Market forces June 30
Funds hastily pretty up their portfolios as the second quarter ends today. Yesterday's volume declined 30% as stocks edged higher. There are what look like short squeezes going on in selected stocks that funds hold and are buying heavily.
The vast numbers of stocks being replaced in the indexes causes another major distortion in index prices. The NASDAQ replaced the greatest number because so many former NASDAQ stocks could no longer make the capitalization limit.
Market Outlook
Market volume collapsed again yesterday as the market rose. It indicated very few buyers at these high prices and very few short sellers willing to risk going up against the institutional owners who buy into their existing portfolio to temporarily raise their performance just as the quarter closes. Short sellers probably will come in at the very end today after the funds exhaust their cash reserves buying to drive up their portfolio values.
The securities firms should profit handily this quarter.
The recent rise in oil prices is attributed to the restless natives in the Nigerian delta attacking Nigeria's incompetent defense forces, blowing up wells and flooding the Atlantic with oil and the atmosphere with natural gas. Most of Nigeria's natural gas is normally burned off anyway polluting the atmosphere and amounting to a 50% waste of Nigerian's natural resources. Per capita production of CO2 and consumption of energy resources in developing nations like Nigeria runs at double that of the developed world. The USA is one of the most efficient users of energy in the world and the most productive on a per capita basis. The international socialists see USA wealth as unfair and they want a piece of the action. The great Cap and Trade heist of American wealth is an inside job since George Soros and the other international highway robbers have bought the seats for their socialist friends in Congress.
"Cap and trade" is the biggest con of this decade. The Socialist-Democrats in the House are a national disgrace and just passed that bill. It now goes to the US Senate. The majority of world scientists have publicly signed petitions declaring that the stupid Al Gore theory is a farce and leads to economic thievery. It is intended to rip-off productive people on a massive scale and subsidizes world incompetence, ignorance, indolence, and evil. The cap and trade bill would distribute American wealth to the third world and to Europe. Europe will just continue to export its dirty industries to the third world. China, India, and Africa already have the most deadly concentrations of pollution. It is a form of coercive foreign aid where the Obama administration probably will stupidly accept Americans being accused of killing the planet. Cap and Trade is not a way to clean up the planet it is only a massive American foreign aid program legally forced upon American entrepreneurs by the stupid socialists in Congress that think Al Gore is some sort of genius.
Last night most Asian markets were generally down again: China down -0.5%, Hong Kong down -0.8%, Japan up 1.8%, and India down -2%.
Most European markets were down this morning in a range of -0.2% to -0.5% half way through their session.
US futures flat-lined at the start today.
We will be cherry picking into the market during what we expect to be about two months of market decline.
Tuesday, June 30, 2009
Monday, June 29, 2009
Why the Obama Bank Bailout continues to fail
Market forces June 29
The old monetary adage is, "You can't push on a string." It comes from the data that shows that during a severe recession or depression, reducing borrowing rates to zero does not seem to induce businesses to expand and people to buy homes. In fact that is exactly what is happening in America and around the world right now. That is why the massive federal money supply expansion is doing so little to stimulate the economy. Here we show that the failure to date of Obama's monetary expansion has been caused by some permanent effects but mostly by the transient effects of abruptly increasing US reserve requirements.
Many people are wrong when they simplistically say:
Money supply = money in circulation * velocity of money.
Here is a more complete definition, but we must realize each nation contributes to the equation and even underground economies and black markets can have effects in individual nations:
Money supply = money in circulation * velocity of money * money multiplier effect– actual reserves.
Now the "money multiplier effect" is inversely proportional to the leverage the FED allows financial institutions. Since OBAMA significantly de-leveraged the system the multiplier effect has shrunk causing the money supply to shrink sharply and that alone nullifies the recent monetary expansion. But there is also a much larger "money pit" that is currently swallowing up American cash faster than the treasury can possibly print $100 dollar bills. In fact the dollar is stronger, not weaker, because de-leveraging is accomplished by requiring banks to increase their reserves. That is a transient effect that literally puts cash in vaults faster than it can be printed until the reserve requirement is met. Only when the reserve requirements are met will the FED's monetary expansion have any beneficial effect on lending.
So you can see the problem is not caused by people unwilling to borrow even at low interest rates. The problem is that the banks are stashing the cash to raise the FED required liquidity. And if that were not bad enough for the economy, individuals too are saving money to raise their own liquidity.
Conclusion:
The Obama Administration's monetary policy has inadvertently been a contraction not the expansion of credit as his administration publicly pronounced. Expansion will not begin to work until the de-leveraging period is complete. This problem could have been avoided by increasing the reserve requirements in small steps. It means that the American economy could be violently jolted with inflation if the extreme 110% monetary expansion is permitted to continue after the reserve requirements are satisfied. Our more correct equation for the actual money supply expansion shows that the Obama administration has not been pushing on the fiscal string at all. It shows they have been contracting the money supply with Obama's abrupt increase in reserve requirements meant to de-leverage the financial institutions to provide more risk avoidance margin. In effect the Obama administration has unintentionally increase risk of a depression by moving too quickly to de-leverage banks.
Market Outlook
Market volume moved above average as the decline continued on Friday. It is possible the Obama administration will put us in a deeper recession and the market could drop 50% below the last bottom. We think that has a low probability but we are in the third week of a highly probable two month stock market decline.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s when FDR was temporarily enamored with socialism and caused the Great Depression. When FDR abandoned socialism the USA recovered rapidly and defeated the enemies of liberty. We continue to have zero confidence in all socialist economies. The pact of communist China with Hong Kong to use the yuan as a settlement currency for trade is a step toward Beijing's long-term aim to use Chinese currency devaluation as a tool to shift risk to and expropriate more from foreign investors.
The dollar is strong now because the US printing press money is being absorbed by the America’s bank deleveraging process. But when deleveraging is complete and American wealth falls under heavy democrat-socialist Obama taxation next year... the dollar will likely fall in value.
"Cap and trade" is the biggest con of this decade. We can hardly wait for them to trade the derivatives of their hoax. The majority of world scientists have publicly signed petitions declaring the Al Gore theory that humans cause Global Warming is a farce and an economic hoax. It is intended to rip-off productive people on a massive scale. The cap and trade bill will prolong and exacerbate the recession and stifle any chance of a quick economic recovery. It will Squeeze state budgets, make US businesses less competitive, and is estimated to have a price tag of $175 Per Household. It will re-distribute American wealth to foreign nations. It is a form of coercive foreign aid where Obama will have Americans wrongly accused of killing the planet. Socialists typically wrongly accused their victims to justify the expropriation of wealth from their victims. Cap and Trade is a massive coercive American foreign aid program.
Last night most Asian markets were generally down: Taiwan down -1.1%, Japan down -1%, and South Korea down -0.4%.
Most European markets were up this morning in a range of -1% to + 1.2% half way through their session.
US futures are slightly higher (+0.3%), at the start today.
We are cherry picking into the market during what we expect to be about two months of market decline.
The old monetary adage is, "You can't push on a string." It comes from the data that shows that during a severe recession or depression, reducing borrowing rates to zero does not seem to induce businesses to expand and people to buy homes. In fact that is exactly what is happening in America and around the world right now. That is why the massive federal money supply expansion is doing so little to stimulate the economy. Here we show that the failure to date of Obama's monetary expansion has been caused by some permanent effects but mostly by the transient effects of abruptly increasing US reserve requirements.
Many people are wrong when they simplistically say:
Money supply = money in circulation * velocity of money.
Here is a more complete definition, but we must realize each nation contributes to the equation and even underground economies and black markets can have effects in individual nations:
Money supply = money in circulation * velocity of money * money multiplier effect– actual reserves.
Now the "money multiplier effect" is inversely proportional to the leverage the FED allows financial institutions. Since OBAMA significantly de-leveraged the system the multiplier effect has shrunk causing the money supply to shrink sharply and that alone nullifies the recent monetary expansion. But there is also a much larger "money pit" that is currently swallowing up American cash faster than the treasury can possibly print $100 dollar bills. In fact the dollar is stronger, not weaker, because de-leveraging is accomplished by requiring banks to increase their reserves. That is a transient effect that literally puts cash in vaults faster than it can be printed until the reserve requirement is met. Only when the reserve requirements are met will the FED's monetary expansion have any beneficial effect on lending.
So you can see the problem is not caused by people unwilling to borrow even at low interest rates. The problem is that the banks are stashing the cash to raise the FED required liquidity. And if that were not bad enough for the economy, individuals too are saving money to raise their own liquidity.
Conclusion:
The Obama Administration's monetary policy has inadvertently been a contraction not the expansion of credit as his administration publicly pronounced. Expansion will not begin to work until the de-leveraging period is complete. This problem could have been avoided by increasing the reserve requirements in small steps. It means that the American economy could be violently jolted with inflation if the extreme 110% monetary expansion is permitted to continue after the reserve requirements are satisfied. Our more correct equation for the actual money supply expansion shows that the Obama administration has not been pushing on the fiscal string at all. It shows they have been contracting the money supply with Obama's abrupt increase in reserve requirements meant to de-leverage the financial institutions to provide more risk avoidance margin. In effect the Obama administration has unintentionally increase risk of a depression by moving too quickly to de-leverage banks.
Market Outlook
Market volume moved above average as the decline continued on Friday. It is possible the Obama administration will put us in a deeper recession and the market could drop 50% below the last bottom. We think that has a low probability but we are in the third week of a highly probable two month stock market decline.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s when FDR was temporarily enamored with socialism and caused the Great Depression. When FDR abandoned socialism the USA recovered rapidly and defeated the enemies of liberty. We continue to have zero confidence in all socialist economies. The pact of communist China with Hong Kong to use the yuan as a settlement currency for trade is a step toward Beijing's long-term aim to use Chinese currency devaluation as a tool to shift risk to and expropriate more from foreign investors.
The dollar is strong now because the US printing press money is being absorbed by the America’s bank deleveraging process. But when deleveraging is complete and American wealth falls under heavy democrat-socialist Obama taxation next year... the dollar will likely fall in value.
"Cap and trade" is the biggest con of this decade. We can hardly wait for them to trade the derivatives of their hoax. The majority of world scientists have publicly signed petitions declaring the Al Gore theory that humans cause Global Warming is a farce and an economic hoax. It is intended to rip-off productive people on a massive scale. The cap and trade bill will prolong and exacerbate the recession and stifle any chance of a quick economic recovery. It will Squeeze state budgets, make US businesses less competitive, and is estimated to have a price tag of $175 Per Household. It will re-distribute American wealth to foreign nations. It is a form of coercive foreign aid where Obama will have Americans wrongly accused of killing the planet. Socialists typically wrongly accused their victims to justify the expropriation of wealth from their victims. Cap and Trade is a massive coercive American foreign aid program.
Last night most Asian markets were generally down: Taiwan down -1.1%, Japan down -1%, and South Korea down -0.4%.
Most European markets were up this morning in a range of -1% to + 1.2% half way through their session.
US futures are slightly higher (+0.3%), at the start today.
We are cherry picking into the market during what we expect to be about two months of market decline.
Thursday, June 25, 2009
Socialism is the system where incompetent people with political power run rough shod over free enterprise and competition.
Market forces June 25
While billionaire Warren Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond.” Buffett said the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.”
The Standard & Poor’s 500 Index will probably gain in three-quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said to his company’s shareholders.
Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington.
Yesterday started with a bull trap and a short squeeze for timid hedge funds to wring out both the arrogant bulls and the timid bears. Again it was on low volume which means the market could easily plummet to new lows just the opposite we saw in the low volume bear market rally we experienced this spring.
The Federal Reserve sought to hide its involvement in Bank of America Corp's acquisition of Merrill Lynch as Merrill's financial condition worsened, the top Republican on the House Oversight and Government Reform Committee said on Wednesday. The Fed "engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," Representative Darrell Issa said in a statement released to Reuters. This is obvious from testimony and documentaries broadcast last week. When CEO Lewis spoke up, democrat-socialists across the nation were given marching orders to vote to throw out Lewis with their union and state pension plan proxies. We told here how the Democrat CT. treasurer was part of that socialist power play when it happened.
Bernacke knows nothing! Yet he and a chorus of Democrat-Socialists conspired to destroy CEO Lewis of BOA and everyone knows it except for Mad Money's Cramer of the GE/MSNBC/Pravda/KGB conglomerate. The GE/MSNBC/Pravda/KGB conglomerate is a self-serving and anti free enterprise monopoly and by far the biggest beneficiary of US government contracts. GE uses its substantial MSNBC propaganda machine clout to undermine critical USA defense programs by undermining important defense products that do not profit GE. They lobby against the Lockheed stealth Raptor F22, the Boeing C17, the Lockheed JSF and other defense systems for which the GE/MSNBC/Pravda/KGB conglomerate has limited profit potential. The GE/MSNBC/Pravda/KGB conglomerate is well known to have lousy arrogant management and would have been broken up if it were not for the fact that MSNBC protects GE and does such a good job destroying capable people and competitive US defense programs. But that is the definition of socialism. Socialism is the system where incompetent people with political power run rough shod over free enterprise and their competition. It is business management by political slimy slugs and arrogant lice. I'm sorry if I am beginning to sound like a Brit., but the British do have a good vocabulary for describing socialist leaders.
Market Outlook
The very light market volume on market advances indicates the market has not stopped going south. We gave you a countdown and it has been six business days since we predicted the bear market rally had ended. Now is the time to begin to cherry pick into the market as individual stocks give up their recent bear market rally gains.
The herd of hedge funds likes to follow the lead analyst's sell recommendation with few exceptions because the lead analyst did such a good job on the up side. So they get out en masse and the stock plummets to near its old low. That is the time to cherry pick back into the market. There is greater than a 50% chance that companies with better management will disappoint the analysts first because they tend to be more honest. They get clobbered for refusing to make the rosy forecasts the Key analyst needs to have the market prove the key analyst is correct. So the first stocks to fall are the great stock buys when the hedge funds finishing dumping on them and the key analyst thinks their management has been sufficiently punished for refusing to lie.
Once the avalanche begins it rumbles through most of the rest of the market providing investors with a continuous stream of buying opportunities. Remember to buy after the stock goes down, not now just because we have a buying opportunity. We should be able to buy stocks after at least a 50% retracement of their recent advance. If a stock rose 30% in the last rally we should be able to buy it 10% to 25% lower than its recent high. We plan to give a count down again to the time when it would be wise to start selling and taking profits cherry picking out of the market.
Bonds will be a very bad investment when inflation kicks in this year.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. We continue to have zero confidence in all socialist economies. The risk of enormous investment/currency losses in emerging economies is now high.
The dollar is strong now because the US printing press money is being absorbed by the America’s bank deleveraging process. But when that ends and American wealth falls under heavy democrat-socialist Obama taxation next year the dollar will likely fall.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are international socialists and plan to distribute America’s wealth around the world. The Al Gore environmental farce is part of the socialist world wealth redistribution plan. Internationalist socialism is another name for failed communism. "Cap and trade" will prove to be the biggest con job of this decade. We can hardly wait for them to trade the derivatives of the hoax. The Waxman-Markey cap and trade bill will prolong and exacerbate the recession and stifle any chance of a quicker economic recovery. It will squeeze state budgets, make US businesses less competitive, and is estimated to have a price tag of $175 per American household per year.
Last night most Asian markets were up with China up 0.1%, Japan up 2.1%, and India down -0.5%.
Most European markets are down sharply today in a range of -0.7% to -1.4% half way through their session.
US futures are flat lined at the start today.
We are cherry picking in now and very very slowly so, for what we expect to be about two months.
Over the next two months we expect to see a stock market sell-off of about 26% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. But we expect to see a divergence in commodities vs. the stock market as the adverse effects of the FED inflationary policy kicks in later this year. That may be the low point this year.
While billionaire Warren Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond.” Buffett said the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.”
The Standard & Poor’s 500 Index will probably gain in three-quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said to his company’s shareholders.
Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington.
Yesterday started with a bull trap and a short squeeze for timid hedge funds to wring out both the arrogant bulls and the timid bears. Again it was on low volume which means the market could easily plummet to new lows just the opposite we saw in the low volume bear market rally we experienced this spring.
The Federal Reserve sought to hide its involvement in Bank of America Corp's acquisition of Merrill Lynch as Merrill's financial condition worsened, the top Republican on the House Oversight and Government Reform Committee said on Wednesday. The Fed "engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," Representative Darrell Issa said in a statement released to Reuters. This is obvious from testimony and documentaries broadcast last week. When CEO Lewis spoke up, democrat-socialists across the nation were given marching orders to vote to throw out Lewis with their union and state pension plan proxies. We told here how the Democrat CT. treasurer was part of that socialist power play when it happened.
