Category Archives: Market Manipulation

Auto Sales Forecast To Tank In April

JD Powers and LMC Automotive are projecting auto sales to drop 8% in April from a year-ago April:

For much of the past two years, the discounts offered by automakers have remained at levels that industry analysts say are unsustainable and unhealthy in the long term…Sales are expected to drop further in 2018 as interest rates rise and more late-model used cars return to dealer lots to compete with new ones. – April Auto Sales Forecast

General Motors reported lousy Q1 numbers this morning. Revenues dropped 3.2% year over year in Q1. Revenues would have been worse but GM joined the rest of the country and extended financing to future deadbeats who took out loans greater than their annual pre-tax income in order to buy a pick-up truck. In other words, GM’s financing unit generated 25% growth in revenues, which cushioned drop in GM’s automotive revenues. Operating income fell off a cliff, plunging nearly 80% vs. Q1. Because of GAAP manipulations, EBIT was down only 55% from Q1 2017.

BUT, GM was credited with a headline “beat” of the Street’s earnings estimates. Only in America can a company’s operating numbers go down the drain and yet still be credited with a headline GAAP-manipulated net income “beat.” I find much humor in this absurdity. Others might find it, upon close examination, to be pathetic or even tragic. Given the forecast for April automotive sales, at least now we know GM announced earlier this month why it will begin to report auto sales on a quarterly basis instead of monthly.

The economy is much weaker than the narrative promoted aggressively by Wall Street, DC and the financial media. This tweet from @RudyHavenstein captures perfectly the divergence between moronic mainstream financial media and Main Street reality. We’re bombarded daily with propaganda about the healthy economy. Yet plenty of statistics show that the average household in this country is struggling under a mountain of debt and is living paycheck to paycheck.

This mostly explains the why credit card debt hits a new record high every month now. The average household is using revolving credit to help make ends meet. The only problem is that, in aggregate, the credit debt is not getting paid down. Rather, it’s increasing by the day. To compound the problem, credit card issuers are aggressive about jacking-up rates when the Fed funds rate is rising. I have a friend who has a 670 FICO score and recently used a loan to buy a car. The interest rate on the loan is 8%. This means that credit cards in general are charging rates in the mid-to-high teens to users with a sub-720 credit score. The outstanding balance will double in 5 years for a card-user who only pays the minimum amount each month on a card with a 15% interest rate. The only problem: that user will likely default before the balance doubles.

But why listen to the Orwellian propagandists?  Just follow the money from corporate insiders: The graphic to the right shows the ratio of insider sells to buys. When the ratio is under 12:1, it’s considered “bullish.” When the ratio is over 20:1, it’s considered bearish. In the last couple of weeks, the ratio has spiked up over 35.

It would seem the Atlanta Fed agrees with the assessment that the economy is far weaker than is being promoted by politicians and Wall Street. Back in February, the Atlanta Fed was forecasting Q1 2018 GDP to be 5.4%. Since then the Atlanta Fed has cut lowering its forecast almost weekly. This past week it chopped its Q1 GDP forecast down to 1.9%.

How can you profit from this insight?   I’ve been presenting several “off the radar” short-sell ideas in my Short Seller’s Journal from which myself and several subscribers are making a quiet killing.  Right now the easiest money to be made in the market is shorting homebuilders.  I have have a subscriber who made 150% on DHI puts in the first 30 minutes of trading today. I have another subscriber who is short Lending Tree (TREE) from $340.  I got this email from him today, with the stock down $42 to $264:  “The TREE keeps on giving. Many thanks!”

Every time the market bounces now, or when individual “daytrader/algo” stocks pop on headline “beats,” it creates an opportunity to make easy money shorting stocks or buying puts.  The Short Seller’s Journal provides unique insight to the economic data and corporate earnings – insight you’ll never get from so-called financial “experts.”  SSJ then offers ideas every week for making money on this insight.   To learn more, click here:  Short Seller’s Journal subscription information. This week I’ll be presenting an oldie but goodie short that soared today on tepid numbers (no, it’s not Facebook).

