Wednesday, May 28, 2014

May 30 Just yesterday all the so called smart stock advisors said they switched from US to emerging-market stocks because US stocks were 40% overpriced. So they got into emerging-market stocks and today they fell the most in a month as Brazil’s Ibovespa led a decline after a drop in raw-material prices. The MSCI Emerging Markets Index lost 1.1 percent today. It is now time to think about that home you wanted on that Florida island. Real Estate in Florida winter and Adirondack summer hideaways is quite undervalued. Stocks and bonds are not always a good short term investment and on average have not done much since 2000. Gold was up about 500% but now is only up only 300% since 2000. But gold is still up from $32 in 1970 to about $1300 today or up 4000% since then. And gold prices are real, stock indices are fabricated to look good by rotating in growth companies in and removing companies that are maturing. They always remove companies that are in decline. Funds, especially mutual funds are very deceptive because stagnant funds disappear altogether and are absorbed at a discount into growing funds making instant profits as liquidated. All we see is an index based on the above average funds not the real growth history of the average fund. If investors knew the truth many might give up investing altogether.

May 29  The dollar fell the most in two weeks versus the yen even before U.S. analysts said the American economy would show that gross domestic product contracted 1% in the first quarter.  This is further evidence of manipulation and leaking of financial data by the Obama administration.  This is a symptom of funds running to safety from the stock market which still has over $4Trillion from Quantitative Easing  propping it up.  But the flow is just about to go negative to pay back the QE.
http://www.bloomberg.com/news/2014-05-29/euro-trades-near-3-1-2-month-low-germany-spain-reports.html
 
The first quarter dipped 1% on an annual basis.  McCarthy said “pro-growth policies” need to be passed, specifically citing the easing of regulations on businesses and approval of the Keystone pipeline to create jobs and increase domestic energy production.  “It’s time for new policies that will free America’s economy so it can return to its former strength,” McCarthy said.
 
Salim Furth, a senior policy analyst at the Heritage Foundation, said legislation passed since the financial crisis of 2008 -- notably the Dodd-Frank banking reform bill -- has forced lending restrictions on banks, curbing their ability to make loans to small businesses. That’s cut into growth by impeding hiring, he said.  Furth acknowledged that elements of first-quarter weakness were one-time events, but suggested the weak quarter points to larger flaws in the economic recovery. 
“We’re definitely not escaping from the troth,” he said. “What it looks like to me is an economy being held back by bad policies.”
 
McCarthy said “pro-growth policies” need to be passed, specifically citing the easing of regulations on businesses and approval of the Keystone pipeline to create jobs and increase domestic energy production.  “It’s time for new policies that will free America’s economy so it can return to its former strength,” McCarthy said.
 
Salim Furth, a senior policy analyst at the Heritage Foundation, said legislation passed since the financial crisis of 2008 -- notably the Dodd-Frank banking reform bill -- has forced lending restrictions on banks, curbing their ability to make loans to small businesses. That’s cut into growth by impeding hiring, he said.
 
Furth acknowledged that elements of first-quarter weakness were one-time events, but suggested the weak quarter points to larger flaws in the economic recovery.  “We’re definitely not escaping from the troth,” he said. “What it looks like to me is an economy being held back by bad policies.”
 
Other analysts and commentators said the sharp first-quarter dip could result in an even sharper slide during the second quarter.  This Administration has done more to hinder than promote growth. The American economy does not wallow for six years on its own."
 
May 27  The game on Wall Street is not to improve the production chain to improve profits.  The new game is now to merge and then dismantle parts of the merged companies and eliminate jobs, and surpress competition to thereby raise prices and profits that way.  This is the destructive phase of the economic cycle.  At current  Obama QE inflated corporate stock prices, monopolies make the most management sense.  Obama mistakenly used government intervention and raised the prices of stocks by pumping in consumption money that raises prices not investment.  The best path would still be infrastructure spending especially on oil piping and fracking that would raise employment and reduce prices.  But Obama’s Kyoto fools have everything backwards.
Obama ridiculously tweeted before confirming that a recent study said a 97% scientific consensus believes the manmade warming myth of climate change.  Obama was very confused and got the scoop from his VP.   The study questioned only scientists who studied climatology (global warming) because they are not qualified to be physicists, nor understood the scientific method and are looking for data modeling jobs that the Obama government might fund.  Al Gore, John Kerry, Husein Obama and Hilary Clinton have the unique kind of scientific expertise that is needed to know there is human caused global warming.   That is why no one knows what Obama did in college.  He had his college grades sealed.
 
President Clinton did not lobby for the Kyoto  global warming Agreement nor did he ratify it.   President Clinton deregulated the banks by killing the Glass-Steagall Act which was created to prevent another bank collapse like in 1929 and 2008.  The Obama-Dodd-Frank Liar Loan derivatives could then be marketed around the world.
 
