Tuesday, May 03, 2011


 Art Cashin....."Banks buying treasuries, worried about economy...mainstreet is NOT BORROWING...." some rally....4 week MA of claims above 400,000 NOT conssitant with any recovery thesis. INDIA raises interest rates 50 basis points to fight inflation, Chinese wage growth 14% !!! in 2010.....you have been sold a bill of goods on this market but IMHO hold 2 week old bananas......soft, brown, mushy.....spoiled.

Without extreme intervention, and subsequent FED policy actions and forced liquidation of savings into risk assets, funneling of Treasuries into stock options and commodity speculation......without the preception of the FED has your back and QE programs.......without the easing of mark to market accounting, would we have a rally at all?

With the continuation of ZIRP policy, it is clear to me, the FED feels the economy and more so the STOCK MARKET cannot stand on its own 2 feet.....and this bubble activity should lead to economic stability.....on the contrary we are headed for instability and the policies have been mostly ineffective towards the ROOT of the problem.

Just as Japan has done for almost 20 years, banks are HIDING their losses....with an accounting gimmick...turned legal by the GAO.

Rising prices are cutting into corporate profits and consumer spending. A $ rally was due and its up this AM, but the US $ has been rapidly falling in lock step but opposite direction to stock gains.

Policies and speculation go rampant and unchecked again, margins raised for 3rd time on the metals.....silver has turned into a bubble and may have finally POPPED.....many have called for buying the dip....they have already lost money on that call...WAY TOO early to tell and currently commodities on my sell signal.

Banks have recently stepped up their Treasury purchases, buying $65 BILLION in the past 7 weeks, this is a defensive move and is it because of the WEAK GDP data?

$ appreciation is against current policy endevors and everything bought with $'s may do a jiggy reversal....in data I watch I neither have seen spirited buying nor selling and the premkt OSAMA IS DEAD BUY THE MKT HYPE didn't even last the day....nothing has changed much.

It has compressed 2 years of gains what might normally take 5.....the market is NO LONGER ATTRACTIVE for longer term gains at current levels, IMHO. DUMMIES ONLY BUY MOMO and don't consider risk reward scenarios....this is NOT 2009 anymore, not by a long shot....only you and financial advisor can determine your next actions, but at some point reality will strike....read DR Hussman's report I posted and decide for yourself.


No comments: