Headlines

Recovery in Danger as Firms, Homebuyers Cut Back- AP (yahoofinance.com)

The economic recovery appears to be stalling as companies cut back last month on their investments in equipment and machines and Americans bought new homes at the weakest pace in decades.

But wallstreet journal says ("case for economic optimism)

Investment in equipment and software is strong (HUH????????), as is the outlook for exports.

STOCKS BREAK DOWN

50/200 in Bear cross mode, it's up to bulls to show they can rally long enough to bend these MA'S back up or both will begin to decline. When the 200 does the decline will probably pick up pace.

BOONE PICKENS N CNBC pushing his rediculous NAT GAS energy plan, what a good somaritan....isn't he big in nat gas? GEE what will happen to NAT GAS price is NAT GAS demand risies substantially? great solution BOONE! not

We already HAVE what we need! hybrids, clean burning high milage DIESELS!!!! just a switch to diesel by good % will bring down demand for oil dramatically.

**breaking data (free at link briefing.com)

Durable goods EX transports FALLS BIG 3.8% !! experts looking for .5% gain (why listen to analysts?) futures took a hit after the data.

Data continues to weaken, no proof economic recovery is sustainable....10 yr falls below 2.5% !!!

2 yr is under .47% !! return of your money is about all you can hope for.

I can be bullish stocks, in the right environment, at the right price, I think this is neither. Near record visits to my blog yesterday.....this is mostly word of mouth....welcome to any new readers....hope you find some value here and we keep growing in number....like an audience at a concert.....can feed off of that but I would do it for one.

Lots of stock writers using data going back to when it might have meant something, all the new rules passed since 2000, the uptick rules suspension....causing 23 90% volume days since APRIL!!! this is madness.....little by little the avg Joe has had enough. And with FED policy at 0% int rates JUST to prop up banks...its helping no one else....and leaving soured avg joe much less that avg returns if risk is whathe doesn't want, if saving is what he wants....savers getting hosed down reall good.....

GOV and FED policy is abject failure.....no alternative policies on the horizon folks

D

FALSE DAWN

•Total home sales fell 27.2% from 5.260 mln in June to 3.830 mln in July.

10 yrs fell to 2.5%........

SPX has fallen BELOW the 1063 support level I drew....I am out soon, my band has evening gig downtown, might post chart later tonight.

D

NOT A SIGN OF STRENGTH

I'd almost have to agree BOND BUBBLE, BUT.......it is fear not greed chasing BILLIONS into the bond funds....it a WEAK ECONOMY worldwide that has many seeking yields......and the stock market doesn't yet agree with the much larger vote being cast in the bond markets....but I think it will....in due time.

D

HOME HOME ON THE RANGE

You see the housing recovery? You see the LIMP stats "outside" shaded Recession area?

Chew on this: Apps for new home purchase declined 38% over last year (was already putrid),

people poking around new home developments and recent conf board surveys showed near historic lows of pessimism. The survey also asks Americans if they "expect to buy a home" there wasn't much response.....they should have asked again.

ALL this is ocurring with 30 yr rates below 5% !! AYKM!!! To get your ass in a new homoe you might have to actually qualify and would need some kind of DOWN PAYMENT...imagine that.

With the rate of home ownership still above historic norms....expect pressure in the housing industry to continue.....and if you add the under and unemployed.....a BOAT LOAD OF PEEPS have been taking OUT of the potential buyer stream.

And you know.....who is afraid that rates will jump up quickly? WHO is afraid prices will begin to rise all of a sudden? what does this mentality sound like? DEFLATION SPEAK!

I have a friend I spoke with yesterday, young man, doing well with Fidelity, one child 5 another on way, he's in townhome, has been eyeing a development for a step up.

20 homes mostly vacant, many in banks hands short or foreclosed.....they did average around $520,000.....after several MARK DOWNS....maybe $450K now......but he's not so jiggy just yet....as he expects prices to fall some more.....he feels he has got time...plenty of time.....prices will fall some more....UGLY LOOP....DEFLATION.

D

Japans Woes continue

NIKK back below 9,000, off 14% this year.....stronger YEN hurting their exports.....deflation is there like a shadow.

More later

Reference previous SPX chart

1063 low next level to watch for support.

I think the market is setting up for some kind of rally, unless selling volume comes into market, this time of year however low volume is the norm....with MANY individual investors exiting because of lack of returns over last 10 years....storming into bonds.

That said, IMHO we have a traders, a pros market....so if you are trading...you better be good.

Many pros laughed as some poured into junior miners and commodities during and after 2000 bear market....only to see those who did hit the JACKPOT!.....I think in a lot of ways, easy money has been made....

D

JAPAN'S SAD TALE OF DEFLATION WOES

20 YEARS FIGHTING DEFLATION, BATTLE LOST AND FEW TOOLS REMAIN....and it was caused by Real Estate and Financial bubbles....sound familiar?

D

DEFLATION vs INFLATION DEBATE

from Karl Denninger site "you can't have inflation without rising wages....." in other words how can you sustain rising prices, inflation w/o having people able to afford to pay for them?


We have collapsing values, the one most people watch is the stock market and THEY are doing all they can to keep IT from collapsing.

Home values have collapsed, not re-inflated, Bond yields have collapsed and show no signs of inflation.

WE have excess capacity.

Where many are looking, FIAT created, is not causing inflation (as yet) because it sits as excess reserves. REAL money gets into system when a loan is made…..banks not doing much of that

My 2 cents

Duratek

WAR AND LIBERTY

TALES FROM THE NORTHWEST FRONTIER

" The Founding Fathers would not agree and would be horrified if they returned to America today. They saw clearly that foreign entanglements would bring about the death of the Republic and granted only to Congress the power to declare war. In spite of that, however, the United States has sent its soldiers into combat situations more than seventy times since the defeat of Japan in 1945, all without a declaration of war by Congress, and the president has acquired pretty much a free hand to initiate military action."

Thought provoking essay, agree or disagree.

D

MONDAY AM SPX CHART SET UP

Another Monday rally setup, it seems gross majority of Mondays begin as rally days, especially when no data.

I hope you read weekend Doug Noland I posted. VERY good backdrop to the fundamental issues that may plague us for years.....yes appears system WAS stabilized....as Mauldin s fond of saying we got a "muddle" kind of recovery......but every time the FED takes the easy way out, somethnig WORSE takes shape than the previous pain....of which they apply the same and ever increasing amounts of elixr....to where it goes they have no control.

It is obvious to me, FED policy has LITTLE effect on the housing market......but look at the bond market GO!

ISn't the most important aspect of our economy the sovereignty of government debt? That my friends with profligate government spending.....is very much at risk

D

THE BIGGEST AND MOST DANGEROUS OF ALL

credit bubble report weekend read

"Push the inflation/deflation debate to the backburner. The critical issue these days is whether global debt markets have succumbed to Bubble Dynamics. Are investors and speculators, once again, participating in a historic bout of (Hyman Minsky) “Ponzi Finance”? Is flawed policymaking fomenting yet another dangerous speculative Bubble and period of deepening economic maladjustment? Are central bankers and markets accommodating history’s greatest expansion/inflation of non-productive government debt?"

