The Peter Schiff Show Podcast

Summary:

Blue Apron Holdings IPO

The Blue Apron Holdings IPO today is reminiscent of the dot com boom.  The market is saying the 5-year old company is worth close to $2 billion. This IPO represents a "down round" which may occur after a company suffers a decline in valuation after it has received initial rounds of capital investment. The initial offering was $10/share, and by the closing bell it only managed to close at $10. This stock may go below $10 as early as tomorrow, as many investors were planning to flip the stock. The concept of this company is not proprietary; indeed the recent merger of Amazon and Whole Foods could pose a serious market threat to this company.

Rand Paul

In more news on this ever-evolving Republican Health Care saga. the Republicans are caving in to media and left spins the Republican Healthcare bill as a re-distribution of wealth from the poor to the rich.  You are not taking from the poor by stealing less from the rich. For some reason, the voting public expects American profit-seeking companies to sell insurance to people who are already sick. This would be the equivalent of selling home insurance for a house that has already burned, or car insurance for a car that has just been in an accident.   Rand Paul is getting a lot of press recently because he is the only Republican who opposes this on principle. He believes in the freedom for Americans to purchase the kind of insurance they need. They can pick their deductible; they can pick their co-pay. They can have the freedom to buy or not to buy health insurance.  But this can only happen in a market where insurance companies are allowed to make a profit and are free to compete for insurance business without government intervention.

U.S. Dollar Continues Decline

* The U.S dollar continued its decline today falling to a fresh 8-month low, closing to about 95.60

* The dollar is being led lower by a surging euro; the euro is actually at a 12-month high against the U.S. dollar

* Trading just below 114.5

* It wasn't too long ago the euro was down around 105, and there was a lot of talk about parity with the dollar

* I was saying that the euro has bottomed; that the euro is going to rise

* And the rise is just now beginning for the euro, I think there's a lot more to this move

* Other currencies are also following the euro's lead, but ultimately I think they will surpass it

* The dollar has a substantial ill-gotten gain that it needs to surrender

* The dollar got bid up for years based on a misunderstanding of the true state of the U.S. economy

* Of the efficacy of Fed monetary policy

* The market was factoring in far more rate hikes than the Fed was capable of delivering

* Meanwhile the economy is rolling over

* I mentioned on my last podcast Mario Draghi's statement about the deflationary threat subsiding

* About the drop in inflation being transitory and the euro rose on that

* The very next day, the ECB went out to do damage control

* Why is it "damage" when the currency is going up?

Strength in Financial Markets

* The only segment of the market that was strong today were the financials

* The banks feel they are going to benefit from higher interest rates, higher spreads

* And here, we had those bogus stress tests where the Federal Reserve supposedly stress-tested all the banks

*  And, what to you know? The all passed

*  So that is creating a bid for the banks

* I have said this before, when it comes to higher interest rates and banks, be careful what you wish for


Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Summary:

Blue Apron Holdings IPO

The Blue Apron Holdings IPO today is reminiscent of the dot com boom.  The market is saying the 5-year old company is worth close to $2 billion. This IPO represents a "down round" which may occur after a company suffers a decline in valuation after it has received initial rounds of capital investment. The initial offering was $10/share, and by the closing bell it only managed to close at $10. This stock may go below $10 as early as tomorrow, as many investors were planning to flip the stock. The concept of this company is not proprietary; indeed the recent merger of Amazon and Whole Foods could pose a serious market threat to this company.

Rand Paul

In more news on this ever-evolving Republican Health Care saga. the Republicans are caving in to media and left spins the Republican Healthcare bill as a re-distribution of wealth from the poor to the rich.  You are not taking from the poor by stealing less from the rich. For some reason, the voting public expects American profit-seeking companies to sell insurance to people who are already sick. This would be the equivalent of selling home insurance for a house that has already burned, or car insurance for a car that has just been in an accident.   Rand Paul is getting a lot of press recently because he is the only Republican who opposes this on principle. He believes in the freedom for Americans to purchase the kind of insurance they need. They can pick their deductible; they can pick their co-pay. They can have the freedom to buy or not to buy health insurance.  But this can only happen in a market where insurance companies are allowed to make a profit and are free to compete for insurance business without government intervention.