Bernacke knows nothing! Yet he and a chorus of Democrat-Socialists conspired to destroy CEO Lewis of BOA and everyone knows it except for Mad Money's Cramer of the GE/MSNBC/Pravda/KGB conglomerate. The GE/MSNBC/Pravda/KGB conglomerate is a self-serving and anti free enterprise monopoly and by far the biggest beneficiary of US government contracts. GE uses its substantial MSNBC propaganda machine clout to undermine critical USA defense programs by undermining important defense products that do not profit GE. They lobby against the Lockheed stealth Raptor F22, the Boeing C17, the Lockheed JSF and other defense systems for which the GE/MSNBC/Pravda/KGB conglomerate has limited profit potential. The GE/MSNBC/Pravda/KGB conglomerate is well known to have lousy arrogant management and would have been broken up if it were not for the fact that MSNBC protects GE and does such a good job destroying capable people and competitive US defense programs. But that is the definition of socialism. Socialism is the system where incompetent people with political power run rough shod over free enterprise and their competition. It is business management by political slimy slugs and arrogant lice. I'm sorry if I am beginning to sound like a Brit., but the British do have a good vocabulary for describing socialist leaders.
Market Outlook
The very light market volume on market advances indicates the market has not stopped going south. We gave you a countdown and it has been six business days since we predicted the bear market rally had ended. Now is the time to begin to cherry pick into the market as individual stocks give up their recent bear market rally gains.
The herd of hedge funds likes to follow the lead analyst's sell recommendation with few exceptions because the lead analyst did such a good job on the up side. So they get out en masse and the stock plummets to near its old low. That is the time to cherry pick back into the market. There is greater than a 50% chance that companies with better management will disappoint the analysts first because they tend to be more honest. They get clobbered for refusing to make the rosy forecasts the Key analyst needs to have the market prove the key analyst is correct. So the first stocks to fall are the great stock buys when the hedge funds finishing dumping on them and the key analyst thinks their management has been sufficiently punished for refusing to lie.
Once the avalanche begins it rumbles through most of the rest of the market providing investors with a continuous stream of buying opportunities. Remember to buy after the stock goes down, not now just because we have a buying opportunity. We should be able to buy stocks after at least a 50% retracement of their recent advance. If a stock rose 30% in the last rally we should be able to buy it 10% to 25% lower than its recent high. We plan to give a count down again to the time when it would be wise to start selling and taking profits cherry picking out of the market.
Bonds will be a very bad investment when inflation kicks in this year.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. We continue to have zero confidence in all socialist economies. The risk of enormous investment/currency losses in emerging economies is now high.
The dollar is strong now because the US printing press money is being absorbed by the America’s bank deleveraging process. But when that ends and American wealth falls under heavy democrat-socialist Obama taxation next year the dollar will likely fall.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are international socialists and plan to distribute America’s wealth around the world. The Al Gore environmental farce is part of the socialist world wealth redistribution plan. Internationalist socialism is another name for failed communism. "Cap and trade" will prove to be the biggest con job of this decade. We can hardly wait for them to trade the derivatives of the hoax. The Waxman-Markey cap and trade bill will prolong and exacerbate the recession and stifle any chance of a quicker economic recovery. It will squeeze state budgets, make US businesses less competitive, and is estimated to have a price tag of $175 per American household per year.
Last night most Asian markets were up with China up 0.1%, Japan up 2.1%, and India down -0.5%.
Most European markets are down sharply today in a range of -0.7% to -1.4% half way through their session.
US futures are flat lined at the start today.
We are cherry picking in now and very very slowly so, for what we expect to be about two months.
Over the next two months we expect to see a stock market sell-off of about 26% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. But we expect to see a divergence in commodities vs. the stock market as the adverse effects of the FED inflationary policy kicks in later this year. That may be the low point this year.
Wednesday, June 24, 2009
Stock and Bond Markets are headed lower but commodities and real estate could begin to recover soon.
Market forces June 24
The Obama Administration and Bernacke have no idea what they are doing. They have forgotten about the economic money multiplier effect that decreases as you increase reserve requirements. The multiplier is inversely related to the reserve requirement while the velocity factor is proportional to the rate that money exchanges hands. They are completely different factors that I will explain at a future date. Be it sufficient to say that if Obama continues the current policy then gold and commodity prices will be a good investment this year and the dollar may come under attack.
Market Outlook
The lighter market volume on market advances indicates the market has not stopped going south. Corporate insider selling is high indicating that corporate insiders themselves find their stocks are still overpriced and that they have more bad news to report.
Bonds will be a very bad choice when inflation kicks in this year.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. Real estate & commodities are probably the best investment at this time. Nationwide real estate pieces are down on average about 33% from the peak.
We continue to have zero confidence in all socialist markets. The risk of enormous investment/currency losses in emerging economies is now very high.
The dollar is strong now because the money is absorbed by the America’s bank deleveraging process. But when that ends and American wealth falls under heavy democrat-socialist Obama taxation the dollar will likely collapse just as all socialist currencies have collapsed on multiple occasions. Socialists have no pride or integrity and if they remain in power they will no doubt embarrass America by defaulting on American debt.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are international socialists and plan to distribute America’s wealth around the world. The Al Gore environmental farce is part of the socialist world wealth redistribution plan. Internationalist socialism is another name for failed communism.
Last night most Asian markets were up with China up 1%, Japan up 0.4%, and India up 0.7%.
Most European markets are up today in a range of 0.3% to 1.2% half way through their session.
US futures are up about 0.2% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next two months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. But soon we expect to se a divergence in commodities vs. the stock market as the adverse effects of the FED inflationary policy kicks in.
The Obama Administration and Bernacke have no idea what they are doing. They have forgotten about the economic money multiplier effect that decreases as you increase reserve requirements. The multiplier is inversely related to the reserve requirement while the velocity factor is proportional to the rate that money exchanges hands. They are completely different factors that I will explain at a future date. Be it sufficient to say that if Obama continues the current policy then gold and commodity prices will be a good investment this year and the dollar may come under attack.
Market Outlook
The lighter market volume on market advances indicates the market has not stopped going south. Corporate insider selling is high indicating that corporate insiders themselves find their stocks are still overpriced and that they have more bad news to report.
Bonds will be a very bad choice when inflation kicks in this year.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. Real estate & commodities are probably the best investment at this time. Nationwide real estate pieces are down on average about 33% from the peak.
We continue to have zero confidence in all socialist markets. The risk of enormous investment/currency losses in emerging economies is now very high.
The dollar is strong now because the money is absorbed by the America’s bank deleveraging process. But when that ends and American wealth falls under heavy democrat-socialist Obama taxation the dollar will likely collapse just as all socialist currencies have collapsed on multiple occasions. Socialists have no pride or integrity and if they remain in power they will no doubt embarrass America by defaulting on American debt.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are international socialists and plan to distribute America’s wealth around the world. The Al Gore environmental farce is part of the socialist world wealth redistribution plan. Internationalist socialism is another name for failed communism.
Last night most Asian markets were up with China up 1%, Japan up 0.4%, and India up 0.7%.
Most European markets are up today in a range of 0.3% to 1.2% half way through their session.
US futures are up about 0.2% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next two months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. But soon we expect to se a divergence in commodities vs. the stock market as the adverse effects of the FED inflationary policy kicks in.
Tuesday, June 23, 2009
GE should and could soon be broken up.
GE/MSNBC/Pravda is now a political sycophant corporation dependent on the continuous adulation of the Democrat-Socialists apparently for favors and future government contracts. Part of the problem is that GE uses its financial division to boost sales and that division is now open to regulation as a bank. In truth it should be regulated because the system GE uses has caused not just GE (in 2008) but CISCO (in 2000) and many others to do things that bank regulators might consider fraudulent. In fact a president of Singer once was ousted for booking potential sales as real sales when in fact many buyers paid nothing and defaulted because the sales were a virtually product give-away. What happens is:
1) GE begins legitimately by facilitating a sale with a legitimate loan.
2) Next it essentially gives the products away with a loan or lease with generous rates and a balloon type payback
3) Finally before the financial division goes bust it can require little or no money down perhaps even give a cash rebate and at that point it is not distinguishable from the subprime scandal where unqualified buyers are systematically approved. With a huge conglomerate like GE, GE is now too big to fail.
But GE goes one step further. They became a GE/MSNBC/PRAVDA type political sycophant heaping political praise on the federal government. Broadcast praise is valuable and it can be said that GE can now buy and bribe with priceless political MSNBC political favors and free political advertising possibly violating election contribution and disclosure laws.
GE is now rife with questionable management, rotting political and economic problems and with a federal administration that suggests busting up financials like them. Have them divest MSNBC at the same time.
Market forces June 22
We went out on the limb and gave a countdown to the end of the rally and our timing was perfect this time but it took until yesterday for Wall Street to concede we were in a bear market rally not a new bull market. Even Kudlow on MSNBC said last night that Socialism would destroy the economy and that there was hope that Democrats in congress would join Republicans and kill all of President Obama's Socialist proposals. Socialism crushes liberty and free enterprise and there is only one country left in the world, America, where liberty and free enterprise still exist together.
President Obama says he believes in the "free market" but so what? The communist Chinese and most Ayatollahs and even Osama does too. Free markets even existed among cave dwellers long before liberty and free enterprise unshackled the human mind.
Socialism is a powerful negative market force that eventually causes economies to spiral down into a chronic permanent depression and rule by political tyrants. Socialism is the primary market force at work in Obama's administration. As long as President Obama wants to nationalize anything his administration will keep the world's economy in a death spiral because the American engine of "free enterprise" and personal liberty is being bleed to death under the Obama administration.
Market Outlook
The light market volume continues and it means that the stock market is destabilized and can be manipulated easily. The market is unstable because even a low volume of selling now drives the market much lower and very rapidly. Lenin and other great socialists created market crises because they are excellent opportunities for socialist dictators to expropriate private wealth. But Wall Street and Congress are now beginning to recognize that the far-left Obama socialists are destroying the American economy that has become the engine of worldwide innovation and productivity. Whatever the hand of socialism touches dies or becomes chronically diseased.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are world socialists and plan to distribute America’s wealth around the world. The "world socialists" in other times preferred to be called "Communists."
Soon we predict that the "Al Gore" farce will become recognized as another socialist instrument of world economic control. Last week the University of Edinburgh reported that since the ignoramus "Al Gore" or "humanoid caused global warming" theory came into existence that many scientific research reports are no longer required to use science. A single Polar bear's death was projected as the death of the entire species. Al Gore and Michael Moore are now the greatest "cinema" scientists the socialists have produced to date.
Last night most Asian markets were down with China down -0.2%, Japan down -2.8%, and Hong Kong down -2.9%, South Korea down -2.9%, and India unchanged. Red China's and Socialist India's market reporting can no longer be taken as even resembling truth. They appear to still be over-inflated equities bubbles. In the USA we would have expected more than 50% bankruptcies of the new companies by now. The socialists, communists, and religious leaders cannot be relied upon in economic reporting. They are dangerouse investments to be in at this time.
Most European markets are flat today in a range of up 0% to 0.5% half way through their session.
US futures are flat at about +0.1% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible. We expect to see a stock market sell-off of about 25% as investors realize this Obama crisis is caused by Obama's socialism. But when American socialist threats end you would not want to be caught selling America short.
1) GE begins legitimately by facilitating a sale with a legitimate loan.
2) Next it essentially gives the products away with a loan or lease with generous rates and a balloon type payback
3) Finally before the financial division goes bust it can require little or no money down perhaps even give a cash rebate and at that point it is not distinguishable from the subprime scandal where unqualified buyers are systematically approved. With a huge conglomerate like GE, GE is now too big to fail.
But GE goes one step further. They became a GE/MSNBC/PRAVDA type political sycophant heaping political praise on the federal government. Broadcast praise is valuable and it can be said that GE can now buy and bribe with priceless political MSNBC political favors and free political advertising possibly violating election contribution and disclosure laws.
GE is now rife with questionable management, rotting political and economic problems and with a federal administration that suggests busting up financials like them. Have them divest MSNBC at the same time.
Market forces June 22
We went out on the limb and gave a countdown to the end of the rally and our timing was perfect this time but it took until yesterday for Wall Street to concede we were in a bear market rally not a new bull market. Even Kudlow on MSNBC said last night that Socialism would destroy the economy and that there was hope that Democrats in congress would join Republicans and kill all of President Obama's Socialist proposals. Socialism crushes liberty and free enterprise and there is only one country left in the world, America, where liberty and free enterprise still exist together.
President Obama says he believes in the "free market" but so what? The communist Chinese and most Ayatollahs and even Osama does too. Free markets even existed among cave dwellers long before liberty and free enterprise unshackled the human mind.
Socialism is a powerful negative market force that eventually causes economies to spiral down into a chronic permanent depression and rule by political tyrants. Socialism is the primary market force at work in Obama's administration. As long as President Obama wants to nationalize anything his administration will keep the world's economy in a death spiral because the American engine of "free enterprise" and personal liberty is being bleed to death under the Obama administration.
Market Outlook
The light market volume continues and it means that the stock market is destabilized and can be manipulated easily. The market is unstable because even a low volume of selling now drives the market much lower and very rapidly. Lenin and other great socialists created market crises because they are excellent opportunities for socialist dictators to expropriate private wealth. But Wall Street and Congress are now beginning to recognize that the far-left Obama socialists are destroying the American economy that has become the engine of worldwide innovation and productivity. Whatever the hand of socialism touches dies or becomes chronically diseased.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are world socialists and plan to distribute America’s wealth around the world. The "world socialists" in other times preferred to be called "Communists."
Soon we predict that the "Al Gore" farce will become recognized as another socialist instrument of world economic control. Last week the University of Edinburgh reported that since the ignoramus "Al Gore" or "humanoid caused global warming" theory came into existence that many scientific research reports are no longer required to use science. A single Polar bear's death was projected as the death of the entire species. Al Gore and Michael Moore are now the greatest "cinema" scientists the socialists have produced to date.
Last night most Asian markets were down with China down -0.2%, Japan down -2.8%, and Hong Kong down -2.9%, South Korea down -2.9%, and India unchanged. Red China's and Socialist India's market reporting can no longer be taken as even resembling truth. They appear to still be over-inflated equities bubbles. In the USA we would have expected more than 50% bankruptcies of the new companies by now. The socialists, communists, and religious leaders cannot be relied upon in economic reporting. They are dangerouse investments to be in at this time.
Most European markets are flat today in a range of up 0% to 0.5% half way through their session.
US futures are flat at about +0.1% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible. We expect to see a stock market sell-off of about 25% as investors realize this Obama crisis is caused by Obama's socialism. But when American socialist threats end you would not want to be caught selling America short.
Monday, June 22, 2009
Socialism is the primary market force at work in America today.
Corruption, incompetence, expropriation of business wealth, enslavement of the competent, central planning, central control, crisis creation, pollution, more lies, more murder and destruction, finally starvation... that is a synopsis of the post WWII European world under the influence of true eastern socialism. That was clearly observed despite no public scrutiny of the corrupt and often evil socialist leaders. Under socialism the incentive was to be an active socialist political leader and to hold a government job.
The post WWII European world under the influence of American western capitalism has been expanded human rights, prosperity, a cleaner environment, an explosion in computer technology, higher productivity, shrinking socialism/unions, shrinking world corruption... all with high public scrutiny of leaders.
Market forces June 22
World instability under current expanding world socialism causes an increasing risk to free capitalism and markets. The Great Depression was caused by the popularization of socialist and communist policies in the 1930s. That led to the rise of Stalin, Hitler and other socialists who squandered former accumulated national wealth to conquer and steal the wealth of neighboring nations. They had to conquer and expropriate the wealth of others in order to survive. When their murderous expansion and exploitation of other people’s accumulated wealth was stopped... the socialists rapidly collapsed.
The current recession has been lead by the socialists too. Once the democrat socialist’s have expropriated the maximum from energetic, productive and competent Americans and redistributed it all to the people who vote for socialism there will be no incentive for energetic, productive and competent Americans to continue. Under Democrat Socialism the incentive is to become politicians and/or to hold a high paying government jobs. The socialist always give their politicians and federal employees the best health and job benefits… not available to other citizens.
Socialism is a powerful negative market force that eventually caused all eastern economies to spiral down into a chronic permanent depression ruled by political tyranny. Socialism is the primary market force at work in America today. Huxley’s book, “1984” applies today to Democrat Socialist manufactured crises. This past week the Democrat Socialists have been spending $millions nationally saying they oppose performance taxes on radio music and we should call our Democrat-Socialist Congressmen about it. The truth is only the Democrat Socialists could even think up such a tax on music.
Market Outlook
The light market volume means that the stock market is destabilized and can be manipulated easily. The market is unstable because even a low volume of selling could now drive the market much lower and very rapidly. Lenin and other great socialists created market crises because they are excellent opportunities for socialist dictators to expropriate private wealth. American socialist government recent intervention at the Stanford investment firm in Texas caused a $5billion evaporation of private wealth on top of the $1billion the FED originally said was actually missing. Socialist government intervention into any honest private company means instant destruction of capital. Criminals like Bernie Madoff can shield stolen money for use in their defense but real business entrepreneurs have their money invested and their investments require active/real management which ends the moment the socialists invade their office and shut them down. That is how Lenin expropriated the wealth of all the Russian banks during their Communist Revolution. The fact that the FED caused $5billion loss at Sanford probably means they were probably not a Ponzi scheme after all but were honest active investors. Socialists think all great individual wealth is a sign of inequity or criminality. However in free societies great individual wealth is usually a sign of industriousness, creativity, and competency.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. Real estate is probably the best investment at this time. Bonds are the most recent victim of expanding American socialism and debt. The Soviets and Nazis were big spenders too and defaulted on everything as interest rates rose.
