Parabolic Trend Failure of the Day: Manufacturing Productivity

Click to enlarge.

Parabolic trend failures, for those times when exponential trend failures just won't do.

Feelin' good about the future though. Real good. Sigh.

Source Data:
St. Louis Fed: Manufacturing Sector: Real Output Per Hour of All Persons

Something I Read Last Tuesday Morning

June 7, 2016
CNBC: Something I saw Tuesday morning makes me think stocks are going higher: Trader

But what really had Gordon convinced Tuesday morning that the rally was about to heat up was when the large-cap S&P 500 breached its respective April high. The next confirmation for Gordon will be when the Nasdaq breaks above its 2016 high, which it is just points away from.

I'm really kicking myself for not pointing this exciting trading opportunity out to you last week. Hope my inexcusable negligence hasn't cost you too much easy money. ;)

Permanently High Plateau?

The following chart shows the 4-quarter moving average of household net worth divided by GDP.


Click to enlarge.

Is it just me, or do risk assets seem especially risky these days?

Source Data:
St. Louis Fed: Custom Chart

The Department Store to Nonstore Retailer Employment Ratio

The following chart shows the number of employees at department stores divided by the number of employees at nonstore retailers.


Click to enlarge.

For those who believe this time isn't different:

This time it's different.

Yeah, yeah. I just used the four most dangerous words of investing. I hear you. Still thinking them though.

Source Data:
St. Louis Fed: Custom Chart

The "Good Bet"

July 31, 2013
MarketWatch: P/E ratios to drop 20% in coming years

The bottom line? It’s a good bet that interest rates will be in a secular uptrend for many years, and we should be planning now how to respond.

The article offers no reasons why interest rates will be in secular uptrend for many years. Not one. There's not even a hint of a reason. Read it in its entirety for yourself. You'll see.

And yet, the bottom line says it's a good bet.

What exactly is a rising interest rate environment? It's such a simple concept but the reality is far more complex. Let me show you.

3-Month Treasury Bill

07/31/13: 0.04%
06/13/16: 0.24%

Rising interest rate environment! Right?

30-Year Treasury Bond

07/31/13: 3.64%
06/13/16: 2.44%

Rising interest rate environment? Hmm.

If betting on rising rates was so good in 2013, then explain this.

ProShares UltraShort 20+ Year Treasury Message Board

merenkov • Jun 6, 2016 11:13

Only down 20% year to date!

This is starting to remind me of 2014, when anyone dumb enough to stay in TBT for the entire year lost 40% of their money. It could be worse, though. The morons in TMV (the triple inverse bond fund) are down 30% YTD...

It's down another 3% in the past week. TBT, it's the "good bet" that just keeps on giving.

Three Point Five Percent

June 12, 2016
Japan’s Second-Biggest Bond Fund Doesn’t See Value in Yen Debt

The yield on the 10-year Japanese government bond plunged to a record low of minus 0.165 percent Monday, while that on the 20-year security slumped to an unprecedented 0.17 percent.

The TOTAL interest earned on a 20-year Japanese Treasury held 20 years is 3.5%.

1.0017^20-1 = 3.455%

A US EE Savings Bond issued today is guaranteed to double in price if (and only if) held 20 years.

The ANNUAL interest earned on an EE Savings Bond held 20 years is 3.5%.

2^(1/20)-1 = 3.526%

For long-term savers willing and able to hold 20 years, you could certainly do worse than an EE Savings Bond. That's especially true considering that the US 10-year Treasury currently yields just 1.61% and the US 30-year Treasury currently yields just 2.43%. No joke.

EE Savings Bonds: Rates & Terms

Treasury guarantees that an EE Bond will be worth at least its face value after the first 20 years. If an EE Bond does not double in value (reach its face value) as a result of applying the fixed rate of interest for those 20 years, Treasury will make a one-time adjustment at the 20 year anniversary of the bond's issue date to make up the difference.

This is not investment advice. You know this isn't investment advice because it is seldom, if ever, mentioned on CNBC. Wall Street's middlemen can't make any money off of investors buying Savings Bonds directly from the government. Go figure.

The Bar for "Happy News" Seems to Be Set Very Low

June 10, 2016
Time: 8 Retail Chains That Are Closing Stores This Year

Barnes & Noble (BKS -1.65%) may be the only happy news on this list as the bookseller has actually decided to close fewer stores in 2016 than it has in any year since 2000. The chain will shutter only eight locations, down from the 13 it had originally planned to lose this year, Fortune reported. The change comes because while most retailers have seen sales slow at physical stores, Barnes & Noble has actually lost online sales volume while its retail locations have been a relative strength.

In addition to closing stores for 15+ consecutive years and recently losing online sales volume in this digital era, Barnes & Noble investors can also find happiness in only losing 30% of their money (counting dividends and splits) over the past year.

Today's Don't Laugh Challenge v.002

Twitter link.

Kirk was here? Hahaha!!!