U.S. Dollar Continues Decline

* The U.S dollar continued its decline today falling to a fresh 8-month low, closing to about 95.60

* The dollar is being led lower by a surging euro; the euro is actually at a 12-month high against the U.S. dollar

* Trading just below 114.5

* It wasn't too long ago the euro was down around 105, and there was a lot of talk about parity with the dollar

* I was saying that the euro has bottomed; that the euro is going to rise

* And the rise is just now beginning for the euro, I think there's a lot more to this move

* Other currencies are also following the euro's lead, but ultimately I think they will surpass it

* The dollar has a substantial ill-gotten gain that it needs to surrender

* The dollar got bid up for years based on a misunderstanding of the true state of the U.S. economy

* Of the efficacy of Fed monetary policy

* The market was factoring in far more rate hikes than the Fed was capable of delivering

* Meanwhile the economy is rolling over

* I mentioned on my last podcast Mario Draghi's statement about the deflationary threat subsiding

* About the drop in inflation being transitory and the euro rose on that

* The very next day, the ECB went out to do damage control

* Why is it "damage" when the currency is going up?

Strength in Financial Markets

* The only segment of the market that was strong today were the financials

* The banks feel they are going to benefit from higher interest rates, higher spreads

* And here, we had those bogus stress tests where the Federal Reserve supposedly stress-tested all the banks

*  And, what to you know? The all passed

*  So that is creating a bid for the banks

* I have said this before, when it comes to higher interest rates and banks, be careful what you wish for

Summary:

Once again the solution doesn't work.  As with the Democrats' solution, the penalties are too low.  In both the House and the Senate, trying to force people to buy insurance won't work because the penalty for not buying insurance is not stiff enough. The reason they aren't doing that is, politically, it is a losing proposition. This is why the Republicans never should have touched this issue. If they did not have the guts for outright repeal, they should have never done anything. They should have left it alone and the Democrats would have owned this disaster. The best thing the Republicans can do, politically, is do nothing. In this way any collapse cannot be attributed to ambiguity in the market.

Downward Pressures on the Dollar

* Very big day in the market today; the most significant being the breakdown in both the NASDAQ composite and the U.S dollar.

* The dollar was down sharply and broadly today, led lower by a rally in the euro

* The catalyst for the euro rise was statements by Mario Draghi early in the morning where he commented that downward pressures on inflation were transitory

* A somewhat hawkish stance on inflation and the markets took that to mean that QE will come to an end sooner rather than later

* But I think the markets are looking for any reason to trade the dollar lower

* I have been talking about that on this podcast, that the dollar has been looking weak

* It broke down again today, the dollar index down just over 1 full percentage point on the day

* The dollar trading at its lowest level in 8 months

* I think this was the lowest closing level in about 9 months

* The euro is trading at a 113 handle

NASDAQ Woes

* At the same time the dollar was breaking down, so were tech stocks, the FANG stocks were particularly weak

* The NASDAQ composite down just over 100 points on the day

* That's a pretty big move; a 1.6% decline

* The Dow was only down about 100 points, just under a half percent

* So the NASDAQ experienced about triple the decline

* I talked about that on this podcast a couple of episodes ago when we had that one really big reversal day in the NASDAQ stocks

* When the NASDAQ stocks made an all-time record high and then closed negative

* We had that kind of flash crash coming into the final hour of trading

* To me, there was some big money that decided to get out of those stocks


Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Summary:

Once again the solution doesn't work.  As with the Democrats' solution, the penalties are too low.  In both the House and the Senate, trying to force people to buy insurance won't work because the penalty for not buying insurance is not stiff enough. The reason they aren't doing that is, politically, it is a losing proposition. This is why the Republicans never should have touched this issue. If they did not have the guts for outright repeal, they should have never done anything. They should have left it alone and the Democrats would have owned this disaster. The best thing the Republicans can do, politically, is do nothing. In this way any collapse cannot be attributed to ambiguity in the market.

