Economic Cycles, Stock Market Crashes and the Scary Scenarios

Here we are ready to inaugurate a new president in 2017 and our stock markets are at all-time highs after a huge ‘Trump Bounce’ after the election. Many that study stock market history admit that we are in a need for a pull back as the DOW is almost ready to break 20,000 pts. What does all this mean?

Well, many analysts are suggesting it is very possible we could get a market correction in mid to late 2017 and that it could be 10-20% by the time it is done, the longer this nonsense goes on, and the bigger the bubble builds then the bigger the drop, we are over bought, almost everywhere. Then all that money printed that ended up inflating emerging markets will look for safe haven, coming back here in the short term. As those go one-by-one, that money flies out, because the money is looking for the nicest looking house (for now) in a majorly bad neighborhood, look at the EU, Japan, Middle East, India, and who knows what the hell China’s real numbers are, they have one thing going for them, they own our debt – but that might not be worth much if things go on. All that money coming back to safe haven in the US will cause inflation here, but at what cost?

Cheap loans, another bubble burst and look at the Student Loan issues 35% in default (past 90-days) and cheap car loans is only producing higher repo rates which are hidden by increased sales figures. It’s all lipstick on a big pig, socialism doesn’t work and you can’t have utopia unless you build it, and that takes capitalism which we are crushing into next week for the falsehood of cronyism. But I digress.

If we don’t get a back pedal on the stock market soon, it will all come at once, and 2008 was 8-years ago remember? That wasn’t a recovery that I’d be bragging about – basically we’ve increased regulations, size of government, and cut our military – all very stupid things to do in the present period. We are digging a hole, and I assume when if it starts to fall apart the left will blame capitalism and get their people back into power – and they will just make things worse – this seems to be a repeating problem with humanity doesn’t it? That is what socialists always attempt to do, but it all collapses anyway – Venezuela, Argentina, Greece, Spain, Italy, Portugal, Zimbabwe, hell, how about that Arab Spring a few years ago, still in shambles – Libya, Egypt, Tunisia, Syria, Yemen, who’s next? Jordan, Turkey, Saudi Arabia? Civil unrest, food shortages, people will demand what was promised and take down their governments to get what’s left. Beware the socialist mobs. But I keep digressing.

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Less Than 1,000 Days Until the Next Total Solar Eclipse in the United States

On Monday, August 21, 2017, a total solar eclipse will be visible in some areas of the United States. This is now less than 1,000 days away. The event has been a long time coming. While the last total solar eclipse to be seen in the United States occurred in 1991, that event was limited to Hawaii. Before that, the last solar eclipse visible from the continental United States was on February 26, 1979.

While the 1979 event tracked across Oregon, Washington and Montana, people in 12 states will see the 2017 event. Both eclipses started in Oregon. The earlier one then tracked up into Canada. The 2017 eclipse starts in Oregon, travels across the central United States before finishing far out to sea beyond South Carolina.

A total solar eclipse is a rather rare occurrence. Estimates place the likelihood of any point on Earth experiencing one only every 400 years. This is not absolute, however. Several Oregon locations saw the 1979 eclipse and they will see the 2017 event as well. For them, experiencing two solar eclipses in a little more than 35 years is quite unusual. Closer yet are the cities of Carbondale, Illinois, and Cape Girardeau, Missouri. Residents there will see the 2017 eclipse as well as another in April, 2024. This separation of less than seven years for these two eclipses is very unusual. Of course, it may be hundreds of years before these cities see another.

To be a total eclipse, the moon must completely obscure the sun, for an observer standing on Earth. This can occur monthly, at New Moon. Ordinarily, however, the moon passes either above, or below, the sun’s position, as viewed from Earth. As a result, the moon’s shadow normally sweeps across open space. On rare occasions, as the moon passes directly in front of the sun, a shadow is cast upon the surface of the Earth. If the sun is partially obscured, a partial eclipse results. If the sun is completely obscured, a total solar eclipse occurs. The moon is much smaller than the sun, of course. In fact, the moon is some 400 times smaller. In an astronomical twist, the moon is also 400 times closer to the Earth. This makes the apparent size of the moon very close to the apparent size of the sun. When the moon passes directly in front of the sun, it is able to completely eclipse the sun, for some viewers on Earth.

The shadow cast by the moon, however, is very small. Depending on the distance between the Earth and the moon, which varies somewhat, the moon’s shadow will darken a strip of Earth about 70 miles wide. This strip is called the Zone of Totality. Those people located within this zone will experience a total solar eclipse. Those near, but outside, will see a partial solar eclipse.