Actually, about 97% of competent scientists know the evidence supports the natural glacial cycle of cooling and warming as the cause.  The scientist Edward Teller began a petition on the matter several years ago and the project has fulfilled the expectations of its organizers that most competent scientists know there is no significant evidence that climate change is other than natural changes the Earth has had for 10 million years. In PhD scientist signers alone, the project already includes 15-times more scientists than are seriously involved in the United Nations IPCC process. The very large number of petition signers demonstrates that, if there is a consensus among American scientists, it is in opposition to the human-caused global warming hypothesis rather than in favor of it.   
http://www.petitionproject.org/frequently_asked_questions.php
http://online.wsj.com/news/articles/SB10001424052702303480304579578462813553136
 
The Climate Change’s junk science '97%'  believers
What is the origin of the false belief—constantly repeated—that almost all scientists agree about global warming?
By Joseph Bast and Roy Spencer  May 26, 2014 7:13 p.m. ET
Last week Secretary of State John Kerry warned graduating students at Boston College of the "crippling consequences" of climate change. "Ninety-seven percent of the world's scientists," he added, "tell us this is urgent."
Where did Mr. Kerry get the 97% figure? Perhaps from his boss, President Obama, who tweeted on May 16 that "Ninety-seven percent of scientists agree: #climate change is real, man-made and dangerous." Or maybe from NASA, which posted (in more measured language) on its website, "Ninety-seven percent of climate scientists agree that climate-warming trends over the past century are very likely due to human activities."
 
But the assertion that 97% of scientists believe that climate change is a man-made, urgent problem is a fiction. The so-called consensus comes from a handful of surveys and abstract-counting exercises that have been contradicted by more reliable research.
 
One frequently cited source for the consensus is a 2004 opinion essay published in Science magazine by Naomi Oreskes, a science historian now at Harvard. She claimed to have examined abstracts of 928 articles published in scientific journals between 1993 and 2003, and found that 75% supported the view that human activities are responsible for most of the observed warming over the previous 50 years while none directly dissented.
 
Ms. Oreskes's definition of consensus covered "man-made" but left out "dangerous"—and scores of articles by prominent scientists such as Richard Lindzen, John Christy, Sherwood Idso and Patrick Michaels, who question the consensus, were excluded. The methodology is also flawed. A study published earlier this year in Nature noted that abstracts of academic papers often contain claims that aren't substantiated in the papers.
 
 
We have warned that the social media group has become an advertising scam.  Invisible bots drones plague web ads.
The website USFunVideos.com displaying snapshots of outdoor scenes and cooking videos. But recently the site contained several tiny websites, smaller than a needlepoint. 
These tiny sites, each the size of a single pixel on a computer screen, carried little content. But each served up video ads, too small to see with the naked eye but slowed down the response time significantly.  This is not because of higher web traffic it is because sites are becoming infested with the internet advertizing roaches.  And big advertisers were charged every time someone clicked on USFunVideos.com, and the tiny sites played the ads that couldn't be seen.
http://online.wsj.com/news/articles/SB10001424052702304893404579530000548363992?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304893404579530000548363992.html
 
Market volume on NYSE advances is now at a low level not seen since the President George Bush’s first administration.  That means the market is highly unstable and it now takes very little selling to create a panic.
 
World Economy
May 29  China’s effort to catch up with the U.S. in developing shale gas and become more energy independent is coming at four times the cost of developing fields in America, according to a new report.
 
Investors are fleeing to government bonds as stock prices peak.  Italy auctioned 3 billion Euros of September 2024 debt at an average yield of 3.01 percent, the lowest for similar-maturity securities since Bloomberg started tracking the offerings in 1991.
 
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy-by-by.
 
If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too but their trend is upward only because the dollar is continually weakening.
 
The French market is about 60% of what it was fourteen years ago. 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=
 
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.
 
The Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2007. Obama has destroyed Swiss banking by attacking Swiss confidentiality that had protected people from the Hitlers and Stalins of the past.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy
May 27
Durable Orders Apr 0.8% down from a revised 3.6%
Durable Goods -ex transportation Apr 0.1% down from a revised 2.9%
Case-Shiller 20-city Index Mar 12.4% down from 12.9%
FHFA Housing Price Index Mar 0.7% flat from 0.6%
Consumer Confidence May 83.0 flat from 82.3
May 28
MBA Mortgage Index 05/24 -1.2% down from 0.9% 
May 29
Initial Claims 05/24 300K down from 326K still too high -
Continuing Claims 05/17 2631K flat 2653K -
GDP - Second Estimate Q1 -1.0% down 0.9% from estimate of 0.1% ---
GDP Deflator for inflation - Second Estimate Q1 1.3% flat at  1.3% - --
GDP after  inflation adjustment -2.3% down -1.1% from -1.2% for the first estimate.
Pending Home Sales Apr 0.4% down sharply from 3.4% ----
May 30
Personal Income Apr 0.3% dropped from 0.5% ---
Personal Spending Apr -0.1% dropped sharply from 1.0%
PCE Prices - Core Apr 0.2% stable at 0.2% ++
Chicago PMI May 65.5 up slightly from 63.0 ++
Michigan Sentiment - Final May 81.9 still flat low 81.8  -
 
The Markets
May 29
The GDP adjusted for inflation was negative 2.3% but was spun to look better by leaving off the deflator.  If history rhymes then the market panic will be in August when I am on vacation.  That is a drag to have to study the market on vacation to get invested again.  So I will take vacation a bit earlier.  In 2008 all the investors who buy and hold were back down where they were in 2001.  Some people believe that by 2015 we will be back there again because the scale of wasted lives in games and social media plus expanded cyber crime, advertizing hit fraud, virus attacks and spying is reaching crippling levels.  Target is now a disaster case and the entire board of directors is now under attack.  All those upscale shoppers are afraid they were compromised.
 
