October 11 The current Shiller PE Ratio is approximately 60% higher than it has been on average. It is as overpriced as the stock market has been on the average panic and stock market collapse that Shiller has tracked. It is almost as bad as 1929 but not nearly as bad as the Dot Com bubble height during Clinton’s presidency that began its collapse in March of the beginning of President Clinton’s last year in office. Of course the leftists blame Bush for that bubble collapse and the 9-11 attack on the Twin Towers, both of with which President Bush had nothing to do with. The important take away point is that the bankrupt situation Obama has created in just two terms is now as bad as the bankrupt situation Obama and other leftist created with the Liar-Loan default bubble that burst in 2008 but not quite as bad as President Clinton’s Dotcom bubble. Of course the liars blame President Bush for everything.

http://www.multpl.com/shiller-pe/

As we slid into the Obama-Dodd-Frank “Liar Loan Derivatives” collapse in 2008 American stocks were priced similar to today.  The trigger mechanism for that collapse was created by well meaning leftists who thought it was the Federal government’s responsibility not just to have a roof over every American’s head but to provide every American with their own home.  The leftists had determined that it was possible because stingy working people were discriminating against wonderful creative people who produced so much of the music, art and city graffiti that Americans enjoy for free.  Liar Loans were the answer to providing a house to every American family.  Realtors and Banks were sued for racially discriminating against poor people because it was found that certain minorities were not getting the homes that they think is every America’s right.  There was circumstantial proof because some who were eligible who refused to show proof were denied and the Banks and Realtors were accused of not doing due diligence and discovering the fact that they had not disclosed their eligibility.  It suddenly became a racist crime to not discover applicant eligibility whereas in the past it had been the responsibility of the applicant to prove they were financially able.  Fannie and Freddie were created as government agencies to provide the cash “no questions asked” to absolve banks and realtors of financial consequences of being less “discriminatory.”  So banks and realtors began taking the word of applicants who could potentially sue them as the leftists allowed.  Then a few banks bundled and turned the risky mortgages into derivatives which vastly increase the bank leverage and for a while created profits that offset the losses when the mortgages of many went into default.  Ultimately that was the trigger mechanism for colapse in 2008.

The trigger mechanism in 2000 was the DOTCOM bubble where stock price valuations went from income based, to future projected return on investment, to finally being based on fantasized revenue growth.  The situation is much worse today.  Today they are talking about free subscription growth in anticipation that at some time in the distant future they will turn Twitter, Alibaba, and other services into real paying revenue streams just like Google, Facebook and others have done with getting paying advertisers who clutter up the services.  That was the DOTCOM bubble hope in 2000 too. 

 

History has repeated itself and big investors are hoping Apple’s stock price will double again that way.  And so according to the current Shiller PE Ratio, the current stock market is inflated approximately 60% higher than the average level… like at the beginning of past bear markets.  Since the stock market valuation based on subscriptions and revenue hope is not reality based, today’s stock valuations are again 60% or more overpriced and we can expect a stock market collapse of that magnitude. 

In the mean time our market cash flow index had a head and shoulders event in September and then a neckline breakdown and finally a trend line breakdown this past week.  The NYSE had a recent trend line breakdown.

http://finance.yahoo.com/q/bc?s=%5ENYA&t=2y&l=on&z=l&q=l&c=

 

The S&P and other major indices seem close behind.

http://finance.yahoo.com/q/bc?t=2y&s=%5ENYA&l=on&z=l&q=l&c=&ql=1&c=%5EGSPC&c=%5EIXIC

  

Note; this is a blog, not a financial service nor a crystal ball.  The primary interest of this Blog is the defense of the American free enterprise stem that by its very name says our unique American system requires human freedom.  A second goal is to expose the leftists who would bring back feudalism and genocide as we see in Islamic (ISIS), Nationalist Socialist (NAZI), and Internationalist Socialist (Communist) systems.  For instance Putin is no different from the Russian Czars who imprisoned opponents and who lived in palaces and made their enemies disappear. 

Leftist like Obama also live like Czars and take dozens of vacations while the world is torn apart and the poor get poorer.  They don’t have to own anything because they get everything at the taxpayer’s expense and act like they have nothing of their own.  Recently Mrs. Clinton indicated she and President Clinton left office with very little.  That is every leftists dream because incompetence does not matter; only political power is needed to live like a Czar.  And Obama loves that term Czar and even made himself the king of his Czars by appointing 50 Czars to serve him.  And the IRS and other agencies have been used illegally and brazenly to harass Americans and political opponents.

 

Oct 9 Our Market Cash Flow Index gave a sell signal Thursday October 9, 2014. Based on how far the market has already fallen we estimate this leg could fall anywhere from 5% to 20% more before any significant rally. If it falls a full 20% it actually has a better chance of stabilizing as it did in 2011. However, in any event the pattern is more like the beginning of the full blown bear market just after Obama was elected in which case it could be down another 50% six months from now.

American Economy

Oct 7

Consumer Credit Aug $13.5B down 50% from $26.0B in one month due to Obama administration incompetence in doing simple arithmetic.  That’s right; Obama wants you to believe people paid off half their credit card debt last month.  What a joke this administration has become.

Oct 8

MBA Mortgage Index 10/04  3.8% but still subpar though up from -0.2%--

Job openings "Jolts" continue to increase not because the economy is improving but because under Obama leftist education American students are increasingly ignorant and cannot qualify for the job openings.  American leftists seek everywhere to remove the history of the American Founding Fathers from school curriculums just because they were old white men.  That shows just how racist, gender biased, and age biased the stupid Obama leftists actually are.

Oct 9

Initial Claims 10/04 287K flat 287K --

Wholesale Inventories Aug +0.7% sharply high from 0.1%-- that means sales are down.  MSNBC/Pravda's Jim Cramer tonight said the stock market was tanking.

 

The Markets

Oct 9  We began shorting the market the second week of September when our market cash flow index gave a head and shoulder’s sell signal.   Today it broke through its trend line and gave an outright sell signal.  By some time in November we expect a year end rally to start and some optimism to follow.  We expect to cover all shorts within two weeks just to be safe.  But we expect to go short again by January if the other market price indices show weakness and cash continues to flow out of the stock markets.

