<ul><li>The New York Times best-selling author and researcher <keyword id="1744391" type="PERSON" weightage="20" keywordseo="John-Mauldin">John Mauldin</keyword> has published a warning by the name Recession Rumbles.<br /></li><li>While the likelihood of a full-blown recession is not clear, even the chances of high-growth and a stocks rally is negligible, according to Mauldin.<br /></li><li>The early warning signals I have used in the past are beginning to flash again, Mauldin wrote right at the start of the report.<br /></li></ul>We are in such bizarre times, all bets are off, wrote John Mauldin, financial writer, publisher, and New York Times bestselling-author in his report dated July 19. While the likelihood of a full-blown recession is not clear, even the chances of high-growth and a stock rally is negligible, according to the researcher and <keyword id="7895624" type="UNKNOWN" weightage="20" keywordseo="wall-street-veteran">Wall Street veteran</keyword>.<br /><br /><br />Mauldin has cited three reasons for the warning. <br /><br /><br />Firstly, the stocks in the US are trending way above than the country's gross national income, an indicator most famously used by the iconic investor Warren Buffet. <br /><br /><br />"Think of Gross Domestic Income as what we collectively earn. When stock prices go up, the collective value of the market goes up and when you compare it to our collective income, you get a ratio to determine if prices got ahead of themselves (overvalued) or are cheap relative to our incomes (undervalued)," Mauldin explained. And on this measure, American stocks are overvalued.<br /><br /><br />Secondly, the Cass Freight Index that measures shipment volume (by quantity, not cost) transported by every possible medium -- truck, rail, air, ship etc -- is signalling that the economy is in far worse shape than it was between 2014 and 2016 period. This was when oil shipments fell due to a recession. This is partially due to Donald Trump's trade war with China and some part of it is due to a cut in consumption in the US. <br /><br /><br />Americans have a high level of household debt as the interest rates started to rise in the US, the people are finding it tougher to service their loans.<br /><br /><br />Thirdly, Mauldin contends that by the time the United States Federal Reserve acts to fix the problems it may be too late. "The Fed waits until it sees signs of weakness, so it’s always behind the curve. By the time there is objective evidence of weakness, it’s too late for the Fed to do a thing," he wrote.<br /><br /><br />All in all, as he summarised, "when you start matters, and now is not a good time. You want to buy on weakness, not strength. The weakness will come, but this isn’t it." In other words, now may not be the time to buy stocks.<br /><br /><br />SEE ALSO:<br /><br /><a href="https://www.businessinsider.in/next-global-recession-may-be-just-two-years-awayand-india-should-be-worried/articleshow/67535452.cms">Next global recession may be just two years away—and India should be worried</a><br /><br /><br /><a href="https://www.businessinsider.in/indias-lehman-moment-seems-closer-as-top-mutual-funds-defer-dues/articleshow/68831689.cms">India's 'Lehman moment' seems closer than ever as top mutual funds defer dues to investors</a><br /><br /><br /><br /><br /><br />

Now is not the time to buy stocks, warns Wall Street veteran John Mauldin

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/551452b0eab8ea241c7ed801-785-588/irs-11.jpg" alt="IRS" data-mce-source="YouTube" data-link="https://www.youtube.com/watch?v=Aw93rd0RTFQ" /><p class="source"><span><a href="https://www.youtube.com/watch?v=Aw93rd0RTFQ">YouTube</a></span></p><p class="caption">IRS enters the ring.</p></div><p></p></div></div>Everyone in Congress pretty much agrees US corporate tax rates are too high.</p><p>The reason they haven't cut them is that politicians want to make corporate tax cuts as part of a larger tax reform plan. They all feel they're being pushed to give up something on taxes, and they want corporate taxes to be part of the deal.</p><p>Understandably, we are going to have a bigger tax reform package, but we need to think even further to make America competitive again.</p><h3><strong>A 15% Corporate Tax Rate</strong></h3><p>Companies always try to locate in countries that are the most tax friendly to their profits. That is why Apple, Google, and thousands of other American businesses have trillions of dollars in cash accounts overseas.</p><p>If they brought the money back, they would have to pay an outrageous 35% tax on it. What business leader in his right mind wants to reduce his working capital by 35%?</p><p>Further, too many very large US corporations (and many more not-so-large ones that fly beneath the radar) let themselves be "acquired" by foreign competitors. Obviously, doing so significantly reduces their taxes and benefits their shareholders.</p><p>The corporate tax rate in Ireland, for example, is 15%. The rest of Europe is pretty annoyed with Ireland for charging such a low rate, but their reaction hasn't made Ireland change.</p><p>The country is seeing a massive benefit in terms of income and job growth, not to mention the increased travel- and housing-related income that comes with so many businesses re-locating to Ireland.</p><p>Now, I have nothing against Ireland-the country of my forebears-but the reality is that, all things being unequal, the US would be a better place to locate your business.</p><p>And the thing to do, then, is to make all things even better than equal.</p><p>Why not enact a 15% US corporate tax rate? Yes, you could propose 20% or 25% and it would be better than what we have. What we want, however, is to get all those companies that left the United States to come back and pay us that 15% tax.</p><p>And that should be 15% on every dime they make above $100,000. The tax form should be very simple. Put the amount of money you made in Box A, subtract $100,000, and pay 15% of the amount in Box B.</p><h3><strong><div class="KonaFilter image-container display-table float_left"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/56815d53e6183e8a0f8b50ad-2232-1674/rtr1w4h0.jpg" alt="globe shadow" data-mce-source="Reuters" /><p class="source"><span>Reuters</span></p></div><p></p></div></div>A 10% Rate on International Profits and No Deductions</strong></h3><p>To get politicians to go along with such a low rate, the President should offer to enact a 10% rate on the international profits of all these companies, so that no matter where US corporations make their money, they are paying something to the US.</p><p>A 10% rate isn't going to change their investment decisions, and they are likely to just bring the money home at that point-putting it to work in our institutions and infrastructure.</p><p>As part of this program, we could get rid of<em> all deductions</em>. Period. End of story.</p><p>If it doesn't fall under normal GAAP accounting guidelines as a deduction, it's a profit and needs to be taxed. Get rid of the 3,000 or so special tax benefits for various and sundry corporations and industries.</p><p>That means hedge funds don't get carried interest, oil depletion allowances become subject to normal depreciation, new assets are written off over the useful life of the asset, and so on.</p><h3><strong>Everyone Is Better Off</strong></h3><p>With a 15% tax rate, companies will probably be just as well off and maybe even better off without the deductions, as they will no longer need to pay their lobbyists to work so hard to wheedle special favors out of Congress.</p><p>This tax program would help our companies compete in an increasingly global environment. It would also encourage them to bring a lot of their manufacturing back to the United States, so boosting our employment with jobs that pay well.</p><p>And I know that dropping taxes from 35% to 15% might seem like it would result in a big loss of revenue; however, if you add in my proposed 10% corporate tax on international earnings, I think there will actually be an increase in revenue.</p><h3><strong>Subscribe to John Mauldin's Free Weekly Newsletter</strong></h3><p>Follow Mauldin as he uncovers the truth behind, and beyond, the financial headlines in his<a href="http://www.mauldineconomics.com/investor-resources" target="_blank">free publication, <em>Thoughts from the Frontline</em></a>. The publication explores developments overlooked by mainstream news and analyzes challenges and opportunities on the horizon.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/dea-agent-when-asked-to-try-drugs-mike-vigil-deal-2016-3">EX-UNDERCOVER DEA AGENT: What I did when drug dealers asked me to try the product</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="w1MGxlMjE6hH45aq4Ag4Q590qZgMWztE" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'w1MGxlMjE6hH45aq4Ag4Q590qZgMWztE',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

