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The "Warfare State" Has Consumed the Middle Class

By , Special Contributor, Money Morning -

The United States spends roughly $800 billion a year on defense; the People's Republic of China, about $146 billion. The Russian Federation lays out around $55 billion, annualized, while the Islamic Republic of Iran's military spend annualizes at $15 billion - not accounting for the crippling 13%-plus inflation it's experiencing.

Finding reliable figures for military expenditures of Syria, Yemen, Afghanistan, or the tattered remnants of al-Qaeda and ISIS would be a waste of time.

It's enough to say that not a single one of these state and non-state actors can reasonably be expected to show up on our shores, "D-Day style," at any point in the near future. And if you expect any of these adversaries might come ashore, cannons blazing, in Cleveland, or San Francisco, or Austin, or Bismarck, N.D., then I respectfully submit you may be watching a little too much cable news.

And in the slightly more likely event that one of these foes were to, say, set off a dirty bomb in any of these places, it's doubtful an extra aircraft carrier would prevent it.

And yet, if the manifestly stupid, hopelessly censored mainstream media - run by just five conglomerates - were to be believed, hordes of jihadist enemies are closing in from all sides, moments away from striking.

Then again, this pale shadow of a legitimate Fourth Estate has also - just as dangerously - confused an East Coast stock bubble for real, widespread prosperity and strength.

No, folks, the real danger to American security and prosperity - what's left of it, at least - is safely ensconced, thriving in its ultimate evil, right here...

Jeff Sessions Is Gone, and Pot Stocks Are Soaring

By , Director of Cannabis Investing Research, Money Morning -

We knew Nov. 7 was going to be a historic day for the cannabis sector - we've been saying as much in the lead-up to the midterms. 

But as we've also seen, the marijuana industry moves at hyper speed. And the real post-election story was virtually impossible to predict, at least in terms of timing.

By midday Wednesday, the markets had woken up to the fact that voters in one of the most populous states, Michigan, and one of the most conservative states, Utah, had opened the door to legal marijuana in some form or another, and stocks spent a couple of hours gaining in value.

But then... it happened.

The No. 1 opponent of legal cannabis in the United States lost every ounce of his power to hold back the fastest-growing industry on the planet. Investors need to know just how important this is to the growth of cannabis as a business in the United States.

This is huge...

Why It's Cannabis Investors Who Really Won Yesterday's U.S. Elections

By , Director of Cannabis Investing Research, Money Morning -

Election Day 2018 marked another resounding victory for cannabis.

At least 36 different ballot measures and elective offices across the country were in play.

From coast to coast, candidates from both parties who are on the record as favoring some form of marijuana reform were returned to office or swept into Congressional delegations, state houses, and local assemblies. These are the folks who can help move reform efforts along all over the country.

More importantly, voters in each of the three states with the most important legalization efforts (all three of which were carried by the Trump campaign in 2016, by the way) passed their referendum questions.

This isn't really a surprise - we knew going into Nov. 6 that 66% of Americans favor the legalization of cannabis for recreational use, and more than 90% want it to be legal for medical application.

Still, the results are big news for cannabis investors - and a flashing green light to folks who may yet be sitting cautiously on the sidelines.

That's because there are major benefits to adding one of the largest states by adult population, and one of the reddest "red states" to the pro-cannabis bandwagon.

Let's take a look...

36 Reasons Why Today Could Be Marijuana's Biggest Day in Weeks

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

Legal cannabis is off to a roaring start in Canada, of course, but the next flood of big-gain potential will come to us courtesy of folks south of the border.

That's because today, voters in Colorado, Michigan, North Dakota, Utah, Missouri, Ohio, and Wisconsin will head to the polls to vote on no less than 36 major cannabis reform ballot measures.

Now, any one of these could catalyze tremendous pot-stock gains virtually overnight because, as we've seen time and again since 2014, "when laws pass, stocks soar."

But I'm most excited about the biggest of them...

How the Trump Tax Cuts Are Biting into Market Returns

By , Liquidity Specialist, Money Morning -

Stock prices and leaves aren't the only things falling right now.

Tax collections fell again in September, but the Congressional "Budget Busting Agreement" has spending soaring right into the face of plunging federal revenue.

And I'm here to tell you this: The fall in tax collections is a big factor driving shares and bond prices down.

Find out why over the long term, there won't be enough liquidity left in the markets for earnings to go anywhere but down...

The Most Controversial (and Profitable) Article You're Going to Read Ahead of Midterm Elections

By , Chief Investment Strategist, Money Map Report -

Midterm elections are only six weeks away, and predictably, many investors are turning themselves inside out because they think the stock market's next move hinges on the results of those elections.

The mainstream media certainly wants you to believe that that's the case. So do legions of pundits hawking their unique brand of divisive spin over the Internet, on the nightly news, at political rallies – even during sporting events.

