Al Peia's Blog: November 17, 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 Economy Will Not Recover Until the Economic Criminals are Prosecuted, and There Are Real Investigations Into 9/11 and Other Government Failures Trust is essential for a stable economy; Trust is currently at an all-time low; Launching criminal prosecutions and real investigations is one of the main prerequisites for an economic recovery.

More Evidence of a Housing Double Dip Crawford ‘More evidence of the double-dip in housing continues to trickle out. Corelogic reported that its home price index fell 1.8% month-over-month from August to September and 2.8% year-over-year. The index is now down 29% from the peak, but still slightly above the low reached in March 2009. Zimbabwe Ben has his work cut out for him to prevent home prices from falling to new lows in 2011. From Corelogic

CoreLogic today released its September Home Price Index (HPI) that shows that home prices in the U.S. declined for the second month in a row after rising slightly for the first seven months of the year. According to the CoreLogic HPI, national home prices, including distressed sales, declined 2.79 percent in September 2010 compared to September 2009 and declined by 1.08 percent [revised] in August 2010 compared to August 2009. Excluding distressed sales, year-over-year prices declined .73 percent in September 2010.

“We’re continuing to see price declines across the board with all but seven states seeing a decrease in home prices,” said Mark Fleming, chief economist for CoreLogic. “This continued and widespread decline will put further pressure on negative equity and stall the housing recovery.”

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Note: Corelogic's index uses a three=month weighted average (July, August, September) to calculate prices.’

Big Money Sells Stocks, Pie-Eyed Bulls Rush In Harding ‘Hey, who's selling those stocks? On the surface at least the market and surrounding conditions look eerily similar to the April top. The S&P 500 is falling back short-term from the same level, breaking below the support at its 21-day m.a. for the first time after a similar two and a half month rally began, with the market being spooked by the return of worries about the debt crisis in Europe, and with investor sentiment as measured by the American Association of Individual Investors at high levels of bullishness and complacency. (The AAII poll reached 48.5% bullish at the April top, and was at 57.6% bullish in its latest report last Wednesday night).

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But there are differences too, the biggest of which is the new round of quantitative easing by the Fed. However, it’s also interesting that the recent high on the S&P 500 was a Fibonacci 62% retracement of the 2007-2009 bear market.

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That’s a level where institutions may start pulling out of equities, just as bullish individual investors start piling in, and trading volume in Tuesday’s sell-off was 30% higher on the NYSE than the average of the last several months.’

If the Fed Can't Keep This Market Afloat, What Can? [ Nothing! Markets go up and down (that’s what markets do), efficient markets doing so for good reason. There is no good reason for the u.s. market (among many others) to be up, and many reasons for it (them) to be down, fraud being just one of many. ] Nyaradi ‘It has been a tough couple of weeks, at best, for Dr. Bernanke and his colleagues at the Federal Reserve, since they’ve been under nearly unrelenting attack since their announcement of “QE2,” the new $600 billion of bond purchases by the Fed.
First it was the Chinese and Germans at the recent G20 meeting in Seoul and then, more recently, they have taken flak from economists and politicians alike.
Sarah Palin led the political parade by issuing a “cease and desist” order while a raft of prominent Republicans including Newt Gingrich and Ron Paul joined in criticizing the Fed’s recently implemented plans.
Beyond that, a group of 23 well known economists including Michael J. Boskin, (Former Chairman, President’s Council of Economic Advisors for George H.W. Bush,) John F. Cogan, (Former Associate Director, U.S. Office of Management and Budget in the Reagan Administration, ( and Douglas Holtz-Eakin, (former Director of the Congressional Budget Office,) wrote an open letter in the Wall Street Journal in which they said, “We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.”
And finally, just yesterday, two prominent Republicans, Senator Bob Corker and Representative Mike Pence, said that they were introducing legislation to force the Fed to focus solely on inflation and drop its dual mandate of promoting inflation within target levels and full employment. Pence said that the Fed policy has “failed” and that the Fed should focus on keeping inflation low and preserving the value of the dollar.
I’m sure that all of this criticism was not expected as so far the Fed has enjoyed relatively easy sailing and has been seen as the architect of global recovery and the savior of the Western World.
I’m also sure that the Fed isn’t too concerned about all of this verbal criticism as it is an independent entity; however, there is one more voice of criticism that I’m sure is much more worrisome to Chairman Bernanke and his colleagues, and that is the voice of “Mr. Market.”

And Mr. Market isn’t happy as global equities markets have completed a seventh straight day of declines which is the longest losing streak since January, commodity prices have plummeted in recent days, the dollar has rallied and Treasuries have been selling off.

These are exactly the opposite results from those expected or desired as “QE2” was designed to increase the “wealth effect” of a rising stock market and to lower interest rates.

Now of course, the declines of recent days aren’t solely due to market dissatisfaction with “QE2” as we’ve had a blizzard of troubling news out of Europe surrounding Ireland, Greece and Portugal and worries about rising inflation in China that has caused their markets to plummet.

However, it is troubling that with QE2 engaged and the Permanent Open Market Operations in progress nearly everyday, that the markets have ignored this unprecedented liquidity and the “Bernanke Put.”

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Chart courtesy of http://www.stockcharts.com

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Chart courtesy of http://www.stockcharts.com

In the charts above, we see the recent rise of the U.S. dollar which has been moving inversely to the S&P 500 and the sharp sell off over the last four days in the Shanghai Composite which is often viewed by analysts as a leading indicator for other major global markets.

“QE2” is designed to put a floor under asset prices and has the corollary effect of weakening the U.S. dollar. These charts would indicate that either quantitative easing could have lost its effect or could be backfiring as markets lose confidence in the Fed’s ability to promote the fragile recovery.

So while everyone is mad at Ben and his friends, that is a secondary problem for him and his colleagues at the Federal Reserve. The primary problem is this: “If the Fed and their printing presses can’t keep this market afloat, what can?’

Which Country's Banking System Is Most at Risk? Crawford ‘Previously, we took a look at European banks to see which one had the largest sovereign exposure to Ireland. Here is a very interesting chart from the Bank for International Settlements that shows total foreign exposure to Greece, Ireland, Portugal, and Spain by bank nationality. This is very important because it shows not just sovereign exposure but also total exposure (consumer lending, lending to the public sector, etc). The information is current as of the end of Q1 2010.The most alarming statistic from the report is that total worldwide exposure to Greece, Ireland, Portugal, and Spain amounts to a whopping $2.6 trillion, which shows that any default could quickly collapse Europe and have significant consequences for the entire world. The two countries who should be praying for a bailout of Ireland are Germany and Great Britain since they are they have the largest exposures. Better fire up those ECB printing presses!
Click charts
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Here is a chart I made based on the BIS report which is easier to follow and more colorful. One thing to remember about the BIS report is that it does not include exposures of banks headquartered in the respective country.
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From the BIS report: (pdf)

Banks increase exposures to Greece, Ireland, Portugal and Spain: BIS-reporting banks increased their total exposures to residents of Greece, Ireland, Portugal and Spain in the first quarter of 2010, despite mounting market pressures on these countries. The $109 billion (4.3%) combined expansion brought BIS reporting banks’ aggregate exposures to that group of economies to $2.6 trillion. Total exposures to Greece, Ireland, Portugal and Spain increase. Total exposures to Greece grew by $20.7 billion (7.1%). The expansion was driven by a $21.6 billion (29.3%) rise in BIS reporting banks’ other exposures, most of which reflected an $18.1 billion (54.0%) increase in their credit commitments to residents of the country. By contrast, foreign claims on residents of Greece declined by $0.9 billion (0.4%). Claims on non-banks and claims on the public sector both went up (by $4.0 billion (4.7%) and $0.8 billion (0.8%), respectively). However, those increases were more than offset by a $5.7 billion (16.9%) contraction in foreign claims on banks located in the country. BIS reporting banks also increased their exposures to the residents of Spain and Portugal. Despite the fact that foreign claims on Spain declined by $10.3 billion (1.2%) during the period, overall exposures to residents of the country expanded by $17.3 billion (1.5%) due to a $27.6 billion (11.8%) rise inbanks’ other exposures. Meanwhile, banks increased their total exposures to Portugal by $10.6 billion (3.2%). Both foreign claims and other exposures went up (by $5.8 billion (2.3%) and $4.8 billion (6.1%), respectively). Spanish banks increased their exposures to residents of Portugal by $5.2 billion (4.7%), more than banks headquartered in any other country.’