JOHN MAULDIN: The US needs to lower its corporate tax rate to 15%

<p>Investing veteran <keyword id="1744391" type="PERSON" weightage="60" keywordseo="John-Mauldin">John Mauldin</keyword> spoke on a panel at the California Resource Investment Conference held February 23 &amp; 24 in Palm Springs.</p>
<p>Mauldin shared an anecdote of the time he had a four hour dinner with Speaker of the House <keyword id="51016" type="PERSON" weightage="60" keywordseo="John-Boehner">John Boehner</keyword>. Apparently it was a dinner with lots of wine.</p>
<p>He said to Boehner that it must be tough working with Harry Reid on the debt ceiling.</p>
<p>And Boehner responded.</p>
<p>"Boehner looks at me and says 'Harry?! Harry ain't the problem. It's Obama. The man can't make a decision. He's got balls made out of marshmallows."</p>
<p>Here's the <a href="http://www.youtube.com/watch?v=FzLENSMeLo8&amp;feature=youtu.be">video</a>:</p>
<p><iframe width="560" height="315" frameborder="0" src="http://www.youtube.com/embed/6-EZpRMWQJs"></iframe></p>

JOHN MAULDIN: Boehner Told Me Obama Has Balls Made Out Of Marshmallows

<p><div class="image-container float_right" style="width:400px"><div class="image"><img src="http://static1.businessinsider.com/image/518577f46bb3f79d0500000c-1014-760/capture-39.jpg?maxX=400" border="0" alt="rosenberg presentation" width="400" /></div><p class="source">Gluskin Sheff</p></div><keyword id="253320" type="PERSON" weightage="60" keywordseo="David-Rosenberg">David Rosenberg</keyword>, the veteran Wall Street economist and <keyword id="46699" type="UNKNOWN" weightage="60" keywordseo="bearish">bearish</keyword> strategist at Gluskin Sheff, gave an intense presentation on Friday at <a href="http://www.altegris.com/sic">John Mauldin's Strategic Investment Conference</a>.</p>
<p>Titled "Bernanke: The Wizard Of Potemkin," this presentation offers a sobering look at the anemic U.S. economy, the labor market mess, and the Federal Reserve's controversial efforts to get everything back on track.</p>
<p>Before you can even think about getting bullish, you must consider the eye-opening charts from Rosenberg's presentation.</p>
<p>Thanks to <a href="http://www.gluskinsheff.com/Thinking/Research">Gluskin Sheff</a> for giving us permission to feature this presentation.</p>

ROSENBERG: The Fed Is Trying Like Crazy, But Nothing It's Doing Can Save The Economy

MAULDIN: There's A Huge Problem With Our Deficit Forecasts -- They Assume A Perfect World

