Wednesday, February 29, 2012

"TrimTabs CEO Charles Biderman says fear of what happens after quantitative easing and other interventions run their course is what could be keeping retail investors from hopping aboard the stock market train.
Curiously, investor surveys, such as the one run by the American Association of Individual Investors, have reflected strongly bullish sentiment for going on nine straight weeks. But investors haven't been backing that up with their dollars.
In addition to parking their money in bonds, individuals have plowed $2.3 trillion into savings accounts over the past five years, which is 2.4 times the amount allocated to bonds.
"The bulls dancing to the central bank's music had better stay close to the door so they can exit quickly when their medicine becomes poison and the music stops," Biderman said in his weekly analysis. "While central bankers can print all the money they want, they cannot control where the money goes."

Tuesday, February 28, 2012

National home prices fell 4% in the fourth quarter of 2011, putting them back at levels last seen in mid-2002.

That's the fifth consecutive annual loss and the biggest decline since 2008, when markets were in free fall and prices plummeted more than 18%.

Prices have been falling since they topped out in 2006, and are down 33.8% from their peak, according to the S&P/Case-Shiller national home price index.

"The housing market ended 2011 on a very disappointing note," said David Blitzer, spokesman for S&P. "While we thought we saw some signs of stabilization in the middle of 2011, it appears that neither the economy nor consumer confidence was strong enough to move the market in a positive direction as the year ended."

Monday, February 27, 2012


Or do they?

The current prices we are paying for OIL are filtering all through the economy. Even airlines are now charging "FUEL SURCHARGES" and soon Freight companies will be also along with manufacturers who pay the freight for their products in a landed cost.

Food, furniture, just about everything requires a TRUCK, which runs on GAS to get the product or service to you. The HIGH OIL and energy costs and part of the same unintended or intended consequences of the current economic revivial package fashioned by 0% rate FED policy and unlimited Gov't deficit spending. BANKS cannot pay you much for deposits, leaving most with one alternative...RISK ASSETS....and IMHO this SCHEME is almost in itself responsible for the 2009 Bull MKT and is why I feel in the end it will fail.

We are also in Afghanistan for what? Violence has picked there since the burning of their holy book, and there is NO plan that will work and what is it we hope to accomplish?

A big country which is a pile of rocks, trying to be governed by a central gov't in kabal...ain't gonna happen. Obama foriegn policy is flawed and yet he keeps going, and American deaths pile up....$billions and billions keep going and going....


Sunday, February 26, 2012


$ TRILLIONS POURED INTO "ECONOMY"?  Evidently not, but it has been going into RISK ASSETS and we are certainly not getting much bang for the buck by this measure, the turnover of money in the economy




Velocity of Money Dropping

ECRI's Lakshman Achuthan discusses our recession call, including the Weekly Leading Index and velocity of money.

Friday, February 24, 2012


Futures show green open, wee Dow 13,000 and hold? Ponder.....2% 10 year yields show either extreme FEAR ad DEFLATION or manipulation. there was extreme manipulation after tech bubble burst, how'd that turn out? OH we got 3 years of fun and higher stocks, actually new all time highs by 2007....then how'd that turn out? NOW, we have HISTORICAL intervention, 0% rates guaranteed for another 3 years making it 6 YEARS of 0% FED rates for's this gonna turn out?

Gap earnings off 44%, but they will buy back $1B of stock? (boy they got that much cash?) and raise divi 11% (more cash and more profits for that too?)

STocks rallying, oil and gold because of WEAK $?  How's that coming $4 gasoline feel? DOES OIL above $108 begin to threaten ecocnomy?  YES

Traders talk: see 1350 SPX key level to HOLD for nice 2nd half of year. VIX falling to 18 level, after historic level of volatility last year, this year not even 1 90% volume day? Complacency?

Market due for push back that doesn't seem to come....


Wednesday, February 22, 2012


The latest data show retail sales rose 0.4 percent during the post-holiday season, while Macy's (NYSE:M - News) indicated strong sales growth in the past quarter.
But Whitney said such figures can be misleading in that the spending is being driven mostly by shoppers at opposite ends of the spectrum. The ones in the middle, she said, are finding it harder to be active consumers."

"Americans are going to be a lot more tightfisted with their tax refunds this year, with more people planning to save the cash they get back from Uncle Sam instead of spending it."


Fitch downgrades Greece

Fitch ratings agency downgrades Greece from CCC to C, indicating default 'highly likely'


IS this what Nat Gas prices should do in a reviving economy?


