Al Peia's Blog: November 26, 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 ]

John Hussman's Index: Stocks Are 13% Overvalued John Hussman, manager of Hussman Strategy Growth Fund (HSGFX), proposed price to peak 10 year average earnings as a long term stock market valuation metric. Compared with the normal one year price to earning ratio, Price to Peak Earnings would eliminate short term noise. This is similar to Shiller's ‘Cyclically Adjusted Price Earning’ ratio (CAPE10) and Warren Buffett’s stock market GNP/GDP metric.In his weekly commentary on Dec 5, 2005, titled as 'Earnings Revert to the Mean, Stocks Will Struggle', he proposed a simplistic method: "buy when Price to Peak Earnings is lower than 15 and sell when it exceeds 19.5". John Hussman has been using this as the valuation yardstick to manage the Hussman Strategic Growth Fund HSGFX.A model portfolio called P Hussman Peak PE Market Timing Strategy Buy 15 Sell 19.5 Weekly is also maintained to live monitor the strategy suggested in 'Earnings Revert to the Mean, Stocks Will Struggle'. click [chart] On Nov 19, 2010, the ratio of Real Price to the average of last 10 year Peak Real Earnings (13.44) to its long term average (11.93) is 1.13. The US stock market is 13% overvalued. We will be tracking this number biweekly.

Howard Davidowitz on the Economy: "Here Are the Numbers ... WE'RE BROKE!" The U.S. economy "is a complete disaster," Howard Davidowitz declared here in July, the most recent in a string of dire predictions from Tech Ticker's most entertaining guest.On the eve of Thanksgiving, I asked Davidowitz if he had any regrets, or was ready to throw in the towel given recent signs of economic revival. Are you kidding me? "Here are the numbers...we're broke," Davidowitz declares, noting the U.S. government goes $5 billion deeper into debt every day and is facing $1 trillion-plus annual deficits for the next decade. "In other words, we're bankrupt."As with the economy, Davidowitz is unwaveringly consistent in his views on President Obama, calling him "deranged, dysfunctional and discredited."Results of the midterm election show "the people of this country think we are in a catastrophe," he says. "I'm with them."Check the accompanying video for more of Howard's unfettered opinions and stay tuned for additional clips from this interview. And...Happy Thanksgiving! Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

Big New York insider trading probe spawns another (AP) ‘NEW YORK – An insider trading case last year that federal authorities said was the biggest ever is providing a recipe for another case that may be even bigger. The current case is largely an extension of work that led to the arrest of Galleon Group founder Raj Rajaratnam in October 2009. The Galleon investigation marked the first time that federal authorities used wiretaps in an insider trading probe. Similarly, wiretaps led to the first arrest in the latest case. Don Ching Trang Chu, a consulting firm executive, was arrested Wednesday for allegedly providing private information about a company's corporate earnings to a hedge fund. The FBI this week searched the offices of three hedge funds and subpoenaed some of Wall Street's most influential firms, including Janus Capital Group and SAC Capital. The Galleon case has resulted in 23 arrests and 14 guilty pleas. Many of those arrested are cooperating in the latest investigation ...’

The Big Disconnect: U.S. Corporate Profits Rising With No Job Growth [ This dynamic is far more dire than presented hereafter; first, profits are inflated by the debasement of the u.s. fiat paper currency ( see infra, ie., Davis, etc.) ; second, there has been an irrevocable structural shift in the u.s. economy in the most negative sense, formally cheered by the churn-and-earn frauds on wall street, and, those jobs really have been shipped overseas and won’t be coming back. ‘The nation’s been taken to the cleaners’ as wall street cheered. Another example: DOW down 142, up 150, down 95 on three successive days. What changed? Hundreds of millions in (computerized high frequency trade) commissions each day taken out of the real economy by those parasitic frauds on wall street. ] Hunkar ‘U.S. companies earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report released Tuesday. In non-inflation adjusted terms, this is the highest figure since the government started keeping track over 60 years ago. Since the credit crisis ended, many businesses have resumed growing profits – but have not resumed creating jobs. The unemployment rate remained unchanged at 9.6% in October, with 14.8 million persons unemployed, according to official figures. U.S. firms slashed 8.5 million jobs during the last recession; millions of these workers remain unemployed. However, corporate profits are soaring to pre-crisis levels. This is because American businesses are able to increase profits by rising productivity, increasing exports, cutting costs, and in some cases raising prices. Productivity simply means extracting more or the same amount of work using fewer workers. Globally, U.S. companies are leaders in productivity due to the corporate culture prevalent in the U.S. and the fierce competition in many industries. Hence, in the current situation, they are wringing out more profits with fewer workers. This concept was illustrated in a recent Bloomberg article:

