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 (Only up to 3-11-11-you must be logged in - (Washington Post) [ Comments COMMENTS ARE CLOSED WHILE WE UPGRADE OUR SYSTEMS ] the comments are no longer archived on their site ) . The following is the cumulative archive of blog posts / topics for 2010 as the new year starts anew (and archived by quarter): http://albertpeia.com/December312010postsarchive.htm or PDF formatted version
http://albertpeia.com/December312010postsarchive.pdf ]
CEOs’ pay: It’s as if the Great Recession never happened (Washington Post) The typical big-business CEO made $9 million last year, exceeding pre-recession level. [ And ‘worth every penny’? Not likely in pervasively corrupt, defacto bankrupt america, leaders no more except in fraud, crime, manipulation, subterfuge. Imagine the comparisons to their foreign counterparts where value still has meaning. As if ‘never happened? How ‘bout not over, and worse to come! UBS bank admits rigging bids (WP) Swiss bank reaped millions of dollars of illegal profits by rigging municipal bond transactions in 36 states, government said. [ The key here is ‘Swiss’ and ‘millions of dollars of illegal profits’ when the american banks / wall street frauds’ generated hundreds of billions in illegal profits, which frauds continue to this day by way of slightly subdued high-frequency trading / commission-generated scams along with cover-up and cash-out from the last, still unprosecuted fraud in the trillions for which disgorgement, fines is long overdue. 24 Signs Of Economic Decline In America ‘The US is in the middle of a devastating long-term economic decline..’ ] States face shortfall for retirees (WP) Public workers’ retirement funds had a gap of $1.26 trillion at the end of fiscal 2009
Study: Affordable rentals scarce (WP)
Poll: For Obama, low marks on Afghan war (WP) More Americans disapprove of President Obama’s management of the war in Afghanistan than support it
Fuel prices cut into Obama popularity (WP) (The frauds on wall street et als should be criminally prosecuted, jailed, fined, and disgorgement imposed), and have used the mideast turmoil to obfuscate their failure. Dave's Daily 'If you can keep interest rates this low this long, its inevitable cheap financing can allow companies to start cobbling each other up. Further Ben's policies allow companies like IBM to sell bonds at 1% and buy back shares with the proceeds (total paper bubble-scam). POMO is occurring almost daily and Primary Dealers can buy back their shares and pay dividends with what essentially is taxpayer money-- … an especially great opportunity to sell / take profits while you still can since there's much worse to come! America Is a Failed State Because It Won’t Prosecute Financial Crime Washington’s Blog / the grim economic reality [ http://albertpeia.com/grimreality.htm ]. Selling In May Is Very Good Advice This Year Harding / April Is a Good Time to Sell Adler Equity Valuations Are Forming the Second Biggest Bubble in U.S. History Kaspar ... According to Yale University’s Dr. Robert Shiller, the market is now 41% overvalued …only time the markets have been more overvalued .. 1929 & tech bubble. http://static.seekingalpha.com/uploads/2011/4/12/saupload_cape_thumb1.png PRECHTER: We're Still In A Massive Bear Market And Stocks Will Crash To New Lows ]
A political minefield in Treasury plan (Washington Post) Questions about deficit and growth complicate Treasury’s plan to overhaul corporate taxes. [ What plan! . Let the budget battle begin After two weeks of tumultuous meetings with constituents, Congress returns to a lengthy fight over the nation’s solvency. (WP) [ Or more aptly put, stated another way, the nation’s solvency is over. .. america’s defacto bankrupt with no end in sight.. interest alone is eating progressively into GDP beyond the subterfuge.. Gerson: How serious are we about the deficit? (WP) [ Not much! I mean come on! 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! ‘ … Suckers’ rally to keep suckers suckered: Philadelphia Fed Depresses Economists Durden ‘..And here comes the first indicator that Q2 GDP is about to be mass revised by everyone, courtesy of Japan, and ongoing inflation pressures: the Philadelphia Fed collapsed from a revised 43.4 (a 27 year high) to 18.5, the lowest since November 2010… This is an especially great opportunity to sell / take profits while you still can since there's much worse to come! U.S. Economy Remains on Life Support Hansen ‘
- The Federal Reserve press conference by Chairman Bernanke which contained almost no new economic insights; and,
- An FOMC meeting with no policy changes or insights..
CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE... ‘In emotional and personal testimony, an ex-Justice official who 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’ Cases against Wall Street lag despite Holder’s vows to target financial fraud Obama has promised to hold Wall Street accountable for the meltdown. ):
‘THE OBAMA DECEPTION’ http://albertpeia.com/obamadeceptionhighqualityversion.flv ]
‘End of Days’ message rolls into D.C. (Washington Post) The potentially rotten news that the world will end on May 21 arrived plastered on a caravan of RVs. [ Gee … little premature … you know, that 2012, end of Mayan calendar, Nostradamus thing … I previously weighed in / wrote: Why do Americans still dislike atheists? (Washington Post) [ And not just americans … Why? First and foremost because there is a God. Second, it is intellectually dishonest to be an atheist. Specifically, there is absolutely no evidence to dispute the existence of God. While one might similarly argue that there is no evidence to suggest there is a God (which I would dispute), which for most is a fair statement, the same would yield at best, if intellectually honest, the position of ‘agnostic’. I can totally understand and even empathize with the view of the agnostic. After all, at this point, there seems to be ‘no rhyme nor reason’ at all. But, think binary, positives / negatives. Just too many negatives. Think ‘capital punishment’. No, the world’s not going to end in 2012 as some fear. Rather, think slow burn; decades at best; then ‘poof’. In the scheme of things, this world’s just not that important (apes, notochordates, and initially single celled organisms). Kind of akin to what I previously wrote: (God doesn’t care that you wrestle a girl who wants to wrestle!) Boy wrestler forfeits match to female opponent... [ What a homo! Wow! I feel sorry for those guys she actually beat (20 of them – her record was 20 and 13) … they’ll probably never get over it … nor should they … I have to rethink my regard for Iowa, Iowa state wrestling now presuming such stalwart championship teams to be the products of out-of-state imports … as for the guy who forfeited, he could have easily and gently taken her down (you can easily do that with a lesser opponent), got her in a double grapevine and grind her in a certain way into the mat, and when she was in the throws of convulsive orgasm, she’d unwittingly arch her back, thereby pressing her own shoulder blades to the mat, thereby pinning herself, thus enabling the homo to say in a manner of speaking that he was making heterosexual love not war with her ……… how pathetic and preposterous this was … and, let me remind the homo that God doesn’t care that you wrestle a girl who wants to wrestle! ]
244,000 jobs added in April Associated Press In biggest hiring spree in five years, employers posted a third straight month of hiring; unemployment rose to 9 percent as people resumed looking for work. Interactive: Why it doesn’t feel like a recovery (Washington Post) [ Short answer: Because it’s really not a recovery! What jobs? $1 dollar a day, 3 days a year … and on government pork projects for the porkers’ reelection campaigns? I don’t think so! Obama’s victory lap (Washington Post) The killing of bin Laden offered hope of instant renewal. [ Only wobama aficionado Mr. Milbank could latch onto this propagandist Orwellian dream and call it victory. Sounds like he’s shootin’ for a job in this failed presidency/administration as others, including from the Post.. 10 Reasons 2011 Is Feeling More and More Like 2008 Jensen ‘..it eerily feels like the months before the financial crisis and meltdown of 2008. .. impending and significant pullback over the summer.
