Monday, May 5, 2014

May 9 The international iron ore bear market caused prices at the Chinese port of Tianjin to plunge 19 percent to $105 a metric ton this year. That leaves the enormous domestic Chinese supply facing a $20 per ton loss in order to clear the oversupply. This is the worst loss and will precipitate the greatest collapse in the mining industry since 2009 according to Bloomberg reports. Michiel Hovers, BHP Billiton’s vice president at a conference in Singapore, predicted many iron ore mining companies with higher costs will soon be forced to close as happened in 2009. The disgorging of the inventory glut will shut down new exploration and mining in SE Asia, particularly in Australia. China, now the world’s second-greatest economy is now growing at its slowest rate in 24 years, since China first adopted a free-enterprise American type economy. The worldwide neo-socialist Obama depression is now bringing down the economies like china that were reducing socialist entitlements. In socialist countries like Obama-land, if you breath you have entitlements for free housing, free cell phones, welfare payments for gambling, food stamps, and a free Harvard education (like Obama had) that working people are not entitled to. Meanwhile world trade is down 55.3% for this year to date and near a 15 year low.

Mergers and acquisitions are now at highs usually seen as the stock market peaks when the shares are used to buy other corporations instead of borrowing because the shares are often overvalued 50% or more.
MSNBC/Pravda had an unusual number of idiots on their show this past week.  That is another reliable sign of a peaking market.
 
May 7  Office Depot to close 400 US stores, yet its shares rose 10% on the news.  This says there are irrational people running this market.  Everyone else apparently has left for the summer.  The markets moved about 1% lower and it took hardly anyone to move it.  Market volume is as low as it was eight years ago.  This market is thin and dangerous.
 
To divert national attention from the 2006 collapse of the liar-loan mortgage market and banks that caused the Obama economy and his miserable economic record, Barack Obama will take the case for blaming climate change on George Bush to Al Roker and other TV weather personalities.  But the more they make doom and gloom predictions the more the weather contradicts their claims.  Twenty years ago they already spawned a crop of movies predicting NYC 300 feet under water.  And in Jimmy Carter’s time they were first predicting a nuclear winter after nuclear wars to get people to forget those years of economic malaise and Carter’s democrat misery index (inflation plus unemployment) that got up to 20% before President Regan turned it around.
 
May 5 Investors in coal-burning utilities are brushing off a decision by the U.S. Supreme Court this week that gave federal regulators more power to control air pollution indicating they see a continuation of socialist economic malaise and a clean sweep out of the socialists by the end of 2016.  Only prudent free enterprise candidates are now on the rise in both political parties.
World trade is now down 55% so far for this year near a 15 year low while the Obama administration spouts optimistic Fed statistics that make absolutely no sense.   Real unemployment is generally known to have grown to be more than twice the Obama unemployment statistics that are known to be about as reliable as the statistics from Obama’s Indonesian and Kenyan homelands where he was educated.
 
World Economy
 
May 7  German factory orders declined last month as tensions with Russian occupied territories increases.  The best solution would be UN action to remove Russia from the UN Security Council and then implement the expulsion of the Russians and their descendents that Stalin forced upon the USSR’s conquered nations.  Russia has become a threat to international peace and freedom.
U.K. Energy Secretary Ed Davey said the G-7 is resolute in Reducing Russia Energy Ties.   The Ukraine conflict is spurring the world’s leading economies to cut their reliance on Russian energy to show President Vladimir Putin that there will be no going back to pre-crisis ties.
The Organization for Economic Co-operation and Development cut its forecast for Russian economic growth from a previous 2.3 percent by almost 80% to 0.5 percent in 2014, citing the crisis in Ukraine.  The OECD is the latest international organization to cut its growth outlook for Russia, as the Russian aggression in Ukraine has provoked large-scale capital outflows and a slump in investment. The International Monetary Fund last week said Russia was in recession and cut its growth forecast for 2014 to 0.2 percent.
Danish Finance Minister criticized foreign investors speculating against the nation’s record world high consumer debt.
 
