Monday, November 24, 2014

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


American Economy
Nonfarm Payrolls Nov 321K rose from 214K for the holidays
Nonfarm Private Payrolls Nov 314K rose from 209K
Unemployment Rate reported Nov 5.8% but actually about 17%
Hourly Earnings Nov rose 0.4%
Average Workweek Nov flat at 34.6
Trade Balance Oct -$43.4B slightly worse from -$43.0B
US factory orders fall for third straight month.  Factory Orders Oct -0.7% dropped again after the last -0.6%.
 
December 4     Obama-Holder lawlessness has now been unleashed on American cities.   It was bad enough that 30,000 Mexicans perished due to Obama-Holder gun running that was meant to be blamed on the American gun industry in 2009.  It was bad enough that the IRS was then unleashed on tax exempt American Historical Societies and Religious groups to harass and defraud them in 2012 because they support basic American principals.  It was bad enough a lame duck congress passed socialized medicine on what their advisor called the “Stupid Americans” who they had to fool to get the bill passed.  Now two deaths of “resisting criminals” by the police is the Obama excuse for new racist oriented demonstrations and looting.  The death toll this year alone in Chicago today stood at 377 with four murders just on November 7 2014 alone.  Chicago Mayor, Rahm Emanuel was the first Obama White House chief of staff and what does he know or care about law or order?  According to Senator Chuck Schumer, the democrat party is beginning to melt down due to the rise of the leftists, lawlessness, and the proliferation of poorly qualified government, economic, and social programs and their program leaders.
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.
 
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Monday, November 17, 2014

Nov 21 It is becoming painfully apparent that the Obama Administration is funded by and in bed with the Insurance Companies. It is another farce that this administration has lowered medical insurance rates or even lowered the inflation rate of insurance rates. The Republicans and Independents have come out with the plan to lower rates by ending state monopolies of Insurance Companies and allowing medical insurance companies to work across all state lines. That alone, free enterprise competition is all that is needed to lower American medical costs. An Obama tax on medical technology would be more appropriate in Obama’s father’s country, Nigeria. In America we do not purposely impede the advance of science.

Nov 20    Morgan Stanley, Goldman Sacks, and JP Morgan are in the FED crosshairs this time for recent leveraged commodity speculations the FED claims could have bankrupted the banks.
 
It is becoming ever more apparent that the USA’s FED has no tools capable of unwinding Quantitative Easing and that once interest rates hit zero they will lose control of the money supply just as the German Weimar Republic did before it collapsed.  The resulting hyperinflation in Germany led to demoralization of Germans, then the blame on the French, the rise of Hitler, WWII, Jewish scapegoats, and then genocide.  More recently in Zimbabwe /Rhodesia, hyperinflation led to European scapegoats, and genocide.
http://www.mensjournal.com/magazine/if-you-think-robert-mugabe-hates-only-white-people-you-re-wrong-20131001
 
 The peaking of IPO’s has always occurred when stocks are at highs and overvalued.  That is when shares can be better used as the currency of IPOs instead of money in order to facilitate inflated buy-out mergers.  The builders’ IPO offerings are drying up now while the last gasp deluge in the overall U.S. IPO market ends before the next recession.  The door is closing on the QE induced run up in most world stock markets.  USA’s Quantitative Easing has ended and the FED said payback will be next in order to liquidate the $4Tiillion+ QE balance sheet of Liar-loan mortgages and other low value assets.  In reality the Fed is afraid they will trigger a recession so they will probably wait until after the recession relapse happens.  But then it will be too late and they will likely try some more QE.  That was German policy in the 1930’s that led to Hyperinflation where the rich bankers then borrowed bank funds and bought out the banks they worked at.   They, the richest 1% in Europe then used hyperinflation’s worthless German Marks to pay off their loans and then the richest personally owned the German Banks.  That triggered the anti-Semitism against the European bankers and led to the rise of Hitler’s National Socialism and world war.
 