<ul class="summary-list"><li>Red and blue states alike are sending out new stimulus checks to offset the pain of high inflation.</li><li>The checks probably won't worsen inflation, but they aren't a lasting solution, one economist said.</li></ul><p>Republicans have blamed President Joe Biden's stimulus checks for fueling inflation, but states controlled by both parties have recently been sending out direct payments of their own to ease the pain of rising prices. </p><p>Experts say there's little reason to worry about it making inflation worse. Instead, Americans should worry about what governments are doing to stop inflation at the source.</p><p>Eighteen states including California, Colorado, Idaho, and Indiana <a href="https://www.businessinsider.com/no-federal-stimulus-payments-states-relief-checks-money-2022-7">have rolled out tax rebates</a> in recent months aimed at providing households much-needed cash relief. The funds, governors argue, help offset the impact of soaring prices throughout the economy. Inflation in the US is <a href="https://www.businessinsider.com/inflation-cpi-price-growth-june-2022-7">at a 41-year high</a>, and with Americans <a href="https://www.businessinsider.com/economic-outlook-consumer-sentiment-lowest-level-ever-2022-6">feeling horrible about the economy</a>, governors are betting on plain old cash to provide some support.</p><p>Garrett Watson, a senior policy analyst at the nonpartisan think tank Tax Foundation, isn't too concerned the payments will exacerbate inflation broadly at the outset, but he told Insider stimulus may not be the best way to ease the strain on people's wallets.</p><p>"Nationwide, it's unlikely that they would significantly contribute to inflation, but in terms of direction, that is where they would go" if consumers start spending money that's parked in state revenue departments.</p><p>Watson added that while some view state stimulus payments as a viable way to offset rising costs of food and gas, it's a "balancing act" for states in terms of how they're handling "this potentially being a temporary influx of cash both in terms of American Rescue Plan funding and the revenue trends that they're seeing, versus making permanent changes in state tax policy or spending."</p><p>The payments represent upside risks to inflation, but the actual effects would be "marginal," Thomas Hogan, a senior research faculty member at the American Institute for Economic Research, told Insider. State governments don't raise cash by selling debt as the federal government does, and Treasury auctions helped "crowd out" some of the inflationary effects of the pandemic stimulus packages, Hogan said.</p><p>That won't happen at the state level, but the extent to which tax rebates could lift inflation is probably minor, he added.</p><p>"It could have some effect, but it'll depend on whether people save or spend that money, and whether they spend it locally or on things from Amazon or something like that," Hogan said, later adding that there are very few studies that shine much light on the effects of state stimulus checks.</p><p>Others aren't so convinced. A new round of checks is a "nice idea," but Americans tend to spend much more when they suddenly come across a windfall of cash, Jared Dillian, an investment strategist at Mauldin Economics, said in a June 29 Bloomberg Opinion <a href="https://www.bloomberg.com/opinion/articles/2022-06-29/california-governor-gavin-newsom-s-rebate-plan-is-economic-illiteracy">column</a>. </p><p>California represents the worst offender, according to Dillian, as its program is among the most generous and set to deliver aid to 23 million people. At a time when inflation sits at historic highs, spurring another spending spree is an unnecessary risk, he added.</p><p>"Newsom's rebates represent economic illiteracy of the highest order," he said. "Of course, the intent is not to fight inflation. The intent is to redistribute, and curry favor with voters."</p><p>While Watson acknowledged the political benefits of delivering direct payments, he noted that both Biden's checks and the ones that states are currently carrying out were intended to combat rising costs largely caused by a public health crisis, and "no one was expecting the inflation of this magnitude" when deciding implementation.</p><h2><strong>Stimulus checks are a 'temporary bridge,' not a permanent solution</strong></h2><p>States' plans mirror the federal government's response to the coronavirus recession, which involved three rounds of stimulus checks by Presidents Trump and Biden.</p><p>Democrats said the size and scope of the plan were necessary, given pandemic uncertainty, but Republican lawmakers seized the opportunity to blame rising inflation on the stimulus.</p><p>"I think that there's no question that the $2 trillion bill last year overheated the economy, and it's why we have the mess that we have today," GOP Sen. John Thune said during a hearing last month referring to the American Rescue Plan in early 2021. </p><p>But several other factors also contributed to the extraordinary price growth seen today. The global supply chain remains badly snarled, leaving businesses under pressure to match high demand with ample inventories. Companies are passing much of the higher shipping costs on to consumers. Russia's invasion of Ukraine has also kept commodities prices elevated, affecting everything from gas prices to food costs.</p><p>But Watson noted that while stimulus checks might bring a temporary reprieve, directly tackling the elements that are causing gas and food prices to be so high is the best place to start.</p><p>"If we think people who are struggling with rising costs need support, addressing inflation issues, energy issues directly would be the way to solve that in a sustainable way," Watson said. "Because these checks were meant to be a temporary bridge getting over an issue. Not as a permanent solution to pressing problems."</p><p>A new round of tax rebates can fill some of the financial hole left by inflation, but it doesn't strike at the core problem, Jonathan Wolff, a professor of economics at Miami University of Ohio's Farmer School of Business, told <a href="https://www.forbes.com/sites/robertfarrington/2022/07/11/will-inflation-stimulus-checks-make-inflation-better-or-worse/?sh=6ae35244f3c8">Forbes</a> earlier in July. Governments should instead prioritize the supply side of the problem and try to boost production, he added.</p><p>"Give people a stronger incentive to work, and remove the disincentives to stay on the sidelines," Wolff said. "Governments can do this by temporarily reducing income taxes and ending COVID-era stimulus programs like eviction moratoriums and student loan forbearance."</p><p>Watson also noted the idea of implementing automatic stabilizers, or safety nets in place that would automatically balance out economic fluctuations — but he said such policies have not gained significant traction because policymakers want to be able to oversee those policies in times of economic crisis.</p>

The 18 states sending out stimulus checks probably won't make inflation worse &mdash; but they're not the best solution to help people cope, economists say

