Aug 29 It appears Britain will now lead the free world in reaction to the vacuum left by the socialist Obama administration. World travel may be severely restricted. The Prime Minister referred to the threat as Islamic terrorist poison.

The long awaited sell signal has not occurred but it feels as though when it occurs it will shake the world more than the Liar-Loan Derivatives market did in 2007 or the earlier off-the-books, now illegal accounting practices and DOT COM bubble did in 2000.  Deflation, or depression followed by hyperinflation are even on the table now.  Even Germany is now slipping into deflation.  Quantitative easing must be ended because if you look at the Japanese economy, the Japanese QE in the early 1990’s ended their economic renaissance.

Aug 28   Christians are often conflicted because socialists like to say that Christ was a socialist at heart.  After all Christian charity is obviously a form of redistribution of wealth.  But it is obviously not socialism because it is not an entitlement for anyone nor is it an obligation for others.  It is a free choice and an act of love and willingness  to sacrifice to help others in need.  American kindness was the idea behind the “Thousand Points of Light” of President Bush Sr.  American love and charity was how penniless immigrants once survived on the goodness and kindness of Americans.  That is why we had so many ethnic churches, clubs, and organizations to connect the immigrants with opportunities, with jobs.  

 

And America was much better for it, and the people who gave us what we have today were much better than we are today with our welfare, and our legions of state and federal make-work employees all unionized and clamoring for more time off and bigger pensions.   Ultimately under socialism, everyone must be a government employee or like the great Russian physicist Solzhenitsyn they are punished for their thoughts  and have to live off the charity of friends and relatives. 

 

It is primarily Christians who are working to stem the spread of Ebola in Africa.  Creeping socialism is destroying America by outlawing and discriminating against Christian Hospitals in socialized medicine and anything related to the socialist government that is growing.   But you behead others, or you have a weird fetish, or in your religion we can have nine year old children in our harem, and then you can do as you please, but don’t advertise it.   The liberals don’t want to know how rotten socialism actually is.  We now have thousands of children in sex slavery, and Great Britain is now finally cracking down on their Moslem Pakistani problem.  The liberals and socialists tend to be blind to reality, possibly because they have never visited socialist countries or watch the world news to see what it is like.  And many of the liberals are mentally ill and convert or have joined ISIS.  It is estimated that about 400  Americans are in the ranks of ISIS and even more are from England.  

Americans need to come to their senses before it is not too late.  It is obvious that the Obama administration had the American Intelligence agencies taping all the lines of the New Jersey governor’s staff and applied complex algorithms to come up with a single staff conversation that sounded suspicious to them.  The two staff members deny the accusation.  How many years does it take to press charges if they are real?  That does not matter to socialists because they are breaking the American Constitution to harass all political opponents with accusations.  They are no better than Stalin and Hitler were when they started their power grabs. J'accuse is the method this administration has used even to prevent Historical Societies from renewing their tax exempt status.

 

Aug 26 The feudalistic and religious governments of the dark ages and the Middle Ages were obviously socialist governments. What makes it difficult for religious Americans is that they know socialism doesn’t work because humans are not perfect. If we were perfect we could not be corrupted by socialism. The Pilgrims arrived at Plymouth Colony in 1620 and began the New World’s first government experiment in socialism. William Bradford was governor of Plymouth Plantation, the small community of Pilgrims who arrived in what is now Massachusetts a full decade before the great migration of Puritans from England to the Bay Colony, now Boston. Bradford's history of the Pilgrims was written as his journal and it admits socialism failed within two years with a loss of 50% of the colonists to starvation. There is in fact only one documented example in the history of the human species where socialism was reported to have succeeded without the need of continuous looting, genocide and wars. That is in the reported life of Christ, where Christ is said to have fed thousands of people from the redistribution of the collection of wealth consisting of a small number of loaves and fishes. After all, what greater miracle could Christ possibly perform than to actually make socialism work somewhere on earth? By bringing good people back from the dead Christ did the direct opposite of what socialism is famous for doing best, falsely convicting, imprisoning, and putting good people to death.

 

The sociopath feudalistic socialist politicians like Putin don’t believe in Christ or charity but think of themselves as emperors with entitlements.  They are especially indignant that intelligent and creative people can make so much more money than they can.  Others like those in the Obama administration try to punish everyone who can compete politically, by illegally investigating (for the purpose of destroying opposition) by tapping their phone and computer lines (e.g. Christy et al).  These socialists also often set up their opponents’ naïve relatives with legal transactions to then try to connect and politically embarrass numerous Governors who had nothing to do with those transactions that new regulations make illegal for elected officials.  That is what corrupt administration politicians are now actively doing to destroy the decent political competitors who are potential presidential candidates to go up against Hillary Clinton in 2015.   The name of the game for corrupt politicians is to create new rules and regulations to make many things illegal for politicians but not necessarily illegal for private citizens.   These same corrupt socialists have also done illegal gun running to Mexico’s drug lords, wire tapping, IRS harassment, in addition to smearing their honest opponents.  The naïve relatives, friends, and employees of the honest politicians cannot be convicted of anything, but they are being used to smear the political opponents of this corrupt socialist administration that has caused the death of an estimated 30,000+ Mexicans with the guns they smuggled in to drug lords, originally to smear the American Riffle Association and all American gun holders in general.   To see so many governors now being smeared is reminiscent of the two well known socialists, Stalin and Hitler.  Even Putin is not up to the level of this administration’s type of political corruption.

