Saturday, November 16, 2013

"HEARING JANET YELLEN"

http://www.prudentbear.com/2013/11/hearing-janet-yellen.html Doug Noland's latest.

Neither Ben, nor Yellen saw the housing bubble forming, and now she does not see an equity bubble forming either. So the market and the leveraged privaledge class are ALL IN and THEN SOME.

FED balance sheet rose 35% this year alone ($1T), so have stocks....certainly NO correlation here.

Though I cannot argue I rather have an economy limping along then one in a death spiral, but when does it go along on its own 2 feet? The LONGER everything is supported by the QE and ZERO interest rates, the harder it will be to function without it. And the higher we go, the harder the fall will be.

Is the market "meltup" being supported durectly by FED policy?

"Investors aren’t worrying much about the stock market, and that worries Edward Yardeni. "
http://www.nytimes.com/2013/11/03/your-money/the-dangers-of-a-stock-market-melt-up.html?_r=0

I think this current bull market has further to go, and THE END I don't think can occur without one violent zap hgiher in a blowoff top sort of action, where we might get an intraday top and reversal.

And it must go along that the masses, will not see danger, and will continue to sit tight as this mess unravels.

Even Yardini, in the above piece see SPX 2000 plus in 2014. Other measures of this bull mkt show a healthy one, without many of the normal signals it might give that a top is in the near future (up to 6 months out).
It may be long in the tooth, but that doesn't rule out much higher prices, or even a nasty correction is around the corner.

We arrive in November a normal bullish period thru Xmas, with markets already enjoying a helluva year.

I dont care what the FED says or anyone else, the action since 2009 is ALL but supported by the FED balance sheet.

Is it any wonder the FED can create a $1T a year out of thin air, and same time BITCOIN appears, a "VIRTUAL" currency, and it (digitally) is tearing through the roof in value....

I say, and repeat buyer beware, but calling tops a tricky business and at this point, and its backed up by the fear guages....not a lot of worry out there....not at all.

PROBLEM is, sooner or later there will be and we are not talking 1 for 1, players are playing with OPM...and it will unwind and feed on itself, a lot faster on the way down, then it did on the way up.

We ARE in the process of forming a top, but the level that occurs may even surprise me.

How we got here, ignorance to bubble formation, will insure a painful retreat

D

Saturday, November 02, 2013

WHY I think SECULAR BEAR IS NOT OVER:


**note from my prorpietary TA MODEL
>RSI not made new high yet....though MACD reaching to or near it's higest point.....I would suggest we could see another 100 pts or so tacked onto SPX before THE TOP.<

 

WHY I think SECULAR BEAR NOT OVER:

 

2003 and 2009......MOMO signals were of greater magnatude and did not offer a divergence in force and price. COntrary...so far anywho...RSI, CCI making lower highs...that can change of course.

 

SECULAR BEAR should last about 16 years (conventional top was 2000) 
putting in a LOW LOW (OUR LIFETIME) in the 2014-2016 time frame (it IS still possible that 2009 low will hold but feel it COULD get tested) . What that will look like I don't know.
IMHO ENERGY, delivery , storage many facets of it will LEAD the "next great bull MKT" as cost for energy DROPS, jobs created, consumers have more spendable income (unlike todays stagnant income growth), manufacturers costs drop dramatically as energy costs drop more will be made in this country.

We are becoming, will be huge net exporter of energy...spurring a real economic boom, IMHO

 
Fallout from FED policies any are now saying "FED effects are overrated, they get too much credit". I recently asked a financial advisor what will happen when the 30 yr BOND BULL busts?

 
I've waited this long, I will not change my opinion of what I think has been going on since 2000 burst....not fooled by new highs....or appearence of a healing economy...PIPER HAS NOT BEEN PAID...only DELAYED.

 
I'm ready for next great Bull, one that isn't created by artificial sweetner...and made to bubble just to burst as they all have been with no fing lessons learned.

 

Last weeks Noland

 

" guess it took the 2008 crisis for economists to finally acknowledge that their models might be deeply flawed, though one would have thought the previous 20-years (plus) of serial global booms and busts would have raised some concerns. I have argued that we’ve been witnessing a unique period in history: For the first time, during recent decades there have seen no constraints on either the quality or quantity of Credit issued on a global basis. No one should expect that unlimited cheap Credit would prove conducive to system stability, and we’re now privy to sufficient history to be certain it’s not. All along the way, policymakers have seemed to go out of their way to avoid learning lessons.

U.S. and global finance were going through epic changes. Meanwhile, policymakers and the economics community stuck their heads in the sand, clinging steadfastly to their outdated old models and analytical frameworks. Greenspan became a vocal proponent for derivatives and Wall Street risk intermediation. He also used the rapidly expanding global leveraged speculating community as the most powerful monetary policy transmission mechanism ever (spur risk-taking and “wealth creation” with a mere hint of a 25bps rate cut!). And with Greenspan (along with the GSEs) backstopping the markets, the bubbling derivatives marketplace could mushroom to hundreds of Trillions on the specious assumption of “continuous and liquid markets.” Opportunistic hedge fund managers could incorporate enormous leverage on (Fed-assured) high probability bets – and become billionaires."

Saturday, October 19, 2013

MUST READS: FED POLICY IS FAILING TO IGNITE ECONOMY, BUT HAS THE STOCK MARKETS

My point being is each time this has occurred, it has ended horribly with the bubble bursting. First in 2000, then 2007, and each phase was magnitudes worse with its aftermath. Gov't debt has grown from $7T to $17T this deacde.
They can raise the debt ceiling and act as if K2 summit has been reached, this is as hollow a victory as one could get. NO issues were resolved, only put off again! No solutions offered, no comprimises to be found or offered. We are again at the crossroads of bigger gov't and a loss of freedoms, higher taxation, OR smaller gov't ( or at least one that won't add another layer) and a resolve to keep more money in your hands, so YOU can decide where to spend, not the gov't.

NAME ME ONE THING once the gov;t gains control that is better off then before they intervened?
It will cost more, it will get f'd up!
How many gov't employees does it take to change a light bulb....



http://www.zerohedge.com/news/2013-10-18/lacy-hunt-warns-federal-reserve-policy-failures-are-mounting

"However, when an economy is excessively over-indebted and disinflationary factors force central banks to cut overnight interest rates to as close to zero as possible, central bank policy is powerless to further move inflation or growth metrics. The periods between 1927 and 1939 in the U.S. (and elsewhere), and from 1989 to the present in Japan, are clear examples of the impotence of central bank policy actions during periods of over-indebtedness.

