November 12, 2010 posts

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 ]

The Early Evidence: QE Does More Harm Than Good Roche What exactly has QE “lite” and the expectations of QE2 done for markets and the economy so far? Two months following the initial rumors of of QE2 and well into QE “lite” we can make some early conclusions:

1) Equity markets have rallied, but this is of little significance. There is no evidence supporting an equity market “wealth effect” according to Robert Shiller (see here) and James Bianco (see here). Bianco’s research actually finds that the corresponding commodity price increases are more likely to be a net negative for consumers. And even if there is a “wealth effect” it only helps the rich because the middle class are only minority holders of equities on the whole. Of course, this isn’t a crisis of the wealthy so this looks like another case of failing trickle down economics at best. It’s also worth nothing that stock prices are nominal wealth so intentionally distorting prices from fundamentals is no recipe for sustained wealth. Keeping equity prices “higher than they otherwise would be” only diminishes the Fed’s credibility while also creating distortions in markets.

2) The 10 year bond yield is HIGHER since the Jackson Hole speech. The 30 year bond yield is up 50 bps since the Jackson Hole speech. Therefore, there is unlikely to be a sustained refinancing effect and no increased demand to take on more debt (not that this would work in a balance sheet recession anyhow, but Mr. Bernanke fails to acknowledge that this is a demand side problem). 74% of all consumer debt is mortgage based so it’s baffling that they are targeting the short end of the yield curve. Bernanke wants to stimulate borrowing, but his actions aren’t backing up his talk. He is focusing his efforts on the short end of the curve where rates are already very low – astoundingly confusing and misguided policy.

3) Many commodities have rallied in recent weeks which will do nothing but put pressure on input costs and ultimately make life more difficult for the US consumer (assuming these costs even get passed along, which is unlikely due to weak end demand). The consumer will either be hit with higher costs which they can’t afford to sustain or US corporations will continue to be hesitant to hire the millions that need jobs because they are too busy protecting their margins. On the one hand, this one of the few certainties we have regarding QE – it hurts corporate margins by causing a speculative ramp up in commodity prices. [chart]

4) QE IS NOT MONEY PRINTING [ It is here where Mr. Roche goes awry and is not quite correct. An analogous example (of enabling), though not perfect, would be if the fed was purchasing worthless driftwood at the base of the Mississippi or tumbleweeds in Texas reflected only by accounting book entries does not change the effect of ever more worthless Weimar dollar creation. ] so there is no reason to believe that it will cause anything more than expectations of future inflation. When the Fed implements a policy of QE they are merely purchasing an asset that already existed and swapping it with a deposit. There is some debate over the price changes before these transactions take place and whether the Fed is buying at higher prices, but this is offset by the fact that the Fed is removing a high yielding asset for a lower yielding asset. In this case, they are removing 1.2% paper (on average) in exchange for reserves that will earn just 0.25%. Remember, in QE1 the Fed removed over ~$47.5B in interest income from the private sector. So if anything, this has a marginal deflationary impact.

5) Borrowing didn’t pick-up after QE1 and there’s certainly no signs of a borrowing boom in recent data. Of course, with real estate in the midst of a double dip there’s unlikely to be a surge in borrowing in the coming quarters anyhow. As Robert Shiller detailed, the “wealth effect” of a housing boom can be quite substantial. With home prices now declining again we’re actually seeing the opposite of a “wealth effect”. In other words, the majority of Americans don’t feel better because Wall Street rallies each and every day. They feel worse because the asset they come home to every night, the asset that accounts for the majority of their net worth, has declined in value. [chart]

So just what exactly does QE do for the economy? Even the people who are advocates of it don’t seem to know and certainly can’t back up their claims with any positive evidence. Meanwhile the media and its misguided punditry are falling all over each other to spread falsehoods and inaccuracies regarding this policy as they shower Ben Bernanke with praise for trying something. I am not sure why Mr. Bernanke is worthy of any praise. He did not foresee this crisis. He responded too late when it was clear that a crisis was on our doorstep. And when he finally did respond he saved the banking system and left the American public out to dry. Thus far the evidence surrounding his latest tool looks poor at best and it in fact appears as though it could be causing more harm than good.

As for the markets, there has been some interesting action in recent weeks. It looks like the smart money markets (FX and fixed income) have slowly started coming around to the fact that QE won’t cause a dollar crash (because there is no interest rate effect and no “printed money”). Meanwhile, risk markets (equities and commodities) are on fire as “buy the dip” and “don’t fight the Fed” become the motto on every trading desk. The divergence here won’t last and given the early evidence it looks to me like a whole lot of investors are deep into the risk trade without the fundamentals to back it up. They’ve placed a bet on a Fed Chief who has failed at nearly every step of his tenure. A great deal of leveraged optimism has been priced into the market based on this “non-event“. I do not know if I have ever seen the market rally so much around an event that involved more misguided and inaccurate analysis.

