Business / Economic / Financial
[ This link to a somewhat more cumulative blog posts page will precede current days news since most all topics remain current in terms of impact and longer-term effect and can be searched by topical index term more easily. The same is provided since the blog site http://alpeiablog.blogspot.com has just been censored as to size by google which is typical for google as nsa / cia / gov’t shill as more are becoming aware of. The same is true for microsoft, another co. that’s seen their best days and relies on the government to maintain their monopoly. Up to now the better page http://www.scribd.com/alpeia is provided for ease of formatting and clarity thereby while the Washington Post page is the real deal but without formatting http://www.washingtonpost.com/wp-srv/community/mypost/index.html?plckPersonaPage=PersonaComments&plckUserId=alpeia&newspaperUserId=alpeia ]
Cleaning up the legal mess (Washington Post) [ Legal mess? Pervasively corrupt, defacto bankrupt america is an illegal mess! Moreover, inherently criminal america by history, definition, and reality beyond propaganda is and will always be an illegal mess. Again, criminal prosecutions of the wall street frauds and government accomplices is long overdue and the only means by which to cleanse the broken and corrupt ‘system’. J.P. Morgan Chase memo predicts 'gridlocked' Congress (Washington Post) [ Sounds like a plan … cooked up on fraudulent wall street … Not really, though they’d love you to think their machinations have a rational basis … The reality is their bribes are only geared to prevent their own long overdue prosecutions and this national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed. Even Greenspan Admits that Moral Hazard and Fraud are the Main Problems Even Alan Greenspan is confirming what William Black, James Galbraith, Joseph Stiglitz, George Akerlof and many other economists and financial experts have been saying for a long time: the economy cannot recover if fraud is not prosecuted and if the big banks know that government will bail them out every time they get in trouble. ] The memo forecasts that lawmakers will extend the Bush-era tax cuts for at least a year.] Regulators and J.P. Morgan Chase are embroiled in a fight over who should cover billions of dollars from a legal mess that the Seattle thrift left behind.
How to Protect Yourself From the Crash of 2011 Lichtenfeld ‘There’s going to be a massive stock and bond market selloff in the first half of 2011.Not only that, the selloff could cause a worldwide financial disaster, global market crashes and the destruction of wealth that will make the popping of the dotcom and housing bubbles feel like a mild inconvenience.
Why?
Because, quite simply, America is playing a dangerous game of “chicken” with its national debt. And the ramifications are extraordinary. I’m going to explain the situation and give you three ways to protect yourself from this mess before it’s too late…
Debt Doomsday: Coming in May 2011
America’s debt ceiling currently stands at $14.3 trillion. This is the level that, by law, the government’s debt is not allowed to exceed.
Trouble is, the government’s present debt has swelled to $13.7 trillion.
This means that at the current rate, we’re on course to smash through that $14.3 trillion ceiling around May 2011 (although it might happen a month or two later, depending on what budget cuts are enacted in the next few months and how quickly they’re implemented).
So what will the government do about this? Same thing it’s done almost every year since 1962: Raise the debt ceiling so America can pay its bills.
Congress really has no choice in the matter either. If the ceiling isn’t raised, we’ve got a problem. A very big one.
A Fistful of Dominos
Without Congressional approval for additional debt, the U.S government cannot pay its bills – most notably, interest payments on treasury bonds, bills and notes.
If America defaults on those payments, or even misses them by just one day, the domino effect would be brutal…
* Domino #1: The country would lose its AAA credit rating and those bonds, bills and notes would no longer enjoy their status as the safest investments on the planet.
* Domino #2: In turn, a lower credit rating would mean that the United States would pay higher interest on its bonds in order to attract investors. Result?
* Domino #3: A tidal wave of selling through fixed income markets, driving interest rates higher still.
* Domino #4: Social Security would be hit hard, as its funds are invested in Treasuries. Suddenly, Social Security would have far less resources than just a day or two earlier.
* Domino #5: If money is pouring out of so-called “safe” investments, you can bet that in that kind of environment, the demand for riskier investments would be next to nil. Stocks and financial markets around the globe would plummet.
So why is this year’s Congressional raising of the debt limit different than every other?
To Raise or Not to Raise?
Simple: This year, some members of Congress have said they won’t vote to raise the debt ceiling. And they may be serious this time.
Earlier this year, 38 Republican Senators voted against raising the ceiling. However, they did so, knowing full well that they’d be outvoted and that the limit would be raised despite their “objections.” That way, they could return to their Congressional districts, claiming some semblance of fiscal responsibility.
Their vote didn’t matter so much back then… but with the Republicans having wrestled control of the House of Representatives last week, it sure does now.
It throws up an interesting dilemma. The Republicans – and particularly the Tea Party candidates who ran on a platform of cutting spending and the deficit – will have a very difficult choice to make. Either go back on their word and vote for an increase in the debt ceiling, or vote against it and run the risk of financial calamity.
It’s still early, but some Senators are already threatening to vote “no.”
* Senator-elect Rand Paul of Kentucky has indicated that he won’t vote in favor of raising the debt ceiling.
* South Carolina Senator Jim DeMint said he won’t vote to raise the limit unless it’s combined with some plan to balance the budget, return to 2008 spending levels and repeal President Obama’s healthcare plan.
* When asked if he’d vote against a debt ceiling increase, even if it leads to a government shutdown, Utah Senator-elect Mike Lee answered, “It’s an inconvenience. It would be frustrating to many people and it’s not a great thing, yet at the same time, it’s not something we can rule out.”
* And Republican National Committee Chairman Michael Steele told CNN, “We’re not going to compromise on raising more debt or the debt ceiling.”
This may be a dangerous political strategy…
History Repeating? Not Likely…
In 1995, the Republicans threatened President Clinton with shutting down the government if he didn’t agree to their budget. Clinton vowed that he’d never agree to it, even if his approval rating fell to 5%.
He won, too. The government did in fact shut down and the Republicans were the focal point of America’s anger. President Clinton’s approval numbers actually went up.
Flash forward to today. President Obama is likely aware of this history. And while he may be willing to negotiate on spending cuts, he will not repeal healthcare reform, which is the hallmark of his Presidency.
For Obama, though, the situation in 2011 will be much worse than it was for Clinton in 1995. I’m talking about a meltdown in the stock and bond markets.
Bill Busting… Washington Style
Bruce Bartlett, a former advisor to President Reagan and deputy assistant secretary for economic policy at the Treasury Department under President George H.W. Bush, recently stated, “You introduce even the tiniest little bit of doubt into the minds of ultra-conservative investors and that’s potentially disastrous. It hurts our ability to raise money without a risk premium.”
