The American deficit rate has declined moving out the date
when the deficit cap has to be raised.
Apple and other companies have increased returns by going
heavily into debt to leverage their meager return on investment. So they may seem profitable when leveraged
with an interest expense less than 1% but at 2% they may be unprofitable and at
5% they can go bankrupt. Unfortunately
when rates rise the federal regulators lose control of the rates and market
risks set the rates. While high prices
of stocks seem very good, many brokerage firms are now quietly telling
investors that money they have in the stock market is not insured for any
amount as bank savings are and stock market accounts and brokerage firms themselves
can be completely wiped out in a serious decline. Very little investment volume has moved
stocks into the stratosphere and a plunge not only affects people who are
invested. If money is just sitting in a
brokerage account it is not insured at all and can be wiped out. Only bank accounts have some insurance but
even then you need to divide the money up so no bank account exceeds the
insured level. But Cyprus
Blatant lying has been going since last Friday by Cramer and
MSNBC saying that suddenly the employment picture has been revised up and all
is well in the economy. Except for the
revision to February, the employment picture has worsened, and February was no
better than last February. They may be
confused and think the number of positions waiting to be filled is an
indication of hiring. A large number of jobs without qualified
applicants are not good news because it shows many people are so poorly
educated that they are becoming unemployable in America Washington
Revenue at Disney's amusement parks and resorts grew 14% to
$3.3 billion, bolstered by the Cars
Land
Southwest's report Tuesday echoed last week's news from US
Airways, which said that while passenger traffic was up the revenue ratio fell
4 percent in April. First class travel by government employees dropped after
automatic federal spending cuts took effect cutting some first class travel and
convention spending. Las Vegas
The Commerce Department reported construction spending in
the U.S.
Manufacturing expanded in April at the slowest pace this
year and companies took on the fewest workers in seven months, adding to
evidence America
Consumer sentiment is still in the doldrums.
Factory orders year to year increases have become stuck near
zero %.
Producer and Consumer price indices are declining again as
if we were slipping into another recession or depression on top of Obama’s 5
year recession.
You can see that the stocks in a selected index become
favorites (e.g. DJI) and consequently that portfolio of stocks rises faster and
gives the false impression that the whole market advances several extra percent
points each year giving doing much better than it actually is doing. And therefore almost no investor averages as
well as an index does. Investors have
the same gambler’s remorse and it has them thinking and saying they actually
had the gains of the index. It is an
illusion. But it is still the best way
to save for the future.
The two rallies before hardly felt a correction:
And the two rallies before those saw a 10% correction a 10% recovery
and then the sharp 20% selloff in 2011
The Group of Seven finance chiefs gather in the U.K.
Hong Kong’s economy grew a less-than-estimated 0.2 percent
in the first three months of this year, the slowest pace in three quarters, as China
Australia & New Zealand Banking Group Ltd (ANZ) cut its
forecast to 2.5 percent from 3.7 percent after China
Speculation is now showing up everywhere. MSNBC said the US was recovering and
explained the new US highs but as we showed the numbers they use are not true
and now the fact that Europe and Asia are rising without any recovery shows the
world stock markets are now being hit with shear and dangerous speculation.
The German market just set a new all time high with a sharp
spike in prices.
All the main international markets just spiked up with no
cause other than speculation with cash from money borrowed from Obama and
Bernanke.
The Greek market indicates stagnation since year 2000.
The French market indicates stagnation since year 2000.
The Swiss market indicates stagnation since 2007. But once again look at the spike up in stock
prices with Bernanke’s $85,000,000,000/month gift from America
The NYSE is similar
to the British and Swiss and indicates stagnation since 2007 given in excess of
15% inflation but the market no similar market advance.
American Economy
Now that the Big Brother and the FED is inflating the money supply the
new highs don’t even Given the inflation exceeding 15% since the last high in
2008 it has a long way to go to break even in 2008 dollar value.
The DJA in 2013 is also now at a record high due to
inflation. Look at the spike up this year as $85,000,000,000 flows into markets
each month.
This week
May 7
Consumer Credit Mar
$8.0B down sharply from $18.6B last month -----
May 8
MBA Mortgage Index 05/04 7.0% up from 1.8% ++
Crude Inventories 05/04 0.230M down sharply from 6.696M -
May 9
Initial Claims 05/04
323K flat from 324 for the week…Not good since fewer than 100K jobs were
created all of last month. New claims
still vastly exceed new jobs. ---
Continuing Claims 04/27 3005K slightly lower 3019K because
people are giving up looking for jobs. ---
The Markets May 9, 2013
Beware of a bull trap when the bulls decide the advance is
long in the tooth and to get out and cause a run-up and then sell into the new
bulls that are too late for the party.
The market drops so fast the new bulls are trapped. Make sure if one bank or brokerage firm goes
broke that you will not lose everything.
Keep no more than the insured amount in one bank. Be aware that you do not know just how leveraged
brokerage firms and banks have become until a collapse and then their hidden
debts and risks are revealed too late.
We think this year will resemble the last two where the
market advanced early in the year then lost most of it and then reversed again
and gained it back by December. There is
however an increasing possibility that the bull market we had since April 2009
is ending now at a peak and it will be down at the end of the year. Bull markets once ran 3 years then 4 years
but rarely 5 years. Ours has already run
4 years so far. Bear markets usually follow
for 1 to 2 years.
Look at the recent Bulls- Bears indicator. More bulls than bears means more exuberance
or topping. http://www.martincapital.com/index.php?page=graph&view=investors_intel
Can world trade go any lower or has it flat lined? Look at the last 5 years. It still looks close to zero growth.
http://www.bloomberg.com/quote/BDIY:IND/chart
Bernanke is pushing on a string. The FED has run out of leverage at close to
0% short term interest rates.
The VIX behaved this way in 2006 and 2007when the bubble
began to unravel but the market did not collapse until 2008. Again look at 5 years and you see the worst
is yet to come. The VIX would normally
top out above 30 before the bear market ends.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=
World market updates:
http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/intlindices?e=asia
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