The entire world will be watching the <keyword id="6356435" type="ORGANIZATION" weightage="20" keywordseo="US-Federal-reserve">US Federal Reserve</keyword> this week and how much money <keyword id="1727754" type="PERSON" weightage="20" keywordseo="Jerome-Powell">Jerome Powell</keyword> is willing to prop up the American economy, which is expected to contract 4.6% this year, according to Goldman Sachs. The best outcome, according to ING, will be a signal that the Fed will allow US inflation to shoot over the preset 2% target. <br /><br /><strong>But, there may already be inflation just not where you are looking<br /></strong><br />Aside from gold, there are a handful of stocks raking up most of the money in many markets across the world. <br /><br />The combined market value of the three iconic companies, Apple, Microsoft, and Amazon, was already bigger than the entire German economy⁠— the fourth largest in the world⁠— at the start of the year. Now, they are even bigger.<br /><strong><br /></strong><table style="width: 373pt;"> <colgroup></colgroup><col /> <col /> <col /> <tbody><tr> <td class="xl63" style="height:15.0pt;width:149pt"><strong>Stock</strong></td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 143pt;"><strong>Market capitalisation</strong></td> <td class="xl63" style="border-left-width: initial; border-left-style: none; width: 81pt;"><strong>2020 gains</strong></td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;"> Apple</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.6 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">23.30%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Microsoft</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.52 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">25.30%</td> </tr> <tr> <td class="xl63" style="height: 15pt; border-top-width: initial; border-top-style: none;">Amazon</td> <td class="xl63" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">$1.5 trillion</td> <td class="xl64" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">58.50%</td> </tr></tbody></table><br />“I think we actually have high inflation, but due to these side effects it is showing up in stock prices instead of consumer prices,” financial market expert John Mauldin wrote in a report on July 24. <br /><br /><strong>The concentration of gains has gotten worse since the pandemic began<br /></strong><br />Mauldin pointed out that the likes of Microsoft, Apple, Amazon, Google, Netflix, and Adobe are part of ten stocks that have gained 35% or more this year, whereas the remaining 490 stocks in the S&amp;P 500 are down 10% or more. He calls this ‘inflation’, a term that usually denotes rising in prices of consumer items. <br /><br />“If the concept of reversion to the mean holds, either their sales are getting ready to explode, or their stock prices are going to fall. Or some combination,” he said.<br /><br />Something similar is happening in India. The gains in Reliance Industries⁠— which is now the world’s second-largest energy company after Exxon⁠— in the last six months is over 46%. The benchmark Sensex is still in the red for the said period.  <br /><br />There are only 14 stocks in the benchmark Nifty50 index that are in the green for the year, the remaining 36 are in the red. Only half of those have seen gains of over 20% since the beginning of 2020, two of those are drug makers Dr Reddy’s Laboratories and Cipla. The broader indices have a lot more red than green.<br /><br /><table style="width: 373pt;"> <colgroup></colgroup><col /> <col /> <col /> <tbody><tr> <td class="xl67" style="height:15.0pt;width:149pt"><strong>Stock</strong></td> <td class="xl67" style="border-left-width: initial; border-left-style: none; width: 143pt;"><strong>Market capitalisation</strong></td> <td class="xl67" style="border-left-width: initial; border-left-style: none; width: 81pt;"><strong>2020 gains</strong></td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Reliance Industries</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;"> ₹14.4 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">44.08%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Dr Reddy's Labs</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;"> ₹669.2 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">39.08%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Cipla</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹527.9 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">36.88%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Infosys</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹3.97 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">27.48%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Britannia</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹911.9 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">25.41%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Bharti Airtel</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹3.02 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">21.35%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">HCL Tech</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹1.8 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">20.52%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Nestle India</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹1.6 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">17.42%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Hindustan Unilever</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹5.17 trillion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">14.54%</td> </tr> <tr> <td class="xl65" style="height: 15pt; border-top-width: initial; border-top-style: none;">Mahindra &amp; Mahindra</td> <td class="xl68" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">₹705.29 billion</td> <td class="xl66" style="border-top-width: initial; border-top-style: none; border-left-width: initial; border-left-style: none;">11.84%</td> </tr></tbody></table><strong><br /></strong><strong>What pushed so much money into so few stocks?<br /></strong><br />In a world gripped by crisis, risk aversion is the norm. Therefore, investors like to take shelter in big companies, market leaders in their own space, and well-diversified conglomerates where at least one wing makes money when many others don’t.<br /><br />One of the reasons why RIL — which has businesses from oil refining to telecom to retail to now, e-commerce⁠— was able to raise over $20 billion from global investors like Facebook, Google, and Intel to name a few at the peak of the pandemic. There will be more funds raised for the retail vertical now, Asia's richest man Mukesh Ambani recently promised.<br /><br /><strong>It’s not just the feeling of safety in familiarity and size<br /></strong><br />According to Mauldin, the current bull market is a kind of perfect cash flow storm. <br /><br /><ul><li>Legions of new investors using stimulus money to buy whatever makes them feel good <br /></li><li>Bored gamblers looking for action, <br /></li><li>Large institutions brimming with Fed liquidity <br /></li><li>Traders of all sizes, small investors to monster hedge funds, chasing momentum—a perfect witches’ brew<br /></li></ul>"...all in the context of ultra-low interest rates that make cash and fixed-income holdings unattractive. You could not have designed a better perfect storm in which to create a market mania, and that’s exactly what we have,” he added. <br /><br /><strong>SEE ALSO:<br /></strong><span class="c-message_attachment__title"><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/markets/news/icici-bank-share-price-falls-alongside-sbi-hdfc-bank-kotak-mahindra-bank-and-other-banking-stocks/articleshow/77191098.cms">The fall in ICICI Bank shares reflects the market’s dislike banking stocks this week</a></span><br /><span class="c-message_attachment__title"><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-has-been-sued-in-australia-for-alleged-misuse-of-personal-data/articleshow/77190288.cms">Google has been sued in Australia for alleged misuse of personal data</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-has-been-sued-in-australia-for-alleged-misuse-of-personal-data/articleshow/77190288.cms"></a></span><br /><span class="c-message_attachment__title"><span class="c-message_attachment__title"><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/an-indian-court-has-summoned-jack-ma-for-wrongfully-firing-an-indian-employee/articleshow/77183378.cms">An Indian court has summoned Jack Ma for wrongfully firing an Indian employee</a></span><br /></span><br />

A market expert sees ‘a perfect storm’ brewing in Amazon, Apple and Microsoft shares⁠

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59d2a4b7351ccf83028b7034-1778/rtx3fbi1.jpg" alt="Equifax trading" data-mce-source="Reuters / Brendan McDermid" /><p class="source"><span>Reuters / Brendan McDermid</span></p></div><p></p></div></div><a href="http://markets.businessinsider.com/stock/EFX-Quote">Equifax</a>, <span>the consumer-data giant targeted in </span><a href="http://www.businessinsider.com/heres-why-you-shouldnt-freak-out-about-the-equifax-breach-ftc-identity-theft-credit-card-report-2017-9">a hack that exposed the personal data</a><span> of nearly half the US population,</span> says millions more consumers might have been affected than originally thought.</p><p>Equifax <a href="https://investor.equifax.com/news-and-events/news/2017/10-02-2017-213238821">announced Monday</a> that cybersecurity firm Mandiant completed the forensic portion of its investigation of the hack.</p><p>The firm said in the release that 145.5 million consumers might now potentially have been impacted by the data breach, 2.5 million more than previously estimated.</p><p><span>In September, Equifax reported a massive data breach, saying hackers <a href="http://www.businessinsider.com/equifax-hackers-may-have-accessed-personal-details-143-million-us-customers-2017-9">may have accessed the personal details</a>, including names and Social Security numbers, of more than 143 million consumers from mid-May to July. Equifax, which said it learned of the breach in late July, said credit-card numbers for about 209,000 people and certain documents for another 182,000 were also accessed.</span></p><p>The disclosure was swiftly met with criticism because of the delay in alerting the public to the hack, as well as<span> </span><a href="http://www.businessinsider.com/equifax-data-breach-site-check-angry-response-2017-9">problems with the website</a><span> </span>that Equifax set up for people to check whether their details were at risk.</p><p><span>The hack is being investigated by the Federal Trade Commission and has prompted promises for inquiries in both the Senate and House of Representatives.</span></p><p><span>Several Equifax officials have left the company since the hack's disclosure. Richard Smith stepped down as chairman of the board and CEO <a href="http://www.businessinsider.com/equifax-ceo-out-2017-9">last Tuesday</a>. And before that, the company announced that the consumer-data firm's CIO, David Webb, and its chief security officer, Susan Mauldin, were also <a href="http://markets.businessinsider.com/news/stocks/equifax-cyberattack-hackers-executives-retiring-2017-9-1002375933">retiring</a>. Webb will be replaced by Mark Rohrwasser, who joined the company last year, Equifax said in an emailed statement. Mauldin will be replaced by Russ Ayres. Both Rohrwasser and Ayers have previously worked in Equifax's IT division.</span></p><p>Equifax officials are also reportedly being investigated by the US Justice Department after selling stock before the company revealed a data breach that exposed the personal information of millions of Americans.</p><p>A<span>ccording to <a href="https://www.bloomberg.com/news/articles/2017-09-18/equifax-stock-sales-said-to-be-focus-of-u-s-criminal-probe">Bloomberg</a>, the department is looking at sales by Equifax's CFO, John Gamble; president of US information solutions, Joseph Loughran; and president of workforce solutions, Rodolfo Ploder. The three senior executives <a href="http://www.businessinsider.com/equifax-executives-sold-shares-after-the-company-learned-of-a-massive-hack-2017-9">dumped almost $2 million worth of stock</a> days after the company learned of the breach, Securities and Exchange Commission filings show. An emailed statement from the credit-monitoring agency said the executives "had no knowledge" of the breach beforehand.</span></p><p><span>All the executives still owned thousands of shares of the company after the sales were completed, <a href="https://www.sec.gov/cgi-bin/browse-edgar?CIK=0000033185&amp;action=getcompany">filings</a> show.</span></p><p><span><a href="http://markets.businessinsider.com/stock/EFX-Quote">Equifax</a> shares dipped in after-hours trading after closing up 1.7% for the day. Shares have tumbled by about 24.5% since news of the hack broke through Monday's close.</span></p><p><span><div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59d2a727351ccf89468b6686-866/screen shot 2017-10-02 at 45233 pm.png" alt="equifax shares" data-mce-source="Markets Insider" data-link="http://markets.businessinsider.com/stock/EFX-Quote" /><p class="source"><span><a href="http://markets.businessinsider.com/stock/EFX-Quote">Markets Insider</a></span></p></div><p></p></div></div></span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/ray-dalio-bridgewater-breaks-down-fundamental-investment-approach-2017-9">RAY DALIO: You have to bet against the consensus and be right to be successful in the markets</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/s9Xtz4uo-xjRU7l6Z.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