We're told that our financial future hangs in the balance.

Not true.

In fact, there is NO documentable link between stock market performance and the outcome of midterm elections...

I'm Not Remotely Worried About a Federal Weed Crackdown

By , Defense + Tech Specialist, Money Morning • @Robinson_STI -

There aren't many U.S. Department of Justice officials who would be "rock stars" anywhere, period, let alone at a San Jose legal cannabis industry expo.

But I'm here to tell you: There was such a star in our midst at this conference...

I'm talking about former Deputy Attorney General James M. Cole.

Back in 2013, he was the No. 2 official at the Justice Department who authored the now-famous "Cole Memo."

That memorandum ordered federal agents to leave states with legalized marijuana well enough alone - as long as they had adopted a clear regulatory framework for doing so. The landmark memo gave the states and federal law enforcement a kind of legal modus vivendi for regulated cannabis, allowing each party to "look the other way."

The memo was instrumental in helping a multibillion-dollar legal weed sector take root and thrive.

So it's no surprise that, as a keynote speaker at the Cannabis Business Summit & Expo in San Jose July 25-27, Cole was treated like a conquering hero.

I had the chance to catch up with him privately beforehand to hear what he had to say...

How We Can Get Out of the Tariff Tantrum "Box"

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks -

Tariff

Last week, I showed you a chart that revealed a key support and resistance zone at the top of the "tariff trouble penalty box" we were trapped in.

I said that, thanks to a just-right "Goldilocks" employment report, we were poised to break out of the box to the upside.

And indeed, that's exactly what happened...

... until we were walloped by more tariffs.

But, like many of the tariff announcement reactions of the past couple of months, the markets only did a brief one-day drop - more of a "wiggle" - down.

Of course, I have some charts to show you, including one that I think shows us getting back to some higher ground in the near term...

Why I Know the "Tariff Tantrums" Will Blow Over

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks -

"Tariff tantrums"

Here are a few things markets don't like:

Geopolitical leadership that doesn't follow a logical path

Uncertainty of any kind

The prospect of contracting economies

On Monday, we got truckloads of all three. And they all came from the trade war news headlines.

The effect was self-reinforcing - and profound.

There was no shortage of illogical geopolitical leadership on display: The U.S. and Chinese presidents (with some European Union officials thrown into the fray for good measure) exchanged barbs about tariffs that sounded more like pregame locker-room posturing than international statesmanship.

And, as we've seen, when emotion enters the process, traders and investors get worried that it could add to the uncertainty.

And one pithy quote sums up the uncertainty the markets felt yesterday.

The Wall Street Journal reported a quote from President Xi of China: "In the West you have the notion that if somebody hits you on the left cheek, you turn the other cheek," Xi said in the report, according to people briefed on his remarks. "In our culture, we punch back."

A biblical analogy: Check.

Open-ended, ominous threat: Check.

That's the height of uncertainty.

Of course, at the root of all this is the prospect of contracting economies. That's the ultimate goal of a trade war, after all - to do such damage to the "other guy's" economy that they blink first. 

If tariffs stick (and tens of billions of dollars' worth are already in force), we'll see the real economic slowdown. Goods will become more expensive for consumers, so they'll buy less of them. Pretty simple stuff from that perspective.

And so, with that triumvirate of market-rocking news, the major U.S. indexes had their biggest down day since...

...The last tariff tantrum on May 29th.

So the big question before every investor this week is: Is this all coincidence? Or is the "Trump growth" narrative asserting its dominance?

I think it's the latter, and I'll show you why that's important with a few charts here...

How to Cash In on the Transatlantic "Split" That's Got Nothing to Do with Trump's Tweets

By , Managing Editor, Money Morning -

Trump’s Tweets

Of course, last week, on June 6, the West marked the 74th anniversary of the allied "D-Day" landings in Normandy, France.

This anniversary, though, was capped off by a G7 summit in Charlevoix, Canada.

Right now, relations - at least, on the surface - between the modern Western allies are mighty frosty, dominated by Twitter and press conference feuds between Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron, and U.S. President Donald Trump, largely over the subject of the multilateral trade war breaking out over protectionist tariffs. Of course, they've largely kept quiet on social media, but it's no secret British Prime Minister Theresa May and German Chancellor Angela Merkel aren't thrilled with Trump's positions, either.

I'm hard-pressed to recall any recent G7 (maybe call this "G6+1") meeting as tense as this one, though a few probably come close.

On the other hand, dispassionate observation and analysis of market action tell us that all this hostility and discord has been baked into prices - discounted.

But our Capital Wave Strategist, Shah Gilani, is watching a "split" of sorts beginning to open up between the United States and the European Union - one that's got nothing to do with politics or soundbites and everything to do with... growth.

I caught up with him to get filled in on the details, but he did me one better...

He told me how to play this emerging situation that's coming and going - there are going to be some pretty big swings...