We have zero confidence in all socialist markets. The risk of enormous investment/currency losses in emerging economies is now very high. The risk of a panic and collapse being orchestrated by Red China, Russia, and N. Korea is now very high. The dollar is strong now but once American wealth falls under heavy socialist taxation the dollar will collapse just as all socialist currencies have collapsed on multiple occasions.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are world socialists and plan to distribute America’s wealth around the world.
Last night most Asian markets were flat with China up 0.5%, Japan up 0.4%, and India down -1.4%.
Most European markets are down sharply today in a range of -0.8% to -1.8% half way through their session.
US futures are down about 0.5% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next two months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
China does not want its population even thinking about the massive drop in their national income as China's exports continue to plummet so we can expect world wide unrest to be the socialist approach to keep citizens from thinking about the destruction of wealth caused by current socialist tyrants.
President Obama has shown Americans just how easy it is to nationalize an industry. First he loans them some government money, then rules them like a dictator, then bankrupts them, and finally takes majority ownership for the government. Then they can appoint their socialist bureaucrat friends as the managers.
The post WWII European world under the influence of American western capitalism has been expanded human rights, prosperity, a cleaner environment, an explosion in computer technology, higher productivity, shrinking socialism/unions, shrinking world corruption... all with high public scrutiny of leaders.
Market forces June 22
World instability under current expanding world socialism causes an increasing risk to free capitalism and markets. The Great Depression was caused by the popularization of socialist and communist policies in the 1930s. That led to the rise of Stalin, Hitler and other socialists who squandered former accumulated national wealth to conquer and steal the wealth of neighboring nations. They had to conquer and expropriate the wealth of others in order to survive. When their murderous expansion and exploitation of other people’s accumulated wealth was stopped... the socialists rapidly collapsed.
The current recession has been lead by the socialists too. Once the democrat socialist’s have expropriated the maximum from energetic, productive and competent Americans and redistributed it all to the people who vote for socialism there will be no incentive for energetic, productive and competent Americans to continue. Under Democrat Socialism the incentive is to become politicians and/or to hold a high paying government jobs. The socialist always give their politicians and federal employees the best health and job benefits… not available to other citizens.
Socialism is a powerful negative market force that eventually caused all eastern economies to spiral down into a chronic permanent depression ruled by political tyranny. Socialism is the primary market force at work in America today. Huxley’s book, “1984” applies today to Democrat Socialist manufactured crises. This past week the Democrat Socialists have been spending $millions nationally saying they oppose performance taxes on radio music and we should call our Democrat-Socialist Congressmen about it. The truth is only the Democrat Socialists could even think up such a tax on music.
Market Outlook
The light market volume means that the stock market is destabilized and can be manipulated easily. The market is unstable because even a low volume of selling could now drive the market much lower and very rapidly. Lenin and other great socialists created market crises because they are excellent opportunities for socialist dictators to expropriate private wealth. American socialist government recent intervention at the Stanford investment firm in Texas caused a $5billion evaporation of private wealth on top of the $1billion the FED originally said was actually missing. Socialist government intervention into any honest private company means instant destruction of capital. Criminals like Bernie Madoff can shield stolen money for use in their defense but real business entrepreneurs have their money invested and their investments require active/real management which ends the moment the socialists invade their office and shut them down. That is how Lenin expropriated the wealth of all the Russian banks during their Communist Revolution. The fact that the FED caused $5billion loss at Sanford probably means they were probably not a Ponzi scheme after all but were honest active investors. Socialists think all great individual wealth is a sign of inequity or criminality. However in free societies great individual wealth is usually a sign of industriousness, creativity, and competency.
The world is becoming politically and economically unstable under President Obama similar to the world in the 1930s. Real estate is probably the best investment at this time. Bonds are the most recent victim of expanding American socialism and debt. The Soviets and Nazis were big spenders too and defaulted on everything as interest rates rose.
We have zero confidence in all socialist markets. The risk of enormous investment/currency losses in emerging economies is now very high. The risk of a panic and collapse being orchestrated by Red China, Russia, and N. Korea is now very high. The dollar is strong now but once American wealth falls under heavy socialist taxation the dollar will collapse just as all socialist currencies have collapsed on multiple occasions.
American socialists are not just interested in redistributing American wealth to other Americans. No, they are world socialists and plan to distribute America’s wealth around the world.
Last night most Asian markets were flat with China up 0.5%, Japan up 0.4%, and India down -1.4%.
Most European markets are down sharply today in a range of -0.8% to -1.8% half way through their session.
US futures are down about 0.5% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings ten years from now. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next two months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
China does not want its population even thinking about the massive drop in their national income as China's exports continue to plummet so we can expect world wide unrest to be the socialist approach to keep citizens from thinking about the destruction of wealth caused by current socialist tyrants.
President Obama has shown Americans just how easy it is to nationalize an industry. First he loans them some government money, then rules them like a dictator, then bankrupts them, and finally takes majority ownership for the government. Then they can appoint their socialist bureaucrat friends as the managers.
Friday, June 19, 2009
Corruption? That is why politicians and political hacks should not be involved in US business.
Socialist dictators historically try to destroy their opponents. Opponent is another word for competition. Socialists do not believe in competition because that works in favor of smart competent people. The Obama administration hates all competition. They appointed a recent college graduate and an old-timer from the AT&T telephone company to run GM to be sure their socialist-democrat union voters get the taxpayer bailout so the union continues to vote for socialism in the future. That is called the redistribution of wealth from the competent workers, and competitive businessmen and entrepreneurs to the folks who socialists need to vote and wave red flags at demonstrations. Also those same socialist political hacks show up at the rallies of their opponents to shout racist remarks so that GE/MSNBC/Pravda can claim the American opponents of national socialism are racist. Lenin and Hitler were experts at those tactics. Mao and Stalin were more direct and just shot their opponents in the head.
GE of the famous GE/MSNBC/Pravda socialist media machine seems to be in line now for $Billions for development of US nuclear alternative energy six months after Obama promised the environmentalists he would never allow nuclear power if they voted for him. Obama will start construction of seven new nuclear plants now. The current executives of GE are well known for their general incompetence. Perhaps the socialists plan to kill all nuclear plant construction with incompetent management wasting taxpayer money on incompetently built/dangerous socialist Chernobyl type facilities. The management of GE/MSNBC/Pravda perhaps would be the best choice the socialists could come up with for another major accident. After all, nuclear energy is the only sufficient source of CO2 free energy that could power the world for 1000 more years until fusion technology is available.
Market forces June 19
Political instability causes an increasing risk to free markets.
China is obviously desperate and using N. Korea as a diversion to unsettle world free capitalist nations. Russia is also now starting to get into this game with N. Korea. Both China and Russia are now paper dragons and their lunatic N. Korean partner gives them a way to threaten the west and possibly avoid retaliation. Clearly China and Russia are doing the best they can to create political/economic uncertainty and destabilize the free world. A major event such as N. Korea detonating a nuclear bomb in the midst of the US Pacific Fleet would probably qualify as their promised 1000 fold retaliation for the US boarding one N. Korean ship carrying such a weapon. Such a weapon could also be brought into the San Francisco harbor. This is the level of insanity the socialists are historically noted for: Stalin, Hitler, Mao, Breshnev, Mugabe, and etc.
Today the Wall Street Journal shows two Latvian socialists attempting to strange each other because they have to cut pensions 10%. In the USA today the corrupt socialists will allow a teacher to retire "disabled" on full pension after being kicked in the knee by a 5th grade student. We all know "disabled" people who ski while we work to pay taxes to support them. But the worst thing in America today are Obama's ACORN thugs who get free union/communist paid bus rides to protest on your lawn and threaten your family if you earn more than they want you to. President Obama has many millions of taxpayer "stimulus funds" to stimulate ACORN to intimidate vote checkers who check for vote fraud and federal authorities who are too active tracking down illegal immigrants.
Market Outlook
The recent market gains were on incredibly light volume. After declining on Wednesday on average volume the markets rose on Thursday with an 18% decline in volume. That is a sign of market weakness and market instability. The market is unstable because even a low volume of selling could now drive the market much lower and very rapidly.
America and the world are becoming politically and economically unstable under President Obama. The communists perceive Obama as weak and apologetic. Israel and many Americans perceive him as anti-Semitic and willing to see Israel cease to exist. He and Senator Dodd first raised the fear of a Great Depression and Dodd himself caused the run on the first American bank by revealing confidential Senate Banking Committee information. Then once elected Obama tried to minimize the fears of a depression that he himself started and he socialized several banks and the auto industry where he installed democrat-socialist management. President Obama apparently owns the management of GE, and MSNBC is now virtually the American version of the Russian Pravda propaganda machine. The worst is yet to come when the $trillions being handed out to corrupt political hacks and Obama friendly corporations destroy the American economy and throw America into potential chaos.
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high similar to the situation in Russia before the collapse of their market and currency. The risk of a panic and collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. This turmoil makes the dollar stronger and that makes the holders of US debt wealthier but hurts US exports. The dollar is strong in spite of the fastest inflation of our money supply in the history of the world because most Asian and European countries (indeed the Middle East as well) are mere economic shells compared to the economy of America. They prosper by selling to American consumers and the American balance of trade has already dropped sharply by more than 50%.
See: http://www.martincapital.com/chart-pgs/Pg_baltr.htm
Last night most Asian markets were up, China up 0.9%, S. Korea up 0.6%, Japan up 0.9%, and Hong Kong up 0.8%.
Most European markets after being flat yesterday are up today in a range of 0.1% to 1.6% half way through their session.
US futures are up about 0.5% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next three months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. China has nothing to fear with America owing them $800 billion. America has several $Trillion invested in China. Thus if Communist China launches the new five year plan and confiscates foreign investments, then the resulting world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility. China does not want its population thinking about the massive drop in national income as China's exports continue to plummet.
President Obama has shown Americans just how easy it is to nationalize an industry. First give them some government funds, then rule them like a dictator, then bankrupt them, and finally take 55% ownership for the USA. Then you can appoint you own socialist political hacks as the managers.
GE of the famous GE/MSNBC/Pravda socialist media machine seems to be in line now for $Billions for development of US nuclear alternative energy six months after Obama promised the environmentalists he would never allow nuclear power if they voted for him. Obama will start construction of seven new nuclear plants now. The current executives of GE are well known for their general incompetence. Perhaps the socialists plan to kill all nuclear plant construction with incompetent management wasting taxpayer money on incompetently built/dangerous socialist Chernobyl type facilities. The management of GE/MSNBC/Pravda perhaps would be the best choice the socialists could come up with for another major accident. After all, nuclear energy is the only sufficient source of CO2 free energy that could power the world for 1000 more years until fusion technology is available.
Market forces June 19
Political instability causes an increasing risk to free markets.
China is obviously desperate and using N. Korea as a diversion to unsettle world free capitalist nations. Russia is also now starting to get into this game with N. Korea. Both China and Russia are now paper dragons and their lunatic N. Korean partner gives them a way to threaten the west and possibly avoid retaliation. Clearly China and Russia are doing the best they can to create political/economic uncertainty and destabilize the free world. A major event such as N. Korea detonating a nuclear bomb in the midst of the US Pacific Fleet would probably qualify as their promised 1000 fold retaliation for the US boarding one N. Korean ship carrying such a weapon. Such a weapon could also be brought into the San Francisco harbor. This is the level of insanity the socialists are historically noted for: Stalin, Hitler, Mao, Breshnev, Mugabe, and etc.
Today the Wall Street Journal shows two Latvian socialists attempting to strange each other because they have to cut pensions 10%. In the USA today the corrupt socialists will allow a teacher to retire "disabled" on full pension after being kicked in the knee by a 5th grade student. We all know "disabled" people who ski while we work to pay taxes to support them. But the worst thing in America today are Obama's ACORN thugs who get free union/communist paid bus rides to protest on your lawn and threaten your family if you earn more than they want you to. President Obama has many millions of taxpayer "stimulus funds" to stimulate ACORN to intimidate vote checkers who check for vote fraud and federal authorities who are too active tracking down illegal immigrants.
Market Outlook
The recent market gains were on incredibly light volume. After declining on Wednesday on average volume the markets rose on Thursday with an 18% decline in volume. That is a sign of market weakness and market instability. The market is unstable because even a low volume of selling could now drive the market much lower and very rapidly.
America and the world are becoming politically and economically unstable under President Obama. The communists perceive Obama as weak and apologetic. Israel and many Americans perceive him as anti-Semitic and willing to see Israel cease to exist. He and Senator Dodd first raised the fear of a Great Depression and Dodd himself caused the run on the first American bank by revealing confidential Senate Banking Committee information. Then once elected Obama tried to minimize the fears of a depression that he himself started and he socialized several banks and the auto industry where he installed democrat-socialist management. President Obama apparently owns the management of GE, and MSNBC is now virtually the American version of the Russian Pravda propaganda machine. The worst is yet to come when the $trillions being handed out to corrupt political hacks and Obama friendly corporations destroy the American economy and throw America into potential chaos.
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high similar to the situation in Russia before the collapse of their market and currency. The risk of a panic and collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. This turmoil makes the dollar stronger and that makes the holders of US debt wealthier but hurts US exports. The dollar is strong in spite of the fastest inflation of our money supply in the history of the world because most Asian and European countries (indeed the Middle East as well) are mere economic shells compared to the economy of America. They prosper by selling to American consumers and the American balance of trade has already dropped sharply by more than 50%.
See: http://www.martincapital.com/chart-pgs/Pg_baltr.htm
Last night most Asian markets were up, China up 0.9%, S. Korea up 0.6%, Japan up 0.9%, and Hong Kong up 0.8%.
Most European markets after being flat yesterday are up today in a range of 0.1% to 1.6% half way through their session.
US futures are up about 0.5% today. We are on the sidelines now. It would be better to buy real estate now than to buy stocks at current prices based on their imaginary potential future earnings. Based on real earnings the S&P PE ratio is at an historic high and even a 50% decline is still possible.
Over the next three months we expect to see a stock market sell-off of about 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. China has nothing to fear with America owing them $800 billion. America has several $Trillion invested in China. Thus if Communist China launches the new five year plan and confiscates foreign investments, then the resulting world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility. China does not want its population thinking about the massive drop in national income as China's exports continue to plummet.
President Obama has shown Americans just how easy it is to nationalize an industry. First give them some government funds, then rule them like a dictator, then bankrupt them, and finally take 55% ownership for the USA. Then you can appoint you own socialist political hacks as the managers.
Thursday, June 18, 2009
Corrupt government? Why a 70% plunge in this stock?
Socialist dictators historically try to destroy their opponents. But how do they go about destroying Rush Limbaugh or FOX network in America? Well they first attacked them and tried to mock them but the opponent's ratings soared. Yesterday, the Wall Street Journal said the administration suddenly pounced on Zimax in May after seven years.
1) The administration discussed " fairness legislation" that would drive opponents out of business by requiring stupid socialists be given equal time. But that hasn't worked in the past because the socialist are given time slots when no one listens or else people listen just to find out how stupid the socialists really are. Usually the local socialists sound like high school dropouts giving advice on how to succeed in life.
2) So is the Obama administration now targeting the sponsors of libertarian and conservative programs; sponsors like Zicam? This May the Obama administration targeted one of the biggest sponsor, Zicam? Zicam stock plunged 70% yesterday. Certainly Stalin himself would be proud of this action. Under Stalin if you did not wave the little red flag enthusiastically you did not get promoted at your government job. If you were so bad that you did not show up at the rally to wave the flag at all, then you lost your government job altogether. Under "successful" socialism there is no private sector so losing your government job means you have no job at all!
3) Shame on the Obama administration! The next administration should investigate this apparent institutionalized corruption of power and throw the criminals in jail if it turns out this attack on sponsors of political opposition is not coincidental.
Market forces June 18
China is obviously desperate and using N. Korea as a diversion to unsettle world capitalism. Iran is in turmoil and seeking nuclear weapons. The Obama administration wants to break the Money Market "dollar" in September when the US government insurance of the Money Market funds expires. That will mean Money Market securities are no safer than mutual funds. But most 401 plans do not have the option of Treasuries so people's retirement funds are going to be at even higher risk.
Market Outlook
The countdown on the end of the "Mad Money" bull market rally is over and yesterday even Jim Cramer admitted that most people now say it could get much worse and it is Obama's fault once again. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the auto unions, indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of. China is using N. Korea to cause major diversionary crises and to protect China's recently accumulated foreign wealth by unleashing world wide deflationary forces as Communist China prepares to launch a new five year economic plan. China wants continued deflation because that makes their US loans more valuable. Mark Spitznagel says he however is building a new fund based on soaring inflation. Who will win?
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high. The risk of a collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. This turmoil makes the dollar stronger and that makes the holders of US debt wealthier and hurts US exports.
Last night most Asian markets were down sharply again. Jakarta down -3.7%, Hong Kong down -1.7%, S. Korea down -1.1%, Japan down -1.4%, and India down -1.8%.