 

http://www.nbcnews.com/storyline/christie-bridge-scandal/second-bridge-investigation-linked-chris-christie-n139166

http://www.nytimes.com/2014/08/23/us/virginias-mcdonnell-tells-of-pursuing-loan-from-businessman.html?_r=0

http://www.jsonline.com/news/statepolitics/walker-says-he-was-unaware-of-700000-donation-from-mining-company-b99336817z1-272433211.html

 http://online.wsj.com/articles/illinois-gov-pat-quinns-re-election-hampered-by-criminal-investigation-1405560943

 

So far the worst politicians are winning in the world because socialists are in control of most national educational systems and are producing ignorant politically correct corrupted graduates like themselves who need entitlements for grants and other handouts to get ahead.  But the sociopath groups are taking control in the Mid East and Africa and they make our Western incompetent and corrupt socialist leaders look good in comparison.

 

  The socialists know and don’t admit that all those smart rich people are only rich on average for about 30 to 40 years and then they die and their wealth is redistributed with much of it going into charitable foundations.  J P Morgan was the richest American tycoon in the history of capitalism (in constant dollars), and most people don’t even know his foundations are now run by socialist liberals trying to get their stupid followers educated enough to be good feudalist socialists and to destroy free enterprise and capitalism.   The socialists don’t really care that all American wealth is automatically redistributed.  The socialists want to control the natural American redistribution because they themselves are parasites and they want the money for themselves and friends.  The American system does what Warren Buffet and Steve Jobs have done.  Good and decent Americans realize that money and power corrupt people and they start to want something for nothing so they tend to become corrupt socialists or completely degenerate.  Intelligent entrepreneurs know money is poison to people who have not earned it just as indiscriminate welfare or other redistribution of wealth destroys the ambition and self respect of the recipients.  

 

PhD Thomas Piketty published research showing that returns on capital historically outstrips gains from economic growth.  So what if the people who finance growth earn more than the entrepreneurs that create products that sell.  That is because they finance many others who do not succeed.  You would think a college PhD could figure that out. 

 

But this is a sign that the current bubble is about to burst because this excess capital always peaks during economic bubbles because apparently the business failures begin to spike and the successes begin to flatten out.  Right now it is at a peak.

 

Last month, research by European Central Bank economist Philip Vermeulen and London School of Economics’ Gabriel Zucman showed that the wealth of the super-affluent is undercounted.  So what again!  These stupid PhD’s have not figured out that in about 40 years we all inherit the rich people’s money and it is recycled in free countries such the USA and then the stupid PhDs and everyone else get their recycled money. 

There are no Warren Buffet or JP Morgan aristocracies because aristocracies are created only by feudalistic socialists who have no interest in working, or new ideas.  

The old Aristocracies were socialist feudal societies, with each farming community that they ruled.  The aristocrats were descendants of feudalist warriors who rampaged, murdered and pillaged to accumulate wealth (like Putin).   But the new affluent American founders were once great leaders but the growth of corrupt government cronyism is creating a new feudalist aristocracy of socialists who historically have ruled and destroyed every economy they touched.  That is why we need to shrink government, not grow it like it.

 

The American race problem identified.

http://www.cnsnews.com/video/national/oreilly-americas-race-problem

 

World Economy

Aug 29

The free world is going into a state of shock.   Britain just raised the terror threat level to the second highest level, severe.  500 Brits are now Islamic terrorists.  It appears Britain will now lead the free world. 

 

 The anniversary of 9-11 is within two weeks.   Forty three NATO peace keepers in the Golan Heights guarding Lebanon and Israel were just abducted. 

 

The Ottoman Empire conducted genocide against Armenians just the way it is being done against non Moslems in Syria and Iraq today and Turkey and the others continue to deny it and the holocaust of Jews.  But now we can see their religion in action once again and still Moslems in America say nothing and toe the line.

 

The Russian army has now officially invaded the Ukraine apparently to provide a land bridge to Crimea.

 

The German economy has now tilted into deflation.  Terrorism and economic problems preceded both world wars.

 

 

Aug 26

Socialists Argentina revokes authorization for officials at BNY Mellon to defraud American’s who invested in Argentina’s socialist government.  Let that be a lesson to foolish Americans who support socialism here and abroad.

Aug 25

Sebastian Stein a medical worker in Africa says Ebola has a specific indescribable smell.   “It’s full on. It’s in your face,” So does world feudalist Communism and Moslem Caliphates.  It is the smell of death, rotting people and rotten national leadership. 

Stagnation has prompted yet another feudalist socialist government’s collapse.   President Francois Hollande was forced into the third major change of his ministerial team in two years of socialist failures.

