HEY! Look Me Over Weekend Edition

First some charts my friends! (click on red live links)

BDI DAILY

5 YEAR BDI It appears that the BDI is now correcting from the sharp decline, and what a decline it was. I fully anticiapte the old highs to stand. If consumer demand weakens in the US, it wouldn't matter what the BDI looked like, if anything, a stronger BDI in comparison to weak consumer demand will cause a flood of unsold merchandise that will put even more deflationary downard pressure on prices of these overstocked items.

Considering the ship time to the US from China, STOCK must be ordered well in advance of demand. What the BDI or Transports don't tell us, is what is happening to inventory.Inventory turns have increased because of better technology and warehousing, inventory to sales levels are near historic lows. When considering the pace of consumer demand, upward pressure to increasing inventory levels has not been felt.

Now, let's look at the adjusted monetary base, each week we will track these indicators. After ROARING ahead in January (to combat slowing economy and markets?) the base flat lines until just recently in May, where it went vertical making up for lost time. It just took it first decline since then and a sharp one. If that continues, economic weakness surely dead ahead.

Most believe Greenspan is carving out his final legacy here, and won't let anything happen to the economy! But, isn't it plain that he doesn't control the all important longer term rates? Isn't it odd such flagrant fiat increases have not totally destroyed the US Dollar?

Maybe our Asian friends are in a conundrum? They MUST continue to buy our worthless fiat debt, and hope they can turn it into HARD ASSETS, though recently thwarted on its Connoc bid. I see it as a selling of America one piece at a time, these near worthless dollars must eventually come home or somewhere to roost!

You see the Highway BIll passing, for 5 years Bush has been in a coma and not veto'd a single spending bill! $230 Billion for roads? I mean graft keep busy projetcs where an unusual proportion of $$$ went to Alaska, no surprise, that Congressman headed the committee!! So, I suspect there is no end to spending in a deficit laden budget that it seems to me, MUST at some point send interest rates to the moon!

Some expected FIB retrace levels for BDI

WHY the sudden disconnect from Copper and BDI? (even more so for OIL)

And SPX? the BDI as leading indicator, spells to me a declining SPX on tap (all same great site)

Enlightening commentary on BDI current situation Galbraith's

BDI moving avg closeup Upswing NOT over.

A LOOK at how the money stock can GROW, yet slow

Velocity of money Considering all we know from Bush and Fed policies, hard to believe this is ALL the bang we got for the Buck!

In this Fed shell game, it says it is taking ever increasing amounts of funny money to get $1 of bang, I liken this to the gravitational pull of a black hole!

This economy only floats as long as credit continues to expand, it only has to slow to topple the apple cart IMHO.

From day one of thew aftermath of 911, Bush made pronouncements of how important it was for Americans to go forth and SPEND, multiply.

In EVERY preceding Recession, though said 2001 was shallowest on record, consumers PULL IN THEIR HORNS, they repair the damage, they save!

Then, repairs done, debt load back to normal, they go forth and PARTY! there is much demand to harness.

NOW?

We have witnessed the weakest recovery on record, in terms of job and wage growth and other areas.

And can you say, we have plenty of "pent up demand" to fuel the expansion?

We have had 5 years of record auto and housing, the 2 MAIN components of our economy, and it seems to me we have spent it forward like never before!

And we have taken mutual fund cash levels down to historic lows, and savings to zero, and debt levels to record heights never before seen.

We have had record consecutive bullish weeks from IIAA, we have had share volume on the most speculative issues more than double from the previous 2000 bubble top high, yet dollar volume lags! (because price in these BB stocks remains muted nothing like past) and it makes you wonder how such bullish action could survive in the face of rocky cheapie stock performance?

The markets have never seen anything like it.

SPX/VIX ratio which I harped on many times and caught a raft of grief for follwoing, has apparently topped at 30% above levels ever seen before.

There are many warning signs of a coming debacle, where even Bears are swimming with bulls, a love affair for salmon>?

In the investment community they remain near 100% invested in stocks, and do not fear a decline, because Sir Greenspan wouldn't let that happen?

My friends, it is because of that.....meglamaniac......we are in this very position. We are guinee pigs to him, some grande experiement.......some sick joke.

That all one must do is print money and liquify, and the bear can be defeated.

Sadly, no bear has ever left the scene with job not completed, and with near 3 years of cyclical bull and weak 18 month performance now, the end must be near.

And at this potential top and bottom somewhere out there levels unknown, with stocks not a bargain nor giving much of a dividend we find a certain peace and bullishness across the land that will be some day the talk of legands.

Duratek