Posts by Marc Nonnenkamp

Financial, Economic and Social Mood Update (February 1, 2018) The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 26,617 on January 26, 2018. The NASDAQ Composite Index hit a new record nominal high of 7,506 (on January 26), as did the S&P 500 Index at a level of 2,873 (also on January 26) and the Wilshire 5000 “Total Market Index” at the level of 29,761 (on January 26 as well). A major failure of Elliott Wave International has been the timing of the forecast collapse of the equity market – it must happen at some point, but the truth is that the equity market has skyrocketed in nominal value for the last decade. And when this crash does come it may manifest as a collapse of the real value of our currency as opposed to a collapse in nominal value. Here are a few examples of the increase in nominal value in the last 10 years. The Dow Jones 30 Industrials have gained 293 percent, the NASDAQ Composite has gained 470 percent, the S&P 500 Index has gained 312 percent, the Wilshire 5000 Total Market Index has gained 239 percent, and Berkshire Hathaway (a huge conglomerate holding company with equity stakes in most major industrial sectors) has gained 339 percent. The Bitcoin Investment Trust has gained a whopping 6,344 percent since its inception in July 2016. This month’s topic is the future of the automotive industry, especially with respect to AI (artificial intelligence), ride-sharing and all-electric plug-in vehicles. Since 2010 I have written and published three books about Volkswagen AG, the largest automaker in Europe and the manufacturer of my favorite automotive brand name (their core brand of VW). VW (Volkswagen) and many other carmakers with…

Financial, Economic and Social Mood Update (January 1, 2018) Happy New Year to all of you! The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 24,876 on December 18, 2017. The NASDAQ Composite Index hit a new record nominal high of 7,004 (on December 18), as did the S&P 500 Index at a level of 2,695 (on December 18) and the Wilshire 5000 “Total Market Index” at the level of 27,870 (on December 18). My good friend and fellow William & Mary MBA Class of 1989 Edward George “Ted” Kaufman had a comment to last month’s financial update. Ted is a broker with Scott & Stringfellow in Norfolk, Virginia (a subsidiary of Branch Banking & Trust Company out of North Carolina). After reading my post about the huge historical fluctuation in foreign exchange rates, Ted said that I should say something about Bitcoin and other similar electronic cryptocurrencies. Bitcoin was introduced to the world on January 3, 2009 and began trading in April 2010 at the value of USD $0.003 per one Bitcoin. Bitcoin is a cryptocurrency, a worldwide payment system and a decentralized digital currency. Its critics claim that it is not backed by anything, but in all fairness, neither are the fiat paper currencies of the world ever since the gold standard was abandoned. Fiat paper currencies have the taxing authority of governments behind them, as well as the ability of quasi-national “central banks” to issue ever more credit out of thin air – giving us the horrendous credit inflation of the last 3 centuries. There are now many more cryptocurrencies in addition to Bitcoin such as Etherium, Ripple, Litecoin, Monero, Etherium Classic and more than 1,300 others. Some national governments such as those…

Financial, Economic and Social Mood Update (December 1, 2017) The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 24,328 on November 30, 2017. The NASDAQ Composite Index hit a new record nominal high of 6914 (on November 28), as did the S&P 500 Index at a level of 2,658 (on November 30) and the Wilshire 5000 “Total Market Index” at the level of 27,508 (on November 30). A friend on Facebook suggested that I take a slightly different approach with the monthly financial update. He suggested that I concentrate on one main issue in each blog, so that important concepts will become clearer to many more readers. I agree that this is an excellent suggestion, and we will therefore start with this right away. Currency Exchange Rates Currency exchange rates have existed for hundreds of years, but in today’s world they have become far more common and much more precise. The foreign exchange market (much like the bond market) is actually far bigger and thus perhaps even more important than the stock market in many ways. Most independent countries have their own unique national currency. Some countries use the national currency of a different country, and some countries have pooled their resources to create common “supra national” currencies, such as the European Euro or the SDR (Special Drawing Rights) used by major countries such as the USA, the European Union (mainly Germany), China, Japan and the UK. Unfortunately, foreign currency exchange rates (much like everything else in our world) are used as “tools” by major world powers to influence and control other countries with less power. Major powers use foreign exchange rates much like they use diplomacy, military might, warfare, foreign trade, monetary policy, immigration policy,…

Financial, Economic and Social Mood Update (November 1, 2017) The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 23,518 on November 1, 2017. The NASDAQ Composite Index hit a new record nominal high of 6760, the S&P 500 Index did likewise (2,588) as did the Wilshire 5000 “Total Market Index” (26,801) on the same date. Keep in mind that these records are “nominal” high values, but NOT real purchasing high values. In other words, the real purchasing power of all global fiat currencies continues to fall. You might be making “good” money – but you might not necessarily feel rich. The power structure, or the “corporate state” in many countries all over the world is in the process of collapsing or imploding – due to corruption and over-extension (i.e., drowning in debt, unfunded liabilities and in “hedged” derivative financial instruments). Here is an interesting summary of the present-day liability balance sheet of planet earth (US Dollar figures listed in MILLIONS): US-Dollar denominated financial derivatives: ($4,000,000,000) US Dollar-denominated debt (UN): ($223,000,000) US Total Unfunded Liabilities: ($150,000,000) FMV of all global equities (08/27/2014): ($66,000,000) EU Pension Liabilities: ($39,300,000) Japan Total Debt and Unfunded Liabilities: ($19,921,661) United Kingdom of Great Britain and N. Ireland: ($10,157,000) Federal Republic of Germany: ($5,674,000) French Republic (France): ($5,632,000) Public Sector Pension shortfall (USA): ($4,700,000) Italian Republic (Italy): ($2,600,000) Netherlands: ($2,590,000) Kingdom of Spain: ($2,392,000) Ireland: ($2,260,000) Kingdom of Belgium: ($1,457,000) Swiss Confederation: ($1,332,000) Commonwealth of Australia: ($1,283,000) Hong Kong (Peoples Republic of China): ($939,830) Hellenic Republic (Greece): ($546,920) Portugal: ($511,940) S&P 1000 Unfunded Pension Liability (USA): ($435,000) The financial derivatives listed above are thus worth US $4 QUADRILLION. Please note that the entire global stock market is miniscule by comparison. Derivatives are a…

