http://www.contraryinvestor.com/mo.htm No wonder commodity prices have slumped?
Duratek
Monday, June 26, 2006
Sunday, June 25, 2006
HOSTILE AND YOUR MONEY
Because I am HOME ALONE for a few days, I use this time to reflect, and to watch bad movies. So last night I chose HOSTILE and Underworld 2
Now Hostile started out great, great looking woman taking their clothes off, party time in Amsterdam for the 3 friends, until they find out the hard way they been had....."I make money on you, that makes you my bitch" says the beautiful vixen. As it turns out, unsuspecting people are being sold for torture, and you could pony up $50K and pick one to mame and kill as you like.....what fun!!!!! Underworld? well who wouldn't love a classic battle against werewolves and vampires?
We are at a crossroads, right here, right now! WHat to do?
Summer rally could be nigh, and it would make sense to come next Wed/Thur around the next Fed meeting on interest rates. 2 more hikes according to futures bets seem clear, MOST think 50 more basis points and DONE....some even think 50 comes next week signaling the FED IS DONE FOR NOW!!!!!
Isn't that what everyone is waiting for? Isn't that reason to PARTY ON DUDE?
Let's think about that. What would the END OF HIKES MEAN FOR US? It would mean SHOR TERM rates halt their rise, but longer term rates are controlled by market forces, and if they DROP, they would INVERT again (already are) signalling RECESSION ahead is likely.
Wouldn't the market like a potential CUT in interest rates by FED? but after such a historic rise in home prices and building activity, lowering rates would NOT, IMHO lead to another leg up in housing.
The US DOLLAR has been in rally mode, and as EWT calls for a 100 index move for dollar, so many feel it impossible to happen, majority long the Euro, that is Hedge Fund buying. A crowded trade is not where I want to be.
Long term rates have broken out, and is causing much pain in economy, higher credit card rates, double minimum payments not to mention a coming rise to all those in adjustable mortgages.
Consider that REAL INFLATION is present in economy, even in manipulated government data, the hawkish tone of FED might mean they overcompensate for these inflation possibilities, as they often overshoot. I mean what would you call keeping rates at 1% for a year when rates fell?
I was just in Fla., and I saw MUCHO for sale signs, prices are easing, inventory rising, speculators may be caught with hand in cookie jar. Speculators fueled the unwanted rise in prices, not NORMAL demand, and it also has unwanted side effect of raising everyone's property taxes!!!
I have read the negative savings rate doesn't matter, that as long as Consumer's keep spending we'll be fine, or if they begin to lighten up, Business Spending will cover the slack. But a recent CEO POLL showed 41% CUTTING SPENDING!!!!!!!
"FORTUNE TELLERS LIVE IN THE FUTURE. SO DO PEOPLE WHO WANT TO PUT THINGS OFF. SO DO FUNDAMETALISTS" ED SEYKOTA
"PROFIT TARGETS IMPLY A TRADER CAN PREDICT THE FUTURE. PROFIT TARGETS ARE PROFIT-LIMITING. TREND FOLLOWERS STAY IN THE MOMENT OF NOW, AVOID PROGNOSTICATION, AND LET THE MARKETS RUN AS FAR AS THEY GO." STUDENT OF ED SEYKOTA
"CONFIDENCE COMES FROM SUCCESS, TO BE SURE, BUT IT CAN ALSO COME FROM RECOGNIZING THAT A LOT OF CAREFULLY EXAMINED FAILURES ARE THEMSELVES ONE PATH TO SUCCESS." DENISE SHEKERJIAN
Friends, the markets will tell us, price action will dictate our course, and there is NO reason trying to predict what no one can.
Duratek
Now Hostile started out great, great looking woman taking their clothes off, party time in Amsterdam for the 3 friends, until they find out the hard way they been had....."I make money on you, that makes you my bitch" says the beautiful vixen. As it turns out, unsuspecting people are being sold for torture, and you could pony up $50K and pick one to mame and kill as you like.....what fun!!!!! Underworld? well who wouldn't love a classic battle against werewolves and vampires?
We are at a crossroads, right here, right now! WHat to do?
Summer rally could be nigh, and it would make sense to come next Wed/Thur around the next Fed meeting on interest rates. 2 more hikes according to futures bets seem clear, MOST think 50 more basis points and DONE....some even think 50 comes next week signaling the FED IS DONE FOR NOW!!!!!
Isn't that what everyone is waiting for? Isn't that reason to PARTY ON DUDE?
Let's think about that. What would the END OF HIKES MEAN FOR US? It would mean SHOR TERM rates halt their rise, but longer term rates are controlled by market forces, and if they DROP, they would INVERT again (already are) signalling RECESSION ahead is likely.
Wouldn't the market like a potential CUT in interest rates by FED? but after such a historic rise in home prices and building activity, lowering rates would NOT, IMHO lead to another leg up in housing.
The US DOLLAR has been in rally mode, and as EWT calls for a 100 index move for dollar, so many feel it impossible to happen, majority long the Euro, that is Hedge Fund buying. A crowded trade is not where I want to be.
Long term rates have broken out, and is causing much pain in economy, higher credit card rates, double minimum payments not to mention a coming rise to all those in adjustable mortgages.
Consider that REAL INFLATION is present in economy, even in manipulated government data, the hawkish tone of FED might mean they overcompensate for these inflation possibilities, as they often overshoot. I mean what would you call keeping rates at 1% for a year when rates fell?
I was just in Fla., and I saw MUCHO for sale signs, prices are easing, inventory rising, speculators may be caught with hand in cookie jar. Speculators fueled the unwanted rise in prices, not NORMAL demand, and it also has unwanted side effect of raising everyone's property taxes!!!
I have read the negative savings rate doesn't matter, that as long as Consumer's keep spending we'll be fine, or if they begin to lighten up, Business Spending will cover the slack. But a recent CEO POLL showed 41% CUTTING SPENDING!!!!!!!
"FORTUNE TELLERS LIVE IN THE FUTURE. SO DO PEOPLE WHO WANT TO PUT THINGS OFF. SO DO FUNDAMETALISTS" ED SEYKOTA
"PROFIT TARGETS IMPLY A TRADER CAN PREDICT THE FUTURE. PROFIT TARGETS ARE PROFIT-LIMITING. TREND FOLLOWERS STAY IN THE MOMENT OF NOW, AVOID PROGNOSTICATION, AND LET THE MARKETS RUN AS FAR AS THEY GO." STUDENT OF ED SEYKOTA
"CONFIDENCE COMES FROM SUCCESS, TO BE SURE, BUT IT CAN ALSO COME FROM RECOGNIZING THAT A LOT OF CAREFULLY EXAMINED FAILURES ARE THEMSELVES ONE PATH TO SUCCESS." DENISE SHEKERJIAN
Friends, the markets will tell us, price action will dictate our course, and there is NO reason trying to predict what no one can.
Duratek
ABRAMOFF : FOLLOW THE MONEY
E-Mails Reveal Abramoff Requests, Contacts
By JOHN SOLOMON, Associated Press Writer
document.write(getElapsed("20060625T133227Z"));
39 minutes agoUPDATED 12 MINUTES AGO
Jack Abramoff leaves Federal Court in Washington, Jan. ...
WASHINGTON - Wanted: Face time with President Bush or top adviser Karl Rove. Suggested donation: $100,000. The middleman: lobbyist Jack Abramoff. Blunt e-mails that connect money and access in Washington show that prominent Republican activist Grover Norquist facilitated some administration contacts for Abramoff's clients while the lobbyist simultaneously solicited those clients for large donations to Norquist's tax-exempt group.
Those who were solicited or landed administration introductions included foreign figures and American Indian tribes, according to e-mails gathered by Senate investigators and federal prosecutors or obtained independently by The Associated Press.
"Can the tribes contribute $100,000 for the effort to bring state legislatures and those tribal leaders who have passed Bush resolutions to Washington?" Norquist wrote Abramoff in one such e-mail in July 2002.
"When I have funding, I will ask Karl Rove for a date with the president. Karl has already said 'yes' in principle and knows you organized this last time and hope to this year," Norquist wrote in the e-mail.
A Senate committee that investigated Abramoff previously aired evidence showing Bush met briefly in 2001 at the White House with some of Abramoff's tribal clients after they donated money to Norquist's group.
The 2002 e-mail about a second White House meeting and donations, however, was not disclosed. The AP obtained the text from people with access to the document.
The tribes got to meet Bush at the White House in 2002 again and then donated to Norquist's Americans for Tax Reform, or ATR.
Though Norquist's own e-mail connects the $100,000 donation and the White House visit, ATR spokesman John Kartch said Norquist never offered to arrange meetings in exchange for money.
Instead, Norquist simply wanted Abramoff's tribes to help pay for a conference where lawmakers and tribal leaders passed resolutions supporting the Bush agenda, ultimately securing a brief encounter with Bush, Kartch said.
"No one from Americans for Tax Reform ever assisted Jack Abramoff in getting meetings or introductions with the White House or congressional leaders in exchange for contributions," Kartch said, suggesting some of the e-mails might be misleading.
"If you look at some of Abramoff's e-mails to third parties, they might be misread to suggest that he was misrepresenting or confusing support for a project with a specific meeting," Kartch said. "This could have been deliberate or just unclear."
Kartch said: "People were invited to ATR's conference and to the White House only if they worked on pro-tax-cut resolutions. Nobody was invited because they made a contribution to ATR."