On August 21, 2017, the sun is eclipsed for as much as 2 minutes and 40 seconds at the maximum point. Hopkinsville, Kentucky happens to be located at this point. People not located there may see a shorter eclipse duration. Those located outside the zone of totality will only see a partial eclipse. Some cities that will experience totality include Nashville, Tennessee, Kansas City and St. Louis, Missouri. The 2017 eclipse will potentially be seen by millions of people located across the United States.

Each total solar eclipse is unique, but there are similarities. The Earth will darken over time as the moon obscures more and more of the sun. This is the partial eclipse phase. As totality approaches, the amount of sunlight striking the Earth will be greatly diminished. The sky will become similar to twilight. Colors normally seen at sunset will be visible during the day. Birds, animals and insects will be fooled into believing that night is falling. Some will return to their nests or roosts. Nocturnal creatures will begin to emerge. These effects often happen even if a total solar eclipse occurs early in the morning. After totality ends, another partial eclipse phase occurs until the moon passes beyond the sun’s location.

The biggest factor that cannot be predicted with certainty is the weather on August 21, 2017. Cloudy weather could obscure the eclipse for interested observers. As a result, many people examine historical weather patterns in order to determine prime eclipse viewing locations. Since the 2017 event occurs in August, there are some rather promising weather possibilities. In Oregon, the August weather tends to be sunny and dry, perfect eclipse conditions. Morning fog, storms, or clouds, could thwart eclipse viewers, however.

Idaho and Wyoming residents will also experience the 2017 eclipse. The weather in these states could allow a very good eclipse viewing experience. The eclipse occurs fairly early in the day, lessening the possibility of localized thunderstorms.

As the total solar eclipse tracks across more states, from Nebraska to South Carolina, the possibility of inclement weather increases. These locations will experience the eclipse later in the day. Afternoon storms, or hazy weather, could be encountered. Such weather could limit the eclipse experience.

Many US cities have already begun planning for the August 21, 2017 total solar eclipse. The event represents an opportunity to entertain tens of thousands of visitors to cities located within the zone of totality. With proper attention to details, cities can provide a favorable eclipse experience that also highlights the attractions of the local area. Weather permitting, of course.

Bonus Facts:

– the distance from the Earth to the moon increases each year. In less than 1.5 billion years, the moon will not be close enough to produce total solar eclipses. After that, only partial or annular eclipses will occur.

– when the moon eclipses the sun, the sky darkens enough to allow planets and bright stars to be seen in the daytime. On August 21, 2017, the bright star Rigel should be visible low in the south. – Albert Einstein predicted that a total solar eclipse could provide direct proof of the General Theory of Relativity. He postulated that the eclipsed sun would cause light to be bent, for an observer on Earth. This would be proved as stars located behind the sun would appear to be shifted in location. This visual evidence was demonstrated during an eclipse in 1919.

– as the moon passes in front of the sun, it blocks enough sunlight that the solar corona, the super heated atmosphere, becomes visible to people on Earth. The shape of the corona is different during each eclipse as it is influenced by the level of magnetic solar storms, which constantly changes.

– ancient civilizations did not understand the science responsible for total solar eclipses. Eclipses were attributed to supernatural causes and thought to be bad omens.

– the theoretical maximum duration of a total solar eclipse is about 7 minutes. The 2017 eclipse is less than half this duration, at 2 minutes, 40 seconds for those located in Hopkinsville, Kentucky.

– the sun is not safe to view during any portion of the partial eclipse phase. Even if only 1% of the sun is visible, observers risk damage to their eyes through direct observation. At this eclipse stage, the sun appears to be dim enough to view. Unfortunately, the lit portion still transmits full force sunlight to the optic nerve. Because the level of light is so much lower than normal, the observer feels no urge to avert their gaze. Moreover, the optic nerve does not contain pain receptors so victims are unaware that their eyesight is being damaged. Proper eye protection is vital for all observers of the partial solar eclipse phase.

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National League Teams Already Have DH, So Why Wait?

After nearly fifty years, the experiment will finally be recognized as a success. Baseball Commissioner Rob Manfred has hinted that the designated hitter, which the New York Times once called a “gimmick,” will be used in the National League.

It was in 1973 that teams in the Junior Circuit elected to have another player hit for the pitcher, a concept that most considered a short term effort to increase offense. History was made that spring when Ron Bloomberg stepped to the plate for the Yankees to become the first DH ever.