Four considerations suggest the Fed will continue to be unsuccessful in engineering increasing growth and higher inflation with their continuation of the current program of Large Scale Asset Purchases (LSAP):

  • First, the Fed's forecasts have consistently been too optimistic, which indicates that their knowledge of how LSAP operates is flawed. LSAP obviously is not working in the way they had hoped, and they are unable to make needed course corrections.
  • Second, debt levels in the U.S. are so excessive that monetary policy's traditional transmission mechanism is broken.
  • Third, recent scholarly studies, all employing different rigorous analytical methods, indicate LSAP is ineffective.
  • Fourth, the velocity of money has slumped, and that trend will continue—which deprives the Fed of the ability to have a measurable influence on aggregate economic activity and is an alternative way of confirming the validity of the aforementioned academic studies."


http://www.prudentbear.com/2013/10/oct-18.html

"The QE-enhanced 2013 version of “how crazy do things get?” is outshining even the 1999 speculative melee. "

Friday, October 18, 2013

CHINA HAS A DEBT PROBLEM???


http://money.cnn.com/2013/10/17/news/economy/china-government-debt/index.html?iid=HP_LN

 

The crowded risky asset trade Titanic is near fully loaded, when it hits the iceberg! and it will, you know it will. I DO NOT know when as the game continues it would seem to NO end. ADJ Money base has already grown by $1 T this yr alone....these are all historical records!

IMHO, valuations are far beyond the fundamentals, and other things like Int rates are DRAMATICALLY lower and away from their mean.....manipulation by the FED is at historical levels and is the MAIN driver of asset prices.....all this while our economy is running aground and cannot even produce a 2% GDP.....
 
Things will eventually SNAP my friends, no one knows at what point, when........we have a critically maladjusted economy, cannot function without MASSIVE FED interference and is addicted to FED QE, now at $85B a month. ANY normalization of longer term rates would cripple the US ability to pay the interest on the debt.
 
Obama says in a recent BS speech " I have cut the deficit by more than any time in the last 50 years"
IS this true? Only if you realize under him it grew to $1.5T and is now back to $750B.....still higher than at anytime while Bush was President, and the 2 faced chided him over this debt pile up.
 
Now with "affordable care act" we have grown the gov't intrusion and size to new bounds. We have an over bloated system as it was......you know it takes 2 Federal employess to do the job of one private sector....we keep paying and paying......
 
Cheap money allows this game to continue, the day of reckoning pushed farther back. But at some point the rubber band is going to break.
 
Money put in a safe place returns you NOTHING, forcing the FLOW into one space, the stock market looks good now....but history tells me its just another bubble. Just another in a series of boom/busts we have seen before....
 
WHEN the music stops, that will be one time......you don't want to be holding these same moon shooting risky assets.....they are NOT moving of their own accord, IMHO

D
 
 

Thursday, October 17, 2013

CRISIS AVERTED

That is what you will read in the headlines. All that was accomplished was another kick the can down the road moment, and the markets are exuberant by a rise in the "debt ceiling"? Growth going forward predicted to be sub 2% as we have added another major gov't intrusion and the cost is enormous.

The Fed continues to POUR $85B a month into the system and most of that ends up in risk assets putting a seemingly permanent back stop to stock prices. There has been little in the normal base building or corrections that take some steam and froth out of the markets allowing them to remain healthy and continue in a long term bull trend......on  their own accord.

have we since the Greenspan era just become an economy built on bubbles and bursts of these? Pouring even more FED fuel as mop up, preferred action for them just so we can reflate and blow even greater bubbles.

LOW LOW long term rates have allowed the US Gov't the ability to continue to fund its long term debts as they grow upwards of $17 TRILLION, about $55,000 per American, but about $135,000 if you only count those with jobs!

If it were you or me, at some point the bank would not allow us to continue borrowing. How does the US Gov't pay back this debt? Never will, but they have to do, is be able to pay the interest on that accumulating debt.

So as the masses and the govt cronies back slap themselves for another kick down the road.....that path may lead to eventual tax increases that won't be called that, they will be called "closing of loopholes".
And cutting of Gov't spending? both these actions would take away from the US economy.

An even SLIGHT rise in borrowing costs could be devastating to this country, considering that for as far as anyone can see, we will continue to add to the national deficit. EVERY $ of interest paid is non productive waste.

ObamaCare has come at a most unfortunate time in history, added another HUGE layer of gov't, and has changed the landscape of our freedoms....I don't know if there is any turning back. Also the gulf between the very wealthy and poor has never been wider, all this under the most Liberal Dem president???

Mere mention of FED tapering had sent stock markets into a downward spiral......if that doesn't tell you what is propping up stock prices, I don't know what will.

As they go ever upward ignoring any warnings or corrections, the gulf between value and cost widens to dangerous levels. After almost 5 years of intervention we cannot stand on our own 2 feet? And cannot maintain an even 3% GDP.

When a BEAR MKT finally takes hold, I do not know what the catalyst will be, but I'm pretty sure of how much pain is down that road near where the can was kicked again.

D

Tuesday, October 15, 2013

"BRIGHT DAY"




 

 
Doug Noland

 
"Our great nation’s brilliant Founding Fathers clearly appreciated the perils of unsound money. They understood the dangers of excessive power and the necessity for checks and balances. They would have never anticipated an American central bank printing money without restraint. There was a major flaw in the structure of the Federal Reserve System – and for central bank structures generally. I just don’t think anyone ever anticipated that central bankers might someday resort to creating Trillions of “money” as they do today – on a whim or academic theory. The Federal Reserve needs some basic concrete rules. It’s insanity to allow a small group of unelected officials the discretion to pump $85bn – or more! - of purchasing power into the markets every month. It’s undemocratic, highly risky and this has gone on for much too long. If there was one issue worth closing down the government and risking default, this would be it."

 

Who would have thought that by just RAISING the debt limit without ANY progress in correcting the issuing of the debt nor the imbalances could exude hope and confidence?
 
D

Saturday, September 28, 2013

SOUND FOOTING? ILLUSIONS


"Those of a bullish persuasion would argue these dynamics confirm the underlying strength and stability of the U.S. economy. I’ll counter with the view – one supported by Fed data - that massive federal deficits and Federal Reserve monetization have created unprecedented and deeply systemic financial and economic distortions.

An economy on firm footing would be one demonstrating at least a reasonable balance within the real and financial sectors. One would hope to see sound money and productive Credit financing capital investments throughout the economy - liquidity/spending power entering the system primarily in the process of financing economic wealth creation in the real economy (as opposed to financing consumption and asset speculation). "
 
The mere mention of a SLOWING of FED asset purchases down from the current $85B a month would have risk markets convulsing, interest rates shooting higher. SO at the last FED meeting we had a STATUS QUO instead of any even mild change in FED actions and policy.
 
The predictions now for GDP and the REAL economy are weaker for the 2nd half than just earlier this summer? How can this be? New highs in the stock markets, near or record lows in junk bonds and yields in general?
Federal spending and FED asset purchases have replaced SOUND money and investment, which lead to REAL economic growth and solid job formation.....now RISK assets vs home owners equity are where the avg citizens wealth resides.......I don't like the sound of that....
 
I think the FED has now painted itself in a corner, the crack addict economy needs to know there will be NO change in the dose, or withdrawl symptons will surely be manifested.
 
We have the ILLUSION of a real economy and sound policy....imagine that.
 
Duratek

Friday, September 27, 2013

LIFE SUPPORT

Fed doves make case for patience on tightening policy Reuters
The Federal Reserve must be patient in deciding when to scale back bond purchases, top officials said on Friday, with one arguing it could wait "years" to lift interest rates and another suggesting ...

