Monday, March 23, 2015

Mar 27 2015 The stock market is being manipulated by the high speed traders. They are bankrupting hedge funds along with individual traders with their volatility. Yesterday was a particularly destructive day for private wealth. The close was exactly the same NYSE index value as it was at the gapped down opening. That means the manipulators managed to buy into the stock market at prices below the close of both yesterday and the day before and by definition they made a large profit just before the close. Their attack caused prices to gap down and triggered stop loss orders that never would have been triggered without illegal manipulation and that caused people with stop loss protection to lose much more than if the market makers had provided continuity. The manipulators caused discontinuites and then bought in below the starting and closing price while others were selling. With knowledge of the conditions for every conditional order they can use their knowledge and their selling and buying power to skim profits. In fact yesterday the WSJ revealed that many banks swap/sell the portfolio information of their clients with/to others. Knowledgeable “Stupid Party” corrupt predators then know what will force the bank and investment firm clients to sell because that information is collected and in the computer system which the corupt Obama government can tap. If the stupid party is not itself illegally involved why does Obama allow these problems to occur?

The "dark pools" are places that manipulator connected with our corrupt government can get access to private information collected under the fabricated cover of  necessary for national security.   How did Obama know the messages of Governor Christy's staff a month before Governor Christy learned? Every potential Republican presidential candidate has been illegally and corruptly monitored and sabotaged by this administration.  That means sick “stupid party” government officials can now even financially target Christians, Jews, conservatives, businessmen, gun owners, and you if they wish.   Does the Stupid Party government also illegally regularly request information on clients from the Banks they investigate?  The Obama administration already had the IRS illegally target Christians, Jews, conservatives, Republicans, the Chamber of Commerce, and gun owners once.  
     High speed traders and the “stupid party” both need to be slowed down and the sharing of personal bank, brokerage, and government client information should be illegal.  Trading volume limits are worthless when high speed manipulators can spread the trades over microseconds and always guarantee they have enough cash during any one millisecond.   A detectable type of volume activity was associated with the selloffs of July 2009, the selloff the summer of 2010 and the fall of 2011.  It has been happening now again for the past month.   Just plot NYSE volume vs time since 2005.  That is why we think it is now possible for the selloff to begin earlier than we originally estimated would occur by October 2015.
     The stupid party administration is deep into criminal activity and “dirty tricks” or so it seems and it has a habit of losing all records and phone messages unlike honest people like Governor Christie whose staff messages were read first by Obama’s dirty tricks stupid party to destroy Christie’s reputation.   Christie himself did not read his staff’s private messages until after Obama’s stupid party made their dirty trick public.  The Attorney General must know this is a “stupid party” smear campaign since they have not brought any charges and will be embarrassed it will be disclosed a one of Obama’s dirty tricks.  In fact the NY Governor has joined Governor Christie and asked for the resignation of all the corrupt Washington Bridge officials who perpetrated the dirty trick.
     The percentage of Americans participating in the American labor force continues to decline under Obama’s Stupid Party administration.  It was steady at a 66% of the population when Obama won election in October 2008.  It was down to 63.7% when he was re-elected in October of 2012.  It is now down to 62.8% today and still falling.  And without Obama converting the work force from full time workers to hamburger helpers his unemployment rate would be a several percent higher.   The “stupid party” administration is all smoke and mirrors and there is unfortunately no wizard behind Obama’s “Alice in Wonderland” curtain. Obama’s socialist wealth redistribution is a farce; it amounts to poverty redistribution as Churchill said.
     In our opinion jobless claims have flattened out at best and it is due to the decline in average weekly work hours and pay while the stupid party continues to cost Americans full employment, and national achievement.  Instead the stupid party released five of the world’s worst terrorists in exchange for one American deserter that cost the lives of American soldiers who went looking for him.  The Stupid Party attitude encourages terrorists planning genocide for the nation of Israel and is enabling terrorist nations to develop nuclear weapons which they could use first against Israel then Iraq, Lebanon, Saudi Arabia and Turkey to create their hoped for new powerful terrorist Persian Empire.  Obama is another hapless Jimmy Carter when it comes to dealing with Iran.  But this time Iran has taken the whole Obama administration hostage.
 
 Mar 26 2015   The key to investing is to keep losses small and let profits run without being eaten alive in a volatile market.   We have noticed that trading market makers have a new strategy to increase their profits.  Very often the first bounce off of a stock’s low is 3% to 5% and that market maker takes that for himself.  This tactic has reduced the profits of investors and hedge funds to the point that our stock market is now so inefficient that small investors and hedge funds are losing money fast.  This type of predatory trading has increased average daily volume on the NYSE by about 300,000 shares a day for the last month.  It has always existed as a sign that a stock market bubble is going to pop.   But now it is done at high speed.