May 28
The market continues to skim along at the recent highs with no breakout.
 
World trade is down 55% for the year to date and near a 15 year low down 80% since 2007.  Look at the last 1+ years of world trade! Use the graph or snapshot option. Unfortunately they do not show back to 2008 when world trade was more than five times higher than it is today.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 Look at the volatility index and you see that the market could fall much faster. This market has little volume or volatility.  So when volume picks up past history says the market will plunge.  This is not a good moment in time for holding equities.
 
 World market updates:
http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/intlindices?e=asia http://in.finance.yahoo.com/intlindices?e=asia
 
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Monday, May 19, 2014

May 23 Market volume on NYSE advances is now at a low level not seen since the President George Bush’s first administration. The thin volume picks up now on market declines and is evident that the collateral used to leverage record levels of bank debt and corporate and raider speculation cannot support even a small contraction. In reality the corporations have squandered all their original cash on corporate bonuses and current cash is now negligible in comparison with the corporation debt and obligations that will remain when this stock market based collateral bubble bursts.

This is a game corporation executives play each economic cycle to line their pockets using cash from their stock price bubble which they falsely claim is due to good management.  It is an economic flaw which enables a concealed fraud to be perpetrated on the stock holders who stay invested long term.  Not only have corporation management, activists, and raiders pilfered corporate cash, they have used the cash to bid up the bubble stock prices to record highs providing bubble assets to further raise corporate cash by going into additional debt. Any small disturbance now could set off cascading bankruptcies and bank collapses. 
The new temptation will be for the poorest developed nations to return to inflation because deflation will only exacerbate the burgeoning corporate, bank, and international debt problem.  The higher this market goes the more disastrous the collapse of the stock market liquidity bubble will become.  In summary the corporation, hedge fund, and bank, excesses of this current bubble are much closer to the speculative 1929 stock market bubble than any since that crash. 

 Forty veterans died while waiting on the VA socialized medicine waiting list.
Obama knew veterans died waiting 11 months to be admitted to a VA Hospital just like socialized medicine in Canada, France, and Great Britain.  Obama was told of the Veterans Affairs health care debacle as far back as 2008.  But Obama continues to lie and he says he only just found out from the news media the same way he found out about his Benghazi ambassador, the IRS harassing conservatives, and his NSA spying on Americans.  Nancy Pelosi repeatedly put the blame for the Veterans Affairs scandal on former President George W. Bush, arguing that her party has worked hard for veterans in recent years, for a red line in Syria, for Israeli safety, for Ukrainian nationhood, to end leaks and administration criticism, and to end gun ownership in America.  
 
May 23  Hewlett-Packard Co results marked the 11th straight quarterly revenue decline for the world's largest maker of personal computers.
 
Sears first-quarter loss widened as sales declined.  “It will take almost an act of God at this point for them to turn this around,” was heard on the street.
 
The Energy Information Administration cut by 96% the estimated amount of recoverable oil buried in the Monterey Shale.
 
May 22  Today Dick Kovacevich told Squawk Box that  the Obama administration attacks and fines on banks are politically motivated to punish the S&P and banks that have executives like him who point out the incompetence of the Obama/Holder administration.
http://www.frontpagemag.com/2014/arnold-ahlert/revenge-obamas-targeting-of-standard-and-poors/
 
Best Buy Co. (BBY), the world’s largest consumer-electronics retailer, posted first-quarter Total revenue declined 3.3 percent amid soft demand for mobile phones and other devices. That marked the ninth straight quarterly drop and trailed analyst’s average estimate by 5.5%.
 
May 21 The Economist magazine said sound the retreat.  Profits in America are declining for this cycle. The lead-up to the first-quarter results season on Wall Street was marked by an unusually large number of profit warnings.  Morgan Stanley, an investment bank, earnings estimates for S&P 500 companies were revised down by 4.4 percentage points in the first quarter.  But by lowering expectations they can beat them and the Obama statisticians can continue to pretend the economy is recovering and Wall Street can proclaim a “successful” season. But the Economist says when one removes the effect of exceptional items (such as write downs the year before), American profits are now falling.  That is also why Obama likes to reduce the previous quarter’s GDP results so the current quarter always looks better than it actually is.
 
The Obamascare Cadillac tax goes on private citizens who pay for their own higher quality healthcare.  It does not apply to unions that historically contribute to socialist candidates, nor to Congress, nor to Obama and his family who get quality health care much better than all other Americans but get unfairly better tax treatment. 
 
In Monday's issue of "The Gartman Letter," Gartman wrote, "With each passing day, we are more and more fearful too that a correction of some very real magnitude is hard upon us as the broader market indices such as the Russell and the NASDAQ have now 'failed' well below their previous highs and as upward sloping trend lines cast back into last year have been broken through to the downside." CNBC
 
Nearly 10 million homeowners remain underwater on their mortgages. Making matters worse, the most affordable homes for first-time homebuyers are also the most likely to be kept off the market because their current lenders have negative equity and the banks that filed those 10 million “list pendens” if they foreclose would fail their stress tests because the house sales would all be losses. 10 million losses of just $10,000 each would be a $100,000,000,000 banking system write down.
 
