While being interviewed in February, Buffett indicated that
the last asset he would want to buy is the 30-year U.S. Treasury bond. When
pushed further on the issue, he then expressed his conviction about this by
saying that he wouldn’t even want to own a 10-day Treasury bond (if one should
exist). Indeed the US and German
Treasuries have begun to be hit indicating that Quantitative Easing is now
taking its toll on perceived credit risks.
He also said dubious maneuvers are used to manufacture rising per-share
earnings, particularly if these acrobatics produce mergers that generate huge
fees for investment bankers.” At one
point in his March letter to shareholders, Mr. Buffett argued: “Investment
bankers, being paid as they are for action, constantly urge acquirers to pay 20
percent to 50 percent premiums over market price for publicly held businesses.
The bankers tell the buyer that the premium is justified for ‘control value’
and for the wonderful things that are going to happen once the acquirer’s
C.E.O. takes charge.” Those premiums
were baked into the stock prices and eventually the IPO values will
collapse. Fraud and fluff now could make
up more than 50% of current stock prices.
We are now seeing all the indices beginning to roll over and lose
altitude.
Inventories grew again as sales did not approach production
levels.
June 11, 2015 Today
the ignorance displayed on CNBC about the economy hit a new low. Retail sales were year over year up a pitiful
1.2% including autos and yet the street said it showed a strengthening
recovery. See for yourself the
truth. The market experts got it wrong. The 1.2% was the change from one year ago not
one month ago and it is horrible. It has
fallen into the region that it was in at
the beginning of the recession in 2008.
It is in extremely pessimistic territory.
The number of zombie housing foreclosures is suddenly
increasing as banks sense that the economy and home prices have peaked and a
worldwide economic crisis could be coming soon.
They want to get out at the top even if they have to take a loss because
prices could be 25% lower before the economy settles. Banks were avoiding foreclosing on the houses
until the losses could be managed. But billions
of unrecognized loses may soon begin to show up on the bank’s books. It represents up to 25% of houses for sale in
many areas.
Yesterday, none of the major American indices we follow on a
cash flow basis were able to rise to their lower trend line so they are all
still sell signals. On a price basis
only the NASDAQ rose to the lower trend line but on no increase in volume and it
did not break through. Therefore they
all remain sell signals as well. The
DJRails and DJUtilities which we also checked both gave sell signals but to
give an official Dow sell signal the DJIndustrials index needs to fall below
17635. That is 365 points or just
2% lower. We estimate that a stock market crash could
happen as soon as this week or as late as December. Last
October, and ever since then we said our broader market cash flow index gave a
sell signal. Also the technology and
growth stock indices have on a cash flow basis given recent sell signals and
all the indices are starting to give sell signals on a plain vanilla price
basis. We said that could come as early
as early as summer but that Jim Cramer probably would not say sell, sell, sell
in a panic again until the market is down at least 20%. That could be as late as October/November, but
investors who read our blog probably will be in cash or gold. When the panic begins sales and production will
drop and energy prices will plummet in anticipation of inventory buildup.
Bond values are now beginning to collapse because the
economy is taking control away from the Federal Reserve. The economy is leveraged to the eyeballs and
default risk is beginning to rise driving up long and shorter term interest
rates. A Fed rate rise will soon be
nothing more than an attempt to pretend the Fed still has any control. The FED and banks are now losing control of
the economy. They are now pushing on a
string.
Obama promises to send in 450 more American soldiers to
defeat the 15,000 to 30,000 ISIS savages. How about a little more fire power
Obama? How about night time B52
saturation bombing of selected areas ISIS
controls whenever we see them congregating or burning people alive? How about targeting every ISIS controlled
city with single bombs two or three times every night at random hours to
deprive them of sleep?
There is perhaps 3 to 5 cents cash available for every
dollar of debt. That means if the internet
goes down or there is a run on the banks there will be hungry people, riots and
social breakdown. This may be a good
time to withdraw some cash. You are
getting nothing for it anyway in the banks.
If you withdraw less than $10,000 the FBI may investigate you for trying
to trick them but if you take out more they may investigate you for drug
dealing. If you are a Republican you may
have to go broke fighting against Obama’s corruption and harassment in court.
