President Trump's Rose-Coloured Glasses Are Back On

It looks like President Trump has chosen to dust off his rose-coloured glasses and put them back on regarding his stance on North Korea and, in particular, its leader, Kim Jong Un.

Take a look at what the President tweeted about his impression of Kim's appearance and health when they met at the Korean DMZ on June 30 and contrast that with what Fox News Anchor, Tucker Carlson, reported in the following video.

Assuming Tucker Carlson's version is accurate wherein he describes Chairman Kim's ill-health (unlike the President, he has nothing to gain by lying about it), I would imagine that Kim depends greatly on his military leaders for support in order to remain in power...for health reasons, safety and security reasons, economic reasons, political reasons, and in order to maximize his priorities of securing North Korea's power as a nuclear powerhouse.

Without that important and immense military support system in place, and as long as they remain loyal to Kim, I believe his future would be very fragile and precarious because of his poor health. For that reason, I cannot foresee an agreement ever being reached between Kim Jong Un and President Trump to completely and verifiably denuclearize, because Trump is not just dealing with Kim, he is also dealing with all of Kim's military leaders/advisers...who are, essentially, propping him up, for the time-being. To create prosperity for the citizens of North Korea would undermine their absolute power over them -- and over Kim -- and would take away their nuclear power and leverage over the rest of the world.

If Kim were of robust health, I'd have a different opinion in this regard...he'd have absolute autonomy to make such a deal with the U.S. However, with so many hard-line military players involved (who are necessary for Kim's survival), the deck is stacked against such a deal ever being struck, with Kim Jong Un at the helm.

So, President Trump is only biding his time with Chairman Kim, using flattery as an interim appeasement tool -- sprinkled with another summit or two and more photo ops, that Kim can use to prop up his image with the North Koreans and the rest of the world -- until such time as he is no longer the U.S. President...and, no doubt, those rose glasses will stay firmly on until then.

In the meantime, I hope the President will not back-track on his maximum pressure campaign against North Korea and will, instead, begin to enforce the rules of that campaign on those countries that are, reportedly, breaking the sanctions that they originally supported at the U.N. (e.g., Russia and China, etc.).

* UPDATE July 26...

It looks like international sanctions against North Korea are working...If Chairman Kim wants to save his people from starvation, he will have to make major concessions soon, especially when it also begins to impact his military personnel...

Source: CTVNews.ca

Message For China, North Korea & Iran

You can't read the instructions when you're

stuck inside the jar. 

In other words, if you hide your head in the sand, you'll never make a deal with the US and save face with, and for the benefit of, your citizens...and it's hard to talk with sand in your mouth.

Muted U.S. Market Reaction Post-U.S./NOKO Summit

* See UPDATE below...

U.S./NOKO SUMMIT

Further to my article of June 3 (and my many follow-up comments/updates), I'm left wondering what planet I'm living on after witnessing a get-together with President Trump and Chairman Kim in Singapore last night.

At the conclusion of their meeting they signed a rather sketchy Joint Statement, which can be read in full here (part of it is shown below). Apparently it's not even as strong as past statements signed by previous U.S. Presidents and NOKO leaders.

We'll see where things develop in the future.

Excerpt from the Trump-Kim Singapore Summit Joint Statement

During brief comments to the press in several breaks throughout the summit and at his subsequent press conference, Mr. Trump was full of flattering remarks about Mr. Kim, while in the same breath, he continued to disparage his allies, especially PM Trudeau...his 'punching bag du jour.' He shouldn't be surprised that America's trading partners would retaliate with their own tariffs in response to his...he knows full well that they have their own countries' interests to protect and will do so, regardless of his personal opinions about them.

I got a kick out of this analysis of his post-summit remarks by CNN. World-wide responses to the summit and agreement are mixed.

Really???...NOT if he treats them like he did Otto Warmbier

(whose parents are suing NOKO for torturing and murdering their son)!

President Trump ends military drills with South Korea, calling them "provocative war games"...a description normally used in propaganda by your opponents.