I wonder, as I usually do when I post, do people really want to read what I write and post....it's not uplifting reading. Why do I read the endless stream of depressing articles I do? Because someone has to, because I want to know the truth, I want to TRY to understand and then I want to share and try to help others.

My goal is not to depress anyone, does it do any good to act like everything is great when IMHO it really isnt?

The markets, economy and related are like the most complicated puzzle, and so I am one of those wierdos who "enjoy" trying to unravlel its secrets.

On the way in my approx 20 years of study, I have met the best teachers, experts and columns to help guide me....Richard Russel, Jim Puplava, Daily Reckoning, KD, Zero Hedge, Prudent Bear Credit Bubble report, Lowry's subscription service for PURE market data, 20 years of technical analysis study, Elliot Wave Theory, and countless articles written by many intelligent writers including Adam HAmilton and Martin Armstrong.

The path to knlwoledge is different for everyone, but there is no fast, or easy way to get there.....but is available to anyone willing to seek it.....and whatever conclusion one comes to,,,,doesn't have to agree with anyone else...and you wil own it.

Duratek

DEFLATION.....YOU ARE NOT MY FRIEND, CAN'T Happen HERE?

Bubble Economy Of Japan

Some MONSTER RALLIES...but in the end for 20 years the SECULAR TREND was deflating asset prices, to this day Japan has NOT been able to escape velocity the dog of deflation biting its ass. The images are eerily similar, though most experts say it wont happen here, its different this time...and we have RESERVE CURRENCY.

I can't stress enough the need to be LIQUID and OUT OF DEBT during these tough economic times. I don't want bonds at these prices, even if I have NO alternative. At some point the bond market will EXPLODE and so many crammed in there for saefty and yield, but 2.5% for 10 years to me is like NOTHING, I'll take my chances staying liquid.

REcord need to finace debt PLUS record LOWS On yield, has me worried of a bond bull trap......certainly yields can go even lower before they POP!

Stay thirsty my friend, stay liquid, be on guard. Most indexes have fallen back below their 50 and 200 MA'S.....23 90% volume days since APril, majority were downers, sorry that doesn't sound like any BUll Mkt I want anything to do with.

Duratek

WHAT LOST MOMENTUM

"if the economy had any, I must have missed while pulling weeds from my garden...." Caroline Baum Bloomberg

FIBS AND MORE WEEKEND WRAP

AT 1217 high, very close to the .618 fib #. ALSO wedge forming and possible head and shoulders also (dashed lines and arrows).

You know anyone alive during 1930's? 70 plus year cycles do exist, one of EXPANSION....eventually leads to ONE OF CONTRACTION.

A BREAK of lower dashed line IMHO would again be ominous sign of BEAR REIGNITING.

Many think FED policy and Bank Bailouts thwarted a financial meltdown and saved the world....these SAME (no bear no lehman GS competitors....) banks are now even BIGGER....have even MORE control....you see any evidence of behind door goings on becoming more public? who owns what derivitives?

Thursday employment report backing up to 500K claims and 4 wk at 478K....how is ANYONE to come away feeling good about that? GDP revision again next week, most figure this massaged # to drop below 2%.......if in "RECOVERY" why don't the data support that?

Growth can be traced 100% to gov stimulus....there are no 2 feet here standing.....just 2 smart hands foisting bad debt onto the public, and stocks to weak hands....the perverbial BAG HOLDERS....don;t be one of them.

There have been 23 90% volume days since last APRIL!!!! 14 have been downers, 9 uppers....last 2 were down volume days...unprescedented....more down volume days than up in a bull market????

Up days continue pattern which began shortly after 2009 bottom of rally days on low volume and decline days on rising volume....hardly a bullish sign IMHO.

SO I don't buy into MSM calls for "birth of new bull mkt" as I dont see technical and I sure don't see normal economic expansionary data and consumer confidence as one would expect....I can only conclude we are in the grasp of a long term bear market interupted by periodic rallies, when concluded could lead to new lows.....so I suspect March 2009 lows will get tested.

2 years of unemployment benefits....then millions run out, and give up...unemployment stats kept by government are erronius at best, fraudulent at worst.

Interest near historic lows, amount of stimulus already applied, and the health of the $ are all at odds as to what is left in the tool shed to avert disaster....FED rates at 0% already.

Secular trend has baby boomers wanting to unload larger homes, can't do that in this environment......young people are wondering about how smart it is to OWN a home.......others can't get approved, stricter standards for sure. ANother group wants to refi.....but huge number of them cannot because of lowered home values.

Trend is more to save (rate up to 5-6% from zero) maybe back to historical NORM of 10%.

Bear Market bottoms of substance usually see SPX dividend yields avg 6% or better and single digit PE ratios......will that happen again?

We cannot SEE the future, it is hard enough to see the now the trees in the forrest....but we can see the past and hopefully gain some knowledge and raise the odds of doing somethng right VS doing somethng wrong.

Can you live off of Money MKT returns of near 0%? How about holding 10 yr notes for 2.5%? $2,500 TAXABLE income per $100,000.......

Are the 8 MILLIONplus out of jobs since 2007 contributing to 401k'S? How is that mutual fund cash levels looking? 70% of volume churning from HFT black boxes......becoming harder and harder to distinguish reality from fantasy....my spidey senses are on full alert

Duratek

STEP BACK. LOOK AT S&P MONTHLY FROM 1980

Technical analysis for me is observation, patterns....probabilities. We can look at charts and not think of any news, earnings or Jim Cramer rants.....we just observe.

Last 30 YEARS no period looks like last 10 years. NOWHERE do we observe "MULTI YEAR" NEW LOWS on the chart....as we have above.

Nor do we see 2 highs spanning 7 years or so ending at near same level (DOUBLE TOP...) If MACD crosses down again, that would be evidence BEAR growling once again (if not already)

Recession declared OVER in media, not by gov BLS, not by economic data nor BOND YIELDS.

IMHO it is tread lightly, stay OUT of debt....own some gold......for me personally I choose not to be long stocks in general......from a technical standpoint, I guess one can always find a few to play....but I understand its play not to love.

D

DOOMSDAY SCENARIO

GOLD SHARE PROXY

Could be double top but 2010 uptrend appears still intact......gold hasn't given much back from highs, not all paper shares performing alike.

D

KING OF BIG BOX ELECTRONICS AND GADGETS

This chart has no opinion, TV commentary not needed. Previously the stock was in a healthy uptrend. A loss of 30% from the top we could argue the uptrend has been halted....WHY?

Don't need to know, you wanna get long, then we look for early signs then sure fire uptrending charts....this isn't one.

