Al Peia's Blog: February 4, 2011 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 following is the cumulative archive of blog posts / topics for 2010 as the new year starts anew: http://albertpeia.com/December312010postsarchive.htm or PDF formatted version
http://albertpeia.com/December312010postsarchive.pdf ]

Budget freeze hampers oversight, SEC chair says (Washington Post) [ Well, now we know the real reason behind the spending freeze. It always was a bit of a stretch to say that was because of their seriousness regarding deficit-reduction which is a catch-phrase but myth at best. That said, in light of wobama’s et als’ failure to live up to campaign promises regarding prosecution of the blatant frauds on wall street, it seems that the absence of the $200 million will be interposed as an excuse for planned failure. After all, at every turn, the frauds on wall street were given every opportunity to cover their tracks and keep their booty. The attorney general’s office, u.s. attorneys and wobama the b are the worst offenders concerning the foregoing. ] Mary L. Schapiro says the freeze is compromising the agency's ability to police the financial markets. Defacto bankrupt, fraudulent america also spends more on offensive (defensive a misnomer / propaganda) military spending than all the nations of the world combined, and by a large margin at that. Do you see a pattern emerging here [ I unfortunately only belatedly did, and the feds, fed employees, cia, all 3 branches of the u.s. government, etc., are included in this evolved american trait of inherent criminality in the most nefarious sense ( http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm ) ]:

CRIME STATISTICS > TOTAL CRIMES (MOST RECENT) BY COUNTRY SHOWING LATEST AVAILABLE DATA (america’s No. 1).

Rank	Countries	Amount
# 1	United States:	11,877,218
# 2	United Kingdom:	6,523,706
# 3	Germany:	6,507,394

… The following youtube video is well worth the look and explains how and why the frauds on wall street have gotten away with their devastating fraud thus far. The frauds on wall street et als should be criminally prosecuted, jailed, fined, and disgorgement imposed. ( `UPDATE: MORE CLAIMS OF RACE BIAS AT JUSTICE...` `CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE...` ex-Justice official quit over the handling of a voter intimidation case against the New Black Panther Party accused his former employer of instructing attorneys in the civil rights division to ignore cases that involve black defendants and white victims `US v. AZ...` Cases against Wall Street lag despite Holder’s vows to target financial fraud Obama broke promises ):

‘THE OBAMA DECEPTION’ http://www.youtube.com/watch?v=eAaQNACwaLw&feature=PlayList&p=2EFAB57B44063742&playnext_from=PL&index=0&playnext=1. [ The Obama Deception Number 1 on U.S. Google Trends ]

‘The Obama Deception’ Censored ‘The Obama Deception’ has been censored In light of this development, I provide an archived site version which appears to be complete (but will be compared with earlier version and replaced with same if incomplete) http://albertpeia.com/obamadeceptionhighqualityversion.flv

Then there is the well researched, produced, and informative ‘ESOTERIC AGENDA’ which explains how we’ve gotten to this forlorn point: http://video.google.com/videoplay?docid=-7052400717834950257#

For the Same Reason I’ve Included Here a Web Site Archived FLV Version of Esoteric Agenda http://albertpeia.com/esotericagenda.flv

]

Iran's Khamenei says uprisings represent 'defeat' for U.S. (Washington Post) [ No matter how you slice it, dice it, or euphemise about it, these are indeed substantial, irrevocable losses for the u.s.; but importantly, of america’s own making; self-defeat if you will, compounded by a slew of bad choices. Sadly, Ayatollah Ali Khamenei is quite correct when he states: "The Israelis and the U.S. are more concerned about what would happen to their interests in a post-Mubarak regime." … and further, ‘He also accused the United States of propping up corrupt leaders in the region to protect its interests and those of its ally israel.’ Unfortunately, as has become chrystal clear from america’s perpetual war in the region, the people have invariably figured last in america/israel’s unbalanced equations. ]

Mixed signals about health of labor market (Washington Post) [ Signals? In universal speak, flatline still means ‘dead, deceased, etc.’. I think we should go with a gallup: Gallup Finds U.S. Unemployment Up Slightly in January to 9.9% Unemployment, as measured by Gallup without seasonal adjustment, increased to 9.9% at the end of January — up from 9.6% at the end of December, but down from 10.9% a year ago. Drudgereport: `GALLUP: Unemployment actually at 9.9%... 'Under-employment' at 19.2%...`
`Labor Force Participation Plunges To Fresh 26 Year Low...`

] Drop in jobless rate from 9.4 percent to 9 percent offers little comfort because a separate survey of employers shows that job growth was anemic in January, with employers adding only 36,000 jobs.

Milbank: Rumsfeld offers no apology on Iraq (Washington Post) [ Well, journalistically speaking, you know Mr. Milbank’s hit the bottom of the barrel when he leads his article with a quote seemingly as a purported standard from war criminal dumbya bush who probably didn’t even understand the words he was regurgitating (see , ie., bushisms from bush the brain-damaged moron http://albertpeia.com/bushisms.htm - sadly, wobama probably understands the words but forgets his prior words contradicting same, campaign promises particularly, and hence, failed presidents both). Who cares about what would be meaningless apologies from these incompetent psychopaths. (2-3-11) Rumsfeld Finally Confesses He Was Wrong About WMD In New Autobiography [ Nice to know … a nation’s bankruptcy (america) and another nation’s destruction (Iraq) later. ] Former Defence Secretary Donald Rumsfeld has finally confessed he was wrong to claim America knew where Saddam Hussein had stockpiled weapons of mass destruction in the first days after the Iraq invasion. Previous: Words are cheap, in america particularly … I don’t believe anything they say and then, as I said, words are cheap. ANALYSIS | Palin's 'blood libel' comment backfires Washington Post) [ God knows I’m no fan of sarah palin’s although I am constrained to admit that as a fan of Saturday Night Live, I do appreciate her contribution to comedic content in the show. That said, this new ‘tempest in a teapot’ of her own making is a bit overdone. After all, it should be common knowledge by now, to put it mildly, that she is quite dumb; and, like that burnt out, dumb, war criminal and moron, dumbya bush (see , ie., bushisms from bush the brain-damaged moron http://albertpeia.com/bushisms.htm), she also has trouble with words; more specifically, the meanings of words. But it is also true that wobama and his ilk have trouble with words and their meaning, particularly when those spoken words are measured against what he does, his ilk never seeming to discern the glaring difference … wobama the ‘b’ for b*** s***. Lamentably (by her) and unexpectedly for palin was her failure to fully understand ‘that jewish thing’ attached to the phrase and the tender sensibilities of those who previously have been among the ranks of what seems more and more to be a somewhat offbeat fanclub of sorts. Yeah, that ‘never here the end of it’ jewish stereotype of paranoid sensibilities to religious / ethnic prejudice / slur behind some word, phrase, or even a sneeze (spielberg’s childhood memories) can wind up turning around and biting you’re a** ! Previously: Krauthammer: Beyond Ariz., a reckless charge (Washington Post) [ If it were only that simple; viz., a palin ( I’ve previously said I’m more concerned with her level of stupidity, dumb enough in an infantile way to prove she had gonads by pressing the button – never goin’ to happen, her being in that position), a beck, a bush, a wobama (Drudgereport: OBAMA FLASHBACK: 'If They Bring a Knife to the Fight, We Bring a Gun'... ), etc., there’d be hope for pervasively corrupt defacto bankrupt america. The fact is, the problem is inherent to america / americans themselves as I previously wrote here and reiterate: Will: Half-baked explanations for tragedy (Washington Post) [ Half-baked? Charlatans? The foregoing are in no short supply in defacto bankrupt, meaningfully lawless, pervasively corrupt, fraud prevalent america. See, for example, RICO case http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm . Moreover, Mr. Will as an oftimes apologist for war criminal, pervasively fraud-prone, defacto bankrupt, etc., america, with crime rates exceeding by far those of any other so-called civilized nations, might indeed find himself among those he’s so categorized. Among the last separate page sections to my website will be a somewhat detailed psychoanalytic evolutionary profile of the u.s. (one might ask who am I to do so which is fair comment to which I would reply, read it, or not, your choice). However, for the nonce, let me say that the it is no small coincidence that the 20^th century has been dubbed ‘the american century’. That the 20^th century has been considered the bloodiest is at once the natural concomitant of the foregoing reality. Keeping in mind the so-called ‘selective’ processes in both insurance (adverse) and evolutionary (Darwinian) terms, and as well, the psychology of it all from a behavioral perspective, america has indeed evolved. From the genocide of indigenous populations, to outlandish propaganda in support of same (ie., that ‘manifest destiny’ balderdash with overtones of religiosity spoonfed since elementary school, etc.), to contrived conflict / war, such, euphemistically bad behavior has been reinforced, some of which conditioning not always purposeful, ie., the ever greater frauds perpetrated on wall street for which there have been in large part no real punitive consequences to the perpetrators; but, to the contrary, great financial rewards though substantially detrimental to the majority. Despite the surface appeal, that oft asserted ‘blue-blood’ distinction doesn’t pass muster. Aside from the few seeking seeking religious freedom (ie., Puritans among some others), most then new americans were such disaffected rejects of their former homelands that desperation at best was motivation for travel to the wilds of the ‘so-called new world’ as opposed to intelligent, rational choice; criminals, mentally ill, the not-so-bright but ruthless populating the new nation in disparate numbers toward the ends consistent with greed and common criminality, corruption, and venality. As of the age of the dinosaurs, the american century has passed into the annals of a history replete with self-generating terrorism within and without (that blowback thing). DRUDGEREPORT: NATION SHOCKED: CONGRESSWOMAN SHOT IN TUCSON ]