Representative John Boehner, the new Speaker of the House, appears to be more realistic than his colleagues in the Senate. He’s indicated that he’d vote for raising the debt ceiling as long as it accompanies spending reductions.
The bottom line, though, is this: The Senate likely doesn’t have the votes to defeat a bill to raise the debt ceiling, while the House does.
And in the end, it doesn’t matter. The bill doesn’t have to be defeated. A filibuster accomplishes the same thing. Don’t forget, this bill must be passed by the date we hit the ceiling, otherwise the government goes into default. It’s not something that can be put off until later.
So, in fact, a filibuster is even more powerful than a “no” vote. And the mere threat of a filibuster could spook investors badly enough to sell first and ask questions later.
You need to go about protecting yourself as soon as possible…
Protect Yourself From America’s Debt Showdown
There are a few investments that will likely do well in the chaotic environment I just described…
* Gold: The resilient yellow metal should soar as the U.S. dollar sinks and investors flee to safety. If you don’t want to own the metal itself, you can buy the SPDR Gold Shares Trust (NYSE: GLD) ETF, which serves as a close proxy to the price of gold bullion.
* Short Treasuries (Option 1): Consider the ProShares Short 20+ Year Treasury (NYSE: TBF), which aims for a 100% inverse correlation to the Barclays 20+ Year U.S. Treasury Bond Index.
* Short Treasuries (Option 2): If you’re a more aggressive investor, take a look at the ProShares UltraShort 20+ Year Treasury (NYSE: TBT). It seeks to obtain results that are double the inverse daily performance of the Barclays 20+ Year U.S. Treasury Bond Index. So if the index falls 10%, the ETF should gain about 20%...'
Contrarian Ideas Are Starting to Show 'Teeth' , On Wednesday November 10, 2010, 7:25 pm EST If you've lost money over the past 10 years, this statement may seem like a personal assault: 'Timing the market is easy and profitable.' That's the implied conclusion from a recent TrimTabs study. What's the recipe? A recent Wall Street Journal article drew this lesson from the study: 'Over the past decade, it was actually quite simple to time the market. All you had to do was buy when the public was selling and sell when the public was buying.' Naturally, going against the crowd is easier said than done. That's why it's often said that successful investing is simple, but it isn't easy. Good investment opportunities come along only so often. Now seems to be the time. A good opportunity offers more profit potential than risk of losses.
Do the Opposite 'Buy when the public was selling and sell when the public was buying,' was the Wall Street Journal's conclusion. So, what's the public doing right now? The public - this includes individual investors and Wall Street - is buying everything. Look around you, the S&P (SNP: ^GSPC), Dow Jones (DJI: ^DJI), Nasdaq (Nasdaq: ^IXIC), small caps (NYSEArca: IWM - News), mid caps (NYSEArca: MDY - News), international stocks (NYSEArca: EFA - News), emerging markets (NYSEArca: EEM - News), bonds (NYSEArca: AGG - News), gold (NYSEArca: GLD - News), silver (NYSEArca: SLV - News), and many other commodities (NYSEArca: DBC - News) are up, up, up. Meanwhile, the U.S. dollar (NYSEArca: UUP - News) is down. According to Wall Street and the media, the investment universe is full of profit sweet spots. Stocks right now are a win-win scenario, at least so they say. Any bad news is viewed to bring about more quantitative easing and is, therefore, good news and good news is good news anyway. Gold is another sweet spot. There's no need to worry about inflation or deflation. Gold is sure to profit either way, or so they say. From a fundamental point of view, gold is as sound an investment today as real estate was a few years ago. Of course with gold, this time is different. Isn't it always? The U.S. dollar is doomed because more quantitative easing (more dollars in circulation) will reduce the value of the current dollars in the system. The government doesn't care if the dollar falls to oblivion, so why should you?
Engrained Opinions Actually, there's a good reason to watch what's going on with the dollar. All the assets mentioned above (stocks, bonds and commodities) are denominated in dollars. A cheap dollar means higher prices and vice versa. Over the past five months, the U.S. Dollar Index dropped as much as 15%. Interestingly, it's after a 15% slide that the greenback has become despised. Investors dislike the dollar as much today as they did in late 2009 when it was about to lose its reserve currency status. At that time, the ETF Profit Strategy Newsletter went out on a limb and predicted a major U.S. dollar rally. From November 2009 to June 2010, the dollar soared as much as 20%, a diabolical move for currencies. In June, when fears about Europe and a crumbling euro currency made the rounds (and optimism surrounding the dollar was plentiful), the newsletter called for a dollar correction.
Prediction #1 - The Dollar will Rally This correction has morphed into a decline pervasive enough to push dollar sentiment to an extreme that, historically, has foreshadowed significant turnarounds. The notion of a trend reversal is confirmed by technical indicators. The October 21 Technical Forecast (part of the ETF Profit Strategy Newsletter) stated: 'Last week's dollar action was encouraging as the U.S. Dollar Index finished with a green candle low on Friday and since pushed above the lower acceleration band. That's what bottoms are made of.' Since then, the U.S. Dollar Index has rallied above its middle acceleration band. (chart) As far as a candle formation goes, those are the initial stages of a trend reversal. Once again, a rising dollar is bad for stocks and commodities. Prediction #2 - Commodities (Including Gold and Silver) Will Decline Not only is the dollar way oversold, the commodity rally is stretched to a point where a sharp and prolonged reversal could happen any moment. Net speculative positions in many commodities are at record highs, as is the percentage of bullish traders. We've seen time and again that extreme optimism is unhealthy for any market. Albeit not a short-term timing tool, it's a big red flag. Once underway, the selling pressure should affect nearly all commodities, including oil (NYSEArca: USO - News) and agricultural commodities (NYSEArca: DBA - News).
Prediction #3 - Nasdaq Should Lead Equity Decline Largely due to Apple's stellar performance, the Nasdaq has been outperforming the broad market. The Nasdaq's performance from here will be very telling.The Wall Street Journal just reported that: 'No hype: Tech is again a market star.' Let's see if the tech index can maintain it's star status. If it doesn't, watch out for a Nasdaq-led decline.
Third One 'Free' - QE2 Won't Work If you took a poll on Wall Street, 8 out of 10 Ivy League educated, Armani wearing, Mercedes driving Wall Street Banksters would probably tell you that QE2 will work.The media agrees. When September's jobless numbers went public, the figures were much worse than expected, but stocks surged. Why? Associated Press headline: 'Faith in Fed pushes Dow past 11,000.'When stocks slid on October 14, hope of QE2 kept things from getting worse. AP headline: 'Stocks dip; Likely Fed move keeps losses in check.'QE2 may end up working for Wall Street, but it seems not to have worked for the economy. If it did work, why would we need QE2?Obviously, the rumor of QE2 was enough to drive up stocks. Will the actual news deliver the steak or just the sizzle?