Most European markets are flat today after being down sharply yesterday in a range of -1.6% to -2.6%.
US futures were lower today. Over the next three months we could see a stock market sell-off of 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. If Communist China launches their new five year plan and confiscates all foreign investments as is now indicated by their turbulent diversions, then world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility. China does not want its population thinking about the massive drop in national income as China's exports continue to plummet.
1) The administration discussed " fairness legislation" that would drive opponents out of business by requiring stupid socialists be given equal time. But that hasn't worked in the past because the socialist are given time slots when no one listens or else people listen just to find out how stupid the socialists really are. Usually the local socialists sound like high school dropouts giving advice on how to succeed in life.
2) So is the Obama administration now targeting the sponsors of libertarian and conservative programs; sponsors like Zicam? This May the Obama administration targeted one of the biggest sponsor, Zicam? Zicam stock plunged 70% yesterday. Certainly Stalin himself would be proud of this action. Under Stalin if you did not wave the little red flag enthusiastically you did not get promoted at your government job. If you were so bad that you did not show up at the rally to wave the flag at all, then you lost your government job altogether. Under "successful" socialism there is no private sector so losing your government job means you have no job at all!
3) Shame on the Obama administration! The next administration should investigate this apparent institutionalized corruption of power and throw the criminals in jail if it turns out this attack on sponsors of political opposition is not coincidental.
Market forces June 18
China is obviously desperate and using N. Korea as a diversion to unsettle world capitalism. Iran is in turmoil and seeking nuclear weapons. The Obama administration wants to break the Money Market "dollar" in September when the US government insurance of the Money Market funds expires. That will mean Money Market securities are no safer than mutual funds. But most 401 plans do not have the option of Treasuries so people's retirement funds are going to be at even higher risk.
Market Outlook
The countdown on the end of the "Mad Money" bull market rally is over and yesterday even Jim Cramer admitted that most people now say it could get much worse and it is Obama's fault once again. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the auto unions, indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of. China is using N. Korea to cause major diversionary crises and to protect China's recently accumulated foreign wealth by unleashing world wide deflationary forces as Communist China prepares to launch a new five year economic plan. China wants continued deflation because that makes their US loans more valuable. Mark Spitznagel says he however is building a new fund based on soaring inflation. Who will win?
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high. The risk of a collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. This turmoil makes the dollar stronger and that makes the holders of US debt wealthier and hurts US exports.
Last night most Asian markets were down sharply again. Jakarta down -3.7%, Hong Kong down -1.7%, S. Korea down -1.1%, Japan down -1.4%, and India down -1.8%.
Most European markets are flat today after being down sharply yesterday in a range of -1.6% to -2.6%.
US futures were lower today. Over the next three months we could see a stock market sell-off of 27% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. If Communist China launches their new five year plan and confiscates all foreign investments as is now indicated by their turbulent diversions, then world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility. China does not want its population thinking about the massive drop in national income as China's exports continue to plummet.
Wednesday, June 17, 2009
Communist China in danger of economic collapse
China is obviously desperate and using N. Korea as a diversion.
North Korea just warned that it would launch a "merciless" attack if provoked by the US and its allies, hours after President Barack Obama described the state's nuclear and missile programs as a "grave threat" to the world. North Korea is a puppet of China and China probably had Jong-il put to death last week. It is also highly likely that the nuclear test recently staged in N. Korea was actually a Chinese weapon detonated by the Chinese because China pulls the strings and does not tolerate unstable neighbors. However, being able to appear to contain the raving lunatics of N. Korea makes the lunatic socialists in China appear pragmatic and wise in comparison.
Yesterday, North Korea denied Japanese media reports that Jong-un had flown to Beijing earlier this month to meet the Chinese president, Hu Jintao and get instructions. China is at serious risk of imploding now as Russia did after experimenting with capitalism and therefore they are using N. Korea to divert attention while they make preparations for a crack down and massive default/confiscation of foreign investments. The pre-text for the confiscation has to be believable and accepted by American Democrat-Socialists. China's exports have collapsed but China's demand for commodities has been artificially maintained to reap a financial buffer and recover cash for the "free lunches" they served to garner western currencies. A "great Depression" in America and Europe is now economically desirable to China to reduce the risk of a revolution in China by keeping the value of the US dollar high and using western currencies to carry China into another five-year plan.
Using their N. Korean puppet, Communist China could now have N. Korea launch a small nuclear attack in the vicinity of S. Korea to obliterate any attention being given to the clamping down on economic freedom and default/confiscation of foreign investments in Communist China.
Warning: Recession (at best) to continue flat until 2010 elections:
A top Federal Reserve official warned not to take recent gains as proof the U.S. economy is on the verge of a strong recovery. Federal Reserve Governor Kevin Warsh said, "The panic's hasty retreat should not be confused with robust recovery. The rather indiscriminate bounce off the may be more indicative of a one-time reset, which may or may not be complete." "The global economy runs the risk of being mired in a period of slower growth for several years to come."
Warsh said private demand; the true arbiter of economic performance, "remains weak" even while government spending has surged. He said, "I would expect business capital expenditures and consumer spending to continue to disappoint for the next several quarters."
Looking forward, the Fed "will not ... compromise price stability" by monetising large U.S. budget deficits, he said, warning that "higher interest rates were a risk." if fiscal authorities are unable to demonstrate a credible return to sustainable budgets."
Warsh did not foresee the fast end to the recession that many economists now anticipate, but looked for the huge fiscal and monetary stimulus to finally kick in before the 2010 November elections.
Market forces June 17
Market Outlook
We continue the countdown and go far out on the limb to estimate that the current market rally has at most one business day of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of. China is using N. Korea to prepare the world for a major diversionary crisis and to protect China's recently accumulated foreign wealth by unleashing world wide deflationary forces as Communist China prepares to launch a new five year economic plan.
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high. The risk of a collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. It is unlikely that N. Korea detonated a nuclear weapon but much more likely Communist China detonated a weapon to increase the world crisis to diminish/hide the perceived threat of what China will be doing next.
Last night most Asian markets were down again. China was up 1.2%, Hong Kong down -0.5%, S. Korea down -0.6%, and India down -2.9%.
European markets are down sharply today in a range of -0.6% to -2.6% mid way through their day.
US futures indicate the American markets will be starting slightly lower today. Over the next three months we could see a sell-off of 28% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. If Communist China launches their new five year plan and confiscates all foreign investments as is now indicated by their nuclear diversion and execution of the N. Korean dictator last week then world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility.
North Korea just warned that it would launch a "merciless" attack if provoked by the US and its allies, hours after President Barack Obama described the state's nuclear and missile programs as a "grave threat" to the world. North Korea is a puppet of China and China probably had Jong-il put to death last week. It is also highly likely that the nuclear test recently staged in N. Korea was actually a Chinese weapon detonated by the Chinese because China pulls the strings and does not tolerate unstable neighbors. However, being able to appear to contain the raving lunatics of N. Korea makes the lunatic socialists in China appear pragmatic and wise in comparison.
Yesterday, North Korea denied Japanese media reports that Jong-un had flown to Beijing earlier this month to meet the Chinese president, Hu Jintao and get instructions. China is at serious risk of imploding now as Russia did after experimenting with capitalism and therefore they are using N. Korea to divert attention while they make preparations for a crack down and massive default/confiscation of foreign investments. The pre-text for the confiscation has to be believable and accepted by American Democrat-Socialists. China's exports have collapsed but China's demand for commodities has been artificially maintained to reap a financial buffer and recover cash for the "free lunches" they served to garner western currencies. A "great Depression" in America and Europe is now economically desirable to China to reduce the risk of a revolution in China by keeping the value of the US dollar high and using western currencies to carry China into another five-year plan.
Using their N. Korean puppet, Communist China could now have N. Korea launch a small nuclear attack in the vicinity of S. Korea to obliterate any attention being given to the clamping down on economic freedom and default/confiscation of foreign investments in Communist China.
Warning: Recession (at best) to continue flat until 2010 elections:
A top Federal Reserve official warned not to take recent gains as proof the U.S. economy is on the verge of a strong recovery. Federal Reserve Governor Kevin Warsh said, "The panic's hasty retreat should not be confused with robust recovery. The rather indiscriminate bounce off the may be more indicative of a one-time reset, which may or may not be complete." "The global economy runs the risk of being mired in a period of slower growth for several years to come."
Warsh said private demand; the true arbiter of economic performance, "remains weak" even while government spending has surged. He said, "I would expect business capital expenditures and consumer spending to continue to disappoint for the next several quarters."
Looking forward, the Fed "will not ... compromise price stability" by monetising large U.S. budget deficits, he said, warning that "higher interest rates were a risk." if fiscal authorities are unable to demonstrate a credible return to sustainable budgets."
Warsh did not foresee the fast end to the recession that many economists now anticipate, but looked for the huge fiscal and monetary stimulus to finally kick in before the 2010 November elections.
Market forces June 17
Market Outlook
We continue the countdown and go far out on the limb to estimate that the current market rally has at most one business day of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of. China is using N. Korea to prepare the world for a major diversionary crisis and to protect China's recently accumulated foreign wealth by unleashing world wide deflationary forces as Communist China prepares to launch a new five year economic plan.
We now have zero confidence in Red China, India, or other emerging socialist markets. The risk of enormous investment losses in emerging economies is now very high. The risk of a collapse in western stock markets being orchestrated by Red China through N. Korea is now very high. It is unlikely that N. Korea detonated a nuclear weapon but much more likely Communist China detonated a weapon to increase the world crisis to diminish/hide the perceived threat of what China will be doing next.
Last night most Asian markets were down again. China was up 1.2%, Hong Kong down -0.5%, S. Korea down -0.6%, and India down -2.9%.
European markets are down sharply today in a range of -0.6% to -2.6% mid way through their day.
US futures indicate the American markets will be starting slightly lower today. Over the next three months we could see a sell-off of 28% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years. If Communist China launches their new five year plan and confiscates all foreign investments as is now indicated by their nuclear diversion and execution of the N. Korean dictator last week then world wide deflation would protect China's wealth and China would indeed appear the wisest leader of the world and maintain their domestic tranquility.
Tuesday, June 16, 2009
EU job losses accelerated to the highest rate on record
Warning
This was a red-flag warning about the broader stock market from the folks at the S&A Digest, which they issued when the S&P exceeded 940 last week.
"The combination of a market rally and rampant new share issuance from issuers whose future isn't terribly bright reminds me of 1999 and early 2000. That's when the NASDAQ soared from about 2,500 to a peak of just over 5,000, and IPOs were popping up everywhere like stretch marks on a fat man at a pie-eating contest. Back then, nobody thought stocks were risky, and hot tips oozed from every cabby, bartender, and shoeshine boy. No one knew for sure why the tech stocks and dot-com stocks were doing so well, but who cared, as long as you owned them and they kept going up, up and away. Well, maybe it's not exactly like the tech bubble, since IPOs aren't the hot ticket today. But new equity is nonetheless being printed at a record pace... According to a recent Bloomberg story, more than 150 companies raised $82.2 billion in new equity last quarter – a faster pace of equity issuance than at the height of the equity bubble in 2000."
Market forces June 16
MSNBC/GE/Pravda bull market theories have collapsed
The recent past rally was based on the perception that America was recovering later this year and the world economies of Asia and Europe were stronger. Consequently by definition the American market was perceived as undervalued and the dollar was perceived overvalued. Those were all erroneous MSNBC/Pravda type perceptions and so the dollar declined because European currencies seemed like a better place for countries to hold reserves. That is at least what China and Russia were saying even early last week. That caused entertainers like Jim Cramer to conclude that oil and copper demand were moving up due to the growth of emerging markets such as China not because the dollar was just declining in value due to the belief that the EURO was better. That theory was wrong but the rising oil and commodity prices nevertheless reinforced the false theory that the economy was recovering because demand was supposedly increasing for commodities. That reinforced the false theory that the emerging markets were driving the recovery. It was a nice theory while it lasted. If that theory was true then logically the US currency should and did weaken and US inflation could be coming back soon. That lead to threats by China and Russia that they would abandon the dollar as a reserve currency. But this theory fell apart as the economic contraction in Germany and other major exporters became apparent. Clearly China has to be a living economic lie because they must be contracting the most because they are the most export dependent.
News
U.S. stocks and commodities fell sharply Monday, hurt by the following weak economic signs. The Fed buys Treasurys to help keep rates low, but paradoxically is now pushing rates higher. The New York region manufacturing sales decline is accelerating. Homebuilder confidence in U.S. declined again in the NAHB market index. The Dollar suddenly has no rival as world currency and the consequent decline in commodities shows the previous increase in oil and copper prices was not due to emerging market demand but the irrational decline in the dollar. The recovery of the dollar now hurts the recovery of US exports.
Ecuador defaulted on $3.2 billion of debt six months ago and then repurchased the bonds at less than 40 cents on the dollar.
The Dow Jones Industrial Average, which last week tiptoed into positive territory for the year traded down 2% yesterday. All 30 of its components fell. Commodities are now stuck in a range just like stocks in a secular bear market with cyclical rallies.
With triple witching this week preceded by a slide in volatility over the past weeks rally traders said there is a strong negative bias this week.
"There is a lot of room for the market to fall as more stocks are closer to call resistance than put support," said Todd Salamone, vice president of research for Schaeffer's Investment Research, noting the 4% gain for the Dow in the past month. "When it is negative, it will likely be big negative."
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most two business days of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of.
We reversed our former buy position last week on emerging markets. We now have zero confidence in Red China, India, or other emerging socialist markets.
Last night most Asian markets were down again. China was down -0.5%, Hong Kong down -1.8%, S. Korea down -0.9%, and Japan down -2.9%.
European markets are slightly improved today in a narrow range of 0.6% to 1% mid way through their day.
US futures indicate the American markets will be starting slightly higher today. Over the next three months we could see a sell-off of 28% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
The MSNBC/GE/Pravda/Jim Cramer theory collapsed their theory that commodities were increasing in price because a recovery was already under way in emerging markets and America was already in bull market and would recover this year.
This was a red-flag warning about the broader stock market from the folks at the S&A Digest, which they issued when the S&P exceeded 940 last week.
"The combination of a market rally and rampant new share issuance from issuers whose future isn't terribly bright reminds me of 1999 and early 2000. That's when the NASDAQ soared from about 2,500 to a peak of just over 5,000, and IPOs were popping up everywhere like stretch marks on a fat man at a pie-eating contest. Back then, nobody thought stocks were risky, and hot tips oozed from every cabby, bartender, and shoeshine boy. No one knew for sure why the tech stocks and dot-com stocks were doing so well, but who cared, as long as you owned them and they kept going up, up and away. Well, maybe it's not exactly like the tech bubble, since IPOs aren't the hot ticket today. But new equity is nonetheless being printed at a record pace... According to a recent Bloomberg story, more than 150 companies raised $82.2 billion in new equity last quarter – a faster pace of equity issuance than at the height of the equity bubble in 2000."
Market forces June 16
MSNBC/GE/Pravda bull market theories have collapsed
The recent past rally was based on the perception that America was recovering later this year and the world economies of Asia and Europe were stronger. Consequently by definition the American market was perceived as undervalued and the dollar was perceived overvalued. Those were all erroneous MSNBC/Pravda type perceptions and so the dollar declined because European currencies seemed like a better place for countries to hold reserves. That is at least what China and Russia were saying even early last week. That caused entertainers like Jim Cramer to conclude that oil and copper demand were moving up due to the growth of emerging markets such as China not because the dollar was just declining in value due to the belief that the EURO was better. That theory was wrong but the rising oil and commodity prices nevertheless reinforced the false theory that the economy was recovering because demand was supposedly increasing for commodities. That reinforced the false theory that the emerging markets were driving the recovery. It was a nice theory while it lasted. If that theory was true then logically the US currency should and did weaken and US inflation could be coming back soon. That lead to threats by China and Russia that they would abandon the dollar as a reserve currency. But this theory fell apart as the economic contraction in Germany and other major exporters became apparent. Clearly China has to be a living economic lie because they must be contracting the most because they are the most export dependent.
News
U.S. stocks and commodities fell sharply Monday, hurt by the following weak economic signs. The Fed buys Treasurys to help keep rates low, but paradoxically is now pushing rates higher. The New York region manufacturing sales decline is accelerating. Homebuilder confidence in U.S. declined again in the NAHB market index. The Dollar suddenly has no rival as world currency and the consequent decline in commodities shows the previous increase in oil and copper prices was not due to emerging market demand but the irrational decline in the dollar. The recovery of the dollar now hurts the recovery of US exports.
Ecuador defaulted on $3.2 billion of debt six months ago and then repurchased the bonds at less than 40 cents on the dollar.
The Dow Jones Industrial Average, which last week tiptoed into positive territory for the year traded down 2% yesterday. All 30 of its components fell. Commodities are now stuck in a range just like stocks in a secular bear market with cyclical rallies.
With triple witching this week preceded by a slide in volatility over the past weeks rally traders said there is a strong negative bias this week.