Lawyers for Abramoff declined comment.
The White House said Rove was unaware that Norquist solicited any money in connection with ATR events in both 2001 and 2002 that brought Abramoff's tribal clients and others to the White House.
"We do not solicit donations in exchange for meetings or events at the White House, and we don't have any knowledge of this activity taking place," said a White House spokeswoman, Erin Healy.
After the tribes' 2002 event with Bush, Norquist pressed Abramoff anew for tribal donations _ this time for a political action committee. "Jack, a few months ago you said you could get each of your Indian tribes to make a contribution. ... Is this still possible?" Norquist asked in an October 2002 e-mail.
Abramoff responded that "everyone is tapped out having given directly to the campaigns. After the election, we'll be able to get this moving."
The e-mails show Abramoff delivered on his original promise to get tribal money for the event that included the Bush visit, sending one check from the Mississippi Choctaw tribe in October and one in November from the Saginaw Chippewa of Michigan. Kartch said Abramoff didn't deliver on PAC contributions.
Norquist and Abramoff were longtime associates who went back decades to their days in the Young Republicans movement. Norquist founded ATR to advocate lower taxes and less government. He built it into a major force in the Republican Party as the GOP seized control of Congress and the White House.
Abramoff became one of Washington's rainmaker lobbyists before allegations that he defrauded Indian tribes led to his downfall and a prison sentence. He is cooperating with prosecutors.
At the time ATR dealt with Abramoff, Kartch said, "he was a longtime and respected Republican activist in Washington. There was no reason to suspect any of the problems that later came up."
The e-mails show Abramoff, on multiple occasions, asked clients for large donations to Norquist's group while Norquist invited them to ATR events that brought them face to face with top administration officials.
For instance, several months after donating $25,000 to Norquist's group, Saginaw officials attended a reception in the summer of 2003 at Norquist's home. They posed for a photo with Norquist and Labor Secretary Elaine Chao.
A few weeks earlier, then-Saginaw tribal chief Maynard Kahgegab Jr. had been appointed by Chao to a federal commission, according Labor Department and tribal documents obtained by the AP.
The Saginaw used the Chao photo, the commission appointment and photos they took with Bush at the White House to boast on their internal Web site about the high-level Washington access that Abramoff's team had won.
Labor officials confirmed that Chao attended the reception at Norquist's home. But they said they do not know who recommended Kahgegab to be appointed in May 2003 to the U.S. Native American Employment and Training Council. The department sought to remove the chief a year later after he lost a tribal election, documents show.
"This is one of hundreds of advisory appointments that are sent forward by agencies within the department for front office signoff," said a department spokesman, David James.
ATR's Kartch suggested Chao's contact with the Saginaw at Norquist's home was incidental. "ATR does many receptions for supporters. There were dozens of people in attendance that evening. This event was not organized specifically for any person, but was rather a widely attended general event," he said.
Norquist did make a special effort _ at Abramoff's request _ to introduce a British businessman and an African dignitary to Rove at another ATR event in summer 2002.
Abramoff bluntly told Norquist he was asking the African dignitary for a $100,000 donation to ATR and suggested the introduction to Rove might help secure the money.
"I have asked them for $100K for ATR," Abramoff wrote Norquist in July 2002. "If they come I'll think we'll get it. If he is there, please go up to him (he'll be African) and welcome him."
Norquist obliged.
"I am assuming this is very important and therefore we are making it happen," the GOP activist wrote back, promising to introduce the two foreigners as well as a Saginaw tribal official to Rove that night.
A day later, an ecstatic Abramoff sent an e-mail thanking Norquist for "accommodating" the introductions. "I spoke with the ambassador today and he is moving my ATR request forward," the lobbyist wrote, referring to the donation.
Kartch confirmed Norquist invited the foreigners to the ATR event, but Kartch said the group never asked for, expected or received the $100,000.
It was not the first time that Abramoff sought ATR donations in connection with lobbying business. E-mails dating to 1995 show Abramoff solicited donations from clients to Norquist's group as part of lobbying efforts.
"I spoke this evening with Grover," Abramoff wrote in an October 1995 e-mail outlining how Norquist and his group could help a client on a matter before Congress.
Abramoff wrote that the lobbying help he was seeking from Norquist's group was "perfectly consistent" with ATR's position but that Norquist nonetheless wanted a donation to be made.
"He said that if they want the taxpayer movement, including him, involved on this issue and anything else which will come over the course of the year or so, they need to become a major player with ATR. He recommended that they make a $50,000 contribution to ATR," the lobbyist wrote.
Abramoff cautioned one of his colleagues that the donation needed to be "kept discreet."
"We don't want opponents to think that we are trying buy the taxpayer movement," he said.
Kartch denied that anyone at ATR asked Abramoff for the money. "ATR is not responsible for comments by Jack Abramoff to third parties," he said.
Copyright 2006 The Associated Press
By JOHN SOLOMON, Associated Press Writer
document.write(getElapsed("20060625T133227Z"));
39 minutes agoUPDATED 12 MINUTES AGO
Jack Abramoff leaves Federal Court in Washington, Jan. ...
WASHINGTON - Wanted: Face time with President Bush or top adviser Karl Rove. Suggested donation: $100,000. The middleman: lobbyist Jack Abramoff. Blunt e-mails that connect money and access in Washington show that prominent Republican activist Grover Norquist facilitated some administration contacts for Abramoff's clients while the lobbyist simultaneously solicited those clients for large donations to Norquist's tax-exempt group.
Those who were solicited or landed administration introductions included foreign figures and American Indian tribes, according to e-mails gathered by Senate investigators and federal prosecutors or obtained independently by The Associated Press.
"Can the tribes contribute $100,000 for the effort to bring state legislatures and those tribal leaders who have passed Bush resolutions to Washington?" Norquist wrote Abramoff in one such e-mail in July 2002.
"When I have funding, I will ask Karl Rove for a date with the president. Karl has already said 'yes' in principle and knows you organized this last time and hope to this year," Norquist wrote in the e-mail.
A Senate committee that investigated Abramoff previously aired evidence showing Bush met briefly in 2001 at the White House with some of Abramoff's tribal clients after they donated money to Norquist's group.
The 2002 e-mail about a second White House meeting and donations, however, was not disclosed. The AP obtained the text from people with access to the document.
The tribes got to meet Bush at the White House in 2002 again and then donated to Norquist's Americans for Tax Reform, or ATR.
Though Norquist's own e-mail connects the $100,000 donation and the White House visit, ATR spokesman John Kartch said Norquist never offered to arrange meetings in exchange for money.
Instead, Norquist simply wanted Abramoff's tribes to help pay for a conference where lawmakers and tribal leaders passed resolutions supporting the Bush agenda, ultimately securing a brief encounter with Bush, Kartch said.
"No one from Americans for Tax Reform ever assisted Jack Abramoff in getting meetings or introductions with the White House or congressional leaders in exchange for contributions," Kartch said, suggesting some of the e-mails might be misleading.
"If you look at some of Abramoff's e-mails to third parties, they might be misread to suggest that he was misrepresenting or confusing support for a project with a specific meeting," Kartch said. "This could have been deliberate or just unclear."
Kartch said: "People were invited to ATR's conference and to the White House only if they worked on pro-tax-cut resolutions. Nobody was invited because they made a contribution to ATR."
Lawyers for Abramoff declined comment.
The White House said Rove was unaware that Norquist solicited any money in connection with ATR events in both 2001 and 2002 that brought Abramoff's tribal clients and others to the White House.
"We do not solicit donations in exchange for meetings or events at the White House, and we don't have any knowledge of this activity taking place," said a White House spokeswoman, Erin Healy.
After the tribes' 2002 event with Bush, Norquist pressed Abramoff anew for tribal donations _ this time for a political action committee. "Jack, a few months ago you said you could get each of your Indian tribes to make a contribution. ... Is this still possible?" Norquist asked in an October 2002 e-mail.
Abramoff responded that "everyone is tapped out having given directly to the campaigns. After the election, we'll be able to get this moving."
The e-mails show Abramoff delivered on his original promise to get tribal money for the event that included the Bush visit, sending one check from the Mississippi Choctaw tribe in October and one in November from the Saginaw Chippewa of Michigan. Kartch said Abramoff didn't deliver on PAC contributions.
Norquist and Abramoff were longtime associates who went back decades to their days in the Young Republicans movement. Norquist founded ATR to advocate lower taxes and less government. He built it into a major force in the Republican Party as the GOP seized control of Congress and the White House.
Abramoff became one of Washington's rainmaker lobbyists before allegations that he defrauded Indian tribes led to his downfall and a prison sentence. He is cooperating with prosecutors.
At the time ATR dealt with Abramoff, Kartch said, "he was a longtime and respected Republican activist in Washington. There was no reason to suspect any of the problems that later came up."
The e-mails show Abramoff, on multiple occasions, asked clients for large donations to Norquist's group while Norquist invited them to ATR events that brought them face to face with top administration officials.
For instance, several months after donating $25,000 to Norquist's group, Saginaw officials attended a reception in the summer of 2003 at Norquist's home. They posed for a photo with Norquist and Labor Secretary Elaine Chao.
A few weeks earlier, then-Saginaw tribal chief Maynard Kahgegab Jr. had been appointed by Chao to a federal commission, according Labor Department and tribal documents obtained by the AP.