June 10, 2015 On page
A15 of today’s WSJ Blackstone CEO Stephen Schwarzman explained the coming
financial crisis pretty much as we did on June 8. He makes the point that the Obama regulations
may make things worse by adding to the current administration confusion. “politicians and regulators constructed an
expansive and untested regulatory framework that will have unintended
consequences for liquidity in our financial system.” JPMorgan
CEO Jamie Dimon has gone as far as to say that Wall Street is “under assault”
now from regulators. Economist Nouriel Roubini, who like us correctly
predicted the 2008 financial crisis, recently made similar comments.
Testla’s newest
proposed selling features are red herrings.
Only the dolts of the world are interested in buying self driving cars
that kill you accidentally when the automated driving features fail at high
speed. And when those failures occur
Tesla will be sued out of existence. Look how a defective simple ignition switch
has destroyed GM. Obama appointed the GM
CEOs who hid the faults. Europeans
think the fun of driving the car is the main reason for having a car and they
have built a much safer high speed mass transit for everyone who is just
interested in getting from A to B.
Testla has captivated all the confused global warming worshipers who are
simultaneously the mass transit haters of the world. But if you believed in global warming and
had a functioning brain you would believe in mass transit too, not a Tesla
substitute. Eventually Tesla buyers will
be stigmatized and called cult followers.
Pope Francis has ordered the
establishment of a special court to try bishops who mishandled cases of
clerical pedophile sex abuse. We need a
similar court to head off a resurgence of NAMBLA in America America
Former Congressman Hastert is a Republican homosexual who is
being harassed by the leftists because he is a Republican and for no other
reason. The FBI and the leftist press
are not prosecuting the person who was blackmailing Hastert for decades. Instead this corrupt Obama administration is
persecuting Congressman Hastert because he withdrew money to pay the blackmail
in withdrawal amounts of less than $10000.
Obama’s administration contends that only Drug traffickers do that to
avoid detection. Hastert was
blackmailed and was not dealing drugs so naturally Hastert has pleaded he is
innocent. This Obama administration is
sick, sick, sick persecuting and humiliating a blackmailed gay Congressman just
because he is not a Democrat, a left wing extremist, or a member of NAMBLA. Where are the CEO’s of Apple, Walmart, Yelp,
Salesforce, Angie's List, Eli Lilly, Gap, Levi's, Twitter, Anthem, Nike when a
fellow homosexual is persecuted by leftists?
Persecution is several levels worse than discrimination and the fact
that the CEO’s of Apple, Walmart, Yelp, Salesforce, Angie's List, Eli Lilly,
Gap, Levi's, Twitter, Anthem, and Nike have no compassion for Congressman
Hastert shows the CEO’s are very shallow.
These CEO’s and the Obama administration will be seen as pretty sick puppies
if they do not stop the persecution of good Americans.
June 9, 2015 JOLTS -
Job Openings Apr were 5.367M up from 4.994M indicating there is a growing
shortage of qualified employees to fill American jobs. This is a new symptom of growing social media
and the Apple equipped students who play games and text in class and then drop
out of Community College broke having learned nothing. Job
openings hit new highs because student competence is hitting new lows. A survey of 128 CEOs between April 22 and May
13 found that top corporate leaders expect the economy to grow at 2.5% in 2015,
down from 2.8% projected growth from the first quarter of 2015. Just 34% of CEOs now plan to hire more U.S.
Rising
interest rates are beginning to cause Bond portfolio’s to drop in value. That will give temporary strength to stocks
as people leave bonds. But it is wealth
destruction. The wealth destruction is
now in both stocks and bonds. Eventually
panic will ensue and people will diversify and many more may go into cash.
Wholesale
Inventories in Apr rose 0.4% indicating sales were lower than expected again. Tesla and Apple are probably the two most
overweigh companies at this time. Since
Steve Jobs died Apple has run out of good ideas. Tesla and GM will likely go bankrupt within two
years or be bought out by new management because they are going nowhere. Apple products have no protected technology
or patent value of significance as its products are used primarily to entertain
children and the under employed. And
the young people who most use Apple products tend to drop out and become
unemployable. But for $10 per month
students can now stream Apple music to listen to during General Math and
General Science classes. They are the
Apple “don’t want no education generation!