     On a market cash flow basis, the New York Stock Exchange has been declining since July 1 2014.  The DJI Average itself has been flat lined since December 9.   The Standard and Poors average has been flat lined since December 30.  If you add back in the “non-recurring expenses” which are usually just recurring phony expense right-offs used to make earnings appear higher.  Thus it was reported this morning on CNBC that NASDAQ and Russell 2000 are at bubble price earnings levels well over a 60 PE ratio.  
     Canarsie Hedge Fund LLC collapsed.  According to a March 2014 regulatory filing, the fund then had a gross asset value of $98 million.  They lost 33% in 2014.  The hedge fund led by a longtime former head of risk management at Morgan Stanley lost all but $200,000 of its assets, most of it in a period of less than three weeks this year.  The firm’s trader, a 28-year old former Galleon Fund Management trader took risks that caused the hedge fund to become insolvent.   
    We predict that with the coming rapid deflation of the current stock market bubble many leveraged funds will be wiped out with the markets initial decline of 20% to 30%.  That will be the cause of a new banking crisis and another “Stupid Party” failure that will extend the collapse beyond the typical 60% drop to perhaps as much as 90 %.  Once the Stupid Party is ejected in 2016, the market should regain hope and confidence and form a bottom.   In 1998 Clinton ended all the 1932 FDR Great Depression banking regulation safeguards and the Stupid Party now has an Obama manifesto of banking regulations devised to maximize the socialist corruption of the American government with the buying of influence and the use of payoffs for avoiding prosecution.   The liar loan crisis of 2007-2008 was due to institutionalization of government stupidity with the good intension of redistributing home ownership to the poor but it had the “Stupid Party Effect” of bankrupting not just the poor but many of the proletariat (the working people).   Socialism benefits no one but the socialist government employees. 
   There are several new IRS scams going around where people are called and told the caller is from the IRS and that the IRS is about to prosecute them.  The reputation of the IRS is now so low that this new scam actually works.  Forbes thinks Lois Lerner could actually still have access to American taxpayer records so she could even be selling them.  When will Lerner and former Attorney General Holder be arrested for persecuting Christian and conservative taxpayers with abusive tax restrictions, fraudulent audits, and trumped up fines?
“Stupid Party” BS says that women do better in socialist countries.  They recently reported that in Russia 30% of the managers are women, but because the stupid party members are so stupid they don’t have a clue as to what they are talking about.   In 1989, when the Iron Curtain was torn down the “free world” manufacturers found out that the floor machinists in the Russian factories were paid more than the women managers in their front office.   That is how it is under socialism, women managing the office get paid less than men in the factory.  It is only in the Western World that women and children are not abused and women have “equal opportunity” to men.   Pay in the free world depends on what you accomplish.   But the politicians in the Stupid Party are too weak minded to admit that American freedoms are what keeps the “free world” prosperous.   Socialist dictatorship redistribution of the rewards of hard work is often just pure theft and murder in the poorest countries and it is the cause of world poverty.  Socialist redistribution is just a form of stealing from other workers including the proletariat for the benefit of the government employees.   Under Hitler and Stalin socialist redistribution was terrorism on a scale ten times the terror of socialist redistribution under ISIS today.  No intelligent person in their right mind thinks socialist redistribution in the East, Africa, South America, or the Mid East holds a candle to the freedom of the Free World.   Only the “Stupid Party” members advocate abolishing the opportunities only possible in the free world.  Winston Churchill was right and the fact that Obama hates Churchill and sent his statue back to England shows that Obama rightly belongs in the Stupid Party. 
Make pilots use a potty seat once they lock themselves in the cockpit.   
   It is now evident that one or more insane terrorist pilots were likely flying for Malaysia Airlines Flight 370, and recently Germanwing and that the sane pilots, if any, were  locked out of the cockpits.   It was reported today that a few years ago a Beech airplane pilot prayed in Arabic as he committed suicide plunging his passengers into the ocean.  The cockpit doors are now so fortified to keep out terrorists that a terrorist pilot cannot be dislodged.  It looks like the first action is that all pilots with less than 3000 flight hours and all Moslem pilots will need to be grounded until rechecked for sanity and security and then all pilots will need annual security checks as well.    Higher security is now needed until world insane sanctioned beheadings subside to less than one beheading a day.   Beheadings sanctioned in this day and age is a sign of mass insanity within that organization or nation.  What Christian, Jew or atheist would fly with an airline where they allow insane pilots who believe in beheading infidels?  Pretty soon no one will fly on airlines of countries that pass insane pilots.  I would not want to own any airline stocks at all now until this problem with insane pilots is resolved.