10 reasons 2011 ..like 2008.
- Gas prices rising rapidly, starting to impact consumer spending and sentiment. On Thursday, gas prices hit this highest level since July 31st, 2008 and have risen every month since last August, up over 30% ..
- Despite numerous federal programs (mostly failed), the housing market remains moribund. ..
- The Federal Reserve continues to be behind the curve. In 2008, the subprime loan problem was “contained”. In 2011, Bernanke can’t seem to see any signs of inflation despite rapidly rising energy and food prices (they are not “core” components of the Index Blind Ben
- In 2008, we were fighting military actions in two Middle Eastern countries; Iraq and Afghanistan. In 2011, we are still fighting in Iraq and Afghanistan and have added ½ a war in Libya, .. a higher floor for oil prices ..
- World food prices increased dramatically in the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest ..In 2008, this produced food riots in many developing countries. In 2011, we have uprisings throughout the Middle East ..
- In May 2008, the market was worried about which was the next financial institution ..what European sovereign state will be the next to need a bailout after Greece, Ireland and Portugal and what the ramifications will be for the credit markets.
- In 2008, gold hit $900 an ounce in January of that year and $1000 an ounce for the first time in March 2008. In 2011, gold and silver just hit all time highs last week
- As in 2008, U.S. GDP growth was anemic in the first quarter.. In 2011, GDP growth ..shows a significant slowdown from previous qtr.
- As in 2008, the fiscal and monetary policies of the United States have led to a decline in the value of its currency
- In 2008, China, the world’s third largest economy, instituted a series of measures to curb growth in order to address increasing inflation and the beginnings of a property bubble.. ]
CIA spied on bin Laden in town of Abbottabad (Washington Post) Agency maintained secret facility for a small team of spies who conducted extensive surveillance over a period of months on Osama bin Laden’s compound. [ Come on! Who is foolish enough to believe anything they say; particularly their scripted, ever-changing, evolving, self-serving accounts belied only by truth / reality as told by those with true courage and integrity; as, for example Jessica Lynch, etc.
Top Terrorist Hunter For U.S. Government: Wolfowitz General Told Me 9/11 Was False Flag
9/11 Families Snub Obama’s “Photo-Op”
White House Press Secretary “Floundering Under Pressure” Of Flip-Flopping Bin Laden Fable
Pentagon Dinner Guest al-Awlaki Slated to Replace Osama as the new face of terror in a war designed to last forever.
Staged: White House “Situation Room” Photos Part Of Bin Laden Fable .. it has emerged that the dramatic photos of Obama, Biden, Hillary Clinton and members of the White House security team watching the assassination of Bin Laden “live” were in fact completely staged, casting further doubt on the ever-changing official account of the operation.
Hillary Clinton Claims ‘Allergy Not Anguish’ Reason For Photo As Evidence Points to PR Stunt
No resistance in “cold-blooded” U.S. raid: Pakistan officials
Red Alert: Government Had Osama bin Laden Frozen for Years
Nimmo / Jones | Videos [ I personally believe Osama’s been dead for quite some time. Indeed, for one on dialysis, he otherwise would have been nothing less than a modern day miracle in terms of longevity / mortality rates for those so afflicted, particularly under the ‘stressful’ circumstances involving evading capture, betrayal for money, etc.. His ‘surfacing’ for a ‘talk’ wouldn’t even pass muster in the most rudimentary requirements for ‘proof of life’. The release at this time of the ‘announcement’ is, rather than a victory lap so to speak, but rather a sign of weakness and desperation on the part of america whose global and domestic economic, financial, and geopolitical position is substantially diminished and declining rapidly and whose military industrial complex welfare plan along with the Orwellian diversion of the masses could at most yield a pyrrhic victory which also would require for consummation a wrap-up of this nation-bankrupting contrived war scenario, which is not likely. Moreover, the same comes at a time of systemic failure for pervasively corrupt, defacto bankrupt america While the ‘announcement’ plays well for the nonce, to the dumb, uninformed back home, the same will galvanize resistance in the name of their now martyr, Osama Bin Laden. In sum, other than somewhat questionable propaganda value, the announcement will have no measurable effect on america’s continuing mideast / global debacle. In other words, defacto bankrupt america has used up a ‘bullet’, albeit a blank at that! ]
Weekly Unemployment Claims Going in the Wrong Direction Short May 5, 2011 ‘The Department of Labor’s Unemployment Insurance Weekly Claims Report was released this morning for last week. Claims rose 43,000 from an upward revision of the previous week to 431,000. That is a 10% increase for the week and a 4-week moving average increase of 5.4%. Here is the official statement from the Department of Labor:
In the week ending April 30, the advance figure for seasonally adjusted initial claims was 474,000, an increase of 43,000 from the previous week’s revised figure of 431,000. The 4-week moving average was 431,250, an increase of 22,250 from the previous week’s revised average of 409,000.
The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending April 23, an increase of 0.1 percentage point from the prior week’s unrevised rate of 2.9 percent.
The advance number for seasonally adjusted insured unemployment during the week ending April 23 was 3,733,000, an increase of 74,000 from the preceding week’s revised level of 3,659,000. The 4-week moving average was 3,700,750, a decrease of 1,250 from the preceding week’s revised average of 3,702,000.
Today’s number was 18.5% higher than the Briefing.com consensus expectation of 400,000 claims.
As we can see, there’s a good bit of volatility in this indicator, which is why the 4-week moving average (shown in the callouts) is a more useful number than the weekly data.