Campbell (CPB), the world’s largest soup maker, DuPont Co. (DD), the third-biggest U.S. chemical maker, and United Parcel Service Inc. (UPS), the world’s largest package-delivery business, are asking workers to help save cash by working smarter with existing technology. A potential cost: Efficiency gains reduce the chances recession-casualty jobs will come back.“When the productivity growth comes, then watch out because that is when companies start not needing so much labor,” Edmund Phelps, a Columbia University economist and Nobel laureate, said in an interview.Some 142 non-financial companies in the S&P 500 had improvements in operating margins of three percentage points or more from the final three months of 2007, when the previous expansion peaked, compared with the most recent quarter, according to data compiled by Bloomberg as of yesterday.

The chart below shows annualized corporate profits, both before and after taxes, since 1947: [chart]

The following chart shows corporate profit growth in terms of GDP: [chart]

(Charts source: Bureau of Economic Analysis, via Haver Analytics, as published by The New York Times.)

It represented 11.2% of GDP last quarter, a figure that has been growing for seven consecutive quarters. Therefore, for the past seven quarters, companies have been earning higher profits with almost no hiring of workers, since unemployment remains stubbornly high at around 10 percent. The Economist wrote about this dichotomy in the U.S. economy back in August in an article entitled “Profits, But No Jobs“:

Americans used to love to hear tales of success in business. One of the many oddities of the current joyless economic recovery is that this traditional enthusiasm is strikingly lacking. Corporate America has bounced back impressively. The quarterly results season that is now nearly over has revealed that profits are back within a whisker of the all-time highs achieved before the downturn in late 2008. By some calculations, the rate of recovery of profits from their trough is the strongest since the end of the Great Depression. Yet nobody seems pleased. Not investors, who have failed to push up share prices in the way this sort of earnings growth would have caused them to do at this stage of previous economic cycles. Certainly not politicians, who complain that firms are “hoarding” cash and creating hardly any new jobs. As Robert Reich, an economist at Berkeley and former labour secretary under Bill Clinton, puts it: “Bottom line: higher corporate profits no longer lead to higher employment. We’re witnessing a great decoupling of company profits from jobs.” [Emphasis mine.] Corporate America is reaping the rewards for tough actions taken after the financial markets collapsed in September 2008.

Yes indeed. There is a huge disconnect between rising corporate earnings and job growth. This recovery is not only a “jobless recovery” but also a “joyless recovery." According to S&P, non-financial companies in the S&P 500 held over $1 trillion in cash at the end of the first quarter. Much of this cash is neither getting paid out as higher dividends to investors, nor being spent on capital investments …’

Debt turmoil, contagion fears sweep Europe (AP) ‘LISBON, Portugal – Europe struggled mightily Friday to keep the debt crisis from engulfing country after country. Portugal passed austerity measures to fend off the speculative trades pushing it toward a bailout and Ireland rushed to negotiate its own imminent rescue.As Portugal and Spain insisted they will not seek outside help, creating an eery sense of deja-vu for investors, Europe braced for what seems inevitable — more expensive bailouts.The Portuguese Parliament approved an unpopular debt-reducing package, including tax hikes and cuts in pay and welfare benefits. But while that helped to avoid a sharper deterioration in bond markets, the sense among analysts was that the move had only bought a little time.Adding to the pressure, Ireland's major banks were hit with credit downgrades — one to junk bond status — as speculation mounted that the EU-IMF bailout of Ireland, to be revealed within days, would require investors to take losses, a possibility earlier denied by officials."This confusing `pea-soup' of indecision, vacillation and disunity by the EU is beginning to create unnecessarily seismic waves of fear in international bond and money markets," said David Buik, markets analyst at BGC Partners.Yields in fiscally weak eurozone countries remained near record highs Friday, stocks slumped across the board and the 16-nation euro lost another 0.8 percent on the day to trade at $1.3241, just off two-month lows.Portugal's high debt and low growth have alarmed investors, but the government insists it doesn't require an international rescue — a line ominously reminiscent of claims by Greece and Ireland before their massive rescues.Analysts say markets need more reassurance from EU leaders that the rot can be stopped in Portugal before spreading to Spain, the continent's fourth-largest economy — a scenario that would threaten the 16-nation euro currency itself …’