In POMO They Trust The fact is that the Federal Reserve's Permanent Open Market Operation (POMO) purchases of Treasuries have had a direct and delayed effect on the market's performance. Certain purchases translated into positive performance 89% of the time (a detailed performance analysis and schedule of future POMO purchases is available in the November issue of the).
Should You Fight the Fed? Will the Fed win the tug-of-war against sentiment, valuations, and technical analysis, all of which point towards a correction?If history is a guide, the market will win ... sooner or later. One way of navigating the current uncertainty is via support and resistance levels. A break through overhead resistance is likely to result in higher prices, while slicing through support may open the floodgates.
Who Will Any Form of Intermediate Term Wealth Effect Really Help? [ The so-called ‘wealth effect touted by no-recession helicopter ben‘ is just a continuation of the fraudulent wall street bailout / subsidization churn-and-earn scam / fraud. Bill Fleckenstein Has Some Thoughts On QE2: “These Idiots Think We Can Print Our Way To Prosperity” ( I disagree! I believe they are well aware of the folly of their fraudulent and ultimately disastrous approach but are, as in the last debacle, creating a fraudulent bubble for the wall street frauds and insiders to sell into, which they are indeed doing as we speak. (INSIDER SELLING IS AT RECORD HIGHS) (Another Nobel Economist Says We Have to Prosecute Fraud Or Else the Economy Won’t Recover As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail. ) ] Fed to pump $600B into the economy (Washington Post) [ Listen to this total, absolute b*** s*** … from no-recession-helicopter ben shalom or b.s. for short, bernanke, with green shoots wilting on the vine … to his recent ‘better to try and fail than to do nothing at all’ … Balderdash! … I hearken back to a distinction made by the brilliant Peter Drucker who in emphasizing the distinction between efficiency and effectiveness states that being effective means doing the right things, clearly not the case here … other than frothing that fraudulent wall street market with high-frequency programmed trades and debased dollars he can’t seem to print enough of, and for all but wall frauds churn and earn profits as they retain their fraudulent gains from the last debacle and this one, his policies are nothing short of disaster for this nation and the world. That money going into wall street pockets has to come from somewhere … guess. Remember, america’s defacto bankrupt and the consequences for those continuing frauds on wall street don’t justify the irretrievable costs! ] In addition to a question for Bloomberg TV anchor Betty Lui, who asked Bill to “admit” that “the markets were in a better mood yesterday after QE2,” which is simply this: “Betty? Betty? Betty? How about in summer 2008, 2007, were the markets in a good mood? Were the markets in a good mood then?” Quite right! The same pattern that preceded the last crash. Falling dollar, high volume programmed high frequency trades to the upside creating an even larger, gravity-defying bubble for the wall street frauds and insiders to sell into. They’re not too big or important to fail and jail! Prospective economic health depends on that reality! ] Tradermark ‘…Now let's look at it from one last angle before we leave the subject. There is one form of wealth that has a far more conventional distribution pattern in the US of A. That is saving deposits.Top 1%: 20% of American deposits Next 9%: 38% Bottom 90%: 42% [chart] So if one wanted to actually help the bottom 90%, and "lift all boats" and "generate economic activity" perhaps one would lift Fed fund rates to a level that banks would actually pay something larger than the size of a flea on savings. Or indeed something tangible on Certificates of Deposits (amazingly the average CD rate fell below 1% as of last week). That actually would be some form of wealth effect for the masses... instead our saver class is being used as a mass subsidization scheme for the debtors and speculator class. Of course the latter is concentrated in the upper shards of society as the previous paragraphs showcased. [Mar 31, 2010: Ben Bernanke Content to Sacrifice American Savors to Recapitalize Banks and Benefit Debtors] So who again exactly is QE2 "benefiting" (if the 'wealth effect indeed is even real?) Due to the demolishment of savers, we will have people twice burned by NASDAQ 2000, and real estate 2007 trying to rebuild their savings facing a scorched earth scenario. As for those fixed income seniors (who receive no cost of living adjustment because America has "no inflation" per government statistics)? If they want to make any inflation adjusted returns they will be 'herded' out of CDs and savings into bonds and stocks so they can survive the Bernanke inflation regime. And that's in an environment where the dollar is stable ... don't even think about the losses the savers of the country are suffering as their wealth is sapped away, so that a small proportion of our corporations can create jobs in China and India! make some extra bucks via weak dollar exports. Most likely just about these folks throw their hands up in disgust and go "all in" on risk assets, the next bubble implosion from fake asset values will commence, transferring the last vestiges of middle class wealth to the masters of our universe. (this will be round 3 of that cycle since 1999 - notice a pattern?) So as we clap for Mr. Bernanke, and sing kumbaya about how manipulation of asset prices is helping "us all" try not to think of any of the data in this piece. Stick to dogma recited on CNBC, or else your head might spin off.’
Equities Update: Choppy Trading with Late Rise Midnight Trader ‘ 4:13 PM, Nov 10, 2010 --
* NYSE up 45.13 (+0.6%) to 7,747.44
* DJIA up 10.29 (+0.09%) to 11,357
* S&P 500 up 5.31 (+0.4%) to 1,219
* Nasdaq up 15.80 (+0.6%) to 2,579
GLOBAL SENTIMENT
* Hang Seng down 0.85%
* Nikkei up 1.4%
* FTSE down 0.99%
UPSIDE MOVERS
(+) M tops Q3 estimates.
(+) BNVI gets FDA approval for Menerba.
(+) NTWK swings to profit.
(+) VCGH going private.
(+) SNSS reports positive Phase 2 data for Vosaroxin in AML.
(+) SHPGY secures 5-year exclusivity for Vyvanse.
(+) PCBC continues sharp evening jump that followed return to profit.
(+) LOPE pares evening decline that followed earnings miss.
DOWNSIDE MOVERS
(-) FEED swings to a loss.
(-) LVS downgraded.
(-) AONE continues evening decline that followed latest results.
(-) DEER beats Q3 estimates, raises guidance.