I could offer opinion on why......If COnsumer was healthy and spending I could conjecture, this chart would NOT have broken down. It could be bottoming who knows.

D

HON INDUSTRIES

BUY LOW SELL HIGH In Worst of crisis in 2009 Hon was under $10 !!

D

HEALTH OF US COMPANIES WHAT THEY SEEM?

"This new rule, proposed on August 17th by the two regulators (IASB and FASB), has shocked companies everywhere.

The change will make a lot of firms look wobblier: a survey by PricewaterhouseCoopers, an accounting firm, found that it would add about 58% to the average company’s interest-bearing debt.

Many companies are close to their maximum debt limits, and the new rules could push them over the edge. Small wonder they are howling.

Other companies will see their apparent return on capital plunge. Many firms will see their debt-to-equity ratio rise and their ability to borrow fall."

More detail here

MEASURE OF FEAR

That's what the VIX does, it rises usually during selloffs, falls during rallies.....but during recent period of weakness it has been range bound.

We could be consolidating for move higher after WEAK PERIOD ends in sept/oct....would need a piece or 2 of POSITIVE news would be helpful.

D

MORE ON SLIPPERY SLOPE OF HOPE

"WASHINGTON (AP) -- Nearly half of the homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

A new report issued Friday by the Treasury Department said that approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the effort have been cut loose through July. That's about 48 percent of the 1.3 million homeowners who had enrolled since March 2009. That is up from more than 40 percent through June. "

NO EASY FIX FOLKS

D

THE NEW NORMAL V SHAPED RECOVERY

Stocks socked by economic trifecta
Aug 19 4:58pm:
Investors were hit with a triple whammy of bad economic news Thursday: manufacturing still stinks, more people are jobless and confidence in the future is less than hoped.

IS THE DOW STILL IN CYCLICAL BULL MARKET?

April was last HIGH for DOW, action now below both 50 and 200 SMA. Bond yields are beyond Recession looking......now diving towards lowest levels we've seen last FEB 2009....when stocks hit 6,600...food for thought.

Todays "employment" report was rather sad, sad looking, sad for those wanting to work.

Payroll taxes should be CUT IMMEDIATELY! LOW INTEREST LOANS SHOULD BE MADE TO SMALL BUSINESSES up to $500K...if you have a face, can at least show you are NOW breaking even and can service the loan and employ between 20-50 employees.

What will companies do if as it would appear, their bottom line is at risk with SLOWING sales and no way to raise prices, and costs rising?

WE have a job crisis, and others.....and I'm sorry I don't see the administration taking it seriously....high level action is needed.......and fast....and not the raise your taxes kind!

We are sinking into the pit of iniquity or which no certain return can be promised, not for a long time.

D

BREAKING ECONOMIC DATA

Unemployment claims come in at 500,000 ! 4 week moving avergae rises 8,000 to 482,000....some V SHAPED recovery folks.

And all the POOBAH'S have been claiming we're in recovery not REcession.......we're certainly NOT in Kansas anymore. Now watch the spin put in all this...corporate profits have been scorching...how bout that....

D

THE GUNS OF AUGUST

Lowering the flag on the American Century by Chalmers Johnson

"Where exactly are we, as we continue to garrison much of the globe even as our country finds itself incapable of paying for basic services?"

Take a moment, think about the last 3 years, look around.....try to think of where we are NOW......are we headed in the right direction? What if the US pulled in its horns and instead of being the worlds policeman, we poured that money and invested it back into ourselves? Why is it that our government feels the way to world power is through military power? even as we DECLINE soically? economically and have taken such actions as to fan the fire which is CHINESE POWER? People say.." This is made in China?....I don't want it......" Then in my case I have to tell them that ALL the US manufacturers have plants in CHina or similar and don't make entry level products anymore......but if they want US made....it will cost them 3X as much....they then put their flag down, fold it up and smile about all the cash their saving...BUY AMERICAN? in many cases no one can afford to do so.

I know you have heard Obama's CAR speech, drive the car, R's want keys back now economy is out of the ditch, blah blah....blame game and stump is all we get.....from either party.....there is NO VISION.....NO PLAN FOR THE FUTURE....just politics.

It has been said "let NO crisis go unused..." well instead of introducing REAL REFORM....banks got bigger, more power.....the American people even if paying attention think the adm actually did something......what a joke

Our economy has near ground to a halt, the ENGINE, the US CONSUMER is on the endangered list. Near 8 MILLION have lost jobs and MAYBE some have found LOWER paying or part time jobs. They have cut back on spending, and they dont have a NEW ENGINE to borrow from...like their HOMES during the END of the GREAT CREDIT BUBBLE.

If you paid $300,000 in 2006 for your home, that is now valued at $250,000 WHAT BANK will let you REFI at todays LOW LOW RATES?

Savers get near 0% returns, can't spend that! STocks below levels of 10 years ago....can't spend that.

When is the last time you saw an application for a credit card come in the mail?

The demand for stocks has waned, but for BONDS it has boomed.....am I the only one who finds this continuing rally from MArch 2009 a little puzzling? suspicious? ON PUTRID VOLUME?

2 years of FED policy of ZERO interest rates, lowest mortgage rates in HISTORY......and all we have done is enrich banks, and destroy savers.....and leave NO CHOICE FOR SAFE LOW RISK RETURNS.....great plan!

I am sorry to tell you IMHO we are in the EARLY STAGES (denial?) of the aftermath of the exploding historic credit bubble.....and its collapse has left deflating values and ruin in its path.

Businesses face uncertainty with government policy health care and taxation, State and local governments are forced to CUT back.............in an HISTORICL CONTEXT we are witnessing one of the weakest recoveries from Recession n recorded history and how can anyone DENY even the jaded BLS data coming forth is showing a weakening diminishing economy?

ALmost all of the growth coming from government spending. Profits shown at financial institutions that are using change of GAO accounting urles to NOT HAVE TO show mortgages held at REAL VALUES...mark to market.....their profits which FEED the SPX 500 are mostly bogus.

Good luck in the new normal.....my only hope is that the new normal has you seeing things more for what they are,

Duratek

KYLE BASS INTERVIEW

Posted on Zero hedge website "no way I would be long stocks"





D

Cyclicals

Demise of Barnes And Nobel

HOW IS THIS IDIOT STILL IN OFFICE OF ANY KIND?

2010

WASHINGTON (Reuters) – Fannie Mae and Freddie Mac should be abolished rather than reformed as part of the Obama administration's planned overhaul of the government's role in housing finance, Rep. Barney Frank, chairman of the House Financial Services committee, said on Tuesday.

"They should be abolished," Frank said in an interview on Fox Business, when asked whether the mortgage giants should be elements in housing market reform. "They only question is what do you put in their place," Frank said.

BUT WHAT ABOUT GAY LOVE CONNECTION?