Investor Sentiment and Fund Flows Templeton ‘Two weeks ago bullish investor sentiment was reported at its highest level of the year coming in at 57.56%. At the same time the S&P 500 Index hit its yearly high of 1,225. In the following week the bullish sentiment level fell over 17 percentage points to 40% and the market has trended lower since that time. In the latest week the bullish sentiment level has ticked higher to 47.4% with the market trading pretty much in a volatile range. [chart] From The Blog of HORAN Capital Advisors Click, Data Source: American Association of Individual Investors This market volatility seems to be resulting in investors having uncertainty about investing in equities. The below chart (click to enlarge) shows investors continue to pour money into bond mutual funds at the expense of equity mutual funds. The chart captures data through mid September and the subsequent table (click to enlarge) contains weekly data for November. [chart] From The Blog of HORAN Capital Advisors

[chart] From The Blog of HORAN Capital Advisors Table Data Source: ICI …’

Instead of Actually Dealing With Rampant Mortgage Fraud, Fed Orders More Faux Stress Tests Well-known British economic writer Jeremy Warner said yesterday that the European stress tests were a sham.

The Day the Dollar Died The first 12 hours of a U.S. dollar collapse!

Euro-Zone Debt Crisis Escalates Wall Street Journal | The euro zone’s sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors’ fears.

Putin proposes EU become reserve currency [ As previously stated, Putin’s positions on matters of global concern should be given great deference. ] Russia Today | Russia and Germany should dramatically increase their economic co-operation. That’s the message from Russian Prime Minister Vladimir Putin to some of Germany’s top industrialists at a business forum in Berlin.

Insider-Trading Probe Reinforces Belief Market is Rigged Fox Business | The insider-trading dragnet that has rocked Wall Street this week appears likely to reinforce the feeling that the house always wins.

Euro-Zone Debt Crisis Escalates The euro zone’s sovereign debt crisis escalated Friday as the market homed in on Spain as another potential weak spot, leaving officials scrambling to quell investors’ fears.

Insider-Trading Probe Reinforces Belief Market is Rigged The insider-trading dragnet that has rocked Wall Street this week appears likely to reinforce the feeling that the house always wins.

CLSA’s Chris Wood Chimes In On The Endless European Banker Bailouts CLSA’s Chris Wood has released his latest outlook on the world is out, and it is getting progressively gloomy: when even a banker says that he is “aghast” at the “grotesque” extent to which senior creditors are being bailed out left and right in Europe, one has to stop and wonder.

Economic Implosion Sets The Blame Game In Motion When a child bounds about the house and breaks his mother’s favorite flower vase or creepy ‘Precious Moments’ figurine, he usually blames the dog before he blames himself.

The 17 Things Worrying Investors This Week Lloyd's Wall of Worry

Week of November 22-26
Worry Count: 17

CHINA: 1,330,044,605 people can’t be wrong.

The PIIGS: Fasten your seatbelts. It’s gonna be a long, bumpy, expensive, weird, (insert your own adjective here) freak show of a ride.

CALIFORNIA AND THE OTHER 49 STATES: Not yet as dire as “The PIIGS”. Might I suggest the classier moniker of “The Prosciuttos” for the American basket-case states?

QE II: Gobble?

U.S. ECONOMY: The “Punky Brewster” of the global economic landscape.

UNEMPLOYMENT: Only thing worse than losing your job, losing your unemployment check. At least there’s the holiday season to cheer everyone up (read: heavy sarcasm).

TAXES: Praying to the Financial Market Gods that we don’t have another TARP-like vote fiasco.

OBAMA ADMINISTRATION PART II: Still two years before the Pres. election and the peanut gallery is already pleading for a Hail Mary Pass to get them back in the game.

HFT: Instead of beating up these liquidity supplying traders, let’s honor them with their very own stock exchange. But wait -- with no retail saps to pick-off they will never get that Day 1 opening bell tick. Perfect.

XMAS 2010: As my professor friend Nick says, “Nowadays Americans are dining off of two menus – The Million Dollar and the $0.99 Cent.” And both are pissed about it.

CURRENCIES: Poor Mr. Greenback. Does someone need a hug?

HOUSING CRISIS: Price Stabilization – Are we there yet? Just a little bit more. Are we there yet? Just a little bit more. Are we there yet? Just a little bit more….

INFLATION/DEFLATION: Fed Chief Ben B. comes out swinging from his heels in defense of inflation promotion. Don’t punch yourself out as this one is likely to go the distance.

COMMODITIES: Corrected but still sky high; fortunately these prices are only affecting core, basic, life-sustaining necessities and sparing our electronic gadgets and plus-sized SUVs. Whew!

INSIDER TRADING: Another black eye for Hedge Funds. I estimate that makes black eye number 6,597.

INTEREST RATES: South Korea and China slowly turning up the dial to “11”. On the other hand the U.S. has removed the dial altogether. This never ends well….