May 20  Today, Christopher Flowers said banks are still invested in houses that have been filed under “list pendens” where people are still living free in their houses for over four years because the banks would otherwise have to recognize their losses and pay delinquent taxes if they foreclosed.  This problem exists inside and out of America and if banks and investment firms were forced to recognizes these losses it would show that they actually have no net liquid assets to cover a run on the banks or on the stock market.   In other words if the delinquent mortgages in the world were foreclosed tomorrow most banks and investment firms would show they are broke. 
Quantitative easing has pumped up the credit markets to keep the banks and investment firms functioning but only inflation and a true economic recovery will solve the problem because the banks and investment firms have hidden their losses.  They are almost broke just as most small investors who only still show paper profits on the books.  But neither inflation nor a true economic recovery have occurred under Obama and European socialist wealth redistribution systems. 
Once the Fed begins to remove the more than $4 Trillion in accumulated QE this summer, the squeeze on banks and investment firms will begin in earnest.  You must remember that QE is only now being reduced gradually to zero.  Very soon QE will go negative and could become a -$80 Billion drag per month by the end of 2014.  Obviously there will be a crisis soon and they may never be able to liquidate the $4+ Trillion in accumulated QE.
 
World Economy
May 23  China’s new construction has fallen 22 percent and sales have slumped 7.8 percent this year, testing its reluctance to enact broader economic stimulus. The slowdown’s depth affects everything from demand for Australian iron ore to land sales that provide income for local governments repay what has grown to $3 trillion of debt, a large number relative to local incomes.
 
May 22  In China, the manufacturing PMI contracted at a rate of 49.7. Anything less than 50 is a manufacturing contraction and is not good.  It was reported at 48.1 in April and the current decline in production is the smallest decline in five months as production in China is usually best this time of year.
 
May 21  BoE Deputy Governor Charlie Bean said his fellow central bankers would face the tough challenge as the time approaches to wind down extra support for their economies this summer.  He said, "I do not expect central banks' collective management of the exit from the present exceptionally stimulatory monetary stance will be easy."
"The bottom line is that we may yet encounter a few potholes on the way to the exit."
BoE Governor Mark Carney last week said he expected volatility in financial markets would grow as the time came to return monetary policy to more normal levels this summer.
 
May 20  The biggest Philippine money manager Fitzgerald Aclan, a vice president in the money management unit of BDO Unibank Inc., which oversees about $18 billion is reducing equity holdings on concern the rally that drove valuations to the most expensive level ever in Asia… is poised to end soon.
Deutsche Bank AG increased its sale of subordinated notes to $4.75 billion as Germany’s biggest lender seeks to bolster capital ratios to maintain liquidity to cover unrealized losses.
May 19 After a four-month rally in euro-region debt, Italian and Spanish bonds had their biggest one-day dump in almost a year last week as a selloff spread. With bids evaporating and prices sliding, traders poured into derivatives to protect against losses. Italy’s and Spain’s bonds extended that slump today and the FED is today quizzing US banks and investment firms on the rush for exit recalling the crisis of 2007.
Incoming Indian leader Narendra Modi said the new India finance minister will ease gold import curbs. China overtook India last year as the world’s biggest gold buyer due to high India taxes on gold imports.  “India looks positive” a Geneva-based refiner, said by e-mail today.
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy-by-by.
 
If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too but their trend is upward only because the dollar is continually weakening.
 
The French market is about 60% of what it was fourteen years ago. 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=
 
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.
 
The Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2007. Obama has destroyed Swiss banking by attacking Swiss confidentiality that had protected people from the Hitlers and Stalins of the past. The Obama socialists are trying to legally confiscate everything people earn while lining the pockets of their friends with Ambassadorships and $billions in contracts for inept management of socialized medicine.  Look for world economies to soar when the socialists are no longer running America.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy


May 23
New Home Sales Apr 433K up 8% from wintery April’s 407K 

May 22
Initial Claims 05/17 326K up substantially from 297K ----
Continuing Claims 05/12 2653K down slightly 2667K hides thousands
Existing Home Sales Apr 4.65M up slightly from 4.59M
Leading Indicators Apr 0.4% down sharply from1.0%
 
There has been no net improvement in non-farm employment since 2007 when the Obama-Dodd-Frank Liar- loan scam fell apart.  That was when banks and realtors were sued for red-lining if they did not give high-risk mortgages to people who claimed but did not prove they could afford the mortgages.  Typically they could only afford the payments for 3-yrs at a reduced interest after which a higher normal rate reset kicked in.  But if they were denied that of mortgage the bank was sued for discrimination because Obama-Dodd-Frank stupidly claimed they could flip the house in 3-yrs and unload the house so technically they could afford it and therefore were discriminated against.  As you know the market values dropped and all the liars who could not afford the higher rate after 3 yrs defaulted.  What is worse, nearly 10 million homeowners now remain underwater on their mortgages today because the banks would have to take 25% losses if they foreclose and therefore they would not have the capital to stay in business and there could be a banking collapse. 
 
May 21 During the disastrous Jimmy Carter administration about 50% of the stock market investors decided to buy houses instead of stocks.   Citizen participation in the Stock Market dropped sharply then. That turns out to be a good decision for when there are weak minded mediocre American presidents creating one international disaster after another.  Later Americans got back into stocks when Reagan and Bush made free-enterprise and exceptionalism the national objective again.
 