Seriously?...He continued with his erratic and odd behaviour as he delivered threats to punish Canadians for PM Trudeau's retaliatory tariffs through snarling teeth and with scolding finger-wagging gestures...this came only hours after publicly scoring his relationship with Trudeau as a 'ten' in his press conference that immediately followed the G7 summit. So far, Mr. Trudeau has taken the high road and has refrained from engaging in such pejorative attacks, with the full backing of Canadians...I wonder if Mr. Trump has the full backing of Americans.

And, does this now mean that he will 'feel foolish' again if he's compelled to use tough rhetoric in the future on Kim...or, now that he's exposed this character weakness for Kim and the world to witness, will he continue with his over-the-top flattery of him no matter what?

Who can now take him seriously when he lashes out and uses harsh language with anyone?

MUTED U.S. MARKET REACTION

Meanwhile, U.S. futures markets were muted overnight in their reaction to this news and are slightly up as of 12:00 noon ET today.

If President Trump continues with his steel and aluminum tariffs, and implements additional ones as he's already threatened to do, we'll see how a world-wide trade war impacts inflation and how quickly Central Bankers then raise interest rates (or dispatch further monetary QE measures) to combat that effect.

That may have more effect on markets than future talks with NOKO.

FINAL THOUGHTS

So, will common sense prevail when it comes to President Trump, allies, and trade wars? Do actual (correct and proportional) facts matter to Mr. Trump? We'll see...for the time being he's cozying up to NOKO, China (ZTE) and Russia (inviting them back to rejoin the G7, which was NOT supported by G6 leaders).

* UPDATE June 13...

A slightly more hawkish tone was present in today's FOMC press release regarding future U.S. interest rate increases, including two more for this year...(click here for Fed meeting calendars, statements and minutes). Of note in Chairman Powell's press conference was his announcement that he will hold a press briefing after every Fed meeting beginning in January of next year.

How U.S. Major Indices closed today...

President Trump: Not A Proven Win-Win International Political Deal Maker

* See UPDATES below...

A NO-WIN FOREIGN POLICY

It's clear that President Trump's "America First" policy does not produce a "win-win" outcome for it and other world trading partners...at least, it has not been proven, yet.

So far, he's only been successful in tearing up prior agreements related to the Trans Pacific Partnership, the Paris Climate Agreement, the Iran JCPOA, and has threatened to tear up the NAFTA with Canada and Mexico (see this Global News article: "Reality check: No, the U.S. doesn't have a $17B trade deficit with Canada"..."So the real trade balance with Canada is positive in the U.S.'s favour"...to the tune of "around US$12 billion") as reported by both Statistics Canada and the Office of the United States Trade Representative.

Although he is in current trade talks with China, he has not been successful in negotiating a new trade agreement with Canada and Mexico, nor has he been successful in negotiating any other bi-lateral or multi-lateral agreement that I'm aware of, including a peace agreement between Israel and the Palestinians.

In fact, he has exacerbated tensions in current NAFTA negotiations by slapping hefty and punitive steel and aluminum tariffs on these two closest trading allies, as well as on the European Union...under the guise of "national security" concerns.

He has also increased tensions with these and other countries by tearing up the above-mentioned agreements without replacing them with new agreements.

Inasmuch as the economy of the U.S. is in far better shape than its counterparts, with improved GDP, lower unemployment, rising wage growth, job growth, low inflation, lowered income taxes, reduced business and banking regulations, a comparatively lower dollar (although it has strengthened a bit this year), high business and consumer confidence, increased business capital spending, along with continued growth in its stock markets (likely due to his domestic agenda, much of which he has already implemented), it's inconceivable that Mr. Trump would want to risk all of those gains by taking a hard-line, "winner-takes-all" foreign policy approach by starting trade wars with countries that don't even pose a national security risk and which would create widening and unsustainable imbalances.

THE EVIDENCE

Just look at the evidence as reflected in these world markets and currencies.

Geopolitical Influences on World Markets

The following year-to-date percentage gained/lost graphs of the U.S. Major Indices and Major Sectors show that market participants have favoured riskier technology, small-cap, and consumer cyclical stocks.