ETF’s will be an economic junk bombshell of the coming Obama world economic  depression.  Almost every ETF was started after Obama took office.  To see what happens to a bullish ETF that went through a bear market just plot URE to 2007 back 1938 days to when it was started.  That is what will happen in a bear market to all the investors in new bullish ETF's after Obama was elected.

http://stockcharts.com/freecharts/perf.php?ure

Oct 8 The Obama administration has been telling Americans for 6 years that the American economy is chugging along at about 3.5% growth rate and carrying along the entire world. Later it always gets revised down to 2% or less and the story gets repearted. A six year recovery with nothing to show for it. Obama says all we have to do is raise the minimum wage and we would all become rich with rising incomes. Obama is consistent and is driving American international corporations out of America while Governor Cuomo is building technology centers with Obama incentives that bring in Chinese and other foreign nationals to learn American nanotechnology and 3D printing technology in upstate NY. In the mean time the IMF says the US economy will actually only sputter along at a dismal 2.2% not Obama’s 3.5+ rate. But the IMF says global growth (outside America) will be at 3.8% though they were hoping for 4%. Meanwhile Germany bites the bullet to balance their economy and remain a world powerhouse while the leftists continue to think the French policy is the cat’s meow although France wallows in Obama style economic misery.

https://screen.yahoo.com/wochit/anti-obamacare-filmmaker-latest-slapped-155732839.html

 

How the Bear Market arrives:   As soon as a bear market begins, the padding of the corporate accounts is ended.  No longer are the payments of expenses pushed off and the sales realizations accelerated.  There is nothing illegal about changing accounting principles such as LIFO (last in first out) and FIFO and other accounting practices  and get very conservative in a bear market when no one is buying.  That is called taking "the bath."  When times are good that is when accountants recommend taking more risk, accepting more credit or not foreclosing.  When you foreclose you must take the loss.  That is why banks let people stay in their foreclosed homes if they keep up the property.   That is why most of the value of Freddie and Fannie is not real and using their worthless paper to back Quantitative Easing is a clever way to keep the interest rate on American debt low.  Once QE ends we will begin to see interest on American debt begin to rise.   
During a major stock market decline the opposite type of corporate strategy is taken and the losing production lines are closed and inventory is held at cost and written off and with those reductions people lose jobs.  In bear markets the hidden debt is exposed and taken as losses.  That is why a bear market is severe.  Only inexperienced managers fail to take the bath while every smart manager takes his or hers.  The bath takes about a year to be forgotten and everyone starts with a clean slate again afterward because generally the economic turmoil and decline spares very few corporations.  Therefore the economic news tends to be cloudy until the bathwater is drained.  It makes sense to get it over quickly.

 

Meanwhile most of the sectors of the stock market have already failed new highs or have broken down.  With moronic leftist policies, the free world has a form of economic Ebola and is bleeding internally.

http://stockcharts.com/freecharts/perf.php?MIDU,TNA,DRN,ERX

 

 

Oct 6   We have run out of the experimental Ebola drug which is made using a specific tobacco plant, an indigenous plant of America that was made popular by the American Indian.   The drug has not yet been proven to be effective but almost 30-40% of Ebola victims survive so it will not end the world.  Influenza emerged at the end of WWI and killed more people than World War I in just one year.  Obama thinks he can help Africa by having no three week quarantine for travelers from Africa because he thinks putting Americans at risk will motivate Americans to cure the disease that thrives on poverty.   What he risks is infecting the poor of America, particularly African Americans who have friends and relatives in Africa.  

 

The dollar has risen faster in strength than ever before.  This will cause a sudden decline in orders of American products of high technology and also construction industry products. 

 

World Economy

Oct 7   German factory orders fell 5.7% in August similar to what American aerospace has already seen.  Unlike the Obama administration the Europeans don’t try to conceal information like that because ignorance of trends and problems just makes matters worse.  Obama had his Harvard records sealed from view and just look what a disaster Obama has been for America and the world,   He had the IRS harass and sabotage Republican Americans, especially Governors.  And he had the American Intelligence agencies spy on and apparently sabotaged European French and German leaders.  There are hardly any Republicans that could run for president who have not already been smeared by Obama.  But Obama did his very best to improve Putin’s image up until Putin killed 298 people by providing his Russian separatist fighters the missiles used for shooting down a commercial Airline flying out of Amsterdam.

 

Oct 6   Greece is getting close to having a balance budget for the first time in many years.  Hong Kong protests declined as negotiations with the Chinese Communists hint the Communists may allow the democracy to continue.   

 

However Europe is tilting in anticipation of a world wide slowdown.  And that is making the dollar stronger and will help Europe compete with America shifting part of their slowdown on to American shoulders.

 

Alibaba has been around a long time and will leverage the penetration of Chinese products into the housing, electronics, and the new high technologies.  China is increasingly sending in low paid Chinese workers to install Chinese products.  This also gives them an edge since American companies have greater restrictions on importing foreign workers.  It is a loop hole which could also be a large hole in American defense against illegal immigration.  Alibaba will cause American unemployment attacking manufacturing, capital formation, and American workers directly. 

Upstate New York is seeing a large influx of Chinese buying American homes as China invests in and copies American nano-technology and 3D printing.   They are moving in wherever America is developing technology.  There is still no evidence of an improving American economy after almost seven years of Obama blaming George W Bush for all the consequences of Obama’s incompetent actions.  Giving China our latest technology will be another horrible economic legacy of Obama’s incompetence.

 

American Economy

Oct 7

JOLTS - Job Openings Aug 4.835M up from 4.673M

Consumer Credit Aug $13.5B down 50% from $26.0B

Oct 8

MBA Mortgage Index 10/04 3.8% still subpar from -0.2%  --

 

The Markets

Oct 8  This is not a classic bear market coming up.  This is an Obama nightmare.  We expect a meltdown of bull market ETF 3X derivatives in about a year.  How do people think they went up 3X the underlying market change?  Do they really believe there were as many people losing 3X on the bearish side to fund the bulls? 

 

Oct 7  The stock market breakdown is continuing.  Our proprietary Market Cash Flow index is already at its bear market resistance level.  So if and when the NYSE reaches its bear market resistance level we will already have our proprietary MCF sell signal. 
But we also expect the market will have a “dead cat bounce” and recommend that shorts should be covered by early November before any Xmas rally. There should be another opportunity to get out or sell short before Christmas. 

Oct 6  The recent small rise in the current market does not resemble a rally.   We believe it is all part of a normal topping stock market.  We expect the market to experience at least double the recent decline plus higher volume on the decline before we expect to see a real November-December rally.  We expect the bear market will only be recognized after a November-December rally ends.  Bear stock markets are seldom recognized until the risk and uncertainty affects the Cities, States and the banking industry.

 

World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas

 

Oct 3 The dollar is strong, but it is strong because other world economies are tanking. American construction, manufacturing and consumer confidence have all slumped too, but the diseases of Ebola, ISIS, and Putin socialist totalitarianism are still major world problems that make America look stable in comparison.

