Jan 2, 2015 Socialism takes away the personal headaches of compassion, purpose, and hard work. US construction spending slipped 0.3 pct. in November. US Manufacturing also slipped to 55.5 the level before the administration began hyping a recovery. No one trusts anything Obama says for very good reasons.

http://research.stlouisfed.org/fred2/series/NAPM/

Government supported universities and commercial service groups that depend on government grants cannot paint statistics in rose colors too long before their government bought corruption becomes obvious and Americans lose confidence in Obama’s experts too! 

The MIT professor who Obama paid $4,000,000 to and several states paid a total of  $2,000,000 to, said Americans are just too stupid to see what the leftists are doing. 

http://www.foxnews.com/opinion/2014/11/12/jonathan-gruber-obamacare-architect-elitist-contempt-for-ordinary-americans/

Gruber was paid $6 million for his information.  All of Obama’s US economic statistics are paid for in one way or another by the Obama administration.  Do you really believe our economy is now recovering?  I want to believe it but what I see happening does not support the numbers. 

As the new US recession becomes obvious there will be an avalanche of bad news that must become a crescendo before wall street promoters such as Jim Cramer will admit the truth and say “They (in the administration) are nuts!” again.  But the last time in 2008 the market was already down 30%, about half way to the low before the promoters told the truth.

Remember, this will probably take more than a year to unfold with many spikes on good news such as Putin and Kim Jong Un coming around and acting like mischievous but good boys again. 

And oil and other commodity prices will be bottoming.  The greatest threat is a great depression where the FED no longer pushing for us but is rather pushing on a string that does nothing.   At that time we will become essentially a third world socialist economy.  But what difference does that make at that point?

Germany now has negative real interest rates and is pushing on a string.  Of course the last German great depression brought about Nationalist Socialism in Germany and a secret treaty with Internationalist Socialists in Russia to simultaneously invade and divide up Poland and then the rest of Europe.  Bullying is what socialists do best after they take everything else from their people.

We will not likely see a great depression if we can vote all the leftists and socialist out of office within two years.  But if it begins to look like they will stay in office we believe the stock market will be down 90% before Obama leaves office.  But Hillary will not have a Republican or Conservative to blame in that case and she as usual will not be competent and up to her assignment’s responsibilities. 

https://www.youtube.com/watch?v=8INIH0JfNA8

Hilary blamed her fiasco on a poor Jewish film maker not the Moslem Terrorists, not her lack of preparation for her job, and not her irresponsibility in not taking care of the Americans she directed.  But what difference does that make to Hilary even now much less then?

 Because so much of politics and economics are psychological our normative perspectives tend to become self fulfilling.  For that reason when people are selling something they take a very positive position least they lose the sale.  For that reason we are also bombarded with endless optimistic projections from those who long for the 50year business cycle that existed 2000 years ago in Biblical times when for one short year every 50 years there was a jubilee year when all debts were forgiven.  In the Jubilee year everyone started again with a clean state.  It was only 60 years ago that the business cycle was believed to be just four years long and that every 20 years there was a mild economic depression when debt was often forgiven.  The business cycle has been growing again and our current business cycle that began its decline in early 2007, has been rising since early 2009.  This cycle is almost twice as long-in-tooth of the old 4-year business cycle.  Our sell signals started in October 2014 and the market has been similar in swings and perception to those early runs and plummets of 2007 and 2008.  

Confidence in American leadership has been critical in world economics since WWI.  The only difference now is that the current administration has lost all credibility and they can no longer blame anyone else for the coming economic correction.  And this administration has lost confidence worldwide and has created far more doubt about America’s competence and steadfastness than any previous administration.   And that is the biggest problem we face. 

The only thing we have to fear is this administration itself, because this administration cannot handle any fear.  Look at their crazy reaction to Ebola and then the administration’s subsequent dead silence when they stopped their panicking.  This administration’s believers will be the first jumping out of the windows when the economy drops in 2015.  Let’s hope nobody follows them.

The BRICs are beginning to tumble.  Russia and Brazil are already in decline and will take more than one year to unwind their very different obstacles of corruption and debt.  Lower commodity prices in the developing world will put a strain on their economies.  China’s growth is slowing rapidly and is likely not going to bottom out for at least two years perhaps at a more normal 4% to 5% growth rate.  But China will have to tackle corruption, authoritarianism, and pollution or forever become a shunned backward bumbling country like N Korea.

Japan seems to be rapidly growing their Quantitative Easing even after that policy failed miserably each time it was used since 1980.  QE has led to close to zero growth relative to the growth of the US dollar for 24 years now.  Japan thought they would overtake America until 1990.  Then they launched their Quantitative Easing.  And knowing that QE was a complete failure for Japan, the USA’s FED was allowed by Obama to start it up again after it was first phased out and the economy was recovering.

http://finance.yahoo.com/echarts?s=%5EN225+Interactive#%7B%22range%22%3A%22max%22%2C%22scale%22%3A%22linear%22%7D 

Britain’s productivity continues to decline although their austerity program seems to have righted many of the fiscal excesses.
http://www.goldmansachs.com/our-thinking/outlook/2015/index.html?videoId=99568

http://www.wsj.com/articles/with-less-chinese-support-brics-tumble-heard-on-the-street-1419981481

Dec 31, 2014  The greatest threat of a free enterprise recession is, that it is just as economically bad as socialism is at its very best.  Therefore all the leftists and Elizabeth Warren socialists then come out and say at least under Mao, Castro, and Stalin no one was left out except for scientists, intellectuals and basically everyone who has depended on their brains or compassion to live.   Socialism takes away the personal headaches of compassion, purpose, and hard work.

After WWII we had a space race between the imprisoned German scientists in Russian work camps and the free German Scientists we invited to America and Great Britain.   As the scientists died off, Russia collapsed but under the free world’s free enterprise the scientists had an economic multiplying effect.   The Soviet scientist Lysenko singlehandedly destroyed Soviet genetic science by making it a socialist science much the way American idiot leftist professors destroy science, healthcare, the social sciences and economics in America at places like the EPA, MIT and Harvard.  We now have the Harvard professor who claimed she was a Cherokee in order to get a Harvard post and we have the MIT professor who said Obama had to lie about Medicare because Americans are too stupid to know what is best for them.  We have our school leftists who have taken American education from being #1 in 1963 to being #26 in the world in 2014.  We have a leftist run welfare system that provides cash incentives to break up the American family.  Russia is in a worsening recession and much of the world is lapsing into disease, famine, and terror as the leftists tear down and institutionalize charity, kindness, and committed trusting relationships which are foundations of the laws and life in free societies.  Leftists in East Germany and the USSR ended up training their neighbor’s children to spy on their parents.

