Lately at Dohmen Capital, we are seeing how the Real Estate market now is somewhat reminiscent of the environment leading up to the Great Financial Crisis of 2008. However, we must keep in mind that there was a roughly two year lead time between the first signals of excesses and the crash of 2008.
Between 2008- 2009, many investors were burned, with the estimated losses equaling over 20 trillion U.S dollars.
Germany is proposing legislation to combat the avalanche of fake “news” by imposing heavy fines on media outlets that disseminate slanderous and defamatory material while doing nothing to try to prevent the publishing of such falsehoods. It would be the opposite of U.S. law, which basically gives immunity to the media outlets that post or carry such often malicious articles.
According to the New York Times, major social media firms like Facebook and Twitter may be faced with huge fines, up to $53 million, if they don’t comply with a newly proposed law by Germany’s minister of justice and
One of the biggest hedge fund managers, Bill Ackman, considered to be one of brightest, lost over 95% in one of his largest positions, Valeant Pharmaceuticals (VRX).
He held the stock for about 3 years, while the stock plunged from $257 to $11 on March 14, 2017. On March 13, he declared he had sold his entire position in Valeant.
President Obama promised in 2007 that his policies would “bankrupt the US coal industry.” This was one promise that was kept.
A study found the coal industry lost 50,000 jobs from 2008 to 2012. That’s a lot of misery for those families. Many leading coal companies went bankrupt.
Dohmen Capital presents the chart below for KOL, the ETF for coal companies. The ETF lost 90% of its value from the 2011 peak.
The bulls in the retail sector over the past year got another disappointment with weak sales during the holiday season. As we recently pointed out to our Dohmen Capital clients, Wall Street analysts were bullish on retail late last year, predicting that Christmas sales would be strong. The election results produced further optimism, saying that the prospects of the new President will encourage consumers to spend more.
If the world were only that simple! To spend more, people need more income, which has been declining for several decades. They need jobs, which right now is not happening except in
Apple may not have their phones burning up, but they have other problems, such as disappointing sales of the iPhone 7, so poor that for the first time, they didn’t even release first week sales.
At Dohmen Capital Research, we see that Apple’s US Mac sales are also plunging, down 13.2% from one year ago. This is not a big part of total Apple sales, but it adds up when all the other “great hopes,” such as the Apple Watch, Apple Pay, Apple TV, etc. have fizzled.
The national debt is accelerating at a geometric rate. But no one in Washington seems to notice. “Geometric” rate means it is accelerating exponentially.
Have you noticed that current members of Congress never mention the horrendous explosion in the nation’s debt? Apparently, they hope that Americans won’t notice what they have done to our economic future.
When Apple management announced that the iPhone 7 was sold out, the stock soared about 14%. That’s an increase in market value of over $80 billion. We call that a windfall from a shortfall.
We were skeptical. We consider the reception of iPhone 7 lukewarm, certainly not enough for demand to soar above expectations.
However, there probably is a real shortage at the moment. But instead of being caused by big demand, couldn’t it be due to a lack of supply?
The person nicknamed “Helicopter Ben”, because he said it would be easy to fight DEFLATION, even if it had to be done by throwing money out of helicopters, gave us ‘ZIRP.’ That means “zero interest rate policy.” Now he seems to be leaning toward ‘NIRP,’ “negative interest rate policy.” He is an economics professor now. We can only hope that his students do some outside reading, like Ludwig von Mises.
Jeff Cox and Katie Kramer of CNBC wrote this:
The virtually unlimited level of credit creation by the major central banks over the past seven years has created conditions never seen before in the history of mankind. Yields on government bonds in many countries are now below zero, which we have never seen to this extent in history. In Europe, over $11 TRILLION of government bonds now have a yield below zero. That means the bond owner, in effect the lender, pays interest to the borrower.
This is the ultimate absurdity. How can anyone believe that this won’t eventually result in an unstoppable crisis?
