Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

U.S. debt

Why Prices Will Rise Exponentially Over the Next 10 Years

By | May 6, 2014

Social Security Health Care Costs Double 2014Something just doesn’t make sense here…

In 2013, the U.S. budget deficit came down to $680 billion. Finally, after four consecutive years of annual budget deficits of more than $1.0 trillion, the government got its annual “hole” under the trillion-dollar level, and it seemed as though we were headed in the right direction.

But stop. The government is now reversing its track…

According to the Congressional Budget Office (CBO), the … Read More

National Debt to Double from $17.0 trillion to $34.0 Trillion?

By | November 1, 2013

national debtCan it be true?

The U.S. Department of the Treasury has reported that for the federal government’s fiscal 2013 year, which ended on September 30, 2013, the U.S. government budget deficit was $680 billion—the smallest budget deficit in five years. (Source: Bureau of the Fiscal Service, October 30, 2013.)

Should this be taken as great news? No, it’s “smoke and mirrors,” as I will explain below. But the mainstream certainly … Read More

U.S. Credit Rating Downgraded to Same Level as Brazil?

By | October 17, 2013

171013_PC_lombardiThe U.S. government, after winning World War II for the Allies, was very convincing. It told central banks around the world that they should hold the U.S. dollar as their reserve currency instead of gold, based on the idea the U.S. dollar would be backed by gold. Only limited amounts of U.S. dollars could be printed, because the currency was tied to gold bullion. Central banks bought into the idea…. Read More

Has the Stock Market Gone Mad?

By | October 14, 2013

Has the Stock Market Gone MadThe stock market…a place where rationality has been thrown out the door in favor of trading for immediate profits…profits based on what the government and Federal Reserve are planning to do next. It’s no longer a place for average investors to make money, as the fundamentals that drive key stock indices higher don’t really matter anymore. The notion has become “If it’s good news, buy! And if it’s bad news, … Read More

Growing American Business Inventories Paint Worrisome Picture

By | April 25, 2013

Growing American Business InventoriesThe biggest economic center in the global economy, the U.S., showed dismal growth in the last quarter of 2012. Sadly, the first quarter of 2013 is looking to be the same. Demand in the country is anemic at best as consumers are struggling.

New durable goods orders in the U.S. economy plunged 5.7% in March—the second decline in the first three months of 2013. (Source: United States Census Bureau, April … Read More

Why a Downgrade in the Credit Rating of U.S. Debt Is Imminent

By | April 25, 2013

A report from Standard & Poor’s (S&P), the credit rating agency, indicates there is more than a one-third chance that Japanese sovereign debt could face a downgrade. The report stated, “…the continuing prospect arises from risks associated with recent government initiatives and uncertainty of their success.” (Source: Janowski, T., “S&P says more than one-third chance of Japan downgrade, cites risks to Abenomics,” Reuters, April 22, 2013.)

In an effort to … Read More

Stock Market Overpriced by 50%?

By | February 20, 2013

Stock Market OverpricedAs the key stock indices approach highs not seen since just before the financial crisis, the underlying fundamentals are screaming “watch out.” The stock market could be edging higher on nothing but false optimism and greed.

The most basic reason for any stock market rally, corporate earnings, is missing from the equation. The bellwether stocks are flashing warning signals. Just as one example, United Parcel Service, Inc (NYSE/UPS) reported lower-than-expected … Read More

From Motor City to Fresno, Credit Ratings Being Slashed

By | February 20, 2013

The Congressional Budget Office (CBO) expects the U.S. federal government to have a lower budget deficit this year than those of the previous four years—finally getting the annual deficit under $1.0 trillion (although, not by much). But I am skeptical when it comes to the CBO estimates, as financial conditions at the more local level paint anything but a rosy picture.

Our country has already faced one credit rating downgrade … Read More

U.S. Bonds Enter the Danger Zone?

By | February 8, 2013

U.S. Bonds EnterU.S. bonds could be entering dangerous territory.

According to Bank of America Merrill Lynch indices, 30-year U.S. bonds have declined more than five percent so far in 2013. Their decline in January 2013 was 4.3%—the biggest monthly decline since March 2012. (Source: Bank of America Merrill Lynch, February 6, 2013.)

The following is a price chart of the 30-year U.S. bonds—almost looks like a free-fall:

$USB 30 Year Treasury Bond Price stock chart

Chart courtesy of www.StockCharts.com

Why … Read More

Mining for Riches with Junior Miners

By | January 4, 2013

Mining for Riches with Junior MinersGold and silver are currently taking a breather on the charts, but if the global risk holds, I wouldn’t be surprised to see a rally in the precious metals this year.

I can see gold breaking to $1,800 an ounce, something that nearly materialized on October 5, 2012, when the price of cash gold traded at $1,795.78 prior to slipping. In fact, the previous time the precious metal was trading … Read More

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