U.S. Major Indices Year-to-Date

U.S. Major Sectors Year-to-Date

As you can see from the following monthly charts of the S&P 500 Index, MSCI World Index, and Emerging Markets ETF (EEM), money has been flowing in and out of them on increased volatility all year since they peaked at or near their all-time highs in January...pretty much as I speculated in my Market Forecast for 2018 post at the end of last year.

With rising tensions related to the upcoming U.S. November mid-term Congressional election and other domestic political pressures, world politics and markets, North Korea, Iran, China, trade imbalances, emerging market challenges, increasing inflation and interest rates, and Central Bank money tightening measures in various countries, it's difficult to see where these markets will gain and hold traction to increase much beyond their highs of this year, on a broad scale.

As such, we may see this kind of money 'ebb and flow' scenario continue throughout the remainder of the year, with markets either stuck in their current trading ranges while rotating in and out of various sectors, or maybe drift higher in a slow, choppy and volatile manner, until some kind of major catalyst propels the markets decisively one way or the other. Perhaps we'll have a clearer idea once second quarter earnings releases begin in July as to company forecasts for the second half of 2018 and beyond, as well as more well-defined Central Bank and geopolitical policies and agendas.

Is the Iran Nuclear Deal Illegitimate?

* See UPDATES below...

I watched Prime Minister Netanyahu's recent speech on TV where he described the extent to which Iran's nuclear program had been developed before the 2015 Iran nuclear deal was reached between Iran and six countries -- the US, UK, Russia, France, China and Germany.

From the information he provided, it appears that the parameters around which that deal were structured were false and no longer exist, and, therefore, one could argue that the deal is now illegitimate.

President Trump will have to decide whether or not to recertify the JCPOA by May 12.

By staying in the Iran deal, it sends a message to other countries such as North Korea that they, too, can make deals with the US based on false facts. It sets a precedent and a framework around which future deals could be structured and puts the US and its allies in a more weakened position than they were in before entering into such an agreement, inasmuch as they become tied to the conditions of the agreement.

Stay tuned...

* UPDATE May 8...

President Trump withdrew US participation in the Iran deal today...new sanctions will be implemented against Iran and, possibly, for nations supporting Iran.

Source: NationalReview.com

* UPDATE May 25...

Source: ZeroHedge.com

Stalled Markets, Baby Boomers, and Accelerating Information

BABY BOOMERS & THE INFORMATION AGE

The Merriam-Webster dictionary defines a Baby Boomer as a member of the generation born between 1946 and 1964. If the average age of Baby Boomers is 65 years, then 1953 would be an important year for them. A lot of stuff happened that year, including the end of the Korean War.

Read more at ThePeopleHistory.com

At the age of 65, a person is also considered a senior citizen. With that "badge of honour" comes a whole host of pros and cons. Baby Boomers' young adult lives were much more simple without distraction of home computers, cell phones and social media platforms. This kind of simple life meant that one could live in a more "linear-thinking" kind of mode, where people could more easily define their goals and create strategies and tactics on how they could be achieved at an early age, then work towards those as they aged.

The rapid onset of technology, nano-technology, nuclearization, globalization, pandemics, medical advances and cures, fluctuating climates, and mass human migration that we've seen emerge since the Sixties has brought with it a lot of rising challenges related to the adaption of social, economic, cultural, religious, racial and political differences and discord...as well as an oversaturation of information that's been thrown at us on an ever-accelerating pace.

I'm not sure that the average human brain has kept pace with, and has a full grasp of, all that has occurred during those years and what it will mean for younger generations going forward.

No doubt, Baby Boomers have been and are in the process of retiring and downsizing their homes and possessions. Priorities have changed from work-related and family-raising activities, to ones more focused on health, pensions, friends, and comfort, as well as drawing down their investments for such purposes.

Younger generations are debt-ridden and information-overloaded. They will be saddled with the problems of yesterday, today and tomorrow at an ever-increasing pace and are required to think in a more "lateral" fashion...not an easy task, as they'll need to keep an open mind and a keen eye open. Their disposable income may not be sufficient to plough into the stock markets.

We're now living in that hand-off period between Baby Boomers and these younger people as they begin to step into those roles. What that transition period means for the markets is unknown at the moment...at least I don't have a handle on that aspect (no crystal ball, darn it).