Equifax says 2.5 million more people might have been affected by the hack than previously thought

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59d3aa29c68d7b29008b6e60-580/rick smith equifax.png" alt="Rick Smith Equifax" data-mce-source="Equifax/Youtube" data-link="https://www.youtube.com/watch?v=bh1gzJFVFLc" /><p class="source"><span><a href="https://www.youtube.com/watch?v=bh1gzJFVFLc">Equifax/Youtube</a></span></p><p class="caption">Former CEO of Equifax, Richard Smith</p></div><p></p></div></div>Congress pounced on Richard Smith, the former CEO of Equifax, just minutes into his hearing before the House Energy Committee Tuesday.</p><p><span>"I worry that your job today is about damage control: to put a happy face on your firm's disgraceful actions and then depart with a golden parachute," said Rep. Ben Ray Lujan, D-NM, before Smith's opening remarks.</span></p><p><span>"Unfortunately, if fraudsters destroy my constituents' savings and financial futures, there's no golden parachute awaiting them," he added.</span></p><p><span>"The American people deserve answers, and I hope you are prepared to provide them."</span></p><p><span>Last week, <a href="http://www.businessinsider.com/equifax-ceo-out-2017-9">Smith stepped </a></span><span><a href="http://www.businessinsider.com/equifax-ceo-out-2017-9">down from Equifax</a>, the consumer-data giant targeted in <a href="http://www.businessinsider.com/heres-why-you-shouldnt-freak-out-about-the-equifax-breach-ftc-identity-theft-credit-card-report-2017-9">a hack that exposed the personal data</a> of nearly half the US population. He was answering questions from a congressional panel on Tuesday. </span></p><p><span>Committee members have asked about the company's failure to fix software vulnerabilities, as well as chief legal officer John Kelley (who is still employed at the company) and his role as head of security, and what Smith knew when he was first notified of the breach in late July.</span></p><p><span>During the hearing, Rep. Joe Barton, R-TX, suggested during the hearing that credit-reporting agencies should be required to pay consumers when hacked.</span></p><p><span>"You're just required to notify everybody and say, 'So sorry, so sad,'" he said. "We can have this hearing every year from now on if we don't do anything to change the current system."</span></p><p><span>"It would seem to me that you might pay a little more attention if you had to pay everybody whose account got hacked a couple thousand bucks or something," he added.</span></p><p><span>Rep. Jan Schakowsky, D-IL, meanwhile, suggested the credit-reporting industry is underregulated.</span></p><p><span>In September, Equifax reported a massive data breach, saying hackers <a href="http://www.businessinsider.com/equifax-hackers-may-have-accessed-personal-details-143-million-us-customers-2017-9">may have accessed the personal details</a>, including names and Social Security numbers, of more than 143 million consumers from mid-May to July. Equifax, which said it learned of the breach in late July, said credit-card numbers for about 209,000 people and certain documents for another 182,000 were also accessed.</span></p><p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/59d3abd3c68d7b6d1e8b6a9b-860/screen shot 2017-10-03 at 112454 am.png" alt="Screen Shot 2017 10 03 at 11.24.54 AM" data-mce-source="Markets Insider" /><p class="source"><span>Markets Insider</span></p></div><p></p></div></div>The disclosure was swiftly met with criticism because of the delay in alerting the public to the hack, as well as<span> </span><a href="http://www.businessinsider.com/equifax-data-breach-site-check-angry-response-2017-9">problems with the website</a><span> </span>that Equifax set up for people to check whether their details were at risk.</p><p><span>The hack is being investigated by the Federal Trade Commission and has prompted promises for inquiries in both the Senate and House of Representatives.</span></p><p><span>Several Equifax officials have left the company since the hack's disclosure in addition to Smith. The company previously announced that the consumer-data firm's CIO, David Webb, and its chief security officer, Susan Mauldin, were also <a href="http://markets.businessinsider.com/news/stocks/equifax-cyberattack-hackers-executives-retiring-2017-9-1002375933">retiring</a>. Webb will be replaced by Mark Rohrwasser, who joined the company last year, Equifax said in an emailed statement. Mauldin will be replaced by Russ Ayres. Both Rohrwasser and Ayers previously worked in Equifax's IT division.</span></p><p>Equifax officials are also reportedly being investigated by the US Justice Department after selling stock before the company revealed a data breach that exposed the personal information of millions of Americans.</p><p>A<span>ccording to <a href="https://www.bloomberg.com/news/articles/2017-09-18/equifax-stock-sales-said-to-be-focus-of-u-s-criminal-probe">Bloomberg</a>, the department is looking at sales by Equifax's CFO, John Gamble; president of US information solutions, Joseph Loughran; and president of workforce solutions, Rodolfo Ploder. The three senior executives <a href="http://www.businessinsider.com/equifax-executives-sold-shares-after-the-company-learned-of-a-massive-hack-2017-9">dumped almost $2 million worth of stock</a> days after the company learned of the breach, Securities and Exchange Commission filings show. An emailed statement from the credit-monitoring agency said the executives "had no knowledge" of the breach beforehand.</span></p><p><span>All the executives still owned thousands of shares of the company after the sales were completed, <a href="https://www.sec.gov/cgi-bin/browse-edgar?CIK=0000033185&amp;action=getcompany">filings</a> show.</span></p><p><span><a href="http://markets.businessinsider.com/stock/EFX-Quote">Equifax</a> shares were down 0.2% at $107.59 at 10:59 a.m. ET. Shares have tumbled by about 24% since news of the hack broke.</span></p>     <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/apple-tesla-stock-price-george-blankenship-steve-jobs-elon-musk-interview-2017-9">The secret to Steve Jobs' and Elon Musk's success, according to a former Apple and Tesla executive</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/d12P27wE-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

