocks Are Booming, Which Is Good News for Swindlers with a contrary warning that everyone should be aware of.  Excerpt:

Penny stocks – the name given to more than 10,000 tiny companies like SpectraScience (SCIE)– have been around forever, but they're booming as small investors flood the market. And this time around, social media is fueling the craze. Whether traded to fend off the boredom of pandemic living or to turn a quick profit, these dirt-cheap but risky shares are another frontier in a world where meme stocks like GameStop gained overnight stardom, Dogecoin morphed from a joke cryptocurrency to a hot investment and a digital artwork known as an NFT sold for $69 million.

It's part of a "massive surge" in retail trading reminiscent of the 1920s, when amateurs flooded into the stock market before the 1929 crash, said Tyler Gellasch, a former Securities and Exchange Commission official who leads the nonprofit Healthy Markets Association.

"The only relevant historical precedent seems to increasingly be the days before the Great Depression," he said.

Penny stocks occupy a low-rent district of Wall Street, a world rife with fraud and chicanery where companies that don't have a viable product, or are mired in debt, often sell their shares. Traded on the lightly regulated over-the-counter, or O.T.C., markets, penny stocks face fewer rules about publishing information on financial results or independent board members. Wall Street analysts don't usually follow them. Major investors don't buy them.

But last month, there were 1.9 trillion transactions on O.T.C. markets, an increase of more than 2,000 percent from a year earlier, according to data from the Financial Industry Regulatory Authority, a self-regulatory group that oversees brokerage firms.

The lack of oversight makes penny stocks easy targets for scammers, which has long accounted for their unsavory reputation. But risk can also be a draw for thrill seekers or those who fear they've missed a market boom that is creating wealth all around them.

I think the market is fooling us into an illusionary scheme of  becoming-rich-quick-via-trading with the ultimate top forming in trying to punish most people the most in the months ahead. Sure we are not at the danger of a new Great Depression any time soon but I think we are getting closer and closer with increasing frenzy market behaviors by all kinds of FOMOs in nearly everything. The ending won't be pretty, folks😨 and a lot of people will be in tears gravely 😭

Rotation works but......

First of all, a quick word about the market status. While there has been a lot of sharp moves during this week, the market has basically not done much and is still hanging around the important inflection point around $3900ish for S&P. Although the price action is not utterly bearish on the surface, the market is struggling at the top, failing to break out decisively even after a couple of new highs this week. I still keep my overall bearish bias for the next few weeks until I see an emphatic breakthrough to the upside! In the meantime, I'm doing long and short trading depending on the sentiment at the time. Quite often these days, I'm holding both long and short positions for SPY at its two extremes and overall it works out quite well for me😏 To be clear, my trading is generally in terms of a few days or a week or so, not in months. It is challenging to bet for anything a bit longer these days🤔

Since my call "Rotation has started!" back in Nov last year, both oil and financials have indeed mounted a fantastic rebound💪 while high-flying tech stocks have been struggling dearly lately. This is truly a textbook rotation! All of a sudden the once extremely pessimistic sentiment towards energy and financials has totally shifted to extremely bullish. Looking at the Bullish Percent Index (BPI) for both sectors, they are approaching or already reached the max reading at 100. In other words, people are universally bullish on energy and financials and their mood cannot be better at the moment. Unfortunately this is a good contrary indicator, often preceding an upcoming correction. At this level of bullishness, we often see a 15-20% correction for both sectors per their past records.  Will we see something similar this time? I bet so! 

 

From $100 to $69 millions

Recently I wrote a story that I missed the opportunity to turn $150 to $150,000. I thought this was an unbelievable return that can hardly be beaten. Wrong! Now we have just witnessed a historical moment that turned $100 to $69 million!!😨

Heard about NFT? It is the most popular new kind of crypto, so-called non-fungible token, which can effectively tokenize any assets for sales online.  Here comes the digital artist Beeple. He has created and uploaded a new piece daily for more than 13 years. Then he issued his NFT for an art piece called  "Everydays: The First 5000 Days" as shown below.  This is a digital collage of the first 5,000 creations that Beeple put online...His unique art work was put out for auction via the NFT, starting from $100. Within days, the price bidded up to millions till the historical moment on Mar 11, 2021: it ended up with $69 million to complete the sale. See the report here:  Digital artist Beeple is "a rich man" after his non-fungible token sold for nearly $70 million at auction.

What I learnt is that this Beeple is a self-taught painting artist. This really excites me as my wife is also self-learning painting and quite productive in the past two years. From my amateur's eyes, her works have already shown quite good skills and are mature enough to be accepted by laymen. You may check out her works here. Who knows maybe someday she can also tokenize her works with NFT and go for auction😜😇

I know I'm in a dream talking now,😴 so don't take me seriously here. But the point I want to make is that this is a great new trend upon us and we are quickly moving into a historical era where we virtually can have all our assets tokenized safely on Blockchain (BC) that cannot be mutated  by others and more excitingly can be easily sold online without anyone in between😋. Mark my words, in just a few years or even sooner, you don't need an agent to sell your house as it can be sold solely by yourself via tokenization, even without attorneys involved. Also, the traditional banking will be obsolete as you don't need a bank to do any transactions including sending or receiving money as BC will allow you to do businesses safely and securely in a trustless world!🤔💪 Sounds like fiction, right? Just wait and see🤗

Higher taxes are coming....

The Great American Tax Hike
By Trish Regan

Remember when Biden told us the $1.9 trillion would be just a "down payment?"

He wasn't kidding...

Get ready, America. The great American tax hike is in the works.

After all, you can't spend $1.9 trillion you don't have... let alone an additional $2 trillion to $4 trillion, which is what the Biden administration is now prepared to ask for.

The Big Tour With a Big Ask

President Biden and Vice President Harris are gearing up for a grand cross-country tour in the coming weeks. The two are embarking on a series of public speaking events in an effort to help sell the American public on the idea of trillions more in stimulus spending.

The Biden presidency is modeling itself after the likes of FDR... This is a "New Deal" with new projects like basic income, infrastructure, and possibly even reparations for Black Americans all in the works.

To pay for their massive undertaking, Biden and Harris intend to propose the biggest increase in federal taxes since 1993. These tax hikes, if approved, would take effect next year.

And let me be clear, these aren't just any little ol' tax hikes. The Biden-Harris proposal will be a mammoth...

Biggest Tax Hikes Since 1993

For starters, President Biden and his team want to raise the corporate income tax from the current 21% to 28%.

They also intend to raise income taxes on individuals earning more than $400,000.

Not to mention, they will expand the reach of the estate tax.

And finally, they want to raise capital gains taxes on folks with incomes over $1 million dollars. Oh, and don't forget, while on the campaign trail, Biden proposed applying income tax rates on investments in capital gains.

That's not all... There's even talk of a wealth tax, something Treasury Secretary Janet Yellen admitted in a recent interview with George Stephanopoulos on ABC's This Week... "That is something we haven't decided yet and we can look at."

Really? I mean, wouldn't that in fact be unconstitutional? Didn't Congress need to pass a constitutional amendment to secure the income tax in 1913?

But progressives never met a tax they didn't love...

Government Gone Wild

This is what I call "government gone wild."

We have a group of people in Washington that have never really rolled up their sleeves and worked in the real world. They don't know what it's like to be a small-business owner trying to make payroll, nor do they know what it's like trying to save over your entire life so you'll have something to leave to your family.

They fundamentally believe in a different kind of system... a socialist system (or worse) in which business is bad, income is bad. And government (because in their utopian world, they run it) is good.

That belief is what has led a group of progressive lawmakers (with Sen. Elizabeth Warren at the helm) to recently introduce legislation that would create an annual 2% tax on the net worth of households between $50 million and $1 billion. The proposal also allows for an additional 1% on those above $1 billion.

According to Warren, it's simply the right, most justifiable thing to do...

This is a wealth tax that has been needed for a long time. We need it to produce more revenue, to create more opportunity in America. But it is a wealth tax that we particularly need because of the changes in this country... As Joe Biden says, "it would let us make the investments in our children, investments in infrastructure, investments in a clean economy, investments in America's future."

Too bad for Warren (and Biden), a version of that has been tried quite recently and declared a miserable failure.

The French Super-Tax Failure

In France, under President François Hollande's leadership, the government introduced a "super tax" in 2012. That 75% super tax on individuals earning more than 1 million euros was almost immediately declared a total disaster – and by 2014, it was dropped.

Instead of helping the French government to collect more revenue, the super tax reduced government tax revenues, restricted economic growth, and spurred a massive flight of capital offshore. French citizens moved abroad, relocating to the U.K., Belgium, and other countries that offered more competitive tax rates. Heck, even the famous French actor Gérard Depardieu wound up becoming a Russian citizen for tax reasons!

As Steve Forbes explained in an interview with me on this week's edition of my podcast, corporations and wealthy individuals will find work-arounds if Biden moves forward with a wealth tax or any other onerous tax proposals.

This is why the Laffer curve is still so relevant. (I encourage you to check out my podcast interview with famed economist Dr. Art Laffer here.) It's critical to provide a balance that enables businesses and individuals to grow – because that growth ultimately benefits all.

For all the Left's complaints about the Trump administration, before the pandemic hit, our economy was expanding... Unemployment levels were some of the lowest in history and medium incomes were some of the highest. Importantly, the Trump administration's lower taxes on corporations and individuals resulted NOT in less revenue (as Warren, Sanders, AOC, and Biden and Harris would like us to believe), but instead with record tax receipts.

Imagine that – you lower taxes and you collect more tax revenue! The Laffer curve strikes again...

And that's the way it should be... Government needs to incentivize people and businesses to invest more. Creating the right incentives helps result in growth and more revenue for everyone, government included.

But what Democrat politician can resist the age-old class war argument? It's politically expedient and helps politicians to maintain control over everyone and everything.

The reality is Biden's proposals would result in less growth, less output, and less tax revenue... not to mention higher deficits, since even with higher taxes, our federal government is still unable to pay its bills.

The Good News

Meanwhile, why discourage people from investing? Shouldn't our government want people to invest in American companies? By instituting an income tax on investment income, the government will surely suppress investment.

Think about it... If you are going to be charged the same as income, why roll the dice and take the chance of investing your money in a company that you don't fully control?

The good news is, this is not where America is right now... Although, Americans on both sides of the aisle like the stimulus checks (who wouldn't appreciate an extra $1,400?). But Americans are not prepared to sign off on massive estate taxes, huge capital gains tax increases, and higher individual tax rates for a series of progress projects like basic income, a government health care system, reparations, green energy, etc.

In fact, I suspect this growing power grab by the Left will be met with some serious resistance... which may result in a shift of power in Congress come 2022.

Even without that, I suspect Biden's tax increases will not fly.

Biden, after all, would need Congress's help in accomplishing these measures. Sen. Joe Manchin (who has become one of the most important people in D.C.) has already indicated that he's not in favor.

Ultimately, the Biden-Harris team is trying to convince America to be something she is not...

The Democrats won the election, but that was more an indictment on Trump's personality than his policies. In fact, the country is still just right of center... and any attempts to construct a massive New Deal akin to FDR's will surely backfire (as they should).

Art of cheating

《华盛顿邮报》公开承认，当初他们爆料的"川普打电话给乔治亚州州长要求更改选票"是假新闻，并正式撤掉了假新闻。

当时乔治亚州的计票出现严重问题，川普打电话给乔治亚州州长，要求调查选举的公正性。一个多小时的对话，FakeNews断章取义，还搞出来剪接的五分钟电话录音诬陷川普要求更改选票。

这项奇事已经确认。

 ****************************************************************************************************

I don't blame the media for dutifully reporting the spread of the coronavirus, the negative effects on business and the economy, and the disruption in our personal lives, including the tragic loss of friends and loved ones.

I fault the media for hyping the narrative, cheerleading draconian lockdowns, promoting pessimists masquerading as "authorities," and providing virtually no balance or context.

Is it wrong to use scare tactics and abject pessimism during a health crisis?

Yes, it is.

The mainstream media celebrated New York Governor Andrew Cuomo for his exemplary job in "following the science" to protect his state's residents with severe lockdowns.

Meanwhile, Florida Governor Ron DeSantis was depicted as reckless, endangering his citizens by giving consideration to the economic and educational impact and imposing only temporary or partial lockdowns.

Today we know that a smaller percentage of Floridians have suffered COVID-19 hospitalizations and deaths than New Yorkers.

And the gap is almost certainly even larger than we know, as Cuomo and his administration are under investigation for deliberately undercounting nursing home deaths.

Throughout the pandemic, the mainstream media has been an energetic cheerleader for severe lockdowns that damaged livelihoods and families.