White House mulls Egypt options as protests persist Pro-democracy demonstrators stage 'Day of Departure' rallies (Washington Post) [ It truly is difficult to even imagine such a scenario as ‘a transition process that would allow Mubarak to remain as a figure head until new elections’, though the same probably comports with america’s own pervasively corrupt style of politics as usual (wobama a glaring current example of actions belying words, war criminal dumbya bush, et als) which has spelled intractable decline for america domestically and internationally (probably also comports with israel’s aims at the expense and to the detriment of Egypt and Egypt’s citizens – also gives the cia time to do their deals which could be whatever nefarious money-making / power brokering scheme comes to mind). In corrupt, defacto bankrupt america, facades count more than reality. Egyptian protesters plan new push Government detains foreigners, says it's willing to open talks (Washington Post) [ Open talks? ‘bout what? Building a pyramid in mubarak’s honor before stepping down? He’s done … finito … burnt as an over-micro-waved burrito! The following from the Post is indeed the straw that broke the riders with whips he sent on camels’ and horses’ backs! ‘Wants to die in Egypt? How touching, or the reality, he’s just plain touched as in totally ‘out of it’. ‘…In what the U.S. State Department called a "concerted campaign to intimidate," several dozen journalists were rounded up by security forces and detained for hours, along with foreigners working as teachers, engineers and human rights researchers. Across the city, angry bands of supporters of President Hosni Mubarak also beat journalists; several reporters said that they were threatened with death…’ ] Cairo seeks to shift blame for clashes by rounding up journalists; U.S. worries renewed protests could spark more violence from Mubarak supporters.

Amid Arab protests, U.S. influence has waned (Washington Post) [ And that’s just the way israel likes it … and to america’s detriment, of course … which is not lost on even George Soros … Drudgereport: Soros: 'The main stumbling block is Israel'...

Egyptian protesters plan new push Government detains foreigners, says it's willing to open talks (Washington Post) [ Open talks? ‘bout what? Building a pyramid in mubarak’s honor before stepping down? He’s done … finito … burnt as an over-micro-waved burrito! The following from the Post is indeed the straw that broke the riders with whips he sent on camels’ and horses’ backs! ‘Wants to die in Egypt? How touching, or the reality, he’s just plain touched as in totally ‘out of it’. ‘…In what the U.S. State Department called a "concerted campaign to intimidate," several dozen journalists were rounded up by security forces and detained for hours, along with foreigners working as teachers, engineers and human rights researchers. Across the city, angry bands of supporters of President Hosni Mubarak also beat journalists; several reporters said that they were threatened with death…’ ] Cairo seeks to shift blame for clashes by rounding up journalists; U.S. worries renewed protests could spark more violence from Mubarak supporters. Demonstrations in Egypt take bloody turn In Cairo square, Mubarak backers confront anti-government crowds (Washington Post) [ Not too difficult for desperate and done mubarak to contrive: Mubarak Says Egyptians Have to Choose Between “Chaos” and Him … Then Sends In His Thugs to Stir Up Chaos (Infowars.com) In order to justify staying in power until elections are held in September, President Mubarak said on tv that the people had to choose between him and “chaos”. ] The coordinated nature of day's events suggested that Mubarak's supporters were determined to show, as he had warned, that the country faced a "choice between chaos and stability." [ Previous: Mubarak's pledge seen as not enough Egyptian president plans to stay in office to transfer power (Washington Post) [ Let me put it another way: Mubarak is as done as an over-cooked tamale … He seems to be stalling for time and even in his age impaired mind certainly knows his position is untenable, unsustainable, and even more irrational as each second passes. There is a possibility that he’s using same to move money / treasure for himself and others, literally as well, buying time. See infra … Previous: Mubarak seeks dialogue, shows no sign of relenting Demonstrators call for massive protest but lack leadership (Washington Post) [ He relented when he resorted to media / internet blackout. Indeed, this lack of sign thing is a testament to how far from reality 30 years has taken him, not to mention the other 52 years that have taken their toll on his cognitive processes. Whether it is plaques ‘on the brain’ or outright senility, that he is so disengaged from the events unfolding around him, one may only wonder how he lasted this long. Nor did his choice of cia standin / shill, new VP Suleiman enhance his now untenable position which leaves him as ‘done as a burnt enchilada’. Kissinger on Egypt unrest – “This is only the first scene of the first act of a drama that is to be played out” [ The import of this so-called interview, and it is here that I part company with alex jones, et als (who by the way, censored me for this very thesis, which puts him and his at the top of my hypocrite list), is that the so-called elite have orchestrated these events and ‘are in control’. First, there are no elites in this world; you can’t derive elites from apes, notochordates, and initially single celled organisms. Second, almost by definition and certainly by history, there are no elites in america even if you were to accept the first proposition (though true) as untrue. What you do have, in this world and america particularly (with few exceptions as I’ve discussed elsewhere / comments / my website), are inherent criminals and mentally ill people of varying degrees of unscrupulousness and insanity who do commit crimes, both small and large, to further their interests or fortunes (sociopaths / psychopaths). The ’so-called alpha-dogs’ of the human species at most, but still incompetent vegetables who, if you look at anything they touch (to use a term term of such incompetent vegetables as historically pertains to their role in the mideast – and generally the state of the world) it invariably goes ‘pear shaped’ (english term). What hasn’t zionist kissinger not messed up as appointee or ‘consultant’ – what does he get paid for? No! The fact is, they have absolutely no idea how this unfolds and as with most of their lives, they will predictably choose the most sordid, despicable, and diabolical course at every turn because … that is their inherently criminal, mentally ill / unstable nature to do so. ]

] Fragile steps to end crisis seen as plans take shape for a transition process that would allow Mubarak to remain as a figure head until new elections.

Ignored but Important - What Omitted Jobs Data means for Stocks [ What it means is that when there are no jobs, and everyone has stopped looking, there will be full employment which of course, is rally time for stocks … riiiiight! ] Maierhofer, see entire article infra: ‘…The headline unemployment rate (U-3) reported by the BLS fell to 9%, the lowest level since April 2009. How can the unemployment rate drop 0.4% if only 36,000 jobs were added? (Much worse than the 140,000 expected – stocks still rallied) 36,000 aren't even enough to provide jobs for a quarter of graduates…’ Riiiiight! … that fudge factor/fraud; viz., discouraged / stopped looking … What total b*** s***! How desperate they are! Previous: Initial Claims Drop More Than Expected [ Come on! Who believes anything they say and at what cost with money not really there in pervasively corrupt, defacto bankrupt america, with manipulated programmed suckers’ rally into the close. …‘In the U.S. market, Slothower concludes: “This is a hard one to gauge, given the QE2 manipulations verses skyrocketing food and energy prices, which have now reached prices levels that have choked off growth in the past and caused recessions, as we saw in 2008 when oil prices hit $100 a barrel (in March of that year).” “It is like walking in a mine field. You move very carefully now with your eyes wide open and on every move, knowing that any day something out of the blue could blow thing up, given these extreme risks.” But he’s now only 70% in cash. The balance is split equally between: iPath Dow Jones-AIG Grains Total Return Sub-Index …’ Minyanville's T3 Weekly Recap: Growing Disconnect Between Market and Economy/World ‘Bernanke said in his comments yesterday that he is responsible for higher stock prices, but not necessarily for sky-rocketing global food prices. Well, you can't have it both ways, Ben. By propping up asset prices when economic data doesn't match the ferocity of the stock market rally, the Fed is potentially creating another bubble of sorts.Just look at today's non-farm payrolls number: There was a gain of only 36,000 jobs when 140,000 were expected. Also, unemployment fell to 9.0% -- a positive sign for the layman, but an ominous sign for the more keen eye. Nine-hundred thousand discouraged job-hunters left the labor force this month, after 500,000 left in the previous month. It's hard to see optimism in the stock market continue unabated while so many Americans remain jobless…’ ‘Kung Hei Fat Choy!: Dave's Daily …Speaking of the man with printers ink stains up to his neck, Bernanke spoke Thursday to the Press Club stating, among other things, "inflation remains quite low". He continued saying, "Since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly...") I believe that sums things up from an investing view. Silly people like me are standing by watching those that can like GS and JPM take this easy money and route it directly to the S&P futures pits, among other similar places, taking on risk the Fed expects. Oh, and speaking of JPM, the Madoff Trustees have sued the bank for complicity in helping steer client funds to Madoff despite complaints from within that his results were "too good to be true"…’ Monthly Market Valuation: Investors Are Too Bullish, Valuations Are Too High The conclusion of the following detailed, documented analysis: ‘Wolinsky :In conclusion, the market is over-valued based on the above data. Tobin's Q, Shiller P/E and AAII data are all indicating that investors are too bullish and valuations are too high.’ ]
Simon Maierhofer, On Friday February 4, 2011, ‘The monthly employment report has become one of the most anticipated and talked about, but least analyzed ritual on Wall Street.As far as the media is concerned, the Bureau of Labor Statistics (BLS) might as well just publish the headline number, because that's about the only thing anyone talks about.Not only does the core message of the 40+ page report go largely un-deciphered, the correlation between the employment reports is also somewhat deceptive.This article will extract some uncommonly reported information and point towards what is likely to move the marketThe only other Wall Street ritual that tops monthly unemployment reports is earnings season. Like any other ritual, it comes with many myths and fables attached. The most common one is that unemployment directly affects stock prices.

