"Stocks Climb After GDP, Unemployment Claims Report- AP
Stocks are ending September with more gains after new reports on unemployment claims and gross domestic product topped expectations" Need I say more, if unsure seen post below.....IMHO this manipulated cess pool; when the printing presses explode will end in tears!
"The beginning of the end for nearly every debt-ridden country has always been the attempt to pay for past expenditures with newly-minted money. It always starts innocently enough and seems like the right thing to do, but soon the programs grow and grow, and eventually the currency of the country is destroyed."
longwavegroup K Winter Warning " By comparing the four autumn economic waves in the United States chronicled above, we can discern a commonality that whether the primary focus of an economic wave is government land sales; railroad construction; industrial stocks/equities; or high tech/internet IPO’s; the bubble patterns are always the same. The natural progression of a bull market – rampant speculation and excessive debt creation – always leads the long term business cycle from the Kondratieff autumn to the bursting of the bubble and into the economic depression of a Kondratieff winter – deflation, high unemployment and economic contraction. This is why the current winter cycle will end badly; because the massive debt accumulation has yet to be expurgated from the American economy. Will we witness the bankruptcy of U.S. states and municipalities, or even the U.S. itself during the current Kondratieff winter cycle?"
Folks, and this is KEY, they have NOT eradicated the DEBT from the system, THEY (FED) have only either HIDDEN THE DEBT or MOVED THE DEBT (to FED balance sheets, GSE'S).....this is why lending has remained DORMANT and the economy is at BEST stuck in neutral, it certainly is not strong enough to CREATE JOBS.....there are anaddt'l 3.5 MILLION homes to be foreclosed a 3-4 year supply....certainly this back log (JPM suspeneded 50,000 foreclosures is in the news) of supply will SUPRESS housing prices. 24% of recent SALES were Foreclosed Homes.
Documentation showing how POMO (FED Permanent Open MARKET OPERATIONS) is MANIPULATING the stock market, there is no such thing today as a FREE MKT SYSTEM, there in here IMHO Lies some of the reasoning that the market no longer makes any sense, we have had about 26 90% volume days since APRIL! Market has MANY late day bumps, rallying on horrid news, little improvment in fundamental data, record lows in some Treasury note yields, gold driving to new highs and rallies on diminishing volume....something is broken.
"tax anyone as long as it's not me" ? Politics can/will POLARIZE America. Obama and friends still blame Bush/R's for the mess.....R's blame DEm's for making their mess worse....Protective LAWS KILLED beginning with CLinton ADM.......any side NOT in power and those IN power do WHATEVER it takes to KEEP or GET power...key word is POWER.
I see AVG JOE In middle of tug of war. 2 sides here NEVER going to agree,,,,
The evil IS THE FED, money rules, too big banks now GINORMOUS too fail....long term issues get short term solutions from small thinking men. We have some good ones, but mostly MORONS in Congress (both sides). HOW MANY DONT EVEN READ BILLS THEY SIGN or NEVER SHOW TO VOTE?
Now stock market controlled by some entity....lost its mind....I look at YIELDS and are YKME???? .37% on the 2 yr there's your real vote of NO confidence add gold to that you got a poops nest they covering it with more manure, obscuring smell of truth
Americans SOLD OUT by both parties, dont expect that to change...we have lost our way....buckle up
I'll tell you how this is going to end? in a shitstorm....maybe they stall it off for awhile longer, but that piper getting real itchy to get paid!
Gold is a hedge against inflation and it hits NEW HIGHS. Gold is a hedge against DEFLATION and it hits new highs. GOLD is a hedge against world CRISIS and it hits new highs.
Where in any history of the markets will you find stock markets will rally in face of weak dollar, historic highs in gold, historic lows in yields, historic lows in housing market, high unemployment, declining volume on rallies, expanding volume on declines and contracting credit? THEN believe they are being manipulated by those with most to gain.
Thanks to all those who come and read my blog, near record visits last few days. I will continue to post something of value and add more as we go along......
Another test of 1130 today, probably why it came back to upper range. Meantime GOLD soars to NEW HIGHS (favored place as "safe haven" in times of CRISIS) and BOND YIELDS keep tumbling to near panic lows in 10 yr, all time lows in 2 year.