Ancillary costs - including the bankruptcy of thousands of small businesses, the layoffs of millions of workers, the educational disruption of tens of millions of students and the personal hardships of countless American families - didn't change the equation.

by Alexander Green

100% of the indicators in risk-on mode!

Investors are nearing a record in Risk-On behavior (by SentimenTrader)

We recently created a new Risk-On / Risk-Off Spotlight page which shows whether some core indicators are indicating that investors are in a risk-on or risk-off mode. As long as the aggregate measure is in risk-on mode, investors tend to be in a buy-the-dip mentality, which we saw again last week.

Like many other positive developments we've looked at over the last month or two, the biggest caveat is simply that the environment has been so positive for so long.

By the end of last week, nearly 100% of the indicators were in risk-on mode. That's so high that it has preceded weak returns.

A risk-on mentality has been so prevalent for such a prolonged period that the 50-day average of the aggregate indicator has climbed above 90.5%, meaning that an average day over the past 50 sessions has seen more than 90% of the indicators displaying risk-on behavior.

Our Backtest Engine shows us that when the 50-day average has been this high, future returns were poor.

If you are interested in this stock.....

Thanks to Trump's great leadership and courageous efforts in breaking down the red tapes on various regulations for vaccine development, US is leading the world now with more and more effective vaccines approved and widely used to slow down the COVID pandemic!💪✌With the light coming up at the end of the tunnel,  there's been a really hasty, mass movement into entertainment, travel, and leisure stocks that have been beaten down badly by the pandemic. Disney (DIS) is one of them. With the end of the pandemic looking closer than ever, Disney has announced its intention to begin a phased reopening of its theme parks in April. This has made investors really eager to buy DIS in anticipation of the upcoming speedy recovery of the company.  There's no denying that Disney has had a great run. Since October, DIS has climbed an impressive 61%, even though its parks are still largely shuttered.

I have no doubt DIS will continue to benefit from the pandemic recovery and will be doing very well in reviving its businesses in the months ahead. But I'm not so sure about its near term future that will continue to shine from the current level. Technically it is a bit moving ahead of itself with a clear negative divergence on its momentum. I think DIS will be struggling for a few weeks at least. At minimum, a 10% correction is likely to me, targeting its 50 DMA. If a more severe correction ensues, a 20-30% downdraft is not unthinkable to bring it down towards its 200 DMA, a very normal return-to-the-mean movement.    

 

Current status

I have to admit that I have largely underestimated the strength of this bounce from its low around 3700 for S&P. I thought the bounce would stop around 3900ish and S&P would start to head back. Totally wrong of course! Yesterday S&P broke out to all-time highs around 3960 intraday but closed below its previous daily high. But today, it managed to close a few points higher, making a new all time high on the closing basis. Truly amazing! I have already heard talking heads euphorically claiming that the tiny correction is over and we are on the way to resume the next leg up. Really?

I don't have a fixed viewpoint for the near term (in terms of weeks) although I have been biased to the downside for sometime. Should I change my standpoint now when all the indexes have broken out with new highs today? I will if I see a clear TA picture. So let's see the current S&P chart as shown below. Indeed it is at a critically important inflection point where it can go either way. If it can decisively go above the tipping point of the triangle and stay above firmly, then the chance is high that this correction is over and we will see the green sky in the weeks ahead. On the contrary, if it turns back from here, it may very well retest its recent low around 3700 or even 3500ish for a more severe plunge. Then if you look at its momentum indicators, IRS and MACD, both are still clearly in a downtrend even though S&P is trending up, a big negative divergence! This is quite bearish, suggesting the current uptrend is fragile and may not be so sustainable. Don't forget, before the March epic crash in 2020, S&P was also making numerous new highs but with consistent negative divergence on its momentums. Until this is cleared up, new highs may not be so bullish! 

Taking all together, I'm still more bearish than bullish and I still doubt we have been out of the woods already as of now. But next week will be critically important for the market's direction. Sure I will be very cautious about shorting the market at this moment until the TA picture becomes more clear. Regardless, I continue doing a lot of swing trading these days. For the passing week, I have traded both longs and shorts a few times actually. So far as good😇✌    

This is how Americans are rescued....

Gary C.

I think the American Rescue Plan is a ridiculous pork-filled and unnecessary bill. I don't know what is wrong with those people in Washington. Who writes those bills anyway? I'm pretty sure that it is not the sponsor of the bill.