What is bothering the Federal Reserve after holding down Fed Funds rate to 0 going on 5 years....we are "years away" from beginning to normalize interest rates and policies?

Economic growth is barely running at 2%, 5 years into the most dangerous FED experiement in their 100 years history, which has helped to create bubbles on multiple levels, including bonds, gov finance, interest rates, bond yields, corporate debt, stock valuations and who knows what else.

This feels like "in for a penny, in for a pound" policy making. And the model set where we will continue with the same policies even though we are not getting the results we want, so more of the same thing will eventually get us to where we need to be.

Each month adds another $85B that the FED will need to unwind at some point, most of the STIMULUS has found its way into NON PRODUCTIVE areas of economy like STOCKS.

But the new highs in stocks mostly seems to benefit the top 1% of our population, almost as deceptive as the "affordable care act", who has seen their healthcare bills go down?

I do think it could have been worse if the FED did nothing, but by now one would hope we were well on our way to a true healing and growing balanced economy not needing to be force fed $BILLIONS of printed $'s.

It feels like we HAVE NOT healed, but instead have reflated the bubbles and this leads me to conclude...they will BURST again.....my only hope is the fallout is not as bad as many predict it will be.

D

Sunday, September 22, 2013

THE NEED FOR CONTINUED FED PROPPING

"Financial Conditions" http://www.prudentbear.com/2013/09/sept-20.html

"As someone who places “Financial Conditions” at the heart of market and economic analysis, I felt Bernanke had opened a real can of worms on the policy and communications front.

From Wednesday’s FOMC statement: “The committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market. The committee recognizes that inflation persistently below its 2% objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.”

Have Financial Conditions really tightened in recent months? Stock prices have surged to all-time record highs. The S&P500 has gained 7.7% in three months, with Nasdaq up 12.4%. The small cap Russell 2000 has surged 11.3% in three months. The Nasdaq Biotech index has jumped 24.8%, increasing its 2013 gain to 53.3% (2-yr gain of 116%). Internet stocks enjoy a three-month gain of 12.6%. The average stock (Value Line Arithmetic) is up 11.2% in three months. Stock prices indicate the opposite of tightening."

The mere mention of a SLOWING in QE by the FED had sent the markets into a tizzy. Prior to the recent FED meeting, it was widely anticipated that the FED would begin to lightenup the pace of their QE injections from current $85 B amonth to something slighly less. INSTEAD we got NO change to policy because of "tightening financial conditions". Was this mostly the back up of mortgage borrowing costs?

Re-INFLATING a burst bubble will only cause a new bubble to form of even greter proportions. The markets now will not tollerate even the mere mention of a change to the status quo, every month that passes and the staggering growth of the FED balance sheet makes any extracation from this to be less likely where it would not cause a gross reaction.

http://research.stlouisfed.org/publications/usfd/page3.pdf The adjusted Monetary BAse has grown by nearly $1 Trillion from just the start of this year......an historic amount judged against anything in history before it.

Yet 5 years of such actions have not YET brought us to a point where we can begin to see some unwinding, even a slowing of the CRISIS managment of our economy and money??

I think the FED and Central bankers have painted themselves into a corner, the further they went, the further they realized they would have to go. I do not think they know where this goes from here, this is a gross experiement, and we are the Guninee Pigs.

You cannot print your way to prosperity and an economy that can sustain itself, for now I guess we will have to make do with what we have. Not willing to deal with the withdrawl symptoms, the CRACK ADDICT ECONOMY will be continuously fed more drugs.....making the dependency greater, the withdrawl worse....when it comes.

D

Saturday, August 31, 2013

DOW MEGAPHONE TOPPING PATTERN

*click to enlarge

This formation is still in play. The adjustment process and deleveraging from decades of credit bubble activity has been delayed by historic Fed actions, and now world CB's.

Delaying is not fixing.


http://www.prudentbear.com/2013/08/weak-links-and-transmission-mechanisms.html
"Fed QE notwithstanding, I believe the market backdrop today implies an important tightening of financial conditions going forward. Policy measures – including boosting QE – do have the potential to delay this tightening, although with the cost of only exacerbating the wide gulf that has developed between inflated global securities prices and deteriorating economic prospects."

D

Monday, August 19, 2013

"SIGNS OF A TOP" MARGIN DEBT FOLLOW UP

http://www.mauldineconomics.com/frontlinethoughts/signs-of-the-top


When margin debt begins to unwind, that's when the selling gets nasty, and why it leads to ALL bottoms. We are now in the TOP zone, more margin can be added, but it's in process of peaking....that's how you make a top. BE CAREFUL going forward, it doesn't matter WHY a stock should be good, they will ALL stumble badly when the music stops.

D

Monday, July 22, 2013

PENSION FUND TIME BOMB

"The recovery in the U.S. state pension system suffered a setback in 2012 as the huge funding shortfall in a large swath of state pensions swelled more than 20 percent, interrupting two years of improvement following the devastation of the financial crisis.
The shortfall in 109 of the nation's state pension plans, which guarantee retirement for millions of public workers such as police, firefighters, and teachers rose to $834.2 billion in 2012, up from $690.3 billion the previous year, according to a new report by Wilshire Consulting, a unit of independent investment management firm Wilshire Associates.
The report highlights the uphill struggle faced by many of the state pension plans nationwide and is a reminder that financially strained state governments will have to make some tough choices in order to make up the shortfall.
It also shows state pension fund managers are continuing to up their exposure to less conventional assets such as real estate, private equity, hedge funds and commodities as they try to boost their returns and diversify away from over exposure to volatile equities."

94% of Corporate pension funds underfunded
http://www.thinkadvisor.com/2013/04/11/94-of-pension-plans-underfunded-wilshire


 Chicago debt downgraded
http://articles.chicagotribune.com/2013-06-06/business/chi-moodys-downgrades-illinois-20130606_1_pension-reform-negative-outlook-ratings-services

Detroit already bankrupt, will the FED now bail out the States? VIVA the recovery!

D

CLARIFY WHY QE WILL NOT, DOES NOT WORK IN THE LONG RUN

"Dr. Richebacher persuasively argued that rising consumer price inflation was the least problematic inflationary manifestation, as it could be rectified by determined (Volcker-style) monetary tightening. Presciently, Richebacher viewed asset inflation and Bubbles as the much more dangerous inflationary strain - too easily tolerated, accommodated or even propagated.

It’s no coincidence that periods of low consumer price inflation preceded the Great Depression and the bursting of the Japanese Bubble. I would further note that consumer price inflation was relatively contained prior to the bursting of the tech and mortgage finance Bubbles. But to claim this dynamic was caused by tight monetary policy is flawed thinking. It was just the opposite.