Underwater Turbulence Boils to the Top The Inflation Trader ‘With the holidays rapidly approaching, it seems the market is striving to get the volatility out of the way as soon as possible. Tuesday was one of those days when the under-the-water turbulence (that I recently referred to in these terms) comes boiling to the top. At low rates, a fluid’s flow may be laminar; at some point, as the fluid’s rate of flow increases, it turns turbulent. The flow rate yesterday managed to exceed the critical point, and suddenly things appeared to be growing less predictable. Ireland was one obvious source of concern. Yesterday, a subtle change took place as Irish 10-year yields rose 29bps. Until now, although there were clearly behind-the-scenes discussions about market conditions, Ireland staunchly denied that it had any need for additional funds before the middle of next year. Yesterday, the Irish government conceded that these discussions were taking place, but Irish Prime Minister Cowen attributed these discussions to circumstances outside of Ireland:

The turbulence in the markets over recent weeks has been about issues of wider concern than Ireland’s situation. It is appropriate therefore that we discuss with our partners, as we are, how these issues should be addressed.

See, it isn’t about Ireland but rather about the general turbulence in the markets…which just happens to come knocking at Ireland’s door. EU Economic Minister Olli Rehn said the problem was in Ireland, but attributable (of course!) to those darn bankers. He said:

The (European) Commission, together with the ECB, the IMF and the Irish authorities, are working in order to resolve the serious problems in the Irish banking sector.

Now, the fact that Ireland is running massive deficits and undertaking austerity measures that will probably make things worse in the short run is conveniently overlooked. After all, despite all of those problems, Ireland was funded through the middle of next year until it had to bail out its banks. The Irish government had painted itself into a corner and made it almost impossible to accept help without admitting defeat; this nuance change allows it to save face by pointing out that it would have been okay but for the problems with Irish banks.The same basic process happened with Greece earlier this year: there is no problem. There is a problem but it isn’t a bad one. There is a problem but it is not about us. There is a problem but we can solve it. Okay, we will accept some help just so that markets can calm down. Well, maybe we do have a little problem. Actually, the problem is somewhat worse than we said. Help. Now.And speaking of Greece, that saga is not yet finished either. Greek bond yields rose 21bps (for the 10y) as Austria threatened to withhold payment of its next tranche payment (due in December). This is one reason that the “shock and awe” deal back in the early summer never seemed very credible to me even though the market loved it for a few months. Each country in the EU – and there are a couple of dozen – needs to write a check every time Greece needs another tranche. In this case, it is easy for Austria to put up a fight, because Greece is not meeting the targets they needed to with respect to cutting the deficit. Austrian Finance Minister Josef Proell said that the current progress “doesn’t give us any reason to approve the December tranche.”So why didn’t the EU just collect all of the money up-front when they passed the hat for Greece? The answer is obvious: if they had demanded that governments write checks back then, they couldn’t have gotten the unanimous vote they required. Some governments went along, assuming that it would be politically more palatable to write checks later “once things calmed down.” But what were the odds that all of the EU members would be able to write the checks later? Nearly nil, I would say, and now we are starting to see how rotten that deal was. Pressure will be brought to bear on Austria. EU President Van Rompuy pulled out the superlatives yesterday when he said “We are in a survival crisis. If we don’t survive with the euro zone we will not survive with the European Union.” This seems accurate, and scary considering that two or three weeks ago no one was worrying much about this.Turbulent flows are inherently chaotic. They will form unpredictable vortices that impede and redirect the flow. In a laminar flow, the transit time of a given molecule of the fluid is highly predictable and distributed normally; in a turbulent flow, the transit time of a given molecule is highly unpredictable. We anthropomorphize such flow: we call the rapids “angry” waters. Right now, the waters are angry.The dollar loves the EU turmoil, and strengthened again yesterday. Stocks, not so much: the S&P dropped 1.6%. The decline of the indices from the highs is not yet very dramatic, but now all of the oscillators have turned and it will be much harder to rally back through the April highs now that momentum has flagged.Bonds sold off, and then rallied to end modestly higher into the close. There were dueling Fed speakers yesterday, with one (Bullard) implying that there was no guarantee the Fed would use the full $600bln they have allotted and another (Rosengren) that he “fully anticipate(s)” the Fed will use the full charge. In fact, they both said almost the same thing: if the economy booms, they won’t need to spend all the money. They merely accented the statement differently.But the bigger news Fed-wise was that there is a strengthening move afoot to change the Fed’s mandate. A group of former Fed and Congressional officials, plus the brilliant Cliff Asness of AQR, wrote a letter to Chairman Bernanke imploring him to stop QE2 before it blows up into serious inflation. The story is here.At the same time, Congressmen Corker and Pence introduced a bill that would replace the Fed’s “dual mandate” with one that focused only on inflation. Helping the bill is the fact that Rep. Barney Frank, who routinely is on the dumb side of history despite being generally perceived as one of the smartest Congressmen in terms of raw IQ, said “The notion that the Fed should be indifferent to unemployment is a terrible idea, damaging to the economy.” Since Mr. Frank is usually wrong, this is good for the bill. Of course, saying the Fed shouldn’t be indifferent to unemployment is like saying the Fed shouldn’t be indifferent to the plight of the Giant Panda. Sure, but the Fed can’t do anything about either. (Okay, so perhaps because of money illusion the Fed can do something about unemployment as a side-effect of monetary policy. But managing to the side-effect seems absurd).This seems as good a time as any to state that I completely support the notion of narrowing the Fed’s mandate to one it actually can do something about. In fact, in my book (by the way, have you considered buying an autographed copy as a holiday gift?) I devote the entirety of Chapter 4 to “Fed Problem 3: An Impossible Mandate.”

The multiple prongs of the Fed’s mission are, unfortunately, significantly in conflict. No, that’s not strong enough: as practiced, they’re inherently inconsistent.

And, later in the chapter, I edit the first bullet point of the Fed’s mandate statement this way:

Conducting the nation’s monetary policy by influencing the money and credit conditions in the economy in pursuit of full employment and stable prices. [Insert] Supervising the credit conditions in the economy and conducting monetary policy in pursuit of a stable monetary environment in which the natural economic cycle can play out.

So, needless to say, I am in support of the Corker/Pence efforts, although I cannot speak to the actual bill since I have not seen it.