THE HEADLINE NUMBER ... WAIT, THERE IS MORE

The headline unemployment rate (U-3) reported by the BLS fell to 9%, the lowest level since April 2009. How can the unemployment rate drop 0.4% if only 36,000 jobs were added? 36,000 aren't even enough to provide jobs for a quarter of graduates.According to BLS data, the number of unemployed workers (not seasonally adjusted) rose from 14.83 million to 14.94 million. The work force shrunk from 153.89 million to 152.54 million. The workforce didn't actually decline, but statistically more workers are considered discouraged and are no longer considered unemployed.One of the most remarkable BLS data points on the BLS site is the average number of weeks workers are now unemployed. The jobless are unemployed for an average of 36.9 weeks, an all-time high (see chart below).[chart]

A SHRINKING POND WITH BIGGER FISH

It is estimated that about 150,000 'youngsters' enter the work force every year. That's why the work force has steadily increased since 1948. Courtesy of the 2008 bear market, the workforce has actually been shrinking, as discouraged workers drop out of the statistics.Discouraged workers are those who have stopped searching in the last four weeks. Excluding them from the workforce and the unemployment equation artificially lowers the U-3 unemployment rate. The real unemployment rate (U-6), which includes workers who stopped looking for jobs or had to settle for part-time jobs - is at 16.1%.

PLAYING DETECTIVE

Based on U-6 numbers, since December 2006 as many as 13 million Americans have either lost their jobs, or have been downgraded.The lucky few who've found a job have to accept pay cuts. According to Annette Bernhardt, policy co-direction for the National Employment Law Project, high wage sectors - such as financial services (NYSEArca: KBE - News) and construction (NYSEArca: XHB - News) - accounted for nearly half the jobs lost during the recession.Those workers made between $17.43 - $31 an hour. Only 5% of those jobs have been resurrected. 76% of new jobs are in low-to mid-wage industries with earnings between $8.92 - $15 an hour.Nevertheless, stocks have shrugged off an avalanche of bad news and continue plowing ahead towards new highs. Does that make sense?

BIG BROTHER IS HERE

It does when you include the Federal Reserve and its quantitative easing program in this lopsided equation. The Fed has a history of creating and ignoring bubbles.The real estate (NYSEArca: IYR - News) bubble was allowed to get bigger to mop up the damage of the tech (NYSEArca: XLK - News) bubble. The financial sector (NYSEArca VHF) financing bubble was encouraged to mask the damage of the real estate bubble. The new QE bubble is absolutely needed to prevent an economic collapse (based on Bernanke's assessment).How long with the Fed's quantitative easing - labeled QE2 - keep stocks afloat? We don't know for sure, but we can tell when the stock market might enter trouble spots that could lead to (severe) corrections.

A FORK IN THE FINANCIAL ROAD

Imagine a car cruising on the highway. The driver doesn't know it yet, but he's heading in the wrong direction. When will he turn around? We don't know, but the most likely place for a change of direction is the next exit.Based on various measures of historic valuation models, the stock market (NYSEArca: VTI - News) is overpriced (heading in the wrong direction). When will stocks stop rising and start falling? We don't know, but the most likely place for a reversal is the next big resistance level.The Dow Jones (DJI: ^DJI), S&P 500 (SNP: ^GSPC), Nasdaq (Nasdaq: ^IXIC) and Financial Select Sector SPDR (NYSEArca: XLF - News) are simultaneously pushing against major resistance. It is rare to see four major indexes at cross roads at the same time.

A HIGH PROBABILITY TRADING OPPORTUNITY

The beauty of well-documented resistance levels is that they provide a high probability, and a low risk trading opportunity for bulls and bears. A solid break above resistance means hurdle cleared. Resistance becomes support and investors can go or stay long using the prior support level as resistance.If the index (es) stays below resistance, resistance is confirmed and a trend change is likely. Investors/traders can go short using the resistance as a stop-loss level.All four indexes are within 1 - 2 % of their resistance levels, which means that either trade has a potential loss of 1 - 2%, compared to a much higher gain. Investing is about putting the odds in your favor. There is no fail-proof system, but this setup is about as good as it gets…’

House Republicans propose $32B in budget cuts (Washington Post) [ Well, there you go … all over but the shoutin’ … $14+ trillion debt problem solved … riiiiight! … Timid Tuesday: Is it Safe? Davis ‘… This is how we pay off our current debts and I think bondholders are simply happy to get anything out of a country that admits it owes $15Tn (1/4 of global GDP) but probably owes closer to $60Tn (entire global GDP) in the form of unfunded liabilities. The funniest thing about this (and you have to laugh) is to see Conservative pundits get on TV and talk about how we need to cut $100Bn worth of discretionary spending to "fix" this (while continuing to spend $1Tn on the military and $1Tn on tax cuts for the top 1% each year). There is no fixing this and even a Republican said you can’t fool all of the people all of the time. THIS HOUSE OF CARDS IS TEETERING FOLKS – PLEASE BE CAREFUL OUT THERE! ‘] The figure represents an unprecedented rollback that would force some agencies to cut spending by as much as 20 percent, analysts say.

]

Home buyers may get less government support (Washington Post) [ Uut, oh! Less help from the pervasively corrupt, defacto bankrupt government? Well, on the bright side, a percentage of near zero is still near zero … I guess that non-wall street addresses just don’t rate! ] Administration officials are looking at scaling back the aid provided during the mortgage crisis to help the ailing real estate market. The move could make home loans in high-priced areas such as the Washington region more expensive.

Fed dismisses inflation concerns (Washington Post) [ If you’re not used to Dave of Dave’s Daily, see infra, ‘he talks with tongue in cheek’; meaning, inflation’s here, including the inflated stock bubble that the frauds on wall street commission and sell into, just as bernanke planned and admitted, with hyperinflation around the corner, and the typical ‘bust’. Initial Claims Drop More Than Expected [ Come on! Who believes anything they say and at what cost with money not really there in pervasively corrupt, defacto bankrupt america, with manipulated programmed suckers’ rally into the close. …‘In the U.S. market, Slothower concludes: “This is a hard one to gauge, given the QE2 manipulations verses skyrocketing food and energy prices, which have now reached prices levels that have choked off growth in the past and caused recessions, as we saw in 2008 when oil prices hit $100 a barrel (in March of that year).” “It is like walking in a mine field. You move very carefully now with your eyes wide open and on every move, knowing that any day something out of the blue could blow thing up, given these extreme risks.” But he’s now only 70% in cash. The balance is split equally between: iPath Dow Jones-AIG Grains Total Return Sub-Index …’ ‘Kung Hei Fat Choy!: Dave's Daily …Speaking of the man with printers ink stains up to his neck, Bernanke spoke Thursday to the Press Club stating, among other things, "inflation remains quite low". He continued saying, "Since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly...") I believe that sums things up from an investing view. Silly people like me are standing by watching those that can like GS and JPM take this easy money and route it directly to the S&P futures pits, among other similar places, taking on risk the Fed expects. Oh, and speaking of JPM, the Madoff Trustees have sued the bank for complicity in helping steer client funds to Madoff despite complaints from within that his results were "too good to be true"…’ Monthly Market Valuation: Investors Are Too Bullish, Valuations Are Too High The conclusion of the following detailed, documented analysis: ‘Wolinsky :In conclusion, the market is over-valued based on the above data. Tobin's Q, Shiller P/E and AAII data are all indicating that investors are too bullish and valuations are too high.’ ]

] Bernanke gives a mixed assessment of the nation's economic prospects.

Kung Hei Fat Choy!: Dave's Daily ‘ The above tribute to the "metal rabbit" was not the cheer from Tahrir Square Thursday. But, U.S. investors are ignoring that in favor of making money with some dip buying abetted by focusing on good news (retail results) and ignoring any negative news from Egypt or even MRK's results. The Fed tossed in another round of POMO to the tune of nearly $9 billion which encouraged buying from trading desks. Speaking of the man with printers ink stains up to his neck, Bernanke spoke Thursday to the Press Club stating, among other things, "inflation remains quite low". He continued saying, "Since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly...") I believe that sums things up from an investing view. Silly people like me are standing by watching those that can like GS and JPM take this easy money and route it directly to the S&P futures pits, among other similar places, taking on risk the Fed expects. Oh, and speaking of JPM, the Madoff Trustees have sued the bank for complicity in helping steer client funds to Madoff despite complaints from within that his results were "too good to be true". Again dip buying was dominant with an "Egypt be damned" attitude although it looked like some bought gold perhaps as insurance. Rumors of bank runs throughout North Africa are present. Volume was just average with most coming early and late. Breadth per the WSJ was mixed to positive. (You'll note the Nasdaq share volume data means investors buying the bigger names.) … ‘ See also re: bernanke’s folly-If You're Going to Do Economics, Don't Do Macro [ Truth be told, I find Mr. Falkenstein’s article a bit too subtle and somewhat shy about getting to the point, but have included same here solely for the reprint of William Buckley’s famous quote which comports with my own view of the ivy league vegetable gardens which turn out as you would expect, vegetables; viz., ‘he would prefer the first 100 names in the Boston phonebook to the Harvard faculty‘. The reality is that ‘harvard professor’, ‘no-recession bernanke’ has given an obfuscating, ephemeral feel good but lucrative to the few gift to the frauds on wall street with ultimately devastatingly great cost / pain to come. ]

Market Crash on 2/28/11? Technical indicators suggest market collapse may begin by February 28th

Regulators shut 3 small banks; 14 failures in 2011

World food prices hit record high AFP | World food prices reached their highest level ever recorded in January and are set to keep rising for months.

Concerns Over Possible Suez Canal Disruptions New York Times | Concern has turned to the risk of the blocking of the Suez Canal or nearby pipelines, which could pose a threat to world energy supplies.

The Scariest Jobs Chart Ever Looks Totally Awful There are some weird things going on in this morning’s jobs report, but the headline number was a joke, and as such, the scariest jobs chart ever looks horrid.

Argentina Threatens To Fine Analysts Who Predict 30 Percent Inflation All Argentine consulting firms that calculated an inflation rate higher than the official 10.9 percent has received a letter from the government today. They’ve been given 48 hours to explain their calculation or face a $125,000 fine, according to the FT.