I would argue that major monetary inflations, along with attendant investment and asset Bubbles, tend to boost the supply of goods and services. Myriad outlets arise that readily absorb inflated spending levels, working to avail the system of a rapid increase in aggregate consumer prices. Booming asset markets become magnets for inflationary monetary flows, while a boom-time surge in more upscale and luxury spending patterns also works to restrain general price inflation. Moreover, a boom in trade and international flows ensures strong capital investment and an increased supply of inexpensive imports (think China, Asia and technology). "

http://www.prudentbear.com/2013/07/inflationphobia.html#more Doug Noland

The FED has NOT been able to create INFLATION, and the money they create each month goes into RISKY ASSETS, created myriad bubbles more dangerous than before returning NO longer benefits.

SO a FEW MEN determine the fate of everyone, f'ing it all up.....the rich got wealthier, the poor got poorer, all under the leadership of a popular Democrat, imagine the hypocrisy?

D

Friday, July 19, 2013

SPX 500 DIVIDEND YIELD DOES NOT CONFIRM BULL MKT

Click to enlarge**

Does the current 1.9% yield look like this is what you see at beginning of Bull markets?
Exactly, with the new FED engineered stock market, we are witnessing the largest bubble blown in the history of the stock market.

It is my suspicion, when it BLOWS, what follows will also be historic.

D



Monday, July 15, 2013

FED LESSONS NOT LEARNED

http://www.prudentbear.com/2013/07/bernankes-comment.html#more
Doug Noland weekly comments

"Significant Fed balance sheet expansions should be temporary and then reversed as soon as possible. The Fed should refrain from non-crisis asset purchases/liquidity injections – and should limit its open-market activity to Treasury bills. The Fed should not accommodate a doubling of mortgage debt in six years. It shouldn’t then accommodate a doubling of federal debt in four. Fed policymaking should not unduly impact system Credit and resource allocation – albeit to housing or, more recently, the federal government.

The Fed should avoid the slippery slope of intervening in the markets in the name of promoting economic growth. Its policies shouldn’t distort market risk perceptions or the pricing of finance. This will only fuel asset inflation, Credit Bubbles and the misallocation of real and financial resources. The Fed should not accommodate persistently large current account deficits. These only promote liquidity excesses and global financial and economic imbalances. The Fed must never set off on an experimental path, but should instead strive toward a stable and conservative rules-based policy regime. "

When I began writing about the financial landscape and markets some 15 years ago, I never envisioned we would arrive at a place like now exists. A place where the FED and other CB'S are in the drivers seat and are leading the LEMMINGS right over the cliff! And they mostly all follow as there is little left as alternative.

A HUGE mispricing of risk exists today, and there is a HUGE disconnect between the markets and REALITY. Don't you know at some point in the future reality will meet head on with perceptions?

5 years into their programs, the FED cannot come off its QE and ZERO rate programs? With stocks at new RECORD HIGHS, the FED cannot signal the end of its easing campaign? The economy cannot survive on its own 2 feet?

With just a mention and a SNIFF of the FED changing its direction, or even SLOWING down its QE program, the market had a VIOLENT reaction and interest rates jumped.

Now, a few calming words, status quo forever, and the VIX which measure volatility and FEAR has fallen back and the market has recouped all its losses.....sounds normal to me.....

What I THINK you have just witnessed is a WARNING SHOT......if you choose to not heed the warning then IMHO you are no more than the gambler at the craps table in a nice run who throws the dice one more time, double or nothing....as with the FED no one can possibly lose but the SAVERS!

WHAT POLICY that encoruages an ALL IN mentality is a good one, will end well? 0% rates doesn't encourage the Government to any fiscal restraint, and doesn't pay deposits a thing.

When "ALL ARE IN", there is nary anyone left to get in, and the opening for the exit door is rarified thin.

Fox news reported over the weekend that Small Business are not encouraged, nor optimistic about the future. For every 3 businesses hiring, 4 are firing. In another sign of pessimism, inventories fell and that will take a bite out of next reading of GDP.

"DON'T FIGHT THE FED", well that works for awhile doesn't it? But I think they tried to signal all good things come to an end, and the market didn't like it one bit. SO it appears it backed off sending signals they might end the ENDLESS MONEY PRINTING SCHEME.

Something about the FED policy in uncharted territory and untried experiements in FED MONETARY AND INT RATE POLICY I find worrisome...maybe it's just me.

D


Wednesday, June 26, 2013

MEGAPHONE TOP

What I'm watching, to see if we had throw over and now TEST of 1600 area, and maybe even a negating of this multi year formation.

D

GOLD FORTUNES

Gold could be headed for $900 area, this is what happens when somethng begins to UNWIND, think Bonds, think STOCKS, IMHO

D

Thursday, June 20, 2013

PARSING FED COMMENTS

STOCKS SELLOFF IN RESPONSE TO FED COMMENTS ON "TAPERING"

If the FED backs off the back stop peddle, hopefully it is because economy can sustain itself.

Real issue is $3 T plus of bond purchases will not unwind quietly. When is last time bonds and stocks sold off in unison?

D

Friday, June 14, 2013

PRODUCTION FALLS BELOW CAPACITY UTILYZATION

Be a casual observer.....what do you see in the past when that occurred?

Years late 1999....and 2007......

D

Thursday, June 06, 2013

NOT MUCH RECOVERY HERE

And yet the FED and friends will continue with their destructive interest rate and QE programs which are causing an even greater them and us VOID.

In a "REAL" recovery, you wouldn;t expect to see a chart like this. Just one of the reasons, IMHO I think the Bear is not over.

D

Wednesday, June 05, 2013

TEST OF THE BREAK?

Price stopped right at the outer break of trend line, nothing is for nothing. My gut says, we rebound some, but a break now or in a few days of the upper line could spell trouble

D

Monday, June 03, 2013

ISM INDEX FALLS BELOW 50.00 to 49.00

As a "casual" observer, what happens in the past when the ISM INDEX falls below 50.00?
 (economic retraction) and how does that line up with past market tops?

D

Sunday, June 02, 2013

NIKK COLLAPSE JUST BEGINNING?

Fall to 10,000 area very possible, as NOTHING was holding this thing up.
Watch the interest rates.....

D

Saturday, June 01, 2013

HAS BOND BUBBLE BURST?


IS THIS THE "BLOW OFF" TOP?

Remember that this top was formed with rates RISING, an ominous warning IMHO.

WILL HUGE LOSSES in the Bond Market force those leveraged to stampede OUT causing a rate accident?

D

Friday, May 31, 2013

LONG TERM SPX CHART TO PONDER

Is the recent splurt above wedge a "throw over", and would a fall back INTO wedge (below 1600) put this pattern back on the table?

If you think the market has either one more huge push up to make or has MUCH further to run then you don't even consider such patterns.

WHat has changed? late Friday selloff where traders don't want to hold for Monday? What we can see with our own 2 eyes is that BOND prices are falling (yields rising) with stocks, and commodities and that is new.

Rates are rising, so where is the flight to quality? FED has been sopping up $45B in demand a month. Their goal is to keep long term rates DOWN, so why are they rising? Where would rates be if there wasn't artificial $45B a month plus another $40B MBS.

Answer is FED controls ST rates, rates are still relatively low, but way off bottom.

JAPANESE MKT has turned very volatile, what a mess IMHO.