2008

Media Mum on Barney Frank's Fannie Mae Love Connection
Democratic House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive.

DISHONERABLE RECORD

Total Credit MArket Debt as % of GDP Chart courtesy of ritholtz visa vi tcw
Historic debt levels
STill another look

It is hotly speculated and talked about how much CASH corporations are sitting on, but why is it that the FACT corporations are also SADDLED with record DEBT ($7T vs $2.6T cash) is never mentioned?



EWT alerts that at record low yields in 2009 Bond bulls were 99%, current reading is 98%.

OK, the chart above is suggesting to me that we have BARELY begun to deal with the debt bubble and that once a record historic credit expansion ends....as did in 1930, that ratio shown falls back to NORMAL historic levels....an historic HIGH is UNSUSTAINABLE.

IN 1929 the ratio was near 265%. SO even now more than year after the PRICK of the bubble we are near 370% ! This is as current as I could find. ATTEMPTS to reflate or send this game into "extra innings" will be futile....and maybe make matters even worse.

Our deficits show NO sign of slowing near $1.8 T a year!!! Accumulated US debt near $14 Trillion. UNFUNDED US liabilities said to be near $50 Trillion (or more?).....yet 10 yr bonds yield 2.6% ??? just above HISTORIC panic lows....good luck with that.





D

MATURE BULL

*Flight To Bonds COntinues (Yelnick) since 1980

MY FEARS ARE NOW "EASED" !

WASHINGTON (AP) -- Industrial production rose in July as manufacturing remained a key engine of the flagging economic recovery.
The Federal Reserve reports that output at the nation's factories, mines and utilities increased 1.0 percent last month. But it says June's results were revised to a loss of 0.1 percent, reflecting the economy's sluggishness.
Factory output grew by a robust 1.1 percent in July, helped by auto plants that kept operating when they normally shutter for summer renovations. Factories are the largest single component of industrial production.
The strong manufacturing growth should ease fears that the economy could begin to shrink again. The nation emerged a year ago from its deepest recession ??????since the Great Depression.

No official call yet! what a JOKE!

RECOVERY IS A METAPHOR FOR RECESSION

August NAHB Housing Market Index 13.0, worse than the 14.0 Briefing.com consensus and prior figure in July of 14.0.

Briefing.com data

YIELD TO ME

Here's the real breaking news, 10 yr bonds now yield a scant 2.57%. Sure the FED doesn't control interest rates (LONG TERM) DIRECTLY....they DO control SHORT TERM rates....but that pulls ALL rates down.

FEAR....is pushing swarms to safety of bonds......even as many warn its getting crowded. It would seem the potential exists, especially if stocks grow weak, for yields to push down evern further before they attempt to bottom and mount a counter trend move.

SO is all we can hope for from world govt's and bankers is a flood of paper currency is the FIX we all need? sounds like ZImbabwe strategy.

2 years we sit here at record low rates,, real problem is banks wont lend to ONLY the highest quality near 100% no risk customers. Those who could benefit from REFI'S WELL they DONT QUALIFY WITH SINKING HOME VALUES....of which may be stagnant or head down for years to come.

1980-2007 the longest recorded, strongest bull market in history. Bear markets usually last 30% of that time frame....we just getting started in the changes that may last some of our lifetimes.....unless printing money is the way to regain prosperity?

If banks aren't making money on loans, on trading profits, 0% savings accounts aren't attracting new money to the banks.

Houston we have a problem, and at some point, IMHO boy is the stock market ever going to reflect that. GOLD has been resilient...I just wonder about the paper gold when baby goes out window

D

WHY LOW RATES ARE NOT HELPING

Lowest rates in decades, but many do not qualify.

Deflation TO BE OR NOT TO BE

Read complete Arstrong Essay here

Martin A Armstrongs thought provoking essay....from the hole. "we better find a BOULDER not a rock to hide under...."

We live in very complicated times, so it will take much effort to get some handle on what has happened and what MIGHT happen. Part of that effort comes from reading, especially pieces that make you think. You cannot afford to go ignorant into the night.

Armstrong says no REPEAT of 1929 style Depression, but he doesn't say road ahead will be easy, perhaps he suggests it might be paved with gold...

At near $14 TRILLION (with a "T") in debts, the US is head closer and closer to a yearly SHORTFALL of near $2 T !!! With the world economies weak, WHO will lend us our ever increasing borrowing needs? And you can see, the US will NEVER be able to pay off its debts.....we will be lucky to just pay the interest, which for now (THE RATE) is historically LOW.

Unemployment stress is comig from the local and state levels as they downsize to come in line with the tax and revenue stream....but don't expect your property taxes to come down....those getting HIKES in 2007 (3 yr phase in to 2010) will not see relief next tax asessment.

WHY LOW RATES HURTING NOT HELPING? No returns on savings, more are saving.

WHY LOW RATES DONT LEAD TO HUGE REFI BOOM? because unlike before, housing values NO longer SUPPORT increased valuations. SO Like a mirage of water to a man dying of thirst in the desert, MOST DO NOT QUALIFY because of loss of home equity BELOW THE ORIGINAL VALUE of the home....the LOW LOW RATES sit there teasing....but out of reach.

D

Fed official calls low rates a `dangerous gamble'

Thomas Hoenig one voice of truth in a cadre of liars, read AP story here

Will be offering an extensive update sometime tomorrow, off for beer and bass.

D

CONSUMER SENTIMENT RISES MORE THAN EXPECTED?

AT 69.5 (blues line total) it is a rather WEAK number, hardly cause for joy! You can see in a TYPICAL recovery the reading should be 90 or above......

CPI rose because OIL rose, final sales weak.

D

TRIM TABS "FED INTERVENTIONS ARE POINTLESS"

Read it on zerohedge.com

Expect market to try and rally from uber selloff 97% down volume day....what market does will not change life on the street

D

MARTIN ARMSTRONG

Interesting case, interesting writings

Not much of a snap back today from 97% downer.....see lower prices coming, if not now after some failed rally.

D

WHAT KIND OF WORLD DO WE LIVE IN?

*Update alert....4 week moving average of claims VAULTS 14,000 to 472,000. weekly claims surprises to upside at 484,000.....export prices continue to FALL.

I am sorry to say a DEFLATIONARY one. That is obvious isn't it? So current FED strategy will not do any more than the previous FED strategy, and we still have the debts and mistakes of OTHERS foisted over to US without much to show for it.

What I think many don't understand is it IS different this time, we are not suffering from the classic Recessionary issues, but from those of a credit bubble cycle.....maybe last seen in 1930.

If you look closely to the data coming out, it really hasn't improved all that much from the period ending in early 2009, yet stocks are up 75% or so......which asset can now appreciate to support expanding consumer spending? Then how much more can the Gov be expected to do to stimulate with funds it doesn't have? This is not just a US phenom and I thnk is why the US $ may not be ripe for extinction just yet, will the Euro replace it? I don't think so just yet.