MARKET DIRECTION Stock averages twisted on both sides of the unchanged line inside the final hour of trading before mounting a late upside push that landed the indexes at the day's highs. Continued gains for several tech issues and higher energy stock trade, moving in stride with firmer crude prices, allowed the broader market to pare some of the day's early declines. Financial shares also firmed.Members of the Group of 20 will be meeting Thursday and Friday in South Korea and currency values and trade deficits will be key discussions as developed nations, including the U.S., continue to struggle with growth.Stocks found some early traction after the Labor Department said first-time claims for unemployment benefits fell more than economists had forecast and reversed a rise reported a week earlier. The claims number came after the government last week said that hiring by private employers rose at its fastest clip in six months.The unemployment report came out a day earlier than usual because government offices are closed Thursday for Veterans Day. The stock market will remain open Thursday.Also, the dollar index is at its highest level since the end of October, MarketWatch reports.The number of workers who filed new claims for unemployment benefits fell 24,000 last week to 435,000, the federal government reported Wednesday, continuing a recent see-saw pattern that's given mixed signals about the U.S. labor market. Economists polled by MarketWatch had expected initial claims to fall to a seasonally adjusted 450,000 in the week ended Nov. 6.Also reported, the nation's trade deficit contracted 5.3% in September to $44.0 billion from $46.5 billion in August, the Commerce Department said. The government initially pegged August's deficit at $46.3 billion. Analysts surveyed by MarketWatch had expected the deficit to narrow to $45 billion in September.In company news:
Cisco (CSCO) shares traded mixed ahead of a highly anticpated report from CEO John Chambers. The maker of computer networking equipment is expected to report strong results for Q1, according to Reuters. Analysts polled by Thomson Reuters are expecting the company to report a profit of $0.40 per share on revenue of $10.74 billion.
Research in Motion (RIMM) is planning a foray into the ever-crowded tablet market after the company said it will begin selling the BlackBerry PlayBook for less than $500, suggesting RIM is looking to take on Apple's (AAPL) iPad, Bloomberg reported. The iPad currently starts at $499 for a model with 32 gigabytes of storage. RIM follows Hewlett-Packard (HPQ), Motorola (MOT) and Samsung, all of which moved into the tablet market following Apple unveiling the iPad.
Limelight Networks Inc (LLNW) is up more than 4% on speculation that the network services provider has won business from Netflix Inc. (NFLX), beating out Akamai Technologies Inc (AKAM). Akamai currently provides Netflix with its video streaming technology. Netflix has not commented on the rumors.
Lions Gate (LGF) shares are lower after the film studio said it swung to a second-quarter loss because of debt payment charges and higher costs. The studio has been in a battle over the last year trying to fend off a hostile takeover bid from activist investor Carl Ichan, Reuters reported. Lions Gate posted a loss of $29.7 million, or 22 cents per share, for its fiscal second quarter. That is compared with a net profit of $31.7 million, or 27 cents per share, a year earlier. Still, the independent studio said it is on track to make its fiscal 2011 target of $75 million in earnings, the report noted.
In other earnings news:
--Smart Technologies Inc (SMT) is down as it reported second quarter profit falling as income tax more than doubled. The digital whiteboard maker was also bearish on its outlook for the latter half of 2011.
--Macy's (M) reported a swing to a Q3 profit and raised its guidance. The department store chain reported earning $10 million, or 2 cents per share, compared with a loss of $35 million, or 8 cents per share, a year ago. Ex items, the department store chain earned 8 cents per share. Analysts' consensus view was for 5 cents. Revenue rose 6.6% to $5.6 billion, while analysts were looking for $5.56 billion, according to a Thomson Reuters poll.
--Polo Ralph Lauren (RL) says Q2 sales were $1.5 billion and EPS were $2.09. The Thomson Reuters mean was for $1.71 per share in earnings and $1.48 billion in sales.
--Campbell (CPB) says it is lowering its full-year guidance due to Q1 results that were weaker than originally planned and the company's current outlook for the remainder of the year. It attributes its change in guidance to increased promotional spending that resulted in lower-than-planned purchases of its soup by U.S. consumers, amid weak economic conditions and intense competitive pricing activity.
China's Dagong Downgrades U.S. Debt to A+ on Quantitative Easing
America Is Either Going To Suffer Through A Deflationary Depression Or Hyperinflation It seems the Fed has given up on the idea that the country can build a viable and stable economy through the conventional means. Instead, our central bank has resorted to once again growing GDP and increasing employment by the creation of asset bubbles. This is a dangerous game that no one, least of all the Fed, knows how to play.
U.S. Debt Proposal Would Cut Social Security, Medicare Bloomberg | The government is projected to run $8 trillion in deficits over the next 10 years, which would push the national debt up to more than $20 trillion.
Bernanke Confirms That The Key Goal Of The Fed, And QE2, Is To Boost Stock Prices Zero Hedge | So much for the Fed’s two mythical mandates of promoting “maximum employment” and maintaining “price stability.”
Phantom Jobs Paul Craig Roberts | The financial press did no investigation and simply reported the number handed to the media by the government.
Volcker Says in China He Remains Concerned About Global Economic Imbalance Bloomberg News | “Concerns about adjustments that I had five years ago remain.”
Chinese Credit Rater Downgrades U.S. Dagong Global Credit Rating Co., the Chinese rating company that was recently rejected in its bid to be an officially recognized bond rater in the U.S., just downgraded the entire U.S. The always objective Xinhua has the “scoop.”
Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire The subprime mortgage crisis isn’t the only calamity Wall Street created that’s upending the finances of U.S. states and cities.
John Hussman: Bubble, Crash, Bubble, Crash, Bubble... [ This really is the story and far worse than the bad scenario presented herefter by Hussman in light of the debased dollar and the inflated earnings and lower P / E ratios thereby, etc. ] Excerpt from the Hussman Funds' Weekly Market Comment (11/8/10):
‘We will continue this cycle until we catch on. The problem isn't only that the Fed is treating the symptoms instead of the disease. Rather, by irresponsibly promoting reckless speculation, misallocation of capital, moral hazard (careless lending without repercussions), and illusory "wealth effects," the Fed has become the disease ... It is difficult to interpret Bernanke's defense of QE2 as anything else but an attempt to replace the recent bubble with yet another - to drive already overvalued risky assets to further overvaluation in hopes that consumers will view the "wealth" as permanent. The problem here is that unlike housing, which consumers had viewed as immune from major price declines, investors have observed two separate stock market plunges of over 50% each, within the past decade alone. While investors have obviously demonstrated an aptitude for ignoring risk over short periods of time, it is a simple fact that raising the price of a risky asset comes at the sacrifice of lower long-term returns, except when there is a proportional increase in the long-term stream cash flows that can be expected from the security. As a result of Bernanke's actions, investors now own higher priced securities that can be expected to deliver commensurately lower long-term returns, leaving their lifetime "wealth" unaffected, but exposing them to enormous risk of price declines over the intermediate (2-5 year) horizon. This is not a basis on which consumers are likely to shift their spending patterns. What Bernanke doesn't seem to absorb is that stocks are nothing but a claim on a long-term stream of cash flows that investors expect to be delivered over time. Propping up the price of stocks changes the distribution of long-term investment returns, but it doesn't materially affect the cash flows. This reckless policy has done nothing but to promote further overvaluation of already overvalued assets. The current Shiller P/E above 22 has historically been associated with subsequent total returns in the S&P 500 of less than 5% annually, on average, over every investment horizon shorter than a decade ... We are betting on the wrong horse. When the Fed acts outside of the role of liquidity provision, it does more harm than good. Worse, we have somehow accepted a situation where the Fed's actions are increasingly independent of our democratically elected government. Bernanke's unsound leadership has placed the nation's economic stability on two pillars: inflated asset prices, and actions that - in Bernanke's own words - should be "correctly viewed as an end run around the authority of the legislature" (see below). The right horse is ourselves, and the ability of our elected representatives to create an economic environment that encourages productive investment, research, development, infrastructure, and education, while avoiding policies that promote speculation, discourage work, or defend reckless lenders from experiencing losses on bad investments.’