[ chart http://dshort.com/charts/indicators/weekly-unemployment-claims.gif ]
Occasionally I see articles critical of seasonal adjustment, especially when the non-adjusted number better suits the author’s bias. But a comparison of these two charts clearly shows extreme volatility of the non-adjusted data, and the 4-week MA gives an indication of the recurring pattern of seasonal change in the second chart (note, for example, those regular January spikes).
Because of the extreme volatility of the non-adjusted weekly data, a 52-week moving average gives a better sense of the long-term trends.
The Bureau of Labor Statistics provides an overview on seasonal adjustment here (scroll down about half way down).
Doug Short Ph.d is the author of dshort.com.’
Closer Than We'd Like to Think to a Second Banking Crisis? The Inflation Trader ‘Trading continues to be lethargic. This isn’t just true of this week – Employment weeks can be notoriously quiet – but of markets generally over some period of time. NYSE Composite total volumes haven’t exceeded 1bln shares this quarter, the longest streak of failing to do so in many years. One reason that the VIX (equities), the MOVE (Treasuries), and other volatility indices are so low is not complacency – although there is some of that as well – but the fact that the realized moves have been so small for so long that it is just too hard for an options trader to keep a long position subject to the drip, drip, drip of time decay. When I first got into the markets and was trained as a technical analyst, we considered this ‘coiling’ and a sign that a big move was near. That may no longer be true. It may simply be that the market has lost enough liquidity, due to Dodd-Frank, rules about naked shorting, and capital constraints, that volumes and volatility are moving to a lower equilibrium.
This is, of course, bad news for the banks. We have noted this week how banks are being forcibly under-levered because of the excess reserves in the banking system. That’s one element of the DuPont model. Lower volumes are a second component. Unless banks can charge much fatter margins (and the chance of that is the only thing that’s fat), earnings are doomed to decline. This has been apparent for a long time, but for a while these companies can keep hitting targets by drawing down reserve accounts (evidence the trend over the last year to sharply reduce credit reserves, supposedly because of improved default experience). The mathematics in the long run are powerful, however, and this is a big reason that while the S&P has recovered 75% of its 2007-2009 decline, the NASDAQ Bank Index has recovered only 28% of its dive (see Chart, click to enlarge).
[ chart http://static.seekingalpha.com/uploads/2011/5/5/saupload_badbanks.png ]
For all the tender mercies of the central banks, the non-central banks are still weak.
No one cries for the banks. But healthy banks matter. I present the chart above not to bury the banks but to point out how poorly they’ve done even with the Fed, ECB, and other monetary authorities working very hard to engineer a very steep yield curve – historically, the way that banks have gotten healthy again after bad periods.
It isn’t American banks only that remain weak (and by weak, I don’t mean so much the balance sheet. The balance sheets have definitely improved, but the long-term growth rate of the company is what allows them to bear up in a crisis and recover after it. It’s the economic strength, not the accounting strength, I’m talking about here). European banks have similar issues, and that matters because they’re also all stuffed with dicey sovereign debt that is allowed to be carried at par. We are, indeed, much closer to a second banking crisis than we would like to think, and this is the significance of comments like those last week from ECB Executive Board member José Manuel González Paramo. In discussing the possibility of simply restructuring Greece’s sovereign debt – never mind default – he said:
Any debt restructuring would imply the breach of legal obligations, which most likely would have a more negative systemic effect than the Lehman catastrophe.
One reason for this is that the banks and the ECB both own lots of Greek paper considered legally to be worth par. And there’s no way it’s really worth par. To a strong banking system, a Greek default or restructuring would be damaging but survivable. In the banking system’s current state? Paramo may not be far wrong.
It would help banks to strengthen, of course, if the economy were to continue to strengthen (it would also help them if inflation rose, because that would increase the value of loan collateral, such as housing, that currently provides insufficient coverage for loan exposures). Yesterday’s economic data in isolation are not encouraging on that score. The ADP number was soft, although close enough to expectations at 179k (198k was expected). More surprising was the Non-Manufacturing ISM report, which printed 52.8 versus expectations for 57.5. The Non-Man ISM is not usually a market-mover, but this big of a miss had some market repercussions. I was right that the markets had more downside than upside: stocks lost 0.7% while 10y notes only rallied 3bp to 3.22%.
A time-series chart of the Non-Man ISM is below (click to enlarge). The number returned essentially to last February’s level, mainly because of a sharp decline in the New Orders subcomponent to 52.7 from 64.1
[ chart http://static.seekingalpha.com/uploads/2011/5/5/saupload_nmi_1_thumb1.png ]
Bad drop, but it's probably not the start of a second leg down. We hope.
Now, keep in mind that this is a relative-change measure, not an absolute measure. That is, the fact that it is at the level of Feb 2010 doesn’t imply activity is at the level of a year ago, but that the economy is improving as fast as it was in February last year – which is to say, it’s not improving very much at all at the moment. That beats getting worse, but with the Fed about to stop its bond-buying program and with “issues” still to solve in Europe it would help to have the economy starting to kick into high gear right about now. And it ain’t. (Hey, but thanks for that $1.5 trillion. It really did a lot, didn’t it?)
These are only two minor reports, although in general the disappointments have been on the downside for a while now (as I showed on Monday). A cheerful Initial Claims report today (Consensus: 410k from 429k) and a strong Payrolls number on Friday would go a long way to dispelling concerns raised from these minor reports. But Claims has actually been part of the problem. Economists were initially encouraged last November when Claims finally moved consistently below 440k. With some chop, they continued to decline until February and March, when for the most part Claims were below 400k. Recently, though, they’ve risen again – to 416k, 404k, and 429k the last three weeks – and after revisions Claims have exceeded the consensus expectations for eight consecutive weeks (actually, on April 1st they matched expectations exactly).
Also due out today is Non-Farm Productivity and Unit Labor Costs for Q1. It isn’t an important number although if ULC exceeds the +0.8% forecast by very much it will get some of the wage-push inflation guys excited.
Bonds continue to do very well despite the poor seasonal pattern for this time of year, but gains below 3.20% yields on the 10y note will get increasingly difficult without a really bad Employment report on Friday. I would expect some duration risk to be taken off the table on Thursday. Commodities have gotten smacked around for a couple of days. Initially it was a Silver thing, then a precious metals thing; yesterday Grains, Livestock, Softs, Precious and Industrial Metals all fell. But with the dollar weak and real interest rates so low, I don’t think commodities are going to take a serious hit.’