The race for yield has been on and AGAIN Bonds are outpacing most others in gains, but the yields are getting rather skimpy with the 10 yr dipping to 2.7% ......what seems like a very crowded trade just keeps getting more crowded....some say 1.5% yield within next year is possible....before that bull mkt ends.

SOme also reccomend looking at QUALITY CORPORATE BONDS as an option (consult your financial advisor).

In an up and down market that has gone nowhere in 10 years, allocation is key IMHO, NOT LTBH.......and we could be in for 10 years of corrective activity AFTER the bubble burst around 2007.....or longer

How much can the shorts be counted on at these levels to cover and support market? more likely these areas may attract more of their kind.

With little improvement in housing and employment, this close to the coming xmas season.....what outlook can retailers possibly have?

As many EXPERTS call this a recovery, NBER has not declared Recession over.....

You understand what can drive an economy, it's not the public sector....its the private sector. TOO MUCH IS IN LIMBO, TOO MUCH UNCERTAINTY....about costs and taxes.

Investment in future business does not like uncertainty.

We must stop trying to create jobs with GOV spending and hiring and resuscitate small business.

Freddie and Fannie doing so good....they need another $2B from US.

The "recovery" has been unlike others in the past by this time, and it seems in almost any measure to be descelerating, and IMHO the chance corporate profits can continue to surprise upward are getting slimmer and slimmer.

Yesterday was another in a series of 90% down volume days, puncuated by some 90% upside days, but there have been more downside volume days and in a new bull mkt that seems rather odd....

D

NO MIXED MESSAGE HERE

"Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July," he said, "have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month."

A near record number of people lost their homes to mortgage payment problems in July. Lender repossessions amounted to 92,858 homes, the second highest monthly total ever behind the 93,777 recorded this May."

CLOSEUP TODAYS ACTION

UGLY DOWNER

Most likely another in ednless stream of 90% days, majority have been DOWN volume days....does that sound like bull mkt action?

1088 is being called out here and there by this dude or that one as big deal....so we got that low with a BIG RED BAR.

I think themin rally trend from June is broken, as I like to use trendlines and that one was broken as drawn. SPX has given back its 200 and now challanges the 50 again.

Under we could challenge 1056 then 1040 area, IMHO if 1040 gives a heave ho.....more evidence of bear lurking.

VIX rose but doesn't shout panic. But enough buying has been put down with putrid volume to be very suspect and might not offer much support on the down low.

Of course you can parse through all the stocks and find some that fare much better than others.....but if a double dip vision seems more and more likely......who is left to buy and put a bid on?

Lowest ever recorded bid on the 2 yr note.....what a mess!

Duratek....keeping it real and not falling asleep

EVERY PICTURE TELLS A STORY, DONT IT

Current administration and FED

GRAVITY of our situation (black hole)

D

CHEAP $ HELPING TRADE BALANCE???????

WHO CARES ABOUT FED ACTION?

Record low mortgage rates do little for demand- Reuters

...so lower them some bleepin more....buy them, print them and buy them yourselves...tell me how YOU are GURU of the great depression.....tell me how fing clueless you are ..BEN

Tell me how the stock market shows a V shaped recovery that never came... tell me why a 2.69%!! 10 year yield is bullish.... for crying out loud.....lost generation #2 coming up

D

RALLY TIME

IN the US $ and Bonds!

FED comes clean like a pick getting hosed down in a mud pen.

Yields signal severe economic contraction. Small BUsiness does not see blue skies (NFIB SURVEY)

WHY rag on the US $ when all fiat currencies are getting shredded? then there's the YEN. Slowing in China? can't they keep making stuff even as economies contract, consumer spending slows?

RECORD GOV and FED intervention, almost 3 years after crisis began in 2007......do you see the results? now they say...oooops, we dont see expansion....credit still contracting....but DO NOT WORRY WE GOT YOUR BACK!

I'm not worried at all.....

Futures ugly red (lets see if buyers step in late) NIKK down 3% overnight.....their 20 yr chart says it all folks....get used to it.

D

ALL ABOARD

10 YEARS at 2.74% !!!!! I hope you understand what is saying...

EXPLANATION "LIMITED HANGOUT"

FROM WICKPEDIA SITE MUST READ (puts FED disclosure today and Obama's and others statements on HEALTH of economy into perspective)

"A limited hangout is a public relations or propaganda technique that involves the release of previously hidden information in order to prevent a greater exposure of more important details. It takes the form of deception, misdirection, or coverup often associated with intelligence agencies involving a release or "mea culpa" type of confession of only part of a set of previously hidden sensitive information, that establishes credibility for the one releasing the information who by the very act of confession appears to be "coming clean" and acting with integrity; but in actuality, by withholding key facts, is protecting a deeper operation and those who could be exposed if the whole truth came out. In effect, if an array of offenses or misdeeds is suspected, this confession admits to a lesser offense while covering up the greater ones."

And should show you, cannot believe a WORD any gov office tells you.....or the DATA they spew out from BLS or BS or FU university....

ALL YOU NEED TO SEE link here
thanks to a friend for heads up

D

ALERT: FED RATE DECISION AND COMMENTS

The Federal Reserve on Tuesday said it would begin funneling proceeds from its maturing mortgage bonds into longer-term government debt in an effort to support a sputtering economic recovery.

Just 2 months ago there was talk of how they would begin taking away stim and begin normalizing positions......

Obama "economy is strengthening minute by minute"

Decide if good or bad, more FED medicine....when some $2TRILLION etc etc didn't do job....they got our back, now take knife out...

Market will go thru several headfakes, but admitting how sour things are, when telling us constatly how they are improving....no CRED IMHO

D

OWN 2 FEET?

BALTO AREA HOME SALES


Baltimore-area home sales fall in July
Fewer are buying in the absence of the homebuyer tax credit

ZEROS

Chinese market was off almost 3% overnight, seems like there is a slowing in their economy...what a surprise.

But don't worry here, FED meeting and rate decision today, and seeing as how everything the FED has already done has worked so well, surely stock bulls will be encouraged if they say they will do more....some suggest they just "add some ZEROS to bank reserves"

Keep in mind, now everyone is sure the $ is going to 0, and talk of deflation is commonplace......this sets up a contrarian rally in both( $ and Yields)

SO many taxes and costs, make it prohibitive for employers to ADD new employees.

Descelerating economy 100% addicted to gov stimulus, businesses not hiring, housing not reviving even in face of record low interest rates, possibility of tax increases, distinct change in Consumer behavior with savings rates rising, still have stock outflows and bond inflows (who is buying stocks and contributing to rally?)......we have a secular theme, we have STRUCTURAL problems that are NOT being dealt with.....with structural solutions....and the band played on.
*($ rallied overnight, oil fell back below $80)
D

IT CAN'T HAPPEN HERE?

