With continued uncertainty in global markets, today one of the greats in the business sent King World News a fantastic piece discussing the chaos in China, plus a bonus Q&A that covers the retailers, QE, inflation vs deflation and much more.

By Bill Fleckenstein President Of Fleckenstein Capital

August 18 (King World News) – China was thumped pretty hard last night, as the market there lost about 6%, though it didn’t seem to matter to Europe, nor our stock market, where the early going saw the indices slightly red in pretty dull trading. The market leaked a bit more in the afternoon (sort of the opposite of yesterday), led by the semis….

Continue reading the Bill Fleckenstein piece below…


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Away from stocks, green paper was stronger, oil gained 1%, fixed income was a little weaker, though the long end was hit hard, while the metals were mixed, with gold flat versus a 3% trashing in silver. The precious metals move appeared to be in sympathy with a decline in base metals, as copper lost 2%.

The Other Side Of Summer

Once again there isn’t a whole heck of a lot to say about the non-action in the market, as it just kind of opens, moves a bit, sits until the end of the day, then moves again one way or the other. But I don’t think this particular pattern is indicative of a “healthy” market, and I continue to believe if (i.e., when) we start to see a little weakness, that is liable to lead to a whole lot more.

King World News - Bill Fleckenstein - The Longer A Mania Goes, The Worse Off Everyone Will Be When It Ends - The Aftermath Of This Is Going To Be Extremely Brutal, Plus A Bonus Q&A

Included below are three questions and answers from today’s Q&A with Bill Fleckenstein.  The questions are from his subscribers and they get to read Fleckenstein’s answers every day.

Bonus Q&A

Question: Bill, have you considered shorting retailers such as Macy’s, Kohl’s, J.C. Penney, and Sears? They look as if they are in bad shape.

Answer from Fleck:  Yes, I have considered it, but haven’t done so. I just feel like I have a better feel for tech stocks at this stage of the cycle.

Question: Any possibility that the major indexes have simply become social engineering tools? Many stocks, commodities and foreign markets are either correcting or crashing, yet USA indexes nada. I don’t recall a previous time when things like this didn’t cause major downward movements in the USA markets indexes. Could it be that the Fed, politicians and bankers are all in this to avoid upsetting the masses? Retiring Boomers might get too upset…just asking, thanks

Answer from Fleck: “I’m assuming this is just out of frustration and you don’t really believe such a silly outcome. You must remember the world has never seen QE before. We just don’t know how long it takes for all that money printing to finally vaporize.”

On The Inflation Front

Question: No inflation here – An observation – hearing wage pressure on conference calls for the first time in a long time. On the Noodles (NDLS) conference call, the CFO was asked, “What kind of wage rate inflation he was running?” He stated that “typically for us over the years, I’ve seen in the 1% to 2% range of average hourly rate. I think we’ve been closer into the 3% to 5% over the last several months.” Similarly, Ingles Markets (IMKTA – grocer mid-atlantic to SE) is seeing wage pressure as it is having trouble filling positions. Hmmm…..

Answer from Fleck: “The infatuation with deflation is just amazing.”

***To subscribe to Bill Fleckenstein’s fascinating Daily Thoughts CLICK HERE.

***KWN has now released the incredible audio interview with 50-year veteran Art Cashin, where he discusses why the worldwide liquidation scramble could morph into a full-blown 2008-style collapse, the chaos in China, global stock markets, commodity markets, whether the U.S. stock market has finally put in a major top and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.

Art Cashin mp3 8:15:2015

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