Mr. Bernanke has created dangerous distortions in many markets over a policy that appears to have no real economic impact. He is playing games with the markets in an effort to give the appearance that he has not run out of policy tools. This not only calls into question the independence of the Federal Reserve, but has to very seriously make one wonder whether Mr. Bernanke is fit to run the world’s most important Central Bank? I have long maintained that he was never fit for this position and in my opinion the early evidence of QE only further confirms that belief.

Stock Slump Friday, Lose 2 Percent for Week Midnight Trader 4:19 PM, Nov 12, 2010 --

* NYSE down 100 (-1.3%) to 7,623.24

* DJIA down 90 (-0.8%) to 11,193

* S&P 500 down 14.33 (-1.2%) to 1,199

* Nasdaq down 37.31 (-1.5%) to 2,518

GLOBAL SENTIMENT

* Hang Seng down 1.93%

* Nikkei down 1.39%

* FTSE down 0.32%

UPSIDE MOVERS

(+) NVDA gains after upbeat evening results.

(+) SHZ swings to profit.

(+/-) CTE announces expansion plans.

(+) POZN gets milestone payment.

(+) A beats estimates.

(+) RJET gains after pricing shares.

(+) ABL results top year-ago period.

DOWNSIDE MOVERS

(-) BA downgraded.

(-) DHI down despite earnings beat.

(-) MO downgraded.

(-) JCP beats with earnings, shy with sales.

(-) CVX affirms production guidance.

(-) WEN issues revenue below expectations, OKs added buyback.

MARKET DIRECTION

Stocks end lower Friday and for the week, giving back the gains scored since the Nov. 2 mid-term elections amid expectations for more growth-cooling efforts in China. The concern over the economy trumped new data that showed the U.S. consumer outlook at a five-month high. On Friday, the Dow Jones Industrial Average closed down 90 points or 0.8%. The Nasdaq Composite dropped 37 points or 1.5%. The S&P 500 is off 14 points or 1.2%. Gold dropped 2.7%, while crude shed 3.3%. Treasury yields jumped by the most since April, with the 10-year at 2.76%.

For the week, both the Dow and the S&P 500 fell 2.2% and the Nasdaq fell 2.4%.

Consumer confidence rose in November for the first time in three months -- a sign that gains in employment and wages are beginning to show in attitudes of Americans. Consumer confidence - as gauged by the Thomson Reuters/University of Michigan survey -- rose to 69.3, in line with a median forecast of economists surveyed by Bloomberg. That is the highest level since June.

Also, European leaders tried to quell unrest among holders of Irish sovereign debt, saying that any mechanism to impose losses on bondholders would only apply to debt issued after mid-2013.

The Irish finance ministry on Friday denied speculation the European Union has prepared an 80 billion euro ($109.1 billion) bailout plan for Ireland, a news report said.

In company news, Intel (INTC) gained after the chipmaker said it will raise its dividend by 15% to 18 cents per share from 15.75 cents starting with Q1, 2011. The move comes after Cisco Systems Inc. (CSCO) weighed on tech stocks with a weak forecast, suggesting a continued sluggish economy. In contrast, Intel Chief Executive Paul Otellini said in a statement his company "remains on track to have our best year ever."

Roche Holdings' (RHHBY) drug Avastin did not get approval from the U.K. National Institute for Health and Clinical Excellence for use along with chemotherapy against colorectal cancer, Bloomberg reported. The new information submitted to the agency did not provide enough evidence to recommend the drug as a cost-effective treatment, the report said, citing the agency.

Yahoo (YHOO) shares were down as the company said reports that it will cut 20% of its staff are "misleading and inaccurate," Bloomberg reported. "Yahoo is always evaluating expenses to align with the company's financial goals," said Charles Sipkins, a spokesman for the Sunnyvale, California-based company, as quoted by Bloomberg. "However, a 20% reduction in Yahoo's workforce across the board is misleading and inaccurate."

Human Genome Sciences Inc (HGSI) is down as the FDA raises questions about the safety and effectiveness of its lupus drug Benlysta. An advisory panel will be meeting Tuesday (Nov. 16) to discuss whether or not to allow the drug developed jointly with GlaxoSmithKline plc (GSK) to go on the market. But the medical review released Friday stated that Benlysta produced a "somewhat marginal efficacy" compared to those treated with placebos. In addition, the agency raised concerns about infection risks and adverse neuropsychiatric effects.

Mizuho Financial Group (MFG) said it would purchase a 2% stake in BlackRock (BLK) for $500 million and bumped its forecase for full-year profit as debts fall, according to a Bloomberg report. Mizuho will buy 3.07 million shares of BlackRock for $163 each. The move is part of Mizuho taking advantage of attempts by bailed-out U.S. banks to sell assets that aren't crucial to their businesses.

