This administration is causing social disintegration,
corruption, and lawlessness which provides several trigger mechanism for
collapse and economic disorder. Electing
a president who clearly always hated everything America stands for has potentially
set the entire world in the direction of social meltdowns, riots, wars, and
economic depressions. The American Supreme
Court needs to reign in this autocratic takeover of America.
American Economy
The American stock markets now appear to be moving beyond
their all time highs. It is difficult to
predict the exact top. We expect several
declining lows and declining highs and about a 30% to 40% net decline from the
top before Wall Street recognizes we are in a bear market. But once
the Bear is recognized the collapse will be much steeper and is usually only two
or three months until a bottom is put in.
But it may take another two or three months to know if the bottom will
hold.
But there will be opportunities to sell near tops and cover
and buy at succeeding lows after major market moves that usually are over
reactions. This will be a volatile time,
a time to be nimble or else to get on the sidelines and wait for the bottoming
out. This president is incapable of
restoring confidence and could go down as one of the most inept American president in
American history.
Dec 1
ISM Service Business index Nov 58.7 down from 59.0 -
Dec 2
Construction Spending up Oct 1.1% from -0.4% as demand declines --
Dec 3
MBA Mortgage Index 11/29 -7.3% decline further from -4.3% --
ADP Private Employment Change Nov 208K down from 233K--- About 300k is needed
Productivity-Rev. Q3 2.3% 2.2% 2.4% 2.0% -
Unit Labor Costs - Revised Q3 -1.0% 0.0% 0.0% 0.3% -
Dec 4
Challenger Job Cuts increase Nov to -20.7% from 11.9% - -
Initial Claims 11/29 297K slightly better from 313K ++
Continuing Claims 11/22 2362K increase from 2316K--
December 3 Famous
Quotations December 3, Honeywell CEO Dave Cote said
about the inflated stock market that we can keep going higher if we can get
“that feeling going again.” But remember
the NYSE already dropped more than 60% in the 2007-2008 declines similar to the
Hover decline, but the worst decline was the FDR decline on top of the Hover
decline that took the market down 90% from pre-depression levels. Here are
other similar pompous optimistic quotes about the economy and the stock
market.
"We will not have any more crashes in our time."
- John Maynard Keynes
in 1927
2."I cannot help but raise a dissenting voice to
statements that we are living in a fool's paradise, and that prosperity in this
country must necessarily diminish and recede in the near future." - E. H. H. Simmons, President, New York Stock Exchange,
January 12, 1928
"There will be no interruption of our permanent
prosperity." - Myron E. Forbes, President, Pierce Arrow Motor Car Co.,
January 12, 1928
3."No Congress of the United
States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that
which appears at the present time. In the domestic field there is tranquility
and contentment...and the highest record of years of prosperity. In the foreign
field there is peace, the goodwill which comes from mutual understanding." -
Calvin Coolidge December 4, 1928
4."There may be a recession in stock prices, but not
anything in the nature of a crash." - Irving Fisher, leading U.S. economist, New York Times,
Sept. 5, 1929
5."Stock prices have reached what looks like a
permanently high plateau. I do not feel there will be soon if ever a 50 or 60
point break from present levels, such as (bears) have predicted. I expect to
see the stock market a good deal higher within a few months." - Irving Fisher, Ph.D. in economics, Oct. 17,
1929
"This crash is not going to have much effect on
business." - Arthur Reynolds,
Chairman of Continental Illinois Bank of Chicago,
October 24, 1929
"There will be no repetition of the break of
yesterday... I have no fear of another comparable decline." - Arthur W. Loasby (President of the Equitable
Trust Company), quoted in NYT, Friday, October 25, 1929
"We feel that fundamentally Wall Street is sound, and
that for people who can afford to pay for them outright, good stocks are cheap
at these prices." - Goodbody and
Company market-letter quoted in The New York Times, Friday, October 25, 1929
6."This is the time to buy stocks. This is the time to
recall the words of the late J. P. Morgan... that any man who is bearish on America will go
broke. Within a few days there is likely to be a bear panic rather than a bull
panic. Many of the low prices as a result of this hysterical selling are not
likely to be reached again in many years." - R. W. McNeel, market analyst, as quoted in
the New York Herald Tribune, October 30, 1929
"Buying of sound, seasoned issues now will not be
regretted" - E. A. Pearce market
letter quoted in the New York Herald Tribune, October 30, 1929
"Some pretty intelligent people are now buying
stocks... Unless we are to have a panic -- which no one seriously believes,
stocks have hit bottom." - R. W.