June 8, 2015 We are now in danger of a second Great
Depression. Reserve requirements are the
amount of funds that a depository institution must hold in reserve against
specified deposit liabilities. Depository institutions must hold reserves in
the form of vault cash or deposits with Federal Reserve Banks. As of this January 22, the requirement has
been:
For more
than $14.5 million up to $103.6 million, 3% must be held to defend a run on the
FED. This allows money in those
quantities can be loaned out 33.3 times or (1/0.03) times the actual money held.
For more
than $103.6 million, 10% must be held to defend a run on the FED. This allows that money to be loaned out 10
times (1/0.10) the actual money held.
At the time
of the Great Depression the rate was about 5% which meant there was 20 times
more money loaned out than cash to back it up.
You can see that on smaller loans of under $103.6 million we are in a
more dangerous position than at the start of the FDR’s Great Depression. On large international loans we don’t have
data from the Great Depression. Herbert
Hover had a recession about as bad as Obama’s, but socialist FDR was the one
that then had the 90% stock market collapse and the Great Depression that
lasted 1933 to the end of WWII in 1945. The “stupid party” never tells the truth
about how they caused the Great Depression.
If Obama sets off a second Great Depression you can be 100% sure the
incompetent and corrupt “stupid party” will blame the former president George
Bush or something else. We have veritable
corrupt fools running the executive branch today. What this all means is that if you consider
most of the money awash in the stock market today, if there is a run on the
banks like in 1933 then for every 33.3 dollars invested by citizens, about $1
would be paid out by the banks. Anything
more would be from printing new money and would be potentially hyperinflationary. You can bet that Jim Cramer and all the other
ignorant commentators on CNBC don’t understand that only roughly 3% to at most
10% of the stock price is based on real cash and the rest (90% to 97%) is
borrowed money leveraged up. And if they
don’t know… then you can also bet the Obama administration is completely
clueless. Leverage was the cause of the
collapse of the fraudulent Obama-Dodd-Frank American Liar Loan mortgages, and
that triggered the collapse of securitized derivatives based on the liar mortgage
fraud and brought down the American economy in 2008.
If the DJI
is peaking as it appears to be, then it will set off a major DOW sell signal,
the signal that made the WSJ famous. The
Dow Rails have already given a major sell signal and it would not take much of
drop in the DJI to give the major Dow Theory stock market sell signal. As we pointed out only the NASDAQ shows any
strength.
June 7 CBS 60 Minutes
program showed how FEMA under Obama’s “stupid party” management engaged in
fraud to cheat many non-Democrat homeowners who’s houses were destroyed by the
storm Sandy New Jersey
The DJI,
NYSE, S & P, and Russell 2000 have all given trend line breakout sell
signals Friday but the NASDAQ is still testing its lower trend line. That is a symptom of a correction coming.
A Reuters
survey of the top 100 retailers shows that of the 98 that sell in physical
retail stores, fewer than 25% accept Apple Pay and 66% said they won’t be
adding Apple’s mobile anytime soon. Only
four said they might add it next year. Apple
can hardly give away their ugly clumsy watches.
Christians,
hunters, and military veterans and their families have become disenchanted with
libtard CEO’s opposing the Constitution’s Bill of Rights that give Americans
the religious freedom to boycott and oppose the tenants of NAMBLA on religious
grounds and even boycott such groups and companies that support church leaders that
prey on children. In fact Libtard CEO’s and
others might soon demand that the church can not discriminate against or
defrock pedophiles who infiltrate the church… and Libtards may even call it
illegal discrimination. That is why
Christians, hunters, and military veterans and their families have become
disenchanted with those Libtard CEO’s who attack the Constitutions Bill of
Rights. No one can force you to buy the stocks
or products of the corrupt. Apple,
Walmart, Yelp, Salesforce, Angie's List, Eli Lilly, Gap, Levi's, Twitter,
Anthem, and Nike support CEOs who want the constitutional religious rights of parents
and churches restricted. That was what it was like in both “Sodom and Gomorrah ISIS . It is another
libtard reaction just like Ruby Ridge and Wako all over, only worse.
NJ Governor Christie, according to The Record newspaper of
New Jersey, said referring to Hilary’s idea that immigrants, legal or not,
should be allowed to vote, “My sense is that she (Hillary Clinton) just wants
an opportunity to commit greater acts of voter fraud around the country.” The FBI still has not yet opened a public
investigation into Hillary’s missing documents and all the unrecorded
contributions to the Clinton USA
will look a little more like the banana republics of Cuba
and Venezuela
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