Walt Disney Co. (DIS) was higher after the media giant said its capital expenditure will increase by $1 billion in 2011 and it topped the Street on Q4 earnings.The company reported Q4 earnings falling to $835 million, or $0.43 a share, down from $895 million, or $0.47 a share a year ago. Ex items, the company reported $0.50 a share, topping analysts' consensus call for $0.46 a share. Sales slid 1.3% to $9.74 billion while analysts were looking for a consensus $9.95 billion, according to a Thomson Reuters poll.

In other earnings news:

--California Pizza Kitchen Inc. (CPKI) was lower as the restaurant group swung to the red in the third quarter and projected a weak fourth quarter.

--Microsemi Corp. (MSCC) rose after the chipmaker reported fourth quarter results that beat analysts' expectations and projected strong first quarter results.

--Caribou Coffee Co. (CBOU) was on the rise as the coffee retailer reported Q3 results that beat expectations.

5 Long-Term Consequences Of The Recession [ Actually this great recession that wasn’t going to happen as per b.s. bernanke is actually a depression which continues despite manipulation and spin and definitional niceties. Those continuing ‘consequences’ are merely a reflection of this fact. ] Simpson ‘Whenever the word “recession” comes up, people expect a certain amount of damage, and damage of a certain type. Everybody knows that there will be job losses and a general sense of gloom and malaise. Most people also seem to expect the government to “do something” to end the recession. Along the way, the stock market falls, interest rates drop and overall economic activity slows down. It is never pleasant, but it is a relatively routine part of the economic cycle.The Great Recession that officially ended a year ago may be different with consequences that could run deep and last for many years…
“I Love You, But …”
This recession seems to be having a definite impact on family life. Industrial production is not the only “production” that has fallen; birth rates have dropped to record lows as people delay having children in the face of the economic troubles. What’s more, there is the expected increase in divorces – not surprising, given that monetary issues are a common root cause of divorce and tough economic times sharpen those problems – as well as a big spike in prenup agreements.
Losing the Future
One of the saddest under-reported consequences of recession is the different impacts it can have on young people. Grim as it is, recessions lead to higher rates of child malnutrition, and there is ample evidence that points to serious long-term consequences to such malnutrition, including stunted development and academic under-achievement.Even for kids who have enough to eat, the impacts can still be serious. Less money in the pockets of parents can have a direct impact on the kids’ education and enrichment opportunities. Too many high school kids are finding college slipping out of reach due to a combination of parents who cannot help with tuition and banks that will not lend. What’s more, it is fair to wonder what the psychological impact may be of seeing mom and/or dad lose a job and be out of work for years – does it inspire unproductive emotions like resentment or fatalism? (For more, see The 6 Worst Student Loan Mistakes You Can Make.)
More Anger, More Distrust
Recessions have a way of stapling a “kick me” sign to the back of whatever government is in charge during the troubles. This recession feels a bit different though, as almost everybody seems angry about something. One side of the aisle is livid at what they see as untrammeled expansion and intrusion of government; the other side chastises the government for not getting involved enough and solving the problem!With a festering pit of rancor to exploit, some politicians are apparently looking to score points with constituents by stirring the pot instead of working with their colleagues to create long-term solutions for national policy. In turn, that may mean that this recession has the long-term side effect of distracting the political process and creating so many bad feelings that important work goes undone and problems become even more serious down the line.
A New World of Jobs and Housing
It seems likely that this recession will have a long tail in terms of its impact on jobs and housing. Individuals who thought their portfolio and/or the value of their house meant that retirement was imminent may now be facing a decade or more of additional working years. That could be bad on several levels, as it will block new entrants from the job market and will mean higher employment costs for companies. Ironically, the government may stand to benefit, as it could increase the spread of time where these workers contribute to the Social Security system before taking benefits.It is not unusual for housing prices to decline in a recession, but the role of housing in this Great Recession is clearly a little different than past examples. With so many people trapped in unsellable houses, the normal migration from areas with no jobs to areas with jobs has been stymied. Moreover, so many people have learned a harsh lesson regarding the fallacy of houses making great investments.What could this mean for the future? It is not unthinkable that politicians may reconsider whether it really is good to aggressively promote home ownership and whether Congress ought to roll back certain incentives. It may also be the case that former homeowners either decide that the hassles of home ownership are not worth the risks, or that they cannot get mortgages again in the future. In either case, houses may lose their luster and the recovery in housing prices could turn into a multi-decade slog. (For more, see Boomers: Twisting The Retirement Mindset.)
Huge Debts to Pay
In an ironic twist, a recession that came about in large part because of excessive consumer debt and excessive financial leverage in the system may yet end with far too much debt on balance sheets. As the Fed has determinedly pushed rates down to near-nothing, corporations (and the federal government) have gorged on the cheap paper.Savvy companies will no doubt put this capital to work and make substantial returns on the leverage. The problem is, it is never the savvy companies that cause reason to worry. It’s the “me too” companies led by reckless or inept managers who will cause the trouble. Sooner or later, these companies will have a tough time paying their debts, and that will lead to a whole new cycle of worry, distress, job loss and so on. Likewise, without a buoyant economy to bail out the federal government, this high public debt burden could lead the way to higher taxes, higher inflation and other unpleasant consequences.’