Tuesday, February 21, 2012

TRANSPORTS DIVERGE "warning short term top"


Before the financial PANIC you could get 3,4 even 5% for a 2 yr treasury, now? .29%The economic recovery and the stock market rally are a sham and when IT TOPS, you better be OUT, good chance ALL the gains from 2009 will be WIPED OUT IMHO.


Unintended consequences of a Greek bailout and worldwide Central Bank inflation? SOARING GOLD to new highs and OIL at almost $106. This will translate to Consumer inflation for goods and energy, gas at pump is already at historic highs for this time of year.

But, you know, I think the FED should keep doing what they are doing, keep rates at 0% even after it is more than obvious to any casual observer it is igniting asset inflation, if you own lots of stocks maybe that's a good thing. The avg American had their net worth mostly tied up in their homes, which won't appreciate in value for some time to come.

The rest of the world may be held accountable for deficit spending and that compared to GDP and ability to repay Bond holders, holders of the debt. HERE? we can just print more of the RESERVE CURRENCY, and don't have to make any significant efforts to trim gov't spending and deficits.

Commodities sniff an issue, and even as the players might be able to control rates for now, other things are out of their control, we have government and central bank intervention at a GLOBAL HISTORICAL SCALE never before seen.



Greek debt settled?  Sell the news affair?


Monday, February 20, 2012


Yes and no. Oddly, there is a direct relationship to direction of stocks and price of oil, but at some point the price of OIL reaches a level that impacts consumers and helps cause a retreat in prices.

Oil this morning is above $105, premium gas nearing $4 again. Other than QE, there is little for the markets to hang their bullish hat on


Sunday, February 19, 2012

“What if we all became Greeks?”

"The only problem is that many of those eurozone members are now looking at Greece and questioning whether they would be next. France’s Liberation said it best this week. “What if we all became Greeks?” the daily asked. “Is what is being imposed today on this pressured and humiliated country a foretaste of what will one day be prescribed for Italy, Portugal and, why not, France?”

Saturday, February 18, 2012

WEAKEST IN HISTORY best read on the web each month.


"THOUGHTS"  you can subscribe on line for John's weekly letter.

"We are coming to the point in the United States when even the US government will no longer be able to borrow at very low long-term rates. That point is a few years off, and we have time to change paths; but as I have shown in previous letters, the longer we wait to get the deficit under control, the fewer choices we have and the more painful they are. NO country can run deficits the size we are currently running, along with unfunded deficits over four times the size of the economy and a growing overall debt burden, without consequences. At some point, investors in bonds will start wondering exactly what the process is by which they will be repaid. And what will the value of those future payments be?"

"Yet these types of policy-induced market runs become the devil’s playground for precarious Bubble excess. With the bears out of the way, stock prices become easily detached from underlying fundamentals. Markets become dislocated – and speculation runs roughshod. Markets will tend to climb walls of worry – and derivatives will tend to leverage market buying power. And a marketplace dominated by trend-following and performance chasing trading dynamics forces everyone in. It convinces most to disregard risk. Hedging is abandoned, and everyone gets comfortably positioned on the same side of the boat.

I look at the global backdrop and see all the makings for a major, major market top. It’s just impossible to know how far away – both in time and price – we are from such an outcome. I don’t envisage a new bull market – but instead see the same type of manic marketplace that brought us the 2010 “flash crash” and the 2011 10-day market shellacking. "

My sense is "enjoy it while it lasts". If you don't think the entire run from 2009 is courtesy of the Federal Reserve and worlds' central banks, better think again. With bond yields here and elsewhere below 2%, they have left you with FEW alternatives, and usually when the choices are slim and none trouble follows....this is NOT a normal functioning market when the people are forced to ALL go in one direction.

Remember who also OWNS the majority of the Bonds being bought at such generational lows in yields? F E D.....Are you making a 10 year committment at 2% or below? Are you buying the argument there is little inflation?

What has the FEDERAL RESERVE and GOVT policies brought us in the last 12 years? BOOMS AND BUSTS, BOOMS AND BUSTS....let's see we got ? BOOM now without the job growth it normally brings....and what follows? B U S T

It's going to be onehelluva BUST as well, because now we have government bonds invloved and the printing presses have been going NON STOP all over the world. The gov't finance bubble is going to POP.....and they might go down like dominos.

SAVERS have been hosed down like Greek rioters in the street. No ONE asked them about the bailouts, about the FEDS 6 YEAR 0% RATE POLICY.

The stock market has always been a place of ups and downs. In bull markets you just HOLD ON, as long as the trend continues, as the market always goes up over time. There is precedent however where a BEAR can last up to 16 years.