The Saginaw used the Chao photo, the commission appointment and photos they took with Bush at the White House to boast on their internal Web site about the high-level Washington access that Abramoff's team had won.
Labor officials confirmed that Chao attended the reception at Norquist's home. But they said they do not know who recommended Kahgegab to be appointed in May 2003 to the U.S. Native American Employment and Training Council. The department sought to remove the chief a year later after he lost a tribal election, documents show.
"This is one of hundreds of advisory appointments that are sent forward by agencies within the department for front office signoff," said a department spokesman, David James.
ATR's Kartch suggested Chao's contact with the Saginaw at Norquist's home was incidental. "ATR does many receptions for supporters. There were dozens of people in attendance that evening. This event was not organized specifically for any person, but was rather a widely attended general event," he said.
Norquist did make a special effort _ at Abramoff's request _ to introduce a British businessman and an African dignitary to Rove at another ATR event in summer 2002.
Abramoff bluntly told Norquist he was asking the African dignitary for a $100,000 donation to ATR and suggested the introduction to Rove might help secure the money.
"I have asked them for $100K for ATR," Abramoff wrote Norquist in July 2002. "If they come I'll think we'll get it. If he is there, please go up to him (he'll be African) and welcome him."
Norquist obliged.
"I am assuming this is very important and therefore we are making it happen," the GOP activist wrote back, promising to introduce the two foreigners as well as a Saginaw tribal official to Rove that night.
A day later, an ecstatic Abramoff sent an e-mail thanking Norquist for "accommodating" the introductions. "I spoke with the ambassador today and he is moving my ATR request forward," the lobbyist wrote, referring to the donation.
Kartch confirmed Norquist invited the foreigners to the ATR event, but Kartch said the group never asked for, expected or received the $100,000.
It was not the first time that Abramoff sought ATR donations in connection with lobbying business. E-mails dating to 1995 show Abramoff solicited donations from clients to Norquist's group as part of lobbying efforts.
"I spoke this evening with Grover," Abramoff wrote in an October 1995 e-mail outlining how Norquist and his group could help a client on a matter before Congress.
Abramoff wrote that the lobbying help he was seeking from Norquist's group was "perfectly consistent" with ATR's position but that Norquist nonetheless wanted a donation to be made.
"He said that if they want the taxpayer movement, including him, involved on this issue and anything else which will come over the course of the year or so, they need to become a major player with ATR. He recommended that they make a $50,000 contribution to ATR," the lobbyist wrote.
Abramoff cautioned one of his colleagues that the donation needed to be "kept discreet."
"We don't want opponents to think that we are trying buy the taxpayer movement," he said.
Kartch denied that anyone at ATR asked Abramoff for the money. "ATR is not responsible for comments by Jack Abramoff to third parties," he said.
Copyright 2006 The Associated Press
Thursday, June 08, 2006
MARCH 2001 AND HIGH ALERT CRASH WARNING
http://www.gatech.edu/news-room/archive/news_releases/allvine.html
A Very Likely Scenario Is For Rate Cut To Cause A Short Term Bounce In Stock Market:
In the past the stock market normally advanced quickly on 1st or 2nd cut of rates by the Federal Reserve. If rates are cut on Tuesday, then this will be the 3rd cut. Our expectation is for there to be a market rally for a few days or a couple weeks. Then we expect the market to turn down and move into lower territory. In other words we believe there is a strong likelihood of a Bear Market Rally, but we do not believe this is the end of the Bear Market. Those needing to raise some cash could liquidate some stocks if the advance occurs, but I do not believe this is a time to be increasing commitment to the stock market.
Why Expect Immediate Advance In Stock Market (if it occurs) To Be Short Lived:
There are two fundamental reasons for believing that the Bear Market will continue, and it will take more cuts in the Discount and Federal Funds rate before the bottom is in place. The first problem is that levels of market valuation remain high and are not consistent with market bottoms. For example, the P.E. ratio of the S&P 500 climbed from 16 at beginning of 1995 to 36 (a 50-year record) at the top of the market in March 2000. The P.E. Ratio for the S&P 500 has come down to 22.6 from 36, but is still way above the average of 16.2 P.E. from 1970 to the present (see chart). In addition, as stock prices soared the dividend yield has fallen from 6% in 1980 to a little over 1% a few weeks ago (now 1.36%). In other words, for the market to put in a real bottom we would expect the P.E. Ratio to fall from 22.6 to around 15, or a decline of another 35%.
The NASDAQ Is Even More Overvalued:
The NASDAQ climbed to a P.E. of 200 at the top of the market in early 2000 and has fallen to around 80. The average PE for the NASDAQ is close to 35 times earnings so the NASDAQ could fall by another 50% to bring it down to its historical average.
Other Problems Hanging Over The Stock Market:
We have gone through the longest economic expansion in history that started in March 1991. The almost 10-year long boom has presented great economic times for many Americans. But at the same time there have been some excesses that have come along with the economic boom. To participate in the good times, consumer credit has exploded with credit cards being extensively used to acquire more of the good life. Home equity (% of equity in a home to the value of the home) has fallen sharply as home owners have refinanced their homes and increased their mortgages, while others have taken out secondary mortgages on their home to finance consumption. Huge credit card debt and home mortgage debt is a hangover from the longest expansion in the history of our economy.
Danger In A Near Zero Savings Rate:
The personal savings rate during the 1960s, 1970s, and 1980s ran from 7%-8%, but in the booming carefree 1990s the personal savings rate has fallen to near zero. With the implosion of the stock market and family wealth and job uncertainty (and rising unemployment if economy further tightens), it can be clearly anticipated that the personal savings rate will start to rise. When everything is bright (good jobs, easy credit, and growing retirement and investment portfolios), then people will cut their savings rate (as has occurred during the booming 1990s). If the saving rate were to start climbing from the 0-1% level now back to 7%-8% (the norm), then this could take 2%-3% out of GDP for several years and cause stagnation much like has occurred in Japan. If the black economic clouds grow, then Americans will pull back from their spending ways and start again saving for a rainy day. We could become more like Japan where personal savings has rapidly increased over the last 12 years while the Japanese economy has been in the tank.
Summary:
We expect the Federal Reserve to cut rates when it meets tomorrow and this is in our opinion the appropriate policy. In the past cuts in the Fed Funds and Discount Rate has been very bullish for the stock market. We believe there is a good chance of a Bear Market Rally if the Fed cuts rates on Wednesday. But after a few days or a couple of weeks, we expect the market to move to new lower territory. Primary reasons for this opinion is that levels of market valuation remain fairly high (not what are usual at market bottoms). In addition, there are excesses associated with the record long economic boom that will have to be worked out before the economy can again advance strongly with stock prices climbing.
*****
Flash forward to today!!! (Duratek)
We now have negative saving rate, consumption was NEVER curbed during the 2001 Recession nor anytime during the 2000-2003 Bear Market, only more excesses more piled up, more debt etc. We are LESS prepared then to deal with any economic adversity.
Higher energy costs, inflation in areas of consumer needs not wants make the disposable income scenario much worse, as wages have FAILED to keep up with even basic inflation.
Real estate has begun to deflate, a major driver of economy, and is why I believe the commodity prices have begun to decline, and may be entering a bear market.
Chinese stock market is in bear market and recently plummeted by 5%.
VIX ratio is now in an uptrend and we have experienced TWO 90% DOWN DAYS in stock market in past 30 days, VERY good chance Bear Market is BACK!!!!! The risk is to the downside, and we have enterred the weakest 6 months of stock market returns.
Stock market leadership is nowhere to be found, MANY Dow and SPX stocks near 52 week lows, any near 52 week highs continues to diminish near record levels.
IMHO, with cyclical bull rally in very elder stages, extreme caution is now advised. Consult with your financial professional to see if your portfolio can withstand the return of the Bear Market should that be the reality.
The financial mechanisms are surrounded by GS cronies, let's see what PPT team can do.
A Very Likely Scenario Is For Rate Cut To Cause A Short Term Bounce In Stock Market:
In the past the stock market normally advanced quickly on 1st or 2nd cut of rates by the Federal Reserve. If rates are cut on Tuesday, then this will be the 3rd cut. Our expectation is for there to be a market rally for a few days or a couple weeks. Then we expect the market to turn down and move into lower territory. In other words we believe there is a strong likelihood of a Bear Market Rally, but we do not believe this is the end of the Bear Market. Those needing to raise some cash could liquidate some stocks if the advance occurs, but I do not believe this is a time to be increasing commitment to the stock market.
Why Expect Immediate Advance In Stock Market (if it occurs) To Be Short Lived:
There are two fundamental reasons for believing that the Bear Market will continue, and it will take more cuts in the Discount and Federal Funds rate before the bottom is in place. The first problem is that levels of market valuation remain high and are not consistent with market bottoms. For example, the P.E. ratio of the S&P 500 climbed from 16 at beginning of 1995 to 36 (a 50-year record) at the top of the market in March 2000. The P.E. Ratio for the S&P 500 has come down to 22.6 from 36, but is still way above the average of 16.2 P.E. from 1970 to the present (see chart). In addition, as stock prices soared the dividend yield has fallen from 6% in 1980 to a little over 1% a few weeks ago (now 1.36%). In other words, for the market to put in a real bottom we would expect the P.E. Ratio to fall from 22.6 to around 15, or a decline of another 35%.