 

New Home Sales Nov 438K down 4.3% from last month and still making very little progress liquidating the inventory of defaulted Liar-Loan houses sitting there unoccupied since 2007.

http://www.bloomberg.com/quote/NHSLTOT:IND

 

Obama’s continuing unemployment claims keep rising even though he says fewer people are getting onto unemployment each week, and unemployment has not been extended so people still have to leave unemployment as scheduled.   That is one of Obama’s economic miracles and why his government statistics indicate he also thinks he walks on water and is not smart enough to know American’s can see through his incompetence.

 

Consumer confidence looks like the same roller coaster we saw in stocks before 2000 and 2007 just before their bubbles burst.  It has been a descending ride of American confidence in since the DOTCOM bubble.  It also shows we are at the top of the ride and about to drop.

http://hosting.briefing.com/cschwab/Calendars/EconomicReleases/conf.htm

 

Similarly Consumer Sentiment is back to where it was on Obama’s first presidential election campaign in 2007 before the Dodd-Frank-Obama Liar-loan derivatives market collapsed.  And think how absurd it is that Obama allowed Dodd and Frank to give input on the new banking regulations.   After the Stupid-Party is thrown out of office ASAP the banking regulations have to be made simple to govern because obtuse regulations are the greatest source of the legalized corruption endemic in socialized nations like Russia and China.

http://www.advisorperspectives.com/dshort/updates/Michigan-Consumer-Sentiment-Index.php

 

Spain has kept Goldman Sachs’ $835,000,000 loan in the failed Banco Espirito in that bank with that bank’s total estimated liquidation value now estimated to be only about 25% of just the Goldman loan alone.  We are now seeing some of the high risks that banks have been taking in Libya, Spain, and other weak or unstable areas.  These are the first stones that the ships of enterprise hit when the flow level in the economic river of investment gets low.  The cause of a 60%-70% stock market drop is never imagined until it happens.  A billion dollars lost here and there begin to add up during a 12 to 18 month economic contraction.

 

Dec 29, 2014  Volatility Ahead-  If you look at the Real Estate ETF called URE back to 2007 and 2008, the number of shares exchanged looks ridiculously high because the ETF dropped so much and had many stock splits along the way.  That is easy but not necessary to correct to recognize the volatility during that last stock market decline.  Obviously people who set narrow price range targets then were quickly liquidated if they used standing orders because individual investors cannot put in standing orders more than 25% above the market.  In other words the average investor in ETFs will be sold out of that kind of market quickly because they will be whip sawed and net values will decline so rapidly that those who hold will fold without benefitting from the spikes in appreciation.   So for many, the best strategy would be to withdraw and re-enter the market when it is lower, perhaps 50% to 60% lower.   For others who study the market there could be extraordinary value ahead.

http://stockcharts.com/freecharts/perf.php?ure

 

Russia today is much the same as it was in 1858 when Abraham Lincoln wrote a letter to convert a longtime friend and still a slave-holder Joshua F. Speed (24 August 1855):  As a nation, we began by declaring that "all men are created equal." We now practically read it "all men are created equal, except negroes." When the Know-Nothings get control, it will read "all men are created equal, except negroes, and foreigners, and Catholics." When it comes to this I should prefer emigrating to some country where they make no pretence of loving liberty — to Russia, for instance, where despotism can be taken pure, and without the base alloy of hypocrisy [sic].

 

The Know-Nothings currently have control of our educational system.  Historically the fascists and other dictatorships of the proletariat first disarmed the general population and then used a secret police, the schools, and a Gulag to control their populations.  Under Obama the elitist Know-Nothing proletariat has taken American heritage out of the schools and inserted a new interpretation of the Constitution’s 2^nd Amendment to support demigod gun control.  In America our armed civilian population is still larger than any standing army and we also have a well regulated militia necessary to the security of a free state.  The original American militia evolved to become the U.S. National Guard.  But the 2^nd Amendment also says, “the right of the people to keep and bear arms shall not be infringed.” Abraham Lincoln warned Americans that America can never be destroyed by any outside force only by the internal rot of Know-Nothings should they get control.  It is too bad America’s Know-Nothing demigods do not emigrate to Russia or Cuba where they would feel much more at home with gun control and income redistribution.  Socialists intentionally create economic crises to blame entrepreneurs and take government control.

http://www.pbs.org/now/classroom/gun.html

http://libertyunyielding.com/2014/03/24/common-core-textbook-rewrites-second-amendment/#JQy21Cf24CEW4l03.99

http://www.ifiberone.com/news/moses-lake-parent-questions-book-s-change-of-second-amendment/article_9fca2cfa-7415-11e3-a01d-001a4bcf6878.html

 

As President Obama’s chief of Staff once said:  Rahm's Rule: You Never Want A Serious Crisis To Go To Waste.'  Certainly socialist like Hitler, Lenin, and Castro took every opportunity to acquire dictatorial power.  You can count on socialist opportunists to make a crisis worse to consolidate power and take away rights.  But most Americans now know this and plan to throw the socialists out at every opportunity.

http://www.foxnews.com/politics/2011/01/11/video-rahm-emanuel-clarifies-2008-comment-never-want-serious-crisis-to-go-to/

December 27 The Shiller P/E, the ratio provides the average inflation-adjusted earnings for the S&P 500 (the SPX) over the previous 10 years. Its 20th-century average has been 15.21. Only four times in the last 100 years has the Shiller P/E been above 25. Those times were 1929, 1999, 2007, and now. We all know what came next after the market peaks in those years. Those times were just before the Great Depression, before the DOTCOM bubble collapsed, before the Liar Loan mortgage derivatives collapsed and right now. Coincidentally they were all long bull runs. But some fools say we are in a new 40 year bull market and that we have a long way to go.