Just wanted to give you kudos for for your Short Sellers Journal. i find myself waiting every Sunday to read your publication. Your research and conclusions ring true. One of the better newsletters I receive. – recent subscriber feedback

Wells Fargo Peddles Fraud

I would have thought that after all of the fraudulent, illegal and unethical business activity for which Wells Fargo has endured, a situation placed in their lap by a concerned citizen would have received immediate attention. What’s most appalling about the story below is the haughty indifference with which this potentially criminal complaint was treated by Wells Fargo employees. While Wells has received some heavy wrist-slapping for getting caught with its pants down, its seems based on the bloated compensation awarded to the CEO and the fact that, based on the true accounting below, Wells doesn’t seem to mind continuing to operate with its pants and underwear draped like a pedophile around its ankles. Mike – aka Silver Farmer (@nhsilverfarm) – has written a stunning report of his attempt alert Wells Fargo of a potentially criminal fraud situation involving Wells Fargo checking accounts – one that may involve fraudulent bank accounts opened by Wells employees:

I’m Mike and up until now, I’ve remained behind the scenes as an audio editor and producer for some of the more popular liberty minded programs out there today. I want to share this story of fraud that centers on habitual offender, Wells Fargo. In life, I have only my credibility and am more than willing to provide the emails that confirm everything I am about to relay.

After nearly 15 years, my wife and family are leaving the house we built. The property taxes having tripled in that time. We are intentionally downsizing, and have a number of valuable items to sell. I started posting ads for these items on Craigslist just over a week ago. There were a handful of items over $300 in value and for every one posed, I got several offers to accept payment by check from out of state and then ship the items to a buyer. I might live in the sticks of rural New Hampshire, but I had heard of these scams, so I decided to play along with a few.

The first was pretty low brow. I had to check my spam folder fro an email from “PayPal” saying that $1000 would be released to me if I sent a Western Union Money Gram to a woman named Deborah in Oklahoma. She was, you see, the mover that was going to pickup my air conditioner. Before I tipped my hand that knew that this was a scam, I contacted the police in my town, the town where the money was to be sent and the FBI.

The next two scammers asked for my address to send a physical check to. This sounded more interesting. I figured, what the hell, I will give them my address, I’m moving and it is public record anyway. Both had similar stories. The check I was to receive was “accidentally” made out for more than my item for sale because the assistant made a mistake and added my price AND the cost of having the item shipped into one check.

So 3 and 4 days later, respectively, I had priority mail envelopes in my mailbox, each containing a check, printed on real check stock with watermarks and other security features, from businesses far away from the return address on the envelope. I did a quick internet search, and found the phone numbers of these very real businesses. One was an oral surgeon in Texas, the other an equipment company in New York. I called each of these companies and was informed that these were, in fact, counterfeit checks.

I played along with the scammers, telling them that I had deposited their checks. At this point, one dropped out from communication, so I was down to one. In the mean time, I contacted the FBI and the postal inspector, both of which referred me to an online complaint form, which I filled out and heard nothing back from.

I told the last remaining scammer on Monday that his check had cleared. He immediately emailed me with the account information of the “mover” so I could wire the excess funds there.

And what account did he send me? Why a Wells Fargo Business account.

I called Wells Fargo and they confirmed it was an active account. I then dropped the bomb. I told them the above story and…literally crickets. The woman on the phone expressed no interest at all that one of their accounts was being used to receive funds from check fraud. I got irritated and a bit rude, and told the Wells employee that I didn’t think that Wells Fargo needed any more black eyes, and if she would not take me seriously, I was going to the media. She then forwarded me to Tim in Minneapolis. After a long hold, I explained the story to Tim. I offered to send a picture of the check and all the emails (Which I am happy to provide to anyone on request). He was not interested and then after about 5 min, he disconnected, without warning. I tried for another half hour to get back to him or find anyone who wanted the information I had. Nobody at Wells Fargo cared. No word of a lie. No concern at all. They didn’t even want my phone number.

When W Bush helped ram thru the Patriot act, part of that was that positive ID MUST be established to open a bank account. If this is the case, the owner of this Wells Fargo account should be easy to find. So why are they not interested?

Is this just the latest Wells Fargo scheme to allow accounts to be opened without proper documentation to pad the employee bonuses? Is this account owned by a Wells Fargo employee that has a side hustle? Something else?