MBA Mortgage Index 05/17 down to 0.9% from 3.6%---  
Contradicts previous bullish housing report when there is a 70% drop in mortgages.
May 19 The world is losing confidence in Obama’s economic statistics which are now about as truthful as Comrade Brezhnev’s USSR statistics were when the USSR disintegrated.   We have had at least six years of Obama blaming Bush and reporting Obama’s economic recovery beginning every quarter and yet every Obama policy has failed.  This is the “equality of poverty” that Winston Churchill said comes with socialist government redistribution of wealth.  Too much government money is going into electronics designed to pacify the uneducated.  America now has an unemployable class of people created by Obama’s socialist policies.  How many poor people have the latest 55” flat screen TV, stereo electronics, are addicted to their cell phones and games, and are up to their ears in debt paying between 19% and 26% interest on their debt?  If you don’t know any such people you obviously are a liberal racist and avoid associating with them because they are now our fastest growing population.  This is why socialists want art, music, twitter, and beach combing to qualify as jobs that receive government subsidies and grants (not that degrading compassionate free-enterprise welfare).
 
The Markets
May 23  Market volume on NYSE advances is now at a low level not seen since the President George Bush’s first administration.  Volume picks up now on market declines but still it is evident that the small individual investor is on the sidelines and the market is being manipulated upwards for the sole reason that it is being used as collateral to leverage record levels of bank debt and corporate and raider speculation.  In reality the corporations have squandered all their original cash on corporate bonuses and the current cash and collateral is now negligible in comparison with real corporation debt when this bubble bursts.  This is a game corporation executives play each economic cycle to line their pockets using cash from their stock price bubble which they claim is due to good management.  It is an economic flaw which enables a concealed fraud to be perpetrated on the stock holders who stay invested long term.  Not only have corporation management, activists, and raiders pilfered corporate cash, they have used the cash to bid up bubble prices to record highs providing bubble assets to raise debt and additional cash. Any small disturbance now could set off cascading bankruptcies and bank collapses.  The new temptation will be for developed nations to return to inflation because deflation will only exacerbate the burgeoning corporate, bank, and international debt problem.  The higher this market goes the more disastrous the collapse of the stock market liquidity bubble will become. 
In summary the corporation, hedge fund, and bank, excesses of this current bubble are much closer to the speculative 1929 stock market bubble than any since the 1929 crash.  
 
May 21  The bull spin continues and although China is still contracting the seasonal warming means China is now contracting at a slower rate than last winter.
May 20  The world wide public stock markets no longer exist.  The banks and investment firms have been managing the markets to elevate prices to try to prevent their liquidity from going to zero.  The future question is do you want to sell out and later buy back in 50% after the market drops 25% to take advantage of a rally and then sell out on any rally?  Or is it better to wait and only buy back in when the market is down more than 50%?  Or another possibly is to never get back in.    Each investor has a unique risk tolerance.  There are pros and cons to any investment decision. 
May 19 Today on Squawk Box the Fed rep said it is now polling financial institutions about their decision practices for liquidating assets to estimate how fast a collapse reminiscent of 2007 could occur.
Remember when AOL was the hottest tech stock?  This poetic video explains why the social business model is another AOL type stock market bubble about to pop as the boom box mania and AOL bubbles popped.  It has become a ridiculous addictive industry that Anthony Weiner used to expose himself thinking it would make him popular.
 
May 7  The market is in the stratosphere and has no breadth.  Sell in May and stay away may be the best advice around.
May 5  Throwing money at the stock market no longer makes it go up relative to the highs of 2000 and 2007.  And here we are at the same relative highs seven years later at the end of another seven year business cycle in 2014.
 
World trade is down 55% for the year to date and near a 15 year low down 80% since 2007.  Look at the last 1+ years of world trade! Use the graph or snapshot option. Unfortunately they do not show back to 2008 when world trade was more than five times higher than it is today.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 Look at the volatility index and you see that the market could fall much faster. This market has little volume or volatility.  So when volume picks up past history says the market will plunge.  This is not a good moment in time for holding equities.
 
 World market updates:
http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/intlindices?e=asia http://in.finance.yahoo.com/intlindices?e=asia
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Thursday, May 15, 2014

May 16 President Eisenhower wrote to his brother, Edgar Newton Eisenhower, on 8 November 1954: “I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental functions. I oppose this — in some instances the fight is a rather desperate one. But to attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything — even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon "moderation" in government. Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

With the exception of the use of the term “stupid,” This sounds a lot like Eisenhower and it is attributed to him by Snopes.   If that is the case, Eisenhower would warn against running any Tea Party candidates like at least three idiots that quickly destroyed themselves in the last two major elections.  The Hunt Brothers became multi-millionaires investing in gold and silver twenty years later when Nixon, was elected and created the EPA, opened up our first talks with Red China,  cracked down on anti-American internal spies, and took the US Dollar off the gold standard.  
 
May 15   The carnage in the Bubble Brain stocks of Twitter, Facebook, gambling, and juvenile computer games may have begun.  These products are becoming a major cause of internet congestion, scholastic failure, dropouts, youth unemployment, and ignorance rising rapidly in America.  The Bubble Brain economic model is a fraud.  It is based on advertizing hits.  It has spawned a business of clutter designed to cause unintentional hits and frustrate users that accidentally hit ad buttons and saddle advertisers with worthless charges.  It also is slowing down internet access.  The Bubble Brain industry plans to rip off the users more by just slowing down access to educational sites so they can speed up access to imbecilic games, gambling and big ad sites.  That is what they propose with two levels of internet access speeds.
 