"DANGEROUSLY CLOSE"

Martenson thinks we’re “dangerously close” to entering a stage of ‘stagflation’ that crippled the economy and market in the 1970s. “That really squeezes the workers even harder than any other condition you can experience," he says, because wages are stagnant while the price of goods and services rises.

With both fiscal and monetary stimulus winding down, Martenson is convinced a double-dip recession is imminent, if not already under way: "The early data is saying, 'weakness still is here' and we’re going to have to live with this for a while,” he says.

Not everyone thinks we're good as gold.

D

DRAMA

Tuesday is the FOMC interest rate decision day at 2:15 PM, usually markets are quiet ahead of that data. Futures point to a green open, I don't expect a lot of volume or volatility....markets sit on ST overbought condition.

Markets will try to confound as many as possible before taking them out. Diversified portfolios still the strategy of most financial advisors.

Lowest mortgage rates in history, many may try to refi...IF they have HOME EQUITY......is it like the man in the desert who thinks he sees a pool of water....but always just out of reach...

WHile we could argue for hours whether we are in a cyclical bull market or not, my argument remains were are in SECULAR BEAR MARKET maybe only half way through.

D

THE CONNECTABLES

Yes the dawn rises, the already sataurated housing market which hasn't responded to all the gimmicks and stimulus nor record low rates. There is the "SHADOW INVENTORY" the banks hold off the market like the Russians keeping diamonds in underground vaults to suppress supply and keep prices high....as Debeers raises their advertising budget....show her you LOVE HER.

And the demographics of baby boomers now just coming onto the scene, and many want to DOWNSIZE, just around the time prices have crashed and that NEW inventory will be met with a generational buyers market.....deflation of housing may be here for awhile...and our problems which are not being dealt with by those in power.....will not go away.

But the bankers are connected, you are not. There are so many to thank for FOISTING THEIR debts and BAD BETS on the PUBLIC.....I don't have enough space....I DO know not one single person has been brought to justice.....do you ever wonder why the major banks and finacials didn't have their top guys replaced?....an honest man put in place would uncover TOO MUCH...and they don't want you to know....too much

D

2010 VS 2007

"The current environment increasingly reminds me of the long, scorching summer of 2007."

credit bubble report

FEW WEEKEND CHARTS

A TALE OF 2 REALITIES

Folks, reading one of my most trusted subs this AM, besides what the coffee usually does to me, I got inspiration for this post.

If at times, the stock market movement makes no sense to you, that is because you are equating your own personal experiences into the mix, and perhaps other opinions...things you read...Gulf Oil SPill....unemployment...record food stamps.....record foreclosures.....in the end you have to make a CHOICE....do you want to take what the STOCK MARKET is willing to give you or don't you?

From the depressing lows of March 2009 when it looked like the financial system would be burnt to dust, one of the best buying opportunities of a lifetime was approaching.....at that time most were calling their brokers to SELL SELL SELL. ( I had been safely on sidelines since early 2007 when I made my bear mkt warning call)......human behavior will repeat over and over again, and when EMOTIONS rule your investing decisions, USUALLY that spells losses!

There is ONE fundamental rule that can control almost all pricing of things...that is THE LAW OF SUPPLY AND DEMAND

If on any given thing there is MORE DEMAND than the SUPPLY for that thing, the price will rise.

If you don't like that thing, or read something that says that THING SUCKS....the law of supply and demand could care less......others want it.....few are selling it....prices rise.

SO, IN THE FACE of a declining economy, few job opportunities, record foreclosures, a swan diving US $, depression like yields on interest rates, record deficits, war, oil spills, expensive oil, possible tax increases, financial regulation, a populace turning away from the stock market and overall down in the dumps attitudes.......the stock market primary rally since March appears to be still alive and kicking.....because it doesn't care what you think.

And never before do we see such demand for stock with public opinion on things stuck at RECESSIONARY LEVELS (consumer confidence).....and we do have a Consumer economy.

I will continue to give an overall view, opinions on many different topics, yes on fundamental issues.....because SOONER OR LATER they will effect supply and demand......but I will also trust my charts and the measures I get, the data that SHOW ME REAL underlying demand or not...to help guide any investing DECISIONS I will make......IMHO if you only keep a bull or a bear jacket on (based on your actions) you will lose.

Now the thng that DOES bother me, is the positive trendd mentioned above is coming with some of the lightest volume of any bull market, the trend in place almost this entire BULL CYCLE is one confounding issue....VOLUME RISES ON THE DECLINES (on avg) and VOLUME FALLS ON THE RALLIES.

In a bull market that is not supposed to happen.

Market sold off Fri on lack of emeployment data, but recovered at close......so it would appear it doesn't care......and wants to go higher.

We look for DIVERGENCES to help spot market turns, even if short term. I see some along with current OVERBOUGHT indicators......so should I WANT to make a few bucks long, I would like to see them resolved.....but any decline is likely to be brief and shallow.

When the law of supply and demand (from whom??????? black boxes???) turns against market with a vengeance, if it does......it will show on the charts.....we should be able to figure if and when the BEAR MARKET which I think is not over will return.......according to many, those same laws say the I'S have control.

D

BIGGER VOTE CAST TO WEAKNESS

*click to enlarge chart.

BDI PAINTS UNCERTAIN PICTURE

ALso check adjusted monetray base much different picture painted here.....far off the peak and not growing.

What you see lately in the US stock market is not the votes of Millions of Americans, I believe it is the votes of massive black computer boxes.....and if the wierd action, HFT, lack of real FINREG (not lame shit they passed off), people are catchng onto the stock market game....and losing faith and interest...and in the end the stock market IS NOT a place where we all can win......where we can ALL make money, all retire off of, count on 8% yearsly gains.....it has been exposed as one big ponzi scheme and if you don't get in early enough the risks rise greatly you will get screwed.

Does the stock market always reflect economic reality? I don't think so, we have eroding financial and economic data.....jobless "recovery" contracting, deflating data....they cannot afford to let the main US asset stocks deflate TOO! and I DO believe that some ATLAS is under this thing.....and the putrid weak, limpass volume is ratting it out.

The stock market is a game of MUSICAL CHAIRS of sorts, yes it has avoided collapse for now, it appears it doesn't want to correct or resume its Bear Market......until its sure.....only the are out safely and don't see what is coming....the chairs will be on fire...the door will be a-closing.....people will run like they did on the TITANIC to one end as the boat shifts...one end sinking as the other end lifts high into the air....and then it all goes down! damn Im cheery

I don't know what others are looking at.....but at this juncture in the scheme.....I need more than JUST rising prices not to get happy feet....NOPE, I'll sit this one out, on the sidelines....and scratching my head why more are not talking about the 2.82% YIELD ON THE 10 YR BOND...holy cow!