The NASDAQ Is Even More Overvalued:
The NASDAQ climbed to a P.E. of 200 at the top of the market in early 2000 and has fallen to around 80. The average PE for the NASDAQ is close to 35 times earnings so the NASDAQ could fall by another 50% to bring it down to its historical average.
Other Problems Hanging Over The Stock Market:
We have gone through the longest economic expansion in history that started in March 1991. The almost 10-year long boom has presented great economic times for many Americans. But at the same time there have been some excesses that have come along with the economic boom. To participate in the good times, consumer credit has exploded with credit cards being extensively used to acquire more of the good life. Home equity (% of equity in a home to the value of the home) has fallen sharply as home owners have refinanced their homes and increased their mortgages, while others have taken out secondary mortgages on their home to finance consumption. Huge credit card debt and home mortgage debt is a hangover from the longest expansion in the history of our economy.
Danger In A Near Zero Savings Rate:
The personal savings rate during the 1960s, 1970s, and 1980s ran from 7%-8%, but in the booming carefree 1990s the personal savings rate has fallen to near zero. With the implosion of the stock market and family wealth and job uncertainty (and rising unemployment if economy further tightens), it can be clearly anticipated that the personal savings rate will start to rise. When everything is bright (good jobs, easy credit, and growing retirement and investment portfolios), then people will cut their savings rate (as has occurred during the booming 1990s). If the saving rate were to start climbing from the 0-1% level now back to 7%-8% (the norm), then this could take 2%-3% out of GDP for several years and cause stagnation much like has occurred in Japan. If the black economic clouds grow, then Americans will pull back from their spending ways and start again saving for a rainy day. We could become more like Japan where personal savings has rapidly increased over the last 12 years while the Japanese economy has been in the tank.
Summary:
We expect the Federal Reserve to cut rates when it meets tomorrow and this is in our opinion the appropriate policy. In the past cuts in the Fed Funds and Discount Rate has been very bullish for the stock market. We believe there is a good chance of a Bear Market Rally if the Fed cuts rates on Wednesday. But after a few days or a couple of weeks, we expect the market to move to new lower territory. Primary reasons for this opinion is that levels of market valuation remain fairly high (not what are usual at market bottoms). In addition, there are excesses associated with the record long economic boom that will have to be worked out before the economy can again advance strongly with stock prices climbing.
*****
Flash forward to today!!! (Duratek)
We now have negative saving rate, consumption was NEVER curbed during the 2001 Recession nor anytime during the 2000-2003 Bear Market, only more excesses more piled up, more debt etc. We are LESS prepared then to deal with any economic adversity.
Higher energy costs, inflation in areas of consumer needs not wants make the disposable income scenario much worse, as wages have FAILED to keep up with even basic inflation.
Real estate has begun to deflate, a major driver of economy, and is why I believe the commodity prices have begun to decline, and may be entering a bear market.
Chinese stock market is in bear market and recently plummeted by 5%.
VIX ratio is now in an uptrend and we have experienced TWO 90% DOWN DAYS in stock market in past 30 days, VERY good chance Bear Market is BACK!!!!! The risk is to the downside, and we have enterred the weakest 6 months of stock market returns.
Stock market leadership is nowhere to be found, MANY Dow and SPX stocks near 52 week lows, any near 52 week highs continues to diminish near record levels.
IMHO, with cyclical bull rally in very elder stages, extreme caution is now advised. Consult with your financial professional to see if your portfolio can withstand the return of the Bear Market should that be the reality.
The financial mechanisms are surrounded by GS cronies, let's see what PPT team can do.
Duratek
Tuesday, May 30, 2006
SIMPLE IS BETTER
(click to enlarge)
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p64235656637
What IS crystal clear to me, is you can even have correction back to 75 WEEK EMA and STILL have a bull mkt! AS long as ????? all 3 of these MA’S are rising stacked on top of each other,
and when the 20 WK slices thru and down, this Bull is officially OVER IMHO, cause when Is the last time that crossover occurred? Back in 2000-2001
And UP again in 2002-2003, I don’t need to know anything more than that.
Duratek (How's my posse doing? or is it one hand clapping?)
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p64235656637
What IS crystal clear to me, is you can even have correction back to 75 WEEK EMA and STILL have a bull mkt! AS long as ????? all 3 of these MA’S are rising stacked on top of each other,
and when the 20 WK slices thru and down, this Bull is officially OVER IMHO, cause when Is the last time that crossover occurred? Back in 2000-2001
And UP again in 2002-2003, I don’t need to know anything more than that.
Duratek (How's my posse doing? or is it one hand clapping?)
Tuesday, May 23, 2006
PEBBLE BED REACTORS
May 23, 2006
Pebble Bed Technology and the Uranium Super Bullby Sol Palha
"Ability hits the mark where presumption overshoots and diffidence falls short." - John Henry Newman 1801-1890, British Religious Leader, Prelate, Writer
China has come up with a new nuclear technology called "pebble bed technology". Essentially power plants built with this technology could only do one thing if something went wrong and that would be to shut down. It would be impossible for these reactors to explode or melt down. The idea is rather simple. Balls of Uranium power these reactors and each ball of uranium is wrapped in an incredibly strong layer of silicon carbide. These spheres have a much higher melting point then the temperature inside the reactor could ever reach. So essentially it would be impossible for the reactor to meltdown or explode. This technology is in the test phase but if it works out as envisioned China will leap frog ahead of the US in this area and then one wonders if they would not export this technology to countries that could help them meet their energy needs. One such country is Iran; in 2003 Iran alone supplied China with over 14% of its oil needs. This figure is definitely substantially higher today. China is desperate for energy and they openly admit to this; when one is desperate for something one is willing to trade almost anything.
"We need every type of energy," says Zhang Zuoyi, head of the institute that helps run the pebblebed test reactor. "We are hungry." China's leaders won't listen to naysayers. They can't afford to.
Another point of interest is that China is about to embark on the biggest nuclear power building plant spree ever undertaken by any nation. Their goal is to derive roughly 4-5% of their Energy needs from Nuclear Power in the next 15 years. While this might sound small when compared to other nations this simple plan means that China will need to build roughly 45 nuclear plants in 15 years or about 3 plants every year. Imagine what effect this will have on uranium prices. Off course in the next few years they could come out with even better technology, which might mean even more nuclear plants. Right now the limiting factor is that no one has thought of coming up with a nuclear power plant assembly line. We are positive that one nation will adopt this idea and when they do installing a new plant will be something that takes months instead of years.
China's new pebble bed technology might be one of the reasons India is not too worried about the nuclear deal falling through with the United States. Not only is this technology superior but also it will most likely cost a lot less and they will not be pushed into a position of having to forcefully take a stance against Iran. Increasingly it appears that more nations are willing to stand up to the US and as the saying goes there is strength in numbers.
China is positioned to leapfrog the world in nuclear power precisely because it entered the race late. Until now, the country has built a hodgepodge of reactors with different technologies and safety features. But recently top leaders decided to build a newer infrastructure virtually from scratch based on the most advanced, and safest, technologies. Although the pebble-bed reactor is not yet ready for prime time, the government is buying equipment and designs that have never been built before. China plans to choose one design of three submitted by Areva of France, Atomstroy export of Russia and Westinghouse Electric for an $8 billion program to build reactors in the eastern province of Zhejiang. (Some industry experts say Areva will probably win, especially since the Chinese government may bristle at the recent takeover bid by Japan's Toshiba on Westinghouse.) The Chinese plan to work closely with the winner to learn how to design and operate the reactors. The goal is to use this technology as the basis for subsequent Chinese plants.
The most likely technology to export, of course, is the pebble bed reactor. All reactors, including the pebble bed, use uranium fuel to produce heat that is used to turn electrical turbines. In conventional so-called light-water reactors, the heat is generated by thousands of fixed metallic rods, which require elaborate cooling systems to keep them from overheating and backup cooling systems in case the primary ones fail. Furthermore, a conventional reactor must be housed in a concrete containment vessel to mitigate damage in case it overheats. In the pebble bed reactor, thousands of tennis-ball-size spheres coated in layers of silicon carbide, ceramic material and graphite each contain thousands of granules of the fuel, uranium dioxide. Because the pebbles dissipate heat so efficiently, say the designers, the fuel inside them couldn't possibly get hot enough to penetrate the graphite casing. The pebble-bed reactor, in fact, doesn't even have a containment vessel. Another advantage of pebble beds is that it's easier to make small plants and put them up quickly, which lends itself to China's plan of spreading plants around the hinterlands. Extracting fuel from pebble bed reactors to use for weapons would be difficult and expensive. Full Story
Conclusion
Even Ukraine which had renounced nuclear technology has decided that they need to build at least 15 plants over the next decade to prevent a repeat of the recent energy crisis when Russia cut of gas supplies to Ukraine. Almost every nation is slowly but surely embracing nuclear energy something that was once shunned. While we have many nations focussing on developing new technologies for nuclear power plants no one is spending the time and money needed to find new supplies of uranium and open up new mines. Current demand far outstrips the available supply and one can only imagine the uranium crunch that will be created in years to come unless a massive program to open up new mines and find new supplies of uranium is undertaken shortly. As usual a crisis that could have easily been prevented will be allowed to develop into a full blown disaster before something meaningful is done. The reasons are always the same; key big players are going to make fortune and the expense and misery of others. When the choice comes to down to money or doing the right thing 9 out of 10 times money wins. Hence make sure that you own the right companies and buy them at the right time as they are many useless so called uranium companies out there. One can also buy a great company at the wrong time. In order to win one has to buy at the right time and also sell at the right time.
"The principle of all successful effort is to try to do not what is absolutely the best, but what is easily within our power, and suited for our temperament and condition." - John Ruskin 1819-1900, British Critic, Social Theorist
Pebble Bed Technology and the Uranium Super Bullby Sol Palha
"Ability hits the mark where presumption overshoots and diffidence falls short." - John Henry Newman 1801-1890, British Religious Leader, Prelate, Writer
China has come up with a new nuclear technology called "pebble bed technology". Essentially power plants built with this technology could only do one thing if something went wrong and that would be to shut down. It would be impossible for these reactors to explode or melt down. The idea is rather simple. Balls of Uranium power these reactors and each ball of uranium is wrapped in an incredibly strong layer of silicon carbide. These spheres have a much higher melting point then the temperature inside the reactor could ever reach. So essentially it would be impossible for the reactor to meltdown or explode. This technology is in the test phase but if it works out as envisioned China will leap frog ahead of the US in this area and then one wonders if they would not export this technology to countries that could help them meet their energy needs. One such country is Iran; in 2003 Iran alone supplied China with over 14% of its oil needs. This figure is definitely substantially higher today. China is desperate for energy and they openly admit to this; when one is desperate for something one is willing to trade almost anything.
"We need every type of energy," says Zhang Zuoyi, head of the institute that helps run the pebblebed test reactor. "We are hungry." China's leaders won't listen to naysayers. They can't afford to.
Another point of interest is that China is about to embark on the biggest nuclear power building plant spree ever undertaken by any nation. Their goal is to derive roughly 4-5% of their Energy needs from Nuclear Power in the next 15 years. While this might sound small when compared to other nations this simple plan means that China will need to build roughly 45 nuclear plants in 15 years or about 3 plants every year. Imagine what effect this will have on uranium prices. Off course in the next few years they could come out with even better technology, which might mean even more nuclear plants. Right now the limiting factor is that no one has thought of coming up with a nuclear power plant assembly line. We are positive that one nation will adopt this idea and when they do installing a new plant will be something that takes months instead of years.
China's new pebble bed technology might be one of the reasons India is not too worried about the nuclear deal falling through with the United States. Not only is this technology superior but also it will most likely cost a lot less and they will not be pushed into a position of having to forcefully take a stance against Iran. Increasingly it appears that more nations are willing to stand up to the US and as the saying goes there is strength in numbers.
China is positioned to leapfrog the world in nuclear power precisely because it entered the race late. Until now, the country has built a hodgepodge of reactors with different technologies and safety features. But recently top leaders decided to build a newer infrastructure virtually from scratch based on the most advanced, and safest, technologies. Although the pebble-bed reactor is not yet ready for prime time, the government is buying equipment and designs that have never been built before. China plans to choose one design of three submitted by Areva of France, Atomstroy export of Russia and Westinghouse Electric for an $8 billion program to build reactors in the eastern province of Zhejiang. (Some industry experts say Areva will probably win, especially since the Chinese government may bristle at the recent takeover bid by Japan's Toshiba on Westinghouse.) The Chinese plan to work closely with the winner to learn how to design and operate the reactors. The goal is to use this technology as the basis for subsequent Chinese plants.
The most likely technology to export, of course, is the pebble bed reactor. All reactors, including the pebble bed, use uranium fuel to produce heat that is used to turn electrical turbines. In conventional so-called light-water reactors, the heat is generated by thousands of fixed metallic rods, which require elaborate cooling systems to keep them from overheating and backup cooling systems in case the primary ones fail. Furthermore, a conventional reactor must be housed in a concrete containment vessel to mitigate damage in case it overheats. In the pebble bed reactor, thousands of tennis-ball-size spheres coated in layers of silicon carbide, ceramic material and graphite each contain thousands of granules of the fuel, uranium dioxide. Because the pebbles dissipate heat so efficiently, say the designers, the fuel inside them couldn't possibly get hot enough to penetrate the graphite casing. The pebble-bed reactor, in fact, doesn't even have a containment vessel. Another advantage of pebble beds is that it's easier to make small plants and put them up quickly, which lends itself to China's plan of spreading plants around the hinterlands. Extracting fuel from pebble bed reactors to use for weapons would be difficult and expensive. Full Story
Conclusion
Even Ukraine which had renounced nuclear technology has decided that they need to build at least 15 plants over the next decade to prevent a repeat of the recent energy crisis when Russia cut of gas supplies to Ukraine. Almost every nation is slowly but surely embracing nuclear energy something that was once shunned. While we have many nations focussing on developing new technologies for nuclear power plants no one is spending the time and money needed to find new supplies of uranium and open up new mines. Current demand far outstrips the available supply and one can only imagine the uranium crunch that will be created in years to come unless a massive program to open up new mines and find new supplies of uranium is undertaken shortly. As usual a crisis that could have easily been prevented will be allowed to develop into a full blown disaster before something meaningful is done. The reasons are always the same; key big players are going to make fortune and the expense and misery of others. When the choice comes to down to money or doing the right thing 9 out of 10 times money wins. Hence make sure that you own the right companies and buy them at the right time as they are many useless so called uranium companies out there. One can also buy a great company at the wrong time. In order to win one has to buy at the right time and also sell at the right time.
"The principle of all successful effort is to try to do not what is absolutely the best, but what is easily within our power, and suited for our temperament and condition." - John Ruskin 1819-1900, British Critic, Social Theorist
Thursday, May 18, 2006
PAUSE THAT WON'T REFRESH
http://www.bloomberg.com/apps/news?pid=10000103&sid=aD_NO5xcEUzQ&refer=us REAL worl evidence of inflation, Fed is bixed in a corner.
Last 8 X Fed discount rate reached 6% (we are there now) there was severe market reaction.
Evidence of 90% or near so down volume yesterday, selling pressure hits a new yearly high.
Vix highest level in 8 months, are the PRO'S getting nervous?
I may be jumping the gun, (meaning getting moving avg confirmation) but stock market action just as we were about to take out OLD bull market highs, making me think Bear market may be back, worst action since cyclical bull began, IMHO
Don't ignore history, are you going to stay fully invested in an aging bull mkt?
Duratek
Last 8 X Fed discount rate reached 6% (we are there now) there was severe market reaction.
Evidence of 90% or near so down volume yesterday, selling pressure hits a new yearly high.
Vix highest level in 8 months, are the PRO'S getting nervous?
I may be jumping the gun, (meaning getting moving avg confirmation) but stock market action just as we were about to take out OLD bull market highs, making me think Bear market may be back, worst action since cyclical bull began, IMHO
Don't ignore history, are you going to stay fully invested in an aging bull mkt?
Duratek
Saturday, May 13, 2006
REASONS
http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=54398
Doug Noland is THE place to go for raw data, and you WILL get something from this TOUGH read.
D
Doug Noland is THE place to go for raw data, and you WILL get something from this TOUGH read.
D
HOW MARKET TOPS ARE FORMED
Ethanol bull (PEIX) could be starting, remember ALL bulls correct, I think TOO many on board, it has been too easy, so a SHAKEOUT is coming, IMHO not bashing just MHO. certainly this stock has been hot.
BUT, if I am correct, and I am not alone, the top in the cyclical bull could be in.,,,and If I am correct it is very possible the bear rips ALL a new one....bonds MAY do better, but so far havent found bottom, a normal safe haven....gold sure has but WAY overbought will plummet in short order
IMHO A STEEP drop in commodities may signal tougher times ahead,,,,especially SILVER AND COPPER....used in all kinds of products....OIL fell as demand eased?
Utility avg usually tops 6-8 mnths ahead of DOW...it topped last OCT 2005. TRANS new ALL time high, but for 6 years DOW didnt agreee, and withing a snot shot this week it has run away from that new high (maybe it tries again)...NAZ topped months ago....so we dont have a unified market working to new highs together.
And we have VERY few of the Dow 30 close to 52 wk highs....and we have PLENTY of stocks off already by 20% or more....ad that % keeps rising.WHat is wrong with MSFT AMZN YHOO INTC DELL EBAY GOOG IBM GM WMT etc etc...many of these are making 52 wk LOWS Under your nose.
Insider selling is at a frenzy, whats their hurry? and here to http://finance.yahoo.com/q/it?s=PEIX Maybe I am wrong, but if your stocks are acting badly, take them out, shoot them, raise cash ....all IMHO
A BEAR has torn even the bears hide to hide....and hasnt it been easy to be a CRAMER?
Been 3 YEARS!!!! since last 10% correction......VIX is moving up, if that continues the PRO'S are getting nervous...you better too.
OK and dismiss me as a nut case, but remember the day you read this.....in the future.We are in a SECULAR BEAR trend, the FED and BUSH have fought it tooth and nail,,very well.....but it has grossly maladjusted our economy and made our "friends" STRONGER, helped build the Chinese Military too.Yeah, 10's of millions willing to work for $200 or less a MONTH!!! how they gonna afford OUR JUNK? oh yeah on credit?
You will figure out too late I am right, the trend may be changing back to the bear....and you cannot afford to drizzle saliva and let it rip you a new one..or can you?
Duratek
BUT, if I am correct, and I am not alone, the top in the cyclical bull could be in.,,,and If I am correct it is very possible the bear rips ALL a new one....bonds MAY do better, but so far havent found bottom, a normal safe haven....gold sure has but WAY overbought will plummet in short order
IMHO A STEEP drop in commodities may signal tougher times ahead,,,,especially SILVER AND COPPER....used in all kinds of products....OIL fell as demand eased?
Utility avg usually tops 6-8 mnths ahead of DOW...it topped last OCT 2005. TRANS new ALL time high, but for 6 years DOW didnt agreee, and withing a snot shot this week it has run away from that new high (maybe it tries again)...NAZ topped months ago....so we dont have a unified market working to new highs together.
And we have VERY few of the Dow 30 close to 52 wk highs....and we have PLENTY of stocks off already by 20% or more....ad that % keeps rising.WHat is wrong with MSFT AMZN YHOO INTC DELL EBAY GOOG IBM GM WMT etc etc...many of these are making 52 wk LOWS Under your nose.
Insider selling is at a frenzy, whats their hurry? and here to http://finance.yahoo.com/q/it?s=PEIX Maybe I am wrong, but if your stocks are acting badly, take them out, shoot them, raise cash ....all IMHO
A BEAR has torn even the bears hide to hide....and hasnt it been easy to be a CRAMER?
Been 3 YEARS!!!! since last 10% correction......VIX is moving up, if that continues the PRO'S are getting nervous...you better too.
OK and dismiss me as a nut case, but remember the day you read this.....in the future.We are in a SECULAR BEAR trend, the FED and BUSH have fought it tooth and nail,,very well.....but it has grossly maladjusted our economy and made our "friends" STRONGER, helped build the Chinese Military too.Yeah, 10's of millions willing to work for $200 or less a MONTH!!! how they gonna afford OUR JUNK? oh yeah on credit?
You will figure out too late I am right, the trend may be changing back to the bear....and you cannot afford to drizzle saliva and let it rip you a new one..or can you?
Duratek
Wednesday, May 10, 2006
GOLD STANDARD, FED IN A BOX
1 M Chinese enter workforce every week (I think right? every day DOH!!?)
avg pay $190 aint gonna make them CONSUMERS instead of savers....as one astute Gov official said...." they need to be more like us!!! and us them!"
Chines official quoted as saying Gov needs to diversify TRILLION $$ reservese doubling maybe QUADUPLING GOLD reserves (reason for recent runup and iran)
State coffers in BLACK, new home buyers TRAPPED with rising costs for everything (cutting consumption or escallating debt or both) as the hidden tax PROPERTY TAX has sky rocketed with HIGHER asessments from housing BUBBLE, you wont see this OVER TAXXING refunded, GOV is OUT OF CONTROL with the taxes
Tarrif could be lifted on Ethanol, IMHO these stocks are VERY vulnerable if so (after speculative fever)
STocks should be near geared up as additive mandated for Summer driving season. Will the increased use of EThanol lead to INFLATION in the raw materials like CORN?
$700 gold? is this the "DATA" Fed is said to be looking at when meeting for rates? HOW does this go unnoticed? wouldnt INFLATION heat up and interest rates RISE sharply is the $$$ is NOT defended.
I think FED is in NO MAN'S LAND, a VICTIM......JAILED by their own hands/policies...NO WAY OUT.
A SEVERE correction at very least is LURKING.....none of us, anyone will see it coming as they stare at CRamer show.......
Up on deck? ATM snafu.......BUSH?repubs want EXTENSION of TAX cuts for RICH....and the AVG JOE gets killed by high energy, levitated Property taxes, and too high mortgages....the ATM tax etc.....etc....the DIV tax cut is for bleep.
avg pay $190 aint gonna make them CONSUMERS instead of savers....as one astute Gov official said...." they need to be more like us!!! and us them!"
Chines official quoted as saying Gov needs to diversify TRILLION $$ reservese doubling maybe QUADUPLING GOLD reserves (reason for recent runup and iran)
State coffers in BLACK, new home buyers TRAPPED with rising costs for everything (cutting consumption or escallating debt or both) as the hidden tax PROPERTY TAX has sky rocketed with HIGHER asessments from housing BUBBLE, you wont see this OVER TAXXING refunded, GOV is OUT OF CONTROL with the taxes
Tarrif could be lifted on Ethanol, IMHO these stocks are VERY vulnerable if so (after speculative fever)
STocks should be near geared up as additive mandated for Summer driving season. Will the increased use of EThanol lead to INFLATION in the raw materials like CORN?
$700 gold? is this the "DATA" Fed is said to be looking at when meeting for rates? HOW does this go unnoticed? wouldnt INFLATION heat up and interest rates RISE sharply is the $$$ is NOT defended.
I think FED is in NO MAN'S LAND, a VICTIM......JAILED by their own hands/policies...NO WAY OUT.
A SEVERE correction at very least is LURKING.....none of us, anyone will see it coming as they stare at CRamer show.......
Up on deck? ATM snafu.......BUSH?repubs want EXTENSION of TAX cuts for RICH....and the AVG JOE gets killed by high energy, levitated Property taxes, and too high mortgages....the ATM tax etc.....etc....the DIV tax cut is for bleep.
Monday, May 08, 2006
http://www.contraryinvestor.com/moprinter.htm May commentary
When there isn't much to say I take a break, so let's catch up.
In a "floating on a sea of liquidity" and 8,000 hedge funds kind of market, it is not surprising to see a new high for move in Dow, and maybe all time high being less than 2% away, will follow......but all is NOT healthy.
As this rally goes into its 44th month from 2002/2003 lows, it becomes ever more LESS inclusive, and not all indexes have come along.
SPX and NAZ are far off their highs, Transports made new all time highs a year ago, without Dow confirmation, and in SEPT of 2005 the Utility index topped out!!! And can be a fore warning of end of the bull market.
What you must remember, is the rally from 2002 lows is in the context of a SECULAR BEAR MARKET, which will probably last up to the length of the preceding bull market, which means as long as 10- 20 years!
And there will be a few of these strong rallys, until the Bear has done its job and or run its course. Which is to restore ORDER, and the NORMS.
Dividend yields at near 2% is even LOWER than at any previous bull mkt top! At bear mkt bottoms near 6% is typical.
SPX earnings have been propped up from historic energy company profits and HUGE stock buyback programs.
Insiders are selling like mad.
It has been over 3 years since the mkt has corrected 10%.
Bear markets reduce speculation, volume on the BB (penny stocks) is DOUBLE what it was in 2000 !! DEBT has exploded, instead of consumers retrenching. Demand is being satiated, a gluttony, not pent up.
Housing has EXPLODED with excess speculation rampant and now unwinding.
I don't know if THE top is coming, but do feel some kind of important top is near, and we are now IN the dead zone for market, the seasonals nolonger supplying a tailwind.....IMHO caution is warranted.
Next update? when I feel like it.
Duratek
When there isn't much to say I take a break, so let's catch up.
In a "floating on a sea of liquidity" and 8,000 hedge funds kind of market, it is not surprising to see a new high for move in Dow, and maybe all time high being less than 2% away, will follow......but all is NOT healthy.
As this rally goes into its 44th month from 2002/2003 lows, it becomes ever more LESS inclusive, and not all indexes have come along.
SPX and NAZ are far off their highs, Transports made new all time highs a year ago, without Dow confirmation, and in SEPT of 2005 the Utility index topped out!!! And can be a fore warning of end of the bull market.
What you must remember, is the rally from 2002 lows is in the context of a SECULAR BEAR MARKET, which will probably last up to the length of the preceding bull market, which means as long as 10- 20 years!
And there will be a few of these strong rallys, until the Bear has done its job and or run its course. Which is to restore ORDER, and the NORMS.
Dividend yields at near 2% is even LOWER than at any previous bull mkt top! At bear mkt bottoms near 6% is typical.
SPX earnings have been propped up from historic energy company profits and HUGE stock buyback programs.
Insiders are selling like mad.
It has been over 3 years since the mkt has corrected 10%.
Bear markets reduce speculation, volume on the BB (penny stocks) is DOUBLE what it was in 2000 !! DEBT has exploded, instead of consumers retrenching. Demand is being satiated, a gluttony, not pent up.
Housing has EXPLODED with excess speculation rampant and now unwinding.
I don't know if THE top is coming, but do feel some kind of important top is near, and we are now IN the dead zone for market, the seasonals nolonger supplying a tailwind.....IMHO caution is warranted.
Next update? when I feel like it.
Duratek
Friday, April 21, 2006
CRASH ALERT!!
not much to say....yeah right. I am on HIGH ALERT, extreme defensive posture taken. Maybe more this weekend.
D
D
Friday, March 31, 2006
ACCIDENT WAITING TO HAPPEN?
Oil Heads Back Toward $70 a BarrelFriday March 31, 3:05 pm ET By Brad Foss, AP Business Writer
Oil Heads Back Toward $70 a Barrel, With Potenially Grave Consequences for Global Economy
WASHINGTON (AP) -- Oil prices appear headed back toward $70 a barrel, a level not seen since Hurricane Katrina battered the Gulf Coast and sporadic shortages sent gasoline at the pump above $3 a gallon nationwide.
While last summer's price spike triggered outrage in Congress and hurt sport utility vehicle sales, it caused only a hiccup in motor-fuel consumption. And for now, with demand back on the rise, the economy seems capable of absorbing uncomfortably high prices.
Analysts warn, however, that consumers and businesses could be just one major supply disruption away from more serious financial consequences.
Sherry Cooper, chief economist at BMO Nesbitt Burns, said the ramifications of $70 oil and $3-a-gallon gasoline would be "more mild" the second time around "because we're getting kind of used to it."
But while the gas-price sticker shock may be wearing off, Nomura Securities chief economist David Resler fears a more subtle fuel-related angst settling in among consumers.
"There is the pessimistic notion that this is not going to go away and that's going to have a more lasting impact on driving habits and behavior, I suspect, than we've seen so far," Resler said.
In that context, a hypothetical supply disruption that jolts oil prices to $80 or higher and keeps them there for an extended period -- say, three months -- could result in "a substantial falloff in discretionary spending" that snowballs into a serious slowdown.
Perhaps the top threat for the oil market is the standoff between the United Nations and Iran, OPEC's No. 2 producer, over Tehran's nuclear energy ambitions. Iran's foreign minister said Friday his country would not use oil as an economic weapon, and that helped ease prices, but analysts say they remain concerned about supplies from Iraq, Russia, Venezuela and other places.
Unrest in Nigeria has taken more than 500,000 barrels per day of oil off the market, and more than 300,000 barrels per day of Gulf of Mexico output remains shut-in because of damage from last fall's hurricanes.
With global oil demand expected to average 85 million barrels per day in 2006, and excess production capacity limited to 2 million barrels per day, oil analyst Jamal Qureshi of PFC Energy in Washington said prices aren't likely to retreat anytime soon.
"The market is awakening to the scope of the risks," said Antoine Halff, director of global energy Fimat USA in New York.
Yet in spite of all the apprehension about oil supplies -- or maybe because of it -- U.S. inventories of crude are at a seven-year high of roughly 341 million barrels. That does not include the 685,700 barrels in the country's strategic reserve, available in an emergency.
Some analysts point to this buildup of inventories as evidence the market is divorced from reality. IFR Energy Services' Tim Evans sees a "dangerous complacency about the downside potential for prices" -- but many more say it is a reflection of unease about geopolitical uncertainties.
On Friday, light crude for May delivery traded at $65.80 a barrel, down $1.35 on the New York Mercantile Exchange. U.S. retail gasoline prices averaged $2.53 a gallon, or 37 cents higher than last year, according to Oil Price Information Service.
The potential exists for $3-a-gallon gasoline at some point this summer, analysts say, but that assumes out-of-the-ordinary disruptions to refining or distribution, or both. The Energy Department, meanwhile, is forecasting an average summertime price of $2.50.
Economists and oil-market experts say industry and homeowners may not like paying more for fuel but they are adapting, in large part because energy is a tiny piece of overall spending and, thanks to more efficient technology, an even smaller piece than it was during the energy crises of the 1970s.
The burden is most severe on low-income families and fuel-intensive businesses, though truckers, chemical manufacturers and, to a lesser extent, airlines have had success in passing along these costs.
Relatively low interest rates, which have made it easy to borrow money while helping to prop up the stock and housing markets, have reduced the impact of high oil prices on the economy.
Of course, the Federal Reserve has raised short-term rates 15 times since June 2004 to cool off the housing market and keep inflation in check, and this is likely to slow growth irrespective of energy prices.
BMO's Cooper said the Fed probably needs to raise interest rates again in May to slow economic growth because there are signs -- rising airfares among them -- that inflationary pressures are creeping up.
Brian Hicks, co-manager of US Global Investors' Global Resources Fund, a mutual fund heavily invested in energy, said a recession in the U.S. would likely reverberate across emerging-market economies and could quickly depress daily oil demand by 2 million barrels per day.
That dire scenario is not what Hicks or most other financial professionals are anticipating. Hicks forsees oil prices trading in a range of $55 to $65 through the end of the year, with consumption tapering off anywhere above $70 and the Organization of Petroleum Exporting Countries curtailing production at around $50.
James Cordier, president of Liberty Trading in Tampa, Fla., believes oil prices will climb as long as the economies of the U.S., China and India continue to grow and that prices may need to hit $75 before there is any significant demand response.
"We are going to find out at what price level we start rationing demand," Cordier said. "That is what we have to do."
Oil Heads Back Toward $70 a Barrel, With Potenially Grave Consequences for Global Economy
WASHINGTON (AP) -- Oil prices appear headed back toward $70 a barrel, a level not seen since Hurricane Katrina battered the Gulf Coast and sporadic shortages sent gasoline at the pump above $3 a gallon nationwide.
While last summer's price spike triggered outrage in Congress and hurt sport utility vehicle sales, it caused only a hiccup in motor-fuel consumption. And for now, with demand back on the rise, the economy seems capable of absorbing uncomfortably high prices.
Analysts warn, however, that consumers and businesses could be just one major supply disruption away from more serious financial consequences.
Sherry Cooper, chief economist at BMO Nesbitt Burns, said the ramifications of $70 oil and $3-a-gallon gasoline would be "more mild" the second time around "because we're getting kind of used to it."
But while the gas-price sticker shock may be wearing off, Nomura Securities chief economist David Resler fears a more subtle fuel-related angst settling in among consumers.
"There is the pessimistic notion that this is not going to go away and that's going to have a more lasting impact on driving habits and behavior, I suspect, than we've seen so far," Resler said.
In that context, a hypothetical supply disruption that jolts oil prices to $80 or higher and keeps them there for an extended period -- say, three months -- could result in "a substantial falloff in discretionary spending" that snowballs into a serious slowdown.
Perhaps the top threat for the oil market is the standoff between the United Nations and Iran, OPEC's No. 2 producer, over Tehran's nuclear energy ambitions. Iran's foreign minister said Friday his country would not use oil as an economic weapon, and that helped ease prices, but analysts say they remain concerned about supplies from Iraq, Russia, Venezuela and other places.
Unrest in Nigeria has taken more than 500,000 barrels per day of oil off the market, and more than 300,000 barrels per day of Gulf of Mexico output remains shut-in because of damage from last fall's hurricanes.
With global oil demand expected to average 85 million barrels per day in 2006, and excess production capacity limited to 2 million barrels per day, oil analyst Jamal Qureshi of PFC Energy in Washington said prices aren't likely to retreat anytime soon.
"The market is awakening to the scope of the risks," said Antoine Halff, director of global energy Fimat USA in New York.
Yet in spite of all the apprehension about oil supplies -- or maybe because of it -- U.S. inventories of crude are at a seven-year high of roughly 341 million barrels. That does not include the 685,700 barrels in the country's strategic reserve, available in an emergency.
Some analysts point to this buildup of inventories as evidence the market is divorced from reality. IFR Energy Services' Tim Evans sees a "dangerous complacency about the downside potential for prices" -- but many more say it is a reflection of unease about geopolitical uncertainties.
On Friday, light crude for May delivery traded at $65.80 a barrel, down $1.35 on the New York Mercantile Exchange. U.S. retail gasoline prices averaged $2.53 a gallon, or 37 cents higher than last year, according to Oil Price Information Service.
The potential exists for $3-a-gallon gasoline at some point this summer, analysts say, but that assumes out-of-the-ordinary disruptions to refining or distribution, or both. The Energy Department, meanwhile, is forecasting an average summertime price of $2.50.
Economists and oil-market experts say industry and homeowners may not like paying more for fuel but they are adapting, in large part because energy is a tiny piece of overall spending and, thanks to more efficient technology, an even smaller piece than it was during the energy crises of the 1970s.
The burden is most severe on low-income families and fuel-intensive businesses, though truckers, chemical manufacturers and, to a lesser extent, airlines have had success in passing along these costs.
Relatively low interest rates, which have made it easy to borrow money while helping to prop up the stock and housing markets, have reduced the impact of high oil prices on the economy.
Of course, the Federal Reserve has raised short-term rates 15 times since June 2004 to cool off the housing market and keep inflation in check, and this is likely to slow growth irrespective of energy prices.
BMO's Cooper said the Fed probably needs to raise interest rates again in May to slow economic growth because there are signs -- rising airfares among them -- that inflationary pressures are creeping up.
Brian Hicks, co-manager of US Global Investors' Global Resources Fund, a mutual fund heavily invested in energy, said a recession in the U.S. would likely reverberate across emerging-market economies and could quickly depress daily oil demand by 2 million barrels per day.
That dire scenario is not what Hicks or most other financial professionals are anticipating. Hicks forsees oil prices trading in a range of $55 to $65 through the end of the year, with consumption tapering off anywhere above $70 and the Organization of Petroleum Exporting Countries curtailing production at around $50.
James Cordier, president of Liberty Trading in Tampa, Fla., believes oil prices will climb as long as the economies of the U.S., China and India continue to grow and that prices may need to hit $75 before there is any significant demand response.
"We are going to find out at what price level we start rationing demand," Cordier said. "That is what we have to do."
Saturday, March 25, 2006
PICTURE OF THE WEEK
http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=52858 Credit Bubble Report
Even as the Dow sits scant 4% below Jan 2000 bubble highs, the market advance is getting more selecive. when the Dow finally tops, the majority of stocks will already be in bear Markets with 20% losses or more, this is a good time IMHO to examine your holdings and their performance. and maybe a very good time to RAISE cash as MM funds yielding near 4% and 91 day Treasuries more, challenging gains in stock market without risk.
Share volume in CHEAP bulletin board stocks last week ran 2 X previous ever high, the so called lesson of previous Bear Market are all but forgotten. Share volume for little GNBT rose to 89 Million one day last week.
Be careful, be very selective......the top making process continues and the current Bull Cycle is VERY long in the tooth, IMHO in respect to historic means. If you have fallen asleep with your investments, NOW would be a good time to wake up.
My blog for now will only be updated each Sat morning, unless a stock market move of 100 points or more has occured.
Duratek
Tuesday, March 21, 2006
Monday, March 20, 2006
HEAD BLOODSUCKER SPEAKS
Bernanke: Fed must watch its step
Fed chief says flat yield curve not a sign of economic slowdown, says it isn't clear why long-term bond yields are so low.
March 20, 2006: 9:41 PM EST
NEW YORK, March 20 (Reuters) - Federal Reserve Chairman Ben Bernanke said on Monday it was hard to gauge why long-term interest rates were so low and said the U.S. central bank could not rely on them as its sole guide for policy-making.
"The implications for monetary policy of the recent behavior of long-term yields are not at all clear-cut," Bernanke told the Economic Club of New York.
In his first public foray onto Wall Street since taking over as Fed chairman on Feb. 1, Bernanke ran through several competing explanations for the unusually low level of U.S. bond yields despite a steady ratcheting up of short-term interest rates by the U.S. central bank.
Bernanke revisited a thesis he first laid out a year ago that a "global saving glut" - an excess of savings because of a dearth of enticing investments - could be depressing rates.
If this were the case, he said, then as long as the factors behind it persisted "global equilibrium interest rates - and, consequently, the neutral policy rate - would be lower than they otherwise would be" to keep the economy on an even keel.
But Bernanke laid out a number of other possibilities and concluded: "The bottom line for policy appears ambiguous."
Fed policy-makers have raised benchmark overnight rates to 4.5 percent in a string of 14 steps dating to June 2004 and are widely expected to bump them up another quarter-percentage point at a meeting next Monday and Tuesday.
While overnight rates have risen 3.5 percentage points since mid-2004, the market-set rate on 10-year U.S. government bonds has barely budged.
Bernanke said that if the low level of long-term rates reflected a decline in the compensation investors demanded to cover the risk of losses on long-term holdings, then it could signal stimulative financial conditions that would require higher short-term rates than otherwise to offset.
"But to the extent that long-term rates have been influenced by macroeconomic conditions, including such factors as trends in global saving and investment, the required policy rate will be lower," Bernanke said.
Little slowdown ahead
As he had in congressional testimony last month, Bernanke said he dd not consider the current flat yield curve - with yields on short-term debt close to yields on long-term bonds - as presaging "a significant economic slowdown" as has sometimes been the case in the past.
Indeed, he said other indicators showed markets with few worries on the future. "The fact that actual and implied volatilities of most financial prices remain subdued suggests that market participants do not harbor significant reservations about the economic outlook," he said.
He said, instead, long-term rates could suggest the level of short-term rates consistent with holding the economy at full employment had declined, perhaps reflecting a lasting drag on the economy from high energy costs, slower growth in house prices and the possibility consumers will begin to save more.
But he also noted long-term rates were low around the globe and said "an explanation less centered on the United States might be required."
One other factor that Bernanke raised, but downplayed, was that large official holdings of U.S. Treasury debt accumulated by countries intervening in currency markets was doing much to push U.S. long-term rates down.
"A reasonable conclusion is that the accumulation of dollar reserves abroad has influenced U.S. yields, but reserve accumulation abroad is not the only, or even the dominant, explanation for their recent behavior," he said.
In the end, Bernanke said the Fed would need to monitor bond yields carefully, but also had to take into account a wide array of other signals on the economy's health.
"Policy-makers are well advised to follow two principles familiar to navigators throughout the ages: First, determine your position frequently. Second, use as many guides or landmarks as possible," he said.
"By not tying policy to a small set of forecast indicators, we may sacrifice some degree of simplicity, but we are less likely to be misled when a favored variable behaves in an unusual manner," Bernanke added.
Fed chief says flat yield curve not a sign of economic slowdown, says it isn't clear why long-term bond yields are so low.
March 20, 2006: 9:41 PM EST
NEW YORK, March 20 (Reuters) - Federal Reserve Chairman Ben Bernanke said on Monday it was hard to gauge why long-term interest rates were so low and said the U.S. central bank could not rely on them as its sole guide for policy-making.
"The implications for monetary policy of the recent behavior of long-term yields are not at all clear-cut," Bernanke told the Economic Club of New York.
In his first public foray onto Wall Street since taking over as Fed chairman on Feb. 1, Bernanke ran through several competing explanations for the unusually low level of U.S. bond yields despite a steady ratcheting up of short-term interest rates by the U.S. central bank.
Bernanke revisited a thesis he first laid out a year ago that a "global saving glut" - an excess of savings because of a dearth of enticing investments - could be depressing rates.
If this were the case, he said, then as long as the factors behind it persisted "global equilibrium interest rates - and, consequently, the neutral policy rate - would be lower than they otherwise would be" to keep the economy on an even keel.
But Bernanke laid out a number of other possibilities and concluded: "The bottom line for policy appears ambiguous."
Fed policy-makers have raised benchmark overnight rates to 4.5 percent in a string of 14 steps dating to June 2004 and are widely expected to bump them up another quarter-percentage point at a meeting next Monday and Tuesday.
While overnight rates have risen 3.5 percentage points since mid-2004, the market-set rate on 10-year U.S. government bonds has barely budged.
Bernanke said that if the low level of long-term rates reflected a decline in the compensation investors demanded to cover the risk of losses on long-term holdings, then it could signal stimulative financial conditions that would require higher short-term rates than otherwise to offset.
"But to the extent that long-term rates have been influenced by macroeconomic conditions, including such factors as trends in global saving and investment, the required policy rate will be lower," Bernanke said.
Little slowdown ahead
As he had in congressional testimony last month, Bernanke said he dd not consider the current flat yield curve - with yields on short-term debt close to yields on long-term bonds - as presaging "a significant economic slowdown" as has sometimes been the case in the past.
Indeed, he said other indicators showed markets with few worries on the future. "The fact that actual and implied volatilities of most financial prices remain subdued suggests that market participants do not harbor significant reservations about the economic outlook," he said.
He said, instead, long-term rates could suggest the level of short-term rates consistent with holding the economy at full employment had declined, perhaps reflecting a lasting drag on the economy from high energy costs, slower growth in house prices and the possibility consumers will begin to save more.
But he also noted long-term rates were low around the globe and said "an explanation less centered on the United States might be required."
One other factor that Bernanke raised, but downplayed, was that large official holdings of U.S. Treasury debt accumulated by countries intervening in currency markets was doing much to push U.S. long-term rates down.
"A reasonable conclusion is that the accumulation of dollar reserves abroad has influenced U.S. yields, but reserve accumulation abroad is not the only, or even the dominant, explanation for their recent behavior," he said.
In the end, Bernanke said the Fed would need to monitor bond yields carefully, but also had to take into account a wide array of other signals on the economy's health.
"Policy-makers are well advised to follow two principles familiar to navigators throughout the ages: First, determine your position frequently. Second, use as many guides or landmarks as possible," he said.
"By not tying policy to a small set of forecast indicators, we may sacrifice some degree of simplicity, but we are less likely to be misled when a favored variable behaves in an unusual manner," Bernanke added.
FED RESERVE IS UNCONSTITUTIONAL
http://www.honestmoneyreport.com/archives/2006/0305.php
Article I, Section 8, Clause 5 of the Constitution states: “The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”
BUT>>>>>>The United States monetary system currently creates, emits, and circulates paper bills of credit known as Federal Reserve Notes. Such acts are not authorized by the Constitution – they are literally prohibited by the Constitution, and should be repealed forthwith.
D...we are losing it people.....
Article I, Section 8, Clause 5 of the Constitution states: “The Congress shall have Power…To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”
BUT>>>>>>The United States monetary system currently creates, emits, and circulates paper bills of credit known as Federal Reserve Notes. Such acts are not authorized by the Constitution – they are literally prohibited by the Constitution, and should be repealed forthwith.
D...we are losing it people.....
Sunday, March 19, 2006
WAKE UP AMERICA WE ARE BEING BUSHWINKED
http://www.cbsnews.com/stories/2006/03/17/60minutes/main1415985.shtml Bush *&&!!sucker pulled out of Kyoto green house gasses treaty..is now censoring CLIMATE REPORTS!!!!
It is going to be TOO late and no place to hide!! Hate them maybe too , but if a Dem with environmental leanings comes up as candidate.....better vote them in!
Temp at Antarctica is rising 2X as fast as elsewhere, the GOV is censoring your right to know, keeping the TRUTH from you.
If we haven't made drastic changes in 10 years there will be NO reversing this process.
D
It is going to be TOO late and no place to hide!! Hate them maybe too , but if a Dem with environmental leanings comes up as candidate.....better vote them in!
Temp at Antarctica is rising 2X as fast as elsewhere, the GOV is censoring your right to know, keeping the TRUTH from you.
If we haven't made drastic changes in 10 years there will be NO reversing this process.
D
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