Sept 20, 2013 Obama said he will negotiate with Putin and Assad but not with the Republicans who want to save America from his national health medicine. America has had five years of Obama’s economic medicine and is getting pretty sick of it. The way the current QE inflated stock market will likely unravel is by beginning each day on the up-side to bring in all the optimists out of the woodwork. Then when the afternoon approaches the sellers come in to take back most of the gains. Most former short sellers had already covered when they lost influence in the market six months ago. Their covering no loner pushes stocks up as evidenced by the topping out of the markets near 2007 highs in the indices. Then those who are long will begin to cover in earnest and begin even shorting specific stocks again. Then when the buying dries up we will see short selling in earnest and the short sellers will then be in the money. They will cover some of their shorts to take profits and we will see the market seem to recover from time to time as a result. But each time the short sellers will have more cash to work with and after a few days will drive the market lower causing margin calls. That is when it gets ugly and those on margin are hit hard.

The Fed has been spending the future of the USA by borrowing against the future to reduce today’s’ borrowing costs thereby lowering interest rates today to stimulate consumer borrowing today.  They have essentially moved 9% of higher interest rates from the present into the future and if they truly were to unwind the Fed debt it would raise rates and depress growth when they unwind.  It is the same problem that individuals get into when they spend more than they earn and borrow against their future.  Occasionally they get in over their head and go bankrupt like Cyprus or get bail-outs like Greece, Ireland, Iceland, and Portugal.

 

WSJ has indicated today that Jamie Dimon is being forced out of JP Morgan.  The Justice Department appears to be continuing to investigate JP Morgan until Jamie either quits or is in jail.

 

Today Squawk Box said American companies were pressured by this administration to buy problem companies like Countrywide.  Warren Buffett indicated it was unwise to talk about it because of the Attorney General’s record of harassment.   Those companies that helped the administration are now being punished by being treated like the criminals who profited from the Barney Frank liar loans when in fact some like Bank of America were forced to take on Countrywide and were literally harassed then and now are harassed again and forced to pay for all of bankrupt Countrywide’s bad behavior and losses.  The conclusion is that the next time… no corporation will cooperate with government again based on the bad behavior of this administration’s leaders.

 

Today the new Apple-s device goes on sale and MSNBC had one but they were told not to try any of the applications.  All it could do was display a pretty picture of the applications.

 

Sept 19, 2013   What America knows about Ben Bernanke is that he knows very little.  What Americans know about Yellen is she knows less than Bernanke.  In the past America had recognized brilliant economists leading the Fed.   The Fed needs new “outside” blood not inbreeding and imbeciles.  The Fed Chairman has now become another political hack presidential appointment under this administration. It takes Bernanke four times as many speeches that are three times as long as former chairman Greenspan’s speeches yet Bernanke tells us little of value. The Fed said on Sept 18 that it will await more evidence that the economy is actually improving before it scales back its US $85billion/month debt-buying program.  Meanwhile the Obama government spends $144 billion/month more than it takes in while the fed inflates a stock market equities asset bubble much worse now than the real estate bubble that Barney Frank and Dodd created with their liar loans backed by Fannie and Freddie.  It was the collapse of a stock market equities asset bubble that caused the Great Depression.  The Fed has already created an equities bubble the size of the 2007 equities bubble that broke when the liar loans collapsed. 

 

The greatest scandal now is the disappearance of both credible American leadership and credible American economic policy which had been the reason for faith in the American Dollar.  Without belief in American acumen the next best reason for China and Japan and all net exporting nations buying American dollars is the even more precarious economic problems now affecting every other major economy.

 

Sept 17, 2013   Yesterday the Dow and NYSE both failed to reach their last highs that occurred after the sell signal in July 8. It was a second opportunity to raise cash near the high.  It then retreated 0.4% after Obama indicated he wants a government shutdown so he can blame someone again for the results of his leading from behind.

 

Scott McNealy, Wayin’s Chairman, was on fire this morning on Squawk CNBC.  He said Obama was almost criminally incompetent. 

He also said unions always have claimed they exist because employees need protection from bad or evil management.  The facts show only 6% of private enterprise workers are unionized but 36% of government workers are unionized.  That should say something about how bad our government has become.

He said 75% of Obama’s job creation claim is in part time jobs.  Now the Obama government claims it is not their fault.  The Obama economist on the show said that it is the wave of the (Obama socialist) future as if he thinks it is inevitable.

https://twitter.com/scottmcnealy

 

Jamie Dimon has cost JPMorgan stockholders at least another $700 million in fines related to the London office trading mistake that has already cost the stockholders more than $6 billion in losses.  The fines are the result of the cover-up or lack of internal investigation by Jamie while it was going on.  Jamie needs to quit before this administration bankrupts the bank.