http://www.multpl.com/shiller-pe/

http://finance.yahoo.com/news/must-know-shiller-p-e-130033217.html

http://www.investopedia.com/terms/p/pe10ratio.asp

December 23 As fear of a global recession grew, people from all over the world flocked first to American stocks and then more specifically to the DJI’ 60 stocks and the Standard and Poor 500 stocks. That drove them to higher highs just as the NYSE, the small cap, and stocks of developing nations began to be hit with recession. Those corporations and nations that depend on mining and oil were hit first because the world recession causes supplies of minerals and energy to fill up all available storage until finally the commodity prices plummet. The slowdown began earlier this year, commodity stocks were falling at the end of summer and oil and gas energy have plummeted this past month.

http://futures.tradingcharts.com/chart/CL_/M?anticache=1417442887 

You can see from the Obama government’s crude oil chart that oil dropped significantly in the Clinton’s 2000 recession hitting a low of $10.87 per barrel.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A 

We told you about that problem on Dec 1 when the news media was saying the price of oil would bottom above $87.50.  We also said we would have a year end rally and the overvalued world stock markets would take the next step down in January.  But we pointed out that in the past the stock market cheer leaders never stop cheer leading until the market is down over 25%.  We expect average prices will hit bottom in 2015 or early 2016 at about 60% below their highs.   The flocking of frightened investors into the DJI set a new record today.   Popular stocks will not avoid the contraction. 

As we previously discussed, Obama’s government economic statistics go beyond simple incompetence and are clearly manipulated.  We saw how the housing market did well in the summer but froze up at the end of September even as many people put their houses up for sale.  Some towns have twice as many houses for sale now as in the summer and almost zero buyer interest.  Here it is three months later and Obama’s statistics are only beginning to show what Americans already knew. 

Dec 23

New Home Sales Nov 438K down sharply from 458K

Durable Orders Nov -0.7% down sharply from 0.4%

Durable Goods -ex transportation Nov -0.4% down sharply again from -0.9% last time.

GDP - Third Estimate Q3 5.0% pure incompetence or bullshit

Foreign Markets:

The favored “BRICs” (Brazil, Russia, India, and China) of a few years ago are sinking and several nations are near bankruptcy again.  Another socialist is about to be elected in Greece, the proverbial canary in the EU mine shaft.

http://www.wsj.com/articles/greek-leftist-party-syriza-spooks-some-investors-1418310035?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB12483005598294434483704580330582292837658.html

 China has attributed their high stock prices to the same stock manipulation crimes that occurred the last time their stock prices ran up.  Obama socialists and the Chinese Communists cannot stand those richest 2% who shrewdly invest in their country’s future.  They believe equality of poverty is better than a system that encourages merit and competence because socialism favors the incompetent.  But price run ups usually are a product of corruption.  In America we have also have both government and private entities overstating valuations. 

http://www.freenewspos.com/en/latest-news-article/c/2199384/china/china-investigates-possible-stock-price-manipulation

Some people sell overpriced stocks in mediocre companies to retirees.  In 2007 many retirees quit the market after losing more than 50% of the money they had saved.  Most of them switched to bonds which are now also overvalued and which will collapse when the FED raises interest rates.   Most brokers now are also bankers and money in the bank is still insured to $200,000.  Money in cash at a brokerage usually is uninsured.  Some people break their IRA’s into 3 or 4 bank accounts for more insurance.  More experience investors sometimes invest in ETF’s but bullish ETFs are a disaster in a declining market (look at URE in 2007 and 2008).  ETFs are only for fairly active experienced trading and often a bearish ETF is held for less than one month at a time.  But a bear market is much more volatile and some people are capable of switching back and forth between bull and bear ETFs.

At this point in time some investors are gaining experience to see if they can safely use bearish ETFs in future declines and possibly alternate back and forth.  However, the ETF URE shows the risk of holding on to an ETF in the wrong market.  Gold unfortunately is only another commodity when there is no inflation.

December 19 No corporation would ever be allowed to make a movie of President Obama where in the end they blow off Obama’s head and say it is a comedy. Yet the subject of a SONY 3rd rate movie was North Korea and in it they blow off the head of the Korean leader and they call that movie a comedy. That kind of movie is not free speech, it is sick and horrible. Sony did the right thing to stop the release. That movie did not represent the culture of America as Obama says. Sony acted irresponsibly and put the entire world under threat of future attacks like the Moslem terror attack on the American embassy in Benghazi. Yet Obama and Hilary Clinton at that time blamed and attacked that movie maker of a truthful movie about Mohamed that was later proven to have had nothing to do with the attack in Benghazi. No Moslems at all have attributed terrorism to that movie. Yet Obama and Hilary said they threw that movie maker in a jail and took away his free speech. The cyber attack on Sony should be a wakeup call that insults and slander are not within an American nor a free world definition of free speech. Demonizing or dehumanizing people is something akin to the behavior of Nazi, and ISIS not to the people of the free world. SONY deserves to be boycotted and put out of business. Obama is also wrong in criticizing Sony for halting the release of their sick movie about Korea. Obama shows he doesn’t understand that with free speech comes a responsibility to be truthful. If Obama begins a cyber war over this sick Sony movie America will have the most to lose.

We estimate the bear market will be back within two weeks.  The expected year end rally has peaked.

 

December 18   The Wall street Journal has branded self proclaimed Cherokee Senator Elizabeth Warren as the new leader of the “Stupid Party”.   Elizabeth apparently now also wants to run as the first Cherokee US President and boot out Hilary Clinton.  Wall Street’s Opinion Page on A17 on December 18, 2014 has the headline, “The New Stupid Party” featuring Senator Elizabeth Warren.  Until she got caught, she claimed she was Cherokee Indian because they suffered greatly on the “Trail of Tears” after they were driven out of the South.  In the 1980’s when universities were looking for minority faculty members Warren had put herself on the “Minority Law Teacher” list in the faculty directory of the Association of American Law Schools and in effect took the job away from a disadvantaged person.   She only took her name off that list when she gained tenure at Harvard in 1995 and realized she would get caught.  But she later repeated her false claims of Native American ancestry in her book, A Fighting Chance and says it was her parents fault if she was misinformed.   Acknowledged Cherokee genealogist Twila Barnes is incensed by Elizabeth Warren’s false claims to be Cherokee as late as 2012 and has documented her false claims.

