http://www.bloomberg.com/quote/BDIY:IND/chart
Five weeks ago we reported that,” People are reporting that
"Big Brother is Watching You!" signs are appearing in various
forms. Some signs have big eyes. Others report they get computer messages
saying things like "Two people are watching you." Read Huxley's book "1984" if you
don't know what that means.” Friday, Charlie
Rangel told MSNBC live that the reason the IRS is auditing and discriminating
against Christian groups and conservative groups is because the Supreme Court ruled
that they do not have to divulge private information. So the IRS made private information part of
the questioning before they give corporate status. Billy Graham’s group however was audited after
they said they were in favor of traditional marriages apparently because they
could not be harassed with months of illegal invasion of their privacy any
other way.
Beware, there appears to be little underlying value in any
of the exchange traded funds (ETF’s).
They appear to be unpredictable (uncorrelated with underlying stocks)
derivative securities.
While shares of
stock are shares of ownership in corporations that have intrinsic value and
create wealth, many ETF’s merely are derivatives that pit buyers against
sellers or sometimes novices against market manipulators.
They go up when there are more buyers than
sellers and the amount of change is not anchored to underlying value, or a
sector of the economy or commodities like gold.
Many on Wall Street know ETF’s could be a latest ticking derivative time
bomb and novice investors who are flocking to them could eventually be hurt
when that system collapses.
Even Jim
Cramer still said buy the underlying gold.
It looks quite possible that this latest stock market run-up
is a consequence of hedge funds cutting short positions at a loss and other funds
eliminating their 10% cash position and pushing ETF’s up on low volume and
triggering the fever (greed) to stop normal fund short selling that keeps the
market in balance and let prices climb with no change underlying values. Add to that all the small investors going
into debt. When the current bubble
bursts they will find many of the new ETF derivatives are worthless just like
the mortgage base derivatives that brought down the banks in 2008. Consumer debt is in record territory.
Monday Treasury 10-year yields were surging toward 2 percent
and 20-year were over 3% for the first time since March. Could this be the end of the usefulness of
QE3 in keeping US interest rates low?
The deficit interest rate will unfortunately eventually balloon like Spain’s rates
when confidence in the Obama administration Anti-American freedom and
enterprise policy is lost. And the
dollar will then come under attack.
10-year Treasury interest cost for the US Treasury reached the highest
level in almost seven weeks on anticipation central banks will use more
Quantitative Easing (leverage) to spur
economic growth will compromise the safety of government debt.
The European and Asian currency declines against the dollar
hurts American sales abroad and the declining currencies mean foreign profits
will decline faster when converted to dollars.
It is the reverse of the double whammy of the recent foreign profit
gains that were realized this past year.
US
industrial production declined in April by the most in eight months, indicating
American manufacturers will provide little support for an economy beset
deficits, gun running, IRS harassment, invasion of privacy, and attacks on the
freedom of the press. There are weaker global markets and federal slow downs
with a President that uses executive privilege for everything but things that
make common sense such merging duplication of effort and other wastes.
World oil markets are under pressure as continuous Islamic
infighting, bomb, riots and terrorism is taking its toll on Sharia law states
and Arabs cannot afford to reduce production to raise prices due to the
increasing cost of continuing Islamic Terrorism.
Yum’s China
sales collapsed 29%.
China’s
retail sales grew 9.3 percent in April while a year earlier it climbed 12.8
percent, China
announced Monday. Fixed-asset
investment unexpectedly decelerated last month increasing concerns that the
economy will fail to show much of a recovery this quarter.
The Commerce Department reported construction spending in
the U.S.
fell in March, reflecting the biggest slump in government projects in 11 years.
http://www.martincapital.com/index.php?page=graph&view=construction
Manufacturing slowed and companies took on the fewest
workers in seven months in spite of the Fed flooding brokers and hedge funds
with cash to bet on the market going higher.
All that money could evaporate in a few days or a week since there has
been no growth to speak of and that would increase the US deficit by
that amount. $85 Billion per month QE is
a potential $1Tillion per year addition to the USA deficit.
http://www.martincapital.com/index.php?page=graph&view=ISM
Consumer sentiment is still in the doldrums.
http://www.martincapital.com/index.php?page=graph&view=consumer_sentiment
Factory orders year to year have become stuck near zero
change.
http://www.martincapital.com/index.php?page=graph&view=factory_orders
Producer and Consumer price indices are declining again as
if we were slipping into another recession or depression on top of Obama’s 5
year recession.
http://www.martincapital.com/index.php?page=graph&view=CPI_PPI
World Economies
http://www.bloomberg.com/news/
http://www.foxbusiness.com/index.html
European Union statistics office said Wednesday that the
euro zone is now in its longest recession in its history. Nine of the 17 EU countries that use the euro
are in recession and overall, the euro zone’s economy contracted for the sixth
straight quarter, shrinking by 0.2 percent in the January-March period.
The Group of Seven finance chiefs gathered Monday to talk
while central banks keep easing but their cuts fail to spur growth while
inflating stock markets and increasing the wealth of only the top 1%. Polls show that this QE policy has made
Obama most popular with the richest Americans and least popular with the
shrinking middle class.
Hong Kong’s economy grew a less-than-estimated 0.2 percent
in the first three months of this year, the slowest pace in three quarters, as China’s
expansion cooled.
U.K.
construction output fell to its lowest level in more than 14 years in the first
quarter as new work declined across the industry.