Gap slashed its earnings guidance for the holiday shopping season,
 
Another year of record cold weather has descended on the USA.  On Nov 19 it was reported that every state in the USA had just recorded a temperature below freezing.  In the past 7 days the USA has seen 1,360 cold weather records broken in states and regions around the country.   Yesterday, EPA activists bundled up to protest the Senate’s vote on the Keystone XL pipeline. The EPA activists specifically targeted Senate Democrats who have said they will vote in favor of the pipeline.  They argued that Keystone will contribute to global warming.  The fact is that virtually every environmental scientist works for a government or a non profit institution because they are not found to be competent enough to keep their jobs in private industry.  The EPA activists created the only area of science where critiques and criticism are not tolerated.  They are more like a religious order of true believers from the Dark Ages before there was science.  They are similar to the Inca Priests who sacrificed people in their temples because they believed it was in the best interest to please the gods.  The Keystone pipeline would move energy far more safely, environmentally safely, and more efficiently than the railroad or other alternatives.  The EPA has become a religious order and ignores scientific data that show they don’t know what they are talking about. 
 
Nov 18     British Prime Minister David Cameron addressed the G20 near the close and warned of a looming new global economic crash.  The PM said ‘red warning lights are flashing on the dashboard of the global economy.”   The Guardian said, “His warning comes days after the Bank of England governor, Mark Carney, claimed a specter of stagnation was haunting Europe. The International Monetary Fund managing director, Christine Lagarde, expressed fears in Brisbane that a diet of high debt, low growth and unemployment may yet become “the new normal in Europe”.
 
Nov 17   Very soon the FED needs to begin unwinding QE1, QE2, and QE3 or else it will be too late.  America is headed for another Obama recession in 2015.  The economic waste of his policies and wealth redistribution at home and abroad has created a structural problem that will only worsen as investment values evaporate.  Google, Yahoo, eBay and Amazon plus Twitter, Facebook and the other social networks form the bubbles that are about to pop the American economy the way the DOT COM bubble burst the economy in yr 2000.   They in turn will cause major bankruptcies as seen in 2008.  All stocks are now overvalued by the dilution the market valuation standards.  Earnings growth was replaced by revenue growth and then sales growth, and finally free user/subscriber growth.  But now finally the bubble stock cash flows are starting to go negative and the hyper inflated stock prices are about to collapse. 
At some point when objectivity and honesty returns, the corporations will take what is called their proverbial business cycle baths and write off all their real losses that were hidden during the run-up in stock prices.  The flood of bad earnings reports can take up to a year to conclude and the market indices normally drop about 60% or more over that period.  Many companies declare bankruptcy and are reabsorbed in the next business cycle.  We predict the US stock market will be recognized in full retreat within about five months and evidenced in all the stock indices.  The declaration of a recession takes two quarters of decline.
 
The results of a new Gallup poll found that approval of the healthcare law has fallen to a new record low with just 37 percent of Americans approving.   MIT professor Jonathan Gruber said that he was paid and instructed to  fool the Lame Duck Democrat Congress and call it the Affordable Care Act, instead of the truth; the unaffordable crappy care tax act.   He was told to pretend he was an independent consultant and not divulge he was being paid by the Obama administration.   However the American public was never fooled like the lame brained members of Congress who think like Reed and Pelosi and passed the law that they never even bothered to read because it was based on Gruber’s commissioned fabrications.  The Obama health care architect Jonathan Gruber has so far received at least $4,300,000 in taxpayer-funded Obama paid health-care-consulting fees, from the Obama administration.  Yet Obama claims he never heard of him before.  Talk about a lame brained administration!  President Obama makes President George Bush look like a genius.
Another African died of Ebola in an American hospital this weekend.  Racists call it racism because so far only the white patients have survived.  This was the first African that Obama officially brought to the USA apparently paying for his transportation since the African could not afford the expensive quarantine transportation.  Someone in the Obama administration apparently is paying to try to bring Ebola to America to get Americans to share the pain.   That is the sick reasoning of this administration.  They think Americans must be infected first to force us to save the world.  But Americans are getting fed up with the stupid racist liberals who hate everything America stands for.  Americans are the most generous people in the world and yet Obama wants Americans to suffer with Ebola to force additional funding by Americans.  But which Americans are likely to get infected besides the nurses and doctors?  In Africa it is the poorest people who generally live in ignorance.  Obama’s spreading of African Ebola to America would likely backfire on the poorest and most ignorant of Americans.  
 