Newmont CEO: Gold Is Going To $1500 This Year Newmont CEO Richard O’Brien comments on where he thinks the price of gold is head.

Must Read: Standard Chartered Issues The Definitive Report On Global Inflation And Its Miscontents Every now and then, Standard Chartered has a knack for coming up with that one report that is miles ahead of the competition and promptly becomes the definitive guidebook for the industry.

William Black Slams Financial Commission For Failing to Use the “F” Word (Fraud) … “Elites Can Now Commit White Collar Crime with Near Impunity” I’ve previously noted that the Financial Crisis Inquiry Commission was a whitewash. Tuesday, senior S&L regulator William K. Black slammed the FCIC for failing to call out fraud.

(2-4-11) Dow 12,092 +29 Nasdaq 2,769 +15 S&P 500 1,311 +3 [CLOSE- OIL $89.03 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $3.11 (reg. gas in LAND OF FRUITS AND NUTS $3.35 REG./ $3.53 MID-GRADE/ $3.62 PREM./ $3.68 DIESEL) / GOLD $1,349 (+24% for year 2009) / SILVER $29.05 (+47% for year 2009) PLATINUM $1,838(+56% for year 2009) / DOLLAR= .73 EURO, 82 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ http://www.federalreserve.gov/releases/h15/update 10 YR NOTE YIELD 3.65% …..… 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

Fury Builds Over Blackouts Caused By De-Industrialization Of America Paul Joseph Watson & Alex Jones | Obama administration’s agenda to block construction of new coal-fired plants triggers nationwide outages.

Codex Alimentarius Loves Toxic Fluoride, Part 1 Brandon Turbeville | The goal is to not only treat nutrients as toxins, but treat toxins as nutrients.

Millions stage anti-Mubarak protests Press TV | Protesters chant slogans against the Mubarak regime as reports flow in about fierce clashes between plainclothes police and protesters. Americans are Oppressed, Too

Republicans Move to Make PATRIOT Act Permanent Kurt Nimmo | The police state act is set to expire in three weeks and Republicans are eager to make sections of the unconstitutional legislation permanent.

Rand Paul worries GOP isn’t ‘brave enough’ to balance budget Sahil Kapur | Paul said the GOP’s proposed budget cuts were inadequate and fretted that his party may not have the courage to make a dent in the deficit.

Fury Builds Over Blackouts Caused By De-Industrialization Of America Fury is building over rolling nationwide blackouts triggered by the Obama administration’s deliberate agenda to block the construction of new coal-fired plants, as local energy companies struggle to meet Americans’ power demands amidst some of the coldest weather seen in decades.

Major Announcement Imminent From Egypt State TV; There’s A Rumor That Mubarak Will Step Down Al-Arabiya says a rumor spread through Egypt this morning that the president has agreed to step down with certain guarantees. This produced celebrations and a tremendous feeling of relief in the crowd at Tahrir Square, says a commentator on Al-Jazeera.

Persons Not In Labor Force Who Want Job Now Jumps To All Time Record; Real Unemployment Rate At 12.8% Probably the last chart to bury any doubt about just how truly horrible today’s employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now.

Cops Brutally Beat Teen Burglar Lying On Ground

Republicans Move to Make PATRIOT Act Permanent Freshly emboldened by their mid-term congressional wins, establishment Republicans are set to extend the unconstitutional police state Patriot Act. It is set to expire in three weeks and Republicans are eager to make sections of the legislation permanent.

US plan: Replace Mubarak with torture-linked ‘CIA point man’ A US plan to see Egyptian President Hosni Mubarak leave office immediately is reportedly in the works and would see a transitional government formed by Mubarak’s vice-president, a former head of Egypt’s spy agency and a “CIA point man” who facilitated the “extraordinary rendition” of terrorism suspects.

Blocking Internet cost Egypt at least $90M, says OECD The Egyptian government’s five-day block of Internet services cost the national economy at least US$90 million, the Organization for Economic Cooperation and Development (OECD) said Thursday.

Rumsfeld Finally Confesses He Was Wrong About WMD In New Autobiography [ Nice to know … a nation’s bankruptcy (america) and another nation’s destruction (Iraq) later. ]Former Defence Secretary Donald Rumsfeld has finally confessed he was wrong to claim America knew where Saddam Hussein had stockpiled weapons of mass destruction in the first days after the Iraq invasion.

Drudgereport: UNEMPLOYMENT AT 9.0% +36,000 JOBS...
CANADA +69,200...
GALLUP: Unemployment actually at 9.9%... 'Under-employment' at 19.2%...
Labor Force Participation Plunges To Fresh 26 Year Low...
Santelli Slams CNBC Panelists for Spinning Jobs Report... VIDEO...

BIG SIS TELLS SUPER BOWL ATTENDEES: 'SEE SOMETHING, SAY SOMETHING'…(If only she really meant that concerning the rest of the nation, and washington particularly – they obsessively cover up almost everything – and saying something is dealt with quite harshly, punitively)...SECRET DEAL: US AGREES TO TELL RUSSIA UK'S NUKE SECRETSGov't Debt Jumped $105.8 Billion in January...
Dems warn of shutdown...
Republicans Propose Spending Cuts...

Market Crash on 2/28/11? Technical indicators suggest market collapse may begin by February 28^th

Investment Themes for the Next Decade Simon Maierhofer, February 3, 2011, ‘Calm seas don't make sailors. Bull markets don't make investors. Will the coming years be calm seas or the calm before the storm?Judging by various developments brewing in the pipeline, investors will get a chance to prove their worth in the decade following the 'lost decade.'Investing is not a sprint it's a marathon. So it behooves us to look beyond just the next earnings season, unemployment report, or FOMC meeting and address what could be the biggest opportunities or stumbling blocks of this decade.
Generational Shift
Starting this year, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years. As baby boomers age, the traditional population pyramid is becoming top-heavy with retirees, while the workforce is shrinking.Social Security will be strained by the growing number of baby boomers retiring and applying for benefits. New congressional projections show Social Security running deficits every year until its trust funds are eventually drained around 2037.A debt commission appointed by President Obama recommended a series of changes such as increasing the retirement age and lowering benefits. With the disappearance of pension guarantees, flat 10-year investment returns and upside down mortgages, retirees depend on Social Security more than ever.As a sum total, this generational shift will result in higher taxes for younger generations (generations X and Y) and less income for baby boomers. This in turn will shrink spendable income.A consumer that doesn't consume and/or a shrinking consumer base is bad for business and should provide a steady headwind for the economy and broad indexes a la the Dow Jones (DJI: ^DJI), S&P 500 (SNP: ^GSPC) and Nasdaq (Nasdaq: ^IXIC).Sectors that might be adversely affected include consumer discretionary (NYSEArca: XLY - News) and retail (NYSEArca: XRT - News).
The Full Faith and Credit of the United States - Worth how Much?
If the debt ceiling was a real ceiling and deficit was water, we'd have drowned by now. But since the deficit ceiling is imaginary it's easier to kick the can down the road and raise the ceiling.Investors of U.S. debt have taken note and are demanding more interest to loan their money to the United States government. Interest rates for Treasury bonds have gone up, even though the Federal Reserve's QE2 bond buying program was supposed to do the opposite.The ETF Profit Strategy Newsletter saw the onset of rising interest rates (in the bond world, rising interest means falling prices) and warned subscribers on August 26, 2010:'Our technical analysis, along with fundamentals suggests that T-Bonds are getting ready to roll over. A look at the overall picture suggests that this is more than just a minor correction. The rally in municipal, corporate, and high yield bonds is showing signs of weakness too. Investors should start exiting from those markets.'30-year T-Bonds, along with municipal bonds (NYSEArca: MUB - News), recorded their top tick on that very day and have since erased more than three years worth of gains.A weak economy in need of more government stimulus is likely to keep the pressure on interest rates. It would be prudent to avoid interest sensitive, long-term maturities such as the iShares Barclays 20+ Year Treasury Bond (NYSEArca: TLT - News) and stick with short-term debt such as iShares Barclays 1-3 Year Treasury Bond (NYSEArca: SHY - News).
Valuations
To many, using valuations to determine the stock market's (NYSEArca: VTI - News) real worth is about as antiquated as using smoke signals. Those ancient smoke signals may cloud the perception of most, but they are nevertheless signals for those willing to listen and learn.Valuations have been ignored before. Ideas and promises eclipsed profits at the height of the technology (NYSEArca: XLK - News) boom, but just temporarily. A few years later, real estate tried to defy the notion of fair value.It seems that periods where valuations are out of favor are particularly susceptible to price corrections. So, where are valuations at today?There are three main ways to measure valuations. The first one - P/E ratios - is somewhat flawed because it is subject to financial engineering. Accounting rule changes have made it possible for banks to inflate their earnings by hiding real estate related losses (see June 2010 ETF Profit Strategy Newsletter for details).But even with artificially engineered profits, the current P/E ratio is historically rich.The second valuation measure - the Dow Jones measured in gold - takes the Federal Reserve's money spigot out of the equation and values stocks in real money - gold (NYSEArca: GLD - News). Ever since its 1999 high, the Gold Dow has been declining. Based on historical patterns, the Dollar Dow always catches up with the Gold Dow - eventually.The third valuation measure - dividend yields - is near an all-time low. Unlike P/E ratios, you can't fudge dividend yields. Either a company has cash to spread among investors or it doesn't. Despite dividend increases by some companies, cumulative dividends paid by the 500 S&P constituents are about the same today as in March 2009. In general, low dividend yields coincide with major market tops.
What Valuations Do for You TODAY
Valuations are a long-term indicator, so what can they do for you TODAY?Valuations set the trend. In an overvalued market the larger trend is down. That doesn't mean you have to be out of the market all the time. On March 2, 2009 the ETF Profit Strategy Newsletter foresaw the biggest counter trend rally since the 2007 all-time high.This counter trend rally is still going on. In fact, it has gone much further than initially expected, but the higher prices rally the more dangerous it becomes to hold positions.Knowing that stocks are at least 30% overvalued, it would be prudent to monitor any decline carefully and pull the trigger before a minor correction turns into something financially painful…’

World food prices hit record high AFP | World food prices reached their highest level ever recorded in January and are set to keep rising for months.