http://www.wsj.com/articles/dan-henninger-the-new-stupid-party-1418862634

http://www.breitbart.com/big-government/2014/04/17/elizabeth-warren-repeats-her-false-claims-of-native-american-ancestry-in-new-book/

http://legalinsurrection.com/2012/09/cherokee-genealogist-to-elizabeth-warren-your-native-american-issue-has-not-been-put-to-rest/

http://elizabethwarrenwiki.org/elizabeth-warren-native-american-cherokee-controversy/

http://www.wsj.com/articles/SB10001424052702304279904579515673803259640

 

The American housing market went into a tailspin at the end of September.  Sales had picked up in the summer and people rushed to the put houses back on the market in October but the market froze up,  In many New England towns houses haven’t had a signal prospective home buy visit for two months now and it is not much better elsewhere.  The economic pickup was nothing but administration “stupid party” glad-talk.  The stock market knows better and promises to resume its slide after the Christmas Season.  Oil prices have plummeted because demand has plummeted and will not bottom until demand and supply are balanced.  Oil prices then will slowly rise as the world recession eases toward the end of 2015.  The FED is waiting for the recession to finish tanking because the FED does not want to be blamed by Obama for his latest recession.  The authors of the 2008 Liar-Loan Recession were actually Senators Dodd, Frank, and Obama and they all blamed George Bush.  The Liar Loan debacle was a “Stupid Party” government attempt to redistribute home ownership to the underprivileged who had no stable income stream.

 

December 17   The FED is apparently waiting to raise interest rates until the US bear stock market is recognized so that the FED will not be blamed for the worsening recession.  Jim Crammer recognized the bear late in 2008 and by then stocks were already half way down to the low.  So Jim Cramer only had missed 30% of the 60% stock market decline.  He was the first commentator to publicly recognize the bear market and he embarrassed the Obama administration using his “they’re nuts” remark again at that time.

 

American Economy

Either there is another gross Obama Administration error or there has been a major rise in cash outflow (TIC flow) from the USA.

Dec 15

Net Long-Term USA TIC Flows Oct -$1.4B sharply down from $164.3B – This appears to a gross Obama Administration error or a major rise in cash outflow from the USA.----

New York Manufacturing Dec -3.6%, sharply lower contradicts Industrial Production reported up 1.3% in Nov.

 

Capacity Utilization Nov 80.1%

The US housing industry had perked up last summer but froze up in October and has declined somewhere between 2% and 6% since then.

NAHB Housing Market Index Dec 57 down from 58 -

Dec 16

Housing Starts Nov 1028K down from 1045K --- a big negative

Building Permits Nov 1035K down sharply from 1092K--- another big negative

MBA Mortgage Index 12/13 -3.3% down from 7.3% --- a bigger negative

CPI Nov -0.3% --- deflation

Current Account Balance Q3 -$100.3B trade balance down more---

 

This appears to be near the low point for Russia and for oil prices this year but both could go lower again next year. 

During a recession many executives are fired and their company books are corrected with honest earnings reported lower due to the write downs of inflated asset values.  We are already seeing many retiring or being fired this year.

 

December 16   China’s successful free economy has been just a brief moment of light in their 4000 years of dictatorial darkness.  China’s corrupt communists have recently betrayed the enlightened economic free-enterprise revolution.    There are three components to a thriving free economy.  There is free-enterprise that unshackles innovative people by allowing them to borrow money for innovative start-up companies.  Secondly, there are competitive capital markets (capitalism) where shrewd investors select only the best innovators and freely but very carefully and democratically vote by placing their capital (money) with the most innovative companies that they conclude will be most successful (profitable).  Finally, there is self determination (freedom to chose) that gives the hard working entrepreneurs, capitalists, and workers the pleasure of the freedom to live and spent their earnings the way they freely chose.   The Chinese government has the responsibility to stop corruption and to limit pollution of the air, water, and land.  But China’s communists have now reversed its course and it is becoming Red China again, a land where the corrupt politicians rule by dictatorship and place their own dictators in power even in Hong Kong. 
The Communists have abrogated their 1984 agreement when Great Britain pulled out of Hong Kong and the Chinese government promised to allow Hong Kong self determination forever.

The Communists can’t even regulate and limit their national pollution.   Fog and smog now deny the Chinese even the pleasure of a beautiful sunset or seeing the sky.  Now the Red Chinese plan to pre-select two or three dictators from which Hong Kong citizens can choose a leader.  Probably only the communists in Hong Kong will vote and the vast majority will boycott the election of the totalitarian Chinese dictator of Hong Kong.   It appears the Communist authoritarian dynasty is returning to the historic 4000 years of the dynasty of coolie poverty and genocide.  We can expect an economic implosion and a Great Depression starting in China very soon.   We are seeing Putin’s communist dictatorship starting to go bankrupt right now.

            It is becoming painfully obvious that Obama’s economic statistics are falsified.  Unemployment in the USA is about 20% and Obama claims it is 5%.  What has happened is that part time jobs have replaced many full time jobs, people are retiring younger, many people have given up and now work odd jobs “under-the-table”, and the number of uneducated and unemployable poor people getting food stamps and welfare has exploded.  Once an Obama falsified statistic is issued they must make several downward corrections or else it creates an opposite effect the next year.  Look at this statistic (below) and you can see that the Obama administration has been pretty stupid in covering its tracks when manipulating data that they pretend will show economic progress. 

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

 

Can you possibly believe (see above) that “Manufacturing Durable Goods Total” rose 1100% (from 2013),  a few months ago, going from 3 to 33?  When you see these huge swings year to year you can understand that the Obama Administration economists are so stupid they can’t even cover their ridiculous manipulations of the economic data.  Obama may very well have already triggered another Great Depression like we had with FDR and his social programs.   Obama seems to have America on the edge of a Great Depression just as Russia implodes, and China is going over the edge.  Germany too is seeing deflation which is the sign of the early stage of economic depression.  Germany has not seen that since the last Great Depression too.