McNeal, financial analyst in October 1929
7."The decline is in paper values, not in tangible
goods and services...America
is now in the eighth year of prosperity as commercially defined. The former
great periods of prosperity in America
averaged eleven years. On this basis we now have three more years to go before
the tailspin." - Stuart Chase
(American economist and author), NY Herald Tribune, November 1, 1929
"Hysteria has now disappeared from Wall Street." - The Times of London, November 2, 1929
"The Wall Street crash doesn't mean that there will be
any general or serious business depression... For six years American business
has been diverting a substantial part of its attention, its energies and its
resources on the speculative game... Now that irrelevant, alien and hazardous
adventure is over. Business has come home again, back to its job,
providentially unscathed, sound in wind and limb, financially stronger than
ever before."
- Business Week,
November 2, 1929
"...despite its severity, we believe that the slump in
stock prices will prove an intermediate movement and not the precursor of a
business depression such as would entail prolonged further liquidation..."
- Harvard Economic Society (HES),
November 2, 1929
8."... a serious depression seems improbable; [we
expect] recovery of business next spring, with further improvement in the
fall." - HES, November 10, 1929
"The end of the decline of the Stock Market will
probably not be long, only a few more days at most." - Irving Fisher, Professor of Economics at Yale University,
November 14, 1929
"In most of the cities and towns of this country, this
Wall Street panic will have no effect." - Paul Block (President of the Block newspaper
chain), editorial, November 15, 1929
"Financial storm definitely passed." - Bernard Baruch, cablegram to Winston
Churchill, November 15, 1929
9."I see nothing in the present situation that is
either menacing or warrants pessimism... I have every confidence that there
will be a revival of activity in the spring, and that during this coming year
the country will make steady progress."
- Andrew W. Mellon, U.S.
Secretary of the Treasury December 31, 1929
"I am convinced that through these measures we have
reestablished confidence."
- Herbert Hoover,
December 1929
"[1930 will be] a splendid employment year." - U.S.
Dept. of Labor, New Year's Forecast, December 1929
10."For the immediate future, at least, the outlook
(stocks) is bright."
- Irving Fisher,
Ph.D. in Economics, in early 1930
11."...there are indications that the severest phase of
the recession is over..."
- Harvard Economic
Society (HES) Jan 18, 1930
12."There is nothing in the situation to be disturbed
about."
- Secretary of the
Treasury Andrew Mellon, Feb 1930
13."The spring of 1930 marks the end of a period of
grave concern...American business is steadily coming back to a normal level of
prosperity."
- Julius Barnes, head
of Hoover's
National Business Survey Conference, Mar 16, 1930
"... the outlook continues favorable..."
- HES Mar 29, 1930
14."... the outlook is favorable..."
- HES Apr 19, 1930
15."While the crash only took place six months ago, I
am convinced we have now passed through the worst -- and with continued unity
of effort we shall rapidly recover. There has been no significant bank or
industrial failure. That danger, too, is safely behind us."
- Herbert Hoover,
President of the United
States, May 1, 1930
"...by May or June the spring recovery forecast in our
letters of last December and November should clearly be apparent..."
- HES May 17, 1930
"Gentleman, you have come sixty days too late. The
depression is over."
- Herbert Hoover,
responding to a delegation requesting a public works program to help speed the
recovery, June 1930
16."... irregular and conflicting movements of business
should soon give way to a sustained recovery..."
- HES June 28, 1930
17."... the present depression has about spent its
force..."
- HES, Aug 30, 1930
18."We are now near the end of the declining phase of
the depression."
- HES Nov 15, 1930
19."Stabilization at [present] levels is clearly
possible."
- HES Oct 31, 1931
20."All safe deposit boxes in banks or financial
institutions have been sealed... and may only be opened in the presence of an
agent of the I.R.S." - President F.D. Roosevelt, 1933 The IRS was confiscating assets. Ownership of gold became illegal.
December 1 Update
Energy stocks fall rapidly as the price of oil plummets. Russia, Venezuela, and the Mid East will
see big budget deficits. Oil companies may have difficulty with the high
leveraged debt levels of their junk bonds as revenues drop. The last collapse
of oil prices is reminiscent of Obama’s 2008 election several months before Fox
News, Squawk Box, and others began to notice we were in a recession. Then it
fell to a low of $44 per barrel. See the historical chart.
http://futures.tradingcharts.com/chart/CL_/M?anticache=1417442887
You can see from the crude Obama government oil chart that
oil dropped significantly in the Clinton’s
2000 recession hitting a low of $10.87 per barrel.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F000000__3&f=A
Energy prices are the canary in the mine shaft that dies
first and warns of the impending deep recession. Only this could be the depression of this
century. The FDR recession on top of the
earlier Hover recession was the depression of the last century which ended in
WWII. In 1920, before the recession Oil
was over $3 per barrel. During FDR’s
Great depression oil fell to 67 cents a barrel.