I haven’t yet commented about the PPI release yesterday. That is partly because there were other important things happening, but in truth almost anything is more important than PPI to an inflation trader. The index surprised on the low side, with core PPI coming in at a breathtaking -0.6%, worse than during any month during the crisis. However, this is a great illustration of why we mostly ignore PPI. The decline was due entirely to a -3% fall in new cars and a -4.3% decline in new trucks. Yes, this is almost certainly due to faulty seasonal adjustment around the model-year changeover…without those two components, core PPI was up. Now, inflation bonds significantly underperformed nominal bonds again, with CPI swaps ending the day down by 4-8bps. Some of that might be a reaction to PPI, but I think it is more likely that it is a reaction to the recent sharp selloff that is driving some investors who loved ‘em at 0.41% to hate ‘em at 0.75%. Now, today, Wednesday’s data is a different story. CPI matters, although with the Fed just beginning QE2 it probably doesn’t matter all that much. The consensus is for +0.3% and +0.1% ex-food-and-energy. The short TIPS are expecting slightly lower numbers than that for the headline index, but the odds are for something a smidge higher. If we get the expected core print of +0.1% then year-on-year core CPI will hit 0.7%. I think there is a small risk of 0.2% on core, but either way this month’s figure ought to mark the trough in the year/year numbers as core prices were completely flat from October through January last year, and rose at only a 0.3% annualized pace between October 2009 and April 2010. Even if core inflation is only running at 0.8% between now and April, the year/year number will rise back to around 1% by the time the April number arrives…and I think that core has a good chance of moving somewhat faster, soon.Also today, but of lesser import, are the Housing Starts data (Consensus: 598k from 610k). These numbers are at such a low ebb that even a significant percentage miss will barely show up as a wiggle on the chart. The inventory of new houses is quite low, which sets up Housing Starts for a move higher eventually; unfortunately, the inventory of existing homes is still far too great, and since existing homes are a substitute for new homes this means that whatever homebuilders build, they’ll have trouble selling.’

Does the Baltic Dry Index's Decline Really Mean Anything for Stocks? [ Short answer: YES! ]Ching ‘The Baltic Dry Index, often considered a leading indicator, has been trending downward for almost a year, even while the stock market has been rising. click [chart] This has lead to a question that many are asking themselves. Will the stock market following the Baltic Dry Index lower? While, the Baltic Dry Index is considered a leading indicator, the term, "leading" generally refers to leading the economy, not necessarily stocks. Stocks are also considered a leading indicator for the economy, and thus the Baltic Dry Index is probably at best a coincident indicator for stocks…’

Soros: Conditions ‘pretty perfect’ for gold Reuters | Billionaire investor and philanthropist George Soros may be cutting back on his gold bets, but he says the precious metal still has some kick to it.

Rothschild-linked author pens “Five Myths About the Federal Reserve” in Washington Post The American Dream | There have been so many attacks on the Federal Reserve recently that the mainstream media now feels almost forced to try to defend their actions.

Former Treasury Secretary Rubin: Bond Market Could Implode; Vote to Increase Deficit Could be the Trigger EconomicPolicyJournal.com | He said Congress’ vote on raising the deficit ceiling next spring could be the “trigger” for a rout in the Treasury market.

Fed May Hesitate on More Easing After Critics Question Mandate The Federal Reserve is facing the fiercest political assault on its powers in three decades as it struggles to help revive the U.S. economy.

George Soros also profiting off controversial new TSA scanners Be sure and read Tim Carney’s Examiner column today on the politically-connected lobby for the controversial new TSA scanners that are upsetting airline employees and travelers everywhere.

Soros: Conditions ‘pretty perfect’ for gold Billionaire investor and philanthropist George Soros may be cutting back on his gold bets, but he says the precious metal still has some kick to it, as long as conditions like low interest rates prevail.

TODAY Congress Will Try – By Secret Vote – to Retroactively Legalize Foreclosure Fraud and Forgery By the Big Banks … Call Congress and Say NO Forgery of mortgage documents is systematic and widespread.

QE2 Is Failing: Here's Evidence Loundsbury [ I quite agree with Loundsbury (and disagree on the point by Roche, infra; viz., there are many reasons for the market to fall including the preposterousness of the failed fed approaches). There are simply an unprecedented plethora of real reasons for the market to fall; ie., overvaluation, debasement of dollar, manipulation, fraud, a clueless fed / no-recession ben shalom bernanke et als who don’t have the slightest idea what they’re doing or what to do, a structural shift away from u.s., pervasive corruption in and defacto bankruptcy of the u.s., etc.. ] ‘ I know I have seen that QE2 is failing a number of times in the last 24 hours. In support of such statements I offer the following two graphs from the 5 Min. Forecast: [charts] Since QE2 hasn't really started yet, it might be more accurate to state that the prospect of QE2 is a failure. However, I would offer the following as the most accurate statement: There have been limited changes in stocks and bonds since the plan for QE2 has been discussed. Stocks are still more than 10% higher than they were at the end of August and bonds have not changed all that much in the past few months as well. The 10-year Treasury yield at 2.85% as this is written is below the rates seen in early August. There are many possible reasons for the sharp losses in stocks and bonds the past several days. The prospects for QE2 may have contributed but, in this analyst's opinion, that affect is very marginal compared to other factors that are current active. See yesterday's article for discussion of some of these market factors. There may be several reasons to question QE2, as Steve Hansen has discussed here and here and here. But screaming that the markets have entered a judgment about QE2 effects on securities markets before it has actually started is just plain poppycock based on the current evidence…’

The 17 Things Worrying Investors Right Now
LLOYD'S WALL OF WORRY
WEEK OF NOVEMBER 15-19
WORRY COUNT: 17

CHINA: Kickin’ it purely “my way or the highway.” Especially treacherous on the rest of us as they are still building their highways.

THE PIIGS: Portugal, Ireland, Italy, Greece and Spain. FYI: News of their demise has been greatly…delayed.

CALIFORNIA AND THE OTHER 49 STATES: Automakers – done. Banks – done. Next on line at the bailout window: Muni Bonds

. “Please step up to the white line.”

QE II: In the popularity ratings still more dear than a root canal but not by much.

U.S. ECONOMY: This aging heavyweight looks to be making a comeback but don’t expect any championship belts.

UNEMPLOYMENT: The good news is we added 151,000 new jobs. The bad news is that's about 100,000 less than needed to keep us from sinking deeper into the jobless quicksand pit.

TAXES: Extend and Pretend-- it ain't just for loans anymore.

HEALTHCARE REFORM: “If I were a cheese what kind of cheese would I be? Umm…that would be Swiss.” Give it a year or so.

OBAMA ADMINISTRATION PART II: “Heavy lies the crown.”

XMAS 2010: Praying the Repo Man doesn’t tow away Santa’s sleigh until after he brings some good cheer. Stack of $20s for me, KK!

CURRENCIES: No longer a race to the bottom. More like a slow bumpy roll down into death valley.

HOUSING CRISIS: The reset button doesn’t seem to be working here. Might I suggest bulldozers and bonfires?

INFLATION/DEFLATION: The Fed’s inflation wish will come true. And then, like old luggage and my gut, it will be with us for a long time.

G20 MEETING: Granted I wasn’t expecting any Gold Medals for the U.S., I wasn’t expecting a disqualification smack down either.

TERRORISM: I knew there was a reason I always hated changing the toner cartridge.

COMMODITIES: Trying to wrestle them down with higher margin requirements. You mean some people actually pay for these things?

HFT: High Frequency Trading -- a festering boil on our stock market but nothing a penny transaction tax wouldn’t clear up. Dr. SEC, we’re waiting…?