We may see a period of instability or chaos occur on a world-wide basis at some point where indecision becomes the norm for awhile, until new order and direction can evolve...one where markets stall and whipsaw for some time.

WHAT THAT MEANS FOR CURRENT EQUITY MARKETS

In the meantime, the technical indicators on the following monthly chart of the S&P 500 Index (SPX) can be monitored to gauge the strength or weakness of equities.

While the parabolic stop & reverse (SAR), momentum (MOM) and relative vigor index (RVGI) indicators are displayed with their default input values, I've shown the average true range (ATR) input value as 1 month.

In this regard, my observations are:

• The SAR has flipped from a buy to a sell signal.
• The RVGI has formed a bearish crossover and is accelerating to the downside.
• The MOM has broken its recent uptrend from the beginning of 2016 and is accelerating to the downside.
• The ATR registered its second-highest reading in history during February of this year...second only to the one made in October 2008 during the financial crisis.

These tell me that markets have reached a level of saturation and indecision...something I've written about in more detail all year in a variety of articles on a variety of markets. And, these technical indicators are additional tools to the ones I've mentioned that can be used to monitor equity strength/weakness/volatility going forward.

Whether this pause reflects, or is the beginning of, what I posited above regarding the generational hand-off is anybody's guess...but it may be...keep an open mind, eyes open and think laterally. 

As a Baby Boomer, myself, I intend to do just that, to the best of my abilities.

Can The South Korea ETF Hold Onto Its Record Breakout?

* See UPDATES below...

The monthly chart below of the South Korea ETF (EWY) shows January's breakout to new all-time highs, followed by a brief pullback and rally back to close above its prior record high of 75.05 in March (now near-term support). Price is cautiously extending these gains, so far this month, while experiencing quite a bit of whipsaw movement on a daily basis.

It's also sitting just above the bottom of a long-term uptrending Andrew's Pitchfork channel around the 70.00 level (major support). Its next major support level is around 60.00 on this timeframe.

Both the momentum and rate-of-change indicators have been waning since last October, but remain above zero. A drop and hold below zero, as well as price drop below 70.00, could see price retest 60.00, or lower.

The daily chart below of EWY shows this whipsaw action (which began last October and which has formed a diamond pattern), and volumes have been high for the past couple of months.

Price is still above the 50-day MA and the RSI, MACD and PMO indicators have just formed a new "BUY" signal. However, this diamond pattern can be a bearish topping formation after a lengthy run up, so a certain amount of caution is warranted, especially with price near its recent all-time high.

Beware of a break with force on escalating volumes below the diamond bottom around 70.00 (which sits below the 200-day MA) as price could very well drop back to 60.00, or lower.

We'll see what happens following Friday's opening talks between the North and South Korean leaders to denuclearize the Korean peninsula and forge a peace agreement, and how further discussions may affect the EWY over the coming days/weeks, particularly in the lead-up to President Trump's proposed meeting with Kim Jong Un in the next couple of months.

* UPDATE April 30...

However, judging from NOKO's past violations of all previous nuclear agreements over the years, I wouldn't hold my breath that the words "Nobel Peace Prize" and "North Korea" will ever appear in the same sentence, despite what some are now excitedly hypothesizing.

Leopards (predators) don't change their spots...they only wish to make themselves relevant by pretending that they will...so, the onus is on Kim Jong Un to be the first to do so on that front and prove that as a verifiable and irreversible fact, while holding onto his power and control in NOKO...good luck with that.

Source: Reuters.com April 30/18

* UPDATE May 16...

Now that Kim Jong Un is revealing his true intentions (with his return to inflammatory rhetoric these past couple of days) that he will not actually disarm and denuclearize NOKO and that his recent (and past) words and promises to do so are empty, I really don't see any good reason for President Trump to meet with him in June. What's the point?

Once again, Chairman Kim is just show-boating and wasting everybody's time with his propaganda and insincerity...and still wearing his leopard skin...that's clear for all to see. He craves and loves attention and limelight and is a nobody without it.