IMF Board To Discuss Expanded SDR Dow Jones | The board of the International Monetary Fund will discuss a possible expansion of the basket of currencies that compose the Special Drawing Right, IMF deputy managing director John Lipsky said Friday.

Even mobster / lightweight / scoundrel wrapped in the flag donald trump Is Warning That An Economic Collapse Is Coming In a shocking new interview, Donald Trump has gone farther than he ever has before in discussing an economic collapse in America.

Bernanke, BLS Lie About Inflation: Dr. Doom Faber Global inflation is far higher than official statistics reveal, Marc Faber, editor and publisher of the “Gloom, Boom and Doom” report told CNBC on Wednesday, with increases in the cost of living amounting to between five and eight percent in the United States and just below that in Europe.

Ron Paul To Ask Fed Why After Trillions In Free Money, Unemployment Is Still Sky High Congressman Ron Paul has announced that the first Monetary Policy subcommittee meeting will focus on one of those two now forgotten Fed mandates, that of creating jobs.

Gold:Silver Ratio Falls as Silver Rises On September 26th, 2010, we released a Chart Blog showing a Gold/Silver ratio that was 60.34, and specified that silver has outperformed gold in the market by far. Now, a few months later, we return to the same graph, only to show a different Gold/Silver ratio of 46.96!

Gallup Finds U.S. Unemployment Up Slightly in January to 9.8% Unemployment, as measured by Gallup without seasonal adjustment, increased to 9.8% at the end of January — up from 9.6% at the end of December, but down from 10.9% a year ago.

Rumsfeld Finally Confesses He Was Wrong About WMD In New Autobiography [ Nice to know … a nation’s bankruptcy (america) and another nation’s destruction (Iraq) later. ]Former Defence Secretary Donald Rumsfeld has finally confessed he was wrong to claim America knew where Saddam Hussein had stockpiled weapons of mass destruction in the first days after the Iraq invasion.

12 Economic Collapse Scenarios That We Could Potentially See In 2011 What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis.
The Economic Collapse Jan 20, 2011 ‘What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of “total system failure”.

So will it be soon? Let’s hope not. Let’s certainly hope that it does not happen in 2011. Many of us need more time to prepare. Most of our families and friends need more time to prepare. Once this thing implodes there isn’t going to be an opportunity to have a “do over”. We simply will not be able to put the toothpaste back into the tube again.

So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011….

#1 U.S. debt could become a massive crisis at any moment. China is saying all of the right things at the moment, but many analysts are openly worried about what could happen if China suddenly decides to start dumping all of the U.S. debt that they have accumulated. Right now about the only thing keeping U.S. government finances going is the ability to borrow gigantic amounts of money at extremely low interest rates. If anything upsets that paradigm, it could potentially have enormous consequences for the entire world financial system.

#2 Speaking of threats to the global financial system, it turns out that “quantitative easing 2″ has had the exact opposite effect that Ben Bernanke planned for it to have. Bernanke insisted that the main goal of QE2 was to lower interest rates, but instead all it has done is cause interest rates to go up substantially. If Bernanke this incompetent or is he trying to mess everything up on purpose?

#3 The debt bubble that the entire global economy is based on could burst at any time and throw the whole planet into chaos. According to a new report from the World Economic Forum, the total amount of credit in the world increased from $57 trillion in 2000 to $109 trillion in 2009. The WEF says that now the world is going to need another $100 trillion in credit to support projected “economic growth” over the next decade. So is this how the new “global economy” works? We just keep doubling the total amount of debt every decade?

#4 As the U.S. government and the Federal Reserve continue to pump massive amounts of new dollars into the system, the floor could fall out from underneath the U.S. dollar at any time. The truth is that we are already starting to see inflation really accelerate and everyone pretty much acknowledges that official U.S. governments figures for inflation are an absolute joke. According to one new study, the cost of college tuition has risen 286% over the last 20 years, and the cost of “hospital, nursing-home and adult-day-care services” rose 269% during those same two decades. All of this happened during a period of supposedly “low” inflation. So what are price increases going to look like when we actually have “high” inflation?

#5 One of the primary drivers of global inflation during 2011 could be the price of oil. A large number of economists are now projecting that the price of oil could surge well past $100 dollars a barrel in 2011. If that happens, it is going to put significant pressure on the price of almost everything else in the entire global economy. In fact, as I have explained previously, the higher the price of oil goes, the faster the U.S. economy will decline.

#6 Food inflation is already so bad in some areas of the globe that it is setting off massive food riots in nations such as Tunisia and Algeria. In fact, there have been reports of people setting themselves on fire all over the Middle East as a way to draw attention to how desperate they are. So what is going to happen if global food prices go up another 10 or 20 percent and food riots spread literally all over the globe during 2011?

#7 There are persistent rumors that simply will not go away of massive physical gold and silver shortages. Demand for precious metals has never been higher. So what is going to happen when many investors begin to absolutely insist on physical delivery of their precious metals? What is going to happen when the fact that far, far, far more “paper gold” and “paper silver” has been sold than has ever actually physically existed in the history of the planet starts to come out? What would that do to the price of gold and silver?

#8 The U.S. housing industry could plunge the U.S. economy into another recession at any time. The real estate market is absolutely flooded with homes and virtually nobody is buying. This massive oversupply of homes means that the construction of new homes has fallen off a cliff. In 2010, only 703,000 single family, multi-family and manufactured homes were completed. This was a new record low, and it was down 17% from the previous all-time record which had just been set in 2009.

#9 A combination of extreme weather and disease could make this an absolutely brutal year for U.S. farmers. This winter we have already seen thousands of new cold weather and snowfall records set across the United States. Now there is some very disturbing news emerging out of Florida of an “incurable bacteria” that is ravaging citrus crops all over Florida. Is there a reason why so many bad things are happening all of a sudden?

#10 The municipal bond crisis could go “supernova” at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. According to Meredith Whitney, the municipal bond crisis that we are facing is a gigantic threat to our financial system….

“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.”

Former Los Angeles mayor Richard Riordan is convinced that things are so bad that literally 90% of our states and cities could go bankrupt over the next five years….

#11 Of course on top of everything else, the quadrillion dollar derivatives bubble could burst at any time. Right now we are watching the greatest financial casino in the history of the globe spin around and around and around and everyone is hoping that at some point it doesn’t stop. Today, most money on Wall Street is not made by investing in good business ideas. Rather, most money on Wall Street is now made by making the best bets. Unfortunately, at some point the casino is going to come crashing down and the game will be over.

#12 The biggest wildcard of all is war. The Korean peninsula came closer to war in 2010 than it had in decades. The Middle East could literally explode at any time. We live in a world where a single weapon can take out an entire city in an instant. All it would take is a mid-size war or a couple of weapons of mass destruction to throw the entire global economy into absolute turmoil.

Once again, let us hope that none of these economic collapse scenarios happens in 2011.

However, we have got to realize that we can’t keep dodging these bullets forever.

As bad as 2010 was, the truth is that it went about as good as any of us could have hoped. Things are still pretty stable and times are still pretty good right now.

But instead of using these times to “party”, we should be using them to prepare.

A really, really vicious economic storm is coming and it is going to be a complete and total nightmare. Get ready, hold on tight, and say your prayers.’

Perception vs. Reality: Four Reasons to Remain Cautious on U.S. Equities [ Hey, Abbott … That’s Lou Costello calling him from the other side … Wake up! … Just kidding … but I’m not kidding when I say that contrary to Abbott’s view, infra, if you’re not a successful market timer you should rethink your position as an equity investor. Moreover, in contradistinction to Mr. Abbott’s implication, if you’re not a successful speculator (there are very few), you should rethink your position as a short seller: reason…, you could be wiped out, lose more than your principal, forced to cover (that’s why the same is considered a contrary market indicator, particularly in these manipulated, contrived markets). When I did my MBA thesis (1977, NYU, GBA, Eve.Prog., Finance), a review of the data revealed even then (and much more so now with computer programmed market manipulation) that the market remained biased / propped up (artificially, especially now with computerized manipulation) to the upside for far longer periods of time than for the downside which meant that dollar-cost averaging (through regular, periodic investment, for example), meant you were accumulating shares at higher prices generally for longer periods of time skewing the average cost to the upside (dollar-cost-averaging in declining markets was ok if analysis / forecast saw resurgence based on fundamentals - now absent – which is timing, as even senile wall street / gov’t shill Buffet would attest, that ‘greedy when others are fearful thing’). Abbott discusses perception which is the psychological factor involved in security evaluation / analysis; but investors need not and should become nuts themselves, particularly when as now, the inmates are running the asylum. ] Abbott ‘Perception determines short-term market movements. The difference between perception and reality determines the direction of major market trends. Though I generally try to avoid making macro prognostications, I believe bottom-up analysis can be informative about the current level of stock prices. I want to share what my recent work tells me about where stocks are (and where they might be headed). I will outline some various nuggets of collective wisdom that are taken for granted right now by stock bulls, and I will attempt to demonstrate how reality is likely to differ from these perceptions.

First, a disclaimer. This is not a market timing call. At all times, I stay away from market timing predictions. I think that's a loser's game in the long run. Even if I'm correct about the discrepancies between the following perceptions and realities, there's no saying when people will change their minds or shift their focuses. That said, let's dive in.

