Monday, September 14, 2015

September 19 Be prepared for the stock markets in the entire world to plunge together in the next systemic decline in equities and asset values. And it will not be the end unless it breaks all records. It is more likely this decline will continue on and off past New Years Day. On Friday the DJI took the most significant hit broadcasting that the rally had failed to break out and the decline that had begun in August had just begun its second leg down. The volume traded on the NYSE during normal hours was extremely large but even so the volume rose another record 40% after hours before the trading settled down. Federal Reserve Bank of Richmond President Jeffrey Lacker agrees with us that failing to tighten rates now has raised the risk of “adverse outcomes” for the nation.

            September 18      The FED under Yellen cowered again and probably missed their last opportunity to regain control of the economy.  In effect they punished every corporation and nation that was trying to put their house in order.   Now when the stock market collapses the FED will be pressured to further leverage the industrial base.  The FED is proving they are now an economic liability.  They have done what the Japanese did in 1990 when the Japanese first invented Quantitative Easing and became addicted to it.  Now Japan has lost its leadership in Asia.  Being “highly accommodative” is Yellen’s term for being addicted to easy money.  The forces will now build up for inflation and depression together.  In many countries it will likely result in hyperinflation and devaluations.  America will not be the first to topple but is the money printing machine that most undisciplined countries are keyed into.   We now know we have an incompetent federal government and FED.  Hold onto your hats!  The recession is starting.
        Americans are getting very angry with career politicians who do nothing but concentrate on becoming millionaires.   Both political parties have failed because once in Washington their politicians are corrupted and follow the money rather than their conscience.  There is no reason they should give themselves better special health care, better special pensions, free lunch and free international travel.   They are corrupt and that is why they give themselves special treatment.  When Abraham Lincoln went to Washington he lived in a cold-water flat above a store in Washington DC.  He aspired to change the world for the better and end slavery.  He rocked the boat and was not corrupted by power.  All Obama did was take worldwide vacations, used the government IRS and the NSA to harass domestic critics, abandoned democratic allies, and tried to reset the button and cozying up with fascist Putin and Sharia criminals around the world.   He has been a complete failure and took America down several notches.
       Do not jump into gold too fast.  America can still throw out the corrupt and socialist politicians.  Hyperinflation is preceded by a depression and a government decision to inflate the money supply.  Usually the federal governments confiscate all the gold by making it illegal to hold so that citizens get very little when they are compelled to turn it in at the banks.   First make sure the government has no interest in buying gold because they can set a fixed price like the first American socialist president FDR did.  FDR even doubled the size Supreme Court to stack it with incompetent political hacks so he could rule using unchallenged orders and legislation.   Obama has defeated the American Constitution by using executive orders.
            September 17   Today should be very volatile with swings in both directions because the FED will say whether they will raise interest rates a fraction of how they raised them before Obama’s disastrous administration.  The low interest rates today have allowed people and corporations to acquire huge debts because they could afford the interest on high debt.  If the hike is 0.25%, some corporation’s debt payments will increase tremendously and that will result in huge losses and bankruptcies.   The only reason the FED has been sitting and doing nothing is because they know the economy is headed to a credit crisis and don’t want to be blamed for it.
            September 16  The Market historically rose the day before a FED meeting and did so again yesterday.  But the market seems to be unable to gain any momentum to advance to a new high.  It seems to be topping out about 8 or 9% below the high.
            The major new threat of economic disruption is the spread of terrorism to Europe and America.  The terrorists are trained and are now coming home to roost and the current migration wave is being utilized for that purpose.  Apparently England and France have learned how to electronically tag Moslem terrorists as they go to Syria for training.  The British successfully targeted one Brit and used a drone to kill him.  And the French are going to finally join the air war and target French Moslems who go back for ISIS training.  Finally Europe and the rest of the world, except Africa, is beginning to realize that Obama and the Stupid Party do not give a dam about them and they have to wake up and protect themselves.  This is how the “Stupid Party” has been turning America into a banana republic.  This is why Americans are getting very angry with the “Stupid Party” and the do-nothing Congress.  This is not a good time to be invested long in stocks unless you trade in and out.
            Advisor Mark Yusko today on “Squawk Box” suggested that the Fed should raise rates a full 3%.  That would of course raise short term rates above the long term rates causing an inversion that would result in a recession.  He was actually serious and said recessions were good for clearing out America’s economic problems.
            September 15  The market is drifting sideways as recession reality sinks in, keeping money on the sidelines and reducing the leverage that previously had inflated the stock market bubble.   The market indices now seem ready to rapidly deflate.
            Trump has been tough on the “Stupid Party” as well as the incompetent Republican career politicians who now control both Houses of Congress and still can’t get a majority vote on anything important. 
            Obama keeps running a deficit of about a $trillion per year.  Both consumer confidence and sentiment are declining again.
            The WSJ reported that a government-corporate gangster relationship now exists in India and the WSJ had to fight an injunction to be able to report how an analyst was kidnapped, threatened, and jailed by the gangster run “Indiabulls Group”.   The analyst was apparently kidnapped and threatened by the company lawyer himself.
            The WSJ reported that the drop in international trade growth has never been this bad since the stock market collapsed in 2008-2009, at the same stock market level we hit this year.
            Economist William Mauldin made some accurate predictions in the past.
            Most women are becoming fed up with the blatant dishonesty of Hilary Clinton and realize she is not worthy of any further support for any government job whatsoever.  She hasn’t the smarts to know it is wrong and dangerous to abandon Americans in foreign countries and to keep national intelligence information on her unprotected home computer. This trend in public opinion is quite evident now and most women now seem to hope Hilary drops out so that a past self proclaimed Cherokee woman from Massachusetts can run for V-P.  Hilary’s and Obama’s incompetence together turned an Islamic Spring of hope into a worldwide Islamic Jihad.  Tens of thousands of unmarried young adult Islamic males with radical indoctrination have infiltrated the refugees seeking refuge in Europe and America.  Hilary and Obama have unleashed the worst chaos on the world since WWII.
            September 14  This is a very critical week on Wall Street.  The market is set to decline but no one wants to see that happen.  Yet it clear that knowledgeable investors now are preparing for a bear market by selling and getting into cash.  We saw the first wave at the end of August when the most astute sold and some others altered their portfolios.  Once the cascade selling begins we expect very small rallies going forward.
            When Alibaba had its IPO we warned they were overvalued more than double what was reasonable.  Now with the bear market the IPO may prove to have been four times the real market value.  It is a Communist-Capitalist mutation.
            Mohamed El-Erian today said he expects the FED to begin raising rates at an incremental rate and expects three months of a stock market sell-off.  If in the unlikely event that the FED promised a one-time small rate increase then he said there would be a short rally.
            If you look at Oct 30, 2008 you will see roughly the point where we think we are in this current bear market.  It is important to protect cash or go contrarian to have money to invest early in 2016 when we expect bargain prices.
            The stock market is run by high speed hacks not hackers.  The price level was leveraged by the Fed’s low current interest rates.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)