NORTH KOREA: Here we go again.

Why We Should Be Skeptical of Any Near Term Strength in the Markets [ Keep in mind, the scenario is even worse than the dismal one described as follows because the debasement of the dollar has artificially inflated earnings substantially and lowered P/E multiples thereby (see, ie., Davis, etc., infra)] The Big Disconnect: U.S. Corporate Profits Rising With No Job Growth [ This dynamic is far more dire than presented hereafter; first, profits are inflated by the debasement of the u.s. fiat paper currency ( see infra, ie., Davis, etc.) ; second, there has been an irrevocable structural shift in the u.s. economy in the most negative sense, formally cheered by the churn-and-earn frauds on wall street, and, those jobs really have been shipped overseas and won’t be coming back. ‘The nation’s been taken to the cleaners’ as wall street cheered. Another example: DOW down 142, up 150, down 95 on three successive days. What changed? Hundreds of millions in (computerized high frequency trade) commissions each day taken out of the real economy by those parasitic frauds on wall street. ] Come on! Rosy numbers on consumer sentiment, unemployment (far better than private forecasts) from the government prior to the holiday so-called ‘shop till you drop’? How can anyone believe anything they say? Najerian interviewed by Motek chimes in with the reason for good retail cheer; viz., people have stopped paying their mortgages and are using the funds to purchase retail goods; while Davidowitz adds that with record numbers of americans on food stamps, real unemployment at 17+, and wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION … the high end stores / jewelers will do well … daaaaah! And, with insiders and wall street frauds selling into the bubble as preceded last crash, this is an especially great opportunity to sell / take profits! Suckers’ rally on light volume, full moon, and government complicity (false data / reports) 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 ]

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.’

(11-26-10) Dow 11,092 -95 Nasdaq 2,534 -9 S&P 500 1,189 -9 [CLOSE- OIL $83.76 (-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 $1,360 (+24% for year 2009) / SILVER $26.65 (+47% for year 2009) PLATINUM $1,651 (+56% for year 2009) / DOLLAR= .75 EURO, 84 YEN, .64 POUND STERLING, ETC. (How low can you go - LOWER)/ http://www.federalreserve.gov/releases/h15/update 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

Spain, Portugal and Belgium set to follow Ireland into abyss as debt crisis threatens to destroy the euro New fears have been raised about the future of the euro with the domino effect of faltering economies spreading today. The latest nation to get sucked into the crisis is Belgium after market traders pushed the cost of insuring the country’s debt to record levels.

South Korea to defy North by sending in troops South Korea’s president vowed today to increase the number of troops on the island hit by a North Korean artillery barrage.

N. Korea vows more attacks North Korea threatened further provocation against South Korea, Thursday, raising the question of its next move as Washington and Seoul prepare military drills in the wake of Pyongyang’s deadly artillery attack earlier this week.

Tarpley: US using Korea to make money North Korea and South Korea exchanged artillery fire yesterday. All the while the United States dollar has strengthened as bad blood between North and South Korea means big business for the US. Investigative journalist Webster Tarpley says the financial district is taking part in a flight to safety moving money in the US treasury, using North Korea as a catalyst to make other nations depend on the US.

China Warns U.S. On Naval Exercises as North Korea Promises Retaliation China has warned the United States against engaging in military activity on its coastline. It was reported today that Obama would be speaking with his Chinese counterpart Hu Jintao in coming days. China has refused to condemn North Korea’s attack.

CHINA TELLS AMERICA: Turn Around The USS George Washington China has warned against military activity near its coastline ahead of U.S.-Korea naval exercises, according to Reuters.China’s Foreign Ministry said in an online posting that naval exercises risks starting a war: “We oppose any military act by any party conducted in China’s exclusive economic zone without approval.”

Alex Jones Show: Judge Napolitano On TSA Storm Trooper Behavior Infowars.com | Judge talks about TSA thuggery, the Constitution, and North Korea.

China Warns U.S. On Naval Exercises as North Korea Promises Retaliation Kurt Nimmo | As U.S. warships steam to the Yellow Sea, North Korea warns it will retaliate with waves of missiles.

The TSA and America’s Turning Point Hobbes | This battle must be won, for to lose it means losing everything.

Doctors sound TSA germ alert Bob Unruh | Some of the infections are “a tough little beast” and easily would be spread through the contact being used by the TSA.

Big Sis’ Street Scanners Target Of FOIA Request Paul Joseph Watson | EPIC attempts to uncover why feds are radiating Americans in their homes and vehicles at internal checkpoints.