 

December 15    Home foreclosures increased in August, October, and November.  The only segment of the USA economy that has been booming is the fracking oil segment so how can any Americans actually believe we are coming out of the Obama recession when he continues to dig the economic hole deeper with his regulations and highway robbery of American banks.  He hits up the banks every year for fines and campaign funds.  In fact campaigning for political contributions is how Obama spends 90% of his time.  Where is there any evidence of US growth outside of US fracking?  And the Liberals want to make fracking illegal, while fracking is about to be hit hard by declining oil prices?  Obama is the Wizard of Oz, behind the curtain pretending he is not responsible for putting America into a spiraling economic depression.  We have a stock market bubble based on illusions and his falsified economic data, all the same wizardry of Brezhnev before the collapse of the USSR.  Soon we will also have to help feed the Russians again if Putin does not retire.

http://www.cnbc.com/id/102178228

http://www.theburningplatform.com/2014/12/11/do-foreclosures-increase-during-a-housing-recovery/

http://www.dailyfinance.com/2014/09/11/august-home-foreclosures-rise-realtytrac/

 

The fact that so many executives are retiring or being replaced this year is a clear sign that the corporation boards are cleaning house in preparation to clean up their account books.  Next year we expect to see more honest corporate reports where obsolete assets are devalued, losses and debts are not hidden, and incomes go negative for several quarters.

 

Again the declining price of oil is not a cause of the stock market sell-off that started in October.  This is the second phase of a sell-off caused by the lower world wide energy consumption of the poorer economies since Obama took office and America abandoned its leadership role in the world. The decline in the 10yr bond interest rate is telling investors a deeper recession or even an Obama depression is looming.  Near zero real growth is what the Obama administration has given America with his new regulations. His wealth redistribution is a major disincentive for Americans getting an education or a job, as is his attack on free enterprise job creation.   Our labor force is losing a whole generation of young people.  The stock market is now weak because the leftists are destroying confidence in America here and abroad.

 

The decline of the price of oil is caused by the inelasticity in the relation between oil production and oil prices due to the ability to store oil in empty barges.  The slower world economy has reduced the bulk trade of the shipping fleet making storage available in empty rail and tanker shipping fleets.  Once the storage tankers and rail cars are all full of oil, production of oil will be forced to decline to just the consumption rate.  That too will have negative effects for jobs and the stock market.  Oil prices will not rebound until the glut of stored oil is reduced.  USA consumer Confidence is 60% lower than it was in 2000.

The cost of an international police force had been born primarily by America.  Obama’s selfish form of American socialism has not been offset by the EU and any of the selfish international socialist leaning countries.   International peace is breaking down.  What is worse is that the selfish and insane socialist religious groups could gain control of Mid East and African oil fields.  In fact it is possible that ISIS is contributing to the destabilization of oil prices.  ISIS socialist religious brainwashing is spreading as converts to the religious socialism of ISIS seek new converts in the free-enterprise world.

http://nypost.com/2014/10/13/isis-cancer-spreading-to-north-africa.

 

After WWII it was necessary to purge the brainwashed communists and nationalist socialists who had infiltrated free-world governments and universities.   Both Truman and Eisenhower let the US Senate take on that job in America.   Communists as well as nationalist socialists were purged everywhere in the free world during the early 1950’s.   Many unions had to purge their leadership as well.  Now the socialists have again infiltrated and are again destroying the American and the free world educational systems.   Since America’s unpopular Vietnam War, many of our university faculties have been infiltrated again and do no allow free speech for students who support free enterprise or a capital based banking system.  American students now often have to “fake it” and produce the leftist bullshit for their professors if they want to get A’s in the humanities courses.  Students need to electronically record those leftist professors so that they can be dismissed for violating the American right to free speech.   

    

December 12 The specialized stock market indices (DJI, NASDAQ, SandP) all have apparently put in their tops for this economic cycle this past week. We pointed out at the end of September that the broader generic NYSE put in its top on July 3. By specialized, we mean that some indices are continually removing maturing corporations and replacing them with the most rapidly growing corporations. Therefore they do not represent the real world stock market mixture of small, growth and mature corporations that make up the economy. The distortion is further exaggerated because the “select” index stocks run up much higher PE ratios because they are a select group overloaded by novice investors who believe almost anything CNBC Jim Cramer and Steve Liesman have to say. Rick Santelli is good as are the Squawk box hosts.

The general incompetence of the Obama administration and Obama’s attempt to “lead from the rear” has removed America from its leadership role in the world.  World and American disorder is consequentially on the rise.  In fact the incompetent Obama administration is fanning the flames by attacking American law enforcement which is among the fairest in the world.  In addition the Democrat party is moving farther left with the rise of Elizabeth Warren from Massachusetts who is more appealing than Pelosi and Reed but even further to the left.

Chinese stocks are now obviously manipulated in an attempt to prevent the down side by the Communist government.  Since February of 2009    The communists put an upward linear floor under the price swings and while it limits downside volatility it is increasing the probability of a cataclysmic crash of China’s corporation stock prices when the artificial floor is soon to be broken by market forces.  That floor is about to be broken on the down side because they lake the power to create growth and a rising floor will not create the growth they need (see chart below).  You can see that the floor will be broken very soon.

http://finance.yahoo.com/echarts?s=%5EHSI+Interactive#%7B%22range%22%3A%22max%22%2C%22scale%22%3A%22linear%22%7D

 

American economy

Dec 9

Wholesale Inventories Oct increasing at 0.4% ---

Dec 9 10:00 AM JOLTS - Job Openings Oct  4.834M up slightly from 4.735M ++

Dec 10

MBA Mortgage Index 12/06 7.3% up from -7.3% --- an absolutely absurd doctored number give the fall &winter slowdown.

Crude Inventories 12/06 1.454M up from -3.689M there is little storage capacity left.

Treasury Budget Nov -$56.8B American consumption slowdown dropped deficit of -$135.2B --

Dec 11

Initial Claims 12/06 294K remain high -

Continuing Claims 11/29 2514K 2350K 2350K 2372K 2362K

Retail Sales Nov 0.7% 0.7% 0.4% 0.5% 0.3%

Retail Sales ex-auto Nov 0.5% 0.5% 0.2% 0.4% 0.3%

Export Prices ex-ag. Nov -1.2% NA NA -0.8% -0.9%

Import Prices ex-oil Nov -0.2% NA NA -0.2% -

Business Inventories Oct 0.2% -0.1% 0.2% 0.3% -

Natural Gas Inventories 12/06 -51 bcf NA NA -22 bcf -

Dec 12

PPI Nov -0.2% down from 0.2% -- possible deflation coming

Core PPI Nov 0.0% -0.2% sharply lower down from 0.4%--  possible deflation coming

 