Oct 2    Basically there is nothing backing the money pumped in with Quantitative Easing.  There is no physical backing of the QE debt just the Obama administration FED’s good intensions.  That is why a depression could now completely wipe out Obama’s fragile system that based on promises of entitlements.   All the money in uninsured brokerage accounts could evaporate over night and it could take weeks to restart the economies of the world. 

We nave gone from 10% unemployment to 6.1% unemployment, plus a 4% increase in part time employment and a 6% increase in the permanently unemployed. We still have at least a 0.5% minimum interest rate so America has not yet totally lost control of monetary policy.  But the EU has gone to a 0% FED rate.

Remember this entire crisis started with Obama-Frank liar loan entitlements meant to give home ownership to people who previously could not afford the mortgage payments.  The liar-loans were then monetized fraudulently as “investment grade tranches” called derivatives that were sold worldwide.  The collapse of the liar loans crippled America’s housing industry and economy.  But worse yet the socialists have used that disaster to further Obama’s brand of socialism and make matter worse today with people still living in the defaulted homes.  “Never waste a good disaster,” has been the motto of the Obama socialists.  Communists go further.  They thrive on financial disasters to create deadly revolutions where the middle class is generally wiped out and nothing is left but a proletariat mob.

 

Oct 1   Both Europe and Japan have now given up control of their monetary policy by setting their Fed rates to zero.  They are now pushing on a string as they did during the great depression.  They a siphoning American reserves because we allow their international banks to park their money with the fed each night at 0.25% interest rate.  US banks do the same and can borrow from the Fed at 0.1% interest to have a guaranteed profit.  But they are our banks with our money.   Nothing quite like this situation has existed since the Great Depression when it was demonstrated that such a policy could not work because it was "pushing on a string."  Throwing money at the economy only makes rich people richer and inflates the stock market.  Today on Squawk Box a very intelligent business leader and a university professor explained the problem succinctly.  But when asked how long this bubble would last the executive made a Freudian slip.  He said another two months and cleared his throat and said I mean two years.  You see this is a depression cycle not another of the inflation cycles we have seen since 1945.  Inflation ends when inflation of goods and services is stopped via higher interest rates.  But monetary easing ends when the bubble in investment prices bursts.  The asset bubble is self evident in the stock market and the absurd Alibaba IPO we just saw.  Within two months was his slip of the tongue!   We agree with the intelligent guest on Squawk Box that the bubble will be commonly known to have burst in about two months.

 

Sept 29  The stock market crash of 1929 was the most significant crash in U.S. history. Although the crash itself only lasted four days, it led to a catastrophic sell-off. The Dow Jones Industrial Average lost 90% of its value between its record high close on September 3, 1929, and its subsequent bottom on July 8, 1932. That was the worst bear market in terms of percentage loss in U.S. history. It took 25 years for the Dow to regain its September 3, 1929 high.

Free enterprise survived 230 years in America because free enterprise always bit the bullet in the past during declines and rapidly recovered.  America was always the last to enter major wars.  Now, America has socialists and former Moslems in power and is up to its nose in socialist and Moslem initiated wars.

 

The USA FED continues to maintain the same failed Japanese type Quantitative Easing policy that has stagnated Japan since 1990.    Now the administration that refused to investigate “Fast and Furious” blames Bush for that too!  But if that were the case why did they stone wall and refuse to investigate “Fast and Furious” as Congress requested?  Is the IRS corruption and harassment of Republicans and conservatives also the fault of Bush?

http://www.irfi.org/articles/articles_1801_1850/letter%20from%20barack%20obama%20on%20his%20muslim%20heritagehtml.htm

 

World Economy

Oct 3   Apparently the one African who flew to Texas with Ebola has already potentially infected 100 people and the liberals/socialists blame America and in particular the Texas hospital for that.  They also allow terrorists and anyone else cross our borders and say it is selfish of Americans not to share the harvest of our hard earned work with the rest of the insane murder and disease ridden societies who could give a dam about Americans, Christians, Jews, Hindus or anyone else.  Socialism and what ISIS does is theft, imprisonment and slavery of totalitarianism for those who go along with them and murder for those who dare to resist.   North Korea, Russia, and China are still socialist though China is starting to improve after 4000 years of its totalitarianism.  The next two American elections are very important.

 

Oct 2   Fear of slaughter of moderate Moslems by Islamic terrorists is starting to wake up the Middle East to the danger of the Sharia Law imposed by the fundamentalists who by their decapitations and slaughter identify themselves as criminally insane.  In addition, the freedom of travel of terrorists and Ebola carriers exposes the vulnerability of our free enterprise western world.

 

Sept 26  The world economies are in decline again.  The strong dollar should help the world economy but will hurt America making foreign imports cheaper.  Hardest hit now are the commodities because China was stockpiling them before their slowdown.

 

Japan’s stock market has declined since 1990 when it began Quantitative Easing. http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

American Economy

The USA dollar is again strong because both Europe and Japan have now lost control of their monetary policy with their zero FED rates and China is now reeling under an international investment crisis that mirrors the wasteful building boom in China.  The gambling boom in the USA is already collapsing under intense competition.  The Chinese economy is now a crap shoot.  Both the EU and Japan have slipped into recession and are already “pushing on a string.”  China and other emerging economies are already faltering.  Weaker economies are close to default.  Tyranny has raised its ugly head with Putin’s War on Eastern Europe and ISIS Crusade against moderate and liberal Moslems and other infidels.

http://online.wsj.com/articles/chinas-bahamas-project-hits-hurdles-1412092767

 

Sept 29  

Personal Income Aug 0.3% up slightly from 0.2%

Personal Spending Aug 0.5% up from -0.1%  more scatter

PCE Prices - Core Aug 0.1% flat at 0.1%  due to Quantitative Easing

Pending Home Sales Aug -1.0% sharply lower from 3.3% ---

Sept 30

Case-Shiller 20-city housing Index Jul 6.7% down from 8.1% --

Chicago PMI Sep manufacturing 60.5 down from 64.3--

Consumer Confidence Sep 86.0 down sharply from 93.4---

Oct  1

MBA Mortgage Index 09/27 -0.2% continuing its fall -4.1%---

ADP Employment Change Sep 213K up from 204K but low.--  It needs to stay above 300.