Correction Continues As Street Slides Schaefer ‘Stocks flail Friday as market pulls back sharply.

Stocks stumbled to close out a red week on Wall Street as the major indexes dropped more than TK over five days.Some pullback was certainly to be expected after a two-month rally culminated in last week's surge punctuated by the Federal Reserve's plan to purchase $600 billion in Treasury debt through June 2011., a plan that got off to a rocky start Friday as technical difficulties forced the central bank to extend the window for its first round of purchases.

The Fed's action has drawn criticism from around the world since last week, leading up to the G20 meeting in South Korea this week that has been marked thus far by sniping whether QE2 is intended to artificially depress the value of the dollar. Another wrinkle comes from China, where inflation hit a two-year high and sparked concerns that the central bank there could try to tamp down growth and in turn slow the global recovery.

All that combined with continued weakness from technology stocks on the heels of a cautious outlook from Cisco Systems ( CSCO - news - people ) Wednesday. The sector was not a complete basket case Friday – its losses were in line with the broader market thanks partly to a dividend hike from Intel ( INTC - news - people ) – but the Technology SPDR ETF ( XLK - news - people ) was still down 1.4%.

The Dow Jones industrial average lost 91 points to 11,193, while the S&P 500 fell 14 points to 1,199 and the Nasdaq sank 37 points to 2,518. For the week the indexes were down 2.2%, 2.2% and 2.4%, respectively. Commodities were also reeling on the news out of China, with gold down more than $30 to below $1,370 an ounce and oil dropping to less than $85 a barrel.

Boeing ( BA - news - people ) was among the culprits behind the Dow's decline, sliding 3.5% amid fresh concerns over delays on its 787 Dreamliner. Analysts at Bernstein cut the aircraft maker to market perform, citing worries that challenges for the 787 could offset positive demand trends, according to TradeTheNews.com.’

Obama Says Federal Reserve’s Easing Wasn’t Aimed at Affecting Dollar Value Bloomberg | President Barack Obama said the U.S. Federal Reserve’s second round of quantitative easing is designed to boost growth.

Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population Zero Hedge | I’ve been arguing that the unpayable Federal government debt, coupled with irresponsible Federal Reserve policies, will inevitably lead to a hyperinflationary event and currency collapse.

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.

No change: Wall Street finds loophole in financial reform US banks have found a way to continue betting their own money on some investments, despite a new law’s restrictions on proprietary trading, the Financial Times reported on Thursday, citing Wall Street executives.

The Fed Trashes The Dollar If it is the first responsibility of the Federal Reserve to protect the dollars that Americans earn and save, is it not dereliction of duty for the Fed to pursue a policy to bleed value from those dollars? For that is what Chairman Ben Bernanke is up to with his QE2, or “quantitative easing.”

John Taylor Predicts Euro Collapse Now that Ben Bernanke has re-introduced quantitative easing (QE2) to a mostly incredulous world and, across the ocean, the Eurozone has begun unraveling again, our thoughts should turn to the parlous state of the world and the risks ahead. These are amazing times and seem to grow more so every day.

We’re On The Brink Of The End Of King Dollar For a very long time I have been calling for, expecting and otherwise anticipating the day that the Federal Reserve would begin openly monetizing government debt. I knew the day would come intellectually, but in my heart I hoped it wouldn’t.

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' Simon Maierhofer, 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! ]

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 ]

(11-12-10) Dow 11,193 -90 Nasdaq 2,518 -37 S&P 500 1,199 -14 [CLOSE- OIL $84.88 (-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 $1,365 (+24% for year 2009) / SILVER $25.99 (+47% for year 2009) PLATINUM $1,665 (+56% for year 2009) / DOLLAR= .73 EURO, 82 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ 10 YR NOTE YIELD 2.76% …..… 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

Obama Says Federal Reserve’s Easing Wasn’t Aimed at Affecting Dollar Value [ Come on! What does wobama know about such things; least of all, what the fed’s doing or why; then there’s the wall street froth / fraud / churn-and-earn thing! ] President Barack Obama said the U.S. Federal Reserve’s second round of quantitative easing is designed to boost growth, not affect the value of the dollar, rebuffing charges that America is seeking a weaker exchange rate.

DHS chief tells pilot, tourism reps scans and patdowns will continue Aaron Dykes & Alex Jones | Homeland Security head Janet Napolitano rebuffed industry concerns at a White House meeting today, frustrating pilot and tourism representatives worried an about economic backlash and traveler revolt.

‘Revolt Against TSA’ hits #1 on Google Trends Aaron Dykes | A surge in criticism against the TSA’s increasingly violating practices along with extensive coverage on the Drudge Report has resulted in an all-out “Revolt Against TSA.”