The DH quickly became a valuable tool for American League clubs, who went on to win five of the next seven World Series. Although the DH was not used during the Fall Classic, one must admit that it certainly proved advantageous in several respects during the season.

Because they did not have to bat, the American League pitchers were better rested with fewer bumps and bruises than their National League counterparts. The A.L. managers had happier players, since each team had nine starters and thus increased playing time for everybody.

Now that the Commissioner has broached the idea of the DH across the board, players on the National League teams can look forward to similar happiness. Manfred declared that the DH in the National League could come as early as the 2017 season. bolder move would be to institute the DH this year, an idea which would intensify the season as well as increase what has been an embarrassing lack of offense over the past half decade. This would be particularly welcome now, since almost half of the teams in the N.L. find themselves in complete rebuilding mode.

Not only would using the DH help these clubs compete, but it would also increase fan interest during the rebuild. Most clubs already have players who fit the DH mold perfectly, and here is the list of those sluggers.

Braves: Nick Swisher

The veteran has been a clutch hitter with decent power and pop throughout his career, but he currently has no spot in Atlanta’s regular lineup.

Brewers: Jonathan Lucroy and Chris Carter

Having Lucroy in the lineup without having to catch every day would certainly increase his production and career. He has already had experience at first, so he could occasionally allow Carter to get a defensive rest without losing his turn in the order.

Cardinals: Matt Adams

Adams would be the perfect DH, especially against right handers. A bonus for St. Louis would be using Yadier Molina as the DH against lefties, thereby preserving his health for a postseason run.

Cubs: Kyle Schwarber and Jorge Soler

Schwarber’s struggles in left were apparent in the playoffs last year, as he had been catcher for most of his career. With the DH in play, he could still catch on occasion and allow Soler to rest defensively.

Diamondbacks: Yasmany Tomas

The International free agent still has no true defensive home after an entire year in Arizona. He would be the perfect fit as DH, almost the Big Papi of the N.L.

Dodgers: Andre Ethier

Instead of trying to trade Ethier, as they have done for the past few winters, Los Angeles could have his quality bat in the lineup every day.

Giants: Buster Posey and Brandon Belt

The former Most Valuable Player and star catcher has already suffered several significant injuries behind the plate, so he has been used occasionally at first. Providing San Francisco with the option of the DH would help Posey’s production and lengthen his career, while allowing Belt more opportunities to spell the outfielders.

Marlins: Ichiro Suzuki

Another former M.V.P., Suzuki is still one of the most exciting players around. Seeing him bat every day would be a good reason for Miami fans to start coming to games. Mets: Wilmer Flores

Currently the fan favorite has no regular position, and he has enough power to warrant a role as the club’s DH.

Nationals: Clint Robinson

He is too good of a hitter to be a backup outfielder/first baseman, so Washington could really benefit from the implementation of the DH.

Padres: John Jay

He was acquired over the winter to be a backup outfielder, but a DH role could allow Jay to be a good veteran presence as San Diego undergoes a rebuilding year.

Phillies: Darrin Ruff

There is already controversy about Ruf taking playing time away from veteran All-Star Ryan Howard, a problem which the N.L. DH would immediately quell.

Pirates: Michael Morse

Had the DH come last year, the Pirates would probably have kept Pedro Alvarez. Nevertheless, Morse could fill a similar role in 2016.

Reds: Devan Mesoraco

Any doubt whether the catcher can fully recover from surgery to be an effective backstop, a situation that would leave Cincinnati without the All-Star’s valuable bat.

Rockies: Mark Reynolds

Reynolds, even though listed as a corner infielder, has always been the N.L.’s version of a DH. An edict from Manfred would simply make it official.

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Cleveland Has A Better Chance Than Chicago To Return To The World Series

The youth of the Cubs, epitomized by the selection of Kris Bryant as the National League Most Valuable Player, has many people discussing a return to the World Series next year and beyond for the team from Chicago’s North Side. In actuality, it seems that their opponents in this past Fall Classic are more likely than the Cubs to reach it again in 2017.

Several key members of the Cubs are facing free agency, most notably closer Aroldis Chapman and leadoff hitter Dexter Fowler. Postseason pitching hero Jon Lester will return, but veteran battery mate David Ross has retired. The loss of his personal long time catcher, who was brought over from Boston to Chicago primarily at Lester’s request, may cause the left hander to be less effective in 2017.