Max Keiser: Teutonic Genie out of bottle, America punches itself in face Max Keiser, financial analyst and host of RT’s Keiser Report says Germany is ready to emerge as the world’s new superpower.

Ten Essential Steps To End A Nightmare We cannot be rescued by the current system because it is that system which is destroying our nations and families by design: using corrupted media-culture with divide-and-rule and false-flag terror deceptions to remove our freedoms.

Currency Crisis! So What Happens If The Dollar And The Euro Both Collapse? Some analysts are warning that the U.S. dollar is in danger of collapse because of the exploding U.S. government debt, the horrific U.S. trade deficit and the new round of quantitative easing recently announced by the Federal Reserve.

Syrian FM warns of war with Israel Syrian Foreign Minister Walid Moallem on Friday warned of the ramifications of a war with Israel. “There is no doubt that closing the horizons to peace may lead to a possible war. This option always exists in our region, as Israel usually outrageously evades the commitment to peace,” he told Russian newspaper Moscow News.

Potential Next UK Prime Minister Admits: “I’m a Socialist” ‘Yeah, I am a socialist,’ he replied. ‘I’m not embarrassed about it. I’ll tell you why I’m not embarrassed about it … there are big unfairnesses in our society, and part of the job of government is to bring about social justice and to tackle those unfairnesses. And that’s why I’m a politician, that’s why I’m in politics.’

Wikileaks set to release more top secret US diplomatic files Embarrassing top secret US diplomatic files are set to be made public by Wikileaks.

Now It’s Italy: Students Occupy Colosseum, Leaning Tower Of Pisa To Protest Cuts STUDENTS ACROSS ITALY have occupied buildings all around the country – including two of the its most iconic tourist attractions – in protest at proposed government cutbacks to university fundings.

‘We are facing new era of unrest’ warns Met chief as further protests are expected The head of the Metropolitan police has said the violence seen in the student protests will bring in a greater risk of civil unrest.

Europe a financial powder keg Europe is sinking ever deeper into a crisis of confidence that its leaders seem unable to stop, threatening the region’s political and social stability.

Polls Tell Different Stories On New Korean War Kurt Nimmo | Corporate and alternative media polls diverge significantly.

Alex Jones on the Keiser Report: Taking Down the Banksters RT | Max talks to Alex Jones about Google bombs, naked body scanners and ‘Crash JP Morgan Buy Silver’.

Deadlier Than Scanners: TSA To Spread Flesh-Eating Bacteria Paul Joseph Watson | Doctors warn of spread of communicable diseases through direct contact with skin; poses far greater risk to public health than statistical chance of being a victim of terrorism.

Endgame Legislation: Lame Duck Session Ushers in Tyranny Eric Blair | Both of these bills will likely become laws given their overwhelming support in Congress.

Violent Crime Rises in New York as … s New York Times

Sanitary Towel Prompts TSA To Grope Sexual Assault Victim Menstruating women beware. If you intend to travel, your panty-liners are now considered suspicious objects, after all you could be concealing a bomb in there.

TSA Hired Sex Offender Despite Prior Convictions Of Harassment and Stalking Channel 2 Action News reporter Tom Regan reviewed court records from Clinton County, Pennsylvania. According to the records, King was charged with nine offenses of harassment and stalking by communication in January 2001. A court clerk told Regan that King pleaded guilty and spent three months in jail for skipping a court appearance.

Daily Kos Obamanoids: TSA Just Following Orders When They Sexually Molest Your Child The Daily Kos says that TSA goons are just following orders when they sexually molest your child, therefore they are not to blame. Even their own readers go off big style in reaction to this putrid and pathetic defense of the indefensible.

Homeland Security To Install Hundreds Of Surveillance Cameras In Houston The city is installing 250 to 300 cameras at downtown intersections in an effort to prevent and fight terrorism and crime, part of a security initiative sponsored by the U.S. Department of Homeland Security.

Confirmed: TSA Switched Off Scanners To Defuse Opt Out Protest The majority of Newark’s full-body scanners were idle throughout much of the day, depriving most passengers of the chance to opt out of the controversial screening procedure even if they had wanted to.

Deadlier Than Scanners: TSA To Spread Flesh-Eating Bacteria Now that the TSA’s new pat down procedures include reaching inside people’s clothing and directly touching their skin and genitals, communicable diseases are set to soar, with doctors warning of a new wave of infections that will pose a greater risk to public health than any statistical probability of being a victim of terrorism.

