Monday, February 23, 2015

Feb 27 It appears all the money that flowed out of the American stock markets last September and October is now back in the market. The NYSE had a net outflow which went into the higher quality stocks at significantly lower volume such that net prices went up on lower volume than when they first declined. Thus we compute there has been virtually no new money that has entered the market in the last eight months. The money has simply been redistributed on low volume from lower quality investments to higher quality safer investments. Therefore we surmise that equities require another big selloff now in order to have new cash to shift to safer investments. The pool of risk money has stopped growing. Soon it will cause credit crises which will cause net outflows not just a redistribution such as we have just completed



Our Market Cash Flow index for the NYSE was unable to break out from the level first hit the first week of July 2014.  In fact there was 2.7% cash flow out of the stocks in the broadest index since then (eight months ago) and it looks like the recent rally has now fizzled out.  The highest July 2014 NYSE price level was the limit for advance.  With the indexes at their highest levels from before Obama and flattening out it looks like we are due for the next downward move at any time.  But we are no where near a capitulation yet as market optimism remains at exuberant levels.

 

Remember the Obama talk during the two week sequester when Obama shut down some of the government.  Remember how he said the GDP was seriously damaged?  Then the first report showed the GDP had significantly improved.  Then it was corrected downward when Obama remembered he had first said the Congressional sequester hurt the economy.  Looking back on it there was no statistical evidence that the sequester had any effect at all.  Did you ever notice that the Obama GDP statistics always are reported high in the last half of the year during elections and then are corrected down after they are no longer in the news so that  Obama can inflate the following quarters?  Obama systematically has been inflating GDP statistics when they come out and lowering them when no one is looking.  That is deliberate and not a random phenomena.  Well Obama just did it again.  At the end of 2014 Obama claimed the GDP was increasing faster than a 5% annual rate.    Then at Christmas he reported new record sales.   They claimed the average growth rate was now between 4% and 5% and the market rallied.  Today the latest estimate is out and Q4 improved only 2.2%, no improvement shown since Obama’s inauguration.   Well the stock market rally we just had was predicated on America breaking out of the Obama malaise and the American economy is not recovering and America is in the same deflation-depression cycle Europe, South America, Russia and China are entering.  Japan has been in it since 1990 when they invented Quantitative Easing.   Obama and Yellen apparently were ignorant of the fact Japan has had a terrible experience with QE.  Look at what QE did to the Japanese Stock market because that is the road Obama and Yellen have put us on.  Japan started their QE1 in 1980 and our American “:Stupid Party” administration lacked the intelligence, competence, and knowledge to avoid an approach that leads to recession and depression (continually falling prices).  If values decline in time it results in declining investment and increased consumption that ultimately a communist type economic system where the government eventually takes control and mandates its own investments.  Unfortunately government leaders tend to be insane or incompetent and end up like the USSR or N. Korea.  China is an experiment where the communists have allowed some private enterprise freedom.  But who knows if that will last.  Obama and Yellen have put America on an economic path that historically has led to totalitarianism and wars.   Look at the plots back to 1980.



 

GDP - Second Estimate Q4 2014: 2.2%  not 4.5% which was the basis for the stock market rally.
http://www.wsj.com/articles/gdp-growth-slows-to-2-2-pace-in-fourth-quarter-1425044000


Existing Home Sales Jan 4.82M down sharply from 5.04M

Initial Claims 02/21 were 313K up from 282K last time.

The Case Shiller home price index has turned down for the first time since the recovery began.



 

Bloomberg reported that the stage is set for another financial crisis to unravel years of relative calm in debt markets.  At least that’s how firms from UBS Group AG to Invesco Ltd. see it. 


 

Obama apparently prefers the pollution and human deaths caused by numerous exploding oil trains as an alternative to safe oil pipelines. A lack of pipelines connecting new fields in North Dakota and Texas to refineries and shipping terminals has led to a fifty fold increase in the amount of oil moved by unsafe trains since 2009 Obama refuses to build even the Keystone pipeline.  Warren Buffet has invested in the dangerous railroads and contributes to the Stupid Party.  Warren brags he pays a smaller percentage in US taxes than his secretary.   He uses all the Obama tax loopholes he gets and nobody in the Obama IRS or justice department ever investigates him.


 

Feb 25  It is obvious that the FED will not begin to raise interest rates until the Obama recession/depression begins to unfold with a cascading collapse of the American stock markets.  The damage that will be done by the FED’s cowardice and current inaction will discredit both the FED and the Stupid Party administration.