D

Wednesday, May 22, 2013

STOCKS REACT TO BERNANKECOMMENTS

It may be more just the market was tired, and needed excuse to take a rest, I am NOT convinced final highs are in. But we did have a significan reversal day where prices staged a strong rally to new highs (Dow was up 154) and then reversed on just the slightest suggestion the "FED could be easing its purchases of Bonds if labor market improves by end of summer"

The mere suggestion of the FED not backstopping market led to a rush for the exits? Tells you a LOT of what has caused the market to rally for 5 years. How ugly could it get should the music actually be FORCED to stop? ISNT IT AN "ALL IN"MKT NOW?

VIX ended at 13.82, hardly a panic.

D

Sunday, May 19, 2013

"MOST SHALLOW SERVICES RECOVERY ON RECORD"

http://contraryinvestor.com/2013/05/18/manufacturing-some-perspective/


IS WEAKNESS PRICE OF GOLD A CANARY IN THE GOLD MINE

http://www.prudentbear.com/2013/05/financial-euphoria.html excerpt from Noland's "Financial Euphoria article linked to"

 "These days, the dynamic of over-issued, mispriced finance is a global phenomenon – the U.S., Europe, Japan, China, Asia and the “developing” economies. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced."

My take on gold etc.


Gold initially has responded (its march to $1,900) to CB monetary inflation, the attempt to devalue world currencies, how will it respond to the END GAME, or are we already seeing that? IS the price of gold warning of a coming major top in world stock markets? Too hard to argue for deflation over inflation, so I won't do that, but in the end, when it all collapses, It is my feeling that debts will be crushed, defaulted on a massive scale.....the QE has only expanded and gone viral...with Japan now pumping $100B in equiv currency...yet Gold falters....interesting in the least

 
I have NEVER seen such complacency as it relates to what I hear, as I drive around most days, what people tell me (many of them financial professionals) and nowhere do I hear much worry. And I do hear "harder" to find value, but they keep looking and none of them are close to more "defensive" measures. Most say, "we are VALUE investors, if the shares fall, then further from underlying values then we will buy more". In the long run that probably works, in the ST to IT can cause lots of pain, when the PAIN gets too much to bear, weak hands succumb and we get the panic selling to create bottoms, like in 2008-2009 etc.

 
5 YEARS into 0% rate policies, and NO sign nor signal when it might end. Last 2 times maybe the FED remembers that as things got better they began to INCH rates backup, as they did that stocks topped. Now THIS TIME an even LONGER more AGGRESSIVE monetary easing and stoking of speculative juices, which have helped risky assets/stocks reach new all time highs.....this is not just a US phenom, it is now as Noland suggested this week a "worldwide affair".....so instead of a TECH BUBBLE, a FINANCE BUBBLE, etc..we now are in the midst, near the end? of a WORLDWIDE BUBBLE. (synchronized QE)

 
Many, like myself, preaching warnings....and not going along for the ride are ridiculed and made to look like the fool. We are all to smart to know that you cannot print your way to prosperity. If the current strategy, given the highs in markets around the world, has not given those responsible what they wanted....then what will??

 
And if the intensity of "digital" printing cannot propel Gold to NEW highs as it has paper assets, IMHO.....the current weakness in GOLD is the proverbial CANARY IN THE COAL MINE. I have a SIMPLE but proprietary measure of extremes, highest prior level at THE TOP was 138 (2007), we are north of 133 and the angle is straight up. IMHO we are in the latter stages of the final melt up in world equities.....and surely it could go higher than one would think.....and a TOP could melt down slowly at first so those who love the ADV/DECLINE signals will get theirs too. Riding the lows (post 2009), even as fundies were awful provided low risk to reward....not anymore.

 
And the weakness in the Gold sector, is screaming something is horribly wrong as the printing presses are kicking into another gear...

Sunday, May 12, 2013

"IT'S ALL ONE BIG HISTORIC BUBBLE"

http://www.prudentbear.com/2013/05/thoughts-on-electronic-printing-press.html

"In equities markets, well, speculative dynamics have taken full command. The bears have been squeezed into oblivion, with a dearth of selling pressure now allowing speculators to easily push prices higher. Bringing back memories of 1999, heavily shorted Tesla Motors was up 41% this week and Green Mountain Coffee jumped 33%. It was a week where I was again contemplating “how crazy could things get?”

The Fed and global bankers should never have become such active players in the financial markets. Asset inflation is indeed more dangerous than consumer price inflation. Central banks will actively support asset prices, while refusing to remove the punchbowl. At all costs, Chairman Bernanke will avoid being a Bubble Popper. And when you read his comments from Friday morning (below), keep in mind that as Bubbles become more systemic they actually become less conspicuous. Today, Bubbles proliferate throughout the securities and asset markets. It’s all become one big historic global Bubble. Yet the Bernanke Fed won’t even begin tapering its $85bn monthly “money printing” operation in the midst of increasingly conspicuous market excesses. "

Folks, it's not really an argument to be had as to whether the stock market rally from 2009 has enterred the speculative blowoff phase, or that what we are witnessing is BUBBLE DYNAMICS.

And what eventually happens to all bubbles throughout history? THEY POP. And what happens when they pop?

Goodnight. This time I think everyone will know exactlt where to point the finger, a loss of faith in the FED on top of the greatest bubble bursting in history, will prove to be a nasty combo.

D

Saturday, May 11, 2013

BUBBLE TALK, BERNANKE HATERS, COMMON SENSE

http://www.prudentbear.com/2013/05/too-much-asset-inflation.html  Tid bits from last weeks CBB

April 30 – Bloomberg (Shobhana Chandra): “Business activity in the U.S. unexpectedly shrank in April for the first time in more than three years, a sign manufacturing may be a smaller contributor to economic growth this quarter. The MNI Chicago Report’s business barometer fell to 49 in April, the lowest since September 2009, from 52.4 last month.”

Federal Reserve Watch:

May 3 – Bloomberg (Steve Matthews): “Federal Reserve Bank of Richmond President Jeffrey Lacker voiced opposition to bond purchases by the Fed, saying the buying probably won’t spur growth beyond 2% while making an exit from stimulus more challenging. ‘The benefit-cost trade-off associated with further monetary stimulus does not look promising… The Fed seems to be unable to improve real growth, despite striving mightily over the last few years, and further increases in the size of our balance sheet raise the risks associated with the ‘exit process’ when it’s time to withdraw stimulus.’”

May 1 – Bloomberg (Fergal O’Brien): “Harvard Economics Professor Martin Feldstein comments on Federal Reserve in CNBC interview: The Fed has ‘stopped talking about early exits or slowing down but frankly I think they’re not accomplishing very much and they are adding to risks in economy… There’s good reason -- not in the way they think about it there’s good reason to be slowing down this process. There are some serious bubbles developing in this economy.’ Feldstein says 10-year Treasury yield not sustainable. ‘I think it has risks and it’s spreading over into things like the stock market.’”
April 29 – Bloomberg (Willow Bay, Jeff Kearns and Jeanna Smialek): “Former Federal Reserve Governor Kevin Warsh said the central bank will probably press on with its ‘aggressive’ easing as growth this year may fall short of the pace needed to put millions of Americans back to work. Job growth requires a 3% to 3.5% expansion that won’t be in reach for the world’s largest economy this year, Warsh said…”

"We are forming balloons......why is the German stock market at new highs with the economy doing so poorly......" said a noted economist on Bloomberg yesterday.