December 9  The irresponsibility of the Obama Administration knows no bounds and puts all Americans at risk while traveling abroad.   Obama took credit for the killing of Bin Laden and now claims he did it without the CIA use of their interrogation procedures they continued to use after he took office.  Both the CIA and the Republican Congressmen disavow the Democrat report and its release.   The CIA methods were reviewed ages ago when deciding to close Guantanamo in 2007 and were made public back while Obama was running for president.  They even showed the procedures in the movie Zero-dark-thirty about the assassination of Bin Laden for which Obama took full credit!  The information has just been released again formally by Obama.  The terrorists in Syria say Obama is the terrorist.  And they say they understand him completely.

http://www.syrianews.cc/lie-qaeda-fsa-terrorists-exposed/

 

Obama’s politics is now a prime catalyst for the collapse of the American economy.  He is now fanning the flames of protests against city police, and authority figures.   His followers even hate their teachers and make an education or a career virtually impossible. Obama is inciting people to riot and burn America down.  The American electorate and now even the Democrat Party leaders are fed up with Obama’s insipid gross stupidity in fanning flames of hated against the American systems of freedoms, values and enterprise from within and without. 

Obama’s arrogance and hatefulness is public now and Obama knows he has been rejected by Americans and he appears to now be working to deliberately damage America.  He could seriously disrupt the economy earlier now as he spreads his hatred of America in our cities.  And it is not a black vs. white threat it is a red vs. dead threat.  The leftists have taken to the streets and attracted unemployed youth and the bored professional students to their mobs.

 

December 8    As we pointed out on December 1, 2014, declining oil prices are caused by a declining economy and do not help until the economy begins to recover and experiences an increased demand for energy.  We showed then that a steep oil price reduction occurred early in every major bear market going back to the Great Depression.  A decline in oil prices has been the forerunner to major stock market pullbacks because it is the symptom of economic stagnation.  MSNBC Jim Cramer and others have it all backwards and do not realize the collapse of oil is in response to the collapsing world economies and not the immediate economic boost they think it is.  They are not too smart and should the check economic history of oil price declines.

In the November 14 commentary we pointed out that Herbert Hoover did not give America the Great Depression.  President Hover was like Obama and gave us a 60% market decline in 1929.  Americans then voted Hoover out of office.  Unfortunately foolish left wing Americans voted Obama back in as they had voted in  Franklin Roosevelt who then gave the world the Great Depression where stocks then ended up down 90% from their 1929 highs.  That is what we potentially face in this second chance the left wing voters have given Obama to destroy American Free enterprise.   A normal bear market can result in a 60% stock market decline but a depression can result in a 90% decline.

A stock market failure during Obama’s last two years in Office caused by a $4+ Trillion collapse of the infusion of Quantitative Easing credit on top of a second Obama recession could take the stock market down 90% from the current highs.  And Obama would love that dire FDR situation because it allowed FDR to rule via Executive Order fiats.   Obama says never let a good crisis go unexploited.  At least that is what his first chief advisor said.  FDR got many former slaves of the democrat south to switch from being liberated working Lincoln Republicans to being FDR democrats favoring a cradle to grave welfare state.  That is how cradle to grave welfare states like the old USSR and the N. Koreans got and maintain power.  Putin still controls the rich oligarchs who have replaced the old communist party leaders.

Today MSNBC began hedging their bets and lowering economic estimates for this year.  Often that is done so that they can pretend the poor results are much better than were predicted.

Higher interest rates will clobber fixed rate assets so if one cannot short stocks or get into growing investments cash may be the best investment to park in.  Bullish ETFs are a disaster in declining markets.  Bearish ETFs may do well but all EDFs require close attention.  Right now we have seen some bearish sectors beginning to bottom out and become attractive as the bullish ETFs are peaking.

December 5 If we had ejected rather than elected Obama in 2012 we would have gone cold turkey by now and would be recovering. That is how a free enterprise economy works. Instead Obama created the world’s most populated economic crack house. Obama has now created the biggest trickle down economy in world history. We know that the optimistic Obama weekly economic statistics have never been believed by the FED because they would now be reducing the QE credit pool of money that has been used to fund corporate mergers and even the foreign initial public offerings such as China’s Alibaba Inc. QE has been the biggest boon for the world’s stock markets, acquisitions and mergers, and initial public offerings that all primarily benefit the rich, destroy the middle class, and do nothing for the poor. So much for planned government with socialist economic policies! All the Obama bullshit about his shovel ready infrastructure improvements went nowhere and instead our roads and bridges are in ruins. But the Chinese company Alibaba will make a lot of corrupt Chinese politicians and the Chinese middle class richer too, and will sell us cheap Chinese products and put more Americans out of jobs. Now the credit bubble Obama created is about to pop and everyone on Wall Street is worried just when it will happen. Well the FED does not want to get blamed for the financial panic so they will likely want to wait until after it happens. But by then we will be trapped and they may not reverse Quantitative Easing since it would make matters even worse. QE is an economic addiction with painful economic withdrawal symptoms.

American Economy

Nonfarm Payrolls Nov 321K rose from 214K for the holidays

Nonfarm Private Payrolls Nov 314K rose from 209K

Unemployment Rate reported Nov 5.8% but actually about 17%

Hourly Earnings Nov rose 0.4%

Average Workweek Nov flat at 34.6

Trade Balance Oct -$43.4B slightly worse from -$43.0B

US factory orders fall for third straight month.  Factory Orders Oct -0.7% dropped again after the last -0.6%.

 

December 4     Obama-Holder lawlessness has now been unleashed on American cities.   It was bad enough that 30,000 Mexicans perished due to Obama-Holder gun running that was meant to be blamed on the American gun industry in 2009.  It was bad enough that the IRS was then unleashed on tax exempt American Historical Societies and Religious groups to harass and defraud them in 2012 because they support basic American principals.  It was bad enough a lame duck congress passed socialized medicine on what their advisor called the “Stupid Americans” who they had to fool to get the bill passed.  Now two deaths of “resisting criminals” by the police is the Obama excuse for new racist oriented demonstrations and looting.  The death toll this year alone in Chicago today stood at 377 with four murders just on November 7 2014 alone.  Chicago Mayor, Rahm Emanuel was the first Obama White House chief of staff and what does he know or care about law or order?  According to Senator Chuck Schumer, the democrat party is beginning to melt down due to the rise of the leftists, lawlessness, and the proliferation of poorly qualified government, economic, and social programs and their program leaders.

http://www.dnainfo.com/chicago/2014-chicago-murders/timeline?mon=11

http://www.realclearpolitics.com/articles/2014/12/03/president_obama_blew_it_--_again_124834.html

http://online.wsj.com/articles/dan-henninger-the-two-faces-of-chuck-schumer-1417653342

This administration is causing social disintegration, corruption, and lawlessness which provides several trigger mechanism for collapse and economic disorder.  Electing a president who clearly always hated everything America stands for has potentially set the entire world in the direction of social meltdowns, riots, wars, and economic depressions.  The American Supreme Court needs to reign in this autocratic takeover of America.