Is Market Weakness About to Emerge? [Short answer: Yes! ] Degner ‘I've thought at length about the bizarre correlation between crude oil and the S&P 500. With equities, oil, precious metals, and other commodities all falling over the last few days, I decided to extend my analysis to the broader commodity market as measured by the S&P Goldman Sachs Commodity Index (GSCI). The GSCI is made up of a basket of commodities covering all major asset groups. Since it's weighted by trading activity and volatility, a large portion of the index is made up of energy commodities. However, precious and base metals as well as agricultural, meat, and "soft" commodities are also represented. The GSCI is designed to give a portfolio view of commodity price movements. Logic would suggest that the value of commodities should be uncorrelated, or perhaps even NEGATIVELY correlated, to equity prices. But logic would be wrong.
http://static.seekingalpha.com/uploads/2011/5/5/saupload_spx_gsci_110504.png
The chart above shows the very strong correlation between commodity and equity prices over the last 18 months. The correlation actually extends back to the precipitous decline in all issue during the 2008 financial melt-down. Over the last 18 months the linkage has been particularly strong, with the r-squared an incredible 88%. Such a relationship is hard to ignore, and reinforces the belief that all markets are being influenced by the same broad macro-economic (or speculative?) trends.
This analysis makes clear that analyzing one particular segment of the financial landscape without considering the fundamentals of other parts of the global financial system is short-sighted and maybe even dangerous. Note for example how the GSCI is now at the lowest level since late March even while (until today) the S&P was very near the highs for the entire move. Could this be a sign of weakness about to emerge in the stock market? [Short answer: Yes! ] …’
UBS bank admits rigging bids (Washington Post) Swiss bank reaped millions of dollars of illegal profits by rigging municipal bond transactions in 36 states, government said. [ The key here is ‘Swiss’ and ‘millions of dollars of illegal profits’ when the american banks / wall street frauds’ generated hundreds of billions in illegal profits, which frauds continue to this day by way of slightly subdued high-frequency trading / commission-generated scams along with cover-up and cash-out from the last, still unprosecuted fraud in the trillions for which disgorgement, fines is long overdue. 24 Signs Of Economic Decline In America ‘The United States is in the middle of a devastating long-term economic decline and it is getting really hard to deny it. ..’ ] States face shortfall for retirees (WP) Public workers’ retirement funds had a gap of $1.26 trillion at the end of fiscal 2009, a report says.
Study: Affordable rentals scarce (WP)
Poll: For Obama, low marks on Afghan war (WP) More Americans disapprove of President Obama’s management of the war in Afghanistan than support it, according to a new Washington Post-ABC News poll, a finding that reflects the public’s broader concern over the course of the nearly decade-old conflict.
Fuel prices cut into Obama popularity (WP) (The frauds on wall street et als should be criminally prosecuted, jailed, fined, and disgorgement imposed), and have used the mideast turmoil to obfuscate their failure. Dave's Daily 'If you can keep interest rates this low this long, its inevitable cheap financing can allow companies to start cobbling each other up. Further Ben's policies allow companies like IBM to sell bonds at 1% and buy back shares with the proceeds (total paper bubble-scam). POMO is occurring almost daily and Primary Dealers can buy back their shares and pay dividends with what essentially is taxpayer money-- … an especially great opportunity to sell / take profits while you still can since there's much worse to come! America Is a Failed State Because It Won’t Prosecute Financial Crime Washington’s Blog / the grim economic reality [ http://albertpeia.com/grimreality.htm ]. Selling In May Is Very Good Advice This Year Harding / April Is a Good Time to Sell Adler Equity Valuations Are Forming the Second Biggest Bubble in U.S. History Kaspar ... According to Yale University’s Dr. Robert Shiller, the market is now 41% overvalued …only time the markets have been more overvalued .. 1929 & tech bubble. http://static.seekingalpha.com/uploads/2011/4/12/saupload_cape_thumb1.png PRECHTER: We're Still In A Massive Bear Market And Stocks Will Crash To New Lows Return of Inflation: 5 Worrying Signs From Friday's NY Times ]
Is this a Republican distress call? (Washington Post) The first presidential primary debate will be distinguished more by who isn’t there than who is. [ What do debates matter in pervasively corrupt, defacto bankrupt america? Take ‘wobama the b’ for b***s***. What did what he said in debates actually matter in reality. Wobama, the failed president as was his predecessor, is a complete and total fraud. Let the budget battle begin After two weeks of tumultuous meetings with constituents, Congress returns to a lengthy fight over the nation’s solvency. (WP) [ Or more aptly put, stated another way, the nation’s solvency is over. .. america’s defacto bankrupt with no end in sight.. interest alone is eating progressively into GDP beyond the subterfuge.. Gerson: How serious are we about the deficit? (WP) [ Not much! I mean come on! 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! ‘ … Suckers’ rally to keep suckers suckered: Philadelphia Fed Depresses Economists Durden ‘..And here comes the first indicator that Q2 GDP is about to be mass revised by everyone, courtesy of Japan, and ongoing inflation pressures: the Philadelphia Fed collapsed from a revised 43.4 (a 27 year high) to 18.5, the lowest since November 2010… This is an especially great opportunity to sell / take profits while you still can since there's much worse to come! U.S. Economy Remains on Life Support Hansen ‘
- The Federal Reserve press conference by Chairman Bernanke which contained almost no new economic insights; and,
- An FOMC meeting with no policy changes or insights..
CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE... ‘In emotional and personal testimony, an ex-Justice official who 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’ Cases against Wall Street lag despite Holder’s vows to target financial fraud Obama has promised to hold Wall Street accountable for the meltdown. ):
‘THE OBAMA DECEPTION’ http://albertpeia.com/obamadeceptionhighqualityversion.flv ]
Dionne: Who is Obama? Now we know. (Washington Post) [ Oh really? Now you tell us what you really know about this fraud and failed president. Barack Obama: The Naked Emperor Shocking but true revelations from David Icke (a must read) | ‘…He has been covertly funded and supported ever since by the Trilateral Commission and its network of foundations connecting into the Ford Foundation, for whom Obama's mother worked... Does anyone really believe that someone, a 'man of the people', would simply appear from apparently nowhere to run the slickest and best-funded presidential campaign in American history? He was chosen long ago by those who wish to enslave the very people that Obama says he wants to 'set free'. The sources of Obama funding .. - Goldman, UBS, Citi, Credit Suisse, Deutsche, J.P. Morgan Chase, Morgan Stanley, etc. No wonder he went back on his pledge to accept the limitations of public funding … Obama is just more of the same, a big smile with strings attached, and controlled completely by those that chose him, trained him, sold him and provided his record funding, kept his many skeletons under wraps, like the gay sex and crack cocaine .. Larry Sinclair (from affidavit: 1. Who is Ron Allen that claims to be with your Presidential camp, who is alleged to claim that someone claiming to represent me called asking for $100,000, to keep me from coming forward about our (Obama and I) November 1999 encounter of sex and cocaine use?), ... Obama is just another Banksters' moll prostituting himself .., and that's why he supported the grotesque bail-out of the banking system and why he will always put their interests before the people. His financial advisors are straight from the Wall Street 'A' list, … Zionist Tim Geithner (Bilderberg Group, Trilateral Commission, Council on Foreign Relations), was appointed Treasury Secretary, a former employee of both the Council on Foreign Relations and the appalling Kissinger Associates. Obama's Treasury team locks into the inner circle around the Zionist Robert Rubin, Citi, Council on Foreign Relations, and economic advisor to Obama. Rubin, ..Illuminati Bilderberg Group, the man behind Citi's debacle.. rescued by taxpayers' money. The very people who caused the financial crisis .. appointed by Obama .. CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE... ‘In emotional and personal testimony, an ex-Justice official who 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 ...’ Cases against Wall Street lag despite Holder’s vows to target financial fraud Obama has promised to hold Wall Street accountable for the meltdown. ):
‘THE OBAMA DECEPTION’ http://albertpeia.com/obamadeceptionhighqualityversion.flv ]
George W. Bush years echo through Obama’s signature security success (Washington Post) The president finds himself in contested legal terrain over how to fight stateless enemies. [ Like the two subject failed presidents, the press is sounding dumb and dumber on this ‘escapade’.
Red Alert: Government Had Osama bin Laden Frozen for Years
Kurt Nimmo and Alex Jones | Obama makes a suspiciously timed speech, claims Osama killed in Pakistan. Videos [ As set forth infra, I personally believe Osama’s been dead for quite some time. Indeed, for one on dialysis, he otherwise would have been nothing less than a modern day miracle in terms of longevity / mortality rates for those so afflicted, particularly under the ‘stressful’ circumstances involving evading capture, betrayal for money, etc.. His ‘surfacing’ for a ‘talk’ wouldn’t even pass muster in the most rudimentary requirements for ‘proof of life’. The release at this time of the ‘announcement’ is, rather than a victory lap so to speak, but rather a sign of weakness and desperation on the part of america whose global and domestic economic, financial, and geopolitical position is substantially diminished and declining rapidly and whose military industrial complex welfare plan along with the Orwellian diversion of the masses could at most yield a pyrrhic victory which also would require for consummation a wrap-up of this nation-bankrupting contrived war scenario, which is not likely. Moreover, the same comes at a time of systemic failure for pervasively corrupt, defacto bankrupt america While the ‘announcement’ plays well for the nonce, to the dumb, uninformed back home, the same will galvanize resistance in the name of their now martyr, Osama Bin Laden. In sum, other than somewhat questionable propaganda value, the announcement will have no measurable effect on america’s continuing mideast / global debacle. In other words, defacto bankrupt america has used up a ‘bullet’, albeit a blank at that! ]
In February, 2004, Iranian state radio claimed Osama bin Laden had been captured in Pakistan’s border region with Afghanistan “a long time ago.” Pentagon and Pakistani officials denied the report. “Osama bin Laden has been arrested a long time ago, but Bush is intending to use it for propaganda maneuvering in the presidential election,” the radio report said…’ Obama’s victory lap (Washington Post) The killing of bin Laden offered hope of instant renewal. [ Only wobama aficionado Mr. Milbank could latch onto this propagandist Orwellian dream and call it victory. Sounds like he’s shootin’ for a job in this failed presidency/administration as others, including from the Post, have done and made. 10 Reasons 2011 Is Feeling More and More Like 2008 Jensen ]
White House goes quiet on bin Laden raid (WashPost) As further questions about the original story surfaced, officials said they will neither release photos of a bloodied terrorist leader nor provide new details about the raid on his compound in Pakistan. [ OBL miraculously cured himself of kidney failure/ no shots fired/Was Bin Laden Assault A Jessica Lynch-Style Fable? Watson | Myriad of inconsistencies in alleged raid begin to resemble war propaganda fairytales told about Private Lynch and Pat Tillman Police State Expands On Bin Laden Death Hype Nimmo ‘World is safer,’ president says Osama exposed his cowardice. (WP) [ This former cia-supported ally may be legitimately described as many things; but coward is not one of them. Principled in giving up riches, comfort, he said americans are thieves; that is absolutely true, and I would add frauds, criminals, war criminals. Bullies / cowards;ie., wobama, bush, clinton, cheney, bush, et als Psychology forum Re: Bystander Effect ‘ I believe the foregoing psycho-babble to be
Rubbish/Hogwash/b.s.
While walking through Military Park (“park”/pedestrian thoroughfare/cement walks) in newark, n.j., I heard the clearly audible screams/cries of what turned out to be an old lady on the ground with blood streaming from her mouth. I ran toward the sound of the cries, the source of which I could not see because there were so many people... When I came to the woman, on the ground, blood streaming from her mouth, I asked what happened, to which she responded she had been hit in the mouth and knocked to the ground, her purse stolen/put inside her shopping bag, and she pointed out the criminal casually now walking across the main street. Nobody stopped to help her, many having passed her by. I slammed the thug to the ground so hard that, in light of all the blood and confusion, I thought I had been stabbed (the blood was from his elbows hitting the pavement so hard - no one helped/a crowd gathered/an undercover cop happened along). I testified at the Grand Jury Proceeding (he went to prison – pled out). (The other case I wrote about here - Having had occasion to have run down a mugger in newark, n.j. who apparent had followed a girl from the bank on her way to the bursar to pay tuition, though in pretty good shape, I was astounded by how totally exhausting such a pursuit was, ..The girl was not that seriously injured, did get her pocketbook and tuition back, and the criminal went to jail. The other thing about such a pursuit that amazed me was that no one else assisted the girl or me despite being in a position to do so).