"The current market entered a long term secular bear market in 2000, and as history shows us, this will last at least until 2010, probably longer. As demonstrated above, during secular bear markets, the market trades in vicious cyclical bull and bear markets. Therefore, you have to be careful in the stocks you buy and be ready to sell them quickly should the market turn against you. Pull backs or cyclical bear markets will present opportunities to take new positions once they have run their course. It is also important to find value situations and play the hot sectors. We will need to be defensive in our positions and for those who are willing to take the risk, we may want to take some short positions.
Trading and investing is much easier in secular bull markets, and much more difficult during secular bear markets. Since we are in a secular bear market for the next 5 to 10 years, it is going to be much more difficult to be successful in your trading and investing.

Currently, the cyclical bull market that begin in early 2003 is close to being over and a new cyclical bear market will begun that will last another 2 to 3 years. This means that the best plays will be on the bearish side for the next couple years, that is, until the next cyclical bull begins."

If you followed above advice and enterred markets in 2003 you exited a bit early but out by 2009 bottom add 3 years you get? 2012.....PIGS GET?

Now IMHO we are STILL in a SECULAR (long term) BEAR MKT? WHAT???!!! ONLY gov't and FED actions, of historical nature have both avoided the inevitable corrections to markets and economic excesses and prolonged a REAL RECOVERY.

Are we headed for an historic BLOW OFF TOP? I think so....look around and see what is being done to stave off what is just around the corner, major Greece bond holders are happy just to get BACK 50% on the $ or Kroner or whatever its called.

GOLD refuses to give up the enterred a TRUE BULL MKT in early 2000 when the FED games began and we have had 2 bulls and 2 bears since then....and they fight it even more now.

And they say "we can withdraw the liquidity" no problem.......with a market doubling from the lows, all these calls of economic expansion, job growth....corporate profits.....why then continuation of 0% rates for another 3 years?

Is a BOND MARKET accident waiting to happen? What if yields begin to rise? and get away from the open manipulation?

US deficits don't seem to be much of a problem.....with attention elsehwere, even to Japan where they have the worst ration to GDP of any's still seen as safe haven...they still fight DEFLATION since 80's.

In for a penny, in for a pound, THEY can't stop now.....the lie grows and grows.....there is NO free market.

Some companies offer a program of "guaranteed" high as 8% a year....and you ALWAYS get the wins, never the losses.....I am guessing you would have to ANNUATIZE the money and get paid monthly for the rest of your life or sacrifice your get paid as long as the company issuing these promises stay solvent.

NOPE, I don't know where top will be or when it will come, but I'm pretty confident because of how we got to here, that this seemingly risk free market is going to reverse and when it does....retrace most of all of its gains and end at new lows.....all will be hope is the fabric of our society can hold together....for that we should pray.


Friday, February 17, 2012


Yesterdays breakout from the trading range is one of 2 things, a breakout move leading to another leg higher or a fakeout exhaustion move. For the latter prices must turn down hard today.


Wednesday, February 15, 2012


One key point to make about todays market "selloff" is that it lacked little vigor, only 66% down volume, by far not a true conviction that market is ready to change trend in the ST. Let's see if any follow through and any pickup in volume.
SPX 1350 area was good excuse to take profits.


Tuesday, February 14, 2012


Daneric EWT site...."I believe we are topping"



"The Fed is not content to let interest rates find their levels, they must repress them, and they are not content to let housing prices find their levels, they seek to intervene to prop them up," Grant said in a radio interview on "Bloomberg Surveillance" with Ken Prewitt and Tom Keene. "The results of all this intervention is not to cure what ails us, but prolongs the symptoms of what distresses us."

Monday, February 13, 2012


NEW YORK (CNNMoney) -- Moody's cut the credit ratings of six European countries on Monday amid continued anxiety over the continent's debt crisis and its sluggish economy.
Italy, Malta, Portugal, Slovakia, Slovenia and Spain were all downgraded, while three other countries -- Austria, France and the United Kingdom -- had the outlook on their current Aaa ratings changed to "negative."

This should be good for another 200 SPX points, don't worry  what ILL can come from 6 years of 0% rates?



"The central bank intends for banks to use the money to lend to businesses and support the economy. That is especially crucial in Europe, where banks, rather than capital markets, are the main source of credit for corporations.

But analysts suspect banks are using much of the cash to buy government bonds. That would help explain why interest rates on Spanish and Italian bonds have plunged in recent weeks.