ISM manufacturing Index Sep 56.6 down from 59.0--

Construction Spending Aug -0.8% sharply down from 1.8%---

Oct 2

Challenger Job Cuts Sep -24.4% got worse from -20.7% -

Initial Claims 09/27 287K stayed as bad as the rate of job creation 293K -

Continuing Claims 09/20 2398K are far underestimated 2439K ---

Factory Orders Aug -10.1% collapsed from 10.5% ---

 

The Markets

Oct 3   It is still too early to declare a bear market.  The markets continue to slide, but even without a normal Christmas rally most declines are interrupted with an early rally before the final two or three plunges.  We hope that kind of opportunity occurs again before the end of the year. 

 

Oct 2  The stock market topping is now self evident.  But the fortunes of many market players will hinge on a very strong bounce back from the drop this month.  We anticipate that this down segment of stock market decline will last about a month before the next rally.   It could be interrupted by a brief rally.  Volume has to peak before  a selling capitulation is over.

 

Oct 1  Our market cash flow index seems to have topped.   But usually after a sell signal there is one more stock market "leap of death" as the major funds throw money in.  The market could go down another 2-8% before we get a market cash flow sell signal.  It depends on volume action in combination with the price action.  Once the eventual market death leap fails, it could be several months before it finally bottoms.

 

Sept 29   The market continues  to weaken.  The next resistance level is  about 10% off the previous market top.  If that resistance level is broken the next resistance level is down 25% from the high.  That often was a rally point in previous declines.  The earlier prediction of a bear market following the peaking of September is starting to look accurate especially on a market cash flow basis that accounts for accumulated daily trading volume times market price change.

World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas

Sept 25 Warning: Look at the performance of URE back to its inception in 2007. You will see that despite the greatest rally ever, the people who held URE from 2007 until today have lost approximately 73% of their equity. That is the calamity that will likely befall all bull market ETF’s in a bear market. In a bear market, the bear market ETF’s are the ones that go up. Since almost all ETF’s were started at the market bottom, most investors are complacent and don’t even have a clue as to the danger they face with long ETFs after making enormous gains in the bull market. Holding long ETF’s into a bear market will be one of the biggest new disasters to face the economy and may even cause panic selling of all stocks. At the low in 2009 the original URE investors who held on to URE had lost more than 95% of their equity if they sold then. Today they would still be down about 73% even after the tremendous rally. The long ETF’s are likely to be a part of the cause of the next financial crisis.

http://stockcharts.com/freecharts/perf.php?ure

 

Fox Business reported that the number of mortgage applications for the week ended Friday fell 4.1% from the week earlier, according to the Mortgage Bankers Association weekly survey.  The unadjusted purchase index rose 2% from the previous week but was down 16% from the year-earlier period, the MBA said.  But somehow the stock market media claimed record purchases.  They did that by comparing with 2008 when the economy was in collapse.  Not only does the Federal Government slant the news, but so do MSNBC and others that have to keep their advertisers happy.

 

Sept 24   MSNBC Squawk Box concluded today that Obama has really messed up America.  Each 1% increase in the FED interest rate will cost Americans an additional $150,000,000,000 in budget deficit per year.  It is unlikely that the FED will ever be able to raise the rates as high as 4% for twenty years without causing an economic depression.   Obama’s Quantitative Easing policy has increased the wealth of only the top 10% of Americans and has unemployed 26% of the poorer Americans.  And unemployment will get worse if we raise rates.  That is the bind we are in.  QE took Japan’s fastest growing economy in 1990 and trapped them in stagflation for 24 years thus far.  In American dollars Japan’s stock market has gone down for 24 years.  Today, Japan’s market is only approaching its level in 2007 and is 60% lower than the Japanese market was in 1990.  See the chart below.

https://in.finance.yahoo.com/q/bc?s=%5EN225&t=my&l=on&z=l&q=l&c=

 

 

Sept 23   Even MSNBC Pravda’s Jim Cramer had “Sell Signal” plastered all over his studio last night.   The classic “head and shoulders” formations have formed in several indices.   Mass inversions of corporations cause Obama to cripple American tax revenue as corporations and wealthy citizens flee harassment by the Obama-Holder-IRS regime in America.  Home sales dropped 5.3% from last year showing the building recovery is over.

 

Washington, DC is now littered with surveillance devices designed to spy on Americans.  More than 18 such devices mimicking legitimate cell towers have been found.

http://rt.com/usa/189116-washington-dc-spying-phone/

 

Last January the Obama Administration said they met their socialized medicine goal of 10 million people.  Eight months later they say they have 7 million people who have joined.  Everyone else apparently will have to pay the penalty for missing the deadlines.  In the mean time the number of people claiming the disability entitlements and who pay nothing has doubled in the past year.  

The "Reader's Digest Version" of OBAMACARE.

Here are the 10,535 pages of ObamaCare condensed to 4 sentences...

1. In order to insure the uninsured, we first have to uninsure the insured.

2. Next, we require the newly uninsured to be re-insured.

3. To re-insure the newly uninsured, they are required to pay extra charges to be re-insured.

4. The extra charges are required so that the original insured, who became uninsured, and

then became re-insured, can pay enough extra so that the original uninsured can be insured, which is their free entitlement as US citizens, except for you fools who like to work for a living.

This redistribution of wealth" ... or, by its more common name, Socialism.   

REMEMBER this on November 4th!!

 

World Economy

Sept 26  The fiction of economic strength anywhere in the world is evaporating.  New internet companies are fart burning through their money with neither profits nor rising revenue.  Today’s exorbitant prices are justified by growth of subscribers not profits and get subscribers and volume is how the FED cash is being burned. There is no rational argument for today’s stock prices other than too much cash chasing too few companies.

Sept 25   ISIS has stopped advertising their brutality as the world’s leading nations begin bombing them.  The new problem is that it gives ISIS the opportunity to send terrorists home with a cover story that they were disillusioned with ISIS.  The world knows they are all criminals and even the quitters are psychopaths that must be rehabilitated in prisons.

 

Sept 24   China is on the edge of a real estate melt down and the communists are beginning to ruin Hong Kong.

 

Argentina is now the poster child for irresponsible fiscal policy and defaults.  The Obama socialists all loved Hugo Chavez of Venezuela.

“When Hugo Chávez was running in his first successful presidential campaign, back in 1998, he was asked point blank in several television interviews whether or not he was a communist. His reply was identical to the one given by Fidel Castro to Princeton University students during his visit to the United States in 1959: “I am a humanist.” Years later, on consolidating total power in his own hands, Chávez again emulated Fidel and confessed to being “a convinced follower of Marxist-Leninist ideology.” Today, Obama says he is a humanist too, not a communist.

http://panampost.com/enrique-standish/2013/11/29/venezuela-communist-finally/

 

Sept 23   The dollar weakened on air strikes on ISIS in Syria and European stocks dropped overnight.