"There is a lot of room for the market to fall as more stocks are closer to call resistance than put support," said Todd Salamone, vice president of research for Schaeffer's Investment Research, noting the 4% gain for the Dow in the past month. "When it is negative, it will likely be big negative."
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most two business days of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of.
We reversed our former buy position last week on emerging markets. We now have zero confidence in Red China, India, or other emerging socialist markets.
Last night most Asian markets were down again. China was down -0.5%, Hong Kong down -1.8%, S. Korea down -0.9%, and Japan down -2.9%.
European markets are slightly improved today in a narrow range of 0.6% to 1% mid way through their day.
US futures indicate the American markets will be starting slightly higher today. Over the next three months we could see a sell-off of 28% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
The MSNBC/GE/Pravda/Jim Cramer theory collapsed their theory that commodities were increasing in price because a recovery was already under way in emerging markets and America was already in bull market and would recover this year.
Monday, June 15, 2009
The large part of the worst is not yet behind us
Market forces June 15
Mad Money thought the mutual fund money would flow in this week but they were off by two weeks. We pointed out that that money inflow occurs at the start of the month and it did very little this past month as banks have been selling huge blocks of stock smartly raising cash while their stocks are at a relative peak in prices.
Stocks were falling sharply worldwide last night and this morning as a stronger dollar took momentum out of the commodities rally and investors paused after the recent run on Wall Street.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
The Dow had risen in 12 of the last 14 weeks, staging its biggest bear market rally since March 1975. But the dollar is now climbing against a basket of currencies, including the euro weakening crude futures, which are priced in dollars. Oil futures fell more than $1 a barrel in electronic trading on the New York Mercantile Exchange. Gold and other commodities are also under pressure. Iran and N. Korea continue to rattle markets around the world. The MSCI index of 23 developed nations slid 1 percent in London, led by raw-materials producers. Russia’s Micex Index fell 4.1 percent. Oil so far has declined as much as 1.9 percent in New York, while copper fell 3.2 percent in London.
The rise in yields is undermining Federal Reserve Chairman Ben S. Bernanke’s misguided inflationary efforts to pull the economy out of the recession. Nations now see the danger of inflation raising rates and crushing the recovery before it begins. The horse may already be out of the barn now as they plan an exit policy to shut the barn's door of inflation.
Americans' wealth dropped $1.3 trillion since socialist Obama was elected as the stock market and home values declined. Americans' stock holdings plunged 5.8% to $5.2 trillion, while home values dropped 2.4% to $17.9 trillion. Yet MSNBC/GE/Pravda still says we are in a bull market. GE/MSNBC/Pravda wants to profit as the propaganda mouth for corrupt Chicago type government as the socialists pass out $Trillions in contracts under ACORN type oversight. ACORN will bus protestors to our lawn to threaten our families and David Letterman will slander us if we don't conform.
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most three business days of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of.
We do not believe in Obama's socialism and all those who apparently hate American human rights intervention and feel compelled to apologize for our human rights and peace keeping efforts, technological creativity, and the most socially equitable society the world has produced to date. Our Navy Seals are given water boarding as part of their training but the socialists say that is torture if done to terrorist killers while under medieval Sharia law children's arms are crushed beneath truck wheels for offenses such as stealing food or failing to kill when ordered. And Obama ignorantly declares that the USA uses torture and then apologizes to those world lunatics who use obedient children to slaughter others.
We reversed our former buy position last week on emerging markets. We now have zero confidence in Red China, India, or other emerging socialist markets because history has shown that socialist always cook their books, pathologically lie about growth and freedom, and then implode when convenient such as now when the free world markets are correcting.
The IMF managing director appealed for caution in assessing the state of the global economy. He said, "The large part of the worst is not yet behind us," in opening remarks at talks with Kazakh Prime Minister Karim Masimov.
Last night most Asian markets were down sharply. Hong Kong down -2%, India down -2.4%, Taiwan down -3.5%, and Japan down -1%.
European markets are down sharply today in a narrow range of -1.6% to -2% mid way through their day.
US futures indicate the American markets will be starting lower by about -1% today. Over the next three months we could see a sell-off of 30% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
MSNBC/GE/Pravda/Jim Cramer was wrong as usual to be pumping stocks to small investors at the peak while his mutual fund friends were dumping stocks.
Mad Money thought the mutual fund money would flow in this week but they were off by two weeks. We pointed out that that money inflow occurs at the start of the month and it did very little this past month as banks have been selling huge blocks of stock smartly raising cash while their stocks are at a relative peak in prices.
Stocks were falling sharply worldwide last night and this morning as a stronger dollar took momentum out of the commodities rally and investors paused after the recent run on Wall Street.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
The Dow had risen in 12 of the last 14 weeks, staging its biggest bear market rally since March 1975. But the dollar is now climbing against a basket of currencies, including the euro weakening crude futures, which are priced in dollars. Oil futures fell more than $1 a barrel in electronic trading on the New York Mercantile Exchange. Gold and other commodities are also under pressure. Iran and N. Korea continue to rattle markets around the world. The MSCI index of 23 developed nations slid 1 percent in London, led by raw-materials producers. Russia’s Micex Index fell 4.1 percent. Oil so far has declined as much as 1.9 percent in New York, while copper fell 3.2 percent in London.
The rise in yields is undermining Federal Reserve Chairman Ben S. Bernanke’s misguided inflationary efforts to pull the economy out of the recession. Nations now see the danger of inflation raising rates and crushing the recovery before it begins. The horse may already be out of the barn now as they plan an exit policy to shut the barn's door of inflation.
Americans' wealth dropped $1.3 trillion since socialist Obama was elected as the stock market and home values declined. Americans' stock holdings plunged 5.8% to $5.2 trillion, while home values dropped 2.4% to $17.9 trillion. Yet MSNBC/GE/Pravda still says we are in a bull market. GE/MSNBC/Pravda wants to profit as the propaganda mouth for corrupt Chicago type government as the socialists pass out $Trillions in contracts under ACORN type oversight. ACORN will bus protestors to our lawn to threaten our families and David Letterman will slander us if we don't conform.
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most three business days of life remaining. The socialist Obama administration and its redistribution of the American worker's wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take America 20 years to get out of.
We do not believe in Obama's socialism and all those who apparently hate American human rights intervention and feel compelled to apologize for our human rights and peace keeping efforts, technological creativity, and the most socially equitable society the world has produced to date. Our Navy Seals are given water boarding as part of their training but the socialists say that is torture if done to terrorist killers while under medieval Sharia law children's arms are crushed beneath truck wheels for offenses such as stealing food or failing to kill when ordered. And Obama ignorantly declares that the USA uses torture and then apologizes to those world lunatics who use obedient children to slaughter others.
We reversed our former buy position last week on emerging markets. We now have zero confidence in Red China, India, or other emerging socialist markets because history has shown that socialist always cook their books, pathologically lie about growth and freedom, and then implode when convenient such as now when the free world markets are correcting.
The IMF managing director appealed for caution in assessing the state of the global economy. He said, "The large part of the worst is not yet behind us," in opening remarks at talks with Kazakh Prime Minister Karim Masimov.
Last night most Asian markets were down sharply. Hong Kong down -2%, India down -2.4%, Taiwan down -3.5%, and Japan down -1%.
European markets are down sharply today in a narrow range of -1.6% to -2% mid way through their day.
US futures indicate the American markets will be starting lower by about -1% today. Over the next three months we could see a sell-off of 30% as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
MSNBC/GE/Pravda/Jim Cramer was wrong as usual to be pumping stocks to small investors at the peak while his mutual fund friends were dumping stocks.
Friday, June 12, 2009
The banking Crisis has only begun
Market forces June 12
The banking Crisis has only begun
The U.S. Federal Reserve has already lost control of interest rates as we predicted would happen earlier this week. They did not admit it outright but phrased it this way, "The FED is unlikely to boost purchases of U.S. Treasures and mortgage-backed securities when policy makers meet later this month amid rising bond yields."
Yesterday yields on 10-year Treasury notes hit 4% for the first time since October. The FED said they aren't convinced rates have risen enough to choke off borrowing and spending by consumers and businesses. They are now sure that stretching Treasury purchases out over a longer period of time can not avoid an end to low rates due to the massive inflationary money printing program needed to pay for the multi trillion dollar debt of the socialist Obama administration. Obama is creating the greatest debt expansion the world has ever seen. Treasuries now have the highest yield on a 30-year U.S. bond auction (4.7 percent) in two years because investors are now concerned that record government debt sales will lead to inflation. As rates increase the face value of the older bonds decreases. Ten-year yields have risen over 140 basis points since the Fed announced its $300 billion, six-month Treasury purchase program on March 18. The average 30-year mortgage rate jumped to 5.59 percent from 5.29 percent a week earlier. In total the face value of treasuries tumbled 6.5 percent so far this year, the worst performance since Merrill Lynch & Co. began tracking returns in 1978.
Socialist president Barack Obama is quadrupling the budget shortfall to $1.85 trillion and raising the risk of inflation. The rise in yields is undermining Federal Reserve Chairman Ben S. Bernanke’s misguided inflationary efforts to pull the economy out of the recession. Yields on Washington-based Fannie Mae’s 30- year fixed-rate mortgage bonds were quoted at 5.07 percent, the highest since Nov. 24, the day before the U.S. central bank announced its plans to buy home-loan bonds, and up from 3.94 percent as recently as May 20.
The ability of homeowners to sell or refinance to avoid bankruptcy has been closed by reckless spending on nationalization of the auto and financial industries. The banks will no see toxic assets grow exponentially and will face possible total nationalization and the total loss of shareholder equity. This coming crisis is no time to own bank stocks.
Americans' wealth drops $1.3 trillion
Fed report shows a decline of home values and the stock market cut the nation's wealth to $50.4 trillion.
Since socialist Obama was elected, Americans saw $1.3 trillion of wealth vaporize in the first quarter of 2009, as the stock market and home values declined, according to a flow of funds report by the Federal Reserve released Thursday. Americans' stock holdings plunged 5.8% to $5.2 trillion, while home values dropped 2.4% to $17.9 trillion.
Under capitalism, Family net worth had hit an all-time high of $64.4 trillion in the second quarter of 2007. Obama may yet turn this recession into an FDR Great Depression as FDR did before the Supreme Court forced FDR to halt socialist policies.
Household debt reduction also slowed to an annual rate of 1.1% to $13.8 trillion for the first quarter, after contracting 2% in the fourth quarter of 2008, the first time household debt shrank in many years.
The ability of the consumer sector to start spending again is what will pull the economy out of the recession, but consumer credit has plunged. It shows that either consumers are not able or willing to borrow to bail out failing socialist policies. Homeowners' equity fell to a record low 41.4% as equity continued to plunge. More than 20% of homeowners now owe more than their houses are worth, according to Zillow.com.
Businesses also decreased their borrowing 0.3% for the first time since 1992. The federal government, however, pumped up its borrowing by 22.6% in an attempt to stabilize the economy. Federal debt grew and is squeezing out the private sector.
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most four business days of life remaining.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
We reversed our former buy position on emerging markets and would now liquidate any investments in that area. We now have zero confidence in Red China, India, or the emerging markets.
We do not believe in Obama's socialism and all those who apparently hate American capitalism and feel compelled to apologize for American peace keeping efforts, technological creativity, human rights, and the most socially equitable society the world has produced to date.
Last night most Asian markets stalled. China’s was down -1.9%, Hong Kong up 0.5%, India down -1.1%, and Japan up 1.5%. Japan broke 10,000 which they first saw in their golden age in 1984 and which they broke again twenty years later in 2004. The socialist Obama administration and its redistribution of American worker wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take 20 years to get out of.
European markets are down today in a narrow range of -0.2% to -0.6% mid way through their day.
US futures indicate the American markets will be starting lower today. We could see a spike upward if weak handed bears capitulate. But a quick subsequent sell-off of up to 30% is becoming more probable now as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
Jim Cramer was wrong again pumping stocks to small investors at the peak while his mutual fund friends were dumping stocks. For quite some time the FED has said the economy would bottom and remain flat next year. The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom like Jim Cramer believes. In a flat economy the stock markets normally trade in limited price ranges.
Market forces June 12
The banking Crisis has only begun
The U.S. Federal Reserve has already lost control of interest rates as we predicted would happen earlier this week. They did not admit it outright but phrased it this way, "The FED is unlikely to boost purchases of U.S. Treasures and mortgage-backed securities when policy makers meet later this month amid rising bond yields."
Yesterday yields on 10-year Treasury notes hit 4% for the first time since October. The FED said they aren't convinced rates have risen enough to choke off borrowing and spending by consumers and businesses. They are now sure that stretching Treasury purchases out over a longer period of time can not avoid an end to low rates due to the massive inflationary money printing program needed to pay for the multi trillion dollar debt of the socialist Obama administration. Obama is creating the greatest debt expansion the world has ever seen. Treasuries now have the highest yield on a 30-year U.S. bond auction (4.7 percent) in two years because investors are now concerned that record government debt sales will lead to inflation. As rates increase the face value of the older bonds decreases. Ten-year yields have risen over 140 basis points since the Fed announced its $300 billion, six-month Treasury purchase program on March 18. The average 30-year mortgage rate jumped to 5.59 percent from 5.29 percent a week earlier. In total the face value of treasuries tumbled 6.5 percent so far this year, the worst performance since Merrill Lynch & Co. began tracking returns in 1978.
Socialist president Barack Obama is quadrupling the budget shortfall to $1.85 trillion and raising the risk of inflation. The rise in yields is undermining Federal Reserve Chairman Ben S. Bernanke’s misguided inflationary efforts to pull the economy out of the recession. Yields on Washington-based Fannie Mae’s 30- year fixed-rate mortgage bonds were quoted at 5.07 percent, the highest since Nov. 24, the day before the U.S. central bank announced its plans to buy home-loan bonds, and up from 3.94 percent as recently as May 20.
The ability of homeowners to sell or refinance to avoid bankruptcy has been closed by reckless spending on nationalization of the auto and financial industries. The banks will no see toxic assets grow exponentially and will face possible total nationalization and the total loss of shareholder equity. This coming crisis is no time to own bank stocks.
Americans' wealth drops $1.3 trillion
Fed report shows a decline of home values and the stock market cut the nation's wealth to $50.4 trillion.
Since socialist Obama was elected, Americans saw $1.3 trillion of wealth vaporize in the first quarter of 2009, as the stock market and home values declined, according to a flow of funds report by the Federal Reserve released Thursday. Americans' stock holdings plunged 5.8% to $5.2 trillion, while home values dropped 2.4% to $17.9 trillion.
Under capitalism, Family net worth had hit an all-time high of $64.4 trillion in the second quarter of 2007. Obama may yet turn this recession into an FDR Great Depression as FDR did before the Supreme Court forced FDR to halt socialist policies.
Household debt reduction also slowed to an annual rate of 1.1% to $13.8 trillion for the first quarter, after contracting 2% in the fourth quarter of 2008, the first time household debt shrank in many years.
The ability of the consumer sector to start spending again is what will pull the economy out of the recession, but consumer credit has plunged. It shows that either consumers are not able or willing to borrow to bail out failing socialist policies. Homeowners' equity fell to a record low 41.4% as equity continued to plunge. More than 20% of homeowners now owe more than their houses are worth, according to Zillow.com.
Businesses also decreased their borrowing 0.3% for the first time since 1992. The federal government, however, pumped up its borrowing by 22.6% in an attempt to stabilize the economy. Federal debt grew and is squeezing out the private sector.
Market Outlook
We continue the countdown and go very far out on the limb to estimate that the current market rally has at most four business days of life remaining.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
We reversed our former buy position on emerging markets and would now liquidate any investments in that area. We now have zero confidence in Red China, India, or the emerging markets.
We do not believe in Obama's socialism and all those who apparently hate American capitalism and feel compelled to apologize for American peace keeping efforts, technological creativity, human rights, and the most socially equitable society the world has produced to date.
Last night most Asian markets stalled. China’s was down -1.9%, Hong Kong up 0.5%, India down -1.1%, and Japan up 1.5%. Japan broke 10,000 which they first saw in their golden age in 1984 and which they broke again twenty years later in 2004. The socialist Obama administration and its redistribution of American worker wealth to the corrupt, the indolent socialist voters, and 12 million illegal immigrants could easily create a hole deep enough to take 20 years to get out of.
European markets are down today in a narrow range of -0.2% to -0.6% mid way through their day.
US futures indicate the American markets will be starting lower today. We could see a spike upward if weak handed bears capitulate. But a quick subsequent sell-off of up to 30% is becoming more probable now as investors realize this Obama crisis of socialism will get deeper and will last at least another one or two years.
Jim Cramer was wrong again pumping stocks to small investors at the peak while his mutual fund friends were dumping stocks. For quite some time the FED has said the economy would bottom and remain flat next year. The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom like Jim Cramer believes. In a flat economy the stock markets normally trade in limited price ranges.