Downward Pressures on the Dollar

* Very big day in the market today; the most significant being the breakdown in both the NASDAQ composite and the U.S dollar.

* The dollar was down sharply and broadly today, led lower by a rally in the euro

* The catalyst for the euro rise was statements by Mario Draghi early in the morning where he commented that downward pressures on inflation were transitory

* A somewhat hawkish stance on inflation and the markets took that to mean that QE will come to an end sooner rather than later

* But I think the markets are looking for any reason to trade the dollar lower

* I have been talking about that on this podcast, that the dollar has been looking weak

* It broke down again today, the dollar index down just over 1 full percentage point on the day

* The dollar trading at its lowest level in 8 months

* I think this was the lowest closing level in about 9 months

* The euro is trading at a 113 handle

NASDAQ Woes

* At the same time the dollar was breaking down, so were tech stocks, the FANG stocks were particularly weak

* The NASDAQ composite down just over 100 points on the day

* That's a pretty big move; a 1.6% decline

* The Dow was only down about 100 points, just under a half percent

* So the NASDAQ experienced about triple the decline

* I talked about that on this podcast a couple of episodes ago when we had that one really big reversal day in the NASDAQ stocks

* When the NASDAQ stocks made an all-time record high and then closed negative

* We had that kind of flash crash coming into the final hour of trading

* To me, there was some big money that decided to get out of those stocks

Summary:

Let the SS ObamaCare Ship Sink

The Republicans in the Senate finally unveiled their version of ObamaCare Repeal & Replace.  It's very heavy on replace, but there really isn't any repeal. They are replacing it with something that may even be worse. Regardless, we still should let the ObamaCare ship sink while it's called the SS ObamaCare.

Senate Bill Leans Toward Socialized Medicine

The House already passed their version. The Senate version is even worse; it takes away all penalties for not buying insurance. At least the House version tried to create some kind of penalty. Now, a penalty of any sort would not be necessary if the government did not mandate insurance companies to cover people with preexisting conditions. The only way insurance companies can survive, if the Senate bill were enacted, is with massive government (taxpayer) subsidies.

Moral Hazard

Of course the Senate does not consider the moral hazard of offering a "medical bill-paying service", so the cost will be enormous. This solution will collapse the health insurance industry and lead to socialized medicine. If the Senate Republicans really want socialized medicine, they should just come out and say it. If you don't believe in the free market, just come out and say it.

Something For Nothing

If the government can deliver healthcare cheaper and better than the free market, then why not socialize everything? Republicans are afraid to say that they don't believe this because they want to get elected and they know that the voters don't understand that capitalism works.  They just want something for nothing.  The Senators want to get elected so they are going to provide it for them.

* It was a relatively quiet week, this week; not a lot of market-driven data

* Next week, things might pick up a bit; we'll get the final week of Q2

* So I have a feeling there may be a little more action as some of the portfolio managers look to window-dress a bit or get their portfolios looking better for the end of Q2

* The dollar finished the week on a down note, although it was relatively flat on the week; it was down today

* The opposite for gold

* Up about $6.50; it was also flat on the week, but it had a good day

* Gold stocks were not flat; I think the gold stocks, as a group, the best performing sector in the market

* I have been noting on this podcast that these stocks have been trading better

* When they were weak, that precipitated the correction in the price of gold

* Then gold bottomed out when the gold stocks showed some relative strength

* That has continued, and I think this was a pretty good week, technically

* We're close to getting above some key resistance on these stocks

* So we will see what kind of bid they can pick up next week as we wrap up Q2

* I think the significant thing, for the dollar and for gold

* Is that the dollar is in the process of putting in a very significant top

* The flip side of that is that gold will be putting in a significant bottom

* I think the catalyst for breakdowns for the dollar and breakouts in gold

* Will be some realization, some capitulation on the part of the markets

* And for the Fed to square perception with reality


Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Summary:

Let the SS ObamaCare Ship Sink

The Republicans in the Senate finally unveiled their version of ObamaCare Repeal & Replace.  It's very heavy on replace, but there really isn't any repeal. They are replacing it with something that may even be worse. Regardless, we still should let the ObamaCare ship sink while it's called the SS ObamaCare.