Australia & New Zealand Banking Group Ltd (ANZ) cut its
forecast to 2.5 percent from 3.7 percent after China’s first-quarter data.
Speculation is now showing up everywhere. MSNBC said the US
was recovering and explained the new US
highs but as we showed the numbers they use are not true and now the fact that
Europe and Asia are rising without any
recovery shows the world stock markets are now hit with shear dangerous
speculation.
The German market just set a new all time high with a sharp
spike in prices.
http://in.finance.yahoo.com/q/ta?s=%5EGDAXI&t=my&l=on&z=l&q=l&p=&a=&c=
All the main international markets just spiked up with no
cause other than speculation with cash from money borrowed from Obama and
Bernanke.
The Greek market indicates stagnation since year 2000.
http://in.finance.yahoo.com/q/bc?s=AEX.AS&t=my&l=on&z=l&q=l&c=
The French market indicates stagnation since year 2000.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my
The Swiss market indicates stagnation since 2007. But once again look at the spike up in stock
prices with Bernanke’s $85,000,000,000/month gift from America to the
stock and bond markets of the world as more people enter poverty, go hungry and
lose their jobs under Socialism’s equality of poverty.
http://finance.yahoo.com/q/bc?s=%5ESSMI+Basic+Chart&t=my
The S&P is also at old
resistance levels which were set in 2000 and 2007 and at this level it has not
even matched inflation. Simple
mathematics says that after a 66.6% drop in value it has to go up 300% from the
low to get back to breaking even. The
market (accounting for inflation) was lower in 2007 than in 2002 and is lower
now in 2013 than in 2007. And
MSNBC/Pravda says we are recovering because we are at the same stock market
level we had in early 2000 before the Clinton
recession, the Bush election and 911 terrorism.
http://www.google.com/finance?q=INDEXSP%3A.INX&ei=l_-LUejREeO_0gHwwQE
American Economy
May 13
Retail Sales Apr 0.1% flat -0.5% ---
Retail Sales ex-auto Apr -0.1% -0.2% -
Business Inventories Mar 0.0% run out 0.1%
May 14
AM Export Prices ex-ag. Apr -0.5% decline with dollar
strength -0.2%
Import Prices ex-oil Apr -0.2% decline with dollar strength
-0.2%
Dollar strength hurts exports---
May 15
MBA Mortgage Index 05/11 -7.3% down terribly 7.0% - -
PPI Apr -0.7% deflationary -0.6% - -
Core PPI Apr 0.1% flat 0.2%
Empire Manufacturing May -1.4 down from 3.1 - -
Net Long-Term TIC Flows Mar -$13.5B still outflow -$17.8B -
Industrial Production Apr -0.5% -much worse 0.4% --
Capacity Utilization Apr 77.8% down 78.5% ---
NAHB Housing Market Index May 44 still torpid 42 -
Crude Inventories 05/11 -0.624M falling from 0.230M+
May 16
Initial Claims 05/11 360K up 10% from 323K ---
Continuing Claims 05/04 3009K up from 3005K --
CPI Apr -0.4% extremely depression like down from -0.2% -
---
Core CPI Apr 0.1% flat at 0.1%
Housing Starts Apr 853K sharply lower from 1036K---
Building Permits Apr 1017K up from 902K ++
Philadelphia Fed May -5.2 sharp contraction 1.3 - --
Natural Gas Inventories 05/11 99 bcf not meaningful 88 bcf
May 17
Mich Sentiment May 83.7 up from 76.4
Leading Indicators Apr 0.6% up from -0.1%
The Markets May 17, 2013
The past short selling of funds is now almost non-existent. When it starts the short sellers will
overwhelm the market. Beware of a bull
trap when the bulls decide the advance is long in the tooth and to get out and
cause a run-up and then sell into the new bulls that are too late for the
party. The market drops so fast the new
bulls are trapped. Make sure if one bank
or brokerage firm goes broke that you will not lose everything. Keep no more than the insured amount in one bank. Be aware that you do not know just how
leveraged brokerage firms and banks have become until a collapse and then their
hidden debts and risks are revealed too late.
We expect ETF’s will be blamed for the losses in the next
market collapse because they are not understood by the people using them and
are complicated derivatives like the ones Goldman and others marketed to the
unsuspecting in 2005-2008.
We think this year will resemble the last two where the
market advanced early in the year then lost most of it and then reversed
again. But it may also be the end of our bull
stock market. There is an
increasing possibility that the bull market we had since April 2009 is ending
now at a peak and it will be down at the end of the year. Bull markets once ran 3 years then 4 years
but rarely 5 years. Ours has already run
4 years so far. Bear markets usually
follow for 1 to 2 years. The NYSE is a
broad market while the DJI is too easily manipulated.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=my;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Look at the recent Bulls- Bears indicator. More bulls than bears means more exuberance
or topping. That is a bearish sign!
http://www.martincapital.com/index.php?page=graph&view=investors_intel
World trade has been dead for four years (flat lined). Look at the last 5 years! It still looks close to zero growth.
http://www.bloomberg.com/quote/BDIY:IND/chart
Bernanke is pushing on a string. The FED has run out of leverage at close to
0% short term interest rates.
The VIX behaved this way in 2006 and 2007when the bubble
began to unravel but the market did not collapse until 2008. Again look at 5 years and you see the worst
is yet to come. The VIX would normally
top out above 30 before the bear market ends.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=
World market updates:
http://finance.yahoo.com/intlindices?e=europe