DHS May Turn To Body Scanners That Store Biometrics Paul Joseph Watson & Kurt Nimmo | Devices ultimately intended to be used to control access to shopping malls, banks and even apartment blocks in frightening new Minority Report-style surveillance grid.

World Battles The Invasion Of The Naked Body Scanners Steve Watson | Scientists, pilots, flight attendants, privacy groups, parents, Muslim groups and everyday passengers all rebelling against airport tyranny.

TSA Desktop Image Makes Joke of Cavity Searching Children Kurt Nimmo | A Flickr photo shows a computer in a TSA airport office with a desktop image of a satirical book entitled “My First Cavity Search.”

Council on Foreign Relations panel advises Obama to scale back Afghan occupation AFP | The task force of the CFR largely backed the Obama administration’s plan of intensifying military operations against the Taliban and starting a withdrawal in mid-2011.

Timetable Abandoned: U.S. And NATO To Wage Endless War In Afghanistan The mainstream news media and alternative sources alike have seized on a recent revelation – though it is hardly such – published by McClatchy Newspapers that “The Obama administration has decided to begin publicly walking away from what it once touted as key deadlines in the war in Afghanistan in an effort to remove emphasis from Barack Obama’s pledge that he would begin withdrawing US forces in July 2011.”

41 Facts About The History Of Central Banks In The United States That Our Children Are No Longer Taught In School [ Oh come on! Only fools could possibly take american history as written by americans seriously! ] Today, most American students don’t even understand what a central bank is, much less that the battle over central banks is one of the most important themes in U.S. history.

Council on Foreign Relations panel advises Obama to scale back Afghan occupation Influential US experts on Friday painted a grim picture of the Afghanistan war, calling on President Barack Obama to consider scaling back the military mission without signs of progress.

Drudgereport: Obama's economic view rejected on world stage...
NYT: Obama’s Glow Dims on Trip to Asia...
UPDATE: G-20 refuses to back US push on China's currency...
Sarkozy questions dollar’s dominant role in world...
IMF Shadow Looms; Irish Take Pay Cuts to Avoid Bailout...

Airport body-scan radiation under new scrutiny...
PILOTS, PASSENGERS RAGE AT NEW NAKED SCANNERS, PATDOWNS...
MUSLIM GROUP TELLS WOMEN WEARING HIJABS: REFUSE FULL-BODY SEARCH...

US postal service delivers less mail, loses $8.5 billion ... [ The u.s.postal service is totally unreliable ‘… *The foregoing and as indicated therein was previously send 9-14-10 but delivery confirmation was flawed as set forth below and my inquiries to the u.s. postal service rebuffed (I believe tampered with inasmuch as your office could not locate same). This cover letter (9-13-10) is on the 3 disks with navigable hyperlinks to the subject files for ease of reference, including the files in the RICO action as indicated. (10-15-10) I spoke with Rose, FBI, ADIC Secretary, who indicates once again that your office has not received the aforesaid and which can reasonably be presumed to have been tampered with, and hence, a violation of the federal statute concerning same…’ ]

Pelosi's bid carries pros and cons (Washington Post) [ That’s pro’s and cons in the more literal sense of the words; viz., pros_titutes and cons / criminals / frauds. No mystery here! ]

Sunnis' walkout mars political talks in Iraq (Washington Post) [ It’s … be…ginning to look a lot like Christmas, everywhere pervasively corrupt ‘little israel’ defacto bankrupt war criminal nation america goes (to the tune of that Christmas song) … Nothing like creating the anti-Christian sentiment through failed policy to keep the war machine greased with money defacto bankrupt america doesn’t really have (and aren’t the jews / israelis by definition ‘anti-Christ and hence anti-Christian’) ] One chaotic parliamentary session reflects challenges facing U.S. efforts to leave behind a stable Iraq with a representative government. Attack on Karachi police building kills 18 (Washington Post) About six militants open fire on a criminal investigations office in the "red zone," a highly secured area within Pakistan's largest city that houses the provincial minister's residence and the U.S. Consulate. [Visiting U.S. senators praise Afghan progress, say drawdown date is unrealistic (Washington Post) [ I’ll tell you what’s unrealistic: having compromised senators ( ie., non-war-heroe senile mccain, closet homosexual graham, incompetent zelig zionist lieberman, new york sinkhole slug Kirsten Gillibrand chided As 'Schumer's (zionist) Little Girl' ) stay the course with already failed pervasively corrupt, defacto bankrupt american policy … Paul Craig Roberts: Government Abandoned Vietnam POWs Kurt Nimmo | John McCain worked overtime to make sure Vietnam POWs never came home. I think the even bigger story vis-à-vis mccain is: http://www.albertpeia.com/heroenot.htm ‘Did you know that that so-called "american heroe" john mccain was referred to by his fellow pows in Vietnam as something akin to the "songbird" inasmuch as he was constantly "singing" to his Viet-Cong captors to curry favor and better treatment? This has been documented with authority by Colonel David Hackworth. The same violates military code/protocol (other soldiers have been court-martialed for far less) click Here, Here. [ http://www.albertpeia.com/hackworth.htm ] But, you see, this covered up scenario, compromizing the false facade of far less than a heroe, is exactly what a criminal (lie of a) nation as america loves and encourages (get everyone's hands dirty so no-one dares to rectify same, ie., bush, sr., clinton, bush, jr.). That is, "toe the (corrupt, propagandized) line", become a criminal, or be exposed, prosecuted, and/or ruined; and, hasn't anyone asked how "wall street" has been "spared the spotlight" (and even was accorded protective legislation from their criminal culpability) and focus of inquiry, attention, and prosecution despite being the primary beneficiaries financial and otherwise of these scams (you know the wall street motto, "churn and earn"; huge conflicts of interest if not outright fraud)…’…Oh and they so can afford it Deficit panel proposes huge cuts (Washington Post) [ Cuts? I heard the corrupt, incompetent lawmakers were giving themselves a raise. They actually deserve at least a 10% paycut and abolition of those lifetime appointments / permanent corrupt bureaucracies. Nothing succeeds like failure and crime in pervasively corrupt, defacto bankrupt america! ] Lawmakers propose curbs on Social Security, cuts in spending and tax hikes if long-term goals aren't met. ]