Congress slams ex-CEO of Equifax during his testimony

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/576f483291058422008cb8bd-2400/gettyimages-488226322.jpg" border="0" alt="Donald Trump" data-mce-source="Tom Pennington/Getty Images" data-mce-caption="Donald Trump." /><p class="source"><span>Tom Pennington/Getty Images</span></p><p class="caption">Donald Trump.</p></div><p></p></div></div></p><p>Good morning! This is the tech news you need to know this Monday.</p><ol><li><strong><a href="https://www.businessinsider.com/trump-to-allow-us-firms-huawei-deal-2019-6?r=US&amp;IR=T">US president Donald Trump said US firms could sell to Huawei, contradicting a Commerce Department ban on the Chinese firm in June</a>.</strong> Confusingly, Trump wouldn't confirm that Huawei was formally off the trade blacklist, but said repeatedly the firm could buy from US companies.</li><li><strong><a href="https://www.businessinsider.com/apple-moves-mac-pro-production-to-china-from-us-wsj-2019-6?r=US&amp;IR=T">Apple is reportedly moving Mac Pro manufacturing to China, despite the looming issue of tariffs</a>.</strong> The move comes at a time when the Trump administration has boosted tariffs on $200 billion of Chinese imports to 25% and has threatened to impose new levies on an additional $300 billion in Chinese imports.</li><li><strong><a href="https://www.businessinsider.com/instagram-recommends-new-us-users-follow-dr-sebi-account-2019-6?r=US&amp;IR=T">Instagram is recommending new users in the US follow an account linked to a "healer" who claimed he could use herbs to cure AIDS, cancer, and other diseases</a>.</strong> "Dr. Sebi," whose clients reportedly included Michael Jackson and John Travolta, said that modern medicine was wrong and that all illnesses were ultimately caused caused by excess "mucus."</li><li><strong><a href="https://www.businessinsider.com/intel-cellular-wireless-patents-auction-5g-smartphone?utm_source=reddit.com&amp;r=US&amp;IR=T">Intel is putting about 8,500 of its 90,000 patents on the auction block as it exits the 5G smartphone modem market</a>.</strong> The Santa Clara, California-based company told Business Insider it is looking to sell intellectual property assets related to 3G, 4G, and 5G cellular and wireless technologies.</li><li><strong><a href="https://www.businessinsider.com/jony-ive-jeff-williams-power-apple-2019-6?r=US&amp;IR=T">Analysts think that Jony Ive's departure is a sign that COO Jeff Williams is becoming even more powerful</a>.</strong> Williams is now overseeing design at Apple, making him a convincing successor to CEO Tim Cook.</li><li><strong><a href="https://www.businessinsider.com/uk-drill-rap-videos-banned-by-police-2019-6?r=US&amp;IR=T">YouTube deleted 130 rap videos to help police fight street gangs responsible for thousands of stabbings</a>.</strong> The gangs use YouTube to threaten rivals and boast about their attacks, and the police have used YouTube videos as evidence against gangs in court.</li><li><strong><a href="https://www.nytimes.com/2019/06/29/us/politics/fake-joe-biden-website.html">A Republican consultant working on Trump's 2020 election campaign has been running a fake but convincing Joe Biden site that features GIFs of the Democratic candidate touching women inappropriately and out-of-context quotes, according to The New York Times</a>.</strong> Patrick Mauldin described the site as a parody, despite its similarity to Russian troll disinformation tactics.</li><li><strong><a href="https://www.businessinsider.com/amd-denies-violating-us-laws-china-processors-2019-6?r=US&amp;IR=T">Advanced Micro Devices on Friday denied that the chip giant broke US laws after a news report said an AMD joint venture gave China access to state-of-the-art processors</a>.</strong> The AMD partnership with a military contractor is helping China compete with the US in building the next generation supercomputer with AMD's chip technology, according to a Thursday report in the Wall Street Journal.</li><li><strong><a href="https://www.businessinsider.com.au/facebook-and-youtube-on-notice-as-australia-leads-global-fight-against-online-terrorism-2019-7">Australia's prime minister Scott Morrison secured a deal with the leaders of other G20 nations to take on social media firms that don't tackle terrorist content</a>.</strong> Social media platforms are expected to develop technology which will allow them to quickly identify extreme content, prevent its proliferation, and record who uploaded it so as to persecute offenders.</li><li><strong><a href="https://www.businessinsider.com/virtual-restaurant-startups-taster-raise-millions-uber-eats-deliveroo-2019-6?r=US&amp;IR=T">Investors are pouring millions of dollars into 'virtual restaurant' startups such as Taster, which create takeaway-only food brands for platforms like Uber Eats and Deliveroo</a>.</strong> Backers are betting on the idea that people will cook at home less, and rely more on ordering through food delivery services.</li></ol><p>Have an Amazon Alexa device? Now you can hear 10 Things in Tech each morning. Just search for "Business Insider" in your Alexa's flash briefing settings.</p><p>You can also <a href="https://newsletter.businessinsider.com/join/free">subscribe to this newsletter</a> here - just tick "10 Things in Tech You Need to Know."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/spacex-falcon-heavy-rocket-most-difficult-launch-ever-2019-6">Watch SpaceX's 'most difficult launch ever'</a></h3>        <div>            <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/yiAdiXUa-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script>        </div>    </div>