E-House China Holdings Ltd. (EJ) led a drop in real-estate companies amid mounting concern that home sales in Chine have dropped 47% this year in spite of the sharp cuts in sales prices this past year. 
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May 05
Russia’s manufacturing industries reported another contraction for a sixth consecutive month as ruble weakness drives up inflation and international tensions over violence in Ukraine threaten their economy.  “The bad news from the HSBC April Manufacturing PMI survey is that the contraction in output and worsening of other economic conditions has continued,” said economist Alexander Morozov.
Portugal will be the third to finish off its EU rescue program after Ireland and Spain.  That leaves only Cyprus and Greece still subject to bailout programs four years after the Greek government was granted outside aid in May 2010 and Cyprus went insolvent and Cypriots lost their savings accounts. Portugal’s borrowing costs have dropped helped by signs of economic recovery and the European Central Bank’s pledge to do what it takes to defend the euro.
 
The European FTSE is at the highs of 2000 and 2007 but MSNBC/PRAVDA is still saying buy-by-by.
 
If you look at Germany where the people have perhaps the strongest work ethic in the world, their stock market has topped out too but their trend is upward only because the dollar is continually weakening.
 
The French market is about 60% of what it was fourteen years ago. At it most recent highs it is still is still down 50% from 2008 and down 60% from 2000.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=
 
Japan’s stock market appears to have topped and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.
 
The Swiss market still indicates stagnation since 2007. It has hit the highs of 2003 but could not make it to the highs of 2007. Obama has destroyed Swiss banking by attacking Swiss confidentiality that had protected people from the Hitlers and Stalins of the past. The Obama socialists are trying to legally confiscate everything people earn while lining the pockets of their friends with Ambassadorships and $billions in contracts for inept management of socialized medicine.  Look for world economies to soar when the socialists are no longer running America.
http://finance.yahoo.com/q/bc?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
 
 American Economy
May 05  World economic turmoil caused by Russian and Chinese deepening recessions increases Russian and Chinese aggressive tendencies which are used to divert their citizen’s attention from worsening economic conditions.  Cash flush western economies in the mean time have been on a buying binge in western countries.  Past experiences show these buying binges are at hyper-inflated prices which severely damage the buyers.  Massive deflation looms as Obama’s socialized medicine rolls out to people who when offered something like a free cell phone, go out and get two a month and throw them away as newer models are offered.
Hedge Funds Cut Gold Bets to 11-Week Low on U.S. Growth numbers yet gold has continued to rise indicating the Obama economic numbers for the American economy do not make any sense.  How could gold rise if the economy is strengthening and hedge funds are selling gold.
ISM Services Apr 55.2 up from 53.1 and the best after six months of decline.
May 6
Trade Balance Mar -$40.4B continues negative from -$42.3B
May 7
MBA Mortgage Index 05/03 5.3% home buying picked up after the winter from -5.9%++
Productivity-Prel Q1 -1.7% collapsed from 2.3% ----
Unit Labor Costs Q1 4.2% jumped from -0.1% +++
AM Crude Inventories 05/03 -1.781M fell from 1.698M -
Consumer Credit Mar $17.5B  jumped to $16.5B ---
May 8
Initial Claims 05/03 319K down from 344K +
Continuing Claims 04/26 2685K Obama’s nonsense statistic 2771K---
 
The Markets
May 9  The stock market is extremely thin and the flight to safety in the DOW stocks has begun.  The carnage in the bubble stocks has only begun.  This poetic video explains why the social business model is a stock market bubble about to pop as the boom box mania popped.  The children addicted to social media are the next generation of ego-centric unemployables like the Boom-Box zombies of the last generation.  They have near-zero useful content being stored between their ears.  Look how Obama gives this free mind numbing stuff to people on welfare the same market they had for the boom box.
 
May 7  The market is in the stratosphere and has no breadth.  Sell in May and stay away may be the best advice around.
 
May 5  Throwing money at the stock market no longer makes it go up relative to the highs of 2000 and 2007.  And here we are at the same relative highs seven years later at the end of another business cycle in 2014.
 
World trade is down 55.3% for the year to date and near a 15 year low.  Look at the last 1+ years of world trade! Use the graph or snapshot option. Unfortunately they do not show back to 2008 when world trade was more than five times higher than it is today.
 http://www.bloomberg.com/quote/BDIY:IND/chart
 Look at the volatility index and you see that the market could fall much faster. This market has little volume or volatility.  So when volume picks up past history says the market will plunge.  This is not a good moment in time for holding equities.
 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 http://in.finance.yahoo.com/intlindices?e=asia
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