Nov 15, 2013 The connection between the US stock market and reality has been broken by the flood of Fed QE money expanding the low cost credit of institutional speculators who have nothing in which to invest their cash other than stocks. So the stock market bubble just gets bigger and bigger. The question this time is, “Will hedge funds and brokers go bust when this bubble bursts leaving everyone with their life savings with brokers and funds broke.” A collapse of the market institutions would bankrupt many banks as well it funds and brokers go bust.

Nov 13, 2013  Honest Texans claim Obama and Holden are publicly falsifying all the penalties they are claiming against the banks.  It turns out they are giving tax breaks for the fines so Holden and Obama can claim they are tougher than they are.  Holden shaved 35 percent off the JPMorgan settlement cost claimed in his headlines. That, for example, turned the publicized settlement of $10 billion into a penalty of only $6.5 billion.   “It shouldn’t have hidden subsidies or sweeteners in the settlement,” said Francisco Enriquez, a tax and budget associate at the U.S. Public Interest Research Group, which says it operates as a counter to big banks. “If the DOJ is in the end going to look for a $6.5 billion price tag, then that’s what they should say.”

 

Emerging-market stocks fell, extending the longest rout since 2006, after China’s leaders failed to outline measures to curb state dominance of the economy and as the U.S. signaled it may trim monetary stimulus.  At the same time MSNBC said small American investors are shunning American funds and pouring into emerging-market funds now.

 

Nov 12, 2013 Low interest rates are rotting out the American economy from the core like an old infested tree. It may look healthy on the outside but it is filled with rot, bugs, worms and parasites. People are now saying that the policies of the Obama administration are creating a permanent American underclass where dishonesty, cheating, and unabashed lying are expected. There is no accountability and the making of false injury claims through a dishonest legal profession is ingrained as a game for survival.

 

Instead of cleaning up the dishonesty at Fannie and Freddie that made possible the liar-loan real estate boom, the administration is spreading the corruption everywhere. If you are a good person you are harassed because you do not go along with the corrosive dishonesty of the socialists who lie continuously.  There are few qualified people able to get mortgages today at low rates because banks make it difficult.  It is very painful to be sued by Attorney General Holden and watch the bank mortgage assets being destroyed by the occupants because the Attorney General is on their side.  Americans are bearing a higher cost now due to the high arson rate in housing in bad neighborhoods.

 

The media’s experts claim the FED has to take action soon to maintain credibility. The FED is currently setting America up for the worst recession/depression in the history of the world. Usually a recession occurs when interest rates rise and weak corporations go out of business causing a cascade of failures of marginal businesses. But QE is a way to suppress interest rates and we could lose much more if the weakness accumulates and gets to the point that many hollowed out industries that have become shadows of their past collapse in unison. Companies get hollowed out by laying off young expensive computer savvy staff while keeping older underpaid staff who are the experts of the old outdated systems. So while revenue declines profit soars and they take on low interest debt to pay off Carl Icahn blackmail threats and give the investors a pile of cash. Then when interest rates rise most of American private industry will risk default along with the American towns, cities, states, and national government. The longer low socialist interest rates continue the more America rots like a tree from the inside out. Greenspan is no socialist and he would never have permitted this national disaster to get so far out of control. Greenspan is philosophically an Objectivist and hates this government’s socialist policies.

 

The banks look healthy and can afford to pay off the Attorney General’s blackmail threats only because QE allows them to make a guaranteed profit with 0.1% borrowing cost from the FED to make 0.25+% corporate loans. Once panic shocks Obama’s socialist FED spending party, the banks will be in for another shock as corporations, towns, cities, states, and nations fail together. If we continue on Obama’s path we are going to soon see a rapid rise in socialist totalitarian governments under tyrants because just like Castro, Hitler, and Stalin; socialists create despair and disorder first so they can become freely elected tyrants to restore law and order and punish criminals. Pol Pot did not even waste bullets on the babies of intellectuals in Cambodia when he killed anyone whom had contact with "corrupt" western countries (America) and smashed the skulls of their children. He was close to unanimously elected. That is how the communist and socialist butchers all claim they are democracies. America is a Republic not a democracy but many socialists want to change our constitution to have elections won by a simple majority. But the socialist’s back up plan is to corrupt the electorate by giving them unearned entitlements by the whims of the socialist candidate. Already American workers are outnumbered as you can see below but so far American’s have not given way to socialism. When America does we will know the American life of free enterprise, liberty, honesty and faith will no longer be an alternative way to live on earth.