Thursday, June 11, 2009
5% of American commercial property is now entering default
Market forces June 11
The market advance since March has been strong but retracements in prior bear markets have been normal fare. Recommending a long position at this time is an irresponsible position to take for MSNBC/GE/Pravda stock tipsters. The current 900 level of the S&P is far ahead of itself and is unrealistic. The chart below shows that Jim Cramer is either lying or ignorant when he says everyone is bearish and it is time to buy stocks. The chart shows he is wrong on both counts.
http://www.martincapital.com/chart-pgs/Pg_sent.htm
We are sellers now and will cherry pick back into the market near and below the S&P 800 level. Stocks should give back at least half their 33% advance even if this were a bull market. If we see the March low we would likely go 90% invested provided we had a buy signal from our Re-spiral/MACD indicators.
But we should not rule out even the 600 level for the S&P as a plausible low over the coming year. The debt burdens, the underwater debtors, rising interest rates, and the upward adjustable rate reset schedule leave considerable damage waiting to uncoil. Foreclosures are now ramping up quickly not just for homes but also commercial real estate where it now stands at a record 5%. Hence toxic assets continue to grow and the coming inflation has yet to destroy bank balance sheets by turning even 5% to 8% high interest loans into toxic assets. The St. Louis FED shows that Obama has thrown more money into the US money supply since his taking office than the previous total for all presidents in US history! This is pure insanity. His administration has lost control.
http://research.stlouisfed.org/fred2/series/AMBNS
Obama will put limits on the wages of business executives but not the movie stars that fawn over him. Crime will likely explode in America as it has in Africa because Obama's administration thinks wealth in America is not distributed to the "right" people and the "right" people take that as a cue to go after hard working Americans. Obama is pumping millions into his ACORN organized crime cartel that specializes in census fraud, voter registration fraud, and intimidation of poll vote checkers for the obvious purpose of using election fraud to steal elections.
Yesterday the Bureau of Labor Statistics released a relatively new report for 2000-2009 that showed job openings for April at a record low 2,531,000. More significantly it showed more than five people unemployed for every job opening. Total unemployment will likely exceed 10% before the end of summer and will get much worse this year as American industrialists realize how irresponsible the socialist Obama administration and terrified FED have been.
Market Outlook
We go very far out on the limb to estimate that the current market rally has at most five business days of life remaining.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
On the positive side we believe the probability of a much deeper bear market breakdown is now relatively low and the bottom for the next years trading range probably is not much lower than 600 on the S&P. From here on we believe the market will be relatively flat in a + or - 20% (a 40% band) trading range until the economy weathers the final ravages of the Democrat-Socialist printing press. Some long-term investors who buy and hold will possibly become suicidal especially if they believe the socialist MSNBC/GE/Pravda propaganda.
We now reverse our former buy position on emerging markets and would now liquidate any investments in that area. We now have zero confidence in Red China, India or the emerging markets. For the most part socialist leaders become corrupt liars and their markets are shell games where the underlying assets are moved around to impress wide-eyed ignorant MSNBC/GE/Pravda socialist investment advisors.
We do not believe in Obama's socialism and all those who apparently hate American capitalism and feel compelled to apologize for American peace keeping efforts, technological creativity, human rights, and the most socially equitable society the world has produced to date.
Last night most Asian markets were down. China’s was down -0.7%, Hong Kong flat 0%, India down -0.4%, and Japan down -0.1%.
European markets are up today in a narrow range of 0.2% to 0.6% mid way through their day.
US futures indicate the American markets will be starting flat today. We could see a spike upward if weak handed bears capitulate. But a quick subsequent sell-off of up to 30% is becoming more probable now as investors realize this Obama crisis will get deeper and will last at least another one or two years. That means we are in a sideways moving market with a limited trading range. It is not a great place for buy and hold type investors.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a lengthy flat bottom like Japan had for 12 years. In a flat economy the stock markets normally trade in limited price ranges.
The market advance since March has been strong but retracements in prior bear markets have been normal fare. Recommending a long position at this time is an irresponsible position to take for MSNBC/GE/Pravda stock tipsters. The current 900 level of the S&P is far ahead of itself and is unrealistic. The chart below shows that Jim Cramer is either lying or ignorant when he says everyone is bearish and it is time to buy stocks. The chart shows he is wrong on both counts.
http://www.martincapital.com/chart-pgs/Pg_sent.htm
We are sellers now and will cherry pick back into the market near and below the S&P 800 level. Stocks should give back at least half their 33% advance even if this were a bull market. If we see the March low we would likely go 90% invested provided we had a buy signal from our Re-spiral/MACD indicators.
But we should not rule out even the 600 level for the S&P as a plausible low over the coming year. The debt burdens, the underwater debtors, rising interest rates, and the upward adjustable rate reset schedule leave considerable damage waiting to uncoil. Foreclosures are now ramping up quickly not just for homes but also commercial real estate where it now stands at a record 5%. Hence toxic assets continue to grow and the coming inflation has yet to destroy bank balance sheets by turning even 5% to 8% high interest loans into toxic assets. The St. Louis FED shows that Obama has thrown more money into the US money supply since his taking office than the previous total for all presidents in US history! This is pure insanity. His administration has lost control.
http://research.stlouisfed.org/fred2/series/AMBNS
Obama will put limits on the wages of business executives but not the movie stars that fawn over him. Crime will likely explode in America as it has in Africa because Obama's administration thinks wealth in America is not distributed to the "right" people and the "right" people take that as a cue to go after hard working Americans. Obama is pumping millions into his ACORN organized crime cartel that specializes in census fraud, voter registration fraud, and intimidation of poll vote checkers for the obvious purpose of using election fraud to steal elections.
Yesterday the Bureau of Labor Statistics released a relatively new report for 2000-2009 that showed job openings for April at a record low 2,531,000. More significantly it showed more than five people unemployed for every job opening. Total unemployment will likely exceed 10% before the end of summer and will get much worse this year as American industrialists realize how irresponsible the socialist Obama administration and terrified FED have been.
Market Outlook
We go very far out on the limb to estimate that the current market rally has at most five business days of life remaining.
The socialist Obama administration has already inflated the money supply more than all previous American administrations since 1790. The Obama socialists plan to run a deficit that is five times higher than the previous highest deficit in human history and to leave future American generations with more debt than the previous accumulated debt of all nations in the history of the world.
On the positive side we believe the probability of a much deeper bear market breakdown is now relatively low and the bottom for the next years trading range probably is not much lower than 600 on the S&P. From here on we believe the market will be relatively flat in a + or - 20% (a 40% band) trading range until the economy weathers the final ravages of the Democrat-Socialist printing press. Some long-term investors who buy and hold will possibly become suicidal especially if they believe the socialist MSNBC/GE/Pravda propaganda.
We now reverse our former buy position on emerging markets and would now liquidate any investments in that area. We now have zero confidence in Red China, India or the emerging markets. For the most part socialist leaders become corrupt liars and their markets are shell games where the underlying assets are moved around to impress wide-eyed ignorant MSNBC/GE/Pravda socialist investment advisors.
We do not believe in Obama's socialism and all those who apparently hate American capitalism and feel compelled to apologize for American peace keeping efforts, technological creativity, human rights, and the most socially equitable society the world has produced to date.
Last night most Asian markets were down. China’s was down -0.7%, Hong Kong flat 0%, India down -0.4%, and Japan down -0.1%.
European markets are up today in a narrow range of 0.2% to 0.6% mid way through their day.
US futures indicate the American markets will be starting flat today. We could see a spike upward if weak handed bears capitulate. But a quick subsequent sell-off of up to 30% is becoming more probable now as investors realize this Obama crisis will get deeper and will last at least another one or two years. That means we are in a sideways moving market with a limited trading range. It is not a great place for buy and hold type investors.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a lengthy flat bottom like Japan had for 12 years. In a flat economy the stock markets normally trade in limited price ranges.
Wednesday, June 10, 2009
Treasury forced to reduce sales 15% yesterday and to print more money to avoid higher Treasury rates.
Market forces June 10
The US government was forced to reduce the auction of treasuries by about 15% to stem the increase of the Treasury bond interest rate.
The US government knows all the bids in advance and it knows just how many people will accept the Treasuries at whatever highest rate bid the FED accepts. The FED can compute the cost of the treasury sales vs. the sales volume and compare it to the present value of the future cost of inflation to make a sales cutoff decision… or they can just decide what rate of increase in Treasury rates they can safely accept. Presently inflation is not a FED concern because they can still control the Treasury note rate.
http://www.martincapital.com/chart-pgs/Pg_infl.htm
But printing money will soon increase the inflation rate too much so the FED is devising better ways to reduce the perception of inflation starting in about a month. Socialists are by definition lying socialists and prefer to keep their electorate ignorant about the real world. Usually it is convenient for lying socialists to err on the high side when something like the inflation rate is low and then correct the rate downward as the rate increases. It keeps the average more in line with perception but makes the economy look more stable and under control. Socialists love to control everything. This kind of corruption of data is common among socialists because they rule by keeping their people ignorant of the real outside world and by manipulating data to always report successes until their system after 50 years collapses into a subsistent economy. Scroll down at the following web site.
http://www.forecasts.org/inflation.htm
Obama is taking us on the path of the great socialists of Africa, the Soviet Union and Red China.
It is the path of socialist; bullshit, extortion via taxation, annihilation of productive individuals (elephants), dissipation of former capitalist expropriated wealth, subsistence, dust bowls, deserts, and starvation.
Socialism equals mediocrity, starvation, and global warming because it is destructive and inefficient.
Capitalism equals excellence, productivity, and environmental restoration because it creates wealth so we can afford the higher quality of life that a clean environment provides. If you don't believe this, go visit Red China or Somalia. Compare Somalia or rich Nigeria with capitalistic South Africa before capitalism is destroyed in South Africa
If you read the droppings that great socialist environmentalist authors leave behind in their writings they literally recommend a worldwide epidemic of Ebola because that seems to work in Africa. You see they say the real problem is not the socialist proletariat dictatorship in starving socialist nations but rather the world just needs to get rid of the polluting human species.
Back to socialist proletariat's FED
Therefore if the FED decides to hold the interest rates on US Treasury Bonds they must gradually reduce their world supply to keep demand up relative to supply. But since socialists have a voracious appetite for other people's money the FED must then print more money each time. That eventually will gradually raise the inflation rate. It appears self evident that at some point the Treasury rate will have to be allowed to go up proportional to the inflation rate to maintain some ratio between borrowing now using Treasuries and borrowing from future generations by printing more money.
Inflation is a product of the money in circulation times the velocity at which it changes hands. Currently credit is not flowing fast and that is the cause of some deflation we have seen. So up until the next month or so printing money reduces deflation and is therefore stabilizing the economy. So the socialists are seeing no down side to printing money at this time and they can still control rates. The FED can only push on a string by dropping interest rates but can do better right now by printing money to compensate for the low velocity of money. Inflation has the effect of reducing effective real interest rates. So right now as the FED prints money to inflate the economy they are reducing effective real interest rates. Mortgage rates have gone up to maintain the attractive real rate of about 5%.
But this period of time that the FED has to freely print money is almost over. Real rates will soon be back in positive territory and the economy and stock market will shudder, as the reality of the enormous American printing spree is no longer concealed by deflation.
http://www.martincapital.com/chart-pgs/Pg_mmnry.htm
Market Outlook
Market volume is now at record lows as the market runs out of steam. The pig's ear is completely gilded now.
Today we go very far out on the limb to estimate that the current market rally has at most six business days of life remaining.
Very often a bear market ends with a spike down on high volume as the weak hold-out bulls capitulate and follow the conventional wisdom and sell out at a low price. But the reverse is also true especially in market rallies like we have right now. Bear market rallies and rallies that occur in flat trading ranges often end like we may very well see today with a spike up in all the markets as many weak hold-out bears capitulate and follow Jim Cramer's advice (and lose their shirts again by getting into the market at a sideways moving market's top).
On the positive side we believe the probability of a much deeper bear market breakdown is now relatively low and the bottom for the next years trading range probably is already set. From here on we believe the market will be flat in a + or - 20% trading range until the economy weathers the ravages of the FED printing press. Long term investors who buy and hold will be stressed out for possibly another year.
Last night most Asian markets were up. China’s was up 1%, Hong Kong up 4%, India up 2.3%, and Japan up 2.1%.
European markets are up today in a narrow range of 2% to 2.3% mid way through their day.
US futures indicate the American markets will be starting significantly higher today. We could see a spike upward as weak handed bears capitulate. But a quick subsequent sell-off of up to 20% is becoming more probable now as investors realize this economic bottom will last another year not just a month until Jim Cramer says the economy recovers. That means we are in a sideways moving market with a limited upward and downward trading range not a bull market. That is also sometimes initially interpreted as a bear market rally but later recognized as a trading range. It is not a great place for buy and hold type investors.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom. In a flat economy the stock markets normally trade in limited price ranges.
The US government was forced to reduce the auction of treasuries by about 15% to stem the increase of the Treasury bond interest rate.
The US government knows all the bids in advance and it knows just how many people will accept the Treasuries at whatever highest rate bid the FED accepts. The FED can compute the cost of the treasury sales vs. the sales volume and compare it to the present value of the future cost of inflation to make a sales cutoff decision… or they can just decide what rate of increase in Treasury rates they can safely accept. Presently inflation is not a FED concern because they can still control the Treasury note rate.
http://www.martincapital.com/chart-pgs/Pg_infl.htm
But printing money will soon increase the inflation rate too much so the FED is devising better ways to reduce the perception of inflation starting in about a month. Socialists are by definition lying socialists and prefer to keep their electorate ignorant about the real world. Usually it is convenient for lying socialists to err on the high side when something like the inflation rate is low and then correct the rate downward as the rate increases. It keeps the average more in line with perception but makes the economy look more stable and under control. Socialists love to control everything. This kind of corruption of data is common among socialists because they rule by keeping their people ignorant of the real outside world and by manipulating data to always report successes until their system after 50 years collapses into a subsistent economy. Scroll down at the following web site.
http://www.forecasts.org/inflation.htm
Obama is taking us on the path of the great socialists of Africa, the Soviet Union and Red China.
It is the path of socialist; bullshit, extortion via taxation, annihilation of productive individuals (elephants), dissipation of former capitalist expropriated wealth, subsistence, dust bowls, deserts, and starvation.
Socialism equals mediocrity, starvation, and global warming because it is destructive and inefficient.
Capitalism equals excellence, productivity, and environmental restoration because it creates wealth so we can afford the higher quality of life that a clean environment provides. If you don't believe this, go visit Red China or Somalia. Compare Somalia or rich Nigeria with capitalistic South Africa before capitalism is destroyed in South Africa
If you read the droppings that great socialist environmentalist authors leave behind in their writings they literally recommend a worldwide epidemic of Ebola because that seems to work in Africa. You see they say the real problem is not the socialist proletariat dictatorship in starving socialist nations but rather the world just needs to get rid of the polluting human species.
Back to socialist proletariat's FED
Therefore if the FED decides to hold the interest rates on US Treasury Bonds they must gradually reduce their world supply to keep demand up relative to supply. But since socialists have a voracious appetite for other people's money the FED must then print more money each time. That eventually will gradually raise the inflation rate. It appears self evident that at some point the Treasury rate will have to be allowed to go up proportional to the inflation rate to maintain some ratio between borrowing now using Treasuries and borrowing from future generations by printing more money.
Inflation is a product of the money in circulation times the velocity at which it changes hands. Currently credit is not flowing fast and that is the cause of some deflation we have seen. So up until the next month or so printing money reduces deflation and is therefore stabilizing the economy. So the socialists are seeing no down side to printing money at this time and they can still control rates. The FED can only push on a string by dropping interest rates but can do better right now by printing money to compensate for the low velocity of money. Inflation has the effect of reducing effective real interest rates. So right now as the FED prints money to inflate the economy they are reducing effective real interest rates. Mortgage rates have gone up to maintain the attractive real rate of about 5%.
But this period of time that the FED has to freely print money is almost over. Real rates will soon be back in positive territory and the economy and stock market will shudder, as the reality of the enormous American printing spree is no longer concealed by deflation.
http://www.martincapital.com/chart-pgs/Pg_mmnry.htm
Market Outlook
Market volume is now at record lows as the market runs out of steam. The pig's ear is completely gilded now.
Today we go very far out on the limb to estimate that the current market rally has at most six business days of life remaining.
Very often a bear market ends with a spike down on high volume as the weak hold-out bulls capitulate and follow the conventional wisdom and sell out at a low price. But the reverse is also true especially in market rallies like we have right now. Bear market rallies and rallies that occur in flat trading ranges often end like we may very well see today with a spike up in all the markets as many weak hold-out bears capitulate and follow Jim Cramer's advice (and lose their shirts again by getting into the market at a sideways moving market's top).
On the positive side we believe the probability of a much deeper bear market breakdown is now relatively low and the bottom for the next years trading range probably is already set. From here on we believe the market will be flat in a + or - 20% trading range until the economy weathers the ravages of the FED printing press. Long term investors who buy and hold will be stressed out for possibly another year.
Last night most Asian markets were up. China’s was up 1%, Hong Kong up 4%, India up 2.3%, and Japan up 2.1%.
European markets are up today in a narrow range of 2% to 2.3% mid way through their day.
