August 21, 2015 Yesterday, the broad NYSE broke below 10660 as we warned and the bear market is now being recognized. All the indices followed suit. This decline should exceed 10% but the next decline will be much deeper if our analysis is correct. Also, the financial sector is again the economy’s weakest link. The Obama administration has bankrupted the American economy creating $18 Trillion of new government debt and flooding the stock market not the economy with Quantitative Easing. That QE cash has been wasted on CEO salaries and low interest rate stock buy-backs which have zero economic benefit and create a smoke screen of income statement value that is all smoke and no value. QE has been nothing but FED economic eyewash. That eyewash hides the fact that the “Emperor has no clothes” the economy is naked and the Financial Sector is nothing but a stock valuation bubble that is about to implode!

            We expect that after about a 10% decline there will be a rally.  A more serious decline will follow that rally and will likely be followed with a series of market price drops with small and diminishing rallies that will punish investors who in the past profited from the rallies.  That punishment will cause investors to get out and stay out until they are convinced a bottom has been set in place.   We expect the total decline will be between 60% and 90% and banks will be on the rocks again because we have an incompetent administration that may chose to “break the buck” and create huge losses for fixed interest funds especially Pension funds.  That is a “stupid party” socialist way to punish the savers to bail out the government spenders.   After all, investors are thought by the “stupid party” socialists to be the rich and they don’t think it is fair that they have accumulated savings.

            August 20, 2015   Today the business news lied again.  They said Existing Home Sales were at an eight year high.  But if you look at the data it is no higher than last year and four years ago and only half the level of 2006 which was the peak year due to the Obama-Dodd-Frank Liar Loan market where they forced banks to meet percent quotas for home sales to minorities.   Later there were over 2000 defaults in the worst month and squatters ended up burning down thousands of homes in cities like Detroit.  Home ownership in the US declined 4% so far under Obama and his “Stupid Party” socialist crony capitalism.  The Nationalist Socialists Party of Germany was socialist and controlled the economy via crony capitalism, a socialist corruption of free enterprise.

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

            The Leading Indicators for July fell -0.2% from 0.6% last month forecasting another economic slowdown beginning.  The stock market is always one of the first to decline.

            The business news folks are looking for a reason for the coming bear market and are clueless so they will probably blame the FED.   We can tell you it is clearly the overwhelming incompetence of the Obama socialist crony capitalist administration.  America cannot afford politicians of the ilk of those who are bankrupting Greece and America.  The world cannot afford losing America as the rock for peace and economic stability.  America has never had hyperinflation.  The closest we got to that was in the gold mining towns during the Gold Rush.  America cannot afford the NY and Mass socialists who are the architects of intellectual stupidity and a failed socialist educational system.  America cannot afford to have unions controlling school systems and state and federal government or government institutions.   We need another Ronald Reagan who busted up the air traffic controller’s union.  Prior to 1955 we did not have socialist controlled state and federal unions.  America was number 1 in education from 1945 to 1963.  Now we are number 26 and have schools primarily to babysit the children of socialists who have no desire to work for a living.  The rich crony capitalists love socialism and send their children to private schools because they are a class conscious exclusive society who thinks they are better than people who create and are productive.

            The market has been supported not by real growth but by the $4 Trillion in Obama QE and the $18 Trillion Obama deficit that has provided cash for crony capitalists to buy back their stock thereby artificially raising profits and stock prices.  But the QE has ended and Keynesian economics has failed once more.  We are going to see a severe contraction soon as the market plummets and the artificial wealth evaporates.

            August 19, 2015   A close below 10660 on the NYSE in the near future would confirm the sell warning we gave last October only this time it would indicate the major market decline is beginning.  That decline would cause many bears to get active short selling.  But we expect the bulls to claim another bear capitulation at the bottom and Jim Cramer will again be one of the last to understand the market’s sell message.

            Incompetence at the highest levels of China’s government is causing the largest outflow of foreign funds in the history of China.  The government tried to attract investors by running up China’s stock prices thinking it would increase the wealth of the home population and stimulate their consumer economy to keep growth and employment high.   Instead the egregious upward manipulation of stock prices panicked international investors and they sold out causing a record outflow of foreign currency driving the Yuan lower.  High prices became the best reason for selling off Chinese investments.  The incompetent communist manipulators are now panicking to keep the economy afloat.  We do not expect a recovery for them until the Chinese markets hit at least a two-year record low and investors see value again.

