The Morning Line

Although in recent years October has not lived up to its reputation for scaring the pants off investors, we should take Friday's punitive reversal seriously, since it could mark the start of a bear market that is arguably years overdue. Although we have grown accustomed to 'freaky' Fridays producing headline events now and then, there was something especially disconcerting about this latest episode. It was driven unmistakably by news that Trump had threatened to slap a 100% tariff on Chinese goods in retaliation for restrictions they placed on so-called rare-earth exports to the U.S. These minerals, while not actually rare, are essential to the production of powerful magnets that are used in electronic hardware, including components vital to the aerospace industry and the military. The U.S. was already focused on establishing alternative sources for rare earth minerals, but it will take time and money, since extracting 'rare earths' from dirt requires processing that is costly and complicated. Downplaying China's Threat  In any event, Western factories and computers are not going to grind to a halt simply because of China's threat. And it is likely to be no more than that, since Trump has cards of his own to play, including access to advanced computer chips that China is presently unable to produce. The foregoing is all secondary to the matter of why U.S. stocks plunged on the news. The broad averages were up sharply in the early going, but by day's end the Dow had reversed by nearly 1200 points. A corresponding reversal took place in the institutionally-driven lunatic sector (aka the Magnificent Seven), wiping trillions of dollars of dubious  'wealth effect' lucre from the macro ledger. Clearly, this was an extreme overreaction to the news, since investors had grown used to Trump's frequent tariff shenanigans. Although the mainstream media

I'm still in San Francisco, avoiding the withering heat of Florida's monsoon season. I am also taking a break from my regular commentaries, since writing about the greed and stupidity that have propped up the stock market and the economy for the last decade was growing boring and repetitive. Instead, I've featured paintings by friends, most recently Geoffrey Leckie and Deborah Oropallo. The photograph above was taken by Victor Riess, whom I met two decades ago in Colorado when he took my trading course. An avid bicyclist and musician, Victor is also the best photographer I know. He took the picture above near his home in Lancaster, PA. It is a wintry Pennsylvania scene that vividly recalls landscapes painted by the Dutch master Pieter Bruegel in the mid-1500s at the height of his powers. All of Victor's photos are for sale, including the picture of the Amish girl featured here last week. The work above, a signed, original print, is priced at $32,000. It is approximately 20" x 30". Considering that a collector paid $68,750 for this appalling Peter Hujar photo of a dead cow at Christie's a few years ago, Victor's beautiful landscape, which makes the heart sing, is a great bargain for $32k. For further details, email me at Rick's Picks.

'' I'm in San Francisco, taking a break from Florida's unbearable heat, but also from my weekly commentaries. Writing regularly about the impending collapse of the stock market, Trump hubris and the fatally diseased, fake economy had become drudgery, and so, at least for the time being, I am focusing on more upbeat fare. Recently, I featured paintings by my college roommate, Geoff Leckie. Now I offer the works of another friend, Deborah Oropallo. In the forty or so years I've known her, she has broken new artistic ground with each new evolution of her style and subject matter;  then, she moved on when multitudes of imitators glutted the market. Deborah has achieved fame and commercial success, including shows at the Whitney Musuem and the Smithsonian. The work above, titled Oil and Water, was completed in 2016. It is a photomontage and acrylic on wood panel, 26 inches square.  For more information about the artist, click here.

I'm in San Francisco, taking a break from Florida's insufferable summer heat, but also from my weekly commentaries. Writing regularly about the impending collapse of the stock market, Wall Street hubris and the fatally diseased economy had grown boring and depressing, and so, at least for the time being, I will be substituting more entertaining fare. Recently, I've featured paintings by my college roommate, Geoffrey Leckie. This week, I offer the works of another friend, Deborah Oropallo. In the forty or so years I've known Deborah, she has broken new artistic ground with each new evolution of her style and subject; then, she moved on when imitators glutted the market she'd created. Deborah has achieved commercial success and fame, including a show at the Whitney Museum. However, my favorite exhibit of her works was mounted by the DeYoung Museum in San Francisco. It was called 'Guise,' and the sly overlay above is an arresting example of the theme. If you want to know more about the artist, click here.

I am on holiday for a short while, far from Florida's disabling seasonal heat and enjoying what so far has been the coolest, foggiest summer anyone who lives in San Francisco can remember. This is a busman's holiday, since I am updating the actionable 'touts' on this page 24/7 and have been fully engaged in the chat room as always, providing timely ideas whenever unusual opportunities arise and answering all questions related to trading. I am also continuing to put out actionable guidance at GoldenMeadow.eu. However, in this space, instead of the usual weekly commentary and graphics, I am presenting a changing selection of paintings by Geoffrey Leckie, my college roommate during our third year at the University of Virginia. His canvases are beautiful and extraordinary (above: Stacking Hay, a scene from Connemara, Ireland), and they can speak for themselves. If you want to know more about the artist, click here. Expect 'Something Big' Concerning the stock market, I've come to expect unusual craziness every time I take an extended holiday. Although my hunch until recently was that the nuttiness would take the form of a melt-up, last week's weakness, especially in Bitcoin, has caused me to reconsider. Although Trump's accomplishments have driven the bull market to new heights, the feel-good energy they created may be spent. For that reason, I have lowered the odds of a thousand-point rally in the S&Ps to 50-50. Correspondingly, I will be more cautious at these heights, since the bear market that's coming will be at least as destructive to the economy as the 1929 Crash.