US futures indicate the American markets will be starting significantly higher today. We could see a spike upward as weak handed bears capitulate. But a quick subsequent sell-off of up to 20% is becoming more probable now as investors realize this economic bottom will last another year not just a month until Jim Cramer says the economy recovers. That means we are in a sideways moving market with a limited upward and downward trading range not a bull market. That is also sometimes initially interpreted as a bear market rally but later recognized as a trading range. It is not a great place for buy and hold type investors.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom. In a flat economy the stock markets normally trade in limited price ranges.
Monday, June 8, 2009
Higher oil prices now are a stick in the eye of world economic recovery.
Market forces June 8
Investors who think that a rising oil price is bullish are mistaking it for one of the opportunities of the last economic bubble. But this time the bubble is not from a growing economy it is from price inflation and currency weakness. Fools on Wall Street think every market change is the same but this increase in fuel prices kicks airlines and consumers in the stomach. It is a stick in the eye of the economic recovery.
Obama Czars, Gestapo, and rattlesnakes:
A Gestapo is to be created to closely regulate American firms. The Obama Czars told financial industry representatives Thursday that it will propose massive, coordinated supervision of financial firms and stronger regulation of consumer financial products as part of regulatory and affirmative action to redistribute wealth to the people who deserve it.
A raid by a regulatory agency can bankrupt a prosperous private company by freezing activity before the company can cover all its trades profitably.
But sources said the Administration has not resolved one major issue in this already enormous expansion of government into the private sector… the future regulation of insurance companies.
One industry participant said that some stakeholders and lawmakers in the debate favor a new federal “council of regulator Czars” to improve and coordinate supervision. The Administration has previously suggested giving the Federal Reserve and other existing agencies more oversight powers too.
Administration officials put meeting participants on notice that their plan will include affirmative action proposals for consumer financial products, like no credit check mortgages, credit card bailouts, and other products to redistribute wealth. Participants discussed whether the additional regulation should be managed by one or multiple new government agencies.
The Stanford case:
DeGuerin said he expects Stanford to be harassed with criminal charges to be filed even though Stanford is innocent. Dick DeGuerin a Houston attorney who was once counsel for Stanford on the civil matters has been replaced with the appointment of a new law firm so he has no interest in the case now. He said,
“This is a very complex case—Stanford didn’t do anything wrong," “The problems with the Stanford Financial Group Companies stem largely from what the SEC did in their Gestapo-like attack on the Stanford companies. They cause a run on the banks and they caused tremendous damage.”
DeGuerin went on to say, “He (Stanford) is not cooperating with the SEC,” “You don’t cooperate with a rattlesnake.”
Regulation and corruption often go hand in hand as it has recently with the SEC. They let Bernie Madoff steal $50 Billion because he was "their man" but Stanford apparently didn't make "wise" campaign contributions like George Soros and many others do.
Market Outlook
Last night most Asian markets were down. China’s was up 0.5% Hong Kong down -2.3%, India down -2.9%, and Japan up 1% on a weak yen which is good for exports.
European markets are down sharply today in the range of -1.2% to -1.7% mid way through their day.
US futures indicate the markets will be starting lower today. A sell-off of up to 20% is becoming more probable now as investors realize this economic bottom will last another year not one month.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom.
Investors who think that a rising oil price is bullish are mistaking it for one of the opportunities of the last economic bubble. But this time the bubble is not from a growing economy it is from price inflation and currency weakness. Fools on Wall Street think every market change is the same but this increase in fuel prices kicks airlines and consumers in the stomach. It is a stick in the eye of the economic recovery.
Obama Czars, Gestapo, and rattlesnakes:
A Gestapo is to be created to closely regulate American firms. The Obama Czars told financial industry representatives Thursday that it will propose massive, coordinated supervision of financial firms and stronger regulation of consumer financial products as part of regulatory and affirmative action to redistribute wealth to the people who deserve it.
A raid by a regulatory agency can bankrupt a prosperous private company by freezing activity before the company can cover all its trades profitably.
But sources said the Administration has not resolved one major issue in this already enormous expansion of government into the private sector… the future regulation of insurance companies.
One industry participant said that some stakeholders and lawmakers in the debate favor a new federal “council of regulator Czars” to improve and coordinate supervision. The Administration has previously suggested giving the Federal Reserve and other existing agencies more oversight powers too.
Administration officials put meeting participants on notice that their plan will include affirmative action proposals for consumer financial products, like no credit check mortgages, credit card bailouts, and other products to redistribute wealth. Participants discussed whether the additional regulation should be managed by one or multiple new government agencies.
The Stanford case:
DeGuerin said he expects Stanford to be harassed with criminal charges to be filed even though Stanford is innocent. Dick DeGuerin a Houston attorney who was once counsel for Stanford on the civil matters has been replaced with the appointment of a new law firm so he has no interest in the case now. He said,
“This is a very complex case—Stanford didn’t do anything wrong," “The problems with the Stanford Financial Group Companies stem largely from what the SEC did in their Gestapo-like attack on the Stanford companies. They cause a run on the banks and they caused tremendous damage.”
DeGuerin went on to say, “He (Stanford) is not cooperating with the SEC,” “You don’t cooperate with a rattlesnake.”
Regulation and corruption often go hand in hand as it has recently with the SEC. They let Bernie Madoff steal $50 Billion because he was "their man" but Stanford apparently didn't make "wise" campaign contributions like George Soros and many others do.
Market Outlook
Last night most Asian markets were down. China’s was up 0.5% Hong Kong down -2.3%, India down -2.9%, and Japan up 1% on a weak yen which is good for exports.
European markets are down sharply today in the range of -1.2% to -1.7% mid way through their day.
US futures indicate the markets will be starting lower today. A sell-off of up to 20% is becoming more probable now as investors realize this economic bottom will last another year not one month.
The stock market historically rallies six months before the economy takes off, not six months before the economy begins a flat bottom.
Friday, June 5, 2009
The bulls are confused, intoxicated, and definitely wrong right now.
Market forces June 5
The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. Jim Cramer and the other perpetual Bulls are intoxicated by this current but ephemeral bear market rally.
Yesterday market volume continued below its moving average indicating the market will wring the last penny out of, as Jim Cramer likes to say, the very last greedy little pig before the next technical correction.
Bob Brinker has continued last week to say stay fully invested now as he has for seven straight years. Once again all the buy and hold broken clocks are saying buy, buy, buy, except Jim Cramer at least rotates his buys and sells stocks that run up too quickly into uncharted territory.
Investors need to think more like Warren Buffet and not just rotate stock sectors but sometimes go directly into real estate partnerships (like now) and commodities futures. The stock market unfortunately is not big enough to handle all investors.
The Obama socialists have a plan to drain money from investors now with city, state and federal taxes. New York City may be the first to see the mass exodus of its wealth.
Market Outlook
Last night Asian markets were slightly higher. China’s was down -0.4% Hong Kong up 1%, India up 0.6%, and Japan up 1%.
European markets are up slightly today in the range of 0.2% to 1.2% mid way through their day.
US futures indicate the markets will be starting flat today. A sell-off of up to 15% is becoming more probable now as the very last bulls realize this market bottom will last one year not one month.
The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. In other words the bear market that started in 1929 did not turn to a bull market in 1931 after the bottom fell out of the economy. It took ten years of bear market rallies before the market became bullish again. Jim Cramer and the other perpetual Bulls are quite intoxicated and deluded by this current ephemeral bear market rally. How can the market rise for another whole year as the economy slides along the bottom? Yes, housing may appear to stabilize at a very low level since it is past its inflection point but it is still a long way from recovery.
Investors would be wise to take profits now before Jim Cramer and Bob Brinker sober up.
The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. Jim Cramer and the other perpetual Bulls are intoxicated by this current but ephemeral bear market rally.
Yesterday market volume continued below its moving average indicating the market will wring the last penny out of, as Jim Cramer likes to say, the very last greedy little pig before the next technical correction.
Bob Brinker has continued last week to say stay fully invested now as he has for seven straight years. Once again all the buy and hold broken clocks are saying buy, buy, buy, except Jim Cramer at least rotates his buys and sells stocks that run up too quickly into uncharted territory.
Investors need to think more like Warren Buffet and not just rotate stock sectors but sometimes go directly into real estate partnerships (like now) and commodities futures. The stock market unfortunately is not big enough to handle all investors.
The Obama socialists have a plan to drain money from investors now with city, state and federal taxes. New York City may be the first to see the mass exodus of its wealth.
Market Outlook
Last night Asian markets were slightly higher. China’s was down -0.4% Hong Kong up 1%, India up 0.6%, and Japan up 1%.
European markets are up slightly today in the range of 0.2% to 1.2% mid way through their day.
US futures indicate the markets will be starting flat today. A sell-off of up to 15% is becoming more probable now as the very last bulls realize this market bottom will last one year not one month.
The stock market is supposed to take off six months before the economy takes off, not six months before the bottom. In other words the bear market that started in 1929 did not turn to a bull market in 1931 after the bottom fell out of the economy. It took ten years of bear market rallies before the market became bullish again. Jim Cramer and the other perpetual Bulls are quite intoxicated and deluded by this current ephemeral bear market rally. How can the market rise for another whole year as the economy slides along the bottom? Yes, housing may appear to stabilize at a very low level since it is past its inflection point but it is still a long way from recovery.
Investors would be wise to take profits now before Jim Cramer and Bob Brinker sober up.
Thursday, June 4, 2009
Stock buying dried up yesterday
Market forces June 4,
The optimistic spin MSNB/GE/Pravda puts on all news seems to be done to help the conglomerate influence government contracts. It creates an aura that President Obama’s socialist policies are good for the economy. It is part of the increase in influence peddling being seen with the sharp increase in government power and spending. However the spin is wearing thin and stock market buying volume was quite low yesterday. So far General Electric is still doing very well with its military industrial complex which was thought to be one of the areas where the socialists would be spending less money. But so far the socialists are only thinking about growing government and increasing spending so that has been good for General Electric and George Soros who seem very happy so far with President Obama. MSNB/GE/Pravda and George Soros appear to be succeeding in becoming an integral part of the informal US government news and social re-education media machine.
General Motors seems destined to be the greatest black hole in the American economy. The socialists now own it and Americans will no longer buy the cars without hefty incentives from the socialists. The failure of GM will drive the socialists to throw more money at it. It will grow to be one of the greatest and most visible failures of the Democrat-Socialists within two years. It will highlight the stupidity of the dangerous polluting cars the socialists produce because we lack clean nuclear energy to provide the electricity needed. Americans will be polluting more to generate electricity with hydrocarbons. The energy waste of multiple energy conversions, storage and transmission will increase pollution far more than the internal combustion engine because clean nuclear electrical energy is not being developed due to the stupid leftist socialists and their misguided environmental religion.
Market Outlook
Yesterday market volume fell even further below its moving average indicating the sense of fear of market vulnerability and a withdrawal of buyers rather than a growth in selling pressure.
Last night Asian markets were lower. China’s was down -0.4% Hong Kong down -0.4%, India up 1%, and Japan down -0.8 %.
European markets are up slightly today in the range of 0.2% to 1% mid way through their day.
US futures indicate the markets will be starting in slightly positive territory today. A sell-off of up to 15% is becoming more probable now.
The optimistic spin MSNB/GE/Pravda puts on all news seems to be done to help the conglomerate influence government contracts. It creates an aura that President Obama’s socialist policies are good for the economy. It is part of the increase in influence peddling being seen with the sharp increase in government power and spending. However the spin is wearing thin and stock market buying volume was quite low yesterday. So far General Electric is still doing very well with its military industrial complex which was thought to be one of the areas where the socialists would be spending less money. But so far the socialists are only thinking about growing government and increasing spending so that has been good for General Electric and George Soros who seem very happy so far with President Obama. MSNB/GE/Pravda and George Soros appear to be succeeding in becoming an integral part of the informal US government news and social re-education media machine.
General Motors seems destined to be the greatest black hole in the American economy. The socialists now own it and Americans will no longer buy the cars without hefty incentives from the socialists. The failure of GM will drive the socialists to throw more money at it. It will grow to be one of the greatest and most visible failures of the Democrat-Socialists within two years. It will highlight the stupidity of the dangerous polluting cars the socialists produce because we lack clean nuclear energy to provide the electricity needed. Americans will be polluting more to generate electricity with hydrocarbons. The energy waste of multiple energy conversions, storage and transmission will increase pollution far more than the internal combustion engine because clean nuclear electrical energy is not being developed due to the stupid leftist socialists and their misguided environmental religion.
Market Outlook
Yesterday market volume fell even further below its moving average indicating the sense of fear of market vulnerability and a withdrawal of buyers rather than a growth in selling pressure.
Last night Asian markets were lower. China’s was down -0.4% Hong Kong down -0.4%, India up 1%, and Japan down -0.8 %.
European markets are up slightly today in the range of 0.2% to 1% mid way through their day.
US futures indicate the markets will be starting in slightly positive territory today. A sell-off of up to 15% is becoming more probable now.
Wednesday, June 3, 2009
End of bear market is within sight
Market forces June 3,
The stock market bottom is within sight
Last November and earlier this year we were bullish and believed President Obama would enjoy popularity and a stock market rally. Clearly he had glad-handlers who wanted a rally but he expressed such a deep tyrannical and confiscator socialist ideology that Obama was effectively causing an economic depression rather than a rally. So we gave up on Obama and his dictatorial control over the three branches of our government. He even dictated who will be the president and the directors of some American corporations; even some he has not nationalized yet.
So in January we said take profits and cherry pick out. That buy and profit taking was pretty much a neutral wash at first. We got a buy signal near the next market low but it did not appeared as though it would be confirmed so we said hold off buying and continue cherry picking out. Therefore anyone who cherry picked in late November and continued to take profits through May should have made a handy profit from that call even though there was no Obama rally.
At the current market high the S&P was close to, and the other American indices exceeded their January highs. That is something one would expect for a bull market but the last market low should not have been so low… it should have been no worse than the previous low for a bull market to be declared.
So there is still a risk that the next decline could wipe out all the recent gains and more. For instance some people prematurely declared the Dot-Com bottom in October of 2002 but the real bottom was in March of 2003 when that bottom was tested. We have been saying for quite some time that we believe the bottom will be in place before fall and likely by the end of August.
Stock market blowhards:
Barron's examined the track record of blowhard Jim Kim Jong-il Cramer. Barron's says that from May to December of 2008, following Cramer's recommendations would have cost you a 35% loss compared to the 30% loss the market saw during the same period.
Cramer's sell recommendations outperform the market by as much as five percentage points, but Barron's reports that his buy recommendations on average lost 10 percentage points more than the market.
"Cramer is wildly inconsistent, and the performance of individual picks varies widely," Barron's reports. "So widely, in fact, that it is impossible to know with confidence that any sample of Cramer's recommendations will enable you to outperform the market." We find that Jim Kim Jong-il Cramer is so erratic he is dangerous to our well being.
Market Outlook
Yesterday volume fell further below its moving average indicating the sense of market vulnerability. MSNBC/Pravda has indicated that the weak stocks were rightfully the market leaders because they are such losers that they have the highest risk and therefore the highest probability of gain. Of course MSNBC/GE/Pravda is known for such foolish reasoning. High-risk stocks do not create high gains, but high gains usually are accompanied by high risk. So you can see investors are stupid and illogical to think that buying high-risk stocks like GM would offer the highest gains. But that is what MSNBC/GE/Pravda has said was happening in recent weeks and they too were out on the limb recommending junk stocks.
Last night Asian markets were higher. China’s was up 2% Hong Kong up 1.8%, India down 0.1%, and Japan up 0.4 %.
European markets are down sharply today in the range of -0.7% to -2% mid way through their day. Europe is beginning to feel the effects of the recession and is worrying that the central banks are creating a more dangerous bubble by inflating the money supply.
US futures indicate the markets will be under pressure today. A sell-off of up to 15% is becoming more probable now.
The stock market bottom is within sight
Last November and earlier this year we were bullish and believed President Obama would enjoy popularity and a stock market rally. Clearly he had glad-handlers who wanted a rally but he expressed such a deep tyrannical and confiscator socialist ideology that Obama was effectively causing an economic depression rather than a rally. So we gave up on Obama and his dictatorial control over the three branches of our government. He even dictated who will be the president and the directors of some American corporations; even some he has not nationalized yet.
So in January we said take profits and cherry pick out. That buy and profit taking was pretty much a neutral wash at first. We got a buy signal near the next market low but it did not appeared as though it would be confirmed so we said hold off buying and continue cherry picking out. Therefore anyone who cherry picked in late November and continued to take profits through May should have made a handy profit from that call even though there was no Obama rally.
At the current market high the S&P was close to, and the other American indices exceeded their January highs. That is something one would expect for a bull market but the last market low should not have been so low… it should have been no worse than the previous low for a bull market to be declared.
So there is still a risk that the next decline could wipe out all the recent gains and more. For instance some people prematurely declared the Dot-Com bottom in October of 2002 but the real bottom was in March of 2003 when that bottom was tested. We have been saying for quite some time that we believe the bottom will be in place before fall and likely by the end of August.