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 ]

(11-17-10) Dow 11,007 -15 Nasdaq 2,476 +6 S&P 500 1,178 -0- [CLOSE- OIL $80.06 (-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 $1,337 (+24% for year 2009) / SILVER $25.51 (+47% for year 2009) PLATINUM $1,636 (+56% for year 2009) / DOLLAR= .73 EURO, 83 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ 10 YR NOTE YIELD 2.86% …..… 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

New French defence minister says Afghanistan a trap Reuters | The war in Afghanistan is a trap for all parties involved and France will discuss how to draw down its troop presence at a NATO summit this week.

DHS Source: TSA Infuriated With Coverage Of Nationwide Backlash Paul Joseph Watson | No Grope, No Fly: TSA Refuses To Back Down: But lawmakers and local authorities prepare to take on feds.

Banksters Move to Gut Aspects of Financial Reform Bill Kurt Nimmo | Banker lobbyists are crawling all over the district of criminals like blood thirsty ticks on a swamp dog.

TSA Hit With Lawsuits As Revolt Explodes Paul Joseph Watson | In one shocking incident, TSA goons pulled down woman’s blouse, exposing her breasts, and laughed about it.

American Idle Keith Johnson | Americans—in large part—have become nothing more than stupid, scared, spoiled rotten slaves to their favorite TV programs, politicians and electronic toys.

The History of Health Tyranny: Codex Alimentarius, part 1 Brandon Turbeville | Codex is merely another tool in the chest of an elite group of individuals whose goal is to create a one world government in which they wield complete control.

Fears of New Food Crisis as Prices Soar The bill for global food imports will top $1,000bn this year for the second time ever, putting the world “dangerously close” to a new food crisis, the United Nations said.

District Attorney: Feds Are Not Above The Law The district attorney’s office in San Mateo County, California has promised to follow up any complaints of over the top TSA pat-downs with prosecutions on the charge of sexual battery, reports ABC 7 News.

Duncan Blasts TSA Pat-Downs, Body Scanners Congressman John J. Duncan, Jr. (R-Tenn.) blasted the Transportation Security Administration Wednesday during a speech on the floor of the House of Representatives for invasive “pat-downs” of U.S. citizens and the role lucrative government contracts played in the use of body scanning machines at airport checkpoints.

Big Sister’s police state: TSA’s tyrannical tactics threaten American freedoms The Transportation Security Administration (TSA) has crossed the line. As if subjecting millions of Americans to X-rated x-ray scans and public groping sessions weren’t bad enough, the agency now threatens $11,000 in fines against anyone refusing to submit to humiliation at the airport.

TSA Hit With Lawsuits As Revolt Explodes The TSA has been hit with a number of lawsuits as the revolt against Big Sis, naked body scanners, and invasive groping measures explodes, with one case involving a woman who had her blouse pulled down in full public view by TSA goons who then proceeded to laugh and joke about her exposed breasts.

TSA, Pilots Weigh Biometric System for Airport Screening Pilots who fly passenger and cargo planes want the U.S. government to implement a program under which their identities will be confirmed using biometrics so they can pass quickly through airport security checkpoints and avoid — for the most part — controversial screening procedures involving body scanners or pat-downs.

Germany warns of imminent terror attacks German Interior Minister Thomas de Maizière on Wednesday warned the government had indications Islamists were planning terrorist attacks in Germany later this month.

Iran intercepts ‘unknown planes’ Iran’s armed forces have intercepted six “unknown planes” that intruded into the country’s airspace during aerial defence manoeuvres, the spokesman for the exercise was quoted as saying on Wednesday.

The Washington Post Runs An Article Entitled “Five Myths About The Federal Reserve” Authored By An Economist Linked To The Rothschilds There have been so many attacks on the Federal Reserve recently that the mainstream media now feels almost forced to try to defend their actions.

Soros: China has better functioning government than U.S. If nothing else, Glenn Beck probably has his top story set for tonight’s show.

Drudgereport: Bernanke's 'Cheap Money' Spurs Investment Outside USA...

AILES: OBAMA 'DIFFERENT BELIEF SYSTEM THAN MOST AMERICANS'...I COULD BEAT HIM! … [ wobama and co. have their fingers crossed since palin’s probably the only one who can’t! ]Euro zone seems at a loss to stop the rot... Berlusconi rating at new low as govt crisis worsens... New French defense minister says Afghanistan a trap... Iran: Foreign planes violated airspace...
Exercises involve protecting nuclear facilities... Efforts to Extend 'Tax Cuts' Falter as Talks Are Delayed...
$319 BILLION PAID IN JOBLESS BENEFITS OVER PAST 3 YEARS...Fears of new food crisis as prices soar...

Study: Americans fleeing high-tax, union-dominated states... ‘Migration from high-tax states to states with lower taxes and less government spending will dramatically alter the composition of future Congresses, according to a study by Americans for Tax Reform Eight states are projected to gain at least one congressional seat under reapportionment following the 2010 Census: Texas (four seats), Florida (two seats), Arizona, Georgia, Nevada, South Carolina, Utah and Washington (one seat each). Their average top state personal income tax rate: 2.8 percent.By contrast, New York and Ohio are likely to lose two seats each, while Illinois, Iowa, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, and Pennsylvania will be down one apiece. The average top state personal income tax rate in these loser states: 6.05 percent.The state and local tax burden is nearly a third lower in states with growing populations, ATR found. As a result, per capita government spending is also lower: $4,008 for states gaining congressional seats, $5,117 for states losing them.And, as ATR notes, “in eight of ten losers, workers can be forced to join a union as a condition of employment. In 7 of the 8 gainers, workers are given a choice whether to join or contribute financially to a union.”Imagine that: Americans are fleeing high tax, union-dominated states and settling in states with lower taxes, right-to-work laws and lower government spending. Nothing sends a message like voting with your feet.’

Budget agreement may be harder than anticipated (Washington Post) [ ‘They’ve seen the enemy / opposition … the enemy is themselves … Yeah … The nation’s defacto bankrupt with an economic / financial structural shift away from america created by them and theirs as never before in the history of the u.s. with the most dour and negative implications. Pervasive corruption, incompetence, fraud, etc., has destroyed this country. The market will ultimately do what they don’t. They’ve seen the enemy … themselves! ]The leaders of the president's fiscal commission come under fire from the panel's own members.

NATO strategy alters weapon development (Washington Post) [ What strategy? National bankruptcies? More unnecessary death and destruction? Yes, I said unnecessary. All this has been geopolitically counter-productive and contra-indicated ab initio. Change? What change? Todays headlines: Nato chief says there is no alternative to staying in Afghanistan Telegraph [ Oooooh! Sounds like a plan! ]| Anders Fogh Rasmussen said NATO would commit the alliance to train and support Afghan troops battling the Taliban in substantial numbers through to the 2014 deadline for local forces to take over security.Britain’s top soldier: al-Qaeda cannot be beaten SINA.com | Violence across Afghanistan is at its worst since the Taliban were overthrown by US-backed Afghan forces nine years ago, with civilian and military casualties at record levels despite the presence of about 150,000 foreign troops. ]As NATO struggles to define itself in a post-Cold War world of new threats and tight budgets, the alliance this week will lay out a vision for itself that is meant to better reflect the 21st century.