 

American Economy

The American stock markets now appear to be moving beyond their all time highs.  It is difficult to predict the exact top.  We expect several declining lows and declining highs and about a 30% to 40% net decline from the top before Wall Street recognizes we are in a bear market.   But once the Bear is recognized the collapse will be much steeper and is usually only two or three months until a bottom is put in.  But it may take another two or three months to know if the bottom will hold.

But there will be opportunities to sell near tops and cover and buy at succeeding lows after major market moves that usually are over reactions.  This will be a volatile time, a time to be nimble or else to get on the sidelines and wait for the bottoming out.   This president is incapable of restoring confidence and could go down as one of the most inept American president in American history. 

 

Dec 1

ISM Service Business index Nov 58.7 down from 59.0 -

Dec 2

Construction Spending up Oct 1.1% from -0.4%  as demand declines --

Dec 3

MBA Mortgage Index 11/29 -7.3% decline further from -4.3% --

ADP Private Employment Change Nov 208K down from 233K---  About 300k is needed

Productivity-Rev. Q3 2.3% 2.2% 2.4% 2.0% -

Unit Labor Costs - Revised Q3 -1.0% 0.0% 0.0% 0.3% -

Dec 4

Challenger Job Cuts increase Nov to -20.7% from 11.9% - -

Initial Claims 11/29 297K slightly better from 313K ++

Continuing Claims 11/22 2362K increase from 2316K--

 

December 3 Famous Quotations     December 3, Honeywell CEO Dave Cote said about the inflated stock market that we can keep going higher if we can get “that feeling going again.”  But remember the NYSE already dropped more than 60% in the 2007-2008 declines similar to the Hover decline, but the worst decline was the FDR decline on top of the Hover decline that took the market down 90% from pre-depression levels. Here are other similar pompous optimistic quotes about the economy and the stock market. 

http://www.gold-eagle.com/article/1927-1933-chart-pompous-prognosticators

http://www.mayflowercapital.com/blog/bid/103047/Stock-prices-explained-by-a-new-plateau-of-prosperity

 

"We will not have any more crashes in our time."

 - John Maynard Keynes in 1927

2."I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."  - E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

"There will be no interruption of our permanent prosperity." - Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

 

3."No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment...and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding."   - Calvin Coolidge December 4, 1928

4."There may be a recession in stock prices, but not anything in the nature of a crash."  - Irving Fisher, leading U.S. economist, New York Times, Sept. 5, 1929

5."Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."  - Irving Fisher, Ph.D. in economics, Oct. 17, 1929

"This crash is not going to have much effect on business."  - Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

"There will be no repetition of the break of yesterday... I have no fear of another comparable decline."  - Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

"We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices."  - Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

 

6."This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."  - R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

"Buying of sound, seasoned issues now will not be regretted"  - E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

"Some pretty intelligent people are now buying stocks... Unless we are to have a panic -- which no one seriously believes, stocks have hit bottom."  - R. W. McNeal, financial analyst in October 1929

 

7."The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin."  - Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

"Hysteria has now disappeared from Wall Street."  - The Times of London, November 2, 1929

"The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before."

 - Business Week, November 2, 1929

"...despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation..."  - Harvard Economic Society (HES), November 2, 1929

 

8."... a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall."   - HES, November 10, 1929

"The end of the decline of the Stock Market will probably not be long, only a few more days at most."  - Irving Fisher, Professor of Economics at Yale University, November 14, 1929

"In most of the cities and towns of this country, this Wall Street panic will have no effect."  - Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

"Financial storm definitely passed."  - Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

 

9."I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress."   - Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

"I am convinced that through these measures we have reestablished confidence."

 - Herbert Hoover, December 1929

"[1930 will be] a splendid employment year."   - U.S. Dept. of Labor, New Year's Forecast, December 1929

 

10."For the immediate future, at least, the outlook (stocks) is bright."

 - Irving Fisher, Ph.D. in Economics, in early 1930

11."...there are indications that the severest phase of the recession is over..."

 - Harvard Economic Society (HES) Jan 18, 1930

12."There is nothing in the situation to be disturbed about."

 - Secretary of the Treasury Andrew Mellon, Feb 1930

13."The spring of 1930 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity."

 - Julius Barnes, head of Hoover's National Business Survey Conference, Mar 16, 1930

"... the outlook continues favorable..."

 - HES Mar 29, 1930

14."... the outlook is favorable..."

 - HES Apr 19, 1930

15."While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us."

 - Herbert Hoover, President of the United States, May 1, 1930

"...by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent..."

 - HES May 17, 1930

"Gentleman, you have come sixty days too late. The depression is over."

 - Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16."... irregular and conflicting movements of business should soon give way to a sustained recovery..."

 - HES June 28, 1930

17."... the present depression has about spent its force..."

 - HES, Aug 30, 1930

18."We are now near the end of the declining phase of the depression."

 - HES Nov 15, 1930

19."Stabilization at [present] levels is clearly possible."

 - HES Oct 31, 1931

20."All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S."   - President F.D. Roosevelt, 1933  The IRS was confiscating assets.  Ownership of gold became illegal.