Government housing and incompetent government planners in China has proven that government cannot create real wealth and do not understand that innovators need free enterprise not empty or decaying cities that the feudalist socialists apparently think stimulate the economy.   The Chinese politicians have built many empty cities as monuments to feudalist /socialist stupidity.  The dead weight of socialism is dragging the Chinese economy down and adds to growing world instability.  Chinese military pilots continue to harass aircraft in international territory.

Hitler led the feudalist nationalist socialists from the beer halls.  Stalin led the feudalist international socialists in the streets.

 

 

 

The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy and by-by.

http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&t=my

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

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.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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

Obama must have made all his advisors learn the new Common Core Mathematics.  The numbers seldom make sense and tend to make Obama stagnation look like prosperity.

Aug 25

New Home Sales Jul 412K down sharply from 422K ---

Aug 26

Durable Orders Jul 22.6% up from  1.7% socialist nonsense

Durable Goods -ex transportation Jul -0.8% down from 1.9% unlikely

Case-Shiller 20-city Index Jun 8.1% down slightly 9.3% -

FHFA Housing Price Index Jun 0.4% flat 0.4% - we need this to increase

Consumer Confidence Aug 92.4 up from 90.9   This is very questionable for stores that employ people

Aug 27

MBA Mortgage Index 08/23 2.8% up from 1.4%  This is good but inconsistent with the flat year so far.

Aug 28

Initial Claims 08/23 298K peaked at 298K --
Continuing Claims 08/16 2527K increased from 2500K --
GDP - Second Estimate Q2 4.2% up from 4.0% +
GDP Deflator - Second Estimate Q2 2.1% up from 2.0% -
Pending Home Sales Jul 3.3% improved from -1.1% +
Aug 29
Personal Income Jul 0.2% sharply lower from 0.5% ---
Personal Spending Jul -0.1% sharply lower from 0.4% ---
PCE Prices - Core Jul 0.1% flat deflation 0.1% --
Chicago PMI Aug 64.3 sharply higher 52.6 a most manipulated statistic
Michigan Sentiment - Final Aug 82.5 supports confidence 79.2 ++


The Markets

Aug 29

The markets and the world sit on the edge of a precipice.  But the panic has not started just yet and we have not yet gotten a sell signal.  But you can almost feel a panic starting.

Aug 26

Volume continues to slide.  Our indictor still needs a sharp sell off on high volume to trigger the sell sign.  

Others think we are only about a week away for other indicators to break down.  A few weeks ago we showed several public indicators that pointed to a downturn occurring about the beginning of September.    But usually there is a recovery of about half the first decline before a long term bear market decline ensues.   A very careful person could consider shorting a company that is beginning and covering it about a week after the first decline of close to 10%.  After the first sharp sell off there will be some very good stocks that should not be down much more than 10%.  A very careful person could consider cherry picking those strong companies that are still strong but also consider getting back out just before they recover from the first sell off loss.  After that first sell off and recovery we expect traders to pile in short selling.

 

Google has a search machine with many good selections and you can save the results in an Excel spreadsheet and capture the HTML’s that let you automatically plot each case that you want to look at.

 

 Look at the volatility index and you see that the market could fall much faster when volume gets back to normal. 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=3m&l=on&z=l&q=l&c=

 

 World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

http://in.finance.yahoo.com/intlindices?e=asia

https://in.finance.yahoo.com/intlindices?e=americas

Aug 21 Prime Minister Benjamin Netanyahu must have read what we said yesterday and today he said Israeli forces will keep hunting down leaders of Hamas in the Gaza Strip after killing the wife and child of the group’s militia chief in an air raid. “The commanders of terror organizations are a legitimate target,” Netanyahu said last night at a Tel Aviv news conference. “No one is immune.”

http://www.bloomberg.com/news/2014-08-20/netanyahu-vows-to-kill-hamas-leaders-as-rockets-fall.html

 

Aug 20   A female Fox newscaster on the 12 o’clock news said today that Moslems have been known to behead Americans since the time of Thomas Jefferson and the only way to stop that is with a bullet to every Moslem’s head.   That suggestion may be misinterpreted and not go down well but intolerant people are beginning to see terrorism now as a necessary and legitimate strategy.  Some anti-terrorist people think preemptive nuking of all the countries that behead good people and violate the bodies of innocent women and pre-pubic children would be better than waiting for the Jihadists to begin a worldwide nuclear war.  The Israelis are now getting the sympathy of the West because ISIS and Hamas are so incredibly horrible.  Israel could now go into Gaza and execute every evil Hamas leader and the people of Gaza would be so grateful to live and let live in freedom once again.  Freedom and peace is so much better than religious intolerance and oppression especial their evil oppression that was born of the Dark Ages.  

It is a very frightening world we live in now and it seems even Putin now sees the possible horrible consequences if someone like him does something that triggers WWIII.  WWI was started unbelievably by a single terrorist who killed the heir apparent of a little poor European country.  How much easier would the next world war start with the beheading of a prominent free world leader or the invasion of free Ukraine?  And with no leadership being shown in the “sane” part of the world it could be tempting for the insane part of the world to go one step over the edge of no return.   The NAZI religion of National Socialism was eradicated after WWII and all the people living under it thanked the Free World for hanging every single on of its leaders.