10 things in tech you need to know today

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/53d68875ecad04803093ea6c-622-466/charles-barkley-tnt-inside-the-nba.png" alt="charles barkley tnt inside the nba" border="0"><p class="source"><span><a href="http://www.youtube.com/watch?v=bU_0FmXEBnY">TNT</a></span></p></img></div><p></p></div></div><em><strong>FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. </strong></em></p><p><strong><a href="http://www.financial-planning.com/news/independent_bds/charles-barkley-plug-a-slam-dunk-for-raymond-james-advisor-2691946-1.html">Charles Barkley gives a shout out to his financial advisor</a> (Financial Planning)</strong><em><strong> </strong></em></p><p>When former NBA all-star Charles Barkley was on the floor of the New York Stock Exchange CNBC anchor Bob Pisani asked him who handled his investments.</p><p>Barkley's response, "Raymond James. I'm [at] Raymond James. Birmingham, Ala. My guy's name is Glenn Guthrie. I've been with him for 27 years and I trust him with my life." <strong><br /></strong></p><p><strong><a href="http://www.investmentnews.com/article/20150217/BLOG12/150219946/longer-life-expectancies-are-killing-pension-funds">People are living longer and its crushing pension funds</a> (John Mauldin)</strong></p><p>John Mauldin writes, "It is a fairly well-defined trend. The actuarial accountants whose responsibility it is to track these things updated the life expectancy tables for a 65-year-old male, who can now expect to live an additional 21.6 years, two years longer than in the old table." By his count pensions may be underfunded by as much as $4.1 trillion because fund managers assume unrealistic earnings of 7.5-8.0%.<strong><span><br /></span></strong></p><p><strong><a href="http://wealthmanagement.com/careers/when-you-move-clients-move-too">Things to consider when contemplating a move to a new firm</a> (Wealth Management)</strong></p><p>Changing firms brings about the opportunity for better pay. However, a move can be costly if the advisor doesn't consider the interests of his/her clients. Mindy Diamond of Wealth Management six things an advisor must take into account before making the big move. </p><p><strong><a href="http://www.financial-planning.com/gallery/fp/10-robo-advisor-moves-to-watch-2691950-1.html">The rise of the 'robo advisor'</a> (Financial Planning)</strong></p><p>The 'robo advisor' has begun to take market share from the traditional financial advisor. Financial Planning outlines the advantages and disadvantages of 10 names in the space. Names highlighted include: Schwab, Vanguard, Wealthfront, Betterment, Motif, Jemstep, SigFig, Aspiration Fund Advisor, Robinhood and Guardvest. </p><p><strong><a href="http://www.investmentnews.com/article/20150217/TECH/150219943/3-must-dos-from-the-t3-conference">3 takeaways from the T3 Conference</a> (Investment News)</strong></p><p>The rise of the 'robo advisor' allows firms to manage thousands of clients, far more than the traditional advisor. Advisors should not fight the trend and should instead embrace change. Steve Sanduski of Investment News says these are three 'must dos' from the T3 Conference: "Implement a robo-adviser strategy, offer a "consumer grade" client interface, and educate your clients."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/iphone-headphones-tricks-2015-2">14 things you didn't know your iPhone headphones could do</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="o2OGM3czpWcydnvhjbkDBd6feXPuExiD" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'o2OGM3czpWcydnvhjbkDBd6feXPuExiD',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

Charles Barkley trusts his financial advisor with his life

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/569e5006c08a8037018ba689-749-562/screen shot 2014-12-10 at 5.57.21 pm.png" alt="John Hussman" data-mce-source="YouTube / John Mauldin" data-mce-caption="John Hussman" data-link="https://www.youtube.com/watch?v=jzkYeSfgZQI" /><p class="source"><span><a href="https://www.youtube.com/watch?v=jzkYeSfgZQI">YouTube / John Mauldin</a></span></p><p class="caption">John Hussman</p></div><p></p></div></div>There has been increasing focus on the US economy's probability of <a href="http://www.businessinsider.com/us-economy-not-entering-recession-2016-1">heading into a recession</a>.</p><p>According to John Hussman of Hussman Capital, it's not just probable, it's nearly guaranteed.</p><p>"<span>Since October, the economic evidence has shifted from supporting a </span><a href="http://www.hussmanfunds.com/wmc/wmc151005.htm">growing risk</a><span> of recession, to a </span><a href="http://www.hussmanfunds.com/wmc/wmc151207.htm">guarded expectation</a><span> of recession, to the present conclusion that a U.S. recession is not only a risk but an imminent likelihood, awaiting confirmation that typically only emerges after a recession is actually in progress," Hussman said <a href="http://www.hussmanfunds.com/wmc/wmc160118.htm">in a post Monday</a>.</span></p><p><span>His key piece of evidence stems from <a href="http://www.businessinsider.com/industrial-production-and-capacity-utilization-2016-1">Friday's US industrial production report</a>. The data was disappointing, missing expectations and indicating the sector is in contraction. Hussman also noted there is more to it than just the headline disappointment. Here's his analysis:</span></p><blockquote class="blockquote">"<span>Industrial production has now also declined on a year-over-year basis. The weakness we presently observe is strongly associated with recession. The chart below (h/t Jeff Wilson) plots the cumulative number of month-over-month declines in Industrial Production during the preceding 12-month period, in data since 1919. Recessions are shaded. <strong>The current total of 10 (of a possible 12) month-over-month declines in Industrial Production has never been observed except in the context of a U.S. recession.</strong> Historically, as Dick Van Patten would say, eight is enough."</span></blockquote><p><span><div class="KonaFilter image-container display-table"><div><div class="image"><img src="https://static-ssl.businessinsider.com/image/569e4969e6183e591e8ba2ea-1038-850/screen shot 2016-01-19 at 9.33.52 am.png" alt="Screen Shot 2016 01 19 at 9.33.52 AM" data-mce-source="John Hussman" /><p class="source"><span>John Hussman</span></p></div><p></p></div></div></span></p><p><span>Hussman gained notoriety for his skepticism in 2007 just before the start of the global financial crisis, though he admits he called a recession in 2011 that "<span>did not emerge."</span></span></p><p><span><span>This time, however, he said that the data, even beyond the flashing red indicator of industrial production, is irrefutable. Additionally, he named 4 indicators that will confirm the downturn:</span></span></p><ol><li><span style="line-height: 1.5em;">"A sudden drop in consumer confidence about 20 points below its 12-month average (which would currently equate to a drop to the 75 level on the Conference Board measure)..."</span></li><li><span style="line-height: 1.5em;">"A decline in aggregate hours worked below its level 3-months prior..."</span></li><li><span style="line-height: 1.5em;">"A year-over-year increase of about 20% in new claims for unemployment (which would currently equate to a level of about 340,000 weekly new claims)..."</span></li><li><span style="line-height: 1.5em;">"Slowing growth in real personal income."</span></li></ol><p><span style="line-height: 22.5px;">Hussman's advice is for investors to protect themselves, as he expects the recession will also bring about a<a href="http://www.businessinsider.com/stock-market-crash-charts-2015-8"> collapse in the stock market</a>, noting "<span>substantial crash risk."</span></span></p><p><span style="line-height: 22.5px;"><span>You've been warned.</span></span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/astonauts-photos-from-space-leds-light-pollution-2016-1">Astronauts found something troubling in these shots from space</a></h3>        <div>            <div>    <script src="http://player.ooyala.com/v3/6e12e8b3387a44daacfb73afba25a76e"></script>    <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="VlYnYyMDE6z_D2WSCsrbNTxn36RjWfwC" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>    <script>    if (typeof RunFunctions === 'undefined') { var RunFunctions = []; }     RunFunctions.push(function()    {         var ooyalapopvideo = OO.Player.create('ooyalaplayer_popvideo', 'VlYnYyMDE6z_D2WSCsrbNTxn36RjWfwC',{ autoplay: 'false' });     });    </script>    <noscript><div>Please enable Javascript to watch this video</div></noscript></div>        </div>        <script>(function() { function createPlayer() { OO.ready(function() { RunFunctions.forEach(function(ooyalaFunction) { ooyalaFunction(); }); RunFunctions = [];}); } createPlayer(); }()); </script>    </div>