The spending is outrageous in my opinion. First... they keep us locked down and wearing masks and unable to eat in restaurants or attend any kind of gatherings.

Then they go on this spending spree to rescue the people that they put out of jobs. However, a large percentage of the spending is not being used to help the people who were economically hit by the lockdowns. Instead, it is going to all kinds of other things.

It's as if the politicians have no concern about creating money out of thin air and the consequences that will ensue.

Bill W.

My wife and I have both worked as legislative assistants on Capitol Hill. One thing we learned fast was that whatever name or title is given a bill, it probably does the opposite. It's all in the details. And that was the early 1990s!

So what do we think of the American Rescue Bill? It's a cement life jacket. Think of this "rescue" as Thelma & Louise, stoned, and in a faster car. In the 2021 remake, it would probably be a Tesla.

Blas P. 

Sadly, the Rescue Plan is exactly the opposite of its rubric. It will enslave everyone under an even larger debt burden for many, many years. There is no question that some people do need assistance, but the process by which that is determined is sloppy and pathetic. I know numerous well-off people that live permanently overseas who received checks in the last round. Are we stimulating the English and Austrian economies too?

There is no greater indication of how much pork and nonsense is in this Bill then looking at what people are actually receiving vs. the overall amount of $1.9 trillion. Basically, every man woman and child should receive $5,400, if this was even distributed among the 350 million Americans, instead some people are getting 1/4 of that. The rest disappears into the amorphous government hole without any accountability.

It's disgraceful!

I don't understand how any person or institution would be willing to buy U.S. Treasurys, and lend the government money, when we can see in this Bill how inefficient and mismanaged everything is. Inflation and currency devaluation are going to move into hyper drive. Buckle up, buttercup!

Hank D. 

Almost all of Congress should be replaced. We continue to spoil Americans with entitlements that only makes it more difficult to get rid of later. Helping those that struggle is... give them the opportunity to work, not lock down business or jobs.

Let's get back to basics.

We are at the point in our lives where we don't need to buy things but just move forward to enjoy the world around us and our family. At 81 and still working as a self-employed Realtor for more than 58 years, there were times when we didn't have any money, but we just worked harder and smarter to get ahead.

We have been blessed by great family training and this is what our country needs now. We were taught to respect the other person even if we didn't agree with them. We were taught to save for a rainy day.

What we our fearful of is that these idiots in Congress are doing is destroying our savings and retirements with stupid money printing. So we have stocks, and real estate. If we sell any of it, capital gains kicks in [and we] pay 30% of our hard-earned savings to the Federal and State governments. Those really aren't gains but direct result of the government devaluing the dollar.

Bob B. 

It stinks terribly, full of unnecessary, unrelated ways to spend money, that have no relation to the COVID situation, sending large sums of money to people who do not need it, and bailing out mismanaged states and municipalities.

Anthony R. 

Not much help – a lot of pork, increasing the debt for future generations to look good and to get votes from those who do not work... What a bunch of GAR-Bage.

Extreme speculation in 20 years

This indicator shows the most speculation since 2000 (by SentimenTrader)

Over the past couple of months, we've been raising the alarm on several pockets of speculative activity, which had reached or exceeded all prior records.

Bullish options trading, IPO and add-on volume, and penny stock trading were among the most egregious examples. With the latter, it's only getting more extreme.

The latest figures are out, covering activity through the end of February, and it shows an increasing willingness to trade the riskiest securities available to individual investors.

The number of shares traded has jumped to nearly 2 trillion shares (yes, trillion).

Zooming out further, we can see that only a few months in early 2006 exceeded this pace of activity.

The dollar volume traded rose to nearly $84 billion, again the highest in the past decade. Going back nearly 30 years, February's activity was only exceeded by January - March of 2000.

Can SpaceX shoot to the moon?

Elon Musk is never short of surprises, sometimes great and other times terrible. In this case, it is great news and music to my ear!!😇✌ Here is what I just learned:

SpaceX just dropped a BOMBSHELL request with the FCC:

If accepted, this could open up Starlink's satellite Internet service to planes, trains, boats, buses… practically any public transit you can think of.

That could put them in position to deliver lightning-fast Internet to a MASSIVE, untapped market…

Sending shockwaves throughout the entire tech industry…

And giving a MAJOR boost to the shares of SpaceX!