May 12 Theodore Roosevelt on Immigrants and being an AMERICAN
"In the first place we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the man's becoming in very fact an American, and nothing but an American...There can be no divided allegiance here. Any man who says he is an American, but something else also, isn't an American at all. We have room for but one flag, the American flag, and this excludes the red flag, which symbolizes all wars against liberty and civilization, just as much as it excludes any foreign flag of a nation to which we are hostile...We have room for but one language here, and that is the English language...and we have room for but one sole loyalty and that is a loyalty to the American people."
Theodore Roosevelt 1907
 
Barack Obama’s controversial friend and pastor, Jeremiah Wright was found guilty of a fraud scheme that siphoned thousands of taxpayer dollars intended for a not-for-profit work and education program known as 'We Are Our Brother’s Keeper.
http://www.nbcnews.com/news/crime-courts/daughter-jeremiah-wright-convicted-fraud-scheme-n47841
 
World Economy
May 16  The Gandhi party has finally lost power in India.  India is back in business based on its new conservative government comments on policy issues such as abuse  of young girls and women, foreign direct investment, the fiscal deficit, the use of gold to stabilize the economy.  They have a super majority giving them the power to make big changes to cut corruption and abuse of women and children.  The Moslem community is very concerned and India promises to be a stronger nation and to resist the Pakistani Taliban terrorists.  Afghanistan is headed towards disintegration caused by Taliban terrorists slowly taking control as Obama pulls all troops out this year.
 
A prolonged political crisis is raising the prospect that Thailand will be Southeast Asia’s biggest economy to slide into a recession this year.
May 15  Bank Of England Governor Mark Carney said yesterday that the currency’s appreciation reflected the strength of Britain’s recovery. The pound has gained about 10 percent against the U.S. dollar in the past 12 months, and England is considering raising interest rates now that the austerity program has been successful.  Higher interest rates will initially stimulate the economy by providing a greater incentive for people and corporations to invest and hire workers instead of hoarding cash.
 
Russia’s first-quarter economic growth is the weakest in over a year as Putin’s aggression against NATO over Ukraine causes investment in Russia to shrive.
 
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy-by-by.
 
If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too but their trend is upward only because the dollar is continually weakening.
 
The French market is about 60% of what it was fourteen years ago. 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=
 
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.
 
The Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2007. Obama has destroyed Swiss banking by attacking Swiss confidentiality that had protected people from the Hitlers and Stalins of the past. The Obama socialists are trying to legally confiscate everything people earn while lining the pockets of their friends with Ambassadorships and $billions in contracts for inept management of socialized medicine.  Look for world economies to soar when the socialists are no longer running America.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy
The world is losing confidence in Obama’s economic statistics which are now about as truthful as Comrade Brezhnev’s USSR statistics were when the USSR started disintegrating.   We have had at least six years of Obama blaming Bush and reporting Obama’s economic recovery beginning every quarter and yet every Obama policy has failed.  This is the “equality of poverty” that comes with Obama’s redistribution of wealth.  Too much government money is going into electronics designed to pacify the uneducated.  America now has an unemployable class of people created by Obama’s socialist policies.  How many poor people have the latest 55” flat screen TV, stereo electronics, are addicted to their cell phones and games, and are up to their ears in debt paying between 19% and 26% interest on their debt?  If you don’t know any such people you obviously are a liberal racist and avoid associating with them because they are now our fastest growing population.  This is why socialists want art, music, twitter, and beach combing to be qualified jobs to receive government subsidies and grants (not degrading welfare).   The Bubble Brain is the Obama administrations most costly phenomena and could take down the economy like 1933.
 
May 12
Treasury Budget Apr +106.9B declined  +$112.9B -
May 13
 8:30 AM Retail Sales Apr 0.1% sharply lower from 1.5% ---
That was just a spike in auto sales last month after winter
Retail Sales ex-auto Apr 0.0% down from 1.0% --
Export Prices ex-ag. Apr -1.2% falling 0.5% -- deflation hurts American deficit
Import Prices ex-oil Apr 0.0% down from 0.3% - price competition hurts exports
Business Inventories Mar 0.4%  up once again 0.4% --- means America is producing more than it is selling and fore bodes a slowdown ahead
May 14
MBA Mortgage Index 05/10 3.6% down from 5.3% -- means home sales are declining
PPI Apr 0.6% up from 0.5% --- Production costs are rising faster
Core PPI Apr 0.5% still increasing 0.6% --- core inflation is the major share of the production cost increase.
Crude Inventories 05/10 0.947M NA NA -1.781M 
May 15
AM Initial Claims 05/10 297K down from 319K +
Continuing Claims 05/03 2667K down from 2685K – leaving the work force
CPI Apr 0.3% up from 0.2% -
Core CPI Apr 0.2% flat from 0.2%+  
Empire Manufacturing May 19.0 looks suspicious up from  1.3 -
Net Long-Term TIC Flows Mar $4.0B down from $85.7B
Industrial Production Apr -0.6% sharply lower 0.7%--- contradicts Empire manuf. above
Capacity Utilization Apr 78.6% down 79.2%-- contradicts Empire manuf. above
May 16 
Housing Starts Apr 1072K makes no sense at all from 946K  In order to have significant housing starts building permits should have risen significantly for at least two months before.
Building Permits Apr 1080K up 9% from 990K
Mich Sentiment in May was 81.8 down sharply from 84.1 and well below the 150% level under the previous free-enterprise government.
 