Insiders selling (into the bubble as preceded last crash), this is an especially great opportunity to sell / take profits! Suckers’ rally to keep suckers suckered (easy for the wall street frauds to do with just a mouse click / push of the button – and, they know all those technical trade lines that are easy to program in this current phase of the scam/fraud with the debased dollar). Keep in mind, the totally mindless blather from the ‘cottage industries’ of and fraudulent wall street itself in talking up lower P/E multiples when the same is a direct result of the debasement of the dollar and the consequent manipulation / translation (not real, see Davis, infra) which preceded the financial crisis / last crash. Unemployment, trade, deficit, etc., numbers continue decidedly worse than expected along with other negative data (and in the ‘wrong direction’, that spin accorded ‘down but not as bad as before’ b*** s*** ) yet the market has rallied like no tomorrow with used home foreclosure / distressed sales, though abated owing to ‘foreclosuregate’, the other ‘heralded’ good news. Moreover, the dumbo lemmings of Europe have jumped on the fraudulent defacto bankrupt american crazy train propelled to the precipice also as if no tomorrow. This is about keeping the suckers sucked in with the help of a market-frothing pre-election debased dollar for favorable currency translation and paper (but not real when measured in, ie., gold, etc.) profits which preceded the last crisis, inflating a bubble as in the last crisis to facilitate the churn-and-earn, particularly with computerized (and high frequency) trades and which commissions they’ll get again on the way down. There is nothing to support these overbought stock prices, fundamentally or otherwise. These are desperate criminals ‘at work’. Even wall street shill, the senile Buffett is saying we’re still in a recession (depression) [ Davis: ‘… all profits are inflated by 10% (from falling, debased dollar) and that 10% is the E that gets divided from the P and gives us a much better price/multiple to hang our hats on and that gets investors to BUYBUYBUY …’ The bull market that never was / were beyond wall street b.s. when measured in gold ] This is a great opportunity to sell / take profits (these lower dollar, hyperinflationary currency manipulations / translations to froth paper stocks will end quite badly as in last crash)! This is a global depression. This is a secular bear market in a global depression. The past up moves were manipulated bull (s***) cycles (at best) in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street ‘programmed computerized high-frequency churn and earn pass the hot potato scam / fraud as in prior crashes ( widely reported, high-frequency trading routinely accounts for more than 50% of daily U.S. equity trading volume and regularly approaches 70%. )’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed.The Stock Market's Long Decline Has Begun Smith ]
(11-10-10) Dow 11,357 +10 Nasdaq 2,578 +15 S&P 500 1,218 +5 [CLOSE- OIL $87.81 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $3.00 (reg. gas in LAND OF FRUITS AND NUTS $3.15 REG./ $3.29 MID-GRADE/ $3.39 PREM./ $3.79 DIESEL) / GOLD $1,399 (+24% for year 2009) / SILVER $26.89 (+47% for year 2009) PLATINUM $1,760 (+56% for year 2009) / DOLLAR= .72 EURO, 82 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ 10 YR NOTE YIELD 2.65% …..… AP Business Highlights ...Yahoo Market Update... T. Rowe Price Weekly Recap – Stocks / Bonds / Currencies - Domestic / International This Is a Secular Bear Market and The End of Buy and Hold … and Hope MARKET MANIPULATION AND HOW THE LATEST BUBBLE-FRAUD PRE-COMING CRASH IS BEING ACCOMPLISHED 3-11-10 6 Theories On Why the Stock Market Has Rallied 3-9-10 [archived website file] Risks Lurk for ETF Investors The bull market that never was/were beyond wall street b.s. when measured in gold Property Values Projected to Fall 12% in 2010 Jan 31, 2010 The Week Ahead: Risk Is Off the Cliff; Unwind Has Begun Jan 31, 2010 01-13-10 Forecast for 2010 from Seeking Alpha Contributor THE COMING MARKET CRASH / CORRECTION 1-28-10 Maierhofer (01-15-10) 11 Clear Signs Economy Sinking Economic Black Hole 1-22-10: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover Current Economic / Fiscal Charts Trendsresearch.com forecast for 2009 1-7-10 Crash is coming! ‘WORST ECONOMIC COLLAPSE EVER’ Must Read Economic / Financial Data This Depression is just beginning The coming depression… thecomingdepression.net MUST READ: JEREMY GRANTHAM’S QUARTERLY UPDATE 25 January 2010 (850 on the S&P) by TPC The Next Wave of Collapse is Coming Sooner than you think Sliding Back Into the Great Depression ABSOLUTELY, ABSURDLY, RIDICULOUS! SELL / TAKE PROFITS WHILE YOU CAN SINCE MUCH, MUCH WORSE TO COME!
National / World
Bombshell: FEMA Camps Confirmed Aaron Dykes | Former Gov. Jesse Ventura and his crew at Conspiracy Theory have blown the FEMA camp issue wide open in a truly groundbreaking episode from the program’s second season on TruTV.
TSA Gives Rapists And Illegals The Green Light While Groping Children Paul Joseph Watson | While sexually molesting children in the name of security, agency hires pedophiles and allows illegal immigrants to fly planes and access secure areas of airports.
Independence Criminalized: The Great Wall of Bureaucracy Comes to America Michael Edwards | The impact that this creeping control structure has had on America’s social climate is beyond measure.
Flight Attendants Outraged Over Intrusive Patdowns Kurt Nimmo | In addition to voicing concern with their union, some flight attendants have contacted the ACLU.
TSA: No Fondling, Groping Or Squeezing Is Taking Place At Airports Paul Joseph Watson | Agency at center of molestation controversy caught in flagrant lie in pathetic effort to counter growing resistance.
Former British intelligence chairman defies Bush, says waterboarding didn’t stop terror plots John Byrne | A former British government minister who also led the House of Commons Intelligence Committee threw cold water on claims made by former President George W. Bush that waterboarding saved British lives.