            Hilary Clinton and Obama put an innocent Jewish film maker in prison as part of their Benghazi cover-up.   I viewed the film that was still publicly available on the internet and saw that the film maker was truthful and innocent as far as I could tell.  Yes he showed that Mohammed took a bride who was only 9 years old but Muslims know that is true and to this day they take brides as young as nine years old.  That Jewish man was thrown in Jail without due process because Obama and Hillary out of stupidity and incompetence did not have US embassies on alert that year on the anniversary of the 9-11 attack.

            The airline industry is now overheated and passing its peak.  Oil prices appear to be bottoming out for now but Iranian oil will be ramping up while most other production is being curtailed.  It is still not a good time for energy companies.

            US housing Starts Jul were 1206K up slightly from 1204K.  But building Permits for Jul 1119K down sharply (over 20%) from 1337K.   While permits are down and housing starts are up they are both well below the levels before the Senator Obama-Dodd-Frank Liar Loan fraud that permitted people without the means to buy houses and then default thus precipitating the Obama 7-year recession.

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

            Wal-Mart will remain an investment disaster until they rid themselves of a CEO who hates the American Bill of Rights. 

 

August 18, 2015   The WSJ reported today that American banks are using a new gimmick to meet bank reserve requirements by using high risk hedging from groups which themselves are at high risk.  

http://www.wsj.com/articles/u-s-lacks-ammo-for-next-economic-crisis-1439865442

            Once again the “Dog of the Day” is Wal-Mart.  Wal-Mart’s revenue was reported today as declining while costs are increasing.  That is because Wal-Mart’s CEO has taken a position against the Constitutions freedoms in the bill of rights and is interested in NAMBLA’s freedoms.   Walmart’s CEO therefore attacks the religious beliefs of the very consumers that were responsible for Wal-Mart’s past success.

            The computer breach at the IRS in which thieves stole tax information was raised by another 220,000 people.

Citigroup will fork over $180 million to settle charges that it misled investors about the risks of two hedge funds that collapsed during the Obama/Dodd/Frank liar loan mortgage meltdown.

The home price index is still 15% below when Obama took office.

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

Empire (NYC) Manufacturing fell sharply by -14.9 in Aug from a typical level of 3.9 

            It is a growing opinion that the following companies are now part of the organized political and moral corruption of crony capitalism and that the Obama administration probably cleared their attack on American Religious freedom this past spring.   (Apple, Wal-Mart, Yelp, Salesforce, Angie's List, Eli Lilly, Gap, Levi's, Twitter, Anthem, and Nike).  Their CEO’s deceive themselves into thinking they are Gods gift to America.   We would not touch their stocks at this time based on the corruption implicit in their cronyism with the current corrupt manipulative administration.  Hitler’s gay Stormtroopers thought they were God’s gift to Germany too. 

            August 17, 2015   The “Stupid Party” elite still have their heads screwed on backwards.  They can’t get anything straight.  Today in the WSJ Opinion section on page 9, Mary Anastasia O’Grady attacked Donald Trump’s economics saying that Trump thinks the leaders of China and Mexico are geniuses.  That was not what Trump said at all.  Trump said the problem is that the American government’s leaders are stupid, corrupt crony capitalist socialists.  The leaders of China and Mexico only seem like geniuses by comparison.  Socialists love corrupt capitalists because they cannot control great industrial free-enterprise capitalists who would rather retire than work with the corrupt “Stupid Party” socialists.   Kenneth D. Lewis, the capitalist who built Bank of America is a good example of an honest banker who would not play ball with Obama/Holder.   The Chairwoman of the Democrat Party still cannot explain the difference between the “Stupid Party” and corrupt socialists.  That is obviously because there is no difference.

            Sentiment in America is still 10% lower than before Obama took office and 45% lower than it was before the Clinton Dot-Com bubble broke in March of 2000.

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

            China’s economy is tanking and losses are mounting due to the socialist manipulation of markets that only work in country’s with free and honest leaders.  Even Alibaba is in sinking sand.