 

The No. 1 song is in the British Empire is in reaction to a terrorist religion. 

 http://www.youtube.com/watch_popup?v=wq_lhlIn1e0

 

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

 

Obama’s incompetence gave the FED the opportunity to cripple free enterprise the same way socialist Japan did in 1990.  Japan has never recovered.  Japan’s stock market appears to have topped again and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only about 60% of what it was fourteen years ago. At its 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=

 

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.

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

 

American Economy

Bret Stephens wsj "what Obama knows"… not very much indeed. 

“I've been thinking about this as it becomes clear that, even at an elementary level, Mr. Obama often doesn't know what he's talking about. It isn't so much his analysis of global events that's wrong, though it is. The deeper problem is the foundation of knowledge on which that analysis is built.”

“Here, now, is reality: In Japan, the economy is contracting. China's real-estate market is a bubble waiting to burst. Indonesia's democracy may be solidifying, but so are Islamism and the persecution of religious minorities. Democracy has been overthrown in Thailand. The march toward freedom in Burma—supposedly one of Mr. Obama's (and Hillary Clinton’s) signature diplomatic victories—has stalled. India may do better than before under its new prime minister, Narendra Modi, but gone are the days when serious people think of India as a future superpower. The government of Pakistan is, as ever, on the verge of collapse.”

“As for Latin America, Argentina just defaulted for the second time in 13 years. Brazil is in recession. Venezuela is a brutal dictatorship. Ecuador is well on its way to becoming one.”

http://online.wsj.com/articles/bret-stephens-what-obama-knows-1411425811

 

Sept 23  

Existing Home Sales Aug 5.05M down from 5.15M –

FHFA Housing Price Index Jul 0.1% sharply lower from 0.4% --

Sept 24  

Mortgage Index (*transactions) 09/20 -4.1% sharply lower 7.9%---

New Home Sales Aug 504K 420K 435K 427K 412K

Initial Claims 09/20 293K up from 280K --

Continuing Claims 09/13 2439K up from  2429K --

Sep 25

Durable Orders Aug -18.2%  sharply down from 22.6%--

Sep 26

GDP - Third Estimate Q2 4.6%  not even credible
GDP Deflator - Third Estimate Q2 2.1% flat at 2.1% -- not credible- energy is down and housing prices are flat.  Deflation has started in some countries.
Michigan Sentiment - Final Sep 84.6 flat 84.6

 

The Markets

Sept 26  Buying was sharply lower Thursday but sellers appeared numerous and previously opened buy orders at lower prices were executed for the sellers to take advantage of dropping the vast majority of stocks.  There was no panic selling but active  buying evaporated and standing buy orders at lower prices were triggered. 

Sept 25   The volume of shares exchanged in yesterday’s rally showed no enthusiasm.  At these lofty stock valuations companies are being caught gradually delaying the recognition of expenses and speeding up the recognition of income.  That artificially inflates profits.  Once the market plummets, the corporations return to conservative accounting practices and recognize their losses while their stock prices are low.  The term used is,”They take their bath.”  They clean up their books.  At the highs the MSNBC pundits blindly pump out the distorted corporate and government statistics.  Then they are quiet about the bad news that is quickly dumped on shareholders.  This makes the market decline very sharp and deep compared to the bull marked where the data manipulation occurs slowly.  One often used trick is a new artificially priced derivative.  Another is the trick of taking debt off the books like corporations did until 2000 and even Greece and Cyprus did until 2008.  Once the stock market starts taking the bath, it spreads fast. 

 

As we warned before, look at URE back to the start of the real estate ETF and you will have an idea what a DISASTER ETFs have in store.  URE is up several hundred percent since 2009 but is still 70% lower than it was when it first came out in 2007.  This will be the newest disaster that small investors will face.   Long ETFs will be a major disaster in the next bear marked.

http://stockcharts.com/freecharts/perf.php?ure

 

Sept 24   Market volume still has not picked up but stock prices are weakening at a faster rate.  Alibaba is incredibly overvalued in today’s market. 

Sept 23   Is the meltdown beginning?  The Market Cash Flow index had a pronounced head and shoulder sell signal with the activity the last three weeks.  S&P 500 fell by largest margin in seven weeks.   But a strong cash flow exit is high volume dependent and volume has remained moderate.

http://www.foxbusiness.com/markets/2014/09/22/markets-slip-as-china-weighs-on-stocks/

 

The Stock market is now cash driven not value driven.  The cash in-flow is out of control.  When one asset becomes inflated it is used as the basis for loans or in many cases the inflated buy-out offers for other assets driving up prices and debt.  While bank leverage is limited often to less than 20:1 the leverage of corporations becomes unlimited because the asset prices themselves have no regulation limits.  As soon as cash flow begins to contract the house of cards will collapse and the FED knows that and is so terrified it has been trapped like Japan was back in 1990.  Look at the Japanese stock market since 1990 to see what America now has in store. 

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The S&P index shows the current highs are more exaggerated than seen in the other indexes.

http://finance.yahoo.com/echarts?s=%5Egspc+interactive

 

 Look at the volatility index and you see complacency and that the market could fall much faster when volume gets back to normal. This market has little volume or volatility.  So when volume picks up suddenly, past history says the market usually plunges.  That is not a good moment in time for holding equities.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=3m&l=on&z=l&q=l&c=

 

 World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas

Sept 19 China will inevitably be discovered as the benificiary of all these cyber attacks seeking purchaser and supplier confidential information. Alibaba is a great copycat company. They just took about $20Billion of American wealth in their IPO. They will destroy Home Depot and Target and Amazon very early because they are building a delivery system that will conquer or acquire UPS and make a delivery system to bring their products to our door at about half our current costs. Home Depot released details of the massive cyber breach incident on Thursday. The roughly 56 million payment cards confirmed to have been compromised is bigger than the infamous 2013 attack on Target that breach impacted 40 million cards.

Sept 18   The new September high in the DOW has not yet been confirmed on a market cash flow basis.   Volume has been higher on declines than on recent price rises.  The broader marker indicators have not even hit new highs.  The DOW is always the last refuge of investors before a bear market sets in.  The scenario for the coming end of the bull market is still in play.  

