What would happen if I recommended a stock that had no profits, was losing billions of dollars a year, and had a net worth of negative $44 trillion?

Chances are, you would cancel your subscription to the Mad Hedge Fund Trader, demand a refund, unfriend me on Facebook, and unfollow me on Twitter.

Yet, that is precisely what my former colleague at Morgan Stanley, technology guru Mary Meeker, did.

Now a partner at venture capital giant, Kleiner Perkins, Mary has brought her formidable analytical talents to bear on analyzing the United States of America as a stand-alone corporation.

The bottom line: the challenges are so great they would daunt the best turnaround expert. The good news is that our problems are not hopeless or unsolvable.

The US government was a miniscule affair until the Great Depression and WWII, when it exploded in size. Since 1965 when Lyndon Johnson's "Great Society" egan, GDP rose by 2.7 times, while entitlement spending leapt by 11.1 times.

If current trends continue, the Congressional Budget Office says that entitlements and interest payments will exceed all federal revenues by 2025.

Of course, the biggest problem is health care spending which will see no solution until health care costs are somehow capped. Despite spending more than any other nation, we get one of the worst results, with lagging quality of life, life span, and infant mortality.

Some 28% of Medicare spending is devoted to a recipient's final four months of life. Somewhere, there are emergency room cardiologists making a fortune off of this. A night in an American hospital costs 500% more than in any other country.

Social Security is an easier fix. Since it started in 1935, life expectancy has risen by 26% to 78, while the retirement age is up only 3% to 66. Any reforms have to involve raising the retirement age to at least 70 and means testing recipients.

The solutions to our other problems are simple, but require political suicide for those making the case.

For example, you could eliminate all tax deductions, including those for home mortgage interest, charitable contributions, IRA contributions, dependents, and medical expenses. That would raise $1 trillion a year, and more than wipe out the current budget deficit in one fell swoop.

Mary reminds us that government spending on technology laid the foundations of our modern economy. If the old DARPANET had not been funded during the 1960s, Google, Yahoo, EBay, Facebook, Cisco, and Oracle would be missing in action today.

Global Positioning Systems (GPS) were also invented by and are still run by the government. They have been another great wellspring of profits (I got to use it during the 1980s while flying across Greenland when it was still top secret).

There are a few gaping holes in Mary's "thought experiment". I doubt she knows that the Treasury Department carries the value of America's gold reserves, the world's largest at 8,965 tons worth $576 billion, at only $34 an ounce versus an actual current market price of $1,280.

Nor is she aware that our ten aircraft carriers are valued at $1 each, against an actual cost of $5 billion each in today's dollars. And what is Yosemite worth on the open market, or Yellowstone, or the Grand Canyon or the Grand Tetons? These all render her net worth calculations meaningless.

Mary expounds at length on her analysis, which you can buy in a book entitled USA Inc. at Amazon by clicking here.

Worth More Than a Dollar?

You have just been adopted by a new rich uncle.

I doubled my short position in the US Treasury bond market last week (TLT).

Furthermore, I'll be using any subsequent price rise to sell more bonds, roll forward put options, put spread options positions, buy LEAPS, sell short bond futures, and buy the ProShares Ultra Short 20+ Treasury Bond Fund (TBT).

It is undoubtedly the cleanest trade out there in the world today.

Of all the momentous changes in the prospects for asset classes as a result of the presidential election, bonds absolutely top the list.

And not just US bonds, but German, Japanese, British, and every other kind of bond out there in the world as well are exiting a 30-year bull market and entering a 20-year bear market.

Fixed income instruments are totally toast for the next four and possibly eight years. Indeed, the list of reasons is so long that I'll have to list them one by one.

1) The hallmark of Trump's economic policy revealed so far is to run the economy hot by launching a massive round of deficit spending.

Independent analysis predicts that the US national debt could rise by as much as $10 trillion over the next decade.

That's what a massive tax cutting, spending rises gets you.

Call it Reagan 2.0, without the jokes.

Even if the Federal Reserve does nothing, this unprecedented issuance of new government paper will crowd out private borrowers and drag interest rates upward, to the detriment of bond prices and borrowers everywhere.

2) The bond market was already in trouble well before the election. Prices peaked in July 2015, and have been steadily eroding since. Every bond position I have strapped on since then has been from the short side.

This was because the world was assigning a growing probability of a long series of Fed interest rate hikes.

You could see this in the way bank shares traded, which started moving off of multiyear bottoms during the same time period.

All the election did was pour gasoline on a small fire that was just starting to build.

3) After hiding in a deep cave for the past ten years, inflation is about to make a dramatic comeback. It was already starting to edge up with recent economic reports.

And here is the problem. If you initiate a huge new jobs program with weekly jobless claims already at a 43-year low, wages will take off like a scalded chimp.

Oh, and by the way, wages are the largest component in any inflation calculation.

4) Years of zero, or subzero, interest rate policies from central banks around the world have created a substantial mal investment bubble in all fixed income assets. As a result, the relative valuations have reached ludicrous levels.

However, that government liquidity flow will turn negative by October 2018, thanks to simultaneous and coordinated QE wind downs.

The S&P 500 is now trading at 20 times earnings, and possibly 18 times 2018 earnings. US Treasury bonds at a 2.37% yield are trading at an amazing 45 times earnings.