Borrowing from the central bank at 1 percent and using the money to buy bonds paying many percentage points more is a nice trade for the banks — as long as the issuers remain solvent. And it raises the chances that Italy or Spain will be able to continue servicing their debt, by holding down their interest payments."

**Problem is, the banks have this "safe trade" and then they don't make loans to companies who need them to expand and hire. And the FED has told everyone they will hold down rates at 0% for another 3 years....that will be almost 6 years of 0% rates......but don't worry that couldn't possibly cause problems.....


Sunday, February 12, 2012



A Megaphone Top is a relatively rare formation and is also known as a Broadening Top. Its shape is opposite to that of a Symmetrical Triangle. The pattern develops after a strong advance in a stock price and can last several weeks or even a few months."  or maybe a decade?



WHile the avg Joe was putting cash into his pillows, the smart money was all over these extreme readings and was buying the bottom...especially after the FED signalled not on my watch.

IMHO, we have not reached the top of this move. This may only end with a BLOWOFF TOP, a capitulation from the shorts.

It may confound historians that are waiting for the LITTLE GUY to buy the top, this market has been moving without confirming volume, the little guy may have bailed for last time and is not coming back



The rallys you see around the world are all mirages.....



Tuesday, February 07, 2012


The market is just hanging around, and as of the current market conditions, no significant sell off should be at hand without a large pick up in desire to sell, not just from lack luster demand.

Why is this occurring? Most of the market participants think the FED has fixed the game, telegraphed policy, 0% rates for another 3 years knocked the snot out of volatility.

We are at decent overhead resistance, for now it is just causing a stall. 3 years into the cyclical bull market, however may not be the time to become totally complacent. We will be on the hunt for any meaningful pick up in the desire to sell.


Sunday, February 05, 2012


With the advance decline line making new ALL TIME HIGHS, if we are in a new Bear Market, this would have occurred only a few times in history with that detail.

Short term we are at resistance and overbought, so a blow back is on the horizon. But there is no indication YET, it will be a serious decline or end of advance as urge to SELL has slacked and without a pick up there and in VIX, it's still Bull game on.

Advance from 09 lows is now in 3rd year, avg bull cycle time frame, but the usual suspects are not in place for THE TOP. You have to play the odds, nothing is 100%.

With the economy in recovery mode, stock market has doubled off the lows of 2009, the Banking system seems resuscitated, why does the FED continue their 0% rate policy?

With any other game in town shut down, the risk markets have little competition, manipulated engineered markets rarely turn out well.
"Chairman Bernanke was forthcoming yesterday when he stated that loose monetary policy distorts the economy and leads to inflationary pressures. I’ll contend that the world would today be a safer place if “easy money” in fact always led to inflationary pressures. In reality, some of history’s most notorious Bubbles developed in an atypical environment comprising loose monetary policy and well-anchored consumer price inflation. One can look to the seemingly sanguine pricing backdrops in the U.S. during the “Roaring Twenties” and Japan in the eighties as cases in point. In both circumstances, a misdiagnosis of the Credit and financial backdrop was instrumental in policymakers remaining too loose for too long - and unwittingly accommodating precarious Bubble dynamics."


Saturday, February 04, 2012


Recent US $ weakness has help fuel a low volume rally that is challenging 1370 bull mkt highs. A break and hold of previous highs could lead to an attack on the ALL TIME HIGHS of 2007. Hard to view current action as Bearish, or occurring within a BEAR MKT.

The story of recovery and job growth are saturating the media. What isn't is the exponential growth in money printing and backstopping. What FED and Central Banks have tripled the money supply in an attempt to paper over the worldwide crisis, and in many ways save the very perpetrators of the crime.

The VIX continues to fade for now, so we will watch for increased volatility. 10 YEAR yields still cannot manage to gain above 2%. Housing prices continue to fall year over year even with historical low mortgage rates, no recovery in price means no recovery for all those underwater in home value.

Excess Reserves not getting into economy....the REAL PAIN many feel is being masked...


Friday, February 03, 2012


We have an "I got mine" society. Most do not take the time to see what is REALLY going on. MAIN STREAM MEDIA cept 60 min cannot be trusted, spend little time deciphering the truth. In the meantime, on the streets and pavements, the AVG American is waking up to the truth and the games being played. GO BACK to observing the constitution and make it a level playing field for all....who can do that? DIF FACES....SAME GAME....MONEY TALKS

CHANGE? where for art thou



"The rainy-day funds that U.S. banks have been tapping to boost their earnings could soon begin to dry up, and that doesn't bode well for bank profits.
Many banks have been "releasing" reserves against bad loans since the worst of the crisis passed and the economy began recovering. That money flows to the bottom line, helping some banks boost earnings at a time when lending and trading profits have been soggy.