I will be on holiday for a short while, far from Florida's disabling seasonal heat and eager to enjoy what so far has been the coolest, foggiest summer anyone who lives in San Francisco can remember. This will be a busman's holiday, since I plan to update the actionable 'touts' on this page 24/7 and to remain fully engaged in the chat room as always, providing timely ideas whenever unusual opportunities arise, and answering all questions related to trading. I will also continue to put out actionable guidance at GoldenMeadow.eu. However, in this space, instead of the usual weekly commentary and graphics, I will present a changing selection of paintings by Geoffrey Leckie, my college roommate during our third year at the University of Virginia. His canvases are beautiful and extraordinary (see above), and can speak for themselves. If you want to know more about the artist, click here. Expect a Melt-Up Concerning the stock market, it would not be unusual for it to go nuts while I'm away from my desk for an extended period. If so, expect the direction of the craziness to be UP. I am on record with a prediction that the S&Ps are about to stage a thousand-point rally. A crash will follow, but I doubt it will happen before late October.

Trump looks like a hero now, but he could become a goat when the bull market ends. He campaigned as the man who would make America great again, and no one should doubt the sincerity of this quest or his commitment to returning the nation to its core values. To judge from his accomplishments so far, he is up to the task. Few could have imagined he would crush the entrenched woke movement and hamstring Deep State within less than a year of taking office. If he can finish the job by bringing criminal charges against Obama, Hillary Clinton, Comey, Clapper, Brennan et al., and make the charges stick, his presidency would become one for the ages. But odds are considerably less favorable that he will be able to prevent the stock market and the U.S. economy from imploding under the weight of public debts grown far too large to repay. They include $37 trillion owed by the U.S. Treasury, as well as the financial liabilities of at least two dozen states, led by the breathtakingly reckless Illinois, whose pension system, along with many others, is just a bear market away from failure. The sums involved are much too big for a taxpayer bailout, and when they are ultimately deflated to zero by bankruptcies, the result will distance America more than ever from greatness. Many Jobs -- for Robots Trump's plan is to ignite economic growth robust enough to make public debts manageable and homes more affordable. But the way he is going about it, with a surge in deficit spending and a Federal Reserve Board hand-picked to turbocharge an already overheated financial system, will only add more IOUs to the mountainous pile that already exists. Although there will eventually be offsets from tariff collections and the re-shoring of U.S.

You've got to hand it to DaBoyz for reviving Apple as a 'wealth'-effect dynamo. The company couldn't innovate its way out of a wet paper bag, and it doesn't even have a horse in the AI race. And yet, the stock recently lurched back to life, emulating those two bull-market superstars, Microsoft and Nvidia. Indeed, any investor who held shares in the company last week, including Vanguard, BlackRock, Berkshire Hathaway and approximately 25,000 other lucky investors, became significantly wealthier on paper without lifting a finger. Rising sharply on gap openings last Wednesday and Thursday (see chart), and on a nasty short-squeeze Friday for good measure, the Cupertino-based seller of iPhones added nearly $500 billion to the world's store of illusory wealth. The Element of Surprise As I've explained here before, almost no stock changes hands on gap openings, and what little actual buying occurs comes almost entirely from short covering. In this instance, AAPL ended last Tuesday's session at around $203 per share. Then news came out after the close that they had sold quite a few more iPhones than benighted analysts had expected. It didn't matter that the flurry of phone-buying could have been a one-time effect caused by consumers trying to get ahead of new tariffs. All that was needed to goose AAPL skyward was the element of surprise. After the earnings beat, the stock's clever handlers lost no time working their levitation scam. By simply pulling their offers overnight and on Wednesday's opening, they enabled panicked bears to do all the lifting into a supply vacuum. Rotation Is Costless It's easy to underestimate the crooks who ply this game. Although we know they routinely rotate money from one sector to the next to push stocks higher with relatively small outlays, we sometimes overlook that they can top

The stock market is priced for perfection in a grotesquely imperfect world. Trump provided a fleeting respite by showing us how the Art of the Deal works in trade negotiations. Fox News rightly rubbed the legacy media’s face in his success while the President took a half-dozen victory laps to muted global applause. This may turn out to be more than he deserves, since no one can predict what will come of the new taxes that have been imposed on global trade. Because eggheads, editorialists and Bloomberg’s talking heads have no deep understanding of tariffs, here’s an interesting thought from someone who does — Reagan budget director David Stockman. The point he makes is too basic to ignore: If capitalism is truly free and functioning, he points out, America doesn’t need a dealmaker in the White House. Affordability is our big problem anyway, as the nation’s erstwhile middle class continues to sink into poverty. Nearly everything we buy has become not merely expensive, but too expensive, particularly big-ticket items like homes and automobiles. The average price of a used car hit $32,000, up from $23,000 just three years ago. It can cost $400 or more to take a family to a ballgame, where a hot dog and a beer are now $25. The $9.99 breakfast special in Las Vegas has risen to $29.99. And if shrinkflation at the supermarket gets any worse, we’ll be buying staples by the gram rather than the ounce.                             Putin’s Hole Cards Inflation will not be the worst of our problems if the Ukraine war takes a turn for the worse. Putin is Trump’s only equal in global power and influence, and he will not bend to Trump’s ultimatums like the pantywaists