 

Aug 19   Bloomberg reported that a Texas office of a drunken political sycophant has been defunded.   Republican Texas Governor Perry took the action against a drunken prosecutor after the prosecutor’s arrest for drunken driving and her obnoxious behavior on jail-house camera.  The governor is now accused by democrats of abusing his authority by trying to force out the drunkard prosecutor who refused to step down voluntarily because Perry is a Republican the drunk was a Democrat… and lets not forget that Perry could run for president.  Texas Governor Perry vetoed the defunding for the drunkard’s entire office of political sycophants.  So a Banana Republic Democrat orchestrated indictment was issued charging Governor Perry, a potential Republican presidential candidate, for ridding Texas of one of their drunken state office sycophants who refused to leave quietly.   This can only help Governor Perry because it will offset his poor debate performance in 2011 and now makes him a viable candidate again!

http://www.bloomberg.com/news/2014-08-18/banana-republic-politics-led-to-perry-charges-defense.html

 

The tech-heavy NASDAQ logged its highest closing level in more than 14 years. As long as the brainless computers keep automatically bidding prices upward, nothing seems to be able to stop the rise in prices until people realize the prices being paid are absolutely ridiculous.  The WSJ and Squawk Box are saying that the little retail investors are now out of the market and all the money is invested by the high paid money managers of the funds using high speed computers to trade.  Most of the exchanges don’t even publish their volume because most trading is very high speed and done with computers that are continuously buying and selling to maintain a market. 

 

The 60 Minutes CBS program on Sunday showed again how the high speed computers are so clever that they break your trade up into smaller trades that cost you more in commissions.  That is why small investors use AON (all or none) because Fidelity does the same to fleece people who don’t know better.  Why should any small trader ever have to say AON when supercomputers can handle any small order without blinking?

 

Banks are getting clever at cheating their fiduciary clients too.  They charge $20 or more for every chick overdraft.  So to maximize their cheating they collect all the checks after you go to sleep and process them in order of the highest checks first.  In that manner once a big check triggers your overdraft each of the many smaller checks triggers an additional $20 penalty.

                                             The Buffet Rule, pass it along…

We must support this...pass it on and let’s see if these idiots understand what people pressure is all about.

Salary of retired US Presidents . . . . . . . . . . $180,000 FOR LIFE

Salary of House/Senate members . . . . . . . . $174,000 FOR LIFE This is stupid

Salary of Speaker of the House . . . . . . . . . . $223,500 FOR LIFE This is really stupid

Salary of Majority/Minority Leaders . . . . .  $193,400 FOR LIFE Ditto last line

Average Salary of a teacher . . . . . . .. . . . ... $40,065

Average Salary of a deployed Soldier . . . .. $38,000

I think he found where the cuts should be made! If you agree pass it on, I just did.

Warren Buffet, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling:

"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.

Warren Buffet is asking everyone to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.

In a week, most people in The United States of America will have the message. This is one idea that really should be passed around.

Congressional Reform Act of 2015

1. No Tenure / No Pension.

A Congressman/woman collects a salary while in office and receives no pay when they're out of office.

2. Congress (past, present & future) participates in Social Security.

All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen/women are void effective 12/1/14. The American people did not make this contract with Congressmen/women.

Congress made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

If each person contacts a minimum of twenty people then it will only take three days for most people (in the U.S.) to receive the message. Don't you think it's time?

THAT IS HOW WE FIX CONGRESS!

 

World Economy

Aug 22

Peruvian President Humala’s cabinet failed to obtain a vote of confidence from its Congress for failing to revive the slowing economy.

Brazil in July created fewest jobs since 1999 as Brazil’s economy declines faster.

Aug 19

Investors that cut their gold holdings in 2012 as prices fell from highs have yet to plunge back in.   Gold production had reached a record 2,632 tons in 2012 causing the price to fall.  But it slumped by a third to 1,763 tons last year. The metal has held in a tight trading range since then according to data compiled by Bloomberg.  But gold bugs are waiting for an upside breakout as the printing presses flood the world with cash.  When interest rates rise the money will come flooding out of US low interest treasuries.  That is why the FED is afraid to stop QE economic cocaine and reverse the process that has stoned our economy.

 

The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy and by-by.  Notice the flat top similar to yr 2000.

http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&t=my

 

The German stock market has topped out and is close to giving a sell signal hitting the sell resistance level for the fourth time in two years.

http://finance.yahoo.com/q/bc?s=%5EGDAXI&t=2y&l=on&z=l&q=l&c=

 

Japan’s stock market appears to have topped and is periodically testing a lower resistance level. It has declined since 1990 when Japan began Quantitative Easing because their Yen is dropping faster than the dollar.  Prior to 1990 Japan was the rising star not China.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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

Obama must have made all his advisors learn the new Common Core Mathematics.  The numbers seldom make sense and tend to make Obama stagnation look like prosperity.