30 YEAR mortgages at 4.5% yet housing near worst levels in history since crisis......bucking the trend is the good old stock market.....that doesn't seem to fit, unless you think like THEM.
Over 800 Banks additionally will probably FAIL going forward, most Regional and that's 10% of all Banks....don't worry....most will get bought out by the BIG BANKS....as they get even too bigger to fail.....even though they for most part CRAFTED the seeds of our finincial crisis....and now on top of their BAILOUT seem to have benefitted the most, HOW PERVERSE IS THAT?
Law of diminishing returns.....velocity of money NOT THE SPEED OF LIGHT.
*click to enlarge all charts.
WHEN Japan needs to fund it's debt it can offer as little as 1% for 10 years and they always sell out the debt.....BECAUSE it's not about the yield....it's about buying the YEN! which has stayed a strong currency so any bonds bought in YEN have appreciated in value.....how about Bonds dennominated in $'s? OUCH!!
Are we setting up for a fiat crisis? competitive devaluation in attempt to stimulate exports? Anybody have any questions on why gold is hitting new highs? Maybe due for brief pullback, but those letter writers, some calling for HUGE pullback to $600-$800 don't have many subscribers left.....and don't understand the back drop.
FED actions have supposedly put a PRICE LEVEL GUARANTEE on the stock market, so that is saying it does not matter where DEMAND is coming from.
DO you SEE the realtionship of falling confidence and stock market? in 1999- 2000 and again leading into 2007 and I can say these are leading indicators.
In 2003 it began to improve, so did economy and stocks (albeit bubble) so when you look at current levels on this chart.....and compare to the rally that began in 2009....there is no longer a correlation.
Same could be said for treasury yields. MANY think stock market is and can be continuously inflated....irregardless of fundamentals.
We are getting a recovery in BS, we know that, OH BOY FED warns they got bag of tricks left...more QE (part 2) so get long stocks......in the meantime we know NO FREE LUNCHES....and the printing of money solves NOTHING in the long run, and are problems are IN the long run.....the clueless run amok.
Great read from John Mauldin guy who coined phrase "muddle through" economy.....but we won't hold that against him.
As we continue through this difficult period, it is my hope all my readers are doing OK. My business experience has been tough, but I'm still alive and kicking, all you can do is continue to fight and stay optimistic. Staying positive does not proclude trying to discuss and understand our current situation.
I will continue with my curretn format, and add addt'l features when I can. Part of me would like to take this to the next level, but I also like this blogger format.....with my intentions an open book....to help others....for now I have no plans to change this
ANother rousing day in the stock market, which began with the famous hedge fund manager telling everyone on CNBC that he was getting LONG STOCKS (that wasn't self serving was it?).
We already know how this is taking place while the economy spits out the weakest data from any Recession in history and instead of gaining momentum is weakening....and even after 2 years needs debt monetization, 0% rates, stimulus, cheer leading and pumping.
But the FED has and will continue to carry out this monetization,, and manipulation of the stock market........so don't fight 'em join 'em? FORGET FUNDAMENTALS?
Over the last 10 years, stocks have rallied with rising rates, and declined with declining rates......stock market rallies in the good old days were fed much by reallocation OUT of BONDS and INTO stocks.....401K contributions and higher cash levels in mutual funds which could FEED stock purchases.
But cash levels are near historic lows in mutual funds, Money continues to flow INTO bonds not OUT OF!!?? and many are taking money OUT OF 401K's, not putting INTO them as so many doing ANYTHING to stay afloat, include the MILLIONS w/o jobs who certainly are NOT buying stocks. That leaves me to WHO benefits most from this rally? The INSIDERS, the 25 execs at CITI (the near FAILED BANK!) who are getting huge MILLION $ plus bonuses, and the wealthy.
The average American had MOST of his wealth expressed in HOME EQUITY, of that about $7 TRILLION has been wiped out at same time stocks are LOWER than they were 10 years ago!
And don't forget the US $ continues to LOSE PURCHASING POWER, causing MANY THINGS YOU NEED to go UP in price (bad inflation) and things you can live w/o go down (flat screens).....the US STOCK MARKET epxressed in GOLD has NOT RALLIED since 2009...it has gone NOWHERE, the current rally is but a mirage.