Perception vs. Reality #1
Perception: Low Interest Rates, Questionable Bond Outlook Means Stocks are Attractive
Reality: Interest Rates Are Being Artificially and Deliberately Manipulated

It's no secret that the Federal Reserve's low interest rate policy and quantitative easing efforts have held interest rates very low for very long. However, when people talk about stock market implications of bond yields, they rarely mention the fact that bond yields are artificially low. In an unmanipulated market, bond prices and stock valuations should be related, but I regard that connection as highly dubious right now. Investors who say that stocks deserve higher multiples (lower earnings yields) because bond yields are so low may well be setting themselves up for disappointing returns/frustrating losses when bond prices normalize. Again, this isn't a market timing call, and yields may remain low for quite some time. But, eventually this discrepancy will correct itself, and stock performance is likely to suffer at that time.

Perception vs. Reality #2
Perception: Earnings Growth Has Been Strong and Will Remain That Way
Reality: Top-Line Growth Will Have to Pick Up; Cost-Cutting has Run Its Course

Earnings growth has certainly been robust, but much of the strength has come from companies running lean cost structures and wringing as much efficiency as possible out of their employees and their assets. Though the recession has ended, the economy is not yet healthy enough to fuel strong sales growth. Companies can only boost profits by cutting costs and increasing productivity for so long. Therefore, top-line growth will have to play a larger role going forward than it has over the past 4-6 quarters. Whether or not economic growth is strong enough to drive revenue increases is unsure, but the current level of stock prices undoubtedly assumes it is. Any stagnation of the recovery and concomitant sluggish sales will likely hit stock prices.

Perception vs. Reality #3
Perception: European Debt Crisis Drives Short-Term Volatility, but It's Not a Long-Term Concern
Reality: Crisis May Be a Harbinger of What's to Come in the U.S. if States, the Feds Don't Improve Balance Sheets

So far, turmoil in Greece and Ireland has served only as a temporary headwind to U.S. stocks. In keeping with the investment world's increasingly short-term focus, people seem more concerned with what fiscal crises in Europe mean for U.S. stocks over the coming days and months than with what they might mean down the road. I believe that this interpretation misses the mark. Since the U.S. fiscal situtation is generally considered to be stronger than that in many European countries, U.S. federal and municipal debt issuance has been relatively smooth, and interest rates have only risen modestly. If the U.S. doesn't get serious about its fiscal woes, eventually the crisis will arrive on American shores. There's no way of telling when this might happen, but the current level of stock prices seems to imply that it never will.

Here's the problem with that. To fix the federal balance sheet and/or to improve state and municipal balance sheets, legislators will have to raise taxes and/or cut spending. Tax hikes and spending cuts both reduce consumer spending. This hurts growth. There's no way around this. Stocks can certainly continue to rise for some time, but austerity will be bearish if/when it comes. If it doesn't come, we're in for a much bigger crisis some time down the road.

Perception vs. Reality #4
Perception: Everywhere You Look, You See Good Companies at Cheap Prices
Reality: It's Hard to Find Genuine Bargains, but There are Intriguing Short Prospects Everywhere

There is no shortage of stock market commentators who claim that they see bargains everywhere they look. Perhaps I'm not looking in the right places, but I've been having a difficult and increasingly impossible time finding good companies at reasonable prices. I use similar criteria to assess long and short investments, and I find intriguing shorts in lots of sectors right now. This tells me that valuations are stretched. Certainly they can become more so before we get a selloff, but every day that stocks rally, they get more expensive.

I've written on Seeking Alpha about a number of stocks which I regard as expensive (CRM, OPEN, GMCR), and take my word for it: there are plenty more than these whose shares I do not want to own at present levels. A few weeks ago, I also mused about the Facebook-Goldman deal and argued that this valuation is indicative of excessive investor enthusiasm. Bargains are hard to find, and as valuations go up, so does positive sentiment. While this is not a prediction of an impending correction or bear market, it is a message of caution for people who think stocks are cheap right now.

All that said, I always try to consider both sides of any investment issue, and there are some reasons for optimism. Job growth has shown signs of improvement, and some economic data have been increasingly (though not uniformly) positive. The Federal Reserve remains accommodative, and I'm skeptical about whether or not there is political will for austerity. For these reasons, stocks could continue onward and upward. That said, I see too many reasons for caution, and investors are turning a blind eye to these concerns as their complacency rises.’

Poor Recovery: The Problem Is Institutional [ Well it’s true that the problem is institutional as in pervasively corrupt, incompetent, nonproductive in real terms relative to their cost / damage (still no pros on the wall street fraud which is ongoing in terms of the last crisis, the worthless paper marked to anything, and the current bubble fraud that’s high-frequency computerized churn-and-earn high-frequency commissioned / sold into, 360 tons of $100 bills disappear in Iraq, etc.. What do they get paid for?) ( Peter Schiff: Washington a parasite to economy ‘US foreclosures hit record highs in 2010, but that may not be the worst of it. 2011 may be even worse. Meanwhile, JP Morgan Chase exceeded market expectations, announcing a 47% rise in quarterly profits and released details on a $28.1 billion pay and bonus pool. Peter Schiff, the President of Euro Pacific Capital said Washington and Wall Street are becoming one force and are sucking the underlying American dry like a parasite’.); but the problem is structural, as in transfer of jobs, industries, etc. (among the sources of the huge over-compensation to wall street, company executives), never to return in any meaningful sense; and as in the defacto bankruptcy of the nation with insurmountable record debt / deficits or stated another way, broke. Unlike in the past, once beyond the propaganda, rhetoric, and smoke and mirrors / obfuscation, there is no prospective way for america to grow its way out, nor are there funds in real money with which to do it. Quite simply, america’s broke / bankrupt in every which way. ] Loundsbury ‘Harold Meyerson, Op Ed Columnist at The Washington Post, has hit the nail right on the head, in the opinion of GEI. Meyerson says the debate about whether the recession and poor recovery is a cyclical problem or a structural problem is misguided. He says the problem is institutional - - - and is he ever right!

In a column last week, Myerson points out that the devastation of The Great Recession has fallen disproportionately on the blue collar population, those without a college degree. And he traces the rolling over of median family income in this century, not just in the downturn, but since the turn of the century. Even at the peak, in 2007, median family income was less than in 2000.

What Meyerson doesn't point out is that average incomes have faired better in the 21st century and in all of the past 50 years. In fact, average family income has risen more than 2.5 times as much and median income over the last 30 years. Why is this important? Because the more there is a fat tail of ever higher incomes for a few, the greater the difference between average and median income becomes.

Myerson says:

The great sociologist William Julius Wilson has long argued that the key to the unraveling of the lives of the African American poor was the decline in the number of "marriageable males" as work disappeared from the inner city. Much the same could now be said of working-class whites in neighborhoods that may not look like the ghettos of Cleveland or Detroit but in which productive economic activity is increasingly hard to find.

This grim new reality has yet to inform our debate over how to come back from this mega-recession. Those who believe our downturn is cyclical argue that job-creating public spending can restore us to prosperity, while those who believe it's structural - that we have too many carpenters, say, and not enough nurses - believe that we should leave things be while American workers acquire new skills and enter different lines of work. But there's a third way to look at the recession: that it's institutional, that it's the consequence of the decisions by leading banks and corporations to stop investing in the job-creating enterprises that were the key to broadly shared prosperity.

Since Meyerson has chosen income disparity as a cornerstone of his argument, let's look at how incomes have grown over the last 50 years. These are shown in the following graph, not adjusted for inflation.

click to enlarge images [chart]

Real median income and average income seem to grow similarly in the 1950s and 1960s, the growth of average income starts to pull away in the mid-1960s and appears to continue to gain gound for the the next 40+ years. The more average income deviates from median income the more money is found in the high income tail on the distribution curve. This is often called a "fat tail", which is very appropriate in this discussion because that is where the fat cats are. The fat tail has not gotten so because ten times as many people equaled the incomes of the former fat cats, but more because a few fat cats have received 10 times the income. This is exemplified by the often quoted statistic that average CEO salaries were 40x average worker pay 50 years ago and today are more like 400x.

The change income distribution that seems to be appearing in the above graph becomes more apparent in the following graph where real income gains are shown for the last six decades starting with the ten years from 1949 - 1959 (the 1950s) and ending with 1999 - 2009 (the 2000s). [chart]

The 1950s and 60s were real boom years. Starting with the 1970s a lower level of income growth was established, but even that lower level could not be maintained in the 2000s.

After the 1950s every decade has seen average real income grow more than the median. The fat tail has gotten fatter over the past half century in every decade, without exception. Yes the average did decline in the 2000s, but the median declined 76% more!

The most dramatic pattern of change is evident when the data is divided into two halves: 1949 to 1979 and 1979 - 2009. This is done in the following graph: [chart]

For thirty years after World War II the wealth of the country increased in a balanced manner. The average income containing the greater contribution from the top earners of the day, grew at a rate very similar to the income growth of the broader population, represented by the median.

Yes there were "fat cats" and they had significantly larger incomes than the bulk of the population. And these top incomes grew over those three decades, but at almost the same rate as the majority of the populace.

Then something happened. From 1979-2009 it appears that the American pie suddenly got smaller. In the later three decades the real median income growth was less than 10% of the rate seen from 1949 to 1979. And as the pie got smaller, the fat cats took a much larger share. The average income grew at a rate 254% that of the median income. You might say that, as the cow gave less milk, the top of the economic ladder skimmed more and more cream off the top.

Meyerson identifies the force majuere to be corporate America:

Our multinational companies still invest, of course - just not at home. A study by the Business Roundtable and the U.S. Council Foundation found that the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies' revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power - the equilibrium that Henry Ford famously recognized when he upped his workers' pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism - has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits. And that's exactly what they've done.