 

President Obama used the fifth anniversary of the collapse of investment bank Lehman Brothers to tout his administration’s economic accomplishments.  Funny because the Bush administration handled it not Obama.  Obama has handled the unemployment situation which he now blames on Republicans in the current Congress.

 

Apple’s stock price started to decline again and manipulator Ack---- finished pumping the stock and finishes up dumping what he bought.

 

Sept 16, 2013   The socialist US government is on the brink nearing the end of its fiscal rope and no matter what they do, it will sting.  Eventually the investor will no longer follow Fed interest rates and the Fed will lose control and have to raise rates to regain control.  But with the socialists in control they would not raise rates because the economy would slow even more.  They will likely allow simultaneous inflation and unemployment with the “Misery Index” (inflation plus unemployment) rising higher than the 20+% it hit under Jimmy Carter.  The socialists will lose the state and federal elections and Socialists involved in harassing American patriot (non-socialist) regular citizens will finally be busted and go to jail.

 

The NYSE hit its peak shortly after we gave the sell signal July 8.  We think it is likely to be a market similar to the Carter market.  It will likely move sideways without making significantly higher highs, and once it hits a major low it will not make new lower lows.  Essentially the market will become range bound until we get a government that once again supports the American Constitution and American free enterprise.

 

Summers pulled out of the contest for Fed chairman and markets rose in anticipation that that loose money will continue to help world economies by devaluing their debt denominated in dollars.  Others just think Summers was Obama’s pick and Summers is just not competent enough.

 

A WSJ pole says only 30% of Americans think Obama’s health care is a good idea.  Will people in Tennessee be paying the same as people in California?  If so, how can they afford it?  If they are subsidized by rich states why won’t every retired person move out of the rich states?  But then taxes will rise and California will become poor too.  Exactly, socialism leads to equality, but it is equality of poverty.

 

The pace of growth in New York State’s manufacturing sector slowed in August and the New York Fed's "Empire State" general business conditions index slipped to 6.29 from 8.24.

 

World Economies Sept 20 2013

http://www.bloomberg.com/news/

http://www.foxbusiness.com/index.html

 

Markets in Europe continue to waver below their 2007 highest levels.   Guillaume Dumans, co-head of a European research firm said, "Investors are now worrying about the lack of potential positive catalysts going forward."

 

Ten thousand al Qaeda troops from Pakistan and Iraq are now in Syria and have pledged to wipe out Christians and other minority groups including the secular freedom fighters and the government’s minority ruling sect.

 

Japan still reels from their devastating nuclear disaster and the stark evidence of the gross incompetence of their engineering management as well as their government leadership.  At the top of their era of national pride in 1988 they proclaimed they committed no war crimes in China, that America was a barking dog, and that they had a national program to take world leadership in computers.  But their economy as well as all of the Asian economies is based on their expertise in pirating and coping not in creating technology.  And Asian manufacturing is not based on technology either but on slave labor in unsafe facilities.  It is the dismal situation of Asia and the Middle East not the Obama Administration that makes America look like the least terrible of all world evils.

 

The reason for China suddenly buying hard assets like gold and iron ore and also sharply increasing purchases of American debt in July is not an improving economy but they seem to be positioning themselves for a burst of their own bubble by disgorging themselves of their own currency for hard assets and American dollars.  They may be getting ready to devalue their own currency to strengthen their balance of trade by making their products cheaper again.

 

Crude oil prices fell on Tuesday as worries about American military involvement in Syria ebbed and output resumed in Libya.

 

China said it would impose preliminary anti-subsidy duties on U.S. solar products, a move that could intensify trade tensions.

 

Industrial production in Germany took a surprising drop of 1.5% in July indicating the recovery may not be real.

 

Canada and USA housing starts posted biggest drops since January.

 

Japan’s stock market appears to have topped and begun a new decline.  It has declined since 1990 when it began Quantitative Easing.  Obama is the first American to use QE to suppress the interest rates on national debt to allow America to take on debt until the economy collapses when as Greenspan predicted the market will force up interest rates in spite of QE.

http://finance.yahoo.com/q/bc?s=%5EN225&t=1y&l=on&z=l&q=l&c=

 

 The German market hit previous resistance levels and has begun to form the second shoulder of the Head and Shoulder sell signal after failing to reach its last high.  It also failed its upper resistance level reached previously in 2000 and 2007.

http://in.finance.yahoo.com/q/bc?s=%5EGDAXI&t=my&l=on&z=l&q=l&c=

 

 The French market has continued to decline since year 2000.  At it most recent highs it is still is still down 50% from 2008 and down 60% from 2000.

http://in.finance.yahoo.com/echarts?s=%5EFCHI#symbol=^fchi;range=my;compare=;indicator=sma+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

 

The Swiss market indicates stagnation since 2007. http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=

 

  The NYSE is similar to the British and Swiss and indicates stagnation since 2007 given in excess of 15% inflation since then and no similar market advance. The NYSE index is too big to manipulate legally. It has 300 stocks just starting with the letter A.

http://finance.yahoo.com/q/bc?s=%5ENYA&t=my&l=on&z=l&q=l&c=

 

 

American Economy

Sep 16

Empire Manufacturing Sep 6.3 a 25% drop from 8.6--- per Bloomberg

Industrial Production Aug 0.4% up from 0.0%  Obama contradicts the above.  Who is correct Bloomberg or Obama?  The Obama data is as falsified as China’s data is.