This sets up the mother of all asset reallocations, out of the worst yielding financial instruments in the world, into the best.

5) After spending 50 years in the financial markets, I can describe to you a problem that I have noticed from the very start.

Institutional investors keep their foot firmly on the gas pedal while only looking in the rear-view mirror.

Call it the herd instinct, safety in numbers, or the lack of imagination, but portfolio managers, by definition, ALWAYS overweight the wrong asset classes at market tops, and underweight the right ones at market bottoms.

Making matters worse is the fact that these institutions move with the speed of molasses in the dead of a High Sierra winter.

Some entertain changes in sector and asset weightings only once a quarter, while others do it annually.

Yes, this means they can minimize tax bills. But it also assures that they are perpetually behind the curve.

When the memo gets out and real changes DO occur, they unfold over years, if not decades.

Every institution in the world is now overweight bonds and underweight stocks.

Guess what happens next?

Finally, investors were reminded of the fact that stocks don't rise in value every day like a sinecure.

We even witnessed a rare $250 point draw down in the Dow Average. In 2017, these have become as rare as hen's teeth.

You can thank the Republican Party's proposal to delay all corporate tax cuts to 2019 for that one.

The closely watched average has not seen a 3% correction in a torrid 370 days, a record.

In the meantime, concentration is increasing to perilous extremes, never a healthy development.

NVIDIA (NVDA), my top market pick for this year, is up 680% in 18 months, making it one of the largest stocks in the market, compared to 37.64% for the Dow Average.

By the way, I hope you have since deservedly fired all those newsletters who were bearish 18 months ago.

As good as 2017 has been, even IT will come to an end.

After earnings, the tax reform bill being mooted by congress has become the sole driver of share prices.

That has made life miserable for strategists such as myself, as trial balloons are floated one day, only to be shot down the next.

For a start, the bill is misnamed as a tax cut, as almost everyone I know will pay higher taxes, and I'm talking acquaintances in all 50 states.

The bill would cost me $100,000 personally, as I own a lot of real estate. The hit promises to heavily influence my vote in the next election.

Vastly complicating matters is the fact that the House and the Senate bills are wildly conflicting on basic issues, meaning that reconciliation is going to be impossible.

In the end, it may be a lot of fuss over nothing.

The bill that makes it to the president's desk for signing will be determined by the most liberal Republican member of the Senate, which at this point is either Maine's Susan Collins and Alaska's Lisa Murkowski.

And at this point Collins has confirmed that she won't vote for ANY bill without public hearings, and certainly WON'T vote for the elimination of the estate (death) tax.

In the end, it may be the erstwhile voters of Alabama who decide the matter.

They vote for a new Senator on December 12, and due to unforeseen circumstances, the Democratic candidate has suddenly shot to a 46% to 42% lead.

However, the margin of error is 4.1%. So once again, we are forced to bet on an event on where we have absolutely no idea of the outcome.

And you wanted to work in show business?

If this is all the bull market has to hang on, it could be in trouble.

It is this conclusion that prompted me to add my first short positions in stocks in many months.

In particular I sold the Russell 2000 (IWM), which actually has only 1,700 stocks left after mergers, bankruptcies, and private equity buyouts.

This is the index you love to hate in falling markets because of the fragility of smaller companies during times of economic uncertainty.

Of course my big trade of the week, if not the year, was my recommendation to buy the March 2018 $123-$125 vertical bear put spread LEAP.

Two days later saw the sharpest bond market selloff of the year, nearly two full points.

Those who got in at the $0.80 Wednesday low saw an eye-popping 69.50% return on capital by the Friday close.

It's another example of how the harder I work, the luckier I get.

Did Christmas come early for me?

I bought the exchange position limit maximum of 2,000 contracts with an average cost of $0.90, meaning that coined $50,000 in two days to cover my coming Christmas shopping bills (front row seats for Hamilton in Chicago, etc.).

Oops, looks like I am going to have to save some for a higher tax bill for 2018 as well.

The third quarter earnings are now winding down to a close, but we still have a few biggies in the coming week.

Troubled General Electric (GE), Wal-Mart (WMT), Home Depot (HD), and Bank of America (BAC) are all reporting.

On Monday, November 13, there is no economic data of any import.

On Tuesday, November 14 at 6:00 AM EST we get a new NFIB Small Business Optimism Index, which is based on a questionnaire of only 10 common business outlook questions.

On Wednesday, November 15, at 7:00 AM EST we obtain MBA Mortgage Applications, which should tail off, given the recent sharp rise in interest rates.

The weekly EIA Petroleum Status Report is out at 10:30 AM.

Thursday, November 16 at 8:30 AM EST we learn the Weekly Jobless Claims, which have been plumbing new 43 year lows.

On Friday, November 17 at 1:00 PM, we receive the Baker-Hughes Rig Count, which lately has been rolling over.

As for me, I'll be personally trying to reinvigorate the economy of Napa Valley by engaging in some high end wine tasting.

The community lost the entire month of October, normally their busiest of the year, and they are trying to get locals to fill the gap left by out-of-state cancellations. Layoffs are now rampant.

I'll also be helping relatives sift through the wreckage to salvage what few mementos they can.

I Call Them As I See Them