Meyerson doesn't get into some of the other areas that might be brought to bear on the current condition of the American economy:

He doesn't address the fact that the U.S. ranks below some third world countries in education.
He doesn't discuss the increasing burden of health care, both because costs have been running out of control and because an ever increasing portion of the population is kept from making the contribution they might have otherwise because of poor health.
He doesn't discuss the capture of much potential domestic capital by financial engineers who find it much easier to get rich in a rigged casino than to make money the old fashioned way.

Part of the problem is that Americans have fallen into the way of the easiest path, where, either by credit card or by making quick trades, the desires of the moment are satisfied with no seemingly current cost.

It seems that few want to think about the needs of tomorrow. This is true starting with the masses who kiss off the idea of working hard in school to prepare for what they will need 20 years down the road. This is also true of the "capitalist" who finds that skimming a few percent off each of many deals a year to get quick, large quarterly returns is much easier than investing and building something that will will make much larger returns extending over decades and producing things of real economic utility.

There are a number of things that Meyerson does not address, but if you want to hit one nail at a time, I think he has picked the baddest nail in the plank. He finishes his column thusly:

Our economic woes, then, are not simply cyclical or structural. They are also - chiefly - institutional, the consequence of U.S. corporate behavior that has plunged us into a downward cycle of underinvestment, underemployment and under-consumption. Our solutions must be similarly institutional, requiring, for starters, the seating of public and worker representatives on corporate boards. Short of that, there will be no real prospects for reversing America's downward mobility.

If we were to address all the other issues I mentioned previously and did not address the institutional problem Meterson has identified, we would not ultimately solve our economic puzzle.’

20 Shocking New Economic Records That Were Set In 2010 2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline…The Economic Collapse Jan 14, 2011 ‘2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline. The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month. Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs. What a mess! In fact, even many of the “good” economic records that were set during 2010 were indications of underlying economic weakness. For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value. Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.

So will things improve in 2011? That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy. The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.

Amazingly, many of our politicians and many in the mainstream media have declared that “the recession is over” and that the U.S. economy is steadily improving now.

Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below. That should shut them up for a while.

The following are 20 new economic records that were set during 2010….

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.

#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009. This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#5 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.

#7 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.

#9 Government spending continues to set new all-time records. In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.

#10 The number of Americans on food stamps surpassed 43 million by the end of 2010. This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping. But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

#13 According to the FDIC, 157 banks failed during 2010. That was the highest number of bank failures that the United States has experienced in any single year during the past decade.

#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010. They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve’s continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.

#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.

#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.

#17 In July, sales of new homes in the United States declined to the lowest level ever recorded.

#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006. Amazingly, this is even farther than house prices fell during the Great Depression. From 1928 to 1933, U.S. housing prices only fell 25.9 percent.

#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.

#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.

There are some people that have a hard time really grasping what statistics actually mean. For people like that, often pictures and charts are much more effective. Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year. It shows the growth of the U.S. national debt from 1940 until today. I honestly don’t know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown….[chart]

14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007 Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. ‘The Economic Collapse Jan 10, 2011

’Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.

Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt.

Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.

We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.

So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.

But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….

#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent.

#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%.

#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#4 Nearly 10 million Americans now receive unemployment insurance, whichis almost four times as many as were receiving it back in 2007.

#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.

#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.

#7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.

#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.

#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers.

#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States.

#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless sheltersincreased from 131,000 to 170,000 between 2007 and 2009.

#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”. Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.

#13 In 2007, the “official” federal budget deficit was just 161 billion dollars. In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.

#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.

So is there any hope that we can turn all of this around?

Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.

If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world.

If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.

We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.

So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.

Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.’

Tipping Point: 25 Signs That The Coming Financial Collapse Is Now Closer Then Ever The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy.

The Economic Collapse
Dec 17, 2010

The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy. Yields on U.S. Treasuries have moved up rapidly and Moody’s is publicly warning that it may have to cut the rating on U.S. government debt soon. Mortgage rates are also moving up aggressively. The euro and the U.S. dollar both look incredibly shaky. Jobs continue to be shipped out of the United States at a blistering pace as our politicians stand by and do nothing. Confidence in U.S. government debt around the globe continues to decline. State and local governments that are drowning in debt across the United States are savagely cutting back on even essential social services and are coming up with increasingly “creative” ways of getting more money out of all of us. Meanwhile, tremor after tremor continues to strike the world financial system. So does this mean that we have almost reached a tipping point? Is the world on the verge of a major financial collapse?

Let’s hope not, but with each passing week the financial news just seems to get eve worse. Not only is U.S. government debt spinning wildly toward a breaking point, but many U.S. states (such as California) are in such horrific financial condition that they are beginning to resemble banana republics.

But it is not just the United States that is in trouble. Nightmarish debt problems in Greece, Spain, Portugal, Ireland, Italy, Belgium and several other European nations threaten to crash the euro at any time. In fact, many economists are now openly debating which will collapse first – the euro or the U.S. dollar.

Sadly, this is the inevitable result of constructing a global financial system on debt. All debt bubbles eventually collapse. Currently we are living in the biggest debt bubble in the history of the world, and when this one bursts it is going to be a disaster of truly historic proportions.

So will we reach a tipping point soon? Well, the following are 25 signs that the financial collapse is rapidly getting closer….

#1 The official U.S. unemployment rate has not been beneath 9 percent since April 2009.

#2 According to the U.S. Census Bureau, there are currently 6.3 million vacant homes in the United States that are either for sale or for rent.

#3 It is being projected that the U.S. trade deficit with China could hit 270 billion dollars for the entire year of 2010.

#4 Back in 2000, 7.2 percent of blue collar workers were either unemployed or underemployed. Today that figure is up to 19.5 percent.

#5 The Chinese government has accumulated approximately $2.65 trillion in total foreign exchange reserves. They have drained this wealth from the economies of other nations (such as the United States) and instead of reinvesting all of it they are just sitting on much of it. This is creating tremendous imbalances in the global economy.

#6 Since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were approximately 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

#7 The United States now employs about the same number of people in manufacturing as it did back in 1940. Considering the fact that we had 132 million people living in this country in 1940 and that we have well over 300 million people living in this country today, that is a very sobering statistic.

#8 According to CoreLogic, U.S. housing prices have now declined for three months in a row.

#9 The average rate on a 30 year fixed rate mortgage soared 11 basis points just this past week. As mortgage rates continue to push higher it is going to make it even more difficult for American families to afford homes.

#10 22.5 percent of all residential mortgages in the United States were in negative equity as of the end of the third quarter of 2010.

#11 The U.S. monetary base has more than doubled since the beginning of the most recent recession.

#12 U.S. Treasury yields have been rising steadily during the 4th quarter of 2010 and recently hit a six-month high.

#13 Incoming governor Jerry Brown is scrambling to find $29 billion more to cut from the California state budget. The following quote from Brown about the desperate condition of California state finances is not going to do much to inspire confidence in California’s financial situation around the globe….

“We’ve been living in fantasy land. It is much worse than I thought. I’m shocked.”

#14 24.3 percent of the residents of El Centro, California are currently unemployed.

#15 The average home in Merced, California has declined in value by 63 percent over the past four years.

#16 Detroit Mayor Dave Bing has come up with a new way to save money. He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.

#17 The second most dangerous city in the United States – Camden, New Jersey – is about to lay off about half its police in a desperate attempt to save money.

#18 In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. More older Americans than ever find that they have to keep working just to survive.

#19 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

#20 The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November budget deficit on record.

#21 The U.S. government is somehow going to have to roll over existing debt and finance new debt that is equivalent to 27.8 percent of GDP in 2011.

#22 The United States had been the leading consumer of energy on the globe for about 100 years, but this past summer China took over the number one spot.

#23 According to an absolutely stunning new poll, 40 percent of all U.S. doctors plan to bail out of the profession over the next three years.

#24 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#25 All over the United States, local governments have begun instituting “police response fees”. For example, New York Mayor Michael Bloomberg has come up with a plan under which a fee of $365 would be charged if police are called to respond to an automobile accident where no injuries are involved. If there are injuries as a result of the crash that is going to cost extra.

16 Nightmarish Economic Trends To Watch Carefully In 2011 The American Dream Dec 15, 2010 ‘If you only watch the “economic pundits” on television, it can be very confusing to figure out exactly what is happening with the U.S. economy. One pundit will pull out a couple statistics that got a little bit better over the past month and claim that we have entered a time of solid recovery. Another pundit will pull out a couple statistics that got a little worse over the past month and claim that we are headed for trouble. So what is the truth? Well, if you really want to get a clear idea of what is really going on you have to look at the long-term trends. There are some economic trends which just keep getting worse year after year after year, and it is those trends that tell the real story of the decline of our economic system.

As you examine the long-term trends, you quickly come to realize that the U.S. is trapped in an endless spiral of debt, the middle class is being wiped out, the U.S. dollar is being destroyed and America is rapidly becoming a post-industrial wasteland.

Posted below are 16 nightmarish economic trends to watch carefully in 2011. It is becoming exceedingly apparent that unless something is done rapidly we are heading for an economic collapse of unprecedented magnitude….

#1 Do you want to see something scary? Just check out the chart below. Since the beginning of the economic downturn, the U.S. monetary base has more than doubled. But don’t worry – Federal Reserve Chairman Ben Bernanke has promised us that this could never cause inflation. In fact, Bernanke says that we need to inject even more dollars into the economy. So if you are alarmed by the chart below, you are just being irrational according to Bernanke….