Stock market blowhards:
Barron's examined the track record of blowhard Jim Kim Jong-il Cramer. Barron's says that from May to December of 2008, following Cramer's recommendations would have cost you a 35% loss compared to the 30% loss the market saw during the same period.
Cramer's sell recommendations outperform the market by as much as five percentage points, but Barron's reports that his buy recommendations on average lost 10 percentage points more than the market.
"Cramer is wildly inconsistent, and the performance of individual picks varies widely," Barron's reports. "So widely, in fact, that it is impossible to know with confidence that any sample of Cramer's recommendations will enable you to outperform the market." We find that Jim Kim Jong-il Cramer is so erratic he is dangerous to our well being.
Market Outlook
Yesterday volume fell further below its moving average indicating the sense of market vulnerability. MSNBC/Pravda has indicated that the weak stocks were rightfully the market leaders because they are such losers that they have the highest risk and therefore the highest probability of gain. Of course MSNBC/GE/Pravda is known for such foolish reasoning. High-risk stocks do not create high gains, but high gains usually are accompanied by high risk. So you can see investors are stupid and illogical to think that buying high-risk stocks like GM would offer the highest gains. But that is what MSNBC/GE/Pravda has said was happening in recent weeks and they too were out on the limb recommending junk stocks.
Last night Asian markets were higher. China’s was up 2% Hong Kong up 1.8%, India down 0.1%, and Japan up 0.4 %.
European markets are down sharply today in the range of -0.7% to -2% mid way through their day. Europe is beginning to feel the effects of the recession and is worrying that the central banks are creating a more dangerous bubble by inflating the money supply.
US futures indicate the markets will be under pressure today. A sell-off of up to 15% is becoming more probable now.
Tuesday, June 2, 2009
When will stock market bubble mania end?
Market forces June 2,
“Geithner knows nothing… he knows nothing,” so says Jim Cramer. And Bernacke looks like a puzzled doe staring into the headlights of an oncoming truck. Both appear to be clueless as to why Treasury note sales are declining. They think China and Japan are holding back because they are clueless to the economic hammering Asia is taking and will continue to take. China has seen a dramatic drop in exports and has tried to stem unemployment with a surge in infrastructure spending limiting the amount of surplus dollars that they have had in the past for purchasing US Treasury’s. This juggernaut is just beginning to be felt abroad because the second shoe is about to fall on Asian heads. Unemployment in the West is the last sector to recover because as people retire or are laid off the remaining American employees have to pick up their work. American productivity then begins to surge and American companies begin to cut back on outsourcing to Asia. The treasury will have to run the printing presses to support the record spending by corrupt ghetto socialists who confiscate and spend other people’s money.
The failure of outsourcing has become apparent. It works when the outsourcing is to India, China, and Ireland where the pay scales are lower. But then it becomes evident that poor communication makes even that non-productive so American firms bring the foreign nationals into the offices in America displacing Americans here. But then Asians demand higher pay and America is saddled with supporting them with social aide and eventually citizenship. Then they legally bring over ma, pa, grandma, grandpa and the whole family so the USA ends up paying about ten times as much for outsourcing as the company gains by doing the outsourcing. In addition the outsource employees learn American technology and then start new Chinese and Indian firms that begin to take business away from the American firms. Outsourcing is America’s most successful foreign aid program at the expense of American workers and technological leadership.
TV Gambling shows
MSNBC/GE/Pravda seems to run the biggest casino in the USA; the stock market. It would not be so bad if they were objective but obviously they are corrupt now.
How much do they get in cash for supporting the pumping and dumping of stocks at market tops?”
How much does Cramer get for deceiving investors by selectively presenting data? While today the home sales report for the nation will not be good, Jim Cramer will once again single out one or two states that have random good statistics this month and will claim they represent the trend in the nation as a whole. MSNBC/GE/Pravda should be investigated by the SEC.
How much kick-back does MSNBC/GE/Pravda get from the short seller attacks they support with their “They know nothing” emotional outbursts near market bottoms?
It is quite obvious that Jim Cramer and the rest hammer stocks when they are down and pump stocks to naïve investors when they are high in price.
MSNBC/Pravda does nothing to help provide good market data; they seem to support phony market volume data so that only massive firms that pay for advertising can afford to have good data.
Right now the American markets appear at their peaks which have equaled or come close to equaling their January peaks. Under normal circumstances that would bode well for the next market bottom being confirmed on the next market pull back. It is now not very likely that a new bear market low will be experienced during this recession. Still recovery is unlikely this year as this recession has not finished moving around the world.
Market Outlook
Yesterday pension plans and 401 plans carried the markets higher in the USA but volume remained below the running average for the one market that seems to have real volume data available to small investors if they know where to look (certainly not Yahoo). The lower than average volume yesterday was indicative of the end of a bear market rally. Some investors were fooled and drawn into a small bull trap at the high yesterday.
Our analysis does not change every other day as you typically see on the NBC/GE/Pravda network. A new ominous wrinkle may be the rise of interest rates that can delay economic recovery and lead to a premature socialist system bankruptcy. The treasury can monitor the bids for Treasury bonds and just exercise the low interest bids and silently print the rest of the money that is needed to buy the remaining Treasury bonds. That makes the auction look successful but in fact we are just running the money press like they do in Zimbabwe. With real interest rates set close to zero… just a 1% rise in rates can triple the cost of national debt. Already mortgage rates are rising and low rates are essential for resolving the crisis of toxic assets.
Last night Asian markets were flat. China’s was up 0.1% Hong Kong down 2.7%, India. up 0.2%, and Japan up 0.3 %. China has seen a dramatic drop in exports and has tried to stem unemployment with a surge in infrastructure work limiting the amount of surplus that they had in the past for treasuries.
European markets are flat today in the range of 0% to -0.5% mid way through their day. Europe is beginning to feel the effects of the recession.
US futures indicate the markets will start flat today.
The only question is how this rally will end. Will it go out with first a spike up or down or will we slide lower into the summer doldrums. It used to be “Sell in May then go away.”
“Geithner knows nothing… he knows nothing,” so says Jim Cramer. And Bernacke looks like a puzzled doe staring into the headlights of an oncoming truck. Both appear to be clueless as to why Treasury note sales are declining. They think China and Japan are holding back because they are clueless to the economic hammering Asia is taking and will continue to take. China has seen a dramatic drop in exports and has tried to stem unemployment with a surge in infrastructure spending limiting the amount of surplus dollars that they have had in the past for purchasing US Treasury’s. This juggernaut is just beginning to be felt abroad because the second shoe is about to fall on Asian heads. Unemployment in the West is the last sector to recover because as people retire or are laid off the remaining American employees have to pick up their work. American productivity then begins to surge and American companies begin to cut back on outsourcing to Asia. The treasury will have to run the printing presses to support the record spending by corrupt ghetto socialists who confiscate and spend other people’s money.
The failure of outsourcing has become apparent. It works when the outsourcing is to India, China, and Ireland where the pay scales are lower. But then it becomes evident that poor communication makes even that non-productive so American firms bring the foreign nationals into the offices in America displacing Americans here. But then Asians demand higher pay and America is saddled with supporting them with social aide and eventually citizenship. Then they legally bring over ma, pa, grandma, grandpa and the whole family so the USA ends up paying about ten times as much for outsourcing as the company gains by doing the outsourcing. In addition the outsource employees learn American technology and then start new Chinese and Indian firms that begin to take business away from the American firms. Outsourcing is America’s most successful foreign aid program at the expense of American workers and technological leadership.
TV Gambling shows
MSNBC/GE/Pravda seems to run the biggest casino in the USA; the stock market. It would not be so bad if they were objective but obviously they are corrupt now.
How much do they get in cash for supporting the pumping and dumping of stocks at market tops?”
How much does Cramer get for deceiving investors by selectively presenting data? While today the home sales report for the nation will not be good, Jim Cramer will once again single out one or two states that have random good statistics this month and will claim they represent the trend in the nation as a whole. MSNBC/GE/Pravda should be investigated by the SEC.
How much kick-back does MSNBC/GE/Pravda get from the short seller attacks they support with their “They know nothing” emotional outbursts near market bottoms?
It is quite obvious that Jim Cramer and the rest hammer stocks when they are down and pump stocks to naïve investors when they are high in price.
MSNBC/Pravda does nothing to help provide good market data; they seem to support phony market volume data so that only massive firms that pay for advertising can afford to have good data.
Right now the American markets appear at their peaks which have equaled or come close to equaling their January peaks. Under normal circumstances that would bode well for the next market bottom being confirmed on the next market pull back. It is now not very likely that a new bear market low will be experienced during this recession. Still recovery is unlikely this year as this recession has not finished moving around the world.
Market Outlook
Yesterday pension plans and 401 plans carried the markets higher in the USA but volume remained below the running average for the one market that seems to have real volume data available to small investors if they know where to look (certainly not Yahoo). The lower than average volume yesterday was indicative of the end of a bear market rally. Some investors were fooled and drawn into a small bull trap at the high yesterday.
Our analysis does not change every other day as you typically see on the NBC/GE/Pravda network. A new ominous wrinkle may be the rise of interest rates that can delay economic recovery and lead to a premature socialist system bankruptcy. The treasury can monitor the bids for Treasury bonds and just exercise the low interest bids and silently print the rest of the money that is needed to buy the remaining Treasury bonds. That makes the auction look successful but in fact we are just running the money press like they do in Zimbabwe. With real interest rates set close to zero… just a 1% rise in rates can triple the cost of national debt. Already mortgage rates are rising and low rates are essential for resolving the crisis of toxic assets.
Last night Asian markets were flat. China’s was up 0.1% Hong Kong down 2.7%, India. up 0.2%, and Japan up 0.3 %. China has seen a dramatic drop in exports and has tried to stem unemployment with a surge in infrastructure work limiting the amount of surplus that they had in the past for treasuries.
European markets are flat today in the range of 0% to -0.5% mid way through their day. Europe is beginning to feel the effects of the recession.
US futures indicate the markets will start flat today.
The only question is how this rally will end. Will it go out with first a spike up or down or will we slide lower into the summer doldrums. It used to be “Sell in May then go away.”
Monday, June 1, 2009
The current illiquid market situation can be dangerous
Market forces June 1,
MSNBC/Pravda, Yahoo and the SEC have pretty much done away with market volume data. In a fully electronic system volume is easy to provide yet since January 2005 most volume information is completely fabricated. Then four of the American exchanges began to show the public the same volume data. Why do they show any volume if it is false or manipulated? Volume tells us not just how liquid the market is but also the strength of the market move. If you look at May 29 2009 volume for the DJA, DJI, DJR, and even the S&P you will see they all report an identical volume last Friday of 6,050,420,000 shares traded. Obviously three of the four different indices are knowingly false and our analysis shows they actually are all the same in the Yahoo data base which Yahoo apparently gets with SEC approval. Why does the SEC put out fake data? Our studies show that there are sometimes large differences relative to real NYSE data on days of large cash flows out of the market. That is to say that whoever produces this fabricated data sometimes reduces volume by 20% or more on very large volume down days to slant the data to be bullish. In our way of thinking this is SEC corruption that started in 2005 and virtually no one seems to know this has happened. We have also seen a growth (inflation) in reported fabricated volume that hides an illiquid market situation.
Ok, the corruption of the data slants to the bullish side and the inflated volumes being reported appear to be to hide liquidity in the stock market. That is a dangerous situation. Just as our financial system collapsed because banks got to be too manipulated and undercapitalized it seems the American 401 and pension plans have made the stock market awash with cash, and manipulated. There is simply too much 401 and other pension fund assets for the market to absorb. That used to cause greater swings in the market until CEOs discovered they could take the excess money in personal bonuses without affecting the market rate of advance. In fact there is so much excess money entering the market that it can't all possibly be used for capitalization. The market has been and even now is a bubble ready to collapse.
Particularly today and the beginning of every month that excess of money entering from 401 and pension plans can cause mini bubbles that can trigger rallies that are bubble rallies not bull markets. Bubble rallies can pop suddenly and the market equity then vanishes instantly.
This recent bear market bubble rally is happening on very low volume. We should first say that we believe we have figured out how to compute a somewhat uncorrupted data set for the largest market though we are not certain we have avoided all the manipulation of data. That data tells us the market is being moved with very low historic volume. We find that the market is still so awash with cash that even the thin end-of-the-month retirement inflow of cash can’t be absorbed in an orderly fashion. That is a dangerous situation today.
The bear market bubble could inflate rapidly today and it could pop tomorrow or next week. There is far too much money chasing very few worthy assets creating a very thin and manipulated market system at this point.
Market Outlook
The last minute buying on Friday probably was based on inside knowledge of how much pension and 401 cash would be coming into the market today. It will be interesting to see if that has fooled investors and will cause a bull trap today.
Our analysis does not change every other day as you typically see on the NBC/GE/Pravda network. A new ominous wrinkle may be the rise of interest rates that can delay economic recovery and lead to a premature socialist system bankruptcy. The treasury can monitor the bids for Treasury bonds and just exercise the low interest bids and silently print the rest of the money that is needed to buy the remaining Treasury bonds. That makes the auction look successful but in fact we are just running the money press like they do in Zimbabwe. With real interest rates set close to zero just a 1% rise in rates can triple the cost of national debt.
Last night Asian markets were up. China’s was up 3.4% Hong Kong up 4%, India up 1.5%, and Japan up 1.6 %.
European markets are up today in the range of 1.5% to 3% mid way through their day.
US futures indicate the markets will start about 1% higher today. The current rally is pure froth at this point. At the end of a bear market rally another 5% upward spike followed by a collapse is not atypical when investors are so bullish with MSNBC/Pravda spinning of marvelous news and cash being dumped with great abandonment into the system by the Treasury.
MSNBC/Pravda, Yahoo and the SEC have pretty much done away with market volume data. In a fully electronic system volume is easy to provide yet since January 2005 most volume information is completely fabricated. Then four of the American exchanges began to show the public the same volume data. Why do they show any volume if it is false or manipulated? Volume tells us not just how liquid the market is but also the strength of the market move. If you look at May 29 2009 volume for the DJA, DJI, DJR, and even the S&P you will see they all report an identical volume last Friday of 6,050,420,000 shares traded. Obviously three of the four different indices are knowingly false and our analysis shows they actually are all the same in the Yahoo data base which Yahoo apparently gets with SEC approval. Why does the SEC put out fake data? Our studies show that there are sometimes large differences relative to real NYSE data on days of large cash flows out of the market. That is to say that whoever produces this fabricated data sometimes reduces volume by 20% or more on very large volume down days to slant the data to be bullish. In our way of thinking this is SEC corruption that started in 2005 and virtually no one seems to know this has happened. We have also seen a growth (inflation) in reported fabricated volume that hides an illiquid market situation.
Ok, the corruption of the data slants to the bullish side and the inflated volumes being reported appear to be to hide liquidity in the stock market. That is a dangerous situation. Just as our financial system collapsed because banks got to be too manipulated and undercapitalized it seems the American 401 and pension plans have made the stock market awash with cash, and manipulated. There is simply too much 401 and other pension fund assets for the market to absorb. That used to cause greater swings in the market until CEOs discovered they could take the excess money in personal bonuses without affecting the market rate of advance. In fact there is so much excess money entering the market that it can't all possibly be used for capitalization. The market has been and even now is a bubble ready to collapse.
Particularly today and the beginning of every month that excess of money entering from 401 and pension plans can cause mini bubbles that can trigger rallies that are bubble rallies not bull markets. Bubble rallies can pop suddenly and the market equity then vanishes instantly.
This recent bear market bubble rally is happening on very low volume. We should first say that we believe we have figured out how to compute a somewhat uncorrupted data set for the largest market though we are not certain we have avoided all the manipulation of data. That data tells us the market is being moved with very low historic volume. We find that the market is still so awash with cash that even the thin end-of-the-month retirement inflow of cash can’t be absorbed in an orderly fashion. That is a dangerous situation today.
The bear market bubble could inflate rapidly today and it could pop tomorrow or next week. There is far too much money chasing very few worthy assets creating a very thin and manipulated market system at this point.
Market Outlook
The last minute buying on Friday probably was based on inside knowledge of how much pension and 401 cash would be coming into the market today. It will be interesting to see if that has fooled investors and will cause a bull trap today.
Our analysis does not change every other day as you typically see on the NBC/GE/Pravda network. A new ominous wrinkle may be the rise of interest rates that can delay economic recovery and lead to a premature socialist system bankruptcy. The treasury can monitor the bids for Treasury bonds and just exercise the low interest bids and silently print the rest of the money that is needed to buy the remaining Treasury bonds. That makes the auction look successful but in fact we are just running the money press like they do in Zimbabwe. With real interest rates set close to zero just a 1% rise in rates can triple the cost of national debt.
Last night Asian markets were up. China’s was up 3.4% Hong Kong up 4%, India up 1.5%, and Japan up 1.6 %.
European markets are up today in the range of 1.5% to 3% mid way through their day.
US futures indicate the markets will start about 1% higher today. The current rally is pure froth at this point. At the end of a bear market rally another 5% upward spike followed by a collapse is not atypical when investors are so bullish with MSNBC/Pravda spinning of marvelous news and cash being dumped with great abandonment into the system by the Treasury.
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