I'm glad and proud to be a shareholder for SpaceX even though it is still private…

USA One-party state forever

Here's Pelosi's Plan to Annihilate the GOP Forever
By Buck Sexton

Officially, it's named the "For the People Act of 2021."

But they should really call it the "Democrats Turning Voting Into a Free-for-All While Gutting Their Political Opponents Act."

Speaker of the House Nancy Pelosi, after three decades of representing San Francisco, wants to change some fundamental rules of American elections. That's what the "For the People Act of 2021," better known as the H.R. 1 bill (House Resolution 1), is really all about... Democrats winning in chaotic, fraud-prone elections.

In a way, you almost have to respect the Democrats' ruthlessness with this bill. As soon as they could, they wielded their power for maximum advantage with no apologies. When Republicans find themselves with control of the White House and Congress, they're pretty content with a decrease in the marginal tax rate and then e-mailing lots of think tank papers around Capitol Hill.

Democrats, on the other hand, don't dither when it comes to enforcing their will... They introduced H.R. 1 on January 4. The Democrat-controlled House of Representatives passed it on March 3. President Joe Biden is now strongly advocating for the Senate to pass it as well, so he can sign it into law.

How bad could H.R. 1 really be, you might ask? After all, it's dressed up with a lot of flowery language about protecting "sacred" voting rights. Here's what H.R. 1 promises to do:

To expand Americans' access to the ballot box, reduce the influence of big money in politics, strengthen ethics rules for public servants, and implement other anti-corruption measures for the purpose of fortifying our democracy, and for other purposes.

It's meant to sound fair, ethical, and nonpartisan... But many of the details of H.R. 1 make it clear that the primary intent of the bill is to replay the "only because it's a COVID emergency" voting changes from 2020 – and expand upon them nationwide.

Democrats want to eliminate many election safeguards in the name of "increasing access" and federalize elections in a way that is contrary to constitutional intent.

One of the biggest changes would be the legalization of a process called "ballot harvesting." This practice is currently illegal in 24 states, though 26 states allow some form of it. Ballot harvesting is when a person can take other voters' ballots and hand them in on their behalf. This is not nefarious in and of itself – in some states, for example, family members are allowed to do this – but it creates major opportunities for fraud when it's more widespread.

For one thing, harvesting creates chain-of-custody issues. If community organizers on behalf of a "get out the vote" effort collect hundreds of ballots at a time, who's to say whether some of them make their way to the polling place while others get dumped in a trash can?

Ballot harvesters, under the guise of "helping" senior citizens and other easily exploited groups, could easily encourage votes to go a certain way on the spot... or even fill out the empty ballots themselves.

That's just the start... There's a whole laundry list of election-integrity measures that are loosened or eliminated in H.R. 1. Voter ID requirements would be decimated. H.R. 1 would give anyone the right to show up on Election Day and, without providing a photo ID, sign an "attestation" and vote.

Automatic voter registration would also be enacted. That means anyone who goes to the DMV, uses food stamps, or attends community or state college would be enrolled as a voter. Some noncitizens would also likely be enrolled in error, as it leaves it up to individuals to attest their eligibility.

The list goes on and on... Universal mail ballots would be sent out to everyone on the voter rolls, and they wouldn't be systematically purged of people who have moved out of state. Ballots could arrive and be counted long after Election Day. Early voting would be expanded. Felons would have voting rights restored upon release from prison (and convicts often overwhelmingly support Democrats, of course).

It's not hard to see the pattern here... Democrats believe that these changes would help them win elections. They don't care about the risks of fraud because they believe they will benefit from the chaos, loopholes, and shenanigans.

Elections aren't supposed to be federalized in this way, but constitutional objections mean nothing to Democrats like Pelosi who see a pathway to becoming a permanent majority.

A number of states made major but temporary changes in the 2020 election cycle based on the COVID-19 emergency status, like a huge increase in mail-in balloting nationwide, and states like Pennsylvania extended the deadline to count mail-in ballots beyond the actual election.

With these changes to election rules, Democrats were able to accomplish big wins in the 2020 election. Biden beat Trump by 7 million votes. But many still believe – despite the social media prohibitions on questioning the election – that there was substantial fraud.

If H.R. 1 becomes law, it could further hurt election integrity and confidence, and could rapidly turn America into a de facto one-party state where the losers no longer have faith that the system is fair or worth preserving.