Financial, Economic and Social Mood Update (October 1, 2017) The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 22,420 on September 21, 2017. The NASDAQ Composite Index hit a new record nominal high of 6498 on September 29, the S&P 500 Index did likewise on the same date (2,519) and the Wilshire 5000 “Total Market Index” did so as well (26,131). Timing is the key – but it is almost impossible to do! The most difficult aspects of market forecasting include 1) timing and 2) degree (magnitude in this case) of wave strength. Elliott Wave International was established near Atlanta, Georgia in 1979 and they accurately called for the bottom of the then near term stock market which took place in 1982 – at that time, the Dow Jones 30 Industrials Index reached a level in between 700 and 800. After this happened, they attempted to forecast how long in time and how high in value a new record bull market would go. The initial forecast called for a “top” as early as 1995 and a value for the Dow as high as 5,000. This did take place, but what happened is that the Dow failed to stop so soon in both time and magnitude. The Dow and the market as a whole kept going until early 2000, when the Dow reached a nominal value of 11,700. Thereafter, a crash did indeed occur – but this was by no means the end of the story. The overall market and in particular the Dow fell to a level of 7,100 by October of 2002. After this, the market went back up once again to break new records – up to the level of Dow 14,800 by October…

Financial, Economic and Social Mood Update (September 1, 2017) The US stock market continues to be profoundly robust – the Dow Jones 30 Industrials Index reached a new record high of 22,179 on August 8, 2017. But the breadth of this advance is narrow – large cap stocks continue to reach new records whereas the broader market does not do so. Eventually the bubble will burst, and the entire world will experience a crash like never before – regardless of political allegiance. 52 days ago I finally purchased a stake in the “Bitcoin Investment Trust” (GBTC). Online companies proved too frustrating to deal with, so I went the more traditional route – I contacted my good friend and fellow College of William and Mary Mason School of Business MBA Edward George “Ted” Kaufman. Ted is a Vice President and Financial Advisor with Scott & Stringfellow, a wholly-owned stock brokerage subsidiary of Branch Banking & Trust Company (BB&T). BB&T is ranked as high as the number 8 commercial bank in the USA with more than 2,100 offices in 15 states and the District of Columbia. Ted has been their top performing broker for more than 20 years. He is a prominent and active member of the business scene in Hampton Roads, Virginia especially in charitable and in Jewish organizations. He and his business partner Joseph Feldman (Senior VP with Scott & Stringfellow) manage the “Shalom Trust,” an investment portfolio for companies based in Israel or which have a strong link to Israel. Ted can be reached toll free at 1-800-515-0294. “Bitcoin” is of course the best known of the so-called electronic crypto-currencies, having been launched in 2010. GBTC has gained 109 percent in the last 52 days, which translates into an annualized return of 765 percent. Due to the current strength…

Financial, Economic and Social Mood Update (July 30, 2017) The US stock market continues to be profoundly robust – the Dow Jones 30 Industrials Index reached a new record high of 21,841 on July 28, 2017. Other major indices including the NASDAQ Composite, S&P 500 as well as the Wilshire 5000 “Total Market Index” did so one day earlier on July 27, 2017. The remarkable success of Amazon.com (led by its CEO Jeff Bezos as being one of the richest people if not the richest person on earth depending upon the day) has finally attracted the notice of potential anti-trust legislation by the US Congress and of President Donald J. Trump, Sr. This after the announced purchase by Amazon.com of Whole Foods – an upscale supermarket chain which ranks among the 5 largest supermarket chains in the USA. Such anti-trust legislation has nothing to do with “wrongdoing” but with negative social mood. Something similar took place with the breakup of AT&T, banking deregulation and airline deregulation in the late 1970s and early 1980s (Presidents James Earl Carter and Ronald Wilson Reagan). Ditto with the breakup of ALCOA (Aluminum Corporation of America) during the Great Depression of the 1930s – these companies did nothing “wrong” per se other than be very big and very successful (President Franklin Delano Roosevelt. The end result of such anti-trust legislation may even be bad in the long run – history will be the judge. Banking deregulation gave us much more risk, much higher service fees, many more bad loans, illegally aggressive sales marketing (ala Wells Fargo Corporation) and airline deregulation has given us much lower ticket costs albeit with much poorer service – “sardine can” coach, economy and “last class” service. Bitcoin Investment Trust (GBTC) I was finally able to “purchase” Bitcoin in the form…