I am turning this over to the honest media so hopefully there can be some relief. These scammers were quick to spend $10 on priority mail (Which either is linked to something like Stamps.com OR they went into a post office, on camera). And the sheer number of attempts was astounding. On 3 items I listed for over $300 (A canoe, a table and an air conditioner) I got 13 fraudulent offers. All of this tells me that not only does this scam work, that they have no fear of being caught.

And as a final note, I am still stringing along that scammer. He will loose intrest in a day or so. Any suggestions on how I should break it to him? nhsilverfarm@gmail.com

Mike the Producer

Stocks Dump Today – WTF Just Happened?

The stock market (per the Dow), after an initial spike up at the open, has sold off continuously today. The sell-off began to accelerate just before 2 p.m. EST on no specific news or event catalysts.  So what the heck happened?  To begin with, the stock market jumps at the open almost everyday no matter what type of news hits the tape overnight.  It’s clear that the Fed’s “unspoken” policy is to support asset prices.  But it’s the events developing behind the thick veil of propaganda that is starting to become obvious.

The real economy sucks.  The average household is sinking slowly under  the weight of debt that grows continuously and will soon become unbearable.  The fraud and corruption at all levels of Government and Corporate America has become glaringly blatant.   The Federal Government is going to issue well over $1 trillion in new Treasury debt this year – debt that not only will never be repaid but will continue to grow exponentially until the system collapses.

Gold has spiked up in response to the stock market turmoil.  Physically deliverable gold is running low in NY and London.  The clearest sign of this is persistent backwardation on the LBMA.  Eric Dubin and I discuss the ticking time bomb of rising interest rates and what it will take for gold and silver to finally break out and up in our “WTF Just Happened” podcast hosted by Jason Burack’s  Wall St For Main St:

A Dollar Collapse – And Gold Revaluation – Is Inevitable

“Furthermore, in the main, historians educated as Keynesians and monetarists do not understand the economic history of money, let alone the difference between a gold standard and a gold-exchange standard. These similar sounding monetary systems must be defined and the differences between them noted, for anyone to have the slimmest chance of understanding this vital subject, and its relevance to the situation today…

…The pricing of financial assets, and today’s extraordinarily low interest rates indicate that a flight from the dollar is the last thing expected in financial markets. If they were still alive, de Gaulle and his economic advisor, Jacques Rueff, would be instructing the ECB, as successor to the Bank of France, to dump all dollars for gold immediately. And probably to dump all other foreign fiat currencies for gold as well. However, today, it is likely that other actors will blow the whistle on the dollar, such as the Chinese, and the Russians.”

The quotes above are from Alasdair Macleod’s piercing essay on the gold standard and the mechanics underlying an inevitable collapse of the U.S. dollar: Why A Dollar Collapse Is Inevitable. No one can claim to understand the modern monetary system without reading this piece from Macleod. It also explains by Modern Monetary Theorists are full of shit.

As the antithesis to the dollar, gold will soar. I was looking at some charts with a colleague earlier this week and was startled to discover that a very quiet bull move has begun in the miners.

Like the move that began in late 2015, it seems that some of the junior miners per GDXJ have gotten the party going. As you can see in the chart below, GDXJ is up 12.8% since December 7, 2017. GDX is up 9.5% since March 1st. Some individual stocks are quite a bit more than the indices: AEM up 18% since March 1st, EXK up 49.7% since Feb 9th, Bonterra up 25% since March 1st, etc.

I’ve had several stocks in my Mining Stock Journal that have outperformed the sector my several multiples. Some of them are risky junior exploration stocks and some are lower-risk producers. A good example is EXK, which I presented in the August 24, 2017 issue at $2.16. It closed Friday at $3.06, up 41% from my buy recommendation. This is just one out of many examples. You can learn more about the Mining Stock Journal here: Mining Stock Journal Information.

“The System Will Have To Collapse”

The public pension fund system is approaching apocalypse.  Earlier this week teachers who are part of the Colorado public pension system (PERA) staged a walk-out protest over proposed changes to the plan, including raising the percentage contribution to the fund by current payees and raising the retirement age.   PERA backed off but ignoring the obvious problem will not make it go away.