Cisco's shortfall an omen for rest of tech world (AP)

Eviction backlog piling up (Washington Post) Amid mess, a populist foreclosure revolt Photos: Thousands of foreclosures are put on hold Full coverage: Foreclosure chaos [ Chaos, rioting in light of pervasively corrupt america’s defacto bankruptcy, fraud, depression, complicity in old and now new wall street fraud without prosecutions, perpetual wars, etc., have been predicted for quite some time (links on this site, trendsresearch, infowars, etc.. (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. ) ]

G-20 agrees to broad guidelines (Washington Post) [ Defacto bankrupt, corrupt and fallen america loves company (like misery) … Drudgereport: Lula: World headed for 'bankruptcy'... G-20 deals prove elusive... Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population Zero Hedge | I’ve been arguing that the unpayable Federal government debt, coupled with irresponsible Federal Reserve policies, will inevitably lead to a hyperinflationary event and currency collapse. 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.” China lashes Fed easing as risk to global recovery China said on Thursday that the U.S. Federal Reserve’s move to ease monetary policy risked undermining the global economic recovery, adding that Washington “should not force others to take medicine for its own disease”. ] Nations defer substance of the work amid uncertainty about how effective the effort will prove in practice.

Dems criticize possible tax deal (Washington Post) [ Well, isn’t that what parties out of power do … criticize … for the record … for the next election … or whatever (they never did stop those wasteful illegal wars, nation’s still defacto bankrupt, huge wall street fraud still unprosecuted, etc.). Besides, their motto’s still as always on capital hill, why sacrifice today when you can sacrifice tomorrow … you know, as derived from those profound philosophers, classic rocksters of old, The Grassroots, ‘La, La, La,La, La, LET’S LIVE FOR TODAY’, ‘La, La, La,La, La, LET’S LIVE FOR TODAY’, ‘and don’t worry ‘bout tomorrow, ‘La, La, La,La, La, LET’S LIVE FOR TODAY’ ] Report indicates that President Obama is likely to back a temporary extension of tax cuts for households with income over $250,000 a year.

Leonardo DiCaprio on tigers (Washington Post) [ This article which warranted frontpage treatment must have been buried inasmuch as I woud have commented before closure. But this is indeed an item of such global importance so as to warrant ‘ better late than never’ treatment. ]By Leonardo DiCaprio and Carter S. Roberts Sunday, November 7, 2010 ‘Tigers have long provoked awe in the human imagination, symbols of untamed nature whose "fearful symmetry," in the words of William Blake, has inspired everything from art to advertising…’

Sentiment Indicators Are Screaming Sell-Off Hedge Fund Live ‘As we have witnessed a solid run up from 1140 and a break to new highs in both the S&P 500 and NASDAQ Composite sentiment indicators are hitting levels we witnessed in January and April which resulted in dynamic sell-offs. The latest indicator comes from Mark Hulbert who keeps a 30+ year sentiment indicator which tracks the mood of newsletter editors for equities, bonds, and gold. As of yesterday the Hulbert Stock Newsletter Sentiment index (S&P 500) is at 60.8% which is about a 40% point jump from September 2010. 60.8% is just below Hulbert’s line in the sand of 65% whcih has coincided with numerous market tops. In April, his indicator topped at 65.5% and in January at 65.2%. Hulbert’s NASDAQ indicator, which has a more volatile range due to the speculative nature of the index, is at 73%. In April 2010 Hulbert’s NASDAQ indicator topped out at 80%. Hulbert’s index isn’t perfect, for instance in Oct. 2006 his index read 67.8%, but, shrugged off the outsized bullishness and continued to rally until Feb. 2007. All in all, the majority of indicators tell you we are overbought and if managers need to chase performance into year-end we should see a rally into year-end, but these are facts and according to Hulbert’s study we could very well see a sell-off.’