The Markets
May 16  The thinly supported stock market is again ready for a large correction.  The drop in bond interest rates was due to a massive movement of funds out of something into bonds which drove up bond prices and forced the rates temporarily lower.   It takes 5 business days for investors to settle accounts so within a week there should be a significant reaction in the markets that lost all the cash flowing into the bonds.  So far the stock market volume is extremely thin making stocks vulnerable to large swings when investors move funds.
May 15  The stock market continues extremely thin and the flight to safety in the DOW stocks and in US Treasury Bonds has begun.  The carnage in the Bubble Brain stocks of Twitter, Facebook, gambling, and juvenile computer games has only begun.  These products are becoming a major cause of internet congestion, scholastic failure, dropouts, and ignorance rising rapidly in America.  The Bubble Brain stock economic model is a fraud.  It is based on advertizing hits.  It has spawned a business of clutter designed to cause unintentional hits and frustrate users that accidentally hit ad buttons and punish the advertisers who are slowing down user access.  They plan to rip off the users more by slowing down access to educational sites so they can speed up access to imbecilic games, gambling and productive ad sites.
 
This poetic video explains why the social business model is a stock market bubble about to pop as the boom box mania popped.  The children addicted to social media are the next generation of ego-centric unemployables like the Boom-Box zombies of the last generation.   Social Media is creating a generation of unemployable mental midgets.  They have near-zero useful content being stored between their ears.  Look how Obama gives this free mind numbing stuff to people on welfare the same market for the boom box and then the 54 inch TV screen was the status symbol.
 
May 7  The market is in the stratosphere and has no breadth.  Sell in May and stay away may be the best advice around.
May 5  Throwing money at the stock market no longer makes it go up relative to the highs of 2000 and 2007.  And here we are at the same relative highs seven years later at the end of another business cycle in 2014.
 
World trade is down 55.3% for the year to date and near a 15 year low.  Look at the last 1+ years of world trade! Use the graph or snapshot option. Unfortunately they do not show back to 2008 when world trade was more than five times higher than it is today.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 Look at the volatility index and you see that the market could fall much faster. This market has little volume or volatility.  So when volume picks up past history says the market will plunge.  This is not a good moment in time for holding equities.
 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 http://in.finance.yahoo.com/intlindices?e=asia
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Monday, May 5, 2014

May 9 The international iron ore bear market caused prices at the Chinese port of Tianjin to plunge 19 percent to $105 a metric ton this year. That leaves the enormous domestic Chinese supply facing a $20 per ton loss in order to clear the oversupply. This is the worst loss and will precipitate the greatest collapse in the mining industry since 2009 according to Bloomberg reports. Michiel Hovers, BHP Billiton’s vice president at a conference in Singapore, predicted many iron ore mining companies with higher costs will soon be forced to close as happened in 2009. The disgorging of the inventory glut will shut down new exploration and mining in SE Asia, particularly in Australia. China, now the world’s second-greatest economy is now growing at its slowest rate in 24 years, since China first adopted a free-enterprise American type economy. The worldwide neo-socialist Obama depression is now bringing down the economies like china that were reducing socialist entitlements. In socialist countries like Obama-land, if you breath you have entitlements for free housing, free cell phones, welfare payments for gambling, food stamps, and a free Harvard education (like Obama had) that working people are not entitled to. Meanwhile world trade is down 55.3% for this year to date and near a 15 year low.

Mergers and acquisitions are now at highs usually seen as the stock market peaks when the shares are used to buy other corporations instead of borrowing because the shares are often overvalued 50% or more.
MSNBC/Pravda had an unusual number of idiots on their show this past week.  That is another reliable sign of a peaking market.
 
May 7  Office Depot to close 400 US stores, yet its shares rose 10% on the news.  This says there are irrational people running this market.  Everyone else apparently has left for the summer.  The markets moved about 1% lower and it took hardly anyone to move it.  Market volume is as low as it was eight years ago.  This market is thin and dangerous.
 
To divert national attention from the 2006 collapse of the liar-loan mortgage market and banks that caused the Obama economy and his miserable economic record, Barack Obama will take the case for blaming climate change on George Bush to Al Roker and other TV weather personalities.  But the more they make doom and gloom predictions the more the weather contradicts their claims.  Twenty years ago they already spawned a crop of movies predicting NYC 300 feet under water.  And in Jimmy Carter’s time they were first predicting a nuclear winter after nuclear wars to get people to forget those years of economic malaise and Carter’s democrat misery index (inflation plus unemployment) that got up to 20% before President Regan turned it around.
 
May 5 Investors in coal-burning utilities are brushing off a decision by the U.S. Supreme Court this week that gave federal regulators more power to control air pollution indicating they see a continuation of socialist economic malaise and a clean sweep out of the socialists by the end of 2016.  Only prudent free enterprise candidates are now on the rise in both political parties.
World trade is now down 55% so far for this year near a 15 year low while the Obama administration spouts optimistic Fed statistics that make absolutely no sense.   Real unemployment is generally known to have grown to be more than twice the Obama unemployment statistics that are known to be about as reliable as the statistics from Obama’s Indonesian and Kenyan homelands where he was educated.
 