Housing starts are still down 60% from the level before the 2006 Obama-Frank Liar Loan Mortgage default crisis collapsed the American housing industry.   It was a stupid party anti-racist program to induce minorities to take the bait and buy homes they never could afford and requiring they lie about their incomes in order to get the mortgages.  Obama-Dodd-Frank had redlining sting operations to sue any bank or realtor who did not meet a quota of minorities.  The sting against honest bankers was accomplished by having a well-to-do minority person pose as someone destitute to try to be rejected.  As soon as the competent and honest framed bankers or real estate agents took the bait and did not finance the purchase they were called racists in the press, the word spread that Obama/Frank required that everyone take the word/lies of minorities as absolute truth or risk government harassment.   Now US housing has been destroyed and is back to levels under Bill Clinton almost twenty years ago and racial minorities have fewer homes than before Obama and Frank got their brilliant corrupt ideas.  Frank was such a crook he quit the Senate rather than be publicly censored.  Dodd was their mentor and he got a nice low interest loan for a house in Ireland from the biggest crook corporation at that time known as Countrywide.  Bank of America, the best run American bank was forced to acquire Countrywide and when BOA objected Obama-Holder relentlessly harassed the bank until its founder and president resigned.  All states with elected stupid-party treasurers illegally joined forces to attend the BOA stockholder’s meeting to vote their BOA shares against the founder and president of Bank of a America.   He won re-election as BOA president anyway.  Under most conditions the stupid party would be considered racketeering but not when high level corrupt politicians become involved.   The founder of BOA survived but the Obama/Holder harassment finally took its toll and the great founding president Ken Lewis took retirement.  We no doubt have the most corrupt and least competent government administration in the history of the USA.  Later Obama-Holder sued the banks because the banks did not investigate the minority applicants as thoroughly as they had done before the banks were first sued for accepting fewer than the quota necessary to not be deemed a racist.  It was simply not possible to meet the quota of minorities without reducing the standards.  That quota was worse than corruption.  Some might say we have a few evil people in high positions in the USA today.  The leaders of the Stupid Party destroyed our housing industry.


 

Feb 24 Saying the NASDAQ has hit its high of February 2000 is another way of saying the NASDAQ has gone nowhere in 15 years and is again at the same level it reached before it collapsed with Bill Clinton’s embattled administration beginning in February of 2000.
The use of the stupid party's Nuclear option tactics to pass legislation and prevent the filibustering could now be used against the minority Stupid Party.
The Sand P has given its second major MACD sell signal in recent months and the market PE is above 20 making the signal more likely to correctly forecast the downturn.  Typically the market is 15% to 30% below the market high and about a year after the high before the Wall Street Analysts admit we have a bear market.  By then we would be less than six months or about 30 to 40% off the bottom.  The last bear market from the end of 2007 to the Obama inauguration date in Jan 2009 was a drop of 60% from the high.  The FDR depression was a 90% stock market drop a few years after the market mostly recovered from the Hover 60% recession stock market drop.  The stupid party blamed Hover of course for the FDR depression and 90% collapse.  If this coming stock market collapse is 90% and leads to an Obama depression Obama will do like FDR did and blame the person before him again just as the socialist FRD did.  Again, our indicator based on cash flow not momentum gave its warning the end of 2007 and the end of 2013 a full year and about 30% higher than when Jim Cramer blew the whistle a year later.  Here is the MACD now giving its second more reliable sell signal.

http://jlfmi.tumblr.com/post/109954108965/how-ominous-is-this-long-term-s-p-500-sell-signal

How is it that Holder resigned over three months ago and he still does the talking for the new woman Attorney General Obama appointed?  Loretta Lynch, an intelligent woman, was appointed and is totally ignored.  How come Obama and Hilary don’t like women advisors in any important positions?  Obama ignores Ms. Lynch and Holder is still his advisor not Ms. Lynch.  Obama seems to ignore the advice of his women advisors just as he ignored Hilary before.

  Elizabeth Warren knows Hillary Clinton paid women on her Senate staff less than Hilary paid the men.  Did Hilary hire women to only make the coffee and do “women’s work”?  Or did she really think women were worth less than men?  Or are they all just hypocrites in the Stupid Party? 

Hedge Funds are a contrarian indicator and it has been just reported that they have moved back into the stock market especially the NASDAQ.  Kudlow and all the analysts seemed to agree that when the hedge funds go long that is time to sell stocks.  But it does explain the new high in the NASDAQ.  Every analyst on CNBC said, “Start a hedge fund don’t be a sucker and invest in one. “



Obama is a former Moslem who says he has converted to Christian.  If Obama were to say ISIS was a Moslem group, Obama would be admitting a death sentence from them because ISIS says conversion to Christian is punishable by death by Moslem tradition.



Continuing Unemployment claims of Obama’s growing unemployable class were 2425K up again by 1%.  Even though Obama claims the unemployment rate is declining the unemployables grow because unlike Bill Clinton, Obama does not want to require the unemployables to do volunteer work cleaning up the cities to collect welfare.  Gradually the unemployables will become untouchables as the stupid party turns America into a backward country. 

Philadelphia Fed economic index fell 20% to 5.2 in Feb.   The poor in cities suffer the most under Obama.

Leading Indicators for Jan at 0.2 down 60% from last month.
Feb 23 Now Obama has tied his illegal presidential executive order that would legalize illegal aliens to the Homeland Security funding.  It creates a dilemma if Congress passes Homeland Security as written.  Legally, if congress funds Obama’s executive action in any way… it becomes the law.  The Republicans who support the funding of the current Obama Bill are apparently too stupid to know funding the executive order in any manner makes it legally approved and it shows the Republicans who don’t know that are just as stupid as the people in the Stupid Party and should be voted out of office next time.   Obama’s Executive order cannot go into effect until either Congress funds it or the Supreme Court says Obama has the authority to circumvent Congress.  Approving the bill as written gives tacit approval to Obama’s executive order.  The Republicans need to re-write the bill and pass it without funding the illegal executive order legalizing illegal aliens.
Existing Home Sales for Jan were 4.82Million down 12% from last month ending the so-called housing boom but actually down 39% from the peak before the Stupid Party took over.  In fact you can see it is still lower than the last two times Obama claimed the housing crisis was over.  Detroit and other Obama Liar Loan plagued Cities still have abandoned and burning houses that make it look like a WWII saturation bombing target.  Instead of helping the poor own homes, Liar Loans were like saturation bombing of all their affordable housing.

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