CONCLUSION
The reality is that quite simply, the vast and overwhelming majority of americans are without any courage whatsoever. They are cowards, plain and simple. All the excuses, psycho-babble, in the world will not change that fact! ]
Oil plummets, breaks below $100/bbl Crude oil continue to fall on Thursday, having lost more than 7%, as concerns about economic growth and monetary tightening hit commodities.
US Jobless Claims Hit Eight Month High The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.
Bigger than Bin Laden – America’s New Public Enemy No.1 From the fans at Citi Field in Flushing to the mobs at the White House gates, “USA, USA,” was the chant heard across the nation. Jubilant Americans celebrated the breaking news that Public Enemy No.1, terrorist mastermind Osama bin Laden was dead.
Mexico Buys 100 tonnes/Global Assault on Paper Gold and Silver continues Today, the banking cartel decided to continue with its massive assault on gold and silver. The bankers are desperate as the end game is now being played out. This is why I have cautioned you against playing with these bullies.
Jobless Claims in U.S. Unexpectedly Jump Bloomberg | The number of claims for U.S. unemployment benefits unexpectedly rose last week, pushed up by auto-plant shutdowns and other unusual events.
Dollar Falls to Three Year Low Reuters | The yen also hit a six-week high against the dollar.
Is a Liquidity Crisis Brewing in Europe? CNBC | Do we bailout the banks or do we throw more money at highly-indebted nations?
(5-5-11) Dow 12,584 -139 Nasdaq 2,814 -14 S&P 500 1,335 -12 [CLOSE- OIL $99.58 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $3.96 (reg. gas in LAND OF FRUITS AND NUTS $4.22 REG./ $4.35 MID-GRADE/$4.45 PREM./ $4.61 DIESELL) / GOLD $1,486 (+24% for year 2009) / SILVER $35.17 (+47% for year 2009) PLATINUM $1,789 (+56% for year 2009) Metal News for the Day / DOLLAR= .68 EURO, 80 YEN, .61 POUND STERLING, ETC. (How low can you go - LOWER)/ Interest Rates: http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield 10 YR NOTE YIELD 3.18% …..… 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 The bull market that never was/were beyond wall street b.s. when measured in gold ‘WORST ECONOMIC COLLAPSE EVER’ Must Read Economic / Financial Data This Depression is just beginning The coming depression… thecomingdepression.net 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
Ron Paul Snubs Hannity’s After Debate Party You Tube | Ron Paul skipped a post-debate interview with Sean Hannity Thursday, opting instead to appear at a nearby Tea Party rally.
Fox News generates post-debate buzz around Herman Cain, Federal Reserve insider; obscures Ron Paul Infowars | The Fox News-led GOP debate in South Carolina gave the first formal glimpse of the emerging 2012 GOP presidential field.
Feds Issue Terror Advisory Based on Info Allegedly Found at Osama’s House Kurt Nimmo | Government claims bad guys may tip trains off bridges on anniversary of 9/11.
Paul Craig Roberts: What Is The Agenda Behind The Bin Laden Fable? Infowars.com | Bin Laden story so poorly crafted that it did not last 48 hours before being fundamentally altered.
9/11 Families Sunb Obama, Want Proof Osama Dead Monica Morales | “Why not show us proof, that Bin Laden was killed? I would like to see that.”
Ron Paul will win tonight’s GOP debate The Hill | Ron Paul will win tonight’s Republican debate because he will be the only candidate discussing serious ideas.
Obama teleprompter coach has $100K contract Washington Times | The White House is using tens of thousands of taxpayer dollars on a public relations firm.
American Decline: Nearly Half Of Detroiters Can’t Read Business Insider | The data about Detroit grow more depressing by the month.
Paul Craig Roberts: What Is The Agenda Behind The Bin Laden Fable? The US government’s bin Laden story was so poorly crafted that it did not last 48 hours before being fundamentally altered. What agenda or agendas is the “death of bin Laden” designed to further?
Top Terrorist Hunter For U.S. Government: Wolfowitz General Told Me 9/11 Was False Flag Listen to the astounding interviews we have conducted this week with Dr. Steve R. Pieczenik. Pieczenik cannot be dismissed as a “conspiracy theorist,” he wrote the book on psychological warfare and counter-terror for the US State Department and was the inspiration for the Jack Ryan character in the popular 1992 movie Patriot Games.
9/11 Families Snub Obama’s “Photo-Op”; ‘Show Us The Bin Laden Proof’ “There is no closure,” a sobbing John Vigiano said. “There is none.” “I’m honored the President of the United States is coming to New York,” he said. “[But] to me its just going to be a photo op.”
White House Press Secretary “Floundering Under Pressure” Of Flip-Flopping Bin Laden Fable “I think he’s doing very badly,” says a political contact based in Washington. “And I’ve heard others say that he’s really struggling.”
Pentagon Dinner Guest al-Awlaki Slated to Replace Osama Yemen-based Anwar al-Awlaki is scheduled to replace the late Osama bin Laden, according to news reports. As Tea Party darling Michele Bachmann notes above, al-Awlaki is the new face of terror in a war designed to last forever.
Staged: White House “Situation Room” Photos Part Of Bin Laden Fable In addition to images of President Obama’s address to the American public on Sunday night, it has emerged that the dramatic photos of Obama, Biden, Hillary Clinton and members of the White House security team watching the assassination of Bin Laden “live” were in fact completely staged, casting further doubt on the ever-changing official account of the operation.
Hillary Clinton Claims ‘Allergy Not Anguish’ Reason For Photo As Evidence Points to PR Stunt An allergy and not anguish may explain why Secretary of State Hillary Clinton had her hand to her mouth while watching the commando operation to kill Osama bin Laden, she said on Thursday.
No resistance in “cold-blooded” U.S. raid: Pakistan officials Osama bin Laden and his comrades offered no resistance when killed by U.S. special forces in a Pakistani town, Pakistani security officials said on Thursday.
Obama Floats Plan to Tax Cars by the Mile The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.
Bin Laden: When the Lie Becomes the Truth The US government’s bin Laden story was so poorly crafted that it did not last 48 hours before being fundamentally altered.
US-Pakistani-Chinese Tensions Growing The immediate reaction by most across the world upon hearing of “Bin Laden’s” death was that America now had the excuse it needed, real or not, to gracefully depart from its disastrous “War on Terror.” However, the architects behind America’s foreign military adventures over the past several decades have already begun clamoring about the need to not only expand their global war, but to implicate Pakistan as being complicit in harboring the mythological “Bin Laden.”
