10 WAYS TO SUNDAY LOOKING AT DEBT

http://www.financialsense.com/contributors/ronald-griess/balance-sheet-household-credit-market-debt

Deleveraging...returning to norm hasn't barely begun.

D

PROBLEMS WITH STUDENT LOANS?

"We give Bernanke at most 2 years before everyone is aware of the true extent of not only the student debt bubble, but that it has already popped, at which point student loans will be the next "asset" to be monetized by the Federal Reserve. "

http://www.zerohedge.com/news/2012-09-28/next-subprime-crisis-here-over-120-billion-federal-student-loans-default

TRANSPORTS BREAKING DOWN AND TEST

PEAK PROFITS?

http://www.mauldineconomics.com/outsidethebox  "What if the FED has it all wrong?"

" Today, employment growth remains below 1.5% YoY, a rate insufficient to reduce unemployment. Nominal wages are growing 1.2% while inflation is 1.7% and threatens to accelerate, in large part due to the impact that the Fed's actions are having on commodity prices, particularly oil prices.

The Fed wants to grow employment faster, but jobs don't grow out of thin air. Corporations create jobs when they have the means, they see a need, and there is visibility to commit.

The problem with Bernanke's wealth effect thesis lies with the new reality in America. Income and assets have lately been so significantly redistributed that only a tiny few actually feel a wealth effect from rising equity prices. "

Today on CNBCBS, "expert" came on ans basically said only worry is some short term turbulence, but longer term NO PROBLEMS as the FED has put a price under market and that we "won't see ANY 200 pt delines as long as FED is there.

All the traders know the FED IS THERE, and maybe this guy is right. But I ask the question, where is it in the FED mandate they target the stock market?

There is a YING and and YANG to everything, and it seems obvious to me, the FED policy for what it is costing, is VERY INEFFECTIVE in helping their #1, and #2 mandates.....full employment and price stability as it also relates to the protection of the reserve currency.

Props to Richard Russell http://ww2.dowtheoryletters.com/dtlol.nsf who is still writing one of the best letters available, especially for the layman, and is going strong well into his 80's. If there was a HALL OF FAME for this, he surely would be there.

D

HOUSING HAS RECOVERED? SO HAS CONSUMER CONFIDENCE?

http://finance.yahoo.com/news/ashes-housing-come-back-163611038.html  Claims housing has come back.

A Chartists Perspective on DOW THEORY NON CONFIRM

http://www.pretzelcharts.com/2012/09/dow-theory-gives-warning-can-fed-print.html

FED RICHARD FISHER SPEAKS

http://www.dallasfed.org/news/speeches/fisher/2012/fs120919.cfm  SEPT 19th

"We can easily conjure up plausible theories as to what we will do when it comes to our next tack or eventually reversing course. The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy. Nobody really knows what will work to get the economy back on course. And nobody—in fact, no central bank anywhere on the planet—has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank—not, at least, the Federal Reserve—has ever been on this cruise before."

"This much we do know: Our engine room is already flush with $1.6 trillion in excess private bank reserves owned by the banking sector and held by the 12 Federal Reserve Banks. Trillions more are sitting on the sidelines in corporate coffers. On top of all that, a significant amount of underemployed cash—or fuel for investment—is burning a hole in the pockets of money market funds and other non depository financial operators. This begs the question: Why would the Fed provision to shovel billions in additional liquidity into the economy’s boiler when so much is presently lying fallow?"

The FED's MANDATE:
"As you all know, the Federal Reserve’s mission is mandated by the Congress. It calls for us to steer a monetary course according to a dual mandate—we are charged with maintaining price stability while conducting policy so as to best assist in achieving full employment."

"In the current tumultuous economic sea, facing strong headwinds common in the aftermath of financial crises and balance-sheet recessions, our desired port is increased employment. Certain theories and various hypothetical studies and models tell us that flooding the markets with copious amounts of cheap, plentiful liquidity will lift final demand, both through the “wealth effect” channel and by directly stimulating businesses to expand and hire. And yet from the perspective of my watch station—as I have reported time and again—the very people we wish to stoke consumption and final demand by creating jobs and expanding business fixed investment are not responding to our policy initiatives as well as theory might suggest."

"Surveys of small and medium-size businesses, the wellsprings of job creation, are telling us that nine out of 10 of those businesses are either not interested in borrowing or have no problem accessing cheap financing if they want it. The National Federation of Independent Business (NFIB), for example, makes clear that monetary policy is not on its members’ radar screen of concerns, except that it raises fear among some of future inflationary consequences; the principal concern of the randomly sampled small businesses surveyed by the NFIB is with regulatory and fiscal uncertainty."   "“If your costs of borrowing were to decrease by 25 or more basis points, would this induce you to spend more on job-creating expansion?” The answer from nine out of 10 was No.”

"To be sure, buying in stock will have a positive wealth effect on that company’s shareholders, but putting the equivalent amount of money to work in spending on plant and equipment would put more people back to work more quickly."

Bottom line is, from the FED's horses mouth, current FED policy is not having the desired effect on business, but yet they just announced a scaling up of QE to another new level of historical insanity....as they have PROOF it's not working, not aiding business borrow nor investment...but they keep piling on!

And Fisher also points out, from these uncertain, uncharted waters Bernanke has swam us into.....there is NO SURE WAY TO GET OUT!

D

NEW ERA OF GROWTH AND PROSPERITY?

Exhibit A http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10709

"Deleveraging – the process of unwinding the economic damage wrought from years of excess - will be a quite arduous economic process; one that will commence at some unknown date in the future. Oh, I guess I failed to mention that total (financial and non-financial) Credit ended Q2 at a record $55.031 TN, or 353% of GDP. And Rest of World holdings of our financial assets ended the quarter at a record $19.100 TN, a $3.860 TN increase from the end of 2008. "

Exhibit B

http://www.mauldineconomics.com/frontlinethoughts?utm_source=newsletter&utm_medium=email&utm_campaign=frontline

"In 2010, the number of Federal Register pages devoted to proposed new rules broke its previous all-time record for the second consecutive year. It's up by 25% compared to 2008. These regulations alone will impose large costs and create heightened uncertainty for business and especially small business."

So we have world Central Bankers printing money like there's no tomorrow, and it is the OPINION of many letter writers that YOU "have to be in stocks for long term...." BUY NOW AND BUY OFTEN!

It is hard to argue the success of current policies for inflating Risky assets. But the whole idea of Bear Markets and periods of reconciliation are that the preceding excesses are cleansed and we acan start anew, REAL GROWTH, a REAL ECONOMY.

Is it any wonder, while some who come here and post how great the stock mkt is, how I'm missing the boat, is that THEY are missing the point of my blog.....the greater risk IMHO is not understanding the greater issues and what might their impact be at some point.

I can't predict THE TOP or when the TIPPING POINT will arrive, what I am saying is current policies are aimed at one sector, STOCK PRICES, and a WHOLE LOT OF AMMO has been used to gain higher prices, but what has been the EFFECT on the overall economy?

Higher spending, consumption.....and a LOT of it is Gov't, but stock prices back to near record highs has increased Household wealth. Housing prices had been a more stable storehouse for personal wealth until the BUBBLE....again created by reckless FED policy of unusually LOW Interest rates held low for TOO LONG, in the face of OBVIOUS price speculation that only after the crash was anyone complaining.

ALL this money thrown at the core problems? Is creating even MORE and larger dysfunction, and total credit market debt is still near 350% of GDP....for now the DAY OF RECKONING has been pushed back.......looking at these 2 charts, especially the one showing debt in 1929 (we know what happened next) and where we are standing today......DO NOT LOOK DOWN!

Duratek

INCONSISTANCIES

Ever since I started my blog, my goal was to educate, to light a fire under the avg person to try to be in more control of their financial destiny.

Depending on your age, and goals you would perhaps look at your investment future differently. I will make it clear again, my goal is not to give you any advice, and everything I post is just my opinion, and articles posted I share opinions, charts of others.

YOU should not make ant decision based on what I think, of course as any writer would suggest, you should work with a financial advisor, professional and make it clear what your objectives are.

I believe we are in a SECULAR BEAR MKT, so that means over a LONG period of time stocks are in for a rough ride. These long term trends can last longer than you think, some of that depends on how hard OTHER FORCES, like the FED fight the prevailing trend.

ALL a BEAR MKT tries to do is RESET things, return the economy and market to a balance, a natural balance so REAL GROWTH can return and the previous imbalances and speculation, excesses can be healed so we can start anew.

This Bear has been fought like no other, HISTORIC, NEVER BEFORE SEEN measures have been taken by the Gov't and especially the Federal Reserve which has overstepped its mandate.

It IS NORMAL to experience periods (CYCLICAL BULLS) of 3 years or more of counter trend rallies and bullish periods, stocks usually react positively to FED MEASURES.

My personal finances aside, I am VERY CONSERVATIVE, so what I do (which I don't usually publish) may not be for everyone.

One of the MORE difficult things to do is ride the bull, especially while it undergoes a shakeout, draw down...like in early 1998 right before one of the greatest rises in stock wealth ever seen in such a short period of time. FED INDUCES TECH CRAZE...worries over Y2K....1998 crash..but that wasn't sustainable, nor was 2003-2007....each time with more disastrous results.

SO either I am 100% WRONG for worry now, and we have sustainable recovery built on SOUND economic policy......or the mother of all shit will hit the fan based on the level of attack fighting the inevitable reconciliation which will bring us to ground zero and true healing to build again from a sound base.

Duratek

HOUSING LEADS US ECONOMY OUT OF RECESSIONS....EXCEPT THIS TIME!

Housing has led the economy out of every Recession:.......until now. Stocks are what is supposed to lead us out? What is targeted by the FED?

With 30% of US homeowners underwater, all that has been done is keep them indebted, transfer debt to the FED, give Treasuries to the deadbeat Banks, bailing them out, in turn they buy stocks, gold....Fed and govt buy ALL US mortgages....stocks are targeted....manipulated

There is your answer why so many remain unemployed, if the economy dips down again, what tools are left to combat it?

WTF happened to all those m'fers who cheated and were a part of this financial disaster certainly committing felonies against the people?

JUSTICE? NOT ONE TRIAL, NOT ONE CONVICTION.

The Gov't represents the people?

D

TOWER OF BABBLE

http://www.oftwominds.com/blog.html

"If the Fed wanted to "save" housing and not the banks, why not buy mortgages directly from homeowners?"

QE3 AND SOMETHING IS WRONG

Why would OIL and the Transports fall after the QE3 and DOW rise to flat?

D

SOME REALITY TO PONDER

WEAK MANUFACTURING DATA GLOSSED OVER?

http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html

QE3 BOOST A HOAX?

http://finance.yahoo.com/news/steep-slide-oil-prices-shows-070648288.html

Crude oil's biggest drop in two month's this week signals investors are deeply skeptical about whether recent stimulus efforts by global central banks - including last week's announcement by the U.S. Federal Reserve of a third round of quantitative easing - will have a meaningful impact on restoring growth, analysts and traders told CNBC.

The positive effect of the Fed's much-awaited stimulus announced last week wore off more quickly than many thought in the oil markets, which are considered a leading indicator of future economic activity.
"The oil market is telling us there is not much faith in another round of QE," said John Licata, Chief Energy Strategist for Blue Phoenix Inc., an independent energy research and consulting company.

QE3 WILL WORK?

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10707

US IN RECESSION NOW?

http://www.safehaven.com/article/26926/ecris-lakshman-achuthan-says-us-in-recession-now-that-makes-three-of-us

BEARISH BROADENING MEGAPHONE TOP SPX 1550 STILL IN PLAY?

WE NOW HAVE A BOOM?

http://finance.yahoo.com/news/marc-faber-were-bernanke-resign-104243316.html

"Central bankers are "counterfeit money printers" and Federal Reserve Chairman Ben Bernanke should resign for messing up the U.S. economy so badly, Marc Faber, author of the Gloom, Doom and Boom, told CNBC on Friday.
He said Bernanke was one of the main proponents of an ultra-expansionist economic monetary policy that was to blame for the latest financial crisis.
"If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous - it doesn't work that way. It's a temporary boost followed by a crash," Faber said."

ANother Headline/story

World Stocks Jump on Fed Pledge for U.S. Economy

AP
World stock markets bounded higher Friday after investors got just what they wanted — big moves by the Federal Reserve to help the U.S. economy out of its funk. More »

Problem is, this move creates asset bubbles, moves stocks, does LITTLE or NOTHING for job creation....I Love a bull mkt like the next guy..I'd rather see people get jobs and a sustainable recovery.

Ask yourself this WHY WOULD THE TARGET THE STOCK MKT NEAR ITS HIGHS?

D

FUNNY HOW WHEN ECONOMY FALLS SHORT IT"S ALWAYS "UNEXPECTED"

• 

  Consumer Credit Falls Unexpectedly in July ReutersConsumer credit fell in July for the first time in nearly a year as Americans reduced credit card debt, a worrisome sign for the economy.

I've said it once, if I have to say it 1,000 X's, Investors are set for a FLEECING.

D