 

Aug 18

NAHB Housing Market Index Aug 55 up from 53  -high data scatter

Aug 19

CPI Jul 0.1% down from 0.3% -  we need inflation not deflation of the economy

Core CPI Jul 0.1% 0.1% 0.1% 0.1% -

Housing Starts Jul 1093K up from 945K.  We have underwater mortgages and don’t need more of them.

Building Permits Jul 1052K up from 963K good jobs bad because there is an over supply of homes now and a shortage of apartments.

Aug 20

MBA Mortgage Index 08/16 1.4% scatter from -2.7% -

AM Crude Inventories 08/16 -4.474M obvious administration error, BS, and scatter 1.401M -  If oil was in short supply it could not result in the lower prices.

FOMC Minutes 7/30 - - - FED still to afraid to make any change due to their inept leadership.

Aug 21

Initial Claims 08/16 298K  down slightly from 311K ++

Continuing Claims 08/09 2500K  down from  2544K +

Existing Home Sales Jul 5.15M  up from 5.04M ++

Philadelphia Fed Aug 28.0 improved from 23.9 +

Leading Indicators Jul 0.9% Common Core math was used for this BS 0.3%

 

The Markets

A few weeks ago we showed several public indicators that pointed to a downturn at about the beginning of September.  Our own market cash flow indicator is nearing a turning point signal too.  But usually there is a recovery of about half the first decline before a long term bear market decline ensues.   A very careful person could consider shorting a company that is beginning to flat line and covering it about a week after the first decline of close to 10%.  After the first sharp selloff  there will be some very good stocks that should not be down 2% much less down more than 10%.  A very careful person could consider cherry picking those strong companies that are still strong but getting out just before they recover the selloff loss.

Google has a search machine with many good options and you can save the results in an Excel spreadsheet and capture the HTML’s that let you automatically plot each case that you want to look at.

 

 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=3m&l=on&z=l&q=l&c=

 

 World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

http://in.finance.yahoo.com/intlindices?e=asia

https://in.finance.yahoo.com/intlindices?e=americas

We are now one or two weeks away from the first big test of this bull market. This test used to occur every four years and was called the “business cycle” but has increased to every seven years beginning before year 2000. The 65 day moving average of most major indicators is now being approached from beneath. Either it breezes up through and the bull market remains intact or next it falls toward the 200 day moving average to test for a bear market. If it hits that 200 dma level on high volume and bounces back up on low volume that would indicate the bear market has begun. Don’t listen to commentators because they almost always lie or do what they are told to say. You must check the volume of transactions at all times yourself. Usually you can find the transactions for the NYSE or in Barons.

If that is the scenario then any last rise up to the 65 day moving average is likely the last chance to get out without a large loss and also probably a good point to short a high priced weak company and anticipate that the 200 pt moving average will break down with another sell signal within a week or two. 

However if the market rises to the 65 day moving average on higher volume than when it declined, it signals that it  is likely just another bear trap and the bull market resumes looking toward new highs. 

 

When a bear market or a bull market begins volume often doubles or even triples the previous normal volume for a few days.

 

Regulators say repo markets still threaten the broader economy with instability.  During the 2008 crisis, the Fed had to backstop banks' repo lending to prevent broad panic across the financial system, but the 2010 Dodd-Frank law made it harder for the central bank to take such action again.  Broker-dealers could experience a funding freeze during future times of financial stress. That potential for problems has not been adequately addressed since the 2007-2008 crises.   Higher capital requirements are needed for broker-dealers that aren't owned by banks, and therefore aren't regulated by the Fed but that could eat up the capital of the investors.  The interest rate is a small daily fee but it is paid every market day.

In a repo, a hedge fund obtains cash by selling bonds to another party for cash with the promise to repurchase the bonds at a slightly higher price in the near future, that day or week. Borrowers are often hedge funds, and lenders are typically money-market funds. Banks stand in the middle, moving cash between the two.

Together, the unstable division of the balance of buying and selling of the mono-pole ETF leads to extreme swings in both directions while the repo market is instable to begin with. 

 

Aug 15

Cisco is cutting 6,000 jobs as CEO forecasts growth stagnation.

 

Aug 12 David Axelrod, the former top political adviser to President Obama, slammed Hillary Clinton for her sharp criticism of Obama's foreign policy.  In an interview with The Atlantic, Hillary said Obama summarized his foreign policy doctrine as “don’t do stupid stuff,” which is not an “organizing principle” worthy of “great nations.”

Axelrod, who knows Hillary supported Bush’s plan to occupy Iraq, fired back, "Just to clarify: 'Don't do stupid stuff’ means stuff like occupying Iraq in the first place”

http://www.nydailynews.com/news/politics/obama-insider-axelrod-bashes-hillary-clinton-article-1.1900683

The left wing is now attacking Hillary too.

http://www.politicususa.com/2014/08/12/obama-adviser-slams-hillary-clinton-criticizing-presidents-foreign-policy.html

 

"As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart's desire at last and the White House will be occupied by a downright  moron."

H.L.   Mencken, July 26, 1920

 

Tesla testing shows that problems emerged after the sedan had been driven more than 10,000 miles. Issues included the center screen going blank reducing access to most functions, and issues with the roof and front trunk lid release.  Tesla stock has had a long run and the aura is beginning to fade.