Let him remain a nobody, Mr. President. Instead, use your time more wisely to further fulfill your election agenda to your citizens, including protecting their national security and economic well-being.

 

* UPDATE May 24...

President Trump cancels the June 12th summit with North Korea after North Korea failed to show up for scheduled pre-summit meetings in Singapore (while U.S. representatives waited there for 3 days) and didn't answer repeated phone calls for days on end, as well as made new threats of a nuclear orgy...

Twitter Link to video

And, once again, childish and anti-American/national security rhetoric come from Democrats (and, most of the media) in order to mock President Trump (it sounds like they're on North Korea's side and don't want the U.S. to succeed with peace-making efforts)...

Source: InsiderFoxNews.com

* UPDATE May 25...

Mr. President, I repeat...don't waste your breath on North Korea. 

Kim and his regime are clearly not serious and will never completely and irreversibly denuclearize and give up their weapons. Nor will they ever allow full and transparent inspections or allow their citizens to enjoy peaceful democratic freedom. They do not value western democratic principles, so do not expect them to embrace such a concept because it's simply beyond their capability.

* UPDATE June 1...

Final thoughts...I have to wonder why Kim Jong Un would actually trust that, if NOKO did completely and verifiably denuclearize NOKO, blow up all their test sites, and disarm and turn over their weapons to the US (rather than, say, to China), any deal that he might make with this current US President would be upheld and honoured by future Presidents to guarantee the safety and security of him and his regime, in perpetuity. We've already seen how two vastly different Presidents operate under Obama and Trump...and how one administration's policies and agreements can be scrapped with the stroke of a pen.

I just don't see the US and NOKO ever agreeing on what the west really wants.

If some kind of a deal is struck, I wonder just how transparent all the facts will be outlined in any agreement that gets released to the public.

Call me a skeptic...with eyes wide open...

Source: @FoxBusiness

NOKO Fallout

Source: ZeroHedge.com

The cumulative, reckless actions over the years of this so-called "very open" and "very honourable" man (Kim Jong Un) could cause a multitude of world-wide devastating effects...and he should be held accountable by ALL world leaders...

President Trump, tear off those rose-coloured glasses! And, just give us the straight goods.

Leader Kim Jong Un...may you always be surrounded by snow...

Source: FoxNews.com April 27 

* UPDATE May 11...

Source: FoxNews.com

North Korea's REAL Plan For Unification?...Keep an Eye on China's Shanghai Index

I wonder if North Korea and China's real plan for unification will, ultimately, see NOKO become another Province in China (while retaining its nuclear program) as an alternative to its alleged wish for a denuclearized unified Korean peninsula, with Kim Jong Un at its helm?

Just a thought.

And, instead of telling me that such a scenario would never happen, how about describing how it could?

ZeroHedge.com

Meanwhile, China's Shanghai Index remains locked in between major resistance at 3600 and major support at 3000, as shown on the monthly chart below.

The momentum indicator has been in a downtrend since it last peaked in November 2016, diverging with its volatile and tight price-range rally, and is currently above the zero level. A drop and hold below zero could see price retest 3000, or lower to around 2650-2700. A drop and hold below 2650 could see a swift price plunge to, at least, 2000.

Pacific Ring of Fire Earthquakes...Who's to Blame?

* See UPDATE below...

I wonder if the missiles that Kim Jong-un is busy recklessly firing into the Pacific Ocean, as well as his underground massive nuclear explosive tests, are contributing to the large-scale earthquakes in the Pacific Ring of Fire that we're seeing of late...think about it...

Sept. 21...Significant Earthquakes during the past 30 days

* UPDATE Sept. 22...

And, now this...NOKO is threatening to detonate a nuclear bomb over/on/in the Pacific Ocean. What about the effects of shock waves on earthquake fault lines, not to mention massive radiation fallout that would likely spread world-wide, or even a devastating elelctromagnetic pulse event (disturbance)?

When are world leaders going to wake up, smell the coffee, and take responsible action that would put an end, once and for all, to such senseless, preventable and willful large-scale human destruction?

THIS MUST STOP!

* UPDATE October 21...

Source: ZeroHedge