Friday, January 27, 2006

NOT THE SAME OLD PAPPA BEAR

"Spx earnings rose 11.5% last qtr" (impressive right?) "WHat is corp America DOING with ALL its cash? Investing in Asia and buying back their shares. (quotations from and paraphrased PRIVATEER)

But we like when shares are bought right? That increases demand for the stock right? It amounted to "US $160 B.....and without this? "US EPS would have FALLEN by 7.8%.....a DRASTIC FALL in earnings" *(we also have massive non-confirmations in various indexes)

WHen CASH is re-invested in the company to upgrade software (you see SEBL and many others languishing?) buy new hardware (Dell languishing) and invest in Capitol equipment (CAT OFFSHORE SALES) the US core health is deintegrating before our very eyes.

The COVER up which I believe GOLD is doing its best to "RAT OUT", is REAL INFLATION is soaring in everything except CHINESE IMPORTS.

How could not RECORD OIL and demand for paper and wood etc, and the transport of all these goods (RECORD HIGH TRANNY AVG) not be filtering down into US goods? We know the CPI and PPI go UNDER REPORTED. OIL remains near $70.

HOUSING IS SLOWING, make no bones about it, Houston we have a trend, this comes first before the FALLING of prices.

'FED reported that in 2004 $600 B was EXTRACTED from household equity" which accounted for 40% of the GDP GROWTH!" THIS is not there for the future, and we already know household DEBT has risen to 121% of disposable income, and that REAL WAGES have fallen, there is margin for error.

I believe we are set up for a NASTY ACCIDENT, see how foolishly they run back to market only days after 200 PT crash?

VIX and CPC remained LOW during this decline.

We know how the FED and BUSH have hoodwinked and used smoke screens to hide the reality of our situation, hey "it's all good".

60% of mortgages now "interest only"? HUGE amounts of SPECULATORS holding investment property in the MOST ILLIQUID market.

It ALL comes together this March again is my guess. We have IRAN and the EURO ONLY OIL BOURUS, we have FED hiding their dirty work with M3, we have new FED Chief at helm, we have Anniversary of 2000 top, we have OLD bull market cycle.

Early buying held up by those who maxxed out contributions mid last year and retirement contributions coming in up to end of March, and I DO believe there is much trouble ahead after that if it even waits.

Consumers in debt to eyeballs, 70% already in homes, WHAT be the driver for the economy? with cash hordes going to make earnings look good instead of investment.....what be the driver? Are recent upswing in yields telling us Foreign buyers of our debt are balking?

When the 20 week EMA crosses down the 50 WK and they both begin to decline, is when I go FULL bearish with leverage as the trend will be obvious to those of us who even bother to look for it.

Til then, I will continue to look for long opps when they appear, with itchy trigger finger. The margin for error (SNDK OFF $10 last night) is going going gone. (INTC at 52 wk low)

Duratek

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