This is how bad things are in the United States.
By Bill Fleckenstein President Of Fleckenstein Capital
June 21 (King World News) – Non-FANG tech led the Nasdaq higher, as that index gained almost 0.5% through midday, while at the same time the S&P and the Dow were negative. The party was apparently precipitated by wins at the ridiculous game of beat-the-number by Adobe and Red Hat…
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“Hidden Figures” In Plain Sight
Longtime readers know that I have railed against this idiotic Wall Street game for years because there is no way one line on an income statement tells you everything you need to know about how a company is doing. I’m sure many readers are also aware how games are played by setting absurdly low estimates.
It was certainly stunning to see Red Hat about 8% higher thanks to its supposed victory. As Fred Hickey pointed out in a tweet last night, the prior two quarters were $0.61. The company was originally supposed to make $0.59 this quarter, but along the way it lowered the number to $0.53. Thus, when it announced results of $0.56, that was deemed a “beat,” and a party ensued.
It Puts the “Numb” In “Numbers Game”
Of course, my complaining about this lunacy isn’t going to change anything. It is just a bird of a feather of all the other crazy things that are, or have been, occurring. In addition, it demonstrates rather graphically that most of the motion in the market has very little to do with the underlying economics or business fundamentals.
In the afternoon, once again nothing happened, as the market just drifted sideways (though some FANG stock did finally join the party). Away from stocks, green paper was flattish, oil fell 2%, fixed income was a little lower, and the metals were mixed, with gold slightly higher and silver a touch lower. The miners were fairly firm, for what that’s worth.
Included below are two questions and answers from the Q&A’s with Bill Fleckenstein.
This Is How Bad Things Are In The U.S.
Question: The stock market is at new highs “May bankruptcy filings rise 5 percent” May Bankruptcy Filings Rise 5% Sometimes, you just got to wonder……
Answer from Fleck: The economy is booming 🙂
King World News note: The snippets below are from the article Bill and his reader are referring to:
Thanks to “mounting financial pressures,” the American Bankruptcy Institute reported that total U.S. filings in May increased 5 percent year-over-year. “More consumers and businesses faced with mounting financial pressures are turning to the fresh start of bankruptcy,” ABI executive director Samuel Gerdano said. “Two ABI efforts are underway to modernize the Bankruptcy Code to meet the current needs of struggling households and business.”
King World News note: This is just more evidence that the reporting from John Williams at Shadowstats is much more accurate when it comes to the economy than any propaganda (economic releases) emanating from the United States. Fleckenstein’s Q&A continues below.
Question: LOL! Thanks for posting the nasty email in Monday’s Ask Fleck — it truly made my day! It warmed my heart to hear some of the familiar storylines of the “it’s different this time” crowd. I’m not the experienced trader I’d like to be, but I’ve been through 2000 (on the wrong side) and 2008 (on the right side (thanks to you & Fred)). And while I can’t claim to be well-read, my biggest common takeaway from Reminiscences of a Stock Operator, Ben Franklin’s autobiography and the Decline and Fall of the Roman Empire was that humans haven’t changed. Our technical/medical knowledge and computational power has expanded greatly, but the human emotions of fear & greed that run stock markets everywhere are exactly the same — just as you noted. Tweak some variables here & there, exaggerate the scale with stimulus, and paint it a different color, but the only variable that counts in the big picture is a constant — humans.
Answer from Fleck: “Well stated by you!”
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