 

Ben S. Bernanke and Obama’s Yellen appointment are making America addicted and the rest of the world dependent on QE money backed by the very Obama/Dodd/Frank liar loans that wrecked the US economy in 2007-2008. Working people are getting exhausted with the work load as corporations cut people to help their bottom line profits. US Government pensions (public side) are already $4 Trillion in the hole. Many states, towns and cities were set up by liberals/ progressive socialists to go bankrupt after they left office and when the pensions and the jobs both go to zero. The joy of being a socialist-liberal-progressive is in winning elections, spending irresponsibly and paying yourself and friends well and then leaving the disaster of bankruptcy for someone else to take the blame. And unless Obama stops creating incentives for people to be corrupt, permanently stupid, and to lie and cheat to take entitlements and disability payments and let government pay off much of their mortgage debt; unless there is an incentive for working for a living, the disillusioned honest working population will give up and join the party or leave the country. Why put up with Obama’s IRS harassment of people who like to work because they until now thought working for a living was what people were expected to do?

 

Nov 11, 2013 Fewer than 143,568,000 people in America pay taxes for 319,900,000 people eligible to work. That means only 44.9% of Americans pay taxes that pay the net salaries of all government employees and all the recipients of welfare, socialized medicine, entitlements, disabilities, rebates, reparations, and subsidies. Government workers (the really stupid ones) claim they pay taxes too but they are too stupid to realize we pay them enough money to cover their taxes as well as their take home income. So who is calling who stupid? Think no further than of all the stupid men and women taxpayers who voted for Obama and his socialist Senators and Congressmen and would do so again.

 US population 2013 = 319.9 million people= 319,900,000 people

 https://www.google.com/#q=US+population

 

The total number of non-government male and female civilians employed in October 2013 was 143,568 thousand or 143,568,000 private sector people. Not all of these pay taxes for 319,900,000 people.

 http://www.bls.gov/news.release/empsit.t01.htm

 

So who is calling who stupid? Think of all the really-really stupid current and retired taxpayers who voted for Obama and his socialist Senators and Congressmen and know now that they voted for these fools and still intend to vote again for any liberal/socialist Democrat or liberal Republican.

 Forget the unemployment rate. The employment rate -- the percentage of adult Americans who hold a job -- has barely budged under Obama.   In the end it is working and the retired American workers who voted for Obama and his policies that are most stupid of all.   And the most stupid American's are the ones who would do it again.  They are not lazy-stupid they are pure stupid-stupid.

 http://www.washingtonpost.com/business/on-small-business/obamacare-prompting-businesses-to-cut-employee-hours-so-far-yes-and-no/2013/10/29/f1fee542-40b7-11e3-a624-41d661b0bb78_story.html

 

World Economies Nov 13, 2013

Reborn fiscal responsibility in the U.K. has unemployment falling to 7.6% in a move toward further austerity to right the Brit economy and avoids the labor force destruction experienced in American under Obama’s quantitative easing and $Trillion annual deficits.  Obama appointed Yellen to maintain loose money.

  

 The biggest ever Chinese demonstration in US history took place across 26 American cities on Saturday to protest the "kill everyone in China" joke told and not cut from the US ABC TV show Jimmy Kimmel Live.

 http://www.deadline.com/2013/11/chinese-foreign-ministry-tells-abc-to-respond-to-protesters-reasonable-demands-over-jimmy-kimmel-comedy-bit/

 

China vowed bigger role for free markets at the party summit. This makes good sense especially for domestic private consumption.

 The economy of Estonia the newest euro member is set to expand 1.3 percent this year, down from 3.9 percent in 2012 when it posted the European Union’s second-highest growth rate. It is headed toward Gross domestic product growth rate of 0.4 percent based on the last quarter.

 Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing.

http://finance.yahoo.com/q/bc?s=%5EN225&t=1y&l=on&z=l&q=l&c=

 

Only just two months after Obama with the rest of the Group representing 20 nations pledged to "refrain from competitive devaluation, the race to take last place in global fiscal responsibility has begun anew as Central Bankers weaken their currencies to get a bigger piece of the pie. The socialist’s welfare system teaches entrepreneurial economic wealth creators that there is no profit incentive and therefore it is stupid to work in a hot risky economic kitchen when they can stay home and watch great TV serials and the sports channel or take the subsidized commuter bus to the casino. The global currency wars are heating up again as central banks are letting their wealth be devalued faster than since 1977 so foreigners will buy more and therefore combat a slowdown in trade. Pretty soon after they sell their houses they will be recommending burning their plastic furniture to heat their rented homes. No one ever suggests cutting socialist welfare when they themselves are trying to get on the dole.

 U.S. Federal Reserve said it will continue printing enough dollars to buy $1.02 trillion of federal bonds each year underwritten with defunct Obama/Frank/Dodd liar Loans because the Obama socialist economy is too weak.

 

Australia warned the Aussie is "uncomfortably high."

New Zealand said it is prepared to temper its dollar.

 The Czech policy makers said they were intervening in the currency market for the first time in 11 years to weaken the koruna. The Czech National Bank drove its koruna down by 4.4 percent versus the euro last Thursday.

 The European Central Bank cut its key rate last week.

 Brazil Finance Minister Guido Mantega said it’s a very real concern of these countries to keep their currencies weak but such moves threaten to spark a new round in a currency war, barely two months after the Group of 20 nations pledged to "refrain from competitive devaluation.

 However hedge funds cut bullish gold bets speculating the Federal Reserve will trim the $1.02 trillion in annual stimulus and strengthen the US dollar and drive down the price of gold. It is understandable that these funds have done very poorly buying gold high and selling gold low. The end result of debasing currencies is a rise in gold prices. The end of stimulation will primarily hurt the stock market and investments based on healthy growth in economic projections. So hedge funds continue to be losers and present an opportunity to pick up gold at recent its lows. These lows are due to the loss in real wealth as socialism brings about equality of poverty.

Anyone who believes the socialists will stay in power and will impose free socialized medicine for all future as well as the current 50million indigents at the expensive of all working Americans and believes these socialists will not be thrown out of office in the next three years should sell gold.

 

The German market is about 7% above the 2007 high which was about 7% above the 2000 high. It failed to break out from its upper resistance level defined by 2000 and 2007.

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

 The French market has continued to decline since year 2000. At it most recent highs it is still is still down 50% from 2008 and down 60% from 2000.

 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&t=my&l=on&z=l&q=l&c=

 

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. The NYSE index is too big to manipulate legally. It has 300 stocks just starting with the letter A.

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

 

American Economy

Nov 13

MBA Mortgage Index 11/09 -1.8% improved from -2.8% after revision from -7.0% shows the Obama government is too incompetent to even fudge the data in a believable manner.-----

Treasury Budget Oct -$91.6B still terrible -$120.0B - ---

Initial Claims 11/09 339K up again 336K ---

Nov 14

Continuing Claims 11/02 2874K up again 2868K ---Trade Balance Sep -$41.8B worse again-$38.5----

Productivity-Prel Q3 1.9% down 2.3% --

Unit Labor Costs Q3 -0.6% down after fudging up to 0.5% after first reporting 0.0%,  If they had not falsified the data it would be down -0.1 % from no change the previous month.