Every public pension fund in the country is catastrophically underfunded, especially if strict mark-to-market of the illiquid assets were applied. Illinois has been playing funding games for a few years to keep its pension fund solvent.  In Kentucky, where the public pension fund is on the verge of collapse, teachers are demanding a State bailout.

If the stock market were sustain a extended decline of more than 10% – “extended” meaning several months in which the stock market falls more than 10% – every public pension in the U.S. would collapse.  This is based on an in-depth study conducted by a good friend of mine who works at a public pension fund.  He has access to better data than “outsiders” and I know his work to be meticulous.   Please note that the three big market declines since August 2015 were stopped at a 10% draw-down followed by big moves higher.  The current draw-down was stopped at 10% but subsequent outcome is to be determined. My friend and I are not the only ones who understand this:

The next phase of public pension reform will likely be touched off by a stock market decline  that creates the real possibility of at least one state fund running out of cash within a couple of years. – Bloomberg

I know a teacher in Denver who left her job that was connected to PERA in order to take a lump-sum payout rather than risk waiting until she retired to bankrupt pension plan. She took a job in the Denver school system, which is not part of the PERA system. She’s actually thinking about teaching in Central America, where there’s high demand for English-speaking teachers and the pay relative to the cost-of-living is much higher:

“Teaching sucks right now.  Teachers are underpaid for the work we’re doing.  After all of these years, I’m making about $60,000. That’s BS! I have a masters. Truthfully, the classroom is burning me out right now. The f#cked up world is spilling into kids’ lives. They’re largely defiant and off-track. I don’t have the energy to try to streamline whole classrooms.”   In reference to the pension system: “When the mother f#cking-f#ck is any of this going to be corrected?!?! I am beyond mad.  Ecuador has become an option, because this country is beyond f#cked up.”

Unfortunately, I was compelled to answer with the truth – a truth she already knows:  “It won’t be corrected. The system will have to collapse and then who knows what will happen. Criminals run everything now and the people who are supposed to enforce Rule of Law are well paid to look the other way. This has been building for at least 2 decades. It doesn’t help when the President is caught shoving a cigar up a staff interns vagina and then a joke is made of it in Congress. “Is oral sex, sex?” Answer: “it depends on what the meaning of the word ‘is,’ is.”

Now the corruption and fraud is out in the open and there’s nothing that can be done about it. The system will have collapse – its the final solution.

Why Mark Cuban’s Comments On Gold Make Me Want To Buy More

Below is a must-read essay from a friend and colleague of mine, Chris Marcus, who is a former options trader (Wharton MBA) that now lives in Denver.  Many of you may not be aware, but Mark Cuban made his fortune the old fashioned way – he was lucky to be in the right place at the right time. Cuban owned Broadcast.com (a relic of the 1990’s tech bubble).  Yahoo.com used tech bubble stock “wampum” to acquire Broadcast.com.  Broadcast.com was no longer around a few years later.

If anyone knows how to get lucky off a worthless asset, it’s Mark Cuban.  Currently he spends his time running the Dallas Mavericks into the ground.   Chris Marcus eloquently presents the counter-argument to Mark Cuban’s absurd comments about gold in a Kitco.com interview.

During my time training to be an equity options trader, the shop I worked for required that I log 100 hours of poker training. Under the belief that there are great similarities between the decision-making required for poker, and that required for successfully trading the financial markets.

Along those lines, there was a particular lesson that always stood out to me. That while the numbers and percentages are important in both sciences, understanding the people you are playing against is equally, if not a more important element of the game.

Because you might think you’re right, and the person you’re trading against might think they’re right. But if you can identify why they’re wrong and spot the flaw in their thinking, that can really arm you with some confidence in your bet.

If you’ve seen the movie The Big Short, you may remember the scene where right before one of the funds was getting ready to increase the size of their bet against the mortgage industry, they were a little bit concerned.

But to ease those fears, the Deutsche Bank character played by Ryan Gosling took the fund managers to meet the people they were actually trading against. Because once they heard how the people they were trading against were completely caught up in the mania and missing the bigger picture, it gave them the confidence to pile on their trade in even bigger size.