 

World Economy

Aug 15

Germany’s economy has begun to decline joining France, and Italy.  The BRICKs turned to stone with China’s and Obama’s economies made of smoke and mirrors.

 

Asset managers pulled 663 million rubles out of Russian mutual funds last month, four times more than in June. The year-to-date exodus stood at 17.2 billion rubles, more than in any calendar year since the company began compiling such figures in 2005.  Withdrawals are on track for a record this year as the standoff in Ukraine and a slumping ruble send investors fleeing.

 

The euro bloc’s economic recovery stalled and signs of ample global supply of oil caused Brent to falls to 13-Month Low along with domestic supplies.

 

Brent oil slumped to a 13-month low and West Texas Intermediate settled at the lowest level since February as.

 

Aug 12   The worst standoff between Russia and its former Cold War foes is curbing trade in the EU’s euro region’s economies.  As Russia responds to sanctions by banning food from the EU, the east’s No. 1 Germany export market, is facing a first contraction in two years with crumbling confidence.

 

The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy and by-by.

http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&t=my

 

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

 

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.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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

We will no longer list Obama economic statistics that are clearly unbelievably wrong or intentionally corrupted.  It is hard to say whether China’s or Obama’s statistics are more manipulated.

Lagging US economy resulted in jobless claims climbing to 311,000 last week, the highest in six weeks.

Aug 12

Job Openings Jun 4.671M flat from 4.635M

Aug 13

MBA Mortgage Index 08/09 -2.7% slowed down from 1.6% ---

Retail Sales Jul 0.0% slowed down from 0.2% ---

Retail Sales ex-auto Jul 0.1% slowed down from 0.4% ---

Aug 14

 Initial Claims 08/09 311K up from 289K ---

Continuing Claims 08/02 2544K up from 2518K---

Export Prices ex-ag. Jul 0.3% up from -0.3% -

Import Prices ex-oil Jul 0.0% no change -0.1% 

 

The Markets

Aug 15  If the 65 day moving average acts as an upper resistance level it will be evidence that a bear market has begun.  In that case a 10% decline over a week or so would set in motion the bulls to counter the decline in the following period.  But we would sell everything in that following bull rally to the 65dma especially long ETFs.  ETFs, once the decline begins, will show that they have likely been much smoke and mirrors too because they cannot be balanced by shorting.  Short ETFs will then advance with full smoke and mirrors because those derivatives cannot be countered directly by bulls.

 

Aug 12   The ETFs will be recognized as another type of treacherous and faulty derivative once the next bear market evolves.  It will be the first major test.  The few long side ETFs that existed in 2007 were a disaster and URE is presently at 15% of its origination value even six years later.  But that is much better than the low it hit.  Look it up yourself.

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

First click on 200 days and select “all” URE data.

 

Two weeks ago we showed several public indicators that pointed to a downturn in about two more weeks.  Our own market cash flow indicator is nearing a turning point signal too.  But usually there is a recovery of about half the first decline before the long term decline ensues.

 

Now the volatility index below is starting to rise.  That normally accompanies a market decline. 

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

 

Safe Bulker’s income dropped 92%.  Global Ship Lease revenue is in decline.  Transocean never picked up on bulk cargo activity.  Either China owns its bulk shipping fleet or else all the financial trade numbers the governments use make no sense.  How can we believe China is growing at 6%+ and bulk trade (other than a Chinese owned fleet) has done nothing since Obama took office?

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 (excluding China’s bulk shipping) 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=3m&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

 

August 8 John Ortberg says, “To an adult, it’s ironic when a two-year-old says, “Mine.” Adults know that two-year-olds don’t earn any of their stuff. It is all provided for them. It is a gift from someone much larger and wiser than they. Nevertheless, two-year-olds get extremely attached to their stuff. If someone tries to take something, that item suddenly becomes their favorite stuff. Two-year-olds can be so deluded, can’t they?”

So Obama has allowed well meaning fools to bring the Ebola virus to America too!  Obama can’t even keep track of our 10 million illegal immigrants, so how will he keep track of the Ebola virus?  Two off duty border agents were just shot and one was killed by former Obama deported Mexican criminals because Obama refuses to secure America’s borders or throw the criminals in jail.

http://www.breitbart.com/Breitbart-Texas/2014/08/06/Illegal-Aliens-Tied-to-Border-Patrol-Agent-Shooting-Had-Been-Deported-Several-Times

 

Obama is doing for America what Putin is doing for Russia.  Socialism is equality of poverty and we are about to get a big dose of it.  Fortunes are at 2007 bubble levels just before the liar-loan collapse.  This collapse will likely be an ETF market and Hedge Fund market collapse.  Real shares of stock are not traded any more for many funds.  We have no idea now what real shares of stock are worth on the ledgers of hedge funds and funds that manufacture sector average funds, volatility funds, and other derivatives.  Banks for the most part manufacture those derivative funds.  Goldman Sacks and others will come under tremendous investigation pressure if there is a melt down.  The Obama/Frank liar loan mortgage scandal that broke in 2007 was caused by Federal pressure on realtors and banks to make home mortgages available to people who could not afford them.