Because the STOCK MARKET and other RISKY asset classes is exactly where the record QE is going. SO you play or go home.

These foolish men are not concerned nor do they really know where this will end, the consequences of BUBBLE CREATION.
You may think I don't like a rising stock market by my comments, that is not true. I don't like a MANIPULATED, FED TARGETED stock market which now solely relies on the FED continuing what they are doing and perhaps even in greater doses to keep the asset inflation going.

We can't even create enough economic growth to create enough jobs for those looking, 3-3.5% GDP.
MAJORITY of jobs in the last report were "part-time".

Each time we have a boom that ends in a BUBBLE, the FED has stated "didn't see that coming". FED was not worried about housing market in 2006, saying " never been a case of year over year price decline.....NO BUBBLE, NO WORRY"....remember how that turned out.

How about the TECH BUBBLE of the pate 90'S, how did that work out? What helped cause and feed that? ULTRA LOOSE MONETARY POLICY, which ramped up into Y2K over FEARS over what might happen when the 1999 calendar turned over to 2000.

To fight that Recession, we got 1% rates, they held it there so long it helped create the next BUBBLE, the HOUSING REAL ESTATE MORTGAGE FINANCING BANKING CRISIS BUBBLE. How'd that turn out?

AGAIN, the FED or policy makers didn't see the excessive speculation going on? NO ONE stepped in to protect us, to put in measures that would have helped us to avoid an almost 1930 like Depression?

Now, it is a WORLDWIDE open spigot, money printing, QE war from the world's Central banks, everyone is IN THE POOL HERE!!!!!

OF COURSE the worlds stock markets are soaring, even as WEAK economic data comes in.
GOOD is GOOD and BAD is even better, so it insures MORE And MORE of the same.

0% rates, no place safe for Conservative investors, savers.....if everyone isn't in the pool, they will be soon. IS there a BEAR left standing now? IS there a CHORUS of non believers and furry folk running around? EVEN perennial bear Roubini sees no trouble for at least 2 more years.

Good news is good, bad news is great....so it would appear BULLS have nothing to worry about. The current policies and 0% rates will continue until they don't.

BUT when you consider how ULTRA LOW RATES misprice risk, if you understand YES THIS IS A BULL RALLY, but NO it cannot stand on its own 2 feet.

AS soon as the FED signals they will pull back, even a little, or inflation is undeniable, or LONG TERM RATES RISE out of control of the FED to signal GAME OVER....
..THAT will leave a HORDE, a CADRE of players that will want to make their way to the exits.....LIKE NEVER BEFORE.

Also keep in mind, that to SAVE US in 2008-2009, the Banks were bailed out, AIG etc and most of the risk was taken off THEM, and given to US the avg people. WE are now saddled with all of their debt and malfeasance, and they are free again to use FREE (FED) MONEY and let their computer algorithms run the market, jump in front of your trades, use unlimited leverage and derivitives with basically no one policing or giving a hoot as long as the trickle down (thought this was Rep Reagonomics?) stock market inflation would spur the real economy. WELL HELOOO IT IS NOT!!! BUT THESE IDIOTS PERSIST!. I'm not a Bernanke hater, I'm a BAD POLICY hater!

Help me see where you can reach prosperity and economic job creating growth by printing money and leaving rates at 0%. How has it worked out since 2008? No one can stop them, but at least they should have courtesy to use a rubber while f'ing us!

The market can fall a lot faster than it rises, most of 2007-2009 losses came in a matter of months, it took 5 years to gain it back.....all through FED QE pumping and printing.

We now have a full scale CRACK ADDICT MARKET, GD help us when we run out of crack, or an unintended consequence raises its head, with ultra, near historic NEAR ZOMBIE like indifference to fear, the next PRICK of this NEW BUBBLE, the depth to where it takes us could surpass anything experienced so far.
If what I suggest is possible, what can we do to protect ourselves, and will we see it coming?

D

Thursday, May 09, 2013

10 YEAR YIELDS TELL A STORY

We are still sitting at generational LOWS for yields on the 10 year notes, these are BELOW the real inflation rates. These LOW FED induced rates are mispricing risk in the economy and creating MAMOTH BUBBLES.

5 YEARS into recovery, STOCKS AT ALL TIME NEW HIGHS.....but yields are LOWER than they were at 2009 crisis bottom?

If everything was all peachy keen, why then don't we begin to normalize things?

D

IS BROADENING MEGAPHONE PATTERN NEGATED?

Possibly, I try to present what is, not just what I think what SHOULD be. Advance delcine lines hitting all time highs, with all manner of stocks doing so cannot be taken as BEARISH.

The world markets are showing strength, like it or not. Economic fundies may be weakening, more on government assistance than ever before....but stocks still rising.

The FED, for now trumps all other developments. I would still argue this will not end well, but that is just my opinion, current stock action does not bear that out. Charts don't lie.

Does above "breakout" signal maybe Roubini comments looking for 2 more years of bull are accurate...then he says lookout. SPX could be at 1900 or more by then.

This is NOT a typical rally, or bull, let's at least get that straight. World Central banks are blowing bubbles like crazy to save us from the financial abyss and for now, judging by stocks it is working.

STock markets are supposed to be "discounting mechanisms", then they for now appear to be saying blue skies ahead.

When stocks continue higher, with fewer and fewer stocks participating, this will be seen by lagging Advance Decline line, THAT will be one of your warnings....THIS is not present today.

With 0% returns on anything else, stocks and riskier asset classes appear to be about only game in town....play or go home.

IMHO, what this WILL do, is set those staying TOO long to the FED punchbowl party for an Historic crash/decline. It would seem there is barely a BEAR left in the house.

Even if sentiment corrects, stocks develop a LITTLE weakness.....greedy hands await.....for now.

This can all change, like the grain of sand analogy....we dont know what or when, but a single grain of trouble could set the whole mess tumbling...we will either SEE it coming as suggested above, or we won't at all (Crash scenario)

D

Monday, May 06, 2013

MONEY FOR NOTHING

"With no recovery in sight, where's all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The national debt is fast approaching $17 trillion, with the Fed monetizing most of the newly issued debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed's easy money. After all, as long as the Fed keeps the spigot open, nominal profits are there for the taking. But this is a house of cards. Eventually, just like in 2008-2009, the market will discipline the bad actions of the Fed and seek to find the real normal."

http://www.safehaven.com/article/29718/federal-reserve-blows-more-bubbles

Saturday, May 04, 2013

A CRASH IS COMING


Here for anyone who thinks or believes what the MEDIA is telling everyone that NEW HIGHS is bullish for mkt. IMHO we are STUCK in Secular BEAR, and only 2 things can happen.....a NEW LOWER LOW comes in the future within 3 years or a LOW COMES without lower RSI, MACD etc....giving us hint that is THE LOW....for decades.