 

The Death of Money discusses the economic problems America will face if we continue in the direction Obama and other socialists prefer.  Ultimately the socialists seek to abolish competition.  Socialism is more of a religion that an economic system.  That is why extremely religious people and especially terrorists tend to embrace socialism.

http://moneymorningtv.com/rickards/ocho.php?pub_id=454975&s1=gdnmmp3

 

Sept 17  there are two international signs that the equities markets are at the top.  First Sony, once the world leader in home electronics has had to cut its dividend for the first time since 1958 and market makers are in hype mode saying it is time to buy the copycat do-it-all patent violator… Alibaba.

 

No one forecast the collapse of the Dot Com market in 2000 that was built on Alibaba type hype and off the books debts, not income let alone profits. 

No one predicted the Dodd-Frank-Obama liar loan mortgage derivatives collapse in 2008 from which we still have not recovered.  We are one of the few who predicted this economic liar-loan recession would have no end as long as Quantitative Easing was used to depress economic growth like a narcotic drug that removes the pain but leaves the user addicted and broke.  We pointed out from the beginning that Japan started QE in 1990 and immediately began their continuous slide into economic oblivion.

 

Sept 16   As we predicted weeks ago what hedge funds would do, the WSJ now reports that hedge funds are beginning to given up using hedging.  We reported that in an irrationally exuberant market like what we have today there is no benefit in distinguishing good growing companies from below average companies and shorting the below average while buying the growing companies.  That is because it eventually good stocks are so overpriced that the below average companies become relative bargains and play catch-up to maintain the same relative price relationship they had when prices were low.  At that point the index funds stand out and the stocks within the indexes are bought making it virtually impossible for anyone to beat the indices.  Right now the DOW and the Nasdaq are about 10% more overpriced than the overall market.  That happens in every peak hyperactive cash flush market.  That is why the indices stocks plunge 60% in bear markets before the cycle repeats itself. 

 

The bull market consists of sub cycles that are three to four months long and interim cycles that are a year or more long.  It is usually at the beginning of the interim cycles that the price catches up of the poorer stocks take place.  That is why near the peak the small cap (risky) stocks make their final surge and then they lead the overall market into the next bear market.  The DOW was, and the Nasdaq now tends to be the last index to give a sell signal for the bear market.  

 

(CNSNews.com) - "This is what happens at the end of wars," President Barack Obama said Tuesday when he was asked about swapping American Army deserter. Bowe Bergdahl for five dangerousTaliban terrorists.  "That was true for George Washington, that was true for Abraham Lincoln, that was true for FDR. That's been true of every combat situation, that at some point, you make sure that you try to get your folks back. And that's the right thing to do."

But what is so stupid about what the most powerful man in the World and 2 term President of the United States said is it shows he lacks even a first grade level of knowledge of American History.  There was no president of the USA until several years after the American Revolution so and an American Constitution was first written.   Abraham Lincoln was assassinated in mid April of 1865. The Civil War ended the following month. He was still dead at that time so he made no deals to exchange prisoners after the war. All prisoners were simply freed. Finally FDR died of a stroke before the end of WWII. You'll recall that Harry S. Truman ended World War II. We made no deals for American prisoners we went in and released them.  The greatest ignorance of this clueless president is demonstrated by the way he managed to surround himself with a staff that is just as clueless as he is and allows him to make such ignorant statements. 

http://cnsnews.com/news/article/susan-jones/obama-compares-his-actions-washington-lincoln-fdr

 

World Economy

Sept 19   India recovers some of the recent market loss as imports decline improving the balance of payments.

 

Sept 18   The International Swaps & Derivatives Association said it postponed the overhaul to the $18 trillion credit derivatives market in more than a decade for fear investors do not know what is coming.  New rules governing credit-default swaps will take effect Oct. 6 rather than Sept. 22. The changes seek to fix flaws in sovereign and bank insurance that prevented some contracts from paying out as was intended since the Liar-Loan financial crisis.   As part of the overhaul, the list of events triggering swaps is being expanded to include bail-ins, where investors will be forced by regulators or governments to contribute to bank rescues. The new definitions also insure against debt write downs, bond exchanges or conversions of debt into equity which monetize the loss so that it becomes a credit or expansion in the reserves.  The entire Quantitative Easing program monetized the Liar-Loan defaults to enable the worthless mortgages to be used to back the expanded American money supply so that America could buy up American debt an compete with international investors and thus artificially cap the interest on American foreign debt.  When this “QE smoke and mirrors” process ends, interest rates on American debt will rise and force up all American interest rates.   The delay will “enable market participants and infrastructure providers to make the necessary operational and infrastructure changes and to allow a smooth adoption of the new definitions with minimal impact on markets,” ISDA said in the statement.

 

Sept 17  China, the most authoritarian thief and censor of personal and public information in the world and the most inclined to steal other nation’s personal and national economic information is launching Alibaba, possibly the most viable snooping platform China has invented.  Yet free-world investment advisors are pumping it up and providing the capital for the communists to do it.  We expect it will end up robbing naïve American investors blind and perhaps signal the next economic crisis. 

Alibaba is a copy cat scam.  It is like the Chinese communist Intelligence and Espionage agency running the free world’s economic system called free enterprise.  Its first business was alibaba.com in 1999 a website to help communist exporters in China (and other countries) connect with product importers in over 190 free-enterprise countries around the world.  The system allows a business in America to find a manufacturer in China and have a range of goods produced and shipped.  It also owns taobao.com, China's largest shopping website, and tmall.com, which offers to export to Americans a wide selection of cheap goods currently bought by China's emerging middle class.  It also runs the online payment system alipay.com, which copies PayPal.  Almost all its technology is created from stolen knockoffs of American technology.  For instance it has China's version of Twitter, and online video similar to YouTube.  It claims it offers online marketing, cloud computing and a logistics operations. It recently bought a controlling stake in a second rate film business and 50% of China's new unknown football club.  Finally, it has plans to enter the banking industry and run the whole world’s system of capitalism.  Ha Ha!  If you believe this hype, go buy Alibaba.

 

Sept 16 

The conflict in Ukraine will take years to resolve, rattling Russia’s investment climate and threatening to push its economy into recession at the current level of sanctions, former Finance Minister Alexei Kudrin said.

“It’s no quick task to resolve the situation in the southeast of Ukraine,” Kudrin said today at a conference organized by the American Chamber of Commerce in Moscow. Finding a solution will require two to three years “at a minimum” under what he called an “optimistic scenario.”

 http://www.bloomberg.com/news/2014-09-16/ukraine-crisis-seen-lasting-for-years-in-threat-to-russia.html

 

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

 

Obama’s incompetence gave the FED the opportunity to cripple free enterprise the same way socialist Japan did in 1990.  Japan has never recovered.  Japan’s stock market appears to have topped again and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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.