Money was created, was not existing to BUY bad assets, money continues to be printed to fund GOV DEBT/DEFICITS every year further indebting American public.....$TRILLIONS of wealth was taken away from PUBLIC and given to FINANCIALS......NO ONE IS IN JAIL FOR THIS........THE BIG BANKS created the crisis, the BIG banks are benefitting...where is the justice in that?
Enjoy the manipulated stock rally as economic indicators continue to whither, few jobs created,and the financial system responsable remains roughly the same.
I am NOT saying stocks can't go higher, obviously they can, but I don't like the values (do like the action) and I do know Secular Bear Bottom consistant with past Bears has not been met.
The way action is diverging from Bond yields.....is most troubling.
"The Republicans who want to take over Congress offered their own ideas the other day. Many were the very same policies that led to the economic crisis in the first place, which isn't surprising, since many of their leaders were among the architects of that failed policy," Obama said."
Oh really? were they Summers? Bernanke? Geithner? and friends? OH....those are your guys....
CNB you know who resorts to bringing in shill hedge trader to hump stocks and his position......gee I'm positioned long stocks, and I think you should buy too! can't lose FED got your back!
WASHINGTON (AP) -- New homes sold at the second-slowest pace on record in August, signaling that the housing market will remain a drag on the economy.
Let's get this straight, FED got my back, go long cause FED got my back......what has FED done for me?
Where did all that bad shit paper go? HOW? FED printed $1.5 Trillion $'s out of thin air and bought the funny money......shit bought with shit....so that's how we solve a financial crisis! Banks getting money for next to nothing from the FED, then BUY the Bonds from ? THE FED......there is little or NO incentive to take ANY risk loaning money to businesses.....wonder about this next time the FED is worried banks are not lending.....
Gold hits new record; silver at 30-year high- ask WHY my friends, why...this is NOT a good thing .
Made $BILLIONS on financials buying cents on $. Says "FED HAS PUT ON MARKET"
"If Fed does more quantitative easing, everythnig will do well"
So he has increased LONG exposure......so either economy improves and stocks rally he makes money, or QE2 the FED comes in provides liquidity and stocks rise he makes money.....sounds pretty simple doesn't it?
What do we know is priced INTO the market? hard to say....FED has already said we got your back. Tepper thinks bonds don't do well under this scenario....food for thought. Not everyone agrees.
"The rate of growth of money supply since the middle of March, 2008, continues to be very low and materially below the rate of inflation. Falling real money supply reflects a continuing hawkish Fed stance.
A hawkish Fed isn’t especially friendly for growth or employment but does have an anti-inflation bias."
Is the FED "quietly trying to withdraw some of the punch? from Mises
"According to the St. Louis Federal Reserve publication Monetary Base in an Era of Financial Change, the adjusted monetary base is an index that measures the effects on a central bank’s balance sheet of its open market operations, discount window lending, unsterilized foreign exchange market intervention, and changes in statutory reserve requirements.
The Adjusted Monetary Base is the one monetary component completely under the control of the Federal Reserve."
What I'm suggesting is the FED expanded their balance sheet by more than 2X in a very short time, and it appears it is draining liquidity from this one measure, not adding more....but they talk about doing more QE2......talk is key word....for now this chart says different.
Apparent breakout to 1150 range (one of my R levels) was cheered by bulls as proof 1130 R had fallen....2 days later we are back under 1130. Thejob of the market is to confound bulls and bears alike.....choppy action! last high 10 months ago.
Lots of blow off moves, will highlight one of these next chart.
This AM jobs report showed uptick to 463,000, 4 million revision upward to continuing claims......this is NOT consistant with grwoing economy, unless you consider extremely SLOW growth....wonder even at that.
NEW LOWS for the 2 year Treasury Bill....need I really say more?
I continue to hear and read such utter uniformed BS from those supposedly informing the public.....from officials to talk show people.....never once uttering any real facts or information....remember all that money on sidelines...
Some goof saying there is NO alternative to stocks to get yield so money is "pouring in there"... OK, what IF you get 6% from VZ and Pay $29 for the stock.....what happens if VZ falls to $20?