 SO over last 13 years we have higher highs and lower lows....a REAL oddity

MUST READ ON FED LED DESTRUCTION

"At some stage, central banks inevitably realize, regardless of whether they admit the catastrophic nature of their own failings, that the cessation of money-printing will cause an instant depression. Even though at that point the cessation of money-printing may be the only action capable of saving society, that becomes a secondary consideration compared to the desire to avoid immediate pain and blame. The world’s central banks are in very deep with QE at present, and the risks continue to build with every new purchase of stocks and bonds with newly-printed money."

http://www.zerohedge.com/news/2013-05-03/elliotts-singer-bernanke-destroying-value-money-and-uprooting-basic-stability-societ

Saturday, April 27, 2013

NO FEAR

After listening to Bloomberg and CNBC commentators and guests all week, a commom theme was running through their message....."DO NOT FEAR A CORRECTION" even if one was overdue. The reason given is a major correction is not possible if even less liekly with the Federal Reserve pumping a continuous $85 Billion into the market each and every month.

Even as margins compress and earnings growth has slowed to a crawl, even as it is obvious all this pumping and humping hs not materially gotten into the real economy, continue as you were...NO FEAR.

If you cannot print your way to prosperity, why do they persist?  Because it is IN FOR A PENNY, IN FOR A POUND mentality, influence what you can and hope it trickles down into the general good.

What is actually happening, is these policies are enriching those who are already rich, those who have a large portion of their wealth in common stocks. It must be nice for those like Zuckerberg of FB fame, can peel off some shares and put some more $BILLION in his pile, and know he has
609 Million more shares to play with. And to think many complain when a pro athlete gets a $100M contract over 5 years.....if this isn't pure obscenity, I don't know what is.

Those INSIDERS with those MILLIONS of shares, and the company has declared dividends, they get to cash in and only pay 15% tax rate. Now many companies have decided to SHARE in their cash hordes with the investors......but the avg Joe may have 100's even 1,000's of shares of a given company....those dividends are not making a big difference in their economic lives.

The GULF between the rich and the poor middle class has expanded to a divide not seen in decades.

There has been only marginal recovery in Consumer Sentiment since the 2009 lows, this has been in many circles the weakest statistical recovery ever recorded....just NOT in stock prices.

SO the FED has targeted risky asset price appreciation (as has Euro CB'S and JCB), and has supported such with QE and now a whopping $85B a month. in asset purchases, even though stock manipulation is not in their mandate.

The TWITTER stock swoon, and minutes later recovery, is a microcosm of what is wrong and what COULD happen in the future facing investors.

There was NO TWITTER PANIC, the so called panic was just computer trading programs reacting to certain taglines they picked up in the news, the Twitter faked up release about the WH......this is what awaits people sitting idley buy and riding the BS rally for all its worth....when the MUSIC or manipulation, when the FED is forced to stop priniting money at an $85B a month clip....the false SUPPORT for the stock market removed will cause a horrendous crash. IMHO

D

Saturday, April 20, 2013

Thursday, April 18, 2013

THE GREAT DIVIDE

http://www.safehaven.com/article/29472/quantifornication-and-an-american-spring

"The class divide
The S&P 500 - an index of 500 large US companies - has finally, after a four year rally, recouped all of its losses from the 2008 global financial crisis.
The S&P 500 became the last major US index to hit a new high. The Dow Jones Industrial average has already climbed past its previous high.
The average net worth of the 400 wealthiest Americans, classified as the super rich, rose to an all-time record of $4.2 billion, up more than 13 percent from a year ago. Collectively, this group's net worth, currently at $1.7 trillion, is the equivalent of one-eighth of the entire U.S. economy.
  • The top one percent of the American population controls 42 percent of all financial wealth in the country.
  • The top 20 percent control roughly 90 percent of all stock ownership and financial wealth.
  • The bottom 80 percent of Americans control less than 10 percent of all stocks owned.
  • The bottom 80 percent of Americans hold roughly 5 to 8 percent of all financial wealth (non-housing related).
"The vast majority of Americans are not the beneficiaries of this "buoyant economy." Rather, growing numbers of people have been thrown deeper into poverty and social distress. Long-term unemployment has become entrenched. Working families are saddled with growing debt and struggle to pay for housing and other basic necessities, let alone put aside anything for retirement...
The US Federal Reserve is pumping $85 billion a month in virtually free money into the financial system, fueling the stock market boom.This is more money in a month than the $76.6 billion the federal government spent all of last year to provide SNAP benefits to 47.8 million impoverished Americans." The two sides of the US economic "recovery", wsws.org
Income inequality is the highest it's been since World War II."

What is the definition of stupid? Continuing to do the same thing expecting a different result?
The "WEALTH EFFECT" is like TRICKLE DOWN economics, but in this case, it isn't trickling down.

The Federal Reserve is working from an untried playbook, making this up as it goes. And they are in now $2.5 TRILLION of QE and adding $85B a month, but my friends it is going into the stock market and other RISKY assets, so that is the reason we are not seeing and feeling a greater effect int he real world.

I don't think they are bad people, but I do think they are closed minded and a few people are making decisions that effect 10's of millions....and they may be wrong!

The avg guy on street does not own stocks or owns not enough to FEEL JIGGY, to CASH OUT and SPEND, which spurs economy. Just look at recent CONSUMER SENTIMENT POLLS that show the worst recovery from recession since these records were held.

More people getting government assistance then before crisis. ALL I am saying folks is SOMETHING IS WRONG, we are misallocating resources AGAIN, which are benefiting a very few people at expense of the many.

Now with 0% return on savings, people have been FORCED into the stock market helping it reach new all time highs....if we reach another EVERYONE IS ON THE SHIP MOMENTS.....getting off will bemore like being thrown overboard...that I believe is coming.

D

Wednesday, April 10, 2013

THROW OVER MOVE?

If this pattern is to play out, the "Megaphone" topping pattern, then there isn't much more room to move with today's large 20 pt SPX vault.

It has that final look of coming out of the smaller wedge pattern, a terminal move, into the triple top, megaphone topping area.

There is no need to philosophize, conjecture, or otherwise, just to witness it.

D

NOT EVERYONE BULLISH

http://finance.yahoo.com/blogs/daily-ticker/p-500-may-fall-more-40-fall-chris-120957460.html

This does NOT include investors of course!,  they are ALL IN THE POOL

D

Tuesday, April 09, 2013

"CHAMP TO CHUMP CYCLE"

"According to Hussman, corporate profits are near 11% of GDP and 70% above the historical norm. (Hussman agrees with Warren Buffett that one has to be wildly optimistic to believe corporate profits -- as a percent of GDP -- can hold above 6% for a sustained period.)"

http://tinyurl.com/d5qjv6j

Sunday, April 07, 2013

MUSICAL CHAIRS AND WHEN DOES THE MUSIC STOP?

http://www.prudentbear.com/2013/04/kuroda-leapfrogs-bernanke.html Doug Noland at Prudent Bear

"Fed, BOJ, BOE, ECB and others have been working desperately to keep investors and speculators fully engaged in global debt, equities and risk markets. With near zero interest-rates and Trillions of monetization, “money” is being methodically devalued around the world. Federal Reserve devaluation is forcing savers out of “money” and into risk markets, apparently believing that asset inflation will spur wealth-creation, risk-taking and economic activity."