Lawmakers seek to change Federal Reserve's mission (Washington Post) [ Well, focusing on their proven talents as opposed to their unmanifested supposed talents, I’d say they should be, not in the ‘beige book’ business; but rather, the comic book business … or, maybe just comics … or, heck, with that ‘no recession’ call, and subsequent fumbling of the ball, how ‘bout ending their mission which for them has proven to be a mission impossible. Abolish the fed! They can always seek work at Marvel Comics as evidenced by their masterwork … The New York Fed's Comic Book Explaining Monetary Policy [ Wow! This is at once both scary and tragic; and as well, a total joke. They are serious … criminals / jokesters / fraudsters! The sinkhole new york fed? … Where’s that missing $4 trillion, etc.? Here’s an archived website copy for your records. http://albertpeia.com/comic_monetary.pdf ] ]] Proposal by Sen. Corker and Rep. Pence would end Fed's three-decade-old "dual mandate."

Dow hovers near 11,000 (Washington Post) [ Yes … this sounds like a job for … Rosanne Rosanna Danna formerly of SNL fame, to chime in with a reminder as her mama always used to say, ‘it’s always something’ … but unfortunately, that somethin’ is not necessarily what they say it is. Reality is that the u.s. market needs no help from Asia or Ireland or Greece, etc., to fall but here in the states they would love for you to think that. The fact is that the u.s. market is way over-valued / over-bought, floating on air and b* s* alone in this new bubble as in the last before the previous crash that the wall street frauds and insiders commission with high frequency churn-and-earn trade programs and sell into. I mean, forget about valuations, security analysis, basic economics, etc. … it’s suddenly, from out of nowhere, Ireland and China jamming on the breaks … riiiiight! Come on! That dog don’t hunt no more! Lloyd, infra, lists 17 concerns right off the top. The decline certainly was no mystery to Loundsbury, Roche, Maierhofer, Hussman, etc., infra, among many others. … Fed Easing Is Not Aimed at Weakening US Dollar: Dudley [ It doesn’t matter what they say … you can’t believe a word they say, like no-recession ben shalom bernanke … and, contrary to rhetoric, their intent was as preceding the last crash was to inflate earnings to froth the stock market (to create the all too familiar bubble for wall street frauds and insiders to commission with high frequency churn-and-earn trade programs and sell into ) by debasing the fiat Weimar dollar currency. ] New York Fed President Bill Dudley, in one of the first Fed interviews since the central bank’s policy came under attack at the G20 meetings in Seoul, said critics were “off base” to believe the aim of the policy is to weaken the U.S. dollar.] U.S. stocks continue recent slide amid deepening investor anxiety about the global economy. The stock market continued its recent slide Tuesday amid deepening investor anxiety about the global economy. Wall Street was worried that Ireland could require a bailout, that China will jam the brakes on its overheating economy ... Commodities sink on China, European concerns BusinessWeek Summary Box: Stocks Sink on Fear of China Slowdown

Lenders, AGs in talks over foreclosure fund (Washington Post) [ Wow! Yet another fund! If you think this is a mess, just wait for the muni (ain’t so puny) bond crisis next up …

The 17 Things Worrying Investors Right Now
LLOYD'S WALL OF WORRY
WEEK OF NOVEMBER 15-19
WORRY COUNT: 17

CALIFORNIA AND THE OTHER 49 STATES: Automakers – done. Banks – done. Next on line at the bailout window: Muni Bonds

. “Please step up to the white line.”

CHINA: Kickin’ it purely “my way or the highway.” Especially treacherous on the rest of us as they are still building their highways.

THE PIIGS: Portugal, Ireland, Italy, Greece and Spain. FYI: News of their demise has been greatly…delayed.

QE II: In the popularity ratings still more dear than a root canal but not by much.

U.S. ECONOMY: This aging heavyweight looks to be making a comeback but don’t expect any championship belts.

UNEMPLOYMENT: The good news is we added 151,000 new jobs. The bad news is that's about 100,000 less than needed to keep us from sinking deeper into the jobless quicksand pit.

TAXES: Extend and Pretend-- it ain't just for loans anymore.

HEALTHCARE REFORM: “If I were a cheese what kind of cheese would I be? Umm…that would be Swiss.” Give it a year or so.

OBAMA ADMINISTRATION PART II: “Heavy lies the crown.”

XMAS 2010: Praying the Repo Man doesn’t tow away Santa’s sleigh until after he brings some good cheer. Stack of $20s for me, KK!

CURRENCIES: No longer a race to the bottom. More like a slow bumpy roll down into death valley.

HOUSING CRISIS: The reset button doesn’t seem to be working here. Might I suggest bulldozers and bonfires?

INFLATION/DEFLATION: The Fed’s inflation wish will come true. And then, like old luggage and my gut, it will be with us for a long time.

G20 MEETING: Granted I wasn’t expecting any Gold Medals for the U.S., I wasn’t expecting a disqualification smack down either.

TERRORISM: I knew there was a reason I always hated changing the toner cartridge.

COMMODITIES: Trying to wrestle them down with higher margin requirements. You mean some people actually pay for these things?

HFT: High Frequency Trading -- a festering boil on our stock market but nothing a penny transaction tax wouldn’t clear up. Dr. SEC, we’re waiting…?

] Proposal would help banks avoid court challenges and aid state investigators in efforts to seek relief for homeowners who were wronged, officials said.

The Economy Will Not Recover Until the Economic Criminals are Prosecuted, and There Are Real Investigations Into 9/11 and Other Government Failures Trust is essential for a stable economy; Trust is currently at an all-time low; Launching criminal prosecutions and real investigations is one of the main prerequisites for an economic recovery.

Markets Hit Vertical Drop: Dave's Daily ‘Markets followed-on Monday's malaise with heavy selling tied to worries from China that inflation was getting out of control. This caused commodity markets to implode. It was reported the Chinese government was dumping stockpiles of grains and meats on markets to drive prices lower. The commodity exchanges have increased precious metals margins twice in the last week which usually stems rallies and that continued this week. Furthermore, investors are having second thoughts about the Fed's QE policies as they become more concerned with China's moves in the opposite direction. It just shows how leadership is changing in the 21^st century. Emerging Market stocks well-tied to commodity markets and with more volatility anyway fell harder than other markets. Earnings were coming in roughly as expected from powerhouses like HD and WMT. Meanwhile Industrial Production was weaker than expected and the PPI was up less than expected (and, yes the laughable "core" rate was down). Bonds rallied, reversing previous declines, in perhaps a brief flight to safety. It seems clear that our DeMark sequential weekly 9 counts well illustrated here many times have once again called an exit correctly with many such views on November 5^th... ‘

Is it Time to Bail on Stocks and Commodities? Simon Maierhofer, On Tuesday November 16, 2010, 2:18 pm EST ‘According to the most recent AAII poll, 57.6% of investors are bullish, so why am I bearish? Well, one reason is that pervasive bullishness has never really paid off. It didn't before the tech-crash (NYSEArca: XLK - News) in 2000, it didn't before the real estate crash in 2005, and didn't before the financial led crash (NYSEArca: XLF - News) in 2007. But - and that's a big but - I have to admit, something is different this time around. What is it?
Does the Market See a Mirage?
It's said that the market discounts the future and looks about six months ahead. In March 2009, stocks turned up. Based on the market's foresight, the economy should have started improving no later than the end of 2009.As 2010 is coming to a close, we notice that the economy is still stuck in a rut. Yes, some indicators have improved, but in terms of aggregate net progress, there's been little over the past year.Unlike the economy, stocks are soaring. From the March 2009 lows, the Dow Jones (DJI: ^DJI) has rallied as much as 77%, the S&P (SNP: ^GSPC) as much as 84% and the Nasdaq (Nasdaq: ^IXIC) as much as 105%. What was the 'futuristic vision' that propelled stocks and left the economy in the dust?
Unexpected Doesn't mean Impossible
The disconnect between stocks and the economy was very pronounced earlier this year. By April, many measures of sentiment had reached extremes not seen since the 2007, 2000 and even 1987 market tops. On April 16, the ETF Profit Strategy Newsletter stated: 'The message conveyed by the composite bullishness is unmistakably bearish.' Referring to the low put/call ratio, the Newsletter remarked: 'Once prices do fall and investors get afraid of incurring losses, the only option is to sell. Selling, results in more selling. This negative feedback loop usually results in rapidly falling prices.'A few weeks later, a 'Flash crash' visited Wall Street and injected a healthy dose of reality. Since the market was repelled by the 61.8% Fibonacci retracement level (a common retracement level for counter trend rallies), which coincided with extremely bullish sentiment, I assumed that the April high would not be broken. But it was. Why?
Liquidity Explained
The effect of supply and demand on prices is almost as well established as the law of gravity. While it's impossible to defy gravity, there's a crafty group of people who've found a way to tamper with the law of supply and demand. As it turns out, if you artificially inflate demand, prices will rise. The only organization big enough to pull off such a stunt is the Fed. And as unethical as it may seem, the Fed is using (as in rewarding) banks (NYSEArca: KBE - News) to do just that. The image below illustrates how quantitative easing (QE2) is designed to inflate asset prices. In short, via QE2 the Federal Reserve injects fresh money into banks. Since banks are not lending (there's just been another drop in consumer loans), they use the money to buy assets across the board (the November issue of the ETF Profit Strategy Newsletter includes a detailed analysis of this process and the long-term effect on asset prices). [Chart] Trading volume has been historically low, so the effect of extra liquidity ($105 billion over the next month) is magnified. Extra liquidity is the only explanation for the rare phenomenon of all asset classes rising at the same time. Do you remember the purpose of asset allocation and diversification? Asset classes boom and bust at various cycles ... Not lately. Most asset classes rise and fall in tandem. That is as unhealthy as it is historically unusual…Is the Fed's open money spigot enough reason to turn bullish? To me it isn't. In fact, I can't think of a single government law, rule or incentive that hasn't backfired in some way, at some time. QE2 is likely to be no different. Up until last week, U.S. stocks, international stocks (NYSEArca: VT - News), emerging market stocks (NYSEArca: EEM - News), commodities (NYSEArca: GSG - News), gold (NYSEArca: GLD - News) and silver (NYSEArca: SLV - News) were rising in sync. Now, the three outrageously contrarian predictions I shared via the ETF Profit Strategy Newsletter aren't that outrageous anymore. The three predictions were: 1) A rising dollar 2) A falling or correction stock market 3) A falling or correcting commodity market…What caused and triggered the post 2007 meltdown? Easy credit fueled unsustainable growth for decades and falling real estate prices caused the collapse. The sub-prime mortgage debacle extends far beyond the mortgage market (worth about $10 trillion). Since sub-prime mortgages have been repacked, tranched, and leveraged many times over, the total problem is much bigger. The only way to recover real estate losses is for real estate prices to return to their 2006 highs. This isn't happening. Since the home buying tax credit expired, home prices have fallen 0.2% year-over-year, while the number of homes sold plummeted more than 25% compared to last quarter. In addition to rising real estate prices, I'd need to see falling unemployment. Not just the media's favorite headline jobless number (currently 9.6%), but real unemployment. The main reason unemployment has at least been stable is due to a shrinking labor pool, otherwise even the rosy 9.6% would be above 10%. Since a recovery in real estate prices and a decline in unemployment would not completely deal with the issue of over valuation, I would only become a cautious bull.
How to Navigate this Market
No doubt, the Fed's outright manipulation of the market is more than just a tempest in a teapot.' Various indicators (in particular sentiment) seem to have been skewed by the massive inflow of indiscriminate dollars. Nevertheless, as the post April 2010 performance shows (including the 'Flash Crash'), the market has not become entirely immune to its own forces. The Fed is simply creating a bigger … bubble…’

Market Sell-Off: The Realization That QE Is Not Inflationary Roche [ Again, Mr. Roche is not quite correct as to why, but correct as to the fed’s failure and sell-off nevertheless, the reasons for which are still extant and further downside in the offing. ] ‘The QE trade is unwinding in dramatic fashion as the market slowly realizes that QE is not in any way inflationary. As I mentioned last week the smart money markets (fixed income and FX) were foreshadowing this as early as last week. The air pocket created by Ben Bernanke created an incredible trading opportunity for investors who weren’t blinded by confidence in the Federal Reserve. Just two weeks ago I said:

Would add (to shorts) into any move over 1200. Would LOVE to see 1220.

My position is that the market is misinterpreting the economic impact of QE in the long-term. My market position has always been that we could rally to these levels and that at these levels the market has become overly optimistic. If I am wrong I will lose some money and move on. It’s part of the business.

Like clockwork the market touched 1220, bounced and sold-off. The carnage across markets is broad. The only thing rallying is volatility, USD and US treasuries. In essence, the leveraged QE inflation trade is collapsing. You can thank Ben Bernanke for this. When you create distortions in the market you get volatility, uncertainty and ultimately a collapse in prices. Keeping market prices “higher than they otherwise would be” is not a recipe for economic growth. The most worrisome development is dissension inside the EMU. Austria is now threatening to withhold their contribution to the Greek bailout unless Greece can prove that they have fulfilled their requirements for aid:

The cost of insuring against default by Greece and the premium investors demand to hold the country’ bonds rather than lower-risk German Bunds jumped on Tuesday after Austria said Athens had not met aid commitments.

Five-year credit default swaps were 100 bps wider on the day at 950 bps, according to monitor Markit, while the 10-year yield spread between Greek and German government bonds was 15 bps wider at 923 bps.

Greece has not fulfilled commitments for its European Union-backed aid package, Austrian finance minister Josef Proell said on Tuesday, adding that Vienna had not yet submitted its contribution for December.

That’s not the only concern in the markets. Municipal bonds in the US continue to crash as a market that was priced for perfection now begins to price in some risk. Commodity markets are being crushed under the pressure of failing QE and tighter monetary policy in China. And ultimately U.S. stocks have finally succumbed to reality.

click to enlarge images

chart1…out (Figure 1)

chart2 (Figure 2)

chart3 (Figure 3) …‘

Lynn Reaser: Significant Profit-Taking Ahead

Ron Paul on Supervising the Fed You Tube | Rep. Ron Paul, (R-TX), on why he wants an audit of the Federal Reserve.

Weaker Dollar Seen as Unlikely to Cure Joblessness CNBC | The declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.

NY Fed: New York state manufacturing plunges ‘unexpectedly’ AFP [ Yeah, right! That global hub of manufacturing activity, sinkhole new york … Unexpected … riiiiight! … There must have been a slowdown in fraudulent paper securities production! ] | New York state manufacturing unexpectedly plunged in November, the first contraction since July 2009 when the US economy exited recession.

Fed Easing Is Not Aimed at Weakening US Dollar: Dudley [ It doesn’t matter what they say … you can’t believe a word they say, like no-recession ben shalom bernanke … and, contrary to rhetoric, their intent was as preceding the last crash was to inflate earnings to froth the stock market (to create the all too familiar bubble for wall street frauds and insiders to commission with high frequency churn-and-earn trade programs and sell into ) by debasing the fiat Weimar dollar currency. ] New York Fed President Bill Dudley, in one of the first Fed interviews since the central bank’s policy came under attack at the G20 meetings in Seoul, said critics were “off base” to believe the aim of the policy is to weaken the U.S. dollar.