This is only one way to judge where we are. 60-70 years of credit expansion are not followed by just 3 years of credit contraction...there is new sheriff in town. WE could be in midst of 16 year bear market.....many will be destroyed.
Levels of cash in Mutual Funds avg 3.5% now.....at MAJOR BOTTOMS they are closer to 10%. The S&P 500 avg dividend yield is barely 2%....more like 5-6% at MAJOR BOTTOMS.
Valuations were NOT consistent at March lows with prior Bear Market Bottoms. Here we go into what is usually a BRUTAL period for market historically and in just a few short weeks, bulls run amok compared to bears...the August selling now distant memory.
Today we get another look at home sales, this is from prior report posted on briefing.com
•Total home sales fell 27.2% from 5.260 mln in June to 3.830 mln in July. •Both the rate of decline and the actual sales level were the worst since records began in 1999. •The Briefing.com consensus forecast expected sales to fall to "only" 4.72 mln.
Dear Readers.......... the FED'S, Gov's, and BULLS claims we are "in recovery" must be very loosely based on reality
"Washington (CNN) -- With Democrats divided on tax cuts, a Senate vote before the election on extending Bush-era tax cuts for the middle class is looking less likely, multiple Senate Democratic sources tell CNN.
These sources all stress that no final decision has been made, and that Senate Democrats could come to a different conclusion after discussing the issue at a meeting Thursday afternoon.
Still, one senior Democratic senator told CNN that a tax cut bill "isn't going anywhere at this point." The senator spoke on condition of anonymity in order to talk about internal deliberations.
Sen. Tom Harkin, D-Iowa, however, did speak freely, telling CNN, "I think it's headed to after the election."
Democratic senators, like their colleagues in the House, have been split about whether it makes sense politically to hold a vote before the election."
This is just what business needs......continued uncertainty.
What is different between the US and GREECE? WE can print money at will.....$TRILLIONS OF IT!!!!!!!!
The IMF made Greece ($400B in debt) install "austerity" measures included increase taxes, reduce government spending, has led to decrease in consumer spending and loss of jobs.
But here the situation, for now, is different. The FED can print money and use the money to buy US Treasuries....how convienent.
Current administration (as they all do) wants to KEEP THE POWER! THE POWER, they will do almost ANYTHING to keep THE POWER. Print money no problem, push social agenda over domestic jobs no problem....and now with ELECTIONS LOOMING.....won't they do ALL THEY CAN to keep the PROP JOB on U S equities going?
KEEP the ILLUSION of recovery? when did less worse pass for economic prosperity? WHEN did listless, putrid below par volume in stocks pass for a bull market? with rising volumes on declines? that's bass ackwards!
Bright spots are all either military spending, or stimulus connected, there is little organic growth! There is little job growth, there is no recovery in housing....housing that drives the economy. WHAT THEY DID...will take MANY years to absorb and correct...I am sorry to say
OBVIOUSLY the world figures the FED is going to have to print a LOT more money.....in an attempt to create INFLATION! In their statements, it seems to me the worry is not about creating too much inflation, it's about the LOW LOW level of inflation bordering on DEFLATION....GOLD is NOT reacting to INFLATION but to the smoke coming off the presses and the deficits.
Power of broken trend lines and support. FED meeting....gap up right after...weak close....blah blah "we stand ready to do more...whatever it takes......"
10 year TIPS are back to where they were year and half ago.
I provided links to gluskin sheff....in the most recent morning piece (you can sign up for one week free trial...)the contrast is shown to the NBER Recession is over tune, and the reality...Philly Fed falls....Manufacturing index EMpire (NY) falls to 4.14 where 7.0 was expected.
Nat'l Assoc of Home Builders at 13 vs 14....sentiment consumers Mich survey plopped to 66.6 from above 70.
SO much of our economy depends on housing, how can we truely recover w/o it?
Article goes on to point out that in a NORMAL RECOVERY the NAHB index is around 54....in Recession it is around 28........and it just came in at 13 !!! enjoy the stock rally
"Furthermore, even if the Fed had been as incompetent as many claim, it would not have taken long for it to improvise a system whereby certain payments would be prioritized and the system of payments would again be up and running. The notion that we would be sitting in a 21st century economy and reduced to barter payments was an invention of the bank lobby to get the taxpayers' money. "
One factor that is followed to track recoveries from recessions is GDP. The weakest GDP recoveries in the past 60+ years are shown in the next graphic" and check out gluskin sheff website
With some effort I was pleased to hunt down the chart above from gluskin sheff's David Rosenberg, one of the few truth seekers out there and he backs up every word with gobs of data and charts....and I'm bringing it to you!