Capacity Utilization Aug 77.8% flat 77.6% 

Sep 17

CPI Aug 0.1% flat from 0.2%

AM Core CPI Aug 0.1% flat from 0.2%

Net Long-Term TIC Flows Jul $31.1B improved from -$66.9B +

NAHB Housing Market Index Sep 58 down from 59 ---

Sep 18

MBA Mortgage Index 09/14 11.2% improved from -13.5% ++

Housing Starts Aug 891K down from 896K -

Building Permits Aug 918K down from 943K --

Crude Inventories 09/14 -4.368M got worse -0.219M - -

FOMC Rate Decision Sep 0.25% unchanged    

Sep 19

Initial Claims 09/14 309K up 3% from 292K ---

Continuing Claims 09/07 2787K up from 2871K --

Current Account Balance Q2 -$98.9B still extremely high -$106.1B --

AM Existing Home Sales Aug 5.48M up slightly 5.39M ++

Philadelphia Fed Sep 22.3 another worthless erratic manipulated statistic up from 9.3 - --

Leading Indicators Aug 0.7% up from the downward revision of last months 0.6%

Natural Gas Inventories 09/14 46 bcf down 65 bcf  -

 

If you look at this next plot you must conclude Obama policies have provided no net new jobs created since 2006 leaving the young with 20+% unemployment.  In fact it is much worse because three out of four Obama jobs are part time jobs.  That means there have been seven lost years due to the mortgage derivative mess caused by the Barney Frank/Dodd Liar-Loan scandal that was meant to increase minority home ownership.  In fact the unethical socialist liar loan system collapsed and reduced overall American home ownership from 66% before liar loans to 62% after the collapse.  This administration has hurt every group that voted for Obama and has given the wealthiest 1%  a 26% increase in earnings.

http://www.martincapital.com/index.php?page=graph&view=nonfarmprivate

 

 

The Markets Sept 20, 2013

Wednesday the market ended at a new high but it was not a breakout.  Thursday was a critical day to see if there was a breakout but the run up failed.  Friday the markets declined.  All the world’s equity markets are the result of QE inflating world debt by making world debt more affordable.  It is unsustainable and has withdrawal symptoms that make it virtually impossible to withdraw.  Ultimately it leads to chronic economic pain as Japan has felt for 20 years or economic colapse as Cyprus and Detroit experienced.  The prospect of America now repeating the mistake of Japan and becoming hooked on Quantitative Easing is extremely high.  In 1989 Japan was on the verge of overtaking the USA as the largest economy and had five of the worlds 10 largest banks.  The foreign markets are up today because they see Quantitative Easing as the end of American world economic leadership just as it put an end to the growth of Japan in 1990.  QE is a national addiction to debt that ultimately leads to a flat-lined socialist economy where all growth is negated by inflation.  QE suppresses interest rates and allows corporations as well as the government to choke on debt.

 

The stock market is testing the resistance level for the third and last time (shoulder 1, head 2, and now second shoulder 3).  If you look at these next two plots it says this bull market is over because prices are about 50% higher than the historical average and the dividends are very low.

http://www.martincapital.com/index.php?page=graph&view=div_earns_payout

 

Probably this is the week stock markets will make critical tests of whether they confirm the developing head and shoulders sell signal with a sharp decline.  When the stock prices give a sell confirmation sell orders can be expected to cascade and a 20% decline could occur in just a day or two selloff.  The WSJ continues to shows the S&P at its critical resistance level and the DJI in a much worse condition.  If the stock market falls 20% on many will be buying stocks again with about 50% of their cash and holding off for the next dip.  Stocks that have fallen 40% or more but which have good balance sheets would have no good reason for being sold down so low. 

 

World trade started to grow as China begins to replenish iron ore stockpiles. Look at the last 5 years! It still looks close to zero growth.  But it is up again this week. 

 http://www.bloomberg.com/quote/BDIY:IND/chart

 

The VIX indicates extreme complacency with the worst about to come. The VIX would normally top out above 30 or even 70 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

http://finance.yahoo.com/intlindices?e=asia