[chart]

#2 Thousands of our factories, millions of our jobs and hundreds of billions of dollars of our national wealth continue to be shipped overseas. In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

#3 The United States is rapidly becoming a post-industrial wasteland. Back in 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall. Sadly, the truth is that America is being deindustrialized. As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#4 The number of Americans that have been out of work for an extended period of time has absolutely exploded over the last few years. As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#5 The middle class continues to be squeezed out of existence. According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck. That was up substantially from 49 percent in 2008 and 43 percent in 2007.

#6 The number of Americans living in poverty is absolutely skyrocketing. 42.9 million Americans are now on food stamps, and one out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government. Unfortunately, many of those that have been hardest hit by this economic downturn have been children. According to one new study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

#7 Many American families have been pushed beyond the breaking point during this economic downturn. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. The final number for 2010 is expected to be even higher.

#8 The U.S. real estate market continues to stagnate. During the third quarter of 2010, 67 percent of mortgages in Nevada were “underwater”, 49 percent of mortgages in Arizona were “underwater” and 46 percent of mortgages in Florida were “underwater”. So what happens if home prices go down even more?

#9 More elderly Americans than ever are being forced to put off retirement and continue working. In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. Unfortunately, it looks like this problem will only get worse in the years ahead. In America today, approximately half of all workers have less than $2000 saved up for retirement.

#10 In the United States today, there are simply far too many retirees and not nearly enough workers to support them. Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.

#11 Financial assets continue to become concentrated in fewer and fewer hands. For example, the “big four” U.S. banks (Citigroup, JPMorgan Chase, Bank of America and Wells Fargo) had approximately 22 percent of all deposits in FDIC-insured institutions back in 2000. As of the middle of 2009 that figure was up to 39 percent.

#12 The Federal Reserve has been destroying the value of the U.S. dollar for decades. Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power. An item that cost $20.00 in 1970 would cost you $112.35 today. An item that cost $20.00 in 1913 would cost you $440.33 today.

#13 Commodity prices continue to soar into the stratosphere. Ten years ago, the price of a barrel of oil hovered around 20 to 30 dollars most of the time. Today, the price of oil is rapidly closing in on 100 dollars a barrel and there are now fears that it could soon go much higher than that.

#14 Federal government spending is completely and totally out of control. The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November deficit on record. But our politicians can’t seem to break their addiction to debt. In fact, Democrats are trying to ram through a 1,924 page, 1.1 trillion dollar spending bill in the final days of the lame-duck session of Congress before the Republicans take control of the House of Representatives next year.

#15 The U.S. national debt is rapidly closing in on 14 trillion dollars. It is more than 13 times larger than it was just 30 short years ago. According to an official U.S. Treasury Department report to Congress, the U.S. national debt is projected to climb to an estimated $19.6 trillion by 2015.

#16 Unfortunately, the official government numbers grossly understate the horrific nature of the crisis we are facing. John Williams of Shadow Government Statistics has calculated that if the federal government would have used GAAP accounting standards to measure the federal budget deficit for 2009, it would have been approximately 8.8 trillion dollars. Not only that, but John Williams now says that U.S. government debt is so wildly out of control that it is mathematically impossible for us to “grow” our way out of it….

The government’s finances not only are out of control, but the actual deficit is not containable. Put into perspective, if the government were to raise taxes so as to seize 100% of all wages, salaries and corporate profits, it still would be showing an annual deficit using GAAP accounting on a consistent basis. In like manner, given current revenues, if it stopped spending every penny (including defense and homeland security) other than for Social Security and Medicare obligations, the government still would be showing an annual deficit. Further, the U.S. has no potential way to grow out of this shortfall.

The more one examines the U.S. economic situation, the more depressing it becomes. The U.S. financial system is trapped inside a horrific debt spiral and we are headed straight for economic oblivion.

If our leaders attempt to interrupt the debt spiral it will plunge our economy into a depression. If our leaders attempt to keep the debt spiral going for several more years it will just make the eventual crash even worse. Either way, we are headed for a financial implosion that will be truly historic.

The debt-fueled good times that we have been enjoying for the last several decades are rapidly coming to an end. Unfortunately for the tens of millions of Americans that are already suffering, our economic problems are only going to get worse in the years ahead.’

Jobless Recovery?: 25 Unemployment Statistics That Are Almost Too Depressing To Read ‘… Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher. So are you enjoying the jobless recovery? Economic Collapse Blog Dec 4, 2010 ‘Guess what? Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher ... Times are really, really tough and unfortunately the long-term outlook is very bleak. We should have compassion on those who are out of work right now, because soon many of us may join them.

The following are 25 unemployment statistics that are almost too depressing to read….

#1 According to the Bureau of Labor Statistics, the U.S. unemployment rate for November was 9.8 percent. This was up from 9.6 percent in October, and it continues a trend of depressingly high unemployment rates. The official unemployment number has been at 9.5 percent or higher for well over a year at this point.

#2 In November 2006, the “official” U.S. unemployment rate was just 4.5 percent.

#3 Most economists had been expecting the U.S. economy to add about 150,000 jobs in November. Instead, it only added 39,000.

#4 In the United States today, there are over 15 million people who are “officially” considered to be unemployed for statistical purposes. But everyone knows that the “real” number is even much larger than that.

#5 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#6 The number of “persons not in the labor force” in the United States recently set another new all-time record.

#7 It now takes the average unemployed American over 33 weeks to find a job.

#8 When you throw in “discouraged workers” and “underemployed workers”, the “real” unemployment rate in the state of California is actually about 22 percent.

#9 In America today there are not nearly enough jobs for everyone. In fact, there are now approximately 5 unemployed Americans for every single job opening.

#10 According to The New York Times, Americans that have been unemployed for five weeks or less are three times more likely to find a new job in the coming month than Americans that have been unemployed for over a year.

#11 The U.S. economy would need to create 235,120 new jobs a month to get the unemployment rate down to pre-recession levels by 2016. Does anyone think that there is even a prayer that is going to happen?

#12 There are 9 million Americans that are working part-time for “economic reasons”. In other words, those Americans would gladly take full-time jobs if they could get them, but all they have been able to find is part-time work.

#13 In 2009, total wages, median wages, and average wages all declined in the United States.

#14 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#15 The United States has lost at least 7.5 million jobs since the recession began.

#16 Today, only about 40 percent of Ford Motor Company’s 178,000 workers are employed in North America, and a big percentage of those jobs are in Canada and Mexico.

#17 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.

#18 Earlier this year, one poll found that 28% of all American households had at least one member that was looking for a full-time job.

#19 In the United States today, over 18,000 parking lot attendants have college degrees.

#20 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#21 As the employment situation continues to stagnate, millions of American families have decided to cut back on things such as insurance coverage. For example, the percentage of American households that have life insurance coverage is at its lowest level in 50 years.

#22 Unless Congress acts, and there is no indication that is going to happen, approximately 2 million Americans will stop receiving unemployment checks over the next couple of months.

#23 A poll that was released by the Pew Research Center back in June discovered that an astounding 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the economic downturn began.

#24 According to Richard McCormack, the United States has lost over 42,000 factories (and counting) since 2001.

#25 In the United States today, 317,000 waiters and waitresses have college degrees.

But this is what we get for creating the biggest debt bubble in the history of the world. For decades we have been digging a deeper hole for ourselves by going into increasingly larger amounts of debt. In America today, our entire economy is based on debt. Even our money is debt. We were fools if we ever thought this could go on forever. Just think about it. Have you ever gone out and run up a bunch of debt? It can be a lot of fun sitting behind the wheel of a new car, running your credit cards up to the limit and buying a beautiful big house that you cannot afford. But in the end what happens? It always catches up with you. Well, our collective debt is starting to catch up with us. There is a sea of red ink on every level of American society. It is only a matter of time before it destroys our economy. IF YOU THINK THAT THINGS ARE BAD NOW, JUST WAIT. THINGS ARE GOING TO GET A WHOLE LOT WORSE. A HORRIFIC ECONOMIC COLLAPSE IS COMING, AND IT IS GOING TO BE VERY, VERY PAINFUL.’

Howard Davidowitz on the Economy: "Here Are the Numbers ... WE'RE BROKE!" 11-25-10 ‘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’

17 Things Worrying Investors Lloyd's Wall of Worry

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. (and now Egypt, etc.)

Consumer confidence down, LiveLeak.com - Loonie closes above U.S. dollar … dollar for first time closes below parity on Canadian loonie … hey, hey, hey … 'Huge' stock decline — but not yet MarketWatch - Brimelow ‘Commentary: Adens … ‘mega trend’ looks grim … The Adens expect a hyperinflationary collapse … ‘ Oh come on! Manipulated dollar decline with inflated earnings, stock prices thereby, etc., … we’ve seen this all before … the last few crashes … Jobless rate jumps to 9.8% as hiring slows (Washington Post) [ The reality is not a mystery! The nation’s been thrown under the bus for the greater good (wealth) of the very few (frauds on wall street, etc.); wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION: Come on! This is gettin’ even more downright ridiculous (if that’s even possible)! Pending home foreclosure / distress sales up, oil prices (and oil stocks) up, debased dollar down, plus a little familiar ‘better than expected’ thrown in along with prospects of a ‘no-recession bernanke’ market-frothing bull session on 60 minutes and, voila, suckers’ rally into the close to keep the suckers suckered! What’s good for the frauds on wall street is bad for just about everyone else which includes the vast majority of people and businesses, domestically and globally, as current dollar manipulation / debasement ultimately results in higher costs and loss of purchasing power (ie., oil, etc.). Clearly, this is one of those fraudulent wealth transfers to the frauds on wall street et als which will ultimately be paid for by those who least are in a position to afford it, courtesy of the ever more worthless Weimar dollar, etc., inflating earnings, eps, lowering p/e multiples, etc., see infra. This is an especially great time to sell / take profits while you can since there's much worse to come! Previous: 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 ]

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Friday, February 4, 2011

February 4, 2011 posts