Drudgereport: CNN SHOCK POLL: RON PAUL HAS BEST CHANCE VS OBAMA
National Home Prices Double Dip...
JOBLESS CLAIMS RISE TO 8 MONTH HIGH...
Fears linger of a new 'flash crash'...
9-11 FAMILY: 'SHOW US PROOF BIN LADEN KILLED'...
Victim's father: Obama 'putting too much spotlight on himself'...
Channels Bush at Ground Zero: 'We will never forget'...
Tells teen survivor he knows Justin Bieber...
Turns Back on 9/11 Family Member...
AUDIO...
Muslim Brotherhood urges review of Israel ties...
Pakistanis burn U.S. flags; backlash over death grows...
Pakistan officials: No resistance in 'cold-blooded' U.S. raid...
Warns America not to stage any more...
Threatens 'disastrous consequences'...
Muslims already name dump location 'Martyr's Sea'...
OBAMA, NO PHOTOS OF OSAMA: 'We don't need to spike the football'...
'Conspiracy theorists will just claim doctored'...
Sen. Scott Brown: 'I've seen picture, he's definitely dead'...
UPDATE: Photo proving bin Laden's death to Sen. Brown was faked...
three senators fell for fakes...
UPDATE: 'The photo I saw and that a lot of other people saw is not authentic'...
Top Dem: No photo needed, 'there's absolute proof'...
REUTERS RELEASES 'DEATH SCENE' PHOTOS
**WARNING GRAPHIC**
UPDATE: Photo proving bin Laden's death to Sen. Brown was faked...
Possibly three senators fell for fakes...
Pakistan: 'Not a single bullet fired from compound'...
WIRE: Photos from 1 hour after raid show 3 dead, no weapons...
The Slippery Story of the bin Laden Kill...
Official says 'killed apparently by the U.S. raid team'...
DOLLAR HITS 3 YEAR LOW...
1 IN 7 ON FOOD STAMPS!
Job numbers disappoint...
Treasury suggests $2 trillion debt cap raise...
Top 3 Reasons Markets were Down Like a Geodetic Effect Wall St. Cheat Sheet May 4, 2011 ‘Markets closed down on Wall Street: DJI -0.66% SP500 -0.69% Nasdaq -0.47% Gold -1.64% Oil -1.95% .
Last week was a streak of winning markets. This week is over the hump — all losers. On the commodities front, Oil (NYSE:USO) sold off most of the day to at $108.89. Gold (NYSE:GLD) and Silver (NYSE:SLV) also sold off hard, with Silver getting slaughtered over 5% — two days in a row!
Today’s markets were down because:
1) Economic data was lackluster. This morning started with lower than expected Private Payrolls and continued with a steep month-over-month drop in the ISM Non-manufacturing Index (Don’t Miss: “Chart of the Day: US Services Sector Trying to Hold On“). Last week’s lackluster data is catching up to us as earnings hasn’t been the savior this week.
2) Gas prices in Hawaii broke $6 a gallon. Oil (NYSE:USO) may have dipped, but someone forgot to tell a lone gas station (NYSE:XOP) attendant in Hana, Hawaii where you can love yourself some gas for the bargain price of only $6.03 a gallon. The silly high number is so silly, every media outlet focused on rising gas prices despite traders slaughtering Oil (NYSE:USO) two days in a row. Well, no one said the mainstream media ever focused on the right meme.
3) Remember the PIIGS? Portugal finally screamed “mercy” and accepted a 78 billion Euro rescue package. As investors wake up to reality, some are finally changing to a “risk off” stance as more debt addicts are in line for harsh sessions of rehab. At least Americans don’t have to worry (yet) because this Pew chart shows we’re in the middle of a textbook relapse…’
Coming to a Head - Long-term Analysis of the U.S. Economy , May 4, 2011 ‘Based purely on the stock market, the economy should be rockin' and rollin', but while the market's performance has been stellar, the economy is flat. QE2 has disrupted the internal balance between stocks and the economy. With QE2 about to end, we ask, will stocks catch up with the economy or the economy with stocks?
Just how strong is the market? The SPDR S&P MidCap 400 ETF (NYSEArca: MDY - News) is trading at an all-time high, the Nasdaq-100 (Nasdaq: QQQQ - News) has surpassed its 2007 watermark, the Russell 2000 (NYSEArca: IWM - News) is closing in on its all-time high, the S&P 500 (SNP: ^GSPC) has doubled since March 2009, and the Dow (DJI: ^DJI) is viewed as the ultra safe haven in a world of turmoil.
How strong is the economy? Real estate (NYSEArca: IYR - News), the biggest wealth builder/destroyer in the country, is still weak. The Standard & Poor's Case-Shiller Home Price Index has dropped to the lowest level in nearly a decade. As the Home Price Index has fallen below March 2009 levels, residential REIT stocks have nearly tripled since then.
Another huge contributor to a healthy economy - unemployment - shows signs of improvements at a peripheral glance but continues to lag significantly if examined beyond the rosy headline numbers. To wit, if it wasn't for the labor force sliding to a near 30-year low, the headline unemployment number would be around 12% while the real unemployment would be around 20%.
Based on an 11-line surface analysis, stocks and the economy are out of sync. To see whether stocks will catch up with the economy, or vice versa, we'll need to slice beneath the service and examine the very foundation of our economy.
Multi-decade Economic Trend
Unnoticed by Wall Street, the economy has been shifting gears, and has gone from acceleration mode to coasting mode. How so?
A few decades ago, sweat-trenched U.S. manufacturing facilities were the most fertile, growth-producing environment on the planet. This growth was fueled by 'Made in America' products. The growth was organic and it was real.
When taking a closer look at the economy over the past 70 years, we see two distinct growth periods. Phase 1 lasted from 1947 - 1966 and phase 2 stretched from 1975 - 2000.
Throughout phase 1, GDP averaged 4.18% while unemployment was low. GDP during phase 2 averaged 3.40% with unemployment inching up.
http://www.etfguide.com//contributor/UserFiles/8/Image/Growth%20Periods%20Yahoo.gif
GE, a company that endured through both phases, provides important clues about the difference between both phases. Up until the end of phase 1, GE was known for manufacturing quality products like light bulbs, refrigerators, jet engines, and aircraft super chargers. GE's slogan was 'We bring good things to life.'
In the second phase, GE ventured into television and high finance. GE Capital, GE Commercial Finance, GE Money, GE Consumer Finance and NBC Universal contributed an ever-growing slice of GE's profit pie.