World Economy
Nov 21   Chancellor Merkel plans to open Germany to commercial Fracking with new legislation.  Poland has enormous reserves too but Europe needs to learn the new technology required.  This will make Europe energy independent of Russia if they do it.
 
Iron ore is headed for a fifth straight weekly drop with prices trading down 6% near the lowest since 2009 on concern that slowing growth in China will hurt demand.  
Nov 20    Japan has dropped the value of the yen by 8% and most of Asia is starting to follow suit.  That will hurt American trade.  Conversely we could say the strong dollar will hurt the American economy.
 
Nov 18    
“The eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too,” Cameron writes. “Emerging market economies which were the driver of growth in the early stages of the recovery are now slowing down. Despite the progress in Bali [trade talks in 2013], global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.”
 
Nov 17  Japan, the world's third largest economy has just slipped into a recession after two consecutive shrinking quarters.
Stefano Fassina, the former deputy Italian finance minister, said “Titanic Europe is heading for a shipwreck without a radical change of course.”
The Euro zone narrowly averted a triple-dip recession but remains in a deep structural induced slump with little momentum to create jobs or to stop hemorrhaging with national debts.   China’s vacant construction site waste and high debt are about to cause a major recession until corruption and waste come under control.  Italy’s economy shrank again and has now been in contraction for over three years.
 
The European FTSE is at the highs of 2000 and 2007.
http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&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.  They have had a head and shoulders breakdown sell signal on OCT 9.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=
 
Japan’s stock market has declined since 1990 when Japan invented Quantitative Easing.  Lately Americans have been investing in Japanese stocks which are at a high.
http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my
 
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 Hitler’s, Stalin’s Putin’s and Obama’s of the past.  Obama finally did them in.  They have had a head and shoulders breakdown sell signal on OCT 15 but returned to previous highs.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy
US home building and sales Oct dropped sharply.  Inventories dropped sharply indicating lower sales expectations this XMASS season.
Nov 18
PPI Oct 0.2% up from -0.1% - inflation even with energy prices dropping
Core PPI Oct 0.4% up from 0.0% -- worse for consumer products
NAHB Housing Market Index Nov 58 up from 54 
Net Long-Term TIC Flows Sep $164.3B up from $52.1B.  Net Long-Term TIC Flows Sep $164.3B up from $52.1B.  A higher Treasury International Capital (TIC) reading is bullish for the already strong US Dollar.  A strong dollar hurts American exports and gold prices.
Nov 19
MBA Mortgage Index 11/15 4.9% as expected
Housing Starts Oct 1009K sharply down from 1038K
Building Permits Oct 1080K up from1031K but inconsistent with the reported drying up of builder merger activity.
Nov 20
Initial Claims 11/15 291K up from 290K
Continuing Claims 11/08 2330K down from 2392K
CPI Oct 0.0% -0.2 up from 0.1%  The effect of low oil prices
Core CPI Oct 0.2% up from 0.1% 
Construction spending under Obama is now back to 2004 levels (up 0%) while the stocks are up about 70% from 2004 levels.  That is consistent with a typical -60% corrections in the 2000 and 2007 bear markets.
 
One game this administration plays is that they systematically release inflated economic indicators and lower them after they are reported.  Then the crooked stock market reporters report the latest inflated figures as improved over the quietly deflated last figures.  For instance the last Leading Economic Indicator was inflated to 0.8% when reported.  It was then quietly revised down to 0.7%.  This time their inflated report is +0.9% and on MSNBC they reported the last deflated number of 0.7%.  So we are supposed to be deceived by the apples to oranges comparison and believe it just improved more than 20%.   We will no longer report suspicious looking Obama data which is probably as corrupt as Russia’s and China’s data.
 