Short-Term, High-Probability Mean Reversion Indicator. Energy Very Overbought Crowder If you recall, yesterday I stated that the Biotech ETF (IBB) was in a “very oversold” state according to my High-Probability, Mean-Reversion Indicators. The RSI (2) had pushed to a low of 1.5. I suppose I should have taken my own advice and placed a trade Tuesday morning as the ETF pushed down to test the 50-day moving average only to bounce right off and push higher to finish the day up $0.61 or 0.7%.As it stands now, the major market indice, S&P 500 (SPY), is still in an overbought state right alongside the tech-heavy Nasdaq 100 (QQQQ). The Energy ETF (XLE) is now on my radar as it has pushed into a “very overbought” state and the RSI (2) is currently reading 94.4. I would prefer to see a reading above 95 before I take a position, so we will have to see how today plays out. As I wrote this, the futures were substantially lower. Cisco’s (CSCO) outlook was well below analysts’ expectations, which pushed the stock lower 12% after hours and as expected, has pushed the Nasdaq 100 lower 1.3% after hours. If this holds up overnight, I should be able to get out of my current QQQQ position for a decent profit. Also, I think this could lead to the 11/4 gap close in all of the major indices. Could this be the beginning of further declines? While no one knows for certain, there are three remaining gaps that have yet to close. So, if indeed you believe that all gaps close eventually then maybe today could be the beginning of something special, that is, if you are one of the few bears left.

Short-Term High-Probability, Mean-Reversion Indicator – as of close 11/10/10

Benchmark ETFs

* S&P 500 (SPY) – 70.5 (overbought)

* Dow Jones (DIA) – 65.0 (neutral)

* Russell 2000 (IWM) – 69.1 (neutral)

* NASDAQ 100 (QQQQ) – 77.5 (overbought)

Sector ETFs

* Biotech (IBB) – 39.6 (neutral)

* Consumer Discretionary (XLY) – 71.3 (overbought)

* Health Care (XLV) – 38.9 (neutral)

* Financial (XLF) – 65.3 (neutral)

* Energy (XLE) – 92.4 (very overbought)

* Gold Miners (GDX) – 68.3 (neutral)

* Industrial (XLI) – 56.7 (neutral)

* Materials (XLB) – 61.0 (neutral)

* Real Estate (IYR) – 47.1 (neutral)

* Retail (RTH) – 58.6 (neutral)

* Semiconductor (SMH) – 75.1 (overbought)

* United States Oil Fund (USO) – 75.2 (overbought)

* Utilities (XLU) – 36.2 (neutral)

International ETFs

* Brazil (EWZ) – 42.7 (neutral)

* China 25 (FXI) – 57.8 (neutral)

* EAFE (EFA) – 54.4 (neutral)

* South Korea (EWY) – 68.2 (neutral)

Commodity ETFs

* Gold (GLD) – 67.6 (neutral)

Ultra Extremes

* Small Cap Bear 3x (TZA) – 28.4 (oversold)

* Small-Cap Bull 3x (TNA) – 68.4 (neutral)

* UltraLong QQQQ (QLD) – 62.3 (neutral)

* Ultra Long S&P 500 (SSO) – 69.5 (neutral)

* Ultra Short S&P 500 (SDS) – 28.8 (oversold)

* UltraShort 20+ Treasury (TBT) – 74.5 (overbought)

Disclosure: Long TZA. Short QQQQ, FXI and SPY.

Cisco Delivers Unexpected Pain: Dave's Daily ‘It wasn't all that bad now, was it? As the day progressed a little Novocain was provided by bulls who very much believe in the meme: good news is good and bad news is better. Markets inched steadily higher since every gap lower is a buying opportunity. Besides, Thursday was Veterans Day so there was no economic data to spoil the party. The G-20 is basically finished with serious issues and controversies papered over. Meanwhile Bernanke's QE plan is getting more negative reaction even as he outlines another $100 billion in Treasury bonds to be purchased over the next month. It's beginning to look a lot like Christmas for the "gang of 21"' (the Fed's Primary Dealer network). Wouldn't you like to be a Primary Dealer? You can sell your bonds to them and get freshly minted greenbacks to trade. What the banks do with that money is anyone's guess since they're not telling. Most believe it pushes stock prices higher, and indeed, Bernanke himself suggested that much last week. Here's the deal from our perspective anyway -- markets were overbought and we observed dozens of weekly DeMark 9 counts on all major markets and subsectors. Usually that indicates "trend exhaustion'", sideways action and perhaps even a reversal…’

