"KICKING THE CAN"

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10474

"The gamey U.S. stock market has placed a big wager on the “risk on” trade. With QE2 in the early phase, greed has thus far held fear at bay. It surely won’t take months of disappointing data to spark QE3 banter. And there’s nothing like a world of synchronized speculative asset markets to embolden those banking on global policymaker liquidity backstops – the Fed, the ECB, BOJ, PBOC… Perhaps U.S. equities will begin to decouple from global asset inflation when the fragile U.S. economy and Credit system come to be viewed as relatively more vulnerable to surging commodities prices and rising global yields."

By all accounts, we seem to be in world equity BULL MARKET. You know how company stocks can go HIGHER after they release dissapointing earnings reports but say they are laying off 20% of employees and doing cost cutting....STOCK market can be, supposed to be a FORWARD looking indicator......maybe it was, maybe it wasn't or is isn't.....not so sure anymore.

We will use technical analysis to do our best to report what IS happening, like in 2000 and 2007 I will do my best to serve up an BEAR ALARM in the appropriate time frame....you can use STOP LOSSES at some level you deem appropriate to try and lock in gains......it is still my opinion, not knowing when this bull cycle will depart but pretty sure we are STUCK in a LONGER DOWN CYCLE known as K WINTER....as we have NOT made needed changes NOR realizied true banking losses....and the proper restructuring and debt dealing not accomplished...instead as Doug suggests we have kicked the can down the road.

Can you spend money you don't have? Can you keep losses off your books to report profits? Can you foist your bad deals gone worse onto someone else?

We have come along and put quarters in the financial parking meters just as they have EXPIRED!

Low interest rates fueled the final leg of 2000 bull in fear of Y2K and that bubble popped after YEARS of loose monetray policy....growth at any cost.

In 2002-2003 we had what many called the RECESSION THAT WASN'T....CONSUMER SPENDING NEVER SLOWED OR CONTRACTED! Overall debt with housing BUBBLE EXPLODED.

$TRILLIONS were taken OUT and CONSUMED from HOME EQUITY the #1 source of the avg persons wealth and this went into economy....some homeowners REFINANCED MULTIPLE TIMES.

The GOV, AGENCIES, the FED who kept rates at 1% for far TOO LONG....did nothing! saw nothing wrong....are DIRECTLY responsable for our current financial crisis and NOBODY is taking the blame! ALL THEY have left is to manipulate the stock market and hope for its wealth effect.

20% of Americans now recieve some form of GOV ASSITANCE, a record! some recovery.

Housing prices still falling in most parts of country, sales lagging near worst on record! some recovery.

9.8% unemployed near wost is ever was but Recession officially ended Aug of LAST YEAR! some recovery.

Banks loans still contracting! some recovery.

Savings earn 1/10th of 1% ! some recovery.

Those without jobs longer than 6 months at a record! some recovery.

SOvereign governments around the world are insolvent. Some recovery.

Gold canary in GOLD MINE at record close. Some recovery.

Gas now over $3. it hurts consumers.

Gov deficits now equal to 10% of GDP. some recovery

FEDERAL RESERVE balance sheet goes from $800B of marketable Treasuries to almost $3 TRILLION mostly now of DUBIOUS VALUE....some recovery.

CPI yr/yr however plunging towards 0%....deflation.

VAST majority of progosticators calling for HIGHER SPX in 2011. BULLISH polls are close to 2007 EXTREMES. It would seem that THEY did good job of forcing most OUT of their protective shells and INTO RISKY assets in hope of higher prices......job well done.

D