Along those lines, for those investing in gold and silver, there were some interesting recent comments from Dallas Mavericks owner Mark Cuban. That are somewhat reflective of the mainstream view of gold, and similar to the rhetoric you hear out of the central banks.

Which in my own personal opinion comes as extremely fantastic news for those who own precious metals and wonder whether there is still upside to the pricing.

Cuban was interviewed by Daniela Cambone of kitco.com. And with all due respect to Mr. Cuban, some of his answers were so far detached from the reality I’m living in that the more I heard him talk, the more I was tempted to dial Andy Schectman and buy more gold.

Consider the following:

Cambone: Where do you think are some of the safest bets for your money right now?

Cuban: If you need safe, just put the money in the bank.  (Editor side note – seems safe to say at this point that Cuban likely hasn’t been reading Von Mises during halftime at the Mavs games).

Cambone: Gold, up 2.5% for the first quarter. I know in the past you’ve seen it as a speculative bet. How do you see it today?

Cuban: I hate gold. Gold is a religion. There’s some fundamental value to gold, but everything else…it’s a collectible.

Cambone: Well hate is a strong word. The miners too?

Cuban: Individually as people, I heard they’re great people (he says giggling). But as an investment, hate is not strong enough. Hate with an extreme prejudice.

Cambone: So you don’t see gold as money.

Cuban: I do not see it as an alternative to currency. No not at all.

Cambone: Do you feel the same about silver, palladium, or platinum?

Cuban: I don’t know those others as well. But those are pretty much based off their intrinsic value as much as I can tell.

Cambone: So you’re in the camp of gold is just a pet rock.

Cuban: Pretty much. But I’d buy a pet rock first.

Mark Cuban Says Gold And Bitcoin Are Equally Useless – Part 1  – Ironically in 2016 in response to market turmoil, Cuban bought call options on gold. At the time he explained how “when traders don’t know what to do, they go where everybody is, and I thought there was a good chance that would be gold.”

Which makes his current comments all the more baffling. Although perhaps Cuban doesn’t see any cause for concern with rising interest rates and foreign creditors walking away from the dollar system.

Ultimately what Cuban thinks about gold may be irrelevant. Yet to the degree that there are many in the markets who share a similar line of thinking, it’s worth registering that if you own gold, this profile and argument is essentially what you’re betting against.

Personally I receive it as great news. Because in my career, the best trades are not when a person thinks they’re right and puts the trade on. But when a person thinks they’re right, knows why the other person is betting against them, and can spot the flaw in that person’s logic.

I’ll leave it up to you to decide whether Cuban’s argument makes much sense. But his views are generally reflective of what the anti-gold crowd is thinking, and it makes me feel better than ever about owning physical gold and silver. (Article LINK)

Subprime Mortgages Come Roaring Back…

…Only this time around they are sponsored by the U.S. Government and guaranteed explicitly  by the Taxpayers.  I say “explicitly” because Government agency-issued mortgages are directly guaranteed.  In 2008, the Government bailed out the banks who had issued subprime mortgages and related derivatives, but the Taxpayer never signed up for the multi-trillion dollar bailout, which largely transferred wealth from the middle class taxpayer to the Too Big To Fail bank executives.

In an attempt to off-set the falling velocity in the housing market, taxpayer-backed Fannie Mae and Freddie Mac have reduced their credit standards on guaranteed conventional mortgages several times over the last 3 years. In 2015 they reduced the down payment requirement to 3% from 5%. In addition, they reduced the amount mortgage insurance required on mortgages with less than 10% down. Then they allowed “soft dollar” contributions to count as part of the 3% down payment, like seller concessions or realtor commission concessions. They also allowed homebuyers to use loans from other sources to fund the down payment. In this manner, a homebuyer could prospectively buy a home with a taxpayer-guaranteed mortgage using no cash out pocket.

Then last June (2017) Fannie and Freddie raised the Debt To Income (DTI) ratio from 45% to 50%. DTI is the ratio of monthly debt payments (all forms of household debt payments) to the borrower’s monthly gross income. A borrower with a DTI of 50%, including the new mortgage, is using 50% of monthly net income to make debt payments (mortgage, credit cart, auto, student loans, personal loans).