Chinese Credit Rater Downgrades U.S. Dagong Global Credit Rating Co., the Chinese rating company that was recently rejected in its bid to be an officially recognized bond rater in the U.S., just downgraded the entire U.S. The always objective Xinhua has the “scoop.”
Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire The subprime mortgage crisis isn’t the only calamity Wall Street created that’s upending the finances of U.S. states and cities.
New Zillow Report Warns Of Unprecedented Decline In Home Prices, No Hints Of Stabilization Zillow just released a devastating third quarter housing report. Basically every major indicator is crashing.
America Is Either Going To Suffer Through A Deflationary Depression Or Hyperinflation It seems the Fed has given up on the idea that the country can build a viable and stable economy through the conventional means. Instead, our central bank has resorted to once again growing GDP and increasing employment by the creation of asset bubbles. This is a dangerous game that no one, least of all the Fed, knows how to play.
Rand Paul: Thought Crime USA In this exclusive never-before-seen interview with new United States Senator for Kentucky Rand Paul, the son of Congressman Ron Paul warns that Americans are being politically profiled for thought crimes, while the Obama administration, in particular people like Rahm Emanuel, is seeking to exploit crises in order to advance the big government agenda.
Drive-by shootings, Metro bombings in DC and parcel bombs on planes but spies in training go unnoticed No mention is made of continuing aggressive field training of Israeli intelligence agents being employed in shopping malls across the country, some near America’s biggest military bases.
Drudgereport: SLASH AND BURN!
Debt Panel: Cut Social Security, Medicare...
End Tax Deduction for Mortgages...
Raise Retirement Age...
DEMS PRESSING PELOSI TO STEP ASIDE...
More federal workers' pay tops $150,000...
REVOLT...
TX GOV CALLS SOCIAL SECURITY BANKRUPT 'PONZI SCHEME'...
OIL HITS $88...
STUDENTS RUN WILD IN LONDON...
'THIS IS JUST THE BEGINNING'...
VIDEO...
UK Govt to withhold welfare checks from some unemployed...
IRELAND MESS: INVESTORS DUMP BONDS...
BANK DOOM...
German tempers fray as US policy gulf widens...
CHINA TO OVERTAKE US ECONOMY 'WITHIN 2 YEARS'...
China to buy stake in GM...
China jails father of tainted milk victim; Organized support group for parents...
Clinton announces $150 million to Palestinian Authority...
...criticizes Israeli expanded building plan
GREENSPAN WARNS OVER WEARKER DOLLAR...
Go to following pages for above links:
http://www.albertpeia.com/currentopics2ndqtr10108.htm
http://www.albertpeia.com
http://www.scribd.com/alpeia
http://alpeiablog.blogspot.com
http://www.albertpeia.com/alresume.htm
http://www.albertpeia.com/wallstreetlunacy2ndqtr10108.htm
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GOP's Palin paradox (Washington Post) Parker: She's too powerful to ignore, and too (fill-in-the-blank) to take seriously. [ Say it! … Dumb! … Everybody knows it! … Cher even said it! … I believe that this further evinces the leadership vacuum in america and is a testament to how unequivocally far america has fallen. Powerful? I don’t think so! ]
Sarah Palin: The Next Teleprompter Reader in the White House [ Not gonna’ happen … she’s just too embarrassingly dumb … and all that fake macho / zionist b*** s*** … unless her gal o’donnel casts a spell … which is a whole new ball game … witches … really … how ‘bout dumb *******s …. she’s really dumb enough to press the button. ] ? Kurt Nimmo | In 2008, Tea Party Sarah trekked to New York to kiss Henry Kissinger’s ring.
Sarah Palin: The Next Teleprompter Reader in the White House? [ Not gonna’ happen … she’s just too embarrassingly dumb … unless her gal o’donnel casts a spell … which is a whole new ball game … witches … really … how ‘bout dumb *******s ... and all that fake macho / zionist b*** s*** ... she’s really dumb enough to press the button. ] It looks like the establishment is grooming Tea Party Sarah for a run. She says as much in the Newsmax interview below.
Palin calls reporters 'impotent' and 'limp' (Washington Post) [ I must reiterate, she, palin’s so embarrassingly dumb! She truly is the joke that keeps on giving! I really mean it! I mean, what next? ] The former Alaska governor weighed in herself: "Those who are impotent and limp and gutless and they go on their anonymous -- sources that are anonymous -- and impotent, limp and gutless reporters take anonymous sources and cite them as being factual references," she told Sean Hannity. "It just slays me ( this could be a somewhat Freudian slip as she contemplates the uselessness of sexually non-interested reporters while she meant lays and I think her supposed / purported attractiveness / desirability is vastly overstated; but, this makes for great SNL skits; you know, those reporters not man enough to service her ) because it's so absolutely clear what the state of yellow journalism is today that they would take these anonymous sources as fact."
The power of Palin's touch (Washington Post) [Wow! Talk about stupid. Murphy could have eliminated the middle-man (person) and appeared on SNL himself; maybe reprising a familiar (Eddie) Murphy role as Gumby 2, Son of Gumby. The only thing funnier is palin herself. She’s so embarrassingly dumb!] .Endorsement lifts little-known candidate in Md., giving the struggling campaign a "megaphone."
Comment on: 5 Myths about Sarah Palin at 10/14/2010 9:39 PM EDT
Test yourself to find out how much you know about Sarah Palin. Take the quiz and after, check out The Washington Post's 'Five Myths about Palin.' (Washington Post) [ Geeh! I scoured the quiz / 5 myths and nowhere did I see the obvious myth; viz., that she really has a brain. Maybe gal pal pol protégé o’donnell can help her out … a few mysterious words, a slimy newt (gingrich) in a caldron of b*** s*** , and voila … a new reality which is what o’donnell herself is sorely in need of … O'Donnell, evolved Milbank: She didn't mention mice with human brains in Wednesday's debate. But she said silly things. Stromberg: O'Donnell is... wow The CNN host, moderating the long awaited Delaware senatorial debate Wednesday night, was trying to get the Republican nominee to talk about her 1998 statement on the Bill Maher show that "evolution is a myth."
"Do you believe evolution is a myth?" Blitzer asked.
"I believe that the local ... " O'Donnell began, then started anew. "I was talking about what a local school taught, and that should be taught, that should be decided on the local community."
"Do you believe evolution is a myth?" the moderator repeated.
"Local schools should make that decision."
"What do you believe?"
"What I believe is irrelevant."
"Why is it irrelevant? Voters want to know."
"What I will support in Washington, D.C. is the ability of the local school system to decide what is taught in their classrooms," O'Donnell repeated.