The Markets
Nov 21   The year end rally seems to be flattening out for the small and mid cap stocks which are the leading indicators of a flight to safety starting.  Look closely at 2007 and 2008 for insight on how long a warning the markets give before even MSNBC's Jim Crammer says sell-sell-sell.  I think Jim was the first reporter to admit the bear market had started after stocks were already down 20 to 30%. 
 
Alibaba’s low priced Chinese products will probably destroy many manufacturers and stores in America with direct delivery of their many poor quality products.  There will be an opportunity for American construction teams that have the intelligence to order their supplies accurately and the skills to install the products bought unseen...  But it will turn companies like Home Depot upside down. 
Hyperinflation is becoming the looming concern tied to Obama's failed leadership.   In the past America had courageous leaders that bit the bullet and solved problems.  The Obama administration is indecisive and many crimes, illegal activities, and injustices just fester in this administration.  Obama inappropriately uses his Czarist government to investigate all the Republican governors and other potential opposition candidates, to play dirty tricks on them such as the NJ traffic jam, to harass all critics using the IRS, other Federal agencies and apparently even American Insurance Companies to raise rates to harass some people. 
The Obama scapegoats are the “filthy” top 2% of the rich and the banks.  Hitler went after the richest 2%, the Jewish, who then had a disproportionate percentage of the richest 2% in all of Europe.   Hitler, Mugabe, and Obama share a common trait of focusing anger and hatred on the richest minorities and thereby demonizing and isolating them.  But Americans voted recently and said they no longer support an inept and divisive president.  Until a “free enterprise” president is elected in 2016 the economy will be in peril.
 
Nov 20    Investor complacency is higher and deeper now than in the last eight years.
Is December a good year for the stock market?  Not when there is a recession!   
2007 ended the year with the NYSE down 7% from the highs of the year and that was just the beginning.  By the end of 2008 the NYSE was down more than 50% from the high of 2007.  
 
In 2000 the recession low was actually hit in early December.  The previous two recessions started with the NYSE market plummeting near their lows in December.  December is not a guaranteed up month when there are recessions.
 
Nov 17   The current rally could abort any day now with an expected next decline of 10% to 25%.   As we transition into a clearly visible bear market, the length of each rally shortens up and the length of declines increases slightly.  It will take more than a year for the market to drop 60% to get back to the December 2002 and 2008 lows.   This bull market has lasted a year longer than the last two did but it is now breaking down the same way.  This time next year we could be 40% to 60% lower.  It will be a cascade of three to five major stock market corrections the first one was just completed as evidence in the broad market indexes not the selective DOW, NASDAQ, or SandP .  (see max and 6 month NYSE plots)
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Thursday, November 13, 2014

Nov 14 Obama care is a huge tax on the American economy and one of the primary reasons for the increase in Obama’s government waste and his economic failures. Under this enormous Obama tax he hopes to give 40 million people effectively another $10,000 welfare check every year in addition to their food stamps, cell phones, free tuition (not an education), child welfare, and disability payments for addictions. He is enabling millions more of American’s to now drop out and join an expanding addicted culture. In the past, those on welfare had to wait in the emergency rooms for services the way emergencies are treated in modern Europe. Obama thinks all the nation states of Europe are better off because he erroneously thinks they share a common national educational and medical systems. That is either an Obama lie or else it shows just how ignorant Obama is. Every EU nation state has its unique educational and medical system. The individual nation states of Europe are no bigger than the individual states of America. Only India, Russia, and China have large faceless national health services of the type that Obama wants and they are terrible systems just like Obama care.

The average Russian life expectancy of 70.8 years is nearly 6 years shorter than the overall average figure for the European Union, or the United States which have state services like or smaller than Massachusetts.
 
In China they have a normal life expectation provided they can survive childhood.  India’s system can't even be called a health care system from a Western perceptive.  India ranks last in healthcare compared to even backward OECD or BRICS countries.  Obama is moving America from a state regulated system to a collectivist system and he is lying about it or just ignorant.
 