Senate Bill Leans Toward Socialized Medicine

The House already passed their version. The Senate version is even worse; it takes away all penalties for not buying insurance. At least the House version tried to create some kind of penalty. Now, a penalty of any sort would not be necessary if the government did not mandate insurance companies to cover people with preexisting conditions. The only way insurance companies can survive, if the Senate bill were enacted, is with massive government (taxpayer) subsidies.

Moral Hazard

Of course the Senate does not consider the moral hazard of offering a "medical bill-paying service", so the cost will be enormous. This solution will collapse the health insurance industry and lead to socialized medicine. If the Senate Republicans really want socialized medicine, they should just come out and say it. If you don't believe in the free market, just come out and say it.

Something For Nothing

If the government can deliver healthcare cheaper and better than the free market, then why not socialize everything? Republicans are afraid to say that they don't believe this because they want to get elected and they know that the voters don't understand that capitalism works.  They just want something for nothing.  The Senators want to get elected so they are going to provide it for them.

* It was a relatively quiet week, this week; not a lot of market-driven data

* Next week, things might pick up a bit; we'll get the final week of Q2

* So I have a feeling there may be a little more action as some of the portfolio managers look to window-dress a bit or get their portfolios looking better for the end of Q2

* The dollar finished the week on a down note, although it was relatively flat on the week; it was down today

* The opposite for gold

* Up about $6.50; it was also flat on the week, but it had a good day

* Gold stocks were not flat; I think the gold stocks, as a group, the best performing sector in the market

* I have been noting on this podcast that these stocks have been trading better

* When they were weak, that precipitated the correction in the price of gold

* Then gold bottomed out when the gold stocks showed some relative strength

* That has continued, and I think this was a pretty good week, technically

* We're close to getting above some key resistance on these stocks

* So we will see what kind of bid they can pick up next week as we wrap up Q2

* I think the significant thing, for the dollar and for gold

* Is that the dollar is in the process of putting in a very significant top

* The flip side of that is that gold will be putting in a significant bottom

* I think the catalyst for breakdowns for the dollar and breakouts in gold

* Will be some realization, some capitulation on the part of the markets

* And for the Fed to square perception with reality

Summary: Every tax cut is temporary. Ryan's premise that we can't get the stimulus we need without a permanent tax cut is complete nonsense.  Congress has no idea what the budget's going to be next year, let alone 10 years from now. The only budget that really counts, and even then they can't get it that accurate, is the current year. When the government cuts taxes it doesn't come with a guarantee that the rates are never going to go up.

* We had a bit of a turnaround Tuesday today; all of the major U.S. stock market averages were higher in the morning and we closed broadly lower on the day

* In fact, the Dow Jones did make an all-time record high this morning before closing down about 60 points, although the decline in the NASDAQ was greater

* We had a .082% decline in the NASDAQ; the Dow was only down by about .03%

* S&P 500 though had a bigger decline, it was down about .07%

* So the broader averages took a bigger decline than the Dow

* I don't think the technical damage is extreme

* Yes, we made new highs and closed lower, but it really wasn't an outside day

* It didn't close below Monday's lows, which would have been an outside reversal

* But when markets are as extended as they are, they can top on just about anything

* I put up an interesting article on my Facebook page that tried to draw a comparison between Amazon and Whole Foods merger and the big high-profile AOL-Time/Warner in 2000

* You had a big, internet darling making a big brick and mortar purchase and that marked the peak of the internet bubble

