Tuesday, April 21, 2015

April 24 The stock market inched up again today but Google, Amazon and Microsoft shot up even after all of them reporting poor profits. Microsoft’ revenue rose slightly from the same quarter last year but its Operating Income and net income both declined steadily for the last two years. But this is how stupid the ABC news was saying “Microsoft rose $4.41, or 10 percent, to $47.75. The software giant had results that beat expectations!”









http://www.theverge.com/2015/4/23/8484267/microsoft-earnings-report-q3-2015

       I seem to recall that a month or two ago they already claimed the NASDAQ had hit its Clintonesque 2000 bubble high and that was really nothing to brag about.  The drug-pharma business is the technology area that is probably most overpriced and they have no idea of the size of the Pandora’s Box they have opened.  It is a very clever idea to invent viruses that target and mutate the genetic structure of specific cancer cell DNAs but that may very well create many new Ebola type diseases that develop using a similar mechanism.  This would be a great time to sell out at this sector’s high prices before the environmentalists get word that the new process is far more dangerous to life on earth than crops that are genetically modified to be disease resistant.  It should be obvious that modifying cancer DNA is not inherently different from modifying human DNA and we may be in for a rash of deformed newborn babies like drug companies had with thalidomide babies only much much worse.   Perhaps two heads with four arms and four legs will occur 9 months after the mutated vector is stolen from a laboratory and spreads like the flue.  So this new technology probably is overvalued now by at least 1000%. 
       While the five indices have peaked on a price basis, on a cash flow basis four of the five have declined.  The NYSE cash flow peaked July of 2014 but its price has only flat-lined so far.  The snake oil stock sales force keeps supporting Obama claiming the economy is surging ahead and we keep showing you the real data plots that prove the “Stupid Party” policies are indeed stupid.
Yesterday they said how new home sales are up now.  Here though is the report.
New Home Sales Mar 481K down from 543K last month.  Yes they are up from last year but they are 60% below when Obama was elected.
         The BBC skipped the morning broadcast on Thursday and did not suggest the EU guarantee safe passage for radical Moslem immigrants today.  I hope they saw our comments on their stupid and irresponsible encouragement of the problem which wrote about the day before.  Radical Islam has been suggested by Moscow scientists to be a mental disease and Chechnya’s leader has ordered his people to shoot-to-kill Russians in uniform.       
April 23  Wednesday the five stock market indices we follow struggled once again to rise to former highs.  The Standard and Poors index had the best chance but it faltered at the end.  Time is running out and they say sell in May and then stay away for the entire summer.  38% of the available American work force is unemployed yet Obama and Clinton claim unemployment is down to what it was before the Obama-Dodd-Frank Liar Loan recession. New Home Sales have risen now to the levels they were 20 years ago.  The Obama/Clinton team thinks the economy is back to normal.  Yellen and Federal Reserve team think the Obama/Clinton team is nuts and they are struggling to give the Obama/Clinton economy life support.  The Obama/Clinton propaganda machine is run by MSNBC.
http://data.bls.gov/timeseries/LNS11300000
http://www.nahb.org/generic.aspx?sectionID=819&genericContentID=97096&channelID=311


 If you listen to MSNBC and Obama everything is fine and dandy and back to normal.  If you listen to Hilary today she tells us that she just discovered that small businesses have been failing and that is why 60 million people are out of work even though only 5.5% of Americans are looking for work.  But the FED knows and you should know that our economy is worse than it was when we had the Clinton Dotcom bubble burst.  Here are some facts not what the “Stupid Party” is saying today.      The FHFA Housing Price Index Feb is up but the Home price index has flattened and is actually down at 2005 price levels.  The stupid party set that back ten years.
http://www.martincapital.com/index.php?page=graph&view=case
Existing Home Sales Mar were 5.19M but still lower than they were 15 years ago.



Housing starts still at recession levels


Crude Inventories 04/18 surge to 5.315M from 1.294M meaning the oil industry is still going lower.

April 22   Petrobras Oil of Brazil should be a case study for how the corrupt American “Stupid Party” Hilary Banana Republic would use government regulation of an industry to enrich themselves and fund their political campaigns.  Petrobras drills for oil and refines and sells it in a government monopoly.  Corruption and kickbacks are the biggest concerns in all socialist countries.  Even in China, government regulators for many years would disappear from public view so their corruption was not revealed.  The corruption in Brazil is so convoluted that a falling oil price means Petrobras loses less money because it can reduce the subsidy for consumers.   The lower public subsidy more than offsets the loss of income from the lower oil market price.  Of course their Brazilian President said she didn’t know that Petrobras corruption was what financed her charities, her parties, and her political campaigns.  And she never kept email or phone records because she has nothing to hide.  The investigators so far have found $3.7 billion stolen and redistributed to Stupid Party functionaries and dozens of their “Stupid Party” functionaries have  already been caught.  One promised to return $30 million if her misunderstanding could be forgiven.   The CEO of Petrobras, Maria das Gracas Foster said she knew nothing and she and five directors resigned. 
http://money.cnn.com/2015/02/04/news/companies/brazil-petrobras-corruption/


       Tuesday the markets traded downward in a narrowing range between the previous highs and lower volatility bottoms.   A breakdown on high volatility is expected soon; in weeks not months.  But we expect the “Stupid Party” will be arguing that things are still getting better for three to seven more months.