 

The new Common Core, CC, American public school curriculum is under fire now because it continues to lower American standards.  America was #1 in 1963 and is now #26 in world in terms of high school student competency.  When these CC students graduate they will have to take special courses to catch up in both science and math because math is at the core of science.  That means the USA is losing the technology race fast and that has been the key to American prosperity. 

 

Aug 5  These crucified men were former Muslims that had converted to Christianity, Illinois Review reports. Each of the 8 men was charged with the crime of apostasy for renouncing Islam and converting to Christianity. When confronted by the ISIS members, they refused to “revert” to Islam.  This is the “only” reason they were crucified. According to Islamic jurisprudence, crucifixion is a method of death reserved for Christians.

http://www.vieinter.com/themiddleeast/isis-crucifies-8-christians-in-syria-for-apostasy-from-islam/

 

A ramp up in illegal immigration, the decline in the economy, and the decline of liberty and free enterprise have all occurred in the last six years.  We can’t blame Congress because they were there for over 200 years.  Only Obama and his incompetent and corrupt staff correlate with all the American economic and international disasters.

 

A new study from researchers at the University of Hong Kong and Indiana University estimates that corruption on the state level is costing Americans in the 10 most corrupt states an average of 5.2% of those states’ average expenditures per year.  The ten most corrupt states are: Mississippi, Louisiana, Tennessee, Illinois, Pennsylvania, Alabama, Alaska, South Dakota, Kentucky, and Florida.  The study also found the least corrupt states are Oregon, Washington, Minnesota, Nebraska, Iowa, Vermont, Utah, New Hampshire, Colorado, and Kansas.

 

World Economy

The world of Obama’s America now resembles Aldous Huxley’s book 1984.  It is a world of continuous wars with “Big Brother” watching everyone through the TV screens.  Who would have guessed that indeed today it is a reality that “Big Brother” can see us through our computer and cell phone screens and even has our precise GPS location.  Russians watch and cheer as Putin sends troops to occupy Belarus and Crimea and shoots down a jet airliner killing 295 adults and three babies.  One baby was found still in one piece.  Putin, still a communist, now has 20,000 communist soldiers on the border ready to invade the Ukraine.

http://www.bloomberg.com/news/2014-08-08/world-war-on-russia-s-mind-when-u-s-duels-over-ukraine.html

 

Aug 5  Despite over 200 years of African infrastructure projects backed by foreign donors, Accra Ghana, still doesn’t have a working sewer system, leaving most of its citizens to choose between communal latrines or defecating on the streets. That’s contaminating the city’s groundwater, according to the World Bank, and almost 700 people have contracted cholera in Accra since June.  That is almost as many as this year's Ebola deaths.  The failure to maintain existing treatment plants has rendered them unusable, while a lack of political will means there’s little prospect of any immediate improvement.   U.S. manufacturers like General Electric Co. and Ford Motor Co. see Africa emerging as the world’s next big growth market and are rushing to expand there.  It sounds like GE and Ford are headed towards big problems and someone ought to tell them about the Ebola epidemic!  This past week Obama launched his big investment effort comparing Africa to Russia, China, and Brazil.  Obama will start with investments in several  $30 million hotels for all the American workers who will go to Africa to work.  He did that for Haiti too except Obama did not build roads to the Hotels so they stand vacant in Haiti’s hills.

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

 

The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy and by-by.

http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&t=my

 

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

 

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.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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

We will no longer list Obama economic statistics that are clearly unbelievably wrong or intentionally corrupted.  It is hard to say whether China’s or Obama’s statistics are more correct.

Aug 5

Factory Orders Jun 1.1% data scatter again -0.5%

ISM Services Jul 58.7 increasing 56.0  ++

Aug 6

Trade Balance Jun -$41.5B not as bad as -$44.4B

Aug 7

 8:30 AM Initial Claims 08/02 289K flat 302K

Consumer Credit Jun $17.3B down from $19.6B -

Aug 8

Unit Labor Costs Q2 0.6% not believable 5.7%

Wholesale Inventories Jun 0.3% 0 0.3%

 

The Markets

Aug 8   Volume being so low during the market advance means the cash supporting the market rise has been less than half the support from 2001 to 2007.  From 2001 to 2007 the share volume doubled as the market rose.  From 2009 to 2014 the share volume dropped 50% as the market rose.   Mathematically if we buy 1000 shares and the price of the stock rises $1 it means we paid $1 times 1000 or $1000 more than the stock was worth on the previous trade.  It takes twice as much extra cash to move the stock $1 if we double the volume as in 2001-2007 vs 2009-2014.  Therefore the market rise this time has less than 50% the strength it had 2001-2004.  It would be 50% of the strength if volume was always 50% lower but the volume was now has dropped as the market rose and the last time the volume rose as the market rose.  So this market is in the stratosphere now with less underlying support than it had in 2007.  That is because people got out and bought bonds instead.  Every time Bernanke dropped bond interest rates bond prices rose by the same percent.  Dropping rates from 4% to 2% means a bond doubles in value.  Dropping from 2% to 1% caused bonds to double again.  So stocks are overvalued and bonds are overvalued and will collapse 50% when the 1% rate goes to 2%.  Therefore when interest rates begin to rise both stocks and bonds will collapse in value.  Interest rates are as low as they can go without causing hyperinflation.  If the FED causes hyperinflation history shows that is always followed by a great depression.  Extremely low interest rates and half the normal volume are both harbingers of a looming financial crisis.  In the past the FED has never allowed the dollar in money markets to be broken below 1.0.  The FED is warning that even money market securities could lose face value in the next financial crisis.  Usually the stock market has to slide about a year for the crisis to hit banks and insolvencies to go virulent. 

