The world’s biggest stock bear says we’re in a dangerous ‘trap-door situation’ — and explains why you shouldn’t be fooled by the market’s recent surge

trader market crash

John Hussman — the outspoken investor and former professor who’s been predicting a stock crash — says traders shouldn’t be fooled by the equity market’s big ongoing rebound.
Hussman explains why he remains bearish on the market in the long term, and breaks down why stocks are still wildly overvalued, even after the December meltdown.

As stocks continue to rip higher following their Christmas-week meltdown, it would be easy to sit back and assume the worst is over.

After all, we’ve already recovered 14% from the 20-year low reached on Dec. 24 — a level that brought the S&P 500 within a hair of a bear market. To hear optimists tell it, the market shook out some negative drivers and is now free to resume its climb higher at more reasonable valuations.

But John Hussman is not particularly known for his optimism — at least not since stocks reached what he views as eye-bleeding valuations. And he contends that the coast is far from clear.

Hussman — the former economics professor and current president of the Hussman Investment Trust — notes that despite the close brush with a bear market, the stock market is still far too expensive to be considered attractive.

That’s reflected in the chart below, which shows stocks are still less than 10% below what he describes as the “steepest speculative extreme in history.”

And while the valuation argument is his core point, Hussman is also intensely focused on what he calls “market internals,” which are a series of indicators that take the overall pulse of the equity landscape.

Hussman has long argued that those internals are pointing in an overwhelmingly negative direction. And while he acknowledges they briefly flashed positive after the December meltdown, he says they’re now back in their long-running negative territory.

“Aside from the likelihood of a knee-jerk market spike on any variant of the word ‘deal,’ we continue to be in a trap-door situation with respect to market risk,” Hussman said, referring to possible trade-war progress.

He continued: “Though we did take the edge off of our negative outlook to allow for a scorching relief rally, my present view is that the overall function of that relief rally has been served.”

So where do we go from here? If Hussman is to be believed, the market could plummet roughly 55% from current levels. That would …read more

Source:: Business Insider


Trump’s Presidency Is at Its Exact Midpoint. Here’s What We’ve Learned

Trump and Putin attend Helsinki summit

On the second anniversary of his inauguration, President Donald Trump is engaged in a no-win standoff with Congress, besieged by new allegations about his relationship with Russia and facing questions about his truthfulness.

As the first commander in chief elected without prior political or military experience, Trump raised many questions about what he might be like in the White House. But there were signs from the very beginning that this is where his presidency was heading.

Trump’s aggressive approach to conflict, his involvement with Russia and his tendency to misstate basic facts were all evident from the first weeks of his administration, not to mention the campaign.

Here’s a look at three telling moments from those first weeks.

Russian interference in the election
US President Donald Trump and Russia’s President Vladimir Putin attend a joint press conference after a meeting at the Presidential Palace in Helsinki, on July 16, 2018.

The moment: As a candidate, Trump repeatedly questioned the intelligence community’s October 2016 assessment that Russia was behind the hacking of the Democratic National Committee and Hillary Clinton’s campaign. But he took it to another level when he continued raising doubts as president-elect and then as president. “Hacking is a very hard thing to prove,” he said on Dec. 31, 2016. “So it could be somebody else.”

The facts: In July of 2018, the Department of Justice unveiled multiple charges against a dozen Russian intelligence officials for hacking the DNC, the Clinton campaign and state election systems. Still, Trump noted later that month that Russian President Vladimir Putin “was extremely strong and powerful in his denial” of interference.

What it showed: Trump’s repeated deference to Putin—even above his own Administration’s intelligence and judicial systems—continues to raise questions. According to a recent New York Times report, Trump has broken with traditional diplomatic protocol for foreign leaders in his face-to-face meetings with Putin, once even taking his interpreter’s notes.

Where things stand now: Trump lawyer Rudy Giuliani raised eyebrows during a CNN interview when he seemed to move the goalposts again, claiming inaccurately that he “never said there was no collusion” between the Trump campaign and Russia, only that there was no collusion directly involving the president. House Democrats have vowed to continue investigating the relationship.

The feud with John Lewis
Rep. John Lewis (D-GA) thanks anti-gun violence supporters following a rally with fellow Democrats on the East Front steps …read more

Source:: Time – Politics