Natural Gas Inventories 11/09 20 bcf down from 35 bcf - -

Crude Inventories 11/09 2.640M up 1.577M +++

Nov 15

Empire Manufacturing Nov -2.2 down sharply from1.5 ---

Export Prices ex-ag. Oct -0.4% down from 0.3% ++

Import Prices ex-oil Oct 0.0% flat from 0.2%

Industrial Production Oct -0.1% down sharply from 0.7% ----

Capacity Utilization Oct 78.1% flat 78.3%

Wholesale Inventories Sep 0.4% still increasing 0.8% ----

The Markets Nov 15, 2013
The connection between the US stock market and reality has been broken by the flood of  Fed QE money expanding the low cost credit of institutional speculators who have nothing in which to invest their cash other than stocks.  So the stock market bubble just gets bigger and bigger.  The question this time is, “When will hedge funds and brokers go bust, i.e. when will this bubble bursts leaving everyone with their life savings with brokers and funds broke.”  A collapse of the market institutions would bankrupt many banks as well it funds when brokers go bust.
 A market collapse does not require an interest rate hike.  There was no FED interest rate increase that caused the 1929 stock market crash or the other half dozen crashes before that.  Yet the market mavens say this market will rise forever unless the FED lets interest rates rise.  That is how gullible people are who are buying at these prices.  However there is always a rotation going on and people still profit by buying strong companies in sectors when they bottom out.

 

Talk on the street Tuesday was that the FED will make at least a token cut to QE to see what happens and the stocks stopped moving up.  So today, Wednesday, the market cheer leaders got their pom-poms out and are saying the FED may never tighten.  So today they obviously want the markets to rise.  Yesterday the market mavens said the market can rise forever as long as the FED does not end QE.  Yet, in both dollars and in ounces of gold, Japan’s market has declined ever since they started QE over 20 years ago.

 

 Remember we showed that the stock market Hindenburg Omen kicks in several months after its sell signal and the market rises for a while first. The reason for the delay is the highly rationalized selection method used in the early stage of a bubble. But at the top of the bubble all reasoning is altogether abandoned and all ships rise with the tide.

 This time the Obama Fed numbers show the economy grew more during the government shutdown than with a functioning Obama government. Obama numbers are about as reliable as the old USSR economic numbers. How can anyone have any confidence in anything the Obama government touches? Treasuries interest rates rose the most in two months after a phony Labor Department report showed the economy added more jobs with the government shutdown, boosting speculation that the Federal Reserve may be setting people up to announce a reduction of its monthly $85 billion of bonds as soon as its Dec. 17-18 meeting. The plunge in stocks last Thursday indicates that the Obama administration leaked the Fed intentions to campaign contributors who then sold.

It is becoming clearer that the Fed’s QE may already have become a crutch that allows the world economy to hobble along. That plus legalized marijuana seems to keep the socialist students happy with the Obama administration. Who cares about studying or a job when you can live pretty comfortable with your girlfriend and her children as long as your girlfriend is on welfare? Is 'Octomom' America's Future? We are seeing the worsening effects of a socialist administration. But the stock market investors are going with the flow. You never go against the FED until the hyperinflation kicks in. And then you run.

 http://online.wsj.com/news/articles/SB123447506782479249

 

Perhaps the fed will not announce QE tapering has begun and keep it a secret as Greenspan would have done. Then perhaps the stock market will not collapse immediately. But still the cash flow would decline. And since drugs like Opium do nothing to improve human productivity and withdrawal destroys productivity… is it not likely that while QE did nothing to improve the economy withdrawal may completely destroy it? It seems QE was just another stupid socialist economic belief in something for nothing.

 If the American Congress does not stop Obama’s socialized medicine America’s bankruptcy will stop it. The QE Liar Loan backed stock market bubble finally has carried the NYSE to within striking distance of a new high. It is not apparent yet how the QE bubble will implode but it has tied the world economies as well as the American stock exchanges to worthless liar-loan mortgage paper. There is little fat left in the economy to cut. It seems the crash may come due to massive bankruptcies brought about by a world wide stock market collapse. That would also hurt precious metals. In FDR’s great depression those who kept their jobs saw pay cuts that dropped their salaries on average by 50% and many people could not pay their debts. Fortunately for them few people had purchased on credit. But with an Obama depression credit markets will undoubtedly collapse as well.

 Stock market volume (investor participation) has dropped continuously and is now down by 40% since Obama was elected in November 2007.

Market rotation continues as QE floods America with cash creating jobless stock market bubbles and wasting human capital.

　

 Markets can remain irrational longer than you can remain solvent –John Maynard Keynes

 If you look at these next two plots it says this bull market is over because prices are about 50% higher than the historical average and the dividends are very low.

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

 

The VIX indicates some market concern now at 20. The VIX would normally top out above 30 or even 70 before the bear market ends. Investors are now as complacent as they were in 2007 at the peak.

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