Holy print mania Batman! Friends, is printing money the answer to the EVIL that has befallen us??
And they don't seem like they have any intention of stopping.

You cannot hide under any rock, nor put your monies under you bed nor pillow case, as the CB'ers are determined to destroy our concept of fiat currencies. You have a problem, just print some more money (digitally) and it goes away?

In the history of this country, is there any example you can give me where you can PRINT YOUR WAY TO PROSPERITY? INFLATE DEBT AWAY? Are we fighting DEFLATION?

What happens when people realize that money may not be the trusted store house of value it was supposed to be and not a toy to be played with by the Federal Reserve System built and entrusted with sound money as one of their main reasons for being? Why are they NOT protecting our reserve Currency? Now in competition with others, like Japan in a race to devalue their currency's value to help inflate debts away? Debts incurred partly because of their inept and wrongful policies on interest rates to begin with?

Devalue your currency and watch your risky assets rise by over 20% ? That's the Nikk. Japan one of the most indebted countries in history? 290% of GDP

Fridays "employment" (or lack of) report shows the folly of the current 5 years of FAILED FED POLICY of trying to force every saver from their hole into the stock market. SHAZAAM it worked to rally stocks to new highs......f the fact that the REAL economy didn't come with it.

What will happen when the music stops? doesn't it always? Markets go in cycles, always have, always will. 5 years for cyclical Bull mkt is long int he tooth.

WILL the policies enacted and forced upon us the last 5 years comeback to bite us in the ass? I think so. WHAT happens if the avg Joe finally up and leaves the asset markets for good, realizing it for the PONZI SCHEME IT IS?

It's great when unemployment rate can drop because so many en masse drop out of the labor pool? SEEING NEW LOWS not seen since the 70's in the LABOR PARTICIPATION RATE doesn't bring anyone else to pause or question current policies for their effectiveness.

Where is our country headed where near 0% rates encourage the government to continue its deficit policies and as national debt continues to grow by a $trillion or more each year, added to what we cannot already pay back....ever? This folly is made possible by historical low interest rates.....surely they will last forever.

Friday, April 05, 2013

GETTING CLOSER TO FED'S UNEMPLOYMENT TARGET

Unemployment today DROPPED another.1% to 7.6%. But unfortunately the rate did not drop because of good news and economic vitality, it dropped because a huge number of job seekers just DROPPED OUT of the job seeking market. The labor participation rate dropped to its lowest reading since the 1970'S!

SO we have had a slew of people accepting part time jobs who want full time jobs, now we have a slew of part timers and those who cannot find any job all dropping out.

Waged are stagnant, energy, food and some other costs continue to rise in an atmosphere which I will label DEFLATIONARY.

5 years of failed Government and Central Bank inflationary, money printing policies and after 5 years we have such a flacid economy?

These historic low interest rates do not stimulate INVESTMENT, they DO stimulate risk taking and help support speculation in risky asset classes at the expense of SOUND MONETARY POLICY.

I have expounded for years how I do not like the FED policy of 0% interest rates and how it is helping to misallocate funds to risky investments and away from sound economic growth strategies.
I have complained for years how these same policies unfairly target the Conservative group of investors and have taken away any chance of a SAFE RETURN.

With little else to choose, it causes the vast majority to go in the same direction, crowd the boat so to speak.

This is the preverbial game of MUSICAL CHAIRS, and when the music stops, it isn't going to matter where interest rates are. The HERD has followed the path of least resistance, and when this trend reverses and it always does, when FEAR that 4 letter word creeps back into the market, you are going to witness a MAJOR HAIRCUT to stock prices, IMHO

D

Wednesday, April 03, 2013

CAW CAW

Black swans? http://finance.yahoo.com/news/three-black-swans-hovering-over-200224264.html

Caw for crows.......

We are hitting this turbulence at the triple top and expanding wedge area I have been posting.....just saying.

D

Monday, April 01, 2013

CONTRASTS ABOUND

"The results of a closely watched business confidence survey in Japan showed that despite a surge in stock prices and a steep fall in the yen, Japanese manufacturers are still largely in a pessimistic mood.
The Tankan survey, Bank of Japan's (BOJ) key economic indicator, came in at minus 8 for the January to March quarter instead of the anticipated minus 7 level. Though the reading was the best in three quarters it was still in negative territory showing that there are more pessimists than optimists among the manufacturers surveyed.
This contrasts with a 34 percent rally in the Nikkei 225 since November when Shinzo Abe, Japan's new prime minister, started pushing for aggressive monetary policy and economic stimulus to end deflation and spur growth. "

http://finance.yahoo.com/news/why-japans-manufacturers-bearish-082814512.html

Sunday, March 24, 2013

Risky Assets Are Already In A Bubble

http://www.safehaven.com/article/29231/equity-bubble-is-based-on-unsustainable-earnings

"If market forces were allowed to prevail and the government permitted the economy to deleverage, earnings of U.S. corporations would be in a depression. And the price to earnings ratio would reveal that stock prices are already in a bubble. A bubble that is only becoming more dangerous with each day of the Fed's money printing."

5 years of intervention and historical stimulus and manipulation. The Federal Rserve is in uncharted territory and admits it is making it up as they go along. So, a room full of men can make decisions effecting the whole country, the entire world population?
                            And there are NO checks and balances for this room full of men?

This room full of men, known as the Federal Reserve, can set interest rate policy and they serve no man, no country, no President, answer to no one?

If printng of $3 TRILLION and flushing it into risky assets has helped corporate profits, stabilized housing, improved home prices, improved Consumer sentiment, then what will happen when this can no longer be done? If this is not a grass roots movement, if the economy and markets cannot stand on their own 2 feet, what will happen when these policies are reversed?

At the moment, there is little in competition with rising asset prices, as the SAVER has been rubber hosed. A $MILLION in a savings of MM account will net you about $100 !!! A $100 return on your $1 MILLION????

I keep hearing radio ads for seminars which will teach you how to ???? FLIP HOUSES!! WTF???
25% of homes bought are from "investors", not new home owners, this is a huge %. 0% rates,
3% mortgages come with a price...CHEAP MONEY COMES WITH A PRICE. That price is the deleveraging processs was not allowed to take place and the HEALING needed to reset economy has not taken place, what we have instead in the steady IV DRIP from the FED RESERVE.....and other CB'S.

If you think we are at beginning of some new great movement, a new great bull market and SOUND economic expansion, then fear not. If however, you question the current environment, understand how we got here and realize it is NOT ORGANIC, then while you are eating your Organic baby spinach salad, and roasted veggie pizza on a gluten free crust with tofu cheese.....think carefully what you are doing and consider other outcomes are possible in the future other than the rosy scenario.

D