The answer, though, was obvious: Of course she believes in evolution; she is a product of evolution herself. She has evolved from a very odd woman who spoke about the evils of masturbation and of mice with fully functioning human brains and of her experience in sorcery (but she didn't join a coven!). …
Obama cites Indonesia as model for Muslims (Washington Post)[ Drudgereport: Obama slams israel from Jakarta … [ Wow! Who woulda’ thunk it … Wobama growing gonads in Indonesia … He is quite correct, albeit in one of those sparingly infrequent moments … But, alas … he’ll be returning to ‘little israel’ soon (usa) and I’m sure his rhetoric will return to typical pro-israeli (anti-american interest) actions and words (b*** s***)! ]...
netanayahu takes Flight Back...
Confronts Anti-israel Reality/Truth Movement in USA...
China Ratings Agency Downgrades America... ] In city he once lived in as a boy, Obama heralds nation's "spirit of tolerance" that allows mosques, churches and temples to co-exist in a democracy.
Panels tackling deficit, but consensus doubts remain (Washington Post) [ Holy smokes … ‘best minds in Washington’ … talk about oxymorons … Come on, lets get real! There are none … best minds, that is … and quite frankly, best in Washington just ain’t that good (Washington Post excepted … I’m talking about government, think tanks, lobbies, consulting orgs., etc.). And, reality is that the debt burdens are now quite insurmountable. ]Some of the best minds in Washington are about to roll out recommendations for bringing government borrowing under control.
Fed decision clouds Seoul debate (Washington Post) [ No! I would say it clarifies the debate, particularly in light of the last financial debacle / crisis / fraud precipitated and perpetrated by the wall street frauds, with pervasively corrupt, defacto bankrupt u.s. government (all three branches) / administration (treasury) / fed complicity, and still unprosecuted with disgorgement long overdue. They’re working on a new (actually continuing) debacle to wall street’s benefit and everyone else’s detriment. President backs $600B move (Washington Post) ( Not to pass up an opportunity to be on the wrong side of almost all issues, wobama, failed presidency in tow, seems more and more to resemble that ‘word picture gumball machine’; but, I say not a gumball machine at all but rather an extension of his teleprompter. His dogs don’t hunt ‘no more! IE. and infra, QE2: Last Rites for the World’s “Reserve Currency” Mike Whitney) ] An international backlash against the Federal Reserve's move last week to pump billions of dollars into the U.S. economy is threatening to undercut the Obama administration's economic goals for this week's G-20 meeting of world leaders.
China’s trade surplus widens more than expected
China’s trade surplus widens in October from September, even as import growth outpaces export growt...
Chinese agency cuts U.S. sovereign rating
China’s lone national ratings agency Dagong cuts U.S. debt ratings and warns of further downgrades,just...
Low expectations for G-20 summit
Analysts have low expectations for this week’s G-20 summit in Seoul, given the global angst over th...
Inflation Targeting Won't Fix the Fed Danker ‘… In as close as he’s gotten to a mea culpa, Bernanke gave a speech last January, “Monetary Policy and the Housing Crisis,” where he admitted that deflation was not the menace the FOMC had thought it was. How did he and the committee get it wrong? They used a measurement for the general price level, the personal consumption expenditure index (PCE), in which inflation was underestimated and later had to be revised upward. Unfortunately, the housing bubble was well under way by that time. Even if the Fed had used a traditional inflation-targeting framework like the ECB, it is far from clear that it would have been able to avoid the road Bernanke took it down. Inflation by any measure was fairly modest and not indicative of the price surge concentrated in residential real estate from 2003-2007. That the bubble happened in the low-inflation environment of the so-called Great Moderation tells us two things: inflation is an inadequate target for monetary policy and it will take more than good interest rate policy to fix it. Ending the Fed’s dual mandate and focusing it on some measure of price stability does not address the underlying structure of the monetary system that enabled the housing bubble: the dollar’s role as the world’s reserve currency. This system encourages massive flows of dollar-denominated debt to foreign central banks for use as reserves and international payments without the appropriate increase in output in the U.S. Asset prices rise to reflect this imbalance -- which is why we’ve experienced a litany of single-sector bubbles, from tech stocks to housing and now perhaps bonds, as this system has evolved in its current form since 1971. Unreasonably low interest rates may not result in domestic inflation, but they will feed these destabilizing one-way flows of hot money that encourage chronic overborrowing. The real choice on monetary reform is between band-aids over the status quo and addressing the roots of the meltdown. Successful inflation targeting by Ben Bernanke or his successors will do no more than paper over a debt-driven system that is beyond repair. It was hot money – not inflation – that steered us into trouble. Until the dollar is replaced as the world’s central bank reserve with something of independent value, gold to be exact, the U.S. will continue to experience monetary-induced boom and bust episodes that undermine our prosperity. World Bank President Robert Zoellick just called for a fresh look at gold as the basis of the international monetary system. For once, the World Bank is right.’
Bernanke Confirms That The Key Goal Of The Fed, And QE2, Is To Boost Stock Prices Zero Hedge | So much for the Fed’s two mythical mandates of promoting “maximum employment” and maintaining “price stability.”
Volcker Says in China He Remains Concerned About Global Economic Imbalance Bloomberg News | “Concerns about adjustments that I had five years ago remain.”
Fed Concludes Structurally High Unemployment is a Myth Mike Shedlock | Ben Bernanke and the Fed have great belief in academic models whether they make any real world practical sense or not. Indeed, Bernanke’s reliance on formulas instead of common sense is what told him there was no housing bubble, that unemployment would not get above 8.5%, and that Quantitative Easing in massive force would cause the unemployment rate to drop. He was wrong on all counts.
[video] December Selling Expected [ Of course that make sense, not that the criminally insane frauds on wall street are rational, but to lock in those ephemeral, illusory paper bubble gains; the kind of bubble that the insiders and wall street frauds sell into; dress up those ‘gains’ to keep the scam rollin’ ‘till the crash; you know, get while the gettin's good … sounds like a plan … hmm … just a typical wall street scam / fraud. ]
Gold shoots to new high on euro worries Gold prices have hit another record high on the back of Euro sovereign debt concerns and inflation worries. This morning, the price of gold rose 1% to a high of $1,422.30 a troy ounce.
Gold at $7800/oz, Or S&P 500 at 220? Take Your Pick The S&P 500 to gold ratio essentially prices the stock market in terms of gold.
Great Job Bernanke Bernanke has not been right about anything since 2005. That’s documented.