GE's focus shifted from manufacturing to financial engineering. If GE didn't build a product, it would finance the consumer's purchase of a competitor's product. It was just appropriate that GE's slogan was changed to 'Imagination at work.'
The 'New Normal' - New but not Normal
The concept of making money by using money, encouraged by the Fed's interest rate policy, lacked substance and sustainability. The 2000 tech (NYSEArca: XLK - News) crash was more pronounced than what we've seen from the decades before. The real estate boom was as gigantic as its subsequent bust.
The post-2007 financial crisis further highlighted the dangers of an economy low on manufacturing but rich on leverage, accounting tricks, and financial engineering. No wonder the average GDP for the 2001 - 2010 period - dubbed the lost decade - dropped to 1.71%.
But amnesia, or selective memory loss, usually triggered by rising prices, is not new to investors. The more stocks rally, the more excited investors become, the more dangerous the stock market gets.
Building an Air Castle?
The post meltdown economy has become a launching pad for the new economy and new key players. Facebook and Twitter are Wall Street's new darlings. Six of the founders and investors behind Facebook just made it on Forbes annual list of world's top billionaires and investors can't wait to get their hands on the upcoming IPOs.
According to Wall Street valuations, Facebook is worth as much as Home Depot or Boeing. Home Depot employs 306,000 workers, Boeing 154,000. Facebook sends paychecks to about 1,000 lucky individuals.
A happy go lucky investor looks at the new economy and says 'Wow, that's just marvelous.' A skeptical mind looks at it and wonders 'How long before that blows up in my face?'
Simple Math
As the economy is weakening, the government and the Fed's role in providing sufficient liquidity (QE2) to keep a faux system running is ever increasing. Government spending (unemployment benefits, social security, welfare, etc.) accounts now for 35% of all private U.S. income and 26% of GDP.
But, the government is nearly broke and will have to face massive spending cuts. The Federal Reserve can't currently risk any more QE as inflation concerns have become prohibitive.
From a fundamental point of view, the outlook is less than rosy. From the valuation standpoint (dividend yields near all-time low, mean reverting projected earnings near all-time high), stocks are looking over priced.
The only thing keeping stocks afloat is the remaining weeks of QE2 and a higher technical target.
The March ETF Profit Strategy Newsletter outlined the ideal up side target for a major market. While the up side target hasn't been reached, the market has reached frothy levels...’
Are We Headed for a Major Correction? The Housing Time Bomb ‘I wanted to take a few minutes and share a chart with you. As you all know I am not much of a T/A guy. However, over the longer term, I do watch them from time to time.
I often watch the Russell 2000 when I am looking for a trend change because it's usually the first sector that rolls over during bear markets.
After taking a peak at the monthly of the Russell, I couldn't help but take notice of an almost perfect double top:
http://static.seekingalpha.com/uploads/2011/5/4/saupload_2011_05_03_tos_charts.png
My Take:
The Russell is much more sensitive than the rest of the market because it is comprised of smaller companies with matching smaller balance sheets. Therefore, they are much more susceptible to a weakening economy versus a huge company like Apple (AAPL) that sits on tens of billion in cash.
As a result, when things start to head south as a result of things like $4 gas, the market tends to sell these names first. The fact that it couldn't hold the trendline after breaking through the 2007 highs is something to take note of.
The Bottom Line:
So are we due for a major correction? Hard to tell. The Fed seems obsessed with taking the market higher, and it has decided to destroy our currency in order to due so in the process.
The reality here is no one wins this game if the dollar loses because stocks are priced in dollars, and if the currency cracks it's not going to matter where the market is.
The market, in my opinion, seems to be struggling with a colossal battle between the powerful forces of debt deflation and deleveraging, versus the equally powerful forces of inflation via currency debasing courtesy of the easy money Fed.
This battle has become a personal struggle for myself, which is why I haven't had much to say recently. Part of me believes that debt deflation is inevitable as the world realizes the trillions of digital dollars that people moronically borrowed over the past decade will never be paid back.
However, at the same time, you also have extremely powerful inflationary forces that are being created by the Fed as they continue money printing and keeping rates low at the same time the rest of the world takes rates higher. India just raised rates by .50 basis points yesterday.
Who will win this battle? Hard to say. I am positioning myself for both.
What I can tell you is what I have done with my positions recently:
I sold out of 50% of my silver at around $45. Things got a little too bubbly for me here. I will look for cheaper prices.
I shorted the Russell last week via TWM. I also continue holding some small short positions in SDS and QID. On the long side I bought the nuclear stock EXC when it got oversold following the Japanese nuclear disaster and I also added the titanium stock TIE.
I still hold the majority of my money in cash which at any moment could become worthless. This is a scary proposition to me but the way I see it the dollar should rise before it tanks because I think Europe is going to go down before we do.
Greece will default by the end of the year. The market has already priced it in. The rippling effects of this in terms of the rest of the PIIGS are flat out frightening to me but there is nothing I can do to control it.
All I can do here is stick to the fundamentals and the most important one to remember is risk is relative! As a result, I don't believe the dollar is toast just yet because the bond market continues to tell us that we are the best looking horse in the glue factory of bankrupt countries.
I write this post as a warning that something big could be coming. Please play defense and be safe.’
High-Probability, Mean-Reversion Strategy - Options Strategy Continues to Succeed Crowder ‘The High-Probability, Mean-Reversion Strategy continued its success Tuesday as the strategy triggered another good trade. This time it was the SPDR S&P 500 ETF (SPY). SPY moved into a short-term extreme state on Friday so I purchased a few puts per the strategy guidelines. Tuesday, I was able to sell them for a decent 7.6% return. So far, after only one trade the strategy is up 5.6% for the month of May. Another trade like Tuesday and the strategy will certainly exceed April’s 10.5% gain.
Year-to-date the HPMR options strategy is up 37.7% . Check out the results.
The decline in the S&P falls right in line with the “sell in May” phenomenon that occurs during this time of year. Will it be this easy?
The market has looked frothy for weeks now, but I think the move in SLV over the last two days was the catalyst the bears needed. Or could it be that the market finally realizes that the strongest monetary and fiscal policy in U.S. history is not enough to keep this economy above water. Did you see the GDP last week – 1.8%. When GDP hit -6.8% and QE1 was enacted the economy came roaring and has done so for slightly over two years. But I think the fun is over. I think now, more than ever is the appropriate time to use sound options-based strategies.