* And the author was making the case that this is another major internet company buying a brick and mortar company, a lot of fanfare, a lot of hype and maybe this is also going to mark a major top

* It's an interesting analysis, because I think we're at about the 15-year anniversary of the purchase

* It is an interesting comparison, not a perfect analogy; some things are similar and some things are not

* I do believe that the U.S. stock market is substantially overvalued, in fact a bubble

* The only reason I believe that the air is not going to come out of the bubble is because the Fed is not going to let it

* I am pretty sure that any significant decline in the stock market is going to be met with an aggressive Fed rate cut, quantitative easing

* I don't believe the Yellen Fed to allow the market to implode the way it did in 2008


Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Summary: Every tax cut is temporary. Ryan's premise that we can't get the stimulus we need without a permanent tax cut is complete nonsense.  Congress has no idea what the budget's going to be next year, let alone 10 years from now. The only budget that really counts, and even then they can't get it that accurate, is the current year. When the government cuts taxes it doesn't come with a guarantee that the rates are never going to go up.

* We had a bit of a turnaround Tuesday today; all of the major U.S. stock market averages were higher in the morning and we closed broadly lower on the day

* In fact, the Dow Jones did make an all-time record high this morning before closing down about 60 points, although the decline in the NASDAQ was greater

* We had a .082% decline in the NASDAQ; the Dow was only down by about .03%

* S&P 500 though had a bigger decline, it was down about .07%

* So the broader averages took a bigger decline than the Dow

* I don't think the technical damage is extreme

* Yes, we made new highs and closed lower, but it really wasn't an outside day

* It didn't close below Monday's lows, which would have been an outside reversal

* But when markets are as extended as they are, they can top on just about anything

* I put up an interesting article on my Facebook page that tried to draw a comparison between Amazon and Whole Foods merger and the big high-profile AOL-Time/Warner in 2000

* You had a big, internet darling making a big brick and mortar purchase and that marked the peak of the internet bubble

* And the author was making the case that this is another major internet company buying a brick and mortar company, a lot of fanfare, a lot of hype and maybe this is also going to mark a major top

* It's an interesting analysis, because I think we're at about the 15-year anniversary of the purchase

* It is an interesting comparison, not a perfect analogy; some things are similar and some things are not

* I do believe that the U.S. stock market is substantially overvalued, in fact a bubble

* The only reason I believe that the air is not going to come out of the bubble is because the Fed is not going to let it

* I am pretty sure that any significant decline in the stock market is going to be met with an aggressive Fed rate cut, quantitative easing

* I don't believe the Yellen Fed to allow the market to implode the way it did in 2008

Summary:

Amazon Buys Whole Foods

The Dow was up today; mainly on the surprise announcement that Amazon, the king of on-line retailing, is buying Whole Foods.  In a labor market significantly altered by ObamaCare-style government intervention, this news could signal further changes to the labor market.  Retail has experienced a steady decline, and this move could usher in a new wave of Amazon Go-style services.

Economic Surprise Index Headed For  2009 Territory

According to an article in Zero Hedge: For the 13th straight week, US economic data disappointed (already downgraded) expectations, sending Citi's US Macro Surprise Index to its weakest since August 2011 (crashing at a pace only beaten by the periods surrounding Lehman and the US ratings downgrade). The last time, Us economic data disappointed this much, Ben Bernanke immediately unleashed Operation Twist... but this time Janet Yellen is hiking rates and unwinding the balance sheet.

"Unexpected" Bad News in Housing Starts and Building Permits

Another "unexpected" big drop in housing starts; the third month in a row is accompanied by a drop in building permits, so that means that this trend is likely to continue. The last time we had 3 consecutive monthly declines it was 2009.