        Russian and China stupid party officials have always been known to lubricate their economies with corruption.  Putin has almost 20 wealthy entrepreneurs who he periodically milks for funds.  Corruption has always been what lubricates the stupid socialist that buy 98% of their votes and pay and bus people to vote multiple times.  That is why the Obama/Clinton stupid party leaders refuse to clean up voter fraud by issuing photo ID cards.  They are willing to give illegal immigrants photo ID driver’s licenses to drive in America but they are unwilling to have photo ID’s for all people legally eligible to vote.  The corruption and fraud in padding of “stupid Party” votes and their corrupt milking of international sources is how Obama/Clinton and the Stupid Party have managed to turn America into a “Banana Republic” in just six years.  If the Stupid Party was not involved in voter fraud every eligible American would have a photo ID when they are 18 years old.  Get serious.  There is no reason for opposing the photo ID’s except for hiding current Stupid Party voter fraud, and Clinton and Obama know that.  And yes it makes a difference just as protecting American Embassies always makes a difference.

        The 2010 flash crash mystery when the Dow industrials sank by around 1,000 points before recovering fifteen minutes later has been solved.   Many lost money but some made windfall profits.   Tuesday the U.S. finally filed a criminal charge relating to it.  Obama was sure George Bush was somehow responsible but it apparently was a British trader, Nav Sarao who was charged.  He did it day-trading in futures contracts from his London home.   He made less than $900,000 that one day with very little risk or collateral but he caused more than 1Trillion dollars in criminal damages that day.  He continued on a smaller scale and made $9 million before he was caught almost five years later.  Think about how ETFs and stocks can be manipulated today.  People who use stop losses can be manipulated to go broke in what is now a mine field.  They take a 5% unexpected hit and just before they recover they take another and then another hit.  It is done with a thousand little cuts until small investors turn it over to wealth managers.

         Brokerage firm wealth management account executives and others are raking it in and their clients don’t realize that they have almost no chance of making even a 1% annual profit because they will stay in until it is too late to get out.   We are already being psychologically conditioned to ignore larger and larger corrections that are coming until it is already too late.  And it will be no consolation that everyone including the wealth management firms goes bankrupt.  But the wealth managers are raking it in right now with their commissions and will fold, disappear, and have nothing left but their fat wallets and private offshore bank accounts when many investors are flat broke.
        The average wealth fund manager does no better than an average investor does in an index fund.  So when the indexes are down 60% to 90% so will the average fully invested investor.  The average wealth fund will have to be down even more because they paid the managers a great salary based on how many investor accounts they captured.   Take a look and see how the clunky brokerage firms that now do wealth management have seen profits suddenly up over 20% each year.  That wealth is coming out of other people’s pockets.  And it is all possible because the “Stupid Party” has put the USA government about $17 Trillion in debt with loans and credit extended to the companies who contribute the most to the politician’s fund raisers and “charities.”   The more money Obama wastes the more broke and broken America becomes.  We now have the most corrupt government in American history and it is the stock markets not the average Americans that are taking in the wealth with Obama’s gift of money that was meant for future generations to invest.  It is not the fault of the senior citizens who saved.  It is the fault of the corrupt and incompetent Stupid Party and a stupid FED that don’t know how to do anything but waste other people’s money and to buy votes.  Another honest Ronald Reagan is what is needed and a competent Federal Reserve that has put America in the same QA straight jacket Japan adopted in 1980 when they thought QE would make them #1 economically in the world.  QE ended the Japanese economic boom and not it has ended America’s.  It is addictive and has serious withdrawal symptoms.

          April 21   Yesterday, the stock indices recovered less than half the ground the previously lost and it was on 25% lower volume showing a weak recovery.  The top resistance level has been unyielding but the Bottom resistance level has been rising and will force either a breakout or breakdown in about three weeks or less.  We are estimating another breakdown to at least the 200 day moving average.   That would be about a 15% drop.
          On Friday, using a cash flow basis, the indices we follow lost anywhere from one to three weeks of the previous cash that had flowed into the market.   There was even greater relative cash flow out of the Russian and Chinese stock markets.  Our prediction of some sort of manipulation in the China and Russian markets was right and China cracked down on margin accounts.  But there is also something else irregular going on with exchange traded funds that are not yet properly regulated.  They cannot possibly be properly regulated since the ETF problems are still unknown and will only be regulated after they are tested in a bear market and are identified.  No regulator is bright enough to know the problems until they jump out and hit them.  But then it is too late. 
 
        The collapse of the misguided Stupid Party Obama-Dodd-Frank Liar Loan derivatives that were associated with stupid ideas for expanding American home ownership was the unanticipated “Stupid Party” disaster that broke the banks in 2008.  That Stupid Party initiative has dropped home ownership to a 20 year low of 63.9%.  The homeownership hit its peak of 69.2 percent under George Bush in June of 2004 just before the “Stupid Party” began a FED policy of forcing banks and realtors to meet racial quotas of home sales.   The FED would run stings where a qualified minority member would apply but be rejected because the realtor or bank could not get documented proof of eligibility to make fixed rate mortgage payments.  The banks were forced to offer applicants adjustable rate mortgages because the applicants could not afford the payments on fixed rate mortgages.  The Stupid Party said the poor should have the same rights as the rich and could flip their house before the higher interest rate went into effect and make a big profit.  Unfortunately the poor did not flip the houses within three years and they defaulted and became squatters.  Much of Detroit’s and other city subsidized housing went under water and much of the American inner cities have since burned down during the Obama Administration… thanks to the “Stupid Party’s” best and brightest thinkers
         Just take the applicant’s word; they will flip the mortgages in time!  Many people lied and got houses and the banks then met their racial quotas.  Those loans corrupted the derivatives markets and broke the banks when all the liars went bankrupt.  Obama and Holder did their best to blame the bankers and the realtors but the fault was entirely due to the “Stupid Party.”  Thank you “Stupid Party” for the Liar Loan Obama-Dodd-Frank recession that you blamed on the Bush family.  Home ownership hit a 20yr low now of just 63.9% down from the Bush high of 69.2% but still Obama's stupid administration blames everything on Bush.












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