Cleveland, on the other hand, will be adding a star player to a lineup that managed to somehow win the pennant without him. Outfielder Michael Brantley, the team’s M.V.P. in 2015, will return after missing nearly all of last season due to injury. They will also get back catcher Yan Gomes, who missed much of the season as well. The path to the playoffs promises to be easier for Cleveland next season. Two of the perennial powers that rival the Indians in the American League Central division, Detroit and Chicago, are going to be considerably weaker as they enter rebuilding mode. The Tigers are looking to trade veterans such as Julio Iglesias and Ian Kinsler in hopes of getting top prospects, and the White Sox are marketing ace left hander Chris Sale and center fielder Adam Eaton.

Also weaker are the teams the Indians breezed through in the playoffs, which saw Cleveland win seven of the eight games in the two rounds. Boston, who was swept in three games by Cleveland, will very likely miss the presence of “Big Papi” David Ortiz. The perennial All-star and likely Hall of Fame designated hitter retired after the season.

Toronto, who was dispatched by Cleveland in five games in the Championship Series, will be losing at least one of its key sluggers Edwin Encarnacion and Jose Bautista. Both All-Stars are free agents this winter, and each will command contracts so large that it would be impossible for the Blue Jays to sign the duo.

On the other hand, the Cubs’ most probable playoff opponents are likely going to be stronger. Washington, which finished behind Chicago for most victories last season, is seeking to acquire Sale from the White Sox. That acquisition would strengthen an already formidable starting rotation, anchored by Cy Young Award winner Max Scherzer. The Nationals are also on target to sign Fowler away from Chicago. The Dodgers, who came just two games from wresting the pennant from the Cubs, are actively pursuing several power hitters that could push them over Chicago in the playoffs. Milwaukee outfielder and former National League M.V.P Ryan Braun continues to be linked in possible trades with Los Angeles.

While there is no doubt that the Cubs will be the favorites to win the pennant again in 2017, Cleveland might be an even better bet to repeat. After all, they won it last year without two of its best players, both of whom should be healthy in the spring.

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The Last Chance for Gold

Growing up in my corner of Florida, there used to be an old gas station on the edge of the Everglades. The proprietor did a lot of business with his oversized, hand-painted warning sign:

Last Chance for Gas.

Beyond the fuel pumps were a thin two-lane ribbon of asphalt and 90 miles of swampy wilderness. No smartphones. No “emergency call boxes.” And, in most places along the highway, no guardrails either.

You were on your own – much like the economic wilderness we’re all forced to navigate today.

Which is why the sharp decline in gold prices and mining stocks is much like that warning sign… and a monetary gift…

In short, if you were waiting on the sidelines after this year’s monster rally, this is your second chance – and, in my view, your last chance – to buy gold at these prices. And it comes at just the right time. Typical Moves for Gold

Gold’s done a full round trip in buyer sentiment during the past 12 months: from being the world’s “most hated commodity” at its lows near $1,050 an ounce 12 months ago to “gotta buy it” status at $1,350 an ounce this summer.

With gold now fallen from those lofty heights, an investor is more likely to ask: “Gold, what have you done for me lately?”

In all, gold’s given back about 60% of its 2017 rally. Yet such sharp declines followed by a resumption of a broader trend higher is a typical early bull market move for this volatile metal. Most famous of these pullbacks was gold’s run to all-time highs in the 1970s.

Starting out at $35 an ounce in the early ’70s, as gold became legal for Americans to own once again, bullion prices soared to almost $190 an ounce in 1975. That’s quite a run all on its own. During the next 18 months, gold prices dropped back nearly 60%, falling to $100 before running to a then-record $800 an ounce in the next three and a half years.

The Song Remains the Same

Most important, when it comes to the companies that dig this stuff out of the ground… nothing has changed.

As I have pointed out in past months, gold mining firms have done a great job getting their costs down and making money to boot.

We noted as early as February that the elite companies in this group were making an average of $215 for every ounce of gold they were digging out of the ground and said, in no uncertain terms, to anyone who’d listen: “Stop panic selling gold mining stocks. Likewise, after cutting dividends in 2014 and 2015 as gold prices plummeted, many of the same companies have not only reinstituted payouts, they’ve started raising them again. In the meantime, mining firms have cleared away much of their old cost structures. That’s why Newmont Mining, as one example, has been able to drop its “AISC” – all-in sustaining costs – from $1,170 in 2012 to $910 so far in 2016.

The point is that there are many reasons to own gold: for speculative profits, as discussed above; for insurance; and for wealth preservation. But you can’t benefit from any of those strategies without taking advantage of the gift that is low gold prices and low expectations put on our table by Wall Street’s hair-trigger traders.

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