Unemployment has resumed its climb as the Obama liar-loan recession teeters on the brink of a possible Great Obama liar loan Depression.  Initial jobless Claims rose 5%.
MIT Professor Jonathan Gruber Obama care’s architect confessed that he got the Democrat lame duck Congress to pass Obama care by playing on their abject stupidity and not calling it a tax.   He is arrogant and condescending, and the Supreme Court was smart and called it a tax and said it is a legal though deceptive act.  He said American lame duck democrats in Congress were ignorant and could not be told it was a tax.  The American people have just had an opportunity voted the ignorant democrats out of Congress.  Rep Nancy Pelosi swallowed Jonathan Gruber’s argument hook and sinker.  She has been removed from power by intelligent voters.
Pelosi Says She Doesn't Know Who Obama Care Architect Jonathan Gruber Is ... But This Video Proves She Does
 
Nov 13, 2014  A dramatic slowdown in housing and retail sales has appeared.  It shows in the housing mortgage numbers and in inventories in preparation for the Christmas season.  Usually this is when store inventories should be peaking.   That is a sharp drop off and further evidence the US recession is worsening in step with China’s, the Bricks, and the EU’s declines.  At the same time the FED is talking about finally tightening after ending the disastrous QE3 that stretched out the recession.  Our cash flow index shows cash has been flowing out of the stock market since the market cash situation peaked in September.  The NYSE, the broadest stock market index gave a head-and-shoulder breakdown sell signal Oct 7 and indicates the bear market decline has already penetrated the housing, small cap, mid cap, energy and Brick stock sectors.  The other sectors are still near their peaks.  Once the new bear market is publicly recognized the next decline is expected to be larger than the last one.  Our cash flow index showed the last 9.5% decline wasn’t even half what is needed for a capitulation.
 
A predicted FED rate hike in June 2015 would be consistent with a decline now because the FED is afraid to act before the market acts because if they act first they know they will be blamed for the anticipated total 60% stock market collapse that has occurred every 7 years since FED manipulation became pro-active instead of reactive.
 
World Economy
Nov 14  Now world bulk world trade is down 90%, but most of the decline is in commodities not finished products.  China and the USA have become less dependent on the “Lunatic Middle East.”
http://www.bloomberg.com/quote/BDIY:IND/chart
 
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy and by-by as markets are passing their 7year peak.
http://finance.yahoo.com/q/bc?s=%5EFTSE+Basic+Chart&t=my
 
Nov 13 Germany's inflation figure still is under control with a yearly rise of 0.8 percent in October. France's yearly figure was a 0.5 annual percent rate last month while Spain's fell at a 0.1 percent annual rate.  An FDR type depression after the current Hoover type recession remains the greatest fear and has caused Gold prices to stay at attractive levels.  But 1933 type German hyperinflation could develop if people’s debt and spending increased because most world currencies are falling in value.
 
Germany just landed a rocket on a comet to show that we could destroy any comet that that threatened to hit Earth.   If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too and they also had a head and shoulders neckline breakdown sell signal on OCT 8.   
 
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.  They have had a head and shoulders breakdown sell signal on OCT 9.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=
 
Japan’s stock market has declined since 1990 when it began Quantitative Easing.  Lately Americans have been investing in Japanese stocks.
http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my
 
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 Hitler’s and Stalin’s of the past. They have had a head and shoulders breakdown sell signal on OCT 15 but returned to previous highs.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
American Economy
US home building and sales Oct dropped sharply.  Inventories dropped sharply indicating lower sales expectations this XMASS season.
Nov 12
Mortgage Index 11/08 -0.9% sharply down from an already weak number -2.6% ---
Wholesale Inventories Sep 0.3% sharply lower before the Xmas season 0.7%---
Nov 13
Initial jobless Claims 11/08 290K up from 278K ---
Continuing Claims 11/01 up from 2348K ---
JOLTS - Job Openings Sep 4.735M down from 4.835M---
 
