30-yr interest rates continue to climb above 3%. The Fed is buying Treasuries as fast as investors dump them thus keeping the Bond market fairly stable. The stock market bubble is occurring apparently because the hedge funds are shifting investments from fixed rate to income stocks. Dividend stocks are under the same selling pressure as bonds at the current moment and some with the highest dividends may be the first to break down when this stock market bubble breaks. The FED will absorb enormous losses as the Treasuries and other fixed rate assets plummet in value by 50% each time interest rates double.

Last Thursday President Obama said he has ended the war on terrorism.   But Obama needs to end the Muslim war on Americans first.  Is Obama now going to switch to actively and publicly seek an end to all the hate speech of Muslim Jihads that are the source of terrorism against Americans? 

 

Wednesday, the State Department reported a “marked resurgence” in terrorist-related activities by Iran and activities by Iran’s Ministry of Intelligence and Security, its Islamic Revolutionary Guard Corps-Quds Force, and its Lebanese ally, Hezbollah.

 

Detroit now is run by an emergency manager appointed by the state who replaces the mayor and city council that left public safety in collapse the city running a $380 million deficit and teetering on a record municipal bankruptcy. The city is bolstering its security by having unarmed citizens patrol the streets. Meanwhile, the homicide rate continues rising.

 

UnitedHealth Group Inc. will only offer coverage in a few of the U.S. health-care law’s new insurance exchanges, in another indication that big insurers see little reason to participate in a dying industry.

 

The Attorney General's harassment, dirty tricks, and violation of other American Constitutional rights such as privacy has been undermining confidence in America’s government with simultaneous Fast and Furious gun running to impugn innocent gun owners, IRS harassment (based on names such as patriot and constitution), and wire tapping of what had been an American free press.  He and his agents need to remove themselves from office ASAP or they may drag down the administration.  He is still in contempt of Congress.

 

U.S. oil stockpiles rose to the highest levels in more than 80 years.

 

World Economies

http://www.bloomberg.com/news/

http://www.foxbusiness.com/index.html

Japan is not a good investment for Americans because since beginning quantitative easing in 1990 they weaken their currency faster than they expanded their economy.

http://finance.yahoo.com/q/bc?s=%5EN225&t=my&l=on&z=l&q=l&c=

 

FTSE 100 Index is close to its upper resistance level reached previously in 2000 and 2007.

http://finance.yahoo.com/echarts?s=%5EFTSE+Interactive#symbol=^ftse;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 

The German market is close to its upper resistance level reached previously in 2000 and 2007.

http://in.finance.yahoo.com/q/ta?s=%5EGDAXI&t=my&l=on&z=l&q=l&p=&a=&c=

 

The French market indicates stagnation since year 2000.  It still is down 50% from 2008.

http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=

 

The Swiss market indicates stagnation since 2007.  http://finance.yahoo.com/q/bc?s=%5ESSMI+Basic+Chart&t=my

 

  The NYSE is similar to the British and Swiss and indicates stagnation since 2007 given in excess of 15% inflation since then and no similar market advance. http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=my;compare=;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 

 The SandP is parabolic at old inflation adjusted resistance levels which were set in 2000 and 2007 and at this level it has not even matched inflation.  Simple mathematics says that after a 66.6% drop in value it has to go up 300% from the low to get back to breaking even.  The market (accounting for inflation) was lower in 2007 than in 2002 and is lower now in 2013 than in 2007.  And MSNBC/Pravda says we are recovering because we are at the same stock market level we had in early 2000 before the Clinton recession, the Bush election and 911.

http://www.google.com/finance?q=INDEXSP%3A.INX&ei=l_-LUejREeO_0gHwwQE

 

American Economy

May 28

 Case-Shiller 20-city Index Mar +10.9% flat 9.3% -

AM Consumer Confidence May 76.2 improved from 68.1 +

May 29

MBA Mortgage Index 05/25 -8.8% declined again -9.8% - --

May 30

 Initial Claims 05/25 354K up from 340K--

Continuing Claims 05/18 2986K up from 2912K--

GDP - Second Estimate Q1 2.4% down from 2.5% --

GDP Deflator - Second Estimate Q1 1.1% flat% 1.2% 

Pending Home Sales Apr 0.3% down sharply from 1.5%- -

Natural Gas Inventories 05/25 88 bcf flat 89 bcf 

Crude Inventories 05/25 +3.0 mln up from -0.338M +

May 31

Personal Income Apr 0.0% down from 0.2% ---

Personal Spending Apr -0.2 down sharply from 0.2% ---

PCE Prices - Core Apr 0.0% flat 0.0%

Chicago PMI May 58.7 improved probably in error 49.0 

Michigan Sentiment - Final May 84.5 up slightly from 83.7 

 

The Markets May 31, 2013

This market is extremely frothy.  Many stocks have corporation stipulations that they cannot be sold short.  Consequently hedge funds can manufacture profits for many years simply by buying the shares of corporations they already own.  Think about it, when together they buy up the majority of a stock they can virtually set the price they want with extremely low volume.  If you own such a Ponzi type “something for nothing” hedge fund, they get to retire on your retirement income and leave you with nothing for your retirement when the thinly traded corporations finally go bust. 

 

The recent Bulls- Bears indicator.  More bulls than bears means more exuberance or topping.   That is a increasingly bearish sign!

 http://www.martincapital.com/index.php?page=graph&view=investors_intel

 

World trade has been dead for four years (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. 

http://www.martincapital.com/index.php?page=graph&view=interest_rates_long

 

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 a 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