Drudgereport: NKorea warns region is on brink of war...
China issues warning ahead of US-SKorea drills...
Sounds of new fire near island cause panic... american HOLIDAY NUTS:VIDEO: Crazed shoppers stampede at TARGET...
Marine stabbed at BEST BUY...
Shopper arrested after packing gun in belt; knives, 'pepper grenade'...
Mall food court placed on lockdown after fight, reports of gunshots...
Shopper arrested after cutting in line, raging...
Police called after 'thousands' rush TOYS R US...
Woman busted after gun threat at toy store...
Shoppers accuse WAL-MART of false advertising...
FACEBOOK posting leads to assault with frying pan, stabbing...
Woman jumps from bridge onto I-95...

EU Debt Crisis Escalates...
Now rescue threatens Germany...
Irish bond yields hit high, banks sink...
'Day of Reckoning' Nears...
Banks downgraded -- one to junk bond status...
Portugal Denies Report on Bailout...
Spain Bets on Budget Cuts... Pentagon to test 2nd space strike craft (illegal militarization of space … oh, they can afford it … riiiiight!) ...
Next Debt Crisis 'May Start in Washington'...

Progress in Afghan war called 'uneven' ( Washington Post ) [ Uneven? Riiiiight! The real question consonant with reality: Is there EVEN progress at all … just a little bit … un petit peux … teeny weeny, itsy bitsy, one iota of progress … A resounding NO! … unless you’re counting the magnitude of america’s defacto bankruptcy, anti-american sentiment, etc.. ]

U.S. deployment sends a message to China ( Washington Post ) [ And what message is that, pray tell … I’d say they’ve gotten the message and here’s the first installment of a reply to the multi-front contrived war / war mongering / pervasively corrupt, defacto bankrupt nation america … Drudgereport: CHINA, RUSSIA QUIT DOLLAR … Previous: N.Korean attack leaves U.S. with few options I’d be very concerned about the contrived nature of the incident as set forth by infowars.com / prisonplanet.com as follows: Korean War Crisis: Brought To You By Uncle Sam Despite the fact that South Korea admits it fired the first shots that prompted the North to retaliate, the vast majority of the establishment press are feverishly blaming North Korea for a new escalation in the crisis, while failing completely to acknowledge the fact that the whole fiasco was generated as a direct result of Uncle Sam’s policy through two separate administrations to ensure hereditary dictator Kim Jong-Il and his successors acquired the atom bomb. North Korea Attack Part Of RAND Plan For Total War? The exchange of artillery fire between North and South Korea, which the North says was started by South Korea firing shells during a military drill, could act as the catalyst for a huge new conflict that the RAND Corporation has been lobbying for over the past two years. ] North Korea's artillery attack on a South Korean island Tuesday, coupled with its choreographed rollout of a new nuclear program, has presented the U.S. with a massive strategic challenge. Photos: Artillery fire exchanged In sending the aircraft carrier USS George Washington to the Yellow Sea, the Obama administration says it is putting on a show of U.S. support for South Korea. Poll: How should U.S. proceed? Few good options for U.S.

Obama is hostage to a tepid economic recovery (Washington Post) [ Cheerleader? Wobama the B (for b* s*)? I think not … he’s been there, done that … that dog don’t hunt no more … this self-created fortress of failure is the direct consequence of failing to do as promised, particularly the war spending (could you imagine the macroeconomic effects of such funds if spent domestically rather than frittered away in foreign lands in illegal, contrived wars / conflicts which are contra-indicated by any rational criteria, prosecutions of the wall street fraud ‘big boys’, etc.. Don’t forget … america’s defacto bankrupt and pervasively corrupt. ] Obama faces the prospect of having to be a cheerleader for a tepid recovery.

Va. liquor privatization plan off by millions, report says (Washington Post) [ What can you expect from a d.c. suburb dominated by the cia, pentagon, et als, essentially an alphabet soup kitchen where ‘being there’ participants wrap themselves in flags as an excuse for their less than legitimate / productive activities which they posit as patriotism in the most self-interested forms otherwise known more colloquially as plain old-style corruption, crime, venality. Then there’s the purposeful lack of math skills that facilitates billions at at time going missing. I think for succinctness we may call this the moonshine effect which I observed, experienced directly: previous - Ex-Justice official: CIA may have exceeded limits (Washington Post) Wee doggies! This sounds like the stuff that SNL Weekend Update ‘Really’ skits are made of; also fitting into that list of queries as, ‘Is the Pope Catholic?’, ‘Do bears **** in the woods?’, etc.. Come on! Wake up! This is the kind of complicit cover-up / corruption found betwixt and between all three branches of the u.s. government leading ineluctably to america’s current decline and to which I’ve attested under penalty of perjury in the context of the RICO litigation [ http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm ].

