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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