Mar 25 2015  The stock market gave ominous indications that even the highest growth stocks are now topping out.   The broader market measured by the NYSE has been virtually flat since July 2014 in spite of the best efforts of the Wall Street snake charmers and snake oil salesmen to hype that we have a Teflon coated stock market bubble this time.  We on the other hand are thinking that the Stock Market Bubble collapse might be moving forward now to this summer from what previously we estimated would be in October based on analysis of past bubbles. 
    The housing market has stagnated in spite the low interest rates because the banks are thwarting homeowner efforts to refinance at lower rates because that hurts a bank’s bottom line. 
    The lower and lower interest rates on government and corporate debt has resulted in a bubble in the fixed rate investment market.  Each time the interest rate drops the market value of the debt skyrockets.  When interest rates dropped from 0.4% to 0.2% the bonds doubled in value.  When they drop from 0.2% to 0.1% they double again and so forth.  Theoretically any issued bond’s value approaches infinity when interest rates fall through 0% and go negative.  That is a precursor for the complete collapse of a banking system and an economy.  When that happened in Germany in the 1930’s the wealthiest 2% of their population, the people Obama hates the most, were the bankers in Germany.   They borrowed their bank saver’s money and bought out the banks and all the hard assets.  Then when hyperinflation followed they did what Warren Buffet likes to do all the time, they took the banks private and paid off the other owners, depositors, and creditors with what became the worthless German currency.  Warren Buffet does not have hyperinflation to play with yet.  That is the process by which Warren Buffet profits already and we only have moderate inflation.  There is nothing wrong with that form of capitalism except… when the economy collapsed Hitler went after the bankers, the top 2%, and Hitler became a national hero.  Obama has spoken against the top 2% many times and he displays totalitarian tendencies and wants to redistribute their wealth.   This Obama administration and his FED appointment Janet Yellen are setting America up for a financial collapse of Weimar Republic proportions.  And the disease is now spreading to the EU.  Socialists in South America have ruined their countries like clockwork with inflation and nationalization on 20 to 40 year intervals.
     Orders for durable goods dropped in February as we expected.  It is not just a sign the slowdown in global growth but is partly because this administration always fudges the numbers upward at year end and has to correct the inflated numbers down afterwards or else they drop the January or February numbers and blame it on the weather.  A competent administration upholds best practices which keeps the numbers seasonally adjusted so that they do not vary much with the seasonal weather.  A competent administration makes standard seasonal adjustments to show true growth because they do not have to lie about imaginary prosperity all year long by inflating numbers and then dropping them with corrections even 2 and 3 months later like Obama does.  This Stupid Party administration blames things on the winter weather just as they have blamed George Bush, Congress, and Israel to hide their Stupid Party’s incompetence.   
    Bookings for durable goods declined 1.4 percent after the January level was already quietly adjust lower from the 0.4% GDP Bulls..t they put out the second half of 2014.   Bloomberg, Squawk Box and others think demand for American-made products are softening as economies abroad struggle.
     Mar 24 2015  The stock market snake oil salesmen are trumpeting that new home sales are at a seven-year high but it is all spin that hides the fact that it has fallen far from nine or ten years ago and is anemic at best.  New house sales are still less than half what they were before Obama got into his redistribution act.  And now Obama smears the Jewish Nation for telling Americans things that Obama wanted to be kept secret such as his giving Iran Nuclear Holocaust capability if the ayatollah only waits 10 years so the next holocaust can be blamed on some other American president.    We have high volatility now because the economy has topped out and banks and stocks are now floating on high risk and debt.  Rick Santo... is one of the few on Squawk box that tries to tell the truth.  
      The Nasdaq bubble collapse started in early 2000 but was only admitted at the end of 2000 and of course the Stupid Party blamed it on G. Bush who took office two months later at the end of January 2001.  Initially the Stupid Party blamed 911 on G. Bush too but stopped when it came out that the warning was given in 1993 when al-Qaida first car bombed the Trade Towers and the Stupid Party did not ramp up security but instead they ramped up bank risk by canceling the Glass-Steagall Act.  Clinton eliminated the banking regulations and allowed derivative fraud, and off balance sheet hiding of debt as well as other financial fraud that created the 2000 and 2008 bubbles.  Now we have another Stupid Party Nasdaq bubble that started with Quantitative Easing, socialized medicine, and is ending with speculation in pharmaceuticals leading this current bubble.  We believe the market is getting ready to pop before the end of this year.  At least this time the Stupid Party will have to take responsibility?  Fat chance that will ever happen!