Wall Street Is Laundering Drug Money And Getting Away With It Zach Carter | Wachovia was moving money behind literally tons of cocaine from violent drug cartels. It wasn’t an accident. ] A commission finds that the Republican governor's staff was too rosy in its estimates and also simply made mathematical errors.

Ireland unveils painful plan to cut spending (Washington Post) [ Things are gettin’ downright existential / philosophical; all this pain, suffering stuff … I’m waitin’ for them to start quotin’ Soren Kierkegaard’s ‘sickness unto death’ … yeah … things are that bad and coming soon to a region near you! Drudgereport:The Domino Effect... List of Problem Banks Grows... ‘…The number of banks on the Federal Deposit Insurance Corp's confidential "problem" list grew over the summer even while the overall industry posted solid net income. The FDIC says its list of troubled banks rose to 860 in the July-September quarter from 829 in the previous quarter. At the same time, the FDIC says banks earned $14.5 billion during the third quarter. That was a decrease from the previous quarter's result of $21.4 billion, but well above the $2 billion banks earned a year earlier ..’ ]The move comes as the near-bankrupt government scrambles to show negotiators from the International Monetary Fund and European Union that it can cut spending and raise more revenue to meet the conditions of a $115 billion rescue package. Related News Europe contagion worsens on Merkel's plan Ireland rating lowered by S&P Spain excludes bailout amid 'speculative attacks'

Come on! Rosy numbers on consumer sentiment, unemployment (far better than private forecasts) from the government prior to the holiday so-called ‘shop till you drop’? How can anyone believe anything they say? Najerian interviewed by Motek chimes in with the reason for good retail cheer; viz., people have stopped paying their mortgages and are using the funds to purchase retail goods; while Davidowitz adds that with record numbers of americans on food stamps, real unemployment at 17+, and wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION … the high end stores / jewelers will do well … daaaaah! And, with insiders and wall street frauds selling into the bubble as preceded last crash, this is an especially great opportunity to sell / take profits! Suckers’ rally on light volume, full moon, and government complicity (false data / reports) 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 ]

Wednesday's Data Dump: Durable Goods, Jobless Claims, Wages [ Dump indeed! As in stocks. After all, as bad as the durable goods data is, it no doubt is worse than they’re saying! ] The U.S. Bureau of Economic Analysis published several economic reports today that collectively offer a mixed bag of macroeconomic news. The updates on new orders for durable goods, personal income and spending, and weekly jobless claims are usually dispatched on separate days. Because of the Thanksgiving holiday tomorrow, all three were released this morning, leaving an unusually hefty dose of statistics to review. Here’s a brief tour of some of the noteworthy data points:
DURABLE GOODS (much worse than expected)
New orders for durable goods dropped a hefty 3.3% on a seasonally adjusted basis in October vs. the previous month. The drop reverses September’s revised 5.0% rise, the Census Bureau reports. It’s too soon to say if October’s retreat for new orders is a sign of things to come, but it’s troubling nonetheless. Indeed, we haven’t seen such a deep fall in durable goods orders since the 8% tumble in January 2009, when the financial crisis and recession were raging. The setback was widespread. Even after ignoring the volatile aircraft sector, or removing the government’s defense-related orders, October was still a losing month for durable goods orders. The only good news is that new orders are still up sharply vs. a year ago, rising more than 10% last month vs. October 2009. And let's remember, too, that this is a volatile series. It's also a crucial leading indicator, and so for the moment there’s a new reason to wonder about the staying power of the economic recovery. One month is hardly definitive proof of anything, but any excuse to worry will do these days. click [chart] for images
[chart]
PERSONAL INCOME & SPENDING
The trend was more encouraging for income and spending last month. Disposable personal income (DPI) rose by a seasonally adjusted 0.4% in October, more than repairing September’s modest 0.1% decline, according to the Bureau of Economic Analysis. DPI has increased every month this year except for September’s mild setback. Meanwhile, consumer spending marched upward last month as well. Personal consumption expenditures (PCE) advanced in October by a respectable 0.4% over September. That’s the fourth consecutive monthly rise. The increase in consumption was especially strong in the cyclically sensitive area of durable goods purchases, which gained 1.9% in October—the best month since March’s 3.5% jump.
[chart]
INITIAL JOBLESS CLAIMS
We saved the best for last. New filings for jobless benefits dropped by a robust 34,000 last week, the Labor Department advises. That pushed new weekly unemployment applications down to 407,000—the lowest since July 2008. Is the long-awaited drop in jobless claims finally here? If so, that bodes well for stronger job growth, or so history suggests. Of course, there’s always reason to doubt any one report. The obvious suspect for skewing the data is the Thanksgiving holiday. Did the newly unemployed delay filing last week because of Turkey day? We’ll know soon enough. But even if last week’s drop is misleading, there’s no denying the improvement in this series over the past few months. If the lower levels of jobless claims holds in the weeks ahead, it’s a strong sign of improving momentum in the labor market.
[chart]
WAGES
In fact, the update on private wages for October in the spending and income report suggests that the job market is on the mend. Or at least wage growth is. Private wages rose 0.6% last month, the fourth-straight monthly increase. On a year-over-year basis, the trend looks even stronger, as the chart below shows. Falling applications for jobless benefits and rising wages is a potent combination, assuming it lasts. It has so far.
[chart]