Weaker Dollar Seen as Unlikely to Cure Joblessness A weakening currency traditionally helps a country raise its exports and create more jobs for its workers. But the declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.

Inflation rises unexpectedly to four-month high Bank of England Governor Mervyn King has had to dig out his headed notepaper once more to write a letter to the Chancellor explaining why UK inflation is too high.

Ireland told: Take EU bailout or trigger crisis An increasingly isolated Irish government was coming under mounting pressure tonight to seek an EU or International Monetary Fund bailout within 24 hours amid fears that contagion from its crippled banking sector might spread through the weaker eurozone countries.

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.

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.

Insiders selling (into the bubble as preceded last crash), this is an especially great opportunity to sell / take profits! Suckers’ rallies 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 ]

(11-16-10) Dow 11,023 -178 Nasdaq 2,469 -44 S&P 500 1,178 -19 [CLOSE- OIL $82.34 (-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 $1,332 (+24% for year 2009) / SILVER $25.23 (+47% for year 2009) PLATINUM $1,635 (+56% for year 2009) / DOLLAR= .74 EURO, 83 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

U.S. Justice System Doesn’t Actually Dispense Justice … It Just Serves the Powers-That-Be, Like the Other Branches of Government. Is anyone so foolish and naïve as to doubt this reality?

The horrible truth starts to dawn on Europe’s leaders The entire European Project is now at risk of disintegration, with strategic and economic consequences that are very hard to predict.

Greek deficit much bigger than estimate Greece’s goal of reducing its gargantuan debt received a fresh blow today when the EU statistics agency announced that the country’s 2009 budget deficit was much worse than first thought.

Euro under siege as now Portugal hits panic button The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a “high risk” of requiring an international bail-out.

Bloomberg Shills Carbon Tax to Fight Terrorism Kurt Nimmo | Is Bloomberg worried about terrorists in Canada?

Infowars’ TSA Abuse Story Number 1 Worldwide Aaron Dykes | Following a top headline on the Drudge Report, the shocking news story by Paul Joseph Watson & Alex Jones has gone completely viral, reaching #1 on Alexa.com’s “Hot Pages.”

TSA Now Putting Hands Down Fliers’ Pants Paul Joseph Watson & Alex Jones | Big Sis turns up the heat: New enhanced pat-down more invasive.

Ireland: Join the IMF-EU Borg Hive or Face the Abyss Kurt Nimmo | Ireland has yet to crawl to the IMF with hat in hand.

TSA Targets Tyner In Effort To Chill Nationwide Backlash Paul Joseph Watson | New CBS poll shows vast majority oppose groping measures.

Nato chief says there is no alternative to staying in Afghanistan Telegraph [ Oooooh! Sounds like a plan! ]| Anders Fogh Rasmussen said NATO would commit the alliance to train and support Afghan troops battling the Taliban in substantial numbers through to the 2014 deadline for local forces to take over security.

Britain’s top soldier: al-Qaeda cannot be beaten SINA.com | Violence across Afghanistan is at its worst since the Taliban were overthrown by US-backed Afghan forces nine years ago, with civilian and military casualties at record levels despite the presence of about 150,000 foreign troops.

Cash-hungry US war Ind stays armed as schools & clinics close Russia Today | Republicans were elected in mid-term elections on a promise to reduce the budget, yet they explicitly exempt the defense budget [ Which of course is totally preposterous … and self-destructive! ].

The Food Inflation Nightmare Is About To Hit 40% Of The World’s Population Overnight, the threat of further Chinese tightening multiplied as a result of food price inflation. A basket of 18 key vegetables saw their prices increase by 62.4%, year-over-year, in the first 10 days of November.

George W. Bush Confronted on 9/11 & war crimes in Florida We Are Change | George Bush Jr. comes to Florida to promote his new book , “Decision Points”,memoirs, we are change tampa confront him on 9/11,torture and him being a war criminal.

Dr. Kelly was murdered: British experts Press TV | Drugs experts leading an inquiry into the death of Britain’s former weapons inspector in Iraq, David Kelly, say his death was “murder” and not suicide.

Euro under siege as now Portugal hits panic button Montreal Gazette | The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a “high risk” of requiring an international bail-out.

Drudgereport: START ON STOP!RANGEL GUILTY...
Old razzle dazzle doesn't save 20-term Dem... Rioters attack UN peacekeepers in Haiti... SHOCK POLL: ONLY 26% OF PUBLIC THINKS OBAMA WILL BE REELECTED...
Emanuel: I never believed in bipartisanship... Woman becomes nation's 1st transgender trial judge...OAKLAND, Calif. – ‘A 49-year-old California patent lawyer has been elected as the nation's first openly transgender trial judge. Alameda County elections officials say Victoria Kolakowski beat prosecutor John Creighton 51 to 48 percent — a margin of nearly 10,000 votes — in the Nov. 2 election to fill the vacancy in California's Superior Court …’

Witnessing the birth of a black hole (Washington Post) [ Geeh! And here I thought this was a story about that sinkhole new york / wall street /nyc metropolitan area including jersey, ct, etc.. And here’s a good one … The New York Fed's Comic Book Explaining Monetary Policy [ Wow! This is at once both scary and tragic; and as well, a total joke. They are serious … criminals / jokesters / fraudsters! The sinkhole new york fed? … Where’s that missing $4 trillion, etc.? Here’s an archived website copy for your records. http://albertpeia.com/comic_monetary.pdf ] ]

Petraeus warns Afghans about Karzai's criticism of U.S. war strategy (Washington Post) [ Riiiiight! It would be so foolish of them to argue with or question such a nation-bankrupting / destroying failed strategy (by even his own prior, stated, unmet standards / criteria.) ]

Study: Million-dollar college presidents are on the rise (Washington Post) [ I think the more correct question must be, ‘what isn’t over-priced / overvalued in america? … Certainly executives who lay-off , ie., 10% of their workforce and bonus themselves hundreds of millions (ie., fiorina, whitman, etc.), or unprosecuted frauds on wall street with their continued frauds / scams and churn-and-earn high-frequency trading, etc., are over-priced / overvalued.. Then there’s the results, which though difficult to quantify, certainly must compare globally because indeed, to some extent, beyond the hype (ivy league vegetable gardens, etc.), some management authorites would say you’re but ‘paying the job’. ] Nationwide, 30 chief executives of private colleges earned more than $1 million in total pay and benefits in 2008, according to a report released Sunday.

Hopes of holiday hires hinge on spending (Washington Post) [ Come on! Does anybody at all realize how desperately preposterous it is to be talking up temporary holiday hires as some kind of a significant and potentially auspicious development, panacea, etc.? What it does mean is how great a failure no-recession ben shalom bernanke, et als have been and continue to be. They haven’t even got a clue!] Retail has been a haven for workers seeking flexible schedules, but that safety net has grown increasingly crowded since the recession.

E.U. considers bailout for Ireland (Washington Post) [ Sounds like a plan … Then there’s Greece's deficit revised to largest in E.U. , and, closer to home, California: America's Greece ‘There is no state in our union suffering a bigger fiscal fiasco than California, with its structural budget deficit, $500 billion unfunded pension liability, and double-digit unemployment rate…’ ]

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

You may post a comment on my blog on any topic: http://alpeiablog.blogspot.com

Wednesday, November 17, 2010

November 17, 2010 posts

Business / Economic / Financial

Soros: Conditions ‘pretty perfect’ for gold Reuters | Billionaire investor and philanthropist George Soros may be cutting back on his gold bets, but he says the precious metal still has some kick to it.