D

PROGRESS AND RECOVERY

"Food Stamp Usage Hits Record High At 40.8 Million"


"An average of 40.5 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates." zero hedge flesh out

D

EDITOR OF SHADOW STATS

JOHN WILLIAMS "APPROACHING THE ABYSS"

JOBS REPORT BROKEN DOWN

KD ON JOBS REPORT

FRI AM DATA UP at 8:30

AM DATA on employment and unemployment rate, so futures pointing to flat open until everyone knows that number....SPX traget of 1150-1170 still possible or slightly higher before rally completes......hard to say whether this number gets jobbed at all, subject to revisions......heavy layoffs are behind us, most companies already did bulk of firings...forcing existing workers to do more, not worrying about wage growth in this environment.

It's job growth is problem, may be key to overall economy....this far into "recovery" it hasn't shown up.......downside target I have is 800-900 with lower test of March lows possible, SPX potential when smoke clears. 2.9% 10 yr note isnt acting like recovery is here....I will be on road this AM, will be back later

D

IN YOUR FACE AMERICA

"First lady under fire for her glitzy Spanish vacation"

"Yet the bigger public furor concerns the cost and appearance of the trip. In a scathing editorial published Thursday, New York Daily News writer Andrea Tantaros trashed Michelle Obama as a "modern day Marie Antoinette" for taking such a glitzy vacation while most of the country is struggling to make ends meet"

THANK G-D WE GOT CHANGE!

D

BLUE SKIES THROUGH A FILTER

Sentiment is BELOW Recessionary levels and FAR below TRUE recovery readings, see for yourself

The ringing in my ears is from all the MSM sources which continue to ring the bell of normalcy, of recovery, of FED got your back......of we're "strengthening MINUTE BY MINUTE"...
...but my friends I don't believe that is anywhere close to the truth....and here is why.

A figure of final sales in the GDP are usually ringing in 4% advances by this far into recovery, currently that's closer to 1.2%

Credit is in contraction mode, not expansion. Credit lending standards have STIFFENED, banks more reluctant to lend.

With "LOWEST MORTGAGE RATES IN HISTORY".....housing lays dormant near the bottom of its devestation.

GDP this far into recovery should be humming along at 5-6%.....even higher, but instead we are limping in at 2.4% and many say that will be reduced further next revision.

The 10 YR yield staying below 3% is a dire warning sign and stands in repudiation of the market rally and recovery crowd.

Sentiment this far into recovery for consumers should be soaring, INSTEAD Consumer sentiment is BELOW RECESSION LEVELS.

SMall BUsinesses are particularly hard hit, the polls that express what they see is at Recession levels.

Reading the data from the credit card companies, they report that transaction are about the same as in 2009.....the so called bottom? Can't lie here, in March on Mastercard:

"Nearly all of the growth in earnings came as a result of cost cutting within the firm and even the 6% increase in revenue was primarily a function of currency fluctuations and not a real growth in business "

Add to misery is oil above $82 ! and in last 2 months a US $ that has fallen 10% in value! If as the stock market insists we have a recovery that's strong, where is the volume? WHY is 70% of volume from a few sources and HFT? WHY is the FED funds rate still 0%? WHY keep paying on the excess reserves banks hold and don't lend? WHY is the 10 yr bond yielding under 3%????

As seen before unless short of memory, in 1999-2000, again in 2006-2007......reality can be escaped...ignored....fundamentals skipped over......then the smoke clears and even a newborn can see the forest is burning.

Is the smoke going to clear and all we see are blue skies instead?

Duratek

BULLISH HEADLINES

"Mortgage Rates Drop to Lowest Level on Record- AP
Mortgage rates dropped to the lowest level on record for the sixth time in seven weeks, offering the most attractive opportunity in decades for those who qualify to refinance or purchase a home.
NEW YORK (Reuters) - Retailers posted July sales below analysts' expectations in the latest sign that skittishness about high unemployment and the economy in general are causing consumers to cut spending and focus on essentials"

RATES “LOWEST ON RECORD”………FORECLOSURES AT RECORD, LOWEST SALES ON RECORD.

CLAIMS AND COUNTER CLAIMS

How about that only 479,000 claims......instead of falling towards 400K we've been steadily climbing back towards 500K.......near the WORST it ever was during LAST 20001-2003 Recession. Shaded area is 4X the size and time period or previous.

If interested Yelnick has assembled an assortment of near term technical charting
"A top Is near"

Claims of jobs being created but 17 months from March 2009 bottom, we still have 450K per week in claims. Claims of a bottom in housing but we still have escalating foreclosures greater than previous year.

Credit/bank loans are harder to come by, standards of course after SUPER LAX BUBBLE PERIOD have become very stringent. Contriction of loans does not equal expanding economy.

Gov stimulus is pretty much done, accounting for 100% of GDP during this period.

FED rates are at 0%, where to now? Most prices deflating, except some natural resource putting the squeeze on embattled consumers with oil now rising to above $82 along with some grains etc.

Last weaker GDP report will most likely be revised down below 2%.......Consumers who make up 70% of our economy show rising saving rates near 6%, wages flat, spending flat to down.....trying to pay down debt.

How many mortgages are NOT BEING PAID? HOW LARGE IS THE "SHADOW HOUSING INVENTORY?" probably keeping a lid of home prices for some time to come.

Where are Banks in realizing ACTUAL LOAN PORTFOLIO VALUES? ARE PROFITS BEING OVERSTATED? IF SO SPX PROFIT REPORTING A SHAM......we don't need accounting fiction......we need a dose of truth and fairness for once.

Presidential speaches fall on deaf ears......decisive, jobs producing action is what is needed with REAL AID to small business.

D

DANCING

63% up volume against aoverbought readings should bring a few days of weakness, but there is no evidence of a return to the bear market has begun or is imminent, not based on supply and demand data.

SO you have a few choices, you go with flow, you stand aside.....being patient is the hardest thing to do in investing.

IMHO the fundamentals don't jive with the market action. But that currently is not making any difference. Then any data even slightly skewed positive is made into a mountain from molehill.....so you can play their game.....or not.

On NPR radio, they were reporting on how this year there were MORE foreclosures than in 2009 !!
".....the legal and financial issues have not improved....." and the main reason given for the problems was not subprime loans it was "THE ECONOMY"....mostly loss of job.

So the market is up 80% from the depths of the problems, and the foreclosures are INCREASING, worse than at MArch 2009 market bottom.

That's dancing to the beat of a different drummer......the US $ is losing any foothold to value......the US MKT in terms of value of our DOLLAR has basically done absolutely nothing since March of 2009....and our growth can be near 100% accounted for from gov stimulus....

D

"TREASURIES LACK SECURITY"

WHat ex CHinese central banker had to say about US Treasuries.