Bill Fleckenstein Has Some Thoughts On QE2: “These Idiots Think We Can Print Our Way To Prosperity” [ I disagree! I believe they are well aware of the folly of their fraudulent and ultimately disastrous approach but are, as in the last debacle, creating a fraudulent bubble for the wall street frauds and insiders to sell into, which they are indeed doing as we speak. (INSIDER SELLING IS AT RECORD HIGHS) (Another Nobel Economist Says We Have to Prosecute Fraud Or Else the Economy Won’t Recover As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail. ) ] Fed to pump $600B into the economy (Washington Post) [ Listen to this total, absolute b*** s*** … from no-recession-helicopter ben shalom or b.s. for short, bernanke, with green shoots wilting on the vine … to his recent ‘better to try and fail than to do nothing at all’ … Balderdash! … I hearken back to a distinction made by the brilliant Peter Drucker who in emphasizing the distinction between efficiency and effectiveness states that being effective means doing the right things, clearly not the case here … other than frothing that fraudulent wall street market with high-frequency programmed trades and debased dollars he can’t seem to print enough of, and for all but wall frauds churn and earn profits as they retain their fraudulent gains from the last debacle and this one, his policies are nothing short of disaster for this nation and the world. That money going into wall street pockets has to come from somewhere … guess. Remember, america’s defacto bankrupt and the consequences for those continuing frauds on wall street don’t justify the irretrievable costs! ] In addition to a question for Bloomberg TV anchor Betty Lui, who asked Bill to “admit” that “the markets were in a better mood yesterday after QE2,” which is simply this: “Betty? Betty? Betty? How about in summer 2008, 2007, were the markets in a good mood? Were the markets in a good mood then?” [ Quite right! The same pattern that preceded the last crash. Falling dollar, high volume programmed high frequency trades to the upside creating an even larger, gravity-defying bubble for the wall street frauds and insiders to sell into. They’re not too big or important to fail and jail! Prospective economic health depends on that reality! ]
China says G20 should monitor US Fed AFP | China’s state media has issued a new broadside at the US Federal Reserve’s move to prime the US economy.
John Hussman: Bubble, Crash, Bubble, Crash, Bubble... [ This really is the story and far worse than the bad scenario presented herefter by Hussman in light of the debased dollar and the inflated earnings and lower P / E ratios thereby, etc. ] Excerpt from the Hussman Funds' Weekly Market Comment (11/8/10):
‘We will continue this cycle until we catch on. The problem isn't only that the Fed is treating the symptoms instead of the disease. Rather, by irresponsibly promoting reckless speculation, misallocation of capital, moral hazard (careless lending without repercussions), and illusory "wealth effects," the Fed has become the disease ... It is difficult to interpret Bernanke's defense of QE2 as anything else but an attempt to replace the recent bubble with yet another - to drive already overvalued risky assets to further overvaluation in hopes that consumers will view the "wealth" as permanent. The problem here is that unlike housing, which consumers had viewed as immune from major price declines, investors have observed two separate stock market plunges of over 50% each, within the past decade alone. While investors have obviously demonstrated an aptitude for ignoring risk over short periods of time, it is a simple fact that raising the price of a risky asset comes at the sacrifice of lower long-term returns, except when there is a proportional increase in the long-term stream cash flows that can be expected from the security. As a result of Bernanke's actions, investors now own higher priced securities that can be expected to deliver commensurately lower long-term returns, leaving their lifetime "wealth" unaffected, but exposing them to enormous risk of price declines over the intermediate (2-5 year) horizon. This is not a basis on which consumers are likely to shift their spending patterns. What Bernanke doesn't seem to absorb is that stocks are nothing but a claim on a long-term stream of cash flows that investors expect to be delivered over time. Propping up the price of stocks changes the distribution of long-term investment returns, but it doesn't materially affect the cash flows. This reckless policy has done nothing but to promote further overvaluation of already overvalued assets. The current Shiller P/E above 22 has historically been associated with subsequent total returns in the S&P 500 of less than 5% annually, on average, over every investment horizon shorter than a decade ... We are betting on the wrong horse. When the Fed acts outside of the role of liquidity provision, it does more harm than good. Worse, we have somehow accepted a situation where the Fed's actions are increasingly independent of our democratically elected government. Bernanke's unsound leadership has placed the nation's economic stability on two pillars: inflated asset prices, and actions that - in Bernanke's own words - should be "correctly viewed as an end run around the authority of the legislature" (see below). The right horse is ourselves, and the ability of our elected representatives to create an economic environment that encourages productive investment, research, development, infrastructure, and education, while avoiding policies that promote speculation, discourage work, or defend reckless lenders from experiencing losses on bad investments.’
Insiders selling (into the bubble as preceded last crash), this is an especially great opportunity to sell / take profits! Suckers’ rally to keep suckers suckered (easy for the wall street frauds to do with just a mouse click / push of the button – and, they know all those technical trade lines that are easy to program in this current phase of the scam/fraud with the debased dollar). Keep in mind, the totally mindless blather from the ‘cottage industries’ of and fraudulent wall street itself in talking up lower P/E multiples when the same is a direct result of the debasement of the dollar and the consequent manipulation / translation (not real, see Davis, infra) which preceded the financial crisis / last crash. Unemployment, trade, deficit, etc., numbers continue decidedly worse than expected along with other negative data (and in the ‘wrong direction’, that spin accorded ‘down but not as bad as before’ b*** s*** ) yet the market has rallied like no tomorrow with used home foreclosure / distressed sales, though abated owing to ‘foreclosuregate’, the other ‘heralded’ good news. Moreover, the dumbo lemmings of Europe have jumped on the fraudulent defacto bankrupt american crazy train propelled to the precipice also as if no tomorrow. This is about keeping the suckers sucked in with the help of a market-frothing pre-election debased dollar for favorable currency translation and paper (but not real when measured in, ie., gold, etc.) profits which preceded the last crisis, inflating a bubble as in the last crisis to facilitate the churn-and-earn, particularly with computerized (and high frequency) trades and which commissions they’ll get again on the way down. There is nothing to support these overbought stock prices, fundamentally or otherwise. These are desperate criminals ‘at work’. Even wall street shill, the senile Buffett is saying we’re still in a recession (depression) [ Davis: ‘… all profits are inflated by 10% (from falling, debased dollar) and that 10% is the E that gets divided from the P and gives us a much better price/multiple to hang our hats on and that gets investors to BUYBUYBUY …’ The bull market that never was / were beyond wall street b.s. when measured in gold ] This is a great opportunity to sell / take profits (these lower dollar, hyperinflationary currency manipulations / translations to froth paper stocks will end quite badly as in last crash)! This is a global depression. This is a secular bear market in a global depression. The past up moves were manipulated bull (s***) cycles (at best) in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street ‘programmed computerized high-frequency churn and earn pass the hot potato scam / fraud as in prior crashes ( widely reported, high-frequency trading routinely accounts for more than 50% of daily U.S. equity trading volume and regularly approaches 70%. )’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed.The Stock Market's Long Decline Has Begun Smith ]
![chart]](http://static.seekingalpha.com/uploads/2010/11/10/saupload_deposits.png){kind=link}
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