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

 

American Economy

…has been stagnant since the liberal socialists took office.  Their Quantitative Easing was invented by the Japanese liberal socialists and put into effect in 1990.  Their economy has been stagnating ever since.  You would think liberal socialists could learn from their mistakes but they never do.

Sep 15

Empire Manufacturing Sep 27.5 up from 14.7  This is Blasio nonsense and completely inconsistent with the next four economic indicators.

http://www.jammiewf.com/2014/nyc-dictator-de-blasio-already-craters-to-39-approval/

 

Industrial Production Aug -0.1% down from 0.4%

Capacity Utilization Aug 78.8% down from 79.2%

Sep 16

PPI Aug 0.0% down from 0.1% --

Core PPI Aug 0.1% down from 0.2% 

Net Long-Term TIC Flows Jul -$18.6B flat from -$18.7B

Sep 17

MBA Mortgage Index 09/13 +7.9% rebound from -7.2% 

This does not compute.  It probably should be zero plus zero which gives the same net result.

CPI Aug -0.2% deflationary 0.1% --

Core CPI Aug 0.0% neutral 0.1%

Current Account Balance Q2 -$98.5B improved from -$111.2B++

NAHB Housing Market Index Sep 59 improved from 55 seasonal and contradictory

FOMC Rate Decision Sep 0.25% shows their fear 0.25% -

Sep 18

AM Initial Claims 09/13 280K down slightly 315K +

Continuing Claims 09/06 2429K more stop working 2487K ---

Housing Starts Aug 956K down sharply 1093K--  contradicts the good housing news

AM Building Permits Aug 998K down 1052K--  contradicts the good housing news

Philadelphia Fed Sep - 15 sharply worse from 28.0  -- show unreliable Obama data

Philadelphia Fed Sep 22.5 15 23.5 28.0 --

Sep 19

Leading Indicators Aug 0.2%  sharply down from 1.1%

 

 

The Markets

Sept 19   Volume on the market advances has been low.  Hold on to your seats.  The next few weeks could be interesting.

 

Sept 18   The Market Cash Flow says 30% of the most recent rise is on hot air, not cash flow, and therefore the market needs to go that much higher to confirm if the bull market is in place. If the market has topped out again as suspected, then it just means we have been given more time to withdraw and to begin shorting the market. 

 

Sept 17  Still no sell signal, but still there has been no confirmation of the bull market.  So far this month has definitely been anemic.

 

Sept 16 

Our market cash flow shows 30% greater weakness than the three market price indices.  The second shoulder formations are beginning in the broader indices, the DOW, and small cap stocks.  They have peaked tending to confirm last months technical predictions that the market would peak near the beginning of September.  Compare the bell  weather DOW and the broad NYSE for the last six months and see it you think they have formed a top.  The smaller selective technology indices tend to trail the overall market. 

http://finance.yahoo.com/q/bc?t=6m&s=%5ENYA&l=on&z=l&q=l&c=&ql=1&c=%5EDJI

 

The Stock market is now cash driven not value driven.  The cash in-flow is out of control.  When one asset becomes inflated it is used as the basis for loans or in many cases the inflated buy-out offers for other assets driving up prices and debt.  While bank leverage is limited often to less than 20:1 the leverage of corporations becomes unlimited because the asset prices themselves have no regulation limits.  As soon as cash flow begins to contract the house of cards will collapse and the FED knows that and is so terrified it has been trapped like Japan was back in 1990.  Look at the Japanese stock market since 1990 to see what America now has in store. 

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

 Look at the volatility index and you see complacency and that the market could fall much faster when volume gets back to normal. This market has little volume or volatility.  So when volume picks up suddenly, past history says the market usually plunges.  That is not a good moment in time for holding equities.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=3m&l=on&z=l&q=l&c=

 

 World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas

Sept 12 While Google’s Android is the most popular Smartphone software, the company lags behind Apple Inc. in generating revenue from children’s mobile game applications. Now Google is turning to a white cat and a gang of monsters to catch up. Google, which sells games and other media through its Play online store, is boosting support for recreational dropout game developers in Japan to take more of their apps overseas. This trend away from business and scientific applications spells near term doom for both Goog and Appl.

Laptops should have a comeback once the economy picks up.  But a booming economy will have to wait until we have an American President  and Congress that understands macroeconomics and doesn’t think a dictionary definition of the term is all that is important.  Incompetence, gun running, recreational drugs, recreational technology, spying on and harassing critics, and corruption are the legacies of the current American administration.

 

Conservative President George Bush was far more intelligent and had 21 nations supporting his move on Sadam Hussein’s terrorist government that had invaded Kuwait and was planning to take control of strategic Mid East oil production.  President Bush left boots on the ground in Iraq because it was needed just as it is needed in South Korea which also has insane neighbors.

 

Sept 11  On 911 let us remember that the evil empire for the last 97 years has been Russia with their KGB of which Putin is the leader.  Germany was smart when the Berlin Wall came down and the free Germans said all the Russian occupiers Stalin planted in Germany had to get out.  Now it is time for Latvia, Estonia, Finland, Ukraine. Lithuania, and Belarus to get free of Russia and deport all the Russian informers and Russian military people that Stalin placed in their countries to continually intimidate and control them. 

 

The housing industry stalled and the cold slow season is about to move in.  Home depot will take a double hit with the cyber theft of the account numbers of everyone with a Home Depot Card and their associated bank accounts.

 

Sept 10 Putin is the most dangerous person in the world today, far more dangerous than all of ISIS.   ISIS is an army of the insane that will naturally destroy itself once every extremist realizes that joining ISIS is the last life choice they will every make.   ISIS is death to all its followers because there is no return to a normal life.  Putin has nuclear weapons and thinks like a KGB criminal.  The chaos Putin is creating in Europe, the murder of 298 people in a commercial airliner, is similar to the effects of the first invasion of Bohemia by Hitler.  If Putin takes all of the Ukraine it will be like when Hitler invaded Poland and WWII was declared.  The only way to ultimately end the Russian threat is to deport all Russians that have settled in Europe the same way that Stalin deported all the Germans living east of Germany.  The Ukrainians are of Swedish heritage not German heritage.  Peter the Great defeated Olaf, King of Sweden and annexed the Ukraine.  Calling Ukrainians Nazis is a Putin slander of his victims of aggression.  But Putin likes to call the Ukrainians Nazi because they hated Stalin as much as they hated Hitler.  In fact Stalin and Hitler were about equal when it came to depravity.  Both Stalin and Hitler were as mentally deranged and as evil as the leaders of ISIS. 