Rothschild-linked author pens “Five Myths About the Federal Reserve” in Washington Post The American Dream | There have been so many attacks on the Federal Reserve recently that the mainstream media now feels almost forced to try to defend their actions.

Former Treasury Secretary Rubin: Bond Market Could Implode; Vote to Increase Deficit Could be the Trigger EconomicPolicyJournal.com | He said Congress’ vote on raising the deficit ceiling next spring could be the “trigger” for a rout in the Treasury market.

Fed May Hesitate on More Easing After Critics Question Mandate The Federal Reserve is facing the fiercest political assault on its powers in three decades as it struggles to help revive the U.S. economy.

George Soros also profiting off controversial new TSA scanners Be sure and read Tim Carney’s Examiner column today on the politically-connected lobby for the controversial new TSA scanners that are upsetting airline employees and travelers everywhere.

Soros: Conditions ‘pretty perfect’ for gold Billionaire investor and philanthropist George Soros may be cutting back on his gold bets, but he says the precious metal still has some kick to it, as long as conditions like low interest rates prevail.

TODAY Congress Will Try – By Secret Vote – to Retroactively Legalize Foreclosure Fraud and Forgery By the Big Banks … Call Congress and Say NO Forgery of mortgage documents is systematic and widespread.

New French defence minister says Afghanistan a trap Reuters | The war in Afghanistan is a trap for all parties involved and France will discuss how to draw down its troop presence at a NATO summit this week.

DHS Source: TSA Infuriated With Coverage Of Nationwide Backlash Paul Joseph Watson | No Grope, No Fly: TSA Refuses To Back Down: But lawmakers and local authorities prepare to take on feds.

Banksters Move to Gut Aspects of Financial Reform Bill Kurt Nimmo | Banker lobbyists are crawling all over the district of criminals like blood thirsty ticks on a swamp dog.

TSA Hit With Lawsuits As Revolt Explodes Paul Joseph Watson | In one shocking incident, TSA goons pulled down woman’s blouse, exposing her breasts, and laughed about it.

American Idle Keith Johnson | Americans—in large part—have become nothing more than stupid, scared, spoiled rotten slaves to their favorite TV programs, politicians and electronic toys.

The History of Health Tyranny: Codex Alimentarius, part 1 Brandon Turbeville | Codex is merely another tool in the chest of an elite group of individuals whose goal is to create a one world government in which they wield complete control.

Fears of New Food Crisis as Prices Soar The bill for global food imports will top $1,000bn this year for the second time ever, putting the world “dangerously close” to a new food crisis, the United Nations said.

District Attorney: Feds Are Not Above The Law The district attorney’s office in San Mateo County, California has promised to follow up any complaints of over the top TSA pat-downs with prosecutions on the charge of sexual battery, reports ABC 7 News.

Germany warns of imminent terror attacks German Interior Minister Thomas de Maizière on Wednesday warned the government had indications Islamists were planning terrorist attacks in Germany later this month.

Iran intercepts ‘unknown planes’ Iran’s armed forces have intercepted six “unknown planes” that intruded into the country’s airspace during aerial defence manoeuvres, the spokesman for the exercise was quoted as saying on Wednesday.

The Washington Post Runs An Article Entitled “Five Myths About The Federal Reserve” Authored By An Economist Linked To The Rothschilds There have been so many attacks on the Federal Reserve recently that the mainstream media now feels almost forced to try to defend their actions.

Soros: China has better functioning government than U.S. If nothing else, Glenn Beck probably has his top story set for tonight’s show.

Ron Paul on Supervising the Fed You Tube | Rep. Ron Paul, (R-TX), on why he wants an audit of the Federal Reserve.

Weaker Dollar Seen as Unlikely to Cure Joblessness CNBC | The declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.

Weaker Dollar Seen as Unlikely to Cure Joblessness A weakening currency traditionally helps a country raise its exports and create more jobs for its workers. But the declining value of the dollar may not help the United States increase economic growth as much as it might have in the past.

Inflation rises unexpectedly to four-month high Bank of England Governor Mervyn King has had to dig out his headed notepaper once more to write a letter to the Chancellor explaining why UK inflation is too high.

U.S. Justice System Doesn’t Actually Dispense Justice … It Just Serves the Powers-That-Be, Like the Other Branches of Government. Is anyone so foolish and naïve as to doubt this reality?

The horrible truth starts to dawn on Europe’s leaders The entire European Project is now at risk of disintegration, with strategic and economic consequences that are very hard to predict.

Greek deficit much bigger than estimate Greece’s goal of reducing its gargantuan debt received a fresh blow today when the EU statistics agency announced that the country’s 2009 budget deficit was much worse than first thought.

Euro under siege as now Portugal hits panic button The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a “high risk” of requiring an international bail-out.

Bloomberg Shills Carbon Tax to Fight Terrorism Kurt Nimmo | Is Bloomberg worried about terrorists in Canada?

Infowars’ TSA Abuse Story Number 1 Worldwide Aaron Dykes | Following a top headline on the Drudge Report, the shocking news story by Paul Joseph Watson & Alex Jones has gone completely viral, reaching #1 on Alexa.com’s “Hot Pages.”

TSA Now Putting Hands Down Fliers’ Pants Paul Joseph Watson & Alex Jones | Big Sis turns up the heat: New enhanced pat-down more invasive.

Ireland: Join the IMF-EU Borg Hive or Face the Abyss Kurt Nimmo | Ireland has yet to crawl to the IMF with hat in hand.

TSA Targets Tyner In Effort To Chill Nationwide Backlash Paul Joseph Watson | New CBS poll shows vast majority oppose groping measures.

Britain’s top soldier: al-Qaeda cannot be beaten SINA.com | Violence across Afghanistan is at its worst since the Taliban were overthrown by US-backed Afghan forces nine years ago, with civilian and military casualties at record levels despite the presence of about 150,000 foreign troops.

Cash-hungry US war Ind stays armed as schools & clinics close Russia Today | Republicans were elected in mid-term elections on a promise to reduce the budget, yet they explicitly exempt the defense budget [ Which of course is totally preposterous … and self-destructive! ].

The Food Inflation Nightmare Is About To Hit 40% Of The World’s Population Overnight, the threat of further Chinese tightening multiplied as a result of food price inflation. A basket of 18 key vegetables saw their prices increase by 62.4%, year-over-year, in the first 10 days of November.

George W. Bush Confronted on 9/11 & war crimes in Florida We Are Change | George Bush Jr. comes to Florida to promote his new book , “Decision Points”,memoirs, we are change tampa confront him on 9/11,torture and him being a war criminal.

Dr. Kelly was murdered: British experts Press TV | Drugs experts leading an inquiry into the death of Britain’s former weapons inspector in Iraq, David Kelly, say his death was “murder” and not suicide.

Euro under siege as now Portugal hits panic button Montreal Gazette | The euro is facing an unprecedented crisis after another country indicated on Monday night that it was at a “high risk” of requiring an international bail-out.

Petraeus warns Afghans about Karzai's criticism of U.S. war strategy (Washington Post) [ Riiiiight! It would be so foolish of them to argue with or question such a nation-bankrupting / destroying failed strategy (by even his own prior, stated, unmet standards / criteria.) ]

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