The Huffington Post said, “U.S. financial markets have been highly volatile but with little to show for investors, as opposed to traders, who make their best livings from pointless volatility, for all the swaying back and forth since the start of 2015. “
    Greece wants more than $110,000,000 in damages from Germany claiming they were bribed to buy certain German products.  The only problem is they can’t find a court to even agree to consider their case.   But just in December, Airbus Helicopters subsidiary Rheinmetall Defence Electronics paid 37 million euros in fines to end a criminal investigation in Germany into suspected bribes in Greek arms deals.  It would seem that such fines should go to the nations that were cheated not the nations with corrupt officials that took the bribes, because bribes cut into the income of the proletariat.   The Russian people go hungry while Putin gets bribes and lives like a king while executing or imprisoning his political enemies.  The Greek bribes should be taken from the hides of the corrupt Greek government officials who took them.  That is how Singapore fixed their economy and China is trying to copy..
    Reuters has found that when Hilary Clinton began working for Obama, the Clinton Foundation published what they claimed was a complete list of the names of its donors and has continued to update it. But it was a farce because the charity's so-called health program spends more than all of the other foundation initiatives put together, and it stopped making disclosures five years ago.
    In Singapore corruption gets the death penalty.  No Secretary of State from Singapore ever has had difficulty turning over their emails when requested by their government.  Ultimately when a democracy gets a government as corrupted this Obama administration with all their so-called charity work conflicts the electorate cleans out the government at the next election.
 
Mar 23 2015  Analysis of the latest “fools rally” in the stock market shows that it was due mostly to speculation in pharmaceuticals, coffee products, monster drinks, and other companies with unreliable and speculative incomes.   Today the snake oil sales force was actually cheerful comparing the Nasdaq level to the Bubble before it popped in 2000 under Bill Clinton.  The reason the FED will probably not reduce Quantitative Easing (QE) for several years is because inflation has dropped to below 1.5% and is declining.  When it was at 2% inflation the FED said they would wait until it hits 2.5%.  Now that it is below 1.5% inflation the FED said they would wait until it hits 2.0%.  The large world economies are headed towards a depression not inflation, i.e. negative inflation not inflation.  We have pointed out many times that Japan began using QE in 1990 and fell from being the second most powerful economy to the fourth place since then.  The Japanese stock market never recovered once they started QE in 1990.
The problem with low interest rates is that capitalism creates wealth only when capital grows when invested by earning interest.  Otherwise people do not invest money and the velocity of money drops because product prices decrease.  So by waiting you can buy more products later at a lower price.  Jim Cramer does not understand economics and he thinks falling commodity prices like we have now and had during the Great Depression are good for the American economy.  Jim Cramer learned nothing, absolutely nothing from history.  Germany is very worried now because their rates have already gone slightly negative as their prices fall faster than ours.  That is why the entire European Union is trying QE to try to create some inflation.  The FED will never phase out QE due to the declining interest rates.   Instead eventually they will likely start QE4 and risk putting the world on a path toward hyperinflation.  But that will not happen until after this stock market bubble bursts like it did in 1933 when stock prices plunged 90%.  Stocks only plunged 60% under Herbert Hover in 1929.  If our analysis is correct this stock market will be down at least 60% before elections in 2016 so that means Obama will not be able to blame it on anyone else this time.
The German bubble appears ready to burst.  http://in.finance.yahoo.com/q/bc?s=%5EGDAXI
Germany’s banks are feeling the pressure of deflation and testing old lows.
 The French stocks have risen recently to former bubble highs.
The Swiss market is now exactly at its bubble high in 2007. http://finance.yahoo.com/echarts?s=%5ESSMI&t=my&l=on&z=l&q=l&c=
   China is supporting its currency and that will hurt their exports and their stock market down the road but will make their stocks more expensive to Americans in the short run.
   We expect Jim Cramer and other snake oil salesmen will wake up to the bubble having burst when the US stock market decline is about half over possibly by this fall.
Existing Home Sales Feb remained well below expectations with prices not rising and jobs stagnant so people are not moving and thus not selling their homes.
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