 

December 1 Update

Energy stocks fall rapidly as the price of oil plummets. Russia, Venezuela, and the Mid East will see big budget deficits. Oil companies may have difficulty with the high leveraged debt levels of their junk bonds as revenues drop. The last collapse of oil prices is reminiscent of Obama’s 2008 election several months before Fox News, Squawk Box, and others began to notice we were in a recession. Then it fell to a low of $44 per barrel. See the historical chart.

http://futures.tradingcharts.com/chart/CL_/M?anticache=1417442887

You can see from the crude Obama government oil chart that oil dropped significantly in the Clinton’s 2000 recession hitting a low of $10.87 per barrel.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A

Energy prices are the canary in the mine shaft that dies first and warns of the impending deep recession.  Only this could be the depression of this century.  The FDR recession on top of the earlier Hover recession was the depression of the last century which ended in WWII.  In 1920, before the recession Oil was over $3 per barrel.  During FDR’s Great depression oil fell to 67 cents a barrel.  The EU is now concerned that the world is about to enter another Great Depression.  During a depression, cash and gold are kings because credit collapses.

Remember we asserted by Oct 15 that within five months there would be clear signs we had entered another recession but it would take up to an additional five months for the recession to be known in hindsight, and be half over before most market analysts acknowledge it.

 

Energy stocks fall rapidly as the price of oil plummets.  Russia, Venezuela, and the Mid East will see big budget deficits.  Oil companies may have difficulty with the high leveraged debt levels of their junk bonds as revenues drop. The last collapse of oil prices is reminiscent of Obama’s 2008 election several months before Fox News, Squawk Box, and others began to notice we were in a recession.  Then it fell to a low of $44 per barrel.  See the historical chart.

http://futures.tradingcharts.com/chart/CL_/M?anticache=1417442887

 

You can see from the crude Obama government oil chart that oil dropped significantly in the Clinton’s 2000 recession hitting a low of $10.87 per barrel.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A

Bond

Energy prices are the canary in the mine shaft that dies first and warns of the impending deep recession.  Only this could be the depression of this century.  The FDR recession on top of the earlier Hover recession was the depression of the last century which ended in WWII.  In 1920, before the recession Oil was over $3 per barrel.  During FDR’s Great depression oil fell to 67 cents a barrel.  The EU is now concerned that the world is about to enter another Great Depression.  During a depression, cash and gold are kings because credit collapses.

 

Liquidity crisis signs are seen in the senior citizen retirement safe-haven of bonds.

Bond Funds have now loaded up on cash fearing a coming crash and a liquidity crisis if bond holders try to get their cash out all at once.

http://online.wsj.com/public/resources/documents/pageone120114.pdf

 

Holiday sales slump signals an Obama economic crisis coming.

2014 US and Canadian Holliday Sales have slumped 11% so far with the next big sale coming in two weeks.  Traffic is down 5%.  Domestic sales during the holiday season weighed on the toy maker’s results because stores have cut orders.  The National Retail Federation said that Consumer spending fell to $50.9 billion down from $57.4 billion in 2013.

http://www.foxbusiness.com/industries/2014/02/10/hasbro-shares-slump-after-4q-sales-disappoint/

http://www.arabianmoney.net/us-stocks/2014/12/01/us-retail-spending-slumps-11-post-thanksgiving-as-consumers-go-on-strike-and-shale-oil-investments-go-bad/

 

Federal guarantee of pensions of private and government union members said sure to go broke this time,  Unions have bought votes and have been promised by the corrupt politicians they bought, that the US Government would stand behind this union/ and political party corruption.  It is unlikely the other political party will pay for the corrupt promises.  Out going L&G pensions Chief John Pollock, a resident fellow at the American Enterprise Institute weighed in with his opinion,

http://online.wsj.com/articles/alex-j-pollock-a-federal-guarantee-is-sure-to-go-broke-1417387173

http://online.wsj.com/articles/alex-pollock-our-financial-crisis-amnesia-1404946250

 

 

International News

The slowdown in the economy of China means their imports of coal and mineral ores have plummeted.  China’s Oversupply of housing now stands at near five years under normal times but demand is now falling and vacant complexes deteriorate in the weather.  Recycling of the first generation of products will further decrease demand by China for ore resources.

http://online.wsj.com/articles/chinas-economic-slump-complicates-beijings-restructuring-plans-1410799858

http://www.reuters.com/article/2014/11/20/markets-global-idUSL6N0TA1X220141120

http://online.wsj.com/articles/chinas-slowdown-hits-price-of-iron-ore-1417371967?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB10909804295654494231304580299081624394468.html

 

November 28 Weekend Update     Our stock market cash flow indicator still shows that the net cash left after advances and declines is in the direction of out of the market.  Even though price has continued higher, we still show peak to peak cash levels and bottom to bottom cash levels getting lower.  We still expect the rally to continue this year and for the bear market to be evident early next year.  It takes about five months for the media to know money has been flowing out and for stock prices to begin to plunge.  That means it could be February or March before MSNBC and Jim Cramer say it is time to get out.   The last cycle when the Dow and the S and P peaked was in July 2007, and the NYSE peaked in October of 2007.  We got our first bear market signal July 26, 2007 and a confirmation on September 28, 2007.  Jim Cramer said Sell on September 18 2008 almost a year later when half the bear market was over.  By then the bear market was about 50% finished.

https://www.youtube.com/watch?v=kKpiWQKTk-4

 

If corporations were forced now to mark their assets and inventories to market, their losses would be tremendous and stock prices would collapse at the net market opening.  But now, as long as they hang on to their dogs and development losses they can pretend earnings are increasing.  But there is a trigger mechanism to start the collapse.  In 2007 we saw the cash flow had turned negative and that means the water level in the economic river was getting lower and the rocks, the triggers, were beginning to surface.  The 2007 trigger mechanism was caused by the Dodd-Frank-Obama liar loans that were supposed to help poor people own houses.  The liar loans were available but the poor people could not afford the interest rate.  So subprime mortgages were made available to the poor because housing prices were rising 6% each year so that in just a few years the poor would either become rich or Dodd-Frank-Obama thought they could just flip their house and bank the profit.  Obama was a relatively poor “community activist” without a steady job and he got a good deal from a corrupt Chicago realtor.   Dodd got a special deal from a realtor in Ireland so they were absolutely certain that the poor or corrupt could get rich quick and own a house if given the chance.  But unfortunately most poor people were not able to sell at a profit within two or three years before the subprime interest rate doubled or tripled.  Only the corrupt were guaranteed a profit.  So almost all the poor people lost everything and there are actually fewer homeowners today than before Dodd, Frank, and Obama became friends and applied their coercive and corrupt get rich quick scheme to try to help the poor.

https://www.youtube.com/watch?v=2mpbgFSPXXA