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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