 

Aug 6 The real worry will come when brokers lose their reputation for safety because funds deposited with brokers do not have the guarantees banks have.  We are optimistic that America can survive the damage Obama has done.  It is increasingly evident that the FED cannot keep America out of a depression without some hyperinflation first to overcome the damage done by Quantitative Easing.  Japan has been a prisoner of QE since 1990 and their values have fallen since then relative to the dollar and China has replaced Japan as the second greatest economy.  At one time Japan owned six of the world’s ten largest banks.

 

Aug 5  As the market bubble expands the waste increases… but is hidden.  When the market declines the waste is exposed and written off.  The damage and corruption occurs during the bubble for as long as the bubble lasts. 

 

Now the volatility index below is starting to rise.

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

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=3m&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

Three Indicators That Proceeded Past Downturns Are Now Flashing Are Signs That Indicate A Stock-Market Tumble Ahead.

http://online.wsj.com/articles/three-signs-that-point-to-a-stock-market-tumble-ahead-1406913915

 

Mark Hulbert's analysis was posted on internet Aug. 1, 2014 1:25 p.m. ET and was printed on page B7 of the Wall Street Journal August 2, 2014.  Over the past 45 years, the stock market has lost more than 20% each time three warning signs of Mark Hulbert flashed simultaneously and all three were flashing August 1, 2014.  The signals are measures of excessive levels of bullishness and enthusiasm; significant stock overvaluation, based price/earnings ratios; and extreme divergences in the performances of different market sectors.

A bear market is considered a selloff of at least 20%.  Hayes Martin’s research as president of Market Extremes, an investment consulting firm in New York finds that the indicators have gone off in unison six times since 1970.  The S&P 500's average subsequent decline on those earlier occasions was 38%, with the smallest drop being 22%. In fact, no bear market has occurred without these three signs flashing at the same time. Once they do, the average length of time to the beginning of a decline is about one month, according to Mr. Martin.

 

The first two of these three market indicators the percentage of advisers who described themselves as bullish rose above 60%, a level Investors Intelligence, an investment service, considers "danger territory." Its latest reading, as of Wednesday, was 56%.

 

The price/earnings ratio for the Russell 2000 index of smaller-cap stocks, after excluding negative earnings, rose to its highest level since the benchmark was created in 1984—even higher than at the October 2007 bull-market high or the March 2000 top of the Internet bubble.

 

The third of Mr. Martin's trio of bearish omens, the fraction of stocks participating in the bull market, declined markedly.   One measure of this waning participation is the percentage of stocks trading above an average of their prices over the previous four weeks. Among stocks listed on the New York Stock Exchange, this proportion fell from 82% at the beginning of July to 50% on the day the S&P 500 hit its all-time high. 

Mr. Martin said it was one of the sharpest breakdowns in market breadth that has ever seen in so short a period of time.  Another sign of diverging market sectors: When the was the S&P 500 hitting its closing high ahead 1.4% for the month on July 24, in contrast to a 3.1% decline for the Russell 2000.

 

Mr. Martin's said stocks with smaller market capitalizations will be the hardest hit and forecasts that the Russell 2000 will fall by as much as 30%.  Among the hardest-hit stocks during a decline will be those with the highest "betas” semiconductors in particular—and technology stocks generally.

 

What to do?  We have already gotten out and have a small amount invested in gold silver stocks.  We anticipate an additional 5% drop within a week or two and a recovery of most of the loss as the FED talks about attempts to calm the markets.   Some stock short term buying opportunities may occur initially. Then an initial FED talked-up recovery may be another opportunity to get completely out of the market. 

 

However, because hedge funds covered so much of their short selling we expect renewed short selling and other dumping of stocks will trigger a classic bear market that will run its course over several months.  And since stocks will be beaten down, corporations will use the next quarterly reports to acknowledge all the hidden losses they have been carrying due to pressure by Jim Cramer type analysts who punish bad news during bull markets and punish fudged profits and revenue in bear markets.  Deceptive optimistic bookkeeping during bear markets are often treated as criminal by irate stock holders and regulators so that bear markets are when the companies will take all possible loses hidden by LIFO vs. FIFO bookkeeping and “creative” accounting.  That is why the stock market is such a good forecaster of the economy.  Bear markets cause belt tightening and a general economic slowdown.  Bull markets generate cash which can be used for growth if there is confidence in national leaders and economic policies.