A key US economic indicator is on an ugly streak that has never occured outside of a recession

<p>For those of you who are into patterns, this chart may be a bit jarring. It comes from an <a href="http://www.businessinsider.com/jp-morgan-funds-guide-to-the-markets-2013-1">excellent presentation</a> on the state of the <keyword id="31671" type="CITY" weightage="60" keywordseo="markets">markets</keyword> published by JP Morgan Funds' David Kelly.</p>
<p>From the looks of it, we're due for a big downward move in the stock market.  Last week, experts like <a href="http://www.businessinsider.com/mauldin-somewhere-over-the-rainbow-2012-12">John Mauldin</a> and <a href="http://www.businessinsider.com/sideways-markets-presentation-2013-1">Vitaly Katsenelson</a> have forecasted that a downward move is coming for the current secular bear or sideways market.</p>
<p><strong><a href="http://www.businessinsider.com/jp-morgan-funds-guide-to-the-markets-2013-1"><em>Click Here For The Whole Presentation &gt;</em></a></strong><br /><div class="image-container" style="width:1000px"><div class="image"><img src="http://static1.businessinsider.com/image/50e63c45eab8ea612300000e-963-724/screen%20shot%202013-01-03%20at%209.17.46%20pm.png?maxX=1000" border="0" alt="stock inflection points" width="1000" /></div><p class="source">JP Morgan Funds</p></div></p>

People Take One Look At This Chart And Conclude Stocks Are Due For A Big Plunge

<p><span style="line-height: 1.5em;"><div class="image-container float_right"><div class="image"><img src="http://static6.businessinsider.com/image/522f15cf69beddca09d85843-1200-924/greenspan-fed.png?maxX=480" border="0" alt="greenspan fed" width="480" /><p class="source on-image"><a href="http://moneyfornothingthemovie.org/">Money For Nothing</a></p></div></div>"When you or I print money it's called counterfeiting," a commentator muses in a new documentary about the <keyword id="6355253" type="ORGANIZATION" weightage="60" keywordseo="Federal-Reserve">Federal Reserve</keyword>. "When the Fed does it, it's called <keyword id="6357126" type="ORGANIZATION" weightage="60" keywordseo="monetary-policy">monetary policy</keyword>."</span></p>
<p>That documentary is <a href="http://moneyfornothingthemovie.org/"><em>Money For Nothing: Inside the Federal Reserve</em></a> and that commentator was former St. Louis Fed Governor William Poole.</p>
<p>Charting 100 years of Fed history, the film features an impressive collection of economic actors and thinkers: Paul Volcker, Janet Yellen, Jim Grant, Peter Atwater, John Mauldin, Barry Ritholtz, Gary Shilling, and others. It's also narrated by the dulcet tones of Liev Schreiber.</p>
<p>If <a href="http://www.imdb.com/title/tt0361596/"><em>Farhenheit 9/11</em></a> was Michael Moore's seminal repudiation of George W. Bush's foreign policy, <em>Money For Nothing</em> is writer/director Jim Bruce's similar critique of the history of the Federal Reserve.</p>
<p><span>"The Fed is supposed to be the guardian of financial stability, preventing chaos in markets<span>," says 1994-1996 Fed Vice Chair Alan Blinder</span>. "Now, usually it can do that. In the summer of 2008, it couldn't do that and we did get chaos."</span></p>
<p>The film's chief villain is Alan Greenpsan, a one-time demigod who kept interest rates too low for too long, in Bruce's telling. Volcker, on the other hand, is painted as a hero for sacrificing short term gain for long term stability during his tenure as Fed chief.</p>
<p>The crux of the film resides in the endemic "hubris" of the Federal Reserve. Greenspan, once an infallible figure in American politics, sacrificed the long-term health of the country for short-term easy money and deregulation.</p>
<p>"I don't think any of us who have ever worked at the Fed take any comfort from the fact that somebody screwed up," says Peter Fisher, former Executive V.P of the New York Fed from 1994-2001. "But it's important we recognize there were some big mistakes made."</p>
<p>The film chastises the Greenspan for thinking any bubble could always be handled after the fact through interest rate adjustments. And according to Bruce, with QE the central bank today seems to have learned little from a century's worth of examples of the long-term woes resultant from accommodative monetary policy.</p>
<p>Money For Nothing hits theaters in New York and DC on Friday, and you can view other release dates <a href="http://moneyfornothingthemovie.org/screenings">here</a>.</p>
<p><a href="http://moneyfornothingthemovie.org/">Watch the trailer</a>:</p>
<p><iframe width="800" height="587" frameborder="0" src="http://moneyfornothingthemovie.org/player/"></iframe></p>

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