World Economy
 
May 7  German factory orders declined last month as tensions with Russian occupied territories increases.  The best solution would be UN action to remove Russia from the UN Security Council and then implement the expulsion of the Russians and their descendents that Stalin forced upon the USSR’s conquered nations.  Russia has become a threat to international peace and freedom.
U.K. Energy Secretary Ed Davey said the G-7 is resolute in Reducing Russia Energy Ties.   The Ukraine conflict is spurring the world’s leading economies to cut their reliance on Russian energy to show President Vladimir Putin that there will be no going back to pre-crisis ties.
The Organization for Economic Co-operation and Development cut its forecast for Russian economic growth from a previous 2.3 percent by almost 80% to 0.5 percent in 2014, citing the crisis in Ukraine.  The OECD is the latest international organization to cut its growth outlook for Russia, as the Russian aggression in Ukraine has provoked large-scale capital outflows and a slump in investment. The International Monetary Fund last week said Russia was in recession and cut its growth forecast for 2014 to 0.2 percent.
Danish Finance Minister criticized foreign investors speculating against the nation’s record world high consumer debt.
 
E-House China Holdings Ltd. (EJ) led a drop in real-estate companies amid mounting concern that home sales in Chine have dropped 47% this year in spite of the sharp cuts in sales prices this past year. 
.
May 05
Russia’s manufacturing industries reported another contraction for a sixth consecutive month as ruble weakness drives up inflation and international tensions over violence in Ukraine threaten their economy.  “The bad news from the HSBC April Manufacturing PMI survey is that the contraction in output and worsening of other economic conditions has continued,” said economist Alexander Morozov.
Portugal will be the third to finish off its EU rescue program after Ireland and Spain.  That leaves only Cyprus and Greece still subject to bailout programs four years after the Greek government was granted outside aid in May 2010 and Cyprus went insolvent and Cypriots lost their savings accounts. Portugal’s borrowing costs have dropped helped by signs of economic recovery and the European Central Bank’s pledge to do what it takes to defend the euro.
 
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy-by-by.
 
If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too but their trend is upward only because the dollar is continually weakening.
 
The French market is about 60% of what it was fourteen years ago. 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=
 
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.
 
The Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2007. Obama has destroyed Swiss banking by attacking Swiss confidentiality that had protected people from the Hitlers and Stalins of the past. The Obama socialists are trying to legally confiscate everything people earn while lining the pockets of their friends with Ambassadorships and $billions in contracts for inept management of socialized medicine.  Look for world economies to soar when the socialists are no longer running America.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
 American Economy
May 05  World economic turmoil caused by Russian and Chinese deepening recessions increases Russian and Chinese aggressive tendencies which are used to divert their citizen’s attention from worsening economic conditions.  Cash flush western economies in the mean time have been on a buying binge in western countries.  Past experiences show these buying binges are at hyper-inflated prices which severely damage the buyers.  Massive deflation looms as Obama’s socialized medicine rolls out to people who when offered something like a free cell phone, go out and get two a month and throw them away as newer models are offered.
Hedge Funds Cut Gold Bets to 11-Week Low on U.S. Growth numbers yet gold has continued to rise indicating the Obama economic numbers for the American economy do not make any sense.  How could gold rise if the economy is strengthening and hedge funds are selling gold.
ISM Services Apr 55.2 up from 53.1 and the best after six months of decline.
May 6
Trade Balance Mar -$40.4B continues negative from -$42.3B
May 7
MBA Mortgage Index 05/03 5.3% home buying picked up after the winter from -5.9%++
Productivity-Prel Q1 -1.7% collapsed from 2.3% ----
Unit Labor Costs Q1 4.2% jumped from -0.1% +++
AM Crude Inventories 05/03 -1.781M fell from 1.698M -
Consumer Credit Mar $17.5B  jumped to $16.5B ---
May 8
Initial Claims 05/03 319K down from 344K +
Continuing Claims 04/26 2685K Obama’s nonsense statistic 2771K---
 
The Markets
May 9  The stock market is extremely thin and the flight to safety in the DOW stocks has begun.  The carnage in the bubble stocks has only begun.  This poetic video explains why the social business model is a stock market bubble about to pop as the boom box mania popped.  The children addicted to social media are the next generation of ego-centric unemployables like the Boom-Box zombies of the last generation.  They have near-zero useful content being stored between their ears.  Look how Obama gives this free mind numbing stuff to people on welfare the same market they had for the boom box.
 
May 7  The market is in the stratosphere and has no breadth.  Sell in May and stay away may be the best advice around.
 
May 5  Throwing money at the stock market no longer makes it go up relative to the highs of 2000 and 2007.  And here we are at the same relative highs seven years later at the end of another business cycle in 2014.
 
World trade is down 55.3% for the year to date and near a 15 year low.  Look at the last 1+ years of world trade! Use the graph or snapshot option. Unfortunately they do not show back to 2008 when world trade was more than five times higher than it is today.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 Look at the volatility index and you see that the market could fall much faster. This market has little volume or volatility.  So when volume picks up past history says the market will plunge.  This is not a good moment in time for holding equities.
 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 http://in.finance.yahoo.com/intlindices?e=asia
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