PERCEPTION 9/10ths OF LAW

Reports of "job growth improving" and most other data used to try and convince investors recovery is on track are pushed on the thinnest of margins and have no credability...BUT

After trips to VIX 80 and a grossly oversold freaked out market MArch 2009 may have set the lows for many years to come. The act that the Bear lows of 2002 were surpassed is one caveat, where previous bear lows were violated, not sure that has happened in 100 years of stock action....but it does point to a more SECULAR trend potential....a STAGNATION....trading range.....Deflation has helped JAPAN move lower and lower over 20 years....this is a REAL possibility as we have not come to grips with credit bubble bust.....we have bought some time.

And because timing is so critical, I don't advocate short positions....for most investors this is too risky.

The reality is economic data point to a weakening of recovery, very little growth in jobs or wages, and a weak housing market that has 1 in 4 underwater.....consumers have cut back and are increasing their savings.....since we have consumer driven economy how is that good for growth?

If indeed we are in a LONG TERM BEAR MKT....I have laid out what was present at other SECULAR BOTTOMS.......so even as the market may move higher....even as it did from 2002-2007 it ecventually made a new low in 2009. IMHO we are in cyclical BULL that may run higher......but it is my belief that we have not enterred into a LONG TERM BULL and the return to the bear when it comes will be horribly painful.....for now the bEAR CROSS has given us choppy action....I will continue to monitor the action and look for clear signs one way or another......AD lines rising to new highs cant be seen as bearish....at this point.

VIX at 22 warns volatility has not been put to rest.

D

SHORT TERM SET UP

Target for SPX initially is 1170 area. It would take significant selling to change a more bullish ST outcome....odds favor higher prices especially if 100 SMA is taken out.

D

CONSUMER SPENDING STAGNATES

Link to NY TIMES ARTICLE

Selling the news. LOTS of hype last week leading to todays RIMM unveiling of their "iphone killer".....stock steadily rose.....phone gets intro today....stock off $1.45

Let's get something straight, most avg Joes are gone from the market, some for a lifetime, many not only NOT adding to 401K's but trying to take money OUT!

No proof business are hiring much, no proof housing is ready to rise from the dust. Banks still don't recognize the losses but DO scrutinize anyone wanting a loan.....add to that loan demand is down.

So everyone is trying to do business with the government, the government is spending like no tomorrow.....where is the funding for $1.5 TRILLION deficits coming from?

WHY are 10 year notes near 2.9% ???? WHY are people still talking about inflation? HOW ABOUT $82.35 OIL and a U S$ still falling now 80.58 !!

Read the credit bubble report I just posted the link for..... what will happen to the stock market if the economic data continues to come in LIGHT?
WILL businesses this far into STIMULUS FED recovery all of a sudden....hire like no tomorrow?

Recovery from a debt bubble hangover will take much longer than most consider.....oh there's business out there......just a lot less than there used to be and THAT was FED by EASY CREDIT....you got a face we got a loan credit.......it LFOWED LIKE WINE!......now it's like a constipated child.

D

CREDIT BUBBLE BULLETIN READ

If anyone wants some real educated insight into our current predicament, they will read summary at end of Doug's weeked commentary and stats

It's called QUANTITATIVE EASING TWO well worth the read and reread if necessary.

D

AT THE CORE

How many $TRILLIONS and 0% FED FUNDS RATE been thrown at the deflating economy to see this limp result for CORE INFLATION?

Now do you understand why 10 yr Bonds yield sub 3%? YES, the bond bubble will burst, but there are still a few smart economist who think that bull may have another year or 2 to go....as most investors of the avg ilk seek income not risk.....that leaves WHO to buy this overvalued stock mkt?

You see, we had been in a bull mkt since 1980, some say as early as 1974....1982 is the yr most refer to, til either 2000 or maybe 2007......after such a LONG RUN, what follows to reach a bottom for the next run a SECULAR BEAR...at those bottoms we find 5% PLUS yields on the SPX 500 (currently 2%) and PE ratios in single digits.

If we refer to history...we ain't there....

D

WATCHING DOW THEORY

S&P 500 still under its 200 WK MA, Dow and others near breaking April highs, Transports 300 points below. 70% of trading is program trading, what does the stock market reflect?

Almost all of our economic output is result of gov intervention....stock market seems much too giddy for economy on near life support.

D

HOW FAR DID WE FALL?

50% below the worst levels shown here going back to 1994. Recovery of sorts, not close to normal levels.

D

TALE OF DIFFERENT WORLDS

SMOKE AND MIRRORS ECONOMY

....."The primary indicator that “something bizarre and unfamiliar was occurring,” according to Levy, was that “the swollen federal deficit fully accounted for domestic profits.” The bracing reality, said Levy, was that “the private economy was unable to generate profits; the federal deficit carried the entire load.”

above is from LEVYFORECAST.COM please visit site to get info on his elite service.

I have read NOWHERE else the quote above about profits...if LEVY is correct, does that not put different face on current conditions? this is why my blog is popular I think among other reasons, I have spent many years cultivating sources and contacts and pay for countless subscriptions for elite data that helps me arrive at my opinions. and how all these things can effect economy and or market action is another unknown and again you can never feel 100% about anything.

D

STOCK THE SHELVES THEY WILL COME?

SUnday at 1:30 parking lot near empty at 1 yr old Best Buy at hot new mall not far from me. SInce it's opening I rarely see more cars than this.

CURRENT SPX SETUP

S&P futures are pointing to a triple digit Dow gain at open, HSB Bank reported sharply higher earnings, putting less away to cover bad debts.

IN THE BOX ABOVE is our trading zone, above the gap up this AM players will be gunning for the SPX 200 moving average, I switched to a SIMPLE computation as I believe this gives a more balanced view.

Is this the start to another big rally push? we are already in overbought territory by most measures.

A flattening MA such as the 200 shown can be like a magnate to any push higher above it and offers LESS support than a rising one.

In STARK contrast sits the 20 yr bond at or under 3% yield screaming deflation not inflation, warning something is still wrong. IMHO

D

US $ EROSION SINCE JUNE

LONG TERM US $ CHART

CRUEL TWIST OF FATE

"The UK is to award Alan Greenspan, chairman of the US Federal Reserve, an honorary knighthood." circa 2002

Instead of taking the sword to each shoulder they should have shoved it up his ass...here's the man who helped unleash the hounds to which we ALL PAY......welcome to the 3rd world America...but I ask how do we change our world?

D

LEAD PAINT EXPORTS

"NEW YORK (CNNMoney.com) -- China's manufacturing sector is still growing, but the pace is starting to slow. That could set off some alarm bells in the financial markets about the state of the global economy.

The government-run China Federation of Logistics and Purchasing reported Sunday that the country's Purchasing Managers Index, or PMI, fell to 51.2 in July from 52.1 a month earlier. A PMI figure above 50 indicates growth in the manufacturing sector, but the July reading was a 17-month low."

Our Money Base topped last FEB/March

D

Some Zerohedge.com Reads

What Happens When 30 yr Bond Bull Ends

Contrarian Albert Edwards sees stock falling BELOW March lows and a SUB 2% 10 yr

Man is ALbert a grouch or what?

D