The Markets
Nov 14   The current rally could abort any week now with an expected next decline of 10% to 25%.   As we transition into a clearly visible bear market, the length of each rally shortens up and the length of declines increases slightly so each rally is about half as long and less than the adjacent declines.  It will take more than a year for the market to drop 60% to get back to the December 2002 and 2008 lows.   This bull market has lasted a year longer than the last two did but it is now breaking down the same way.  This time next year we could be 40% to 60% lower.  It will be a cascade of  three to five NYSE corrections the first one just completed.  (see max and 6 month plots)
 
Nov 13 We are still in the Obama “Liar Loan” world recession.  When the “Liar Loan” mortgage derivatives caused the world banking system breakdown, Congress gave us the $1Trillion cash stimulus package and the FED pumped $4.5 trillion into the USA debt market to stop a depression that could result from the loss in the “velocity of money.”   Gold prices have fallen as a sign that a potential worldwide Obama depression is brewing, not inflation.   To see the collapse in world trade, use the graph or snapshot option. Unfortunately they do not show back to 2008 when the world trade index was above 8000.  Now world bulk trade is down 90% but most of the decline is in commodities not finished products.  The USA have fortunately has become less dependent on the “Lunatic Middle East” for energy.  That is due to fracking which Obama resisted.  We need more pipelines to move the oil and gas safely.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 
This market has little volume or volatility and it is highly manipulated to provide the stability to pump up market prices.  This scenario is now similar to what happened when the 1929 Hover recession turned into a 1937 FDR Great Depression.  Hoover saw just a 60% collapse as we saw so far.  FDR saw another 80% collapse after a partial Hoover recovery.  When volatility picks up, past history says the market will plunge on high volume.  This is not a good moment in time for buying holding equities long-term.
 
 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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Wednesday, November 5, 2014

Friday, Nov 7, 2014 Well we threw out most of them this past week. The last straws were last month when they said ISIS was not Islamic or Muslim, that it made sense to spread Ebola to the USA to motivate racist Americans to cure Ebola, and that Israel’s Prime Minister was a Chicken-Shit. Now we have another Lame Duck Congress that Obama will try to use to put more of his lame legislation through as he did with his Obama-Crappycare National Medicine. He will cry and squeal again when this divided Congress doesn’t do it.


Next year the new US Congress will begin to investigate:

1)      Fast and Furious:

Originally Bush 2 intended to track Mexican Drug Lord's guns as they were transferred to the higher-level traffickers and key figures in Mexican cartels, with the expectation that this would lead to their arrests and the dismantling of the cartels.  The Obama leftists saw this as an opportunity instead to dismantle the US Constitutions 1st Bill of Rights and falsely accuse America’s gun owners of aiding and abetting the illegal trafficking of guns.   It is estimated that 30,000 Mexicans were killed with the weapons Holder supplied.  When one American border guard was killed with one of Eric Holder’s automatic weapons Attorney General Eric Holder became the first sitting member of the Cabinet of the United States to be held in contempt of Congress on June 28, 2012 for refusing to testify in a Congressional investigation.  Democrats stonewalled and attacked anyone who questioned the stupid as well as illegal Obama-Holder operation.  Earlier that month, President Barack Obama had invoked executive privilege for the first time in his presidency over releasing the incriminating documents.


2)      The Benghazi massacre:

The Benghazi cover-up of massacre of the US Libyan Ambassador and three other Americans due to the incompetence of both President Obama and then Secretary of then State Hillary Clinton will be investigated by Congress. The evidence indicates that both Obama and Clinton knew that UN Secretary Susan Rice’s lied to the American people that the attack on the Benghazi compound killing Libyan Ambassador Christopher Stevens and three other Americans was due to an anti-Muslim YouTube video. CIA agents have gone on a TV Documentary and told the real story about how their CIA rescue force was in Libya and was directly told not to rescue the Americans.  Democrats in Congress disrupted Congressional investigations.  Democrats again stonewalled and attacked anyone who questioned the stupid as well as illegal Obama-Holder operation. 