The EU is now concerned that the world is about to enter another Great Depression. During a depression, cash and gold are kings
because credit collapses.
Remember we asserted by Oct 15 that within five months there
would be clear signs we had entered another recession but it would take up to
an additional five months for the recession to be known in hindsight, and be
half over before most market analysts acknowledge it.
Energy stocks fall rapidly as the price of oil
plummets. Russia,
Venezuela,
and the Mid East will see big budget deficits.
Oil companies may have difficulty with the high leveraged debt levels of
their junk bonds as revenues drop. The last collapse of oil prices is
reminiscent of Obama’s 2008 election several months before Fox News, Squawk
Box, and others began to notice we were in a recession. Then it fell to a low of $44 per barrel. See the historical chart.
You can see from the crude Obama government oil chart that
oil dropped significantly in the Clinton’s
2000 recession hitting a low of $10.87 per barrel.
Bond
Energy prices are the canary in the mine shaft that dies
first and warns of the impending deep recession. Only this could be the depression of this
century. The FDR recession on top of the
earlier Hover recession was the depression of the last century which ended in
WWII. In 1920, before the recession Oil
was over $3 per barrel. During FDR’s
Great depression oil fell to 67 cents a barrel.
The EU is now concerned that the world is about to enter another Great
Depression. During a depression, cash
and gold are kings because credit collapses.
Liquidity crisis
signs are seen in the senior citizen retirement safe-haven of bonds.
Bond Funds have now loaded up on cash fearing a coming crash
and a liquidity crisis if bond holders try to get their cash out all at once.
Holiday sales slump signals an Obama economic
crisis coming.
2014 US and Canadian Holliday Sales have slumped 11% so far
with the next big sale coming in two weeks.
Traffic is down 5%. Domestic
sales during the holiday season weighed on the toy maker’s results because
stores have cut orders. The National
Retail Federation said that Consumer spending fell to $50.9 billion down from
$57.4 billion in 2013.
Federal guarantee of
pensions of private and government union members said sure to go broke this
time, Unions have bought votes and
have been promised by the corrupt politicians they bought, that the US
Government would stand behind this union/ and political party corruption. It is unlikely the other political party will
pay for the corrupt promises. Out going
L&G pensions Chief John Pollock, a resident fellow at the American
Enterprise Institute weighed in with his opinion,
International News
The slowdown in the economy of China means their imports of coal
and mineral ores have plummeted. China’s
Oversupply of housing now stands at near five years under normal times but
demand is now falling and vacant complexes deteriorate in the weather. Recycling of the first generation of products
will further decrease demand by China
for ore resources.
November 28 Weekend Update Our stock market cash flow indicator still
shows that the net cash left after advances and declines is in the direction of
out of the market. Even though price has
continued higher, we still show peak to peak cash levels and bottom to bottom
cash levels getting lower. We still
expect the rally to continue this year and for the bear market to be evident
early next year. It takes about five
months for the media to know money has been flowing out and for stock prices to
begin to plunge. That means it could be
February or March before MSNBC and Jim Cramer say it is time to get out. The last cycle when the Dow and the S and P
peaked was in July 2007, and the NYSE peaked in October of 2007. We got our first bear market signal July 26,
2007 and a confirmation on September 28, 2007.
Jim Cramer said Sell on September 18 2008 almost a year later when half
the bear market was over. By then the
bear market was about 50% finished.
If corporations were forced now to mark their assets and
inventories to market, their losses would be tremendous and stock prices would
collapse at the net market opening. But now,
as long as they hang on to their dogs and development losses they can pretend
earnings are increasing. But there is a
trigger mechanism to start the collapse.
In 2007 we saw the cash flow had turned negative and that means the
water level in the economic river was getting lower and the rocks, the
triggers, were beginning to surface. The
2007 trigger mechanism was caused by the Dodd-Frank-Obama liar loans that were
supposed to help poor people own houses.
The liar loans were available but the poor people could not afford the
interest rate. So subprime mortgages
were made available to the poor because housing prices were rising 6% each year
so that in just a few years the poor would either become rich or Dodd-Frank-Obama
thought they could just flip their house and bank the profit. Obama was a relatively poor “community
activist” without a steady job and he got a good deal from a corrupt Chicago realtor. Dodd got a special deal from a realtor in Ireland
so they were absolutely certain that the poor or corrupt could get rich quick
and own a house if given the chance. But
unfortunately most poor people were not able to sell at a profit within two or
three years before the subprime interest rate doubled or tripled. Only the corrupt were guaranteed a profit. So almost all the poor people lost everything
and there are actually fewer homeowners today than before Dodd, Frank, and
Obama became friends and applied their coercive and corrupt get rich quick
scheme to try to help the poor.