OK OK, relax.....YES the stock market has broken out of ONE of the trading ranges listed, however, on the weekly chart I posted yesterday I consider 2 addt'l levels of RESISTANCE most likely to get market to pause. (transports did not close to new high)
I want you to THINK about what "THEY" are presenting to you as BULLISH FODDER and PROOF of recovery, reasons to draw you into the market and grow optimism.
They do this by having NBER (more smart dudes with dipolma's) tell you that 15 months ago the Recession ended??? how does that do anyone any good? WHen did they tell you we were IN that same Recession? this NBER ain't worth SQUAT...lay it down in your cat box.
And when the DATA PEOPLE give you positive data, lots of times they come right back month later and revise it DOWNWARD.....
As above chart PROVES (no opinion, fluff, or BS needed) this is like the exact OPPOSITE of what RECOVERY looks like when comparing to previous ones...period.
We have stock rally based on yesterdays news, while the REAL ECONOMY looks, feels, smells like a dead duck...quacking.
If the recovery is so sound...why do FED rates lay at 0% almost 2 years after getting there? WHY is the GOV talking about another round of STIMULUS? why are car sales close to 11 mil yr vs 16 million? Why is there NO STATISTICAL HOUSING RECOVERY? Why aren't DEMAND for loans jumping off the charts? BANKS will not loan to those in need the most.
Bond yields near 2.7% on the 10 year surely don't represent a strong economic recovery, how do yields limp along at historic lows while they tell you all is jiggy? and governments worldwide are issuing record amounts of debt?
How do you price a S&P 500 when 30% of the earnings come from Financials who do not account for the bad mortgage paper they hold?
How do you square the preaching of recovery while the FED goes about QE2 and does their best reliquifying markets?
How does the bullish calls square with 2 yr notes at or below .5%? a record low.
How do we have a lasting healthy recovery when the GOV becomes the main BORROWER and SPENDER? WITH TAXES SET TO RISE? WITH GOV REGULATION INCREASING? WITH BUSINESSES RELUCTANT TO SPEND THEIR CASH AND INVEST? WITH 10% UNEMPLOYMENT? WITH 1 MILLION out of 99 weeks of handouts?
With record amounts strategically defaulting on loans to maintain spending? WIth housing still DOA? WIth $7 TRILLION loss of home equity. the main source of wealth and borrowing power in this country?
Running $TRILLION deficits each and every year, how does the US get back to fiscal responsability and sound money policies? Has Social agenda taken prominence over pro business actions?
WHY are bond yields back down near levels seen at worst of crisis?
You can lead a prospective borrower to water but you can't make him borrow....or the bank lend.
You can't print your way out of debt nor spend your way to prosperity or something like that.
The American people have been had, the largest wealth transfer in history has taken place, we sit here with negative net worth (owe more housing debt than equity), lost $7 TRILLION in home equity, and the cheers, for me at least are fading from the announcement the Recession "officially" ended 15 months ago.....
Falling value of US $ caused by deficits and printing press. ALL of the true damage has been done since 2000, as the FED and GOV fought the first correction from the binging of the 80's 90's. Hard to see any weakness in this rise....know anyone who owns any gold? PUBLIC mostly oblivious to this magical rise.
FED has failed, gov policies have failed. all that is left is words...
September 14 – Wall Street Journal (Sara Murray): “Efforts to tame America’s ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits,more than at any time in history.At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center… A little more than half don't earn enough to be taxed; the rest take so many credits and deductions they don't owe anything.”
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I have been writing about stocks and the market since the late 90's. My record of calling the last 2 , now maybe 3 bear markets stands. There is more to investing than just avoiding bear markets, but it sure doesn't hurt. I offer NO recommendation to buy or sell equities or trade any vehicle...I just offer my opinion for what it's worth. Consult with your financial advisor before taking any actions. this financial blog is for amusement only.