3) The unconstitutional use of the Obama-Holder power in New Jersey

 Congress will investigate how the Obama Administration used their NSA high technology computer system intended to piece together incriminating words that terrorists use.  It was used instead to fraudulently piece together unrelated messages what appeared to be a conspiracy to close a traffic lane in New Jersey to make it look like NJ Governor Christie was punishing a Democrat who did not endorse Christie.  Then Obama and Holden had members of the bridge commission plan a lane repair to actually shut down a lane and cause a traffic jam.  One month later the Obama Administration then lied and said they discovered the lane was shut down by Christie and used the two unrelated email messages of the Christie aids to falsely and illegally incriminate the aids and cause them financial ruin so that Obama and Holder could illegally and wrongfully impugn the integrity of Governor Christie.  Congress will concurrently investigate the illegal use of the NSA to investigate members of the American Press.

 

4)  The Obama- Holder unconstitutional use of the IRS NSA/CSS, FBI etc for harassment of people and groups who used their right to American Free Speech.

The Obama-Holder tyranny will be investigated by Congress and it will show how Putin KGB type harassment was conducted on American individuals and groups (even historical societies) that promoted the ideas of the America Founding Fathers.  Obama does not believe in any of the ideals of the American Founding Fathers.  To a racist himself, he thinks they are just dead  “old white men” to be forgotten.  Anyone who keeps the ideas of Washington, Jefferson, Madison and Lincoln alive is a racist according to Obama/Holder and it shows just how bigoted their administration has been.

The American Constitution was the first in the world to protect the rights of individuals, minorities, and states by limiting the power of the federal government. It was well understood from earlier democracies that in a democracy of three persons, two persons could create and pass laws to legally expropriate and redistribute the wealth or labor of any third person. Thomas Jefferson to P. Dupont in 1816; "The majority oppressing an individual, is guilty of a crime, abuses its strength, and by acting on the law of the strongest breaks up the foundation of society."  James Madison in the Federalist Papers, Feb 5, 1788 to the Massachusetts Convention, "but as a just government protects all alike, it is necessary that the sober and industrious part of the community should be defended from the rapacity and violence of the vicious and idle.  A bill of rights, therefore, ought to set forth the purposes for which the compact is made, and serves to secure the minority against the usurpation and tyranny of the majority."

            In fact under English colonial law the ruling majority had already democratically classified some minority peoples as goods to be bought, used, and sold. We pledge allegiance to a Republic because that is what the Founding Fathers intended.  The American Constitution was designed for a Republic specifically to limit federal government power. The government is divided into three branches of power, each completely unique with differing election terms, checks and balances. In the Senate, small states have the same power as populous states. These impediments to strong centralized majority power were included in the American Constitution because every pure democracy before America was short lived and often ended in a bloodbath. By 1824 Thomas Jefferson already thought the American Government was too big.  He wrote to William Ludlow, "I think myself, that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious."   Thomas Jefferson was the founder the Democratic Party.   In  1816 he wrote (note in Tracy's Political Economy), “To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one of a free exercise of his industry, and the fruits acquired by it."

Clearly the American Founding fathers saw slavery as a form of redistribution of wealth from the workers to a class of people who chose not to work.

 

The Economy and Markets

As for the economy: until we have a new American President who believes the truths of the Founding Fathers… we can expect this Obama Administration to try to destroy America even faster now that Americans are rejecting and investigating his leftist KGB tactics.  The motive of the leftists will be to try to make the economy worse because the Leftists are now being rejected by the American people and they will try to blame the new Congress.   Therefore the market rally may already be over or cut short very soon.   We can depend on the Leftist blaming the new Congress for all the problems the Leftists are creating while subverting the rights of all good outspoken Americans.  We think this destructive Executive Branch will likely try to further imperil American security and the world economy and blame the damage on the American people who dislike their KGB type tactics.  This could be a volatile period.
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