But with loan-loss cushions now receding toward precrisis levels, some analysts doubt banks can afford to keep up the pace of reserve releases. Lowering reserve releases could increase pressure on profits that are being hit by slow economic growth, low interest rates and tighter rules.

The releases are "masking some horrible operating performance," said Mike Mayo, a banking analyst for Crédit Agricole Securities. "The bottom line is your earnings power is decreasing."


The story of the reach of GS again almost sounds like fantasy...extreme point of view until you let it sink in, and NO arrests in the scandal of century.

GOOD reason VOLUME doesn't accompany this mkt higher....the players can have fun on paper....but the populace has been stunned out of the market, or at least to follow it like they used to.

WHAT IS a breakout to new highs without confirming volume?

All those DROPPED OFF THE LIST, not finding opportunity as it is presented by THEIR data..have no voice. "FED DIDN'T SEE THIS DATA..." my ASS they didn't....

If all is going in right direction, normalize rates......can or will the mkt do it for them?  FED "we have all the tools to take the liquidity out of market, we would be SELLERS....." yeah

Thursday, February 02, 2012


*click to enlarge

The Goldman Sachs subprime scandal

**Why do I bring this up again? Not ONE (1, single, nada) person has been made to pay for the worst financial crisis in our history....not 1. And at the same time our own Congress can't put forth legislation to make it illegal for them and ONLY them to profit from "INSIDER INFORMATION". Is it any wonder to see why their approval rating is lower than our Presidents?

The Goldman Sachs subprime scandal

Wednesday 21st April 2010
Wednesday 21st April 2010
Read a 30-second background on:
The US sub-prime mortgage crisis explained
John Paulson.jpg
Wall Street kingpin Goldman Sachs was last week charged with investor fraud by America’s financial referee, the Securities and Exchange Commission (SEC).
The shock announcement rattled nerves across the stock markets, with Goldman’s own share price falling by 13%.
But the bank has come out firing, saying the charges have no basis in fact or law and it will vigorously defend both the firm and its reputation.
The alleged fraud occurred in 2007 – about the time the US housing market was faltering.
The SEC says Goldman Sachs advised two of its clients to accept a US$1 billion bet over sub-prime mortgage bonds that they knew were going to fail.
They say Goldman did not tell the clients that the person they were betting against, John Paulson, had actually fixed the odds in his favour.


Wednesday, February 01, 2012

"The Federal Reserve's zero-interest-rate policy is hampering economic recovery by discouraging bank lending, Pimco bond titan Bill Gross said in an analysis.

For banks, a healthy lending environment exists where they can borrow at low rates in the short term and lend at significantly higher rates over the long term, a situation that creates a profit through a positively sloped yield curve ."


"GLADWYNE, Pennsylvania (Reuters) - A top Federal Reserve official sharply criticized the U.S. central bank's decision last week to telegraph ultra low interest rates for nearly three more years, saying on Wednesday the move undermined confidence and caused confusion.
 The Fed's policy-setting committee, citing a bleak outlook for the fragile economic recovery, said last week it expected to keep rates "exceptionally low" at least through late 2014. The forecast, which was contingent on economic conditions, pushed the target date some 18 months later than a previous forecast, and it sparked a rally in stocks and bonds."

CONSUMER CONFIDENCE RECOVERY?  The level is about HALF what it is normally this far into "RECOVERY".
The worldwide money printing by the Central Banks is floating the stock markets in a sea of freshly printed fiat in an attempt to never have to pay the piper.

The FED comes out and says for another 3 years rates will stay at 0%, meaning savers and conservative investors who RELY on returns to live have only ONE PLACE to put down their chips.

And in the end, the HOARD of players in the bond market at SKIMPY rates and those in stocks will be trapped. AS it is, there is little volume outside of the manipulators, the HFT's.

WE have OFFICIALLY 2.8 GDP, but 3.5 is needed to create jobs in a meaningful way. The unemployment drop is mostly from long time unemployed just giving up, or settling for part time or jobs that pay 50% of what they used to make, if lucky to find one.

WE have an engineered economy, one that evidently cannot stand on its own 2 feet, or interest rates would float in an open and free market.

Manipulation, and regulation can work for a time, but in the end, I am afraid the end game is being made much more dramatic, details to come. "Castles made of sand, slip into the sea, eventually".