NUTCASE CENTRAL [comedy if not so tragic] : Tim Geithner Bought Shares Of Sweet Ass Manufacturer To Teach His Kids About Stocks - Government officials often avoid conflicts between professional obligations and personal finances by divesting company stocks from their portfolios. So it comes as a surprise that, along with the s... Merrill Lynch Guys Got At Least One Thing Right - Say what you want about them but they knew their Harry Potter references. And shouldn’t that count for something? Some Merrill Lynch & Co. traders had a dark departmental secret: They called it the ... Goldman Sachs Interview Tutorial Devoid Of Any Useful Tips For A Reason - As a firm with one of the most daunting interview processes on Wall Street, in which candidates may be asked to come in 30 to 100 times, Goldman Sachs is uniquely qualified to offer tips to job seeker... FSA To Require Firms To Record Employees’ Phone Calls Despite It Being A Waste Of Money That Enterprising Insider Traders Will Undoubtedly Work Around - The Financial Services Authority announced today that “relevant communications made with, sent from or received on mobile phones and other handheld devices must be recorded and stored for six months.”... Harbinger Capital Has An Interesting Alternative Theory For Why Goldman Sachs Pulled Its Money From The Fund

Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population Zero Hedge | I’ve been arguing that the unpayable Federal government debt, coupled with irresponsible Federal Reserve policies, will inevitably lead to a hyperinflationary event and currency collapse.

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.”

China lashes Fed easing as risk to global recovery China said on Thursday that the U.S. Federal Reserve’s move to ease monetary policy risked undermining the global economic recovery, adding that Washington “should not force others to take medicine for its own disease”.

Gonzalo Lira And The Boiling Frog: Effects Of QE2 On The Bottom 80% Of The U.S. Population An old metaphor: If you take a frog and drop it into a roiling pot of boiling water, it’ll jump right out, unscathed. But if you put that same frog in a pot of cold water, and then slowly raise the heat, that frog won’t move. It’ll stay in that pot of water, calm as can be, right up until it is boiled to death.

Keynsianism Fallen Upon Hard Times The cult of Keynesianism is about to come upon very hard times. The quantitative easing plan, known as QE1, did not produce a recovery in the American economy.

The “Current Housing Recession is Rivaling the Great Depression’s Real Estate Downturn [and] Will Easily Eclipse It In the Coming Months” During the Great Depression, home prices fell 25.9 percent in five years. The U.S. housing market is now down around 25 percent from its peak in 2006.

National / World

New Body Scanners to Store Biometrics Kurt Nimmo | New system marketed as one-stop for government’s body scanning and biometric collection needs.

Wayne Madsen: China Fired Missile Seen In Southern California Wayne Madsen Report | China flexed its military muscle Monday evening in the skies west of Los Angeles.

‘FEMA camps’ tops Google Trends as TruTV exposé set to air Aaron Dykes | The previously taboo issue of ‘FEMA internment camps’ is finally breaking into mainstream coverage, thanks to a #1 search term on Google and a powerful upcoming episode of Ventura’s Conspiracy Theory.

Glenn Beck Says Government Will Stage False Flag Terror to Discredit Opposition Paul Joseph Watson & Alex Jones | Fox News host warns Obama administration is planning to exploit crisis to demonize political opposition.

Statism, the Greatest Threat Campaign for Liberty | Pervasive confusion over the nature of government and freedom has opened the gates to perhaps the greatest, most widespread increase in political power in history.

Is the Fed’s Debt-Buying Unconstitutional? Fox News | Is the Fed engaging in an unconstitutional monetization of the U.S. Congress’ out of control spending spree that is really a bridge loan to fiscal insanity?

Agents Provocateurs Turn Tuition Protest Into Violent Melee Kurt Nimmo | Another protest devolves into a violent sideshow for the corporate media.

More Eyewitness Accounts Of Explosions On 9/11 Emerge From NIST Lawsuit More videos shot on the day of September 11 2001 that were held back by The National Institute of Standards and Technology (NIST) as part of it’s investigation into the attacks reveal accounts of explosions in the base of the towers before the planes hit and before they collapsed.

Drudge Stirs National Debate On TSA Abuse The populist Drudge Report website has stirred a national debate on TSA abuse of passengers through dangerous naked body scanners and invasive groping measures, culminating in an onslaught of resistance from numerous prominent travel and pilots associations, and leading to the organization of a national opt out day on November 24.

Staged Government Terror: An Open Admission Within The British House of Lords Activist Post | If there was any doubt that governments fund terror and stage false flag attacks against themselves, it should be erased by a recent exchange

Republican congressman: I have ‘no hesitation whatsoever’ in probing Bush for torture Raw Story | A newly elected Republican congressman said in a little-noticed interview Tuesday he’d have “no hesitation whatsoever” in beginning an investigation of the former President George W. Bush for torture.

Drudgereport: Backlash grows over TSA's 'naked strip searches'...
Pilots and passengers rail at new airport patdowns...
Resistance spreads...
UPDATE: China lashes Fed pumping as risk to global recovery...
Lula: World headed for 'bankruptcy'...
G-20 deals prove elusive...
Woman Tries To Set Herself On Fire Outside Summit...

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