AP Business Highlights: On Wednesday November 24, 2010, 5:47 pm EST ‘Probe leads investors to wonder: Is game rigged? NEW YORK (AP) -- The Wall Street insider trading investigation may lead everyday investors -- already rattled by a stock market meltdown, a one-day "flash crash" and the Madoff scandal -- to finally conclude that the game is rigged …’ [ Come on! Wake up! It’s worse than just rigged! These computerized high-frequency churn-and-earn commissioned tades are literally eating away at the nation’s productive resources ($144 billion in wall street bonuses this year alone) … then the continuing frauds … the mark to anything worthless paper from the last fraud still out there … now let’s see if they have the fortitude and resolve to prosecute the perps. ]

YAHOO [BRIEFING.COM]: ‘… Support picked up amid news that the latest initial jobless claims count fell 34,000 week-over-week to a two-year low of 407,000, which is less than the 442,000 initial claims that had been widely expected among economists polled by Brieifng.com. Continuing claims set their own two-year low at 4.18 million, down from 4.32 million in the prior week. The improvement in jobless claims generally overshadowed disappointing durable goods orders data for October. Total orders declined 3.3%, which is worse than the 0.3% decline that had been widely expected. Orders less transportation fell 2.7%, which contrasts sharply to the 0.4% increase that had been expected by many. The rather poor orders readings for October come after overall orders for September increased 5.0% and orders less transportation increased 1.3%. Less attention was paid to personal income and spending for October. Income increased 0.5%, which is slightly stronger than the expected increase of 0.4%. Spending increased 0.4%, but that was a bit softer than the 0.6% increase that had been expected. In the prior month income was flat and spending had increased 0.3%. Once trade opened and stocks made a nice gap up, buying was further bolstered by the final Consumer Sentiment Survey for November from the University of Michigan. It improved to 71.6 after a preliminary reading of 69.3. However, enthusiasm for that report was offset by news that new home sales for October fell 8.1% month-over-month to an annualized rate of 283,000 units, which is less than the 314,000 units that had been broadly forecast by economists polled by Briefing.com …’

[video] Teddy Weisberg: No Positives for Market NEW YORK (TheStreet) - - Teddy Weisberg of Seaport Securities is bearish on the direction of the market.

Insider Trading Inquiry Accelerates New York Times - Peter Lattman, Azam Ahmed - John Marshall Mantel for The New York TimesDon Chu was arrested on charges that he helped hedge funds obtain improper information about publicly traded companies. Crackdown on Insider Trading Picks Up Steam Wall Street Journal Authorities suspect an inside game on Wall Street Los Angeles Times [ Suspect? With the computer-programmed high-frequency churn-and-earn scams it’s far worse than they can even imagine! ]

Stocks Sharply Lower Today as Fed Minutes Aggravate Negative Global Factors Midnight Trader 4:14 PM, Nov 23, 2010

China, Russia quit dollar China Daily | China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Portugal Goes Pop? ‘Euro burning, people pay, bankers get away’ Protests against austerity measures have also flared in cities across Europe. Portugal has ground to a halt, as workers stage a 24-hour general strike over public sector pay cuts and tax rises. It comes two days before parliament votes on a severe new budget. Some experts say adopting the single currency was a mistake in the first place.

As Irish Financial System Collapses, We Present Goldman’s Recent Thoughts On Bank Of Ireland Take one look at Bank of Ireland stock this morning. Then read the following October 4 report on BOI from Goldman Sachs, and please join us in extended our congratulations to Goldman analyst Pawel Dziedzic who has joined the prestigious ranks of Cramer and Dick Bove of telling those who care to buy a bank days or weeks ahead of its bankruptcy.

For Europe’s Future, Spain Is All That Matters Last Spring it was Greece that was in crisis mode—then last week, it was Ireland—and coming up next is Portugal— but all those pale in comparison to Spain.

China, Russia quit dollar on bilateral trade China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday in St. Petersburg.