 

Sept 8  Inversions are a symptom of the long term decline of the American economy under the entitlement society socialists that control the Senate and the Executive branch of the US government.  The longer those socialist stay in office the more intractable the US decline becomes not just in leadership but in all industrial, energy, scientific, and innovation competencies.  There is a point of no return when the creative and industrious people become so frustrated they go on strike and take a permanent vacation.  We are not there yet but even nationalized rationed socialist medicine is becoming more difficult to reverse.  The American system was designed to allow each state to become a laboratory of democracy and each American state is like a nation state with its own educational system just like the EU or the British Commonwealth that has each nation state with its own heath system as well as its own educational system and system of government.  If we can get a new party in power we can let states like Massachusetts, Tennessee, and California experiment with their own medical system and let the other states have free enterprise medical systems if they chose.   We predict all the best newly graduated doctors would leave the states that have socialized medicine.

 

World Economy

Sept 12  The Asian stocks fell again with the MSCI Asia Pacific Index retreating for a seventh day. The equity gauge posted a 1.7 percent decline this week as investors weighed the poor outlook for the Obama Administrations faltering QE monetary policy and poor economic reports from China.  It is the longest losing streak in 4 1/2 years, as Chinese lending data added to signs the region’s largest economy is weakening.

 

Sept 11

Finland, whose economy contracted in two of the last three quarters, estimates about 5 percent of its trade with Russia will be hit by restrictions caused by Putin’s invasion of Crimea and part of the Ukraine. The nation, which has underscored its support for sanctions, is more exposed than any other euro member to a slump in Russian demand.

Finland’s economic reliance on its eastern neighbor shows the unacceptable cost of any trade after Vladimir Putin’s incursion into Ukraine. Prime Minister Alexander Stubb says Finland’s economy is in the middle of a “lost decade” as Russia collides with the EU and the national sovereignty of the former slave states of the USSR.

 

Sept 10  World commodity prices are sliding and that is a leading indicator that the rate of world growth is slowing.   The QE trap appears to have sprung on the FED.  They are paralyzed with fear that the American economy will sink if USA Quantitative Easing ends.  Europe is now sliding into a recession as the cost of alternative energy rises and the cheapest and cleanest form, nuclear energy is phased out due to the fear Japan let out of the box by building their facilities on a tsunami threatened beach.  The selection of that location was typical of Japanese bureaucratic incompetence.

 

Sept 8  Most of the world economies are now in decline due to entitlement societies that demand more pay and fewer work hours so they have more time to spend wealth than to create wealth.  The EU block is now getting ready to go on Quantitative easing and lock themselves into the Japanese socialist conundrum of stagnation and incompetence.  Before the Japanese nuclear disaster incompetence ruined their confidence in nuclear energy their aviation industry incompetence prevented their growth in conventional technology.  Socialism leads to national incompetence in every economic sector and the growth of a prison mentality.  In Russia they still have a Gulag and the UN is trying to get the Russian who saved the Russian  oil business from collapse out of prison.  Putin is now an absolute dictator with the powers of a Stalin or Hitler.

 

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.

http://finance.yahoo.com/q/bc?s=%5EGDAXI+Basic+Chart&t=my

 

Obama gave the FED the opportunity to cripple free enterprise the same way socialist Japan did in 1990.  Japan has never recovered.  Japan’s stock market appears to have topped again and begun a new decline. It has declined since 1990 when it began Quantitative Easing because their Yen is dropping faster than the dollar.

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

The French market is only 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=

 

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.

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

 

American Economy

…has been stagnant since the liberal socialists took office.  Their Quantitative Easing was invented by the Japanese liberal socialists and put into effect in 1990.  Their economy has been stagnating ever since.  You would think liberal socialists could learn from their mistakes but they never do.

Sep 8

Consumer Credit Jul $26.0B loaded up from $17.3B --- high consumer debt.

Sep 9

JOLTS - Job Openings Jul 4.673M unfilled job openings declined from 4.675M –

Fewer jobs are now available for unemployed Americans.---

Sep 10

MBA Mortgage Index 09/06 -7.2% crashing down from 0.2% ---

Real estate is contracting.

Wholesale Inventories Jul 0.1%  up slightly 0.3% -

Sept 11

Initial Claims 09/06 315K up from 302K

Continuing Claims 08/30 2487K up from 2464K

Treasury Budget Aug -$128.7B high deficit continues -$129B

 

The Markets

Sept 12 

The second shoulder formations are beginning in the broader indices, the DOW, and small cap stocks.  They have peaked tending to confirm last months technical predictions that the market would peak near the beginning of September.  Compare the bell  weather DOW and the broad NYSE for the last six months and see it you think they have formed a top.  The smaller selective technology indices tend to trail the overall market.

http://finance.yahoo.com/q/bc?t=6m&s=%5ENYA&l=on&z=l&q=l&c=&ql=1&c=%5EDJI

 

Sept 11

Most world markets declined overnight.  Obama is preparing to declare war on ISIS and halt their extermination of Moslems.  Iraq could be broken into three pieces.  Western Iraq merges with Syria, Eastern Iraq merges into Iran and Northern Iraq oil fields go to a new Kurdish state aligned with Turkey where they have religious freedom for Christians and other religions.

 

Sept 10 The market has declined to a 65 day moving average (dma) level the first selling resistance level.   The 250 dma level needs to be broken before a selling panic or bear market normally occurs.  That resistance level has held up four times since 2012.  Presently the stock market is deteriorating.  We have predicted that the Achilles heel of this market will be the collapse of the ETF market and the re-emergence of intense short trading.

 

Sept 8  The Stock market is now cash driven not value driven.  The cash flow is cascading out of control.  When one asset becomes inflated it is used as the basis for loans or in many cases the inflated buy-out offers for other assets driving up prices and debt.  While bank leverage is limited often to less than 20:1 the leverage of corporations becomes unlimited because the asset prices themselves have no regulation limits.  As soon as cash flow begins to contract the house of cards will collapse and the FED knows that and is so terrified it has been trapped like Japan was back in 1990.  Look at the Japanese stock market since 1990 to see what America now has in store. 

http://in.finance.yahoo.com/q/bc?s=%5EN225&t=my

 

 Look at the volatility index and you see complacency and that the market could fall much faster when volume gets back to normal. This market has little volume or volatility.  So when volume picks up suddenly, past history says the market usually plunges.  That is not a good moment in time for holding equities.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=3m&l=on&z=l&q=l&c=

 

 World market updates:

https://in.finance.yahoo.com/intlindices?e=europe

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

https://in.finance.yahoo.com/intlindices?e=americas