* We got some more bad economic news coming out today, and it capped a week of generally worse than expected news

* I was looking at a chart of the Economic Surprise Index on an article on Zero Hedge and it was a new low for this cycle

* They went back to find the last time the Economic Surprise Index was this low

* It was right about the time the Federal Reserve launched "Operation Twist"

* Remember that? I was calling it "Operation Screw"

* When the Fed was lengthening the maturity of its balance sheet

* It was selling some of its short term bonds and buying longer term bonds

* To have a better impact on pushing down long-term interest rates

* Yet today, when the market is being surprised by the same amount of negative economic data

* "Unexpected negative news"

* Again, every time you read a negative news story it is always prefaced with "Unexpected"

* I always put that in quotes because, why don't they expect it by now?

* You get enough bad news, you should expect it

* At some point, they will, and that's when the index starts to go the other way

* When things are bad long enough, people start expecting bad things to happen

* And then the next thing you know, good things happen

* So the Economic Surprise Index goes the other way

* People are still optimistic, yet they keep being disappointed

* Despite this, the Fed is not only not doing "Operation Twist", it is tightening

* It's putting the screws on big time in that it has just announced quantitative tightening

* Not only did they just raise interest rates on Wednesday but they indicated they are getting ready to do quantitative tightening for the first time ever

* This has never been tried before by the Federal Reserve

* It's amazing, too that the Federal Reserve is always out there talking about quantitative easing helped the economy

* It pushed up asset prices, it pushed up the stock market, pushed up the real estate market

* O.K., if that is what they think,

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Summary:

Amazon Buys Whole Foods

The Dow was up today; mainly on the surprise announcement that Amazon, the king of on-line retailing, is buying Whole Foods.  In a labor market significantly altered by ObamaCare-style government intervention, this news could signal further changes to the labor market.  Retail has experienced a steady decline, and this move could usher in a new wave of Amazon Go-style services.

Economic Surprise Index Headed For  2009 Territory

According to an article in Zero Hedge: For the 13th straight week, US economic data disappointed (already downgraded) expectations, sending Citi's US Macro Surprise Index to its weakest since August 2011 (crashing at a pace only beaten by the periods surrounding Lehman and the US ratings downgrade). The last time, Us economic data disappointed this much, Ben Bernanke immediately unleashed Operation Twist... but this time Janet Yellen is hiking rates and unwinding the balance sheet.

"Unexpected" Bad News in Housing Starts and Building Permits

Another "unexpected" big drop in housing starts; the third month in a row is accompanied by a drop in building permits, so that means that this trend is likely to continue. The last time we had 3 consecutive monthly declines it was 2009.

* We got some more bad economic news coming out today, and it capped a week of generally worse than expected news

* I was looking at a chart of the Economic Surprise Index on an article on Zero Hedge and it was a new low for this cycle

* They went back to find the last time the Economic Surprise Index was this low

* It was right about the time the Federal Reserve launched "Operation Twist"

* Remember that? I was calling it "Operation Screw"

* When the Fed was lengthening the maturity of its balance sheet

* It was selling some of its short term bonds and buying longer term bonds

* To have a better impact on pushing down long-term interest rates

* Yet today, when the market is being surprised by the same amount of negative economic data

* "Unexpected negative news"

* Again, every time you read a negative news story it is always prefaced with "Unexpected"

* I always put that in quotes because, why don't they expect it by now?

* You get enough bad news, you should expect it

* At some point, they will, and that's when the index starts to go the other way

* When things are bad long enough, people start expecting bad things to happen

* And then the next thing you know, good things happen

* So the Economic Surprise Index goes the other way

* People are still optimistic, yet they keep being disappointed

* Despite this, the Fed is not only not doing "Operation Twist", it is tightening

* It's putting the screws on big time in that it has just announced quantitative tightening

* Not only did they just raise interest rates on Wednesday but they indicated they are getting ready to do quantitative tightening for the first time ever

* This has never been tried before by the Federal Reserve

* It's amazing, too that the Federal Reserve is always out there talking about quantitative easing helped the economy

* It pushed up asset prices, it pushed up the stock market, pushed up the real estate market

* O.K., if that is what they think,