Friday Fracas…
1. The Markets. All historic indicators have been suggesting for a few years now that stock markets are overvalued – the Q Ratio, the Shillers P/E, etc. Interest rates are going up, and stock markets finally started to pull back last week (My timing was off for at least a year…as evidenced by my short positions getting killed!)
Usually, bubbles go from initiation, to build-up, to euphoria, to crisis then to final collapse. The crisis stage sees prices waffle up and down in a herky-jerky motion as Greed and Fear take turns dominating investor sentiments. Welcome to the crisis. We have entered the “yo-yo” phase of this bubble, where prices will move up and down until we have a collapse, which I think will be in three to six months.(Note – house prices in Toronto are up about 17% in 30 days – rising over half a percent a day.)
2. Mueller. The bombs have stared to drop again!. Expect any of the 13 Russians who face indictment by the Grand Jury to roll the second that Mueller's G-Men get their hands on them...assuming they do not come down with the ever fatal "Putin Flu" first. Also expect Bannon to become even more vocal about the nature of the June, 2016, meeting between Manafort, Trump Jr, Kushner and the Russians. The word “treason” will start to become current. Also watch for select Republicans to start to turn on Trump...they got tax cuts, and no longer need him.
3. Florida Shootings. I must say that I love America…not as much as my own country, but Americans are wonderful people, and their country, in spite of its issues, is simply awesome. One difference between Canada and America is that America loves its guns. One price of this love affair is enduring mass murder on a regular basis. When will we start to mock the cliché of heavily armed SWAT and other police combing an area in the hours after a massacre – as if there is anything to be gained other than to put on a show for the media? And when will people start to note that, beyond the problem of easy access to assault weapons, America may have a cultural problem – a culture that, for a tiny minority of its citizens, is informed and motivated by mass murder? (Note – The Swiss let hundreds of thousands of their citizens take assault rifles home as part of their national defence strategy – when was the last time you heard of a mass murder there?) Sadly, the next one is already being planned…
4. North Korea. Will Kim Jong-un launch an ICBM on the last day of the Olympics in South Korea?
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