The chart on the right shows the spike-up in the number of conventional mortgages issued by Fannie and Freddie once the DTI was raised (source: Corelogic w/my edits). As you can see, before the DTI was raised the number of mortgages issued with a DTI over 45% was one in twenty. After the change, the one in five new mortgages backed by the taxpayer were issued to homebuyers with a DTI over 45%. This is, by far, the highest level of high-DTI mortgages since the financial crisis.

But the story gets worse. The Urban Institute conducted a study of high DTI mortgages and discovered that 25% of all Fannie Mae mortgages issued to borrowers with a credit score below 700 had a DTI over 45% in just the first two months of 2018. This is up from 19% a year earlier. This is after Fannie Mae reported a $6.5 billion loss in Q4 2017 that the taxpayers will cover. The Government raised the DTI in order to stimulate home sales by inducing households, who could otherwise not afford the monthly cost of home ownership, into taking on even more debt to purchase a home. The majority of these home “buyers” will ultimately default and the taxpayer will get the privilege of eating the loss.

Zillow Group Is Now Flipping Homes? – Zillow Group stock plunged as much as 11% on Friday after it announced that it would be adding home flipping to its home-listing services. Clearly the market was spooked by this announcement – and for good reason. The plan will significantly raise ZG’s risk profile and will require the assumption of $10’s of millions in debt, depending on the number of homes ZG holds on its balance sheet any given time. It’s plan now forecasts holding up to 1,000 homes by year-end.

ZG stock is extraordinarily overvalued.   The Company released its Q4 and full-year 2017 earnings on February 8th and the numbers had little affect on ZG’s stock. ZG continues to generate operating and net losses. It incurred a $174 million intangibles write-down in Q4 2017 that was related to its 2015 acquisition of Trulia. While the Company and Wall St. analysts will remove this write-down as “non-recurring, non-cash,” it is indeed a write-down that occurred to an asset for which Zillow overpaid by at least $174 million. As the housing market fades, ZG will likely incur bigger write-downs of its “intangibles and goodwill,” which represents 85% of ZG’s book value.

The move into home-flipping signals, at least in my view, that ZG has determined that its current business model will never be profitable. The decision to test  home flipping in Phoenix and Vegas can be seen as desperate attempt to generate income. Ironically, in the last housing bubble, flippers in those two markets were decimated. I don’t see how this will end well for ZG, especially now that Congress is exploring rules changes to Fannie and Freddie that will raise the cost of conventional mortgages. The conventional mortgage user is the prime market for home flippers and now the average conventional mortgage applicant has de facto sub-prime credit.

By the way, just for the record, on average and in general, home prices are coming down quickly in most markets.  Case Shiller is severely lagged data and it emphasizes price gains from flips.  Robert Shiller used to admit to these facts publicly. Now he’s a bubble cheerleader like everyone else who sold out.

Taxpayer:  Get ready to eat more losses on the housing and mortgage market.

The commenetary above is from my latest Short Seller’s Journal. For the past several issues I have been focusing on both short-term and long-term homebuilder short ideas. Several of my subscribers have told me they are making double-digit percentage gains on the ideas presented. You can learn more about this unique newsletter here:  Short Seller’s Journal information.

“LEN! Bagged another 30% on April $60 puts.  Of course took some profits and added more to other ideas” – subscriber email last week

Tesla (TSLA): “It’s Not A Lie If You Believe It”

TSLA stock has levitated on statements from Elon Musk that TSL A would be cash flow positive by Q3, an announcement that TSLA would roll out a Model Y “crossover” SUV by November 2019 and the reiteration of ambitious Model 3 production milestones. All three will never happen.

Elon Musk’s attorneys must be giving Elon the same advise given to Jerry Seinfeld by George just before Jerry took a polygraph test: “Elon, just remember, it’s not a lie if you believe it it.”

It looks like reality is catching up to TSLA and TSLA is going into a death spiral.  An amended complaint to an existing class-action suit against the Company, Musk and the CFO was filed. The suit accuses Musk and the CFO of knowingly making false and misleading public statements with regard to production and quality targets for all of TSLA’s models. The amended complaint includes testimony from several former employees.  The amended allegations give the lawsuit far sharper teeth than the original court filing. When I find the time, I’m going to read the entire court filing.

In addition, recently a judge denied Elon Musk’s request to dismiss a class-action suit stemming from TSLA’s acquistion of Solar CIty (which is turning into a disaster) against Musk and TSLA’s board

As for TSLA generating positive cash flow by Q3 and avoiding the need to raise more money, I found an analysis of TSLA’s current liabilities which shows TSLA’s current cash position is worse than it appears.

At the end of 2017, TSLA showed a cash balance of $3.3 billion. Of that, 25% or $840 million is refundable customer deposits. Another $1.3 billion is current payables which are due over the next few months. This includes $753 million owed for equipment, $378 million in payroll and $185 million in taxes payable. Netting out customer deposits and the accrued payables, TSLA’s net cash position at the end of 2017 was $1.3 billion.

TSLA’s current assets minus current liabilities showed a working capital deficit of $1.1 billion at year-end. TSLA generates a cash loss on every vehicle sold. It’s highly likely that TSLA’s cash net of current cash payable obligations is now well under $1 billion. Elon Musk must have taken LSD before he made the announcement that TSLA would be operating cash flow positive and would not need to raise money in 2018.

Although nothing would surprise anymore in this market, I just don’t see how TSLA breaks higher from the current chart formation. Lawsuits are piling up. Last week the NTSB kicked TSLA out of its participation in the NTSB’s investigation of that fatal accident involving a Tesla in California. The NTSB stated that TSLA violated agency protocols. Consumer Union, the consumer advocacy division of Consumer Reports, issued a report last week which stated that Tesla needs to improve the safety of its autopilot. On top of all of this, I’m convinced that Elon Musk, based on his erratic and volatile behavior, is certifiably insane.

Syria: What Just Happened?

This essay on the ramifications of the United States’ Deep State missile attack on Syria.  The OPCW – Organization for the Prohibition of Chemical Weapons – is an independent organization formed to implement the provisions of the Chemical Weapons Convention.  There’s 192 member states, including the U.S. and Russia.

Russia sponsored a resolution in the U.N. for the U.N. to endorse the OPCW’s investigation of the alleged chemical attack in Syria.  Not surprisingly, the U.S. blocked the U.N. from endorsing the mission, which will still proceed as planned.  I would have  thought the U.S. would have led call for an independent investigation…

Eric Zeusse of the Strategic Culture Foundation writes:

So: what is at stake here from the OPCW investigation is not only the international legitimacy of Syria’s Government, but the international legitimacy of the Governments that invaded it on April 13th. These are extremely high stakes, even if no court in the world will possess the authority to adjudicate the guilt — either if the US and its allies lied, or if the Syrian Government lied.

The entire article is worth a perusal: Syria: What Just Happened?

As for the U.S. Government’s Deep State: Oh what a tangled web we weave, when first we practice to deceive. – Sir Walter Scott

Insane Valuations On Top Of Insane Leverage

The recent stock market volatility reflects the beginning of a massive down-side revaluation in stocks. In fact, it will precipitate a shocking revaluation of all assets, especially those like housing in which the price is driven by an unchecked ability to use debt to make the “investment.” This unfettered and unprecedented asset inflation is resting precariously on a stool that is about to have its legs kicked out from under it.

The primary reason the U.S. is now holding a losing hand at the global economic and geopolitical “poker table” is that this country has been committing too many sins for too long for there not to be a price to be paid. With bankrupt Governments (State and Federal), a bankrupt pension system, a broken healthcare system, all-time high corporate and household debt levels and a broken political and legal system, the U.S. is slowly collapsing. This is the “perfect storm” for which you want to own plenty of gold, silver and related stocks.

Eric Dubin and I are producing a new podcast called, “WTF Just Happened?” The inaugural show discusses the topics mentioned above:

“WTF Just Happened?” w/ Dave Kranzer and Eric Dubin is produced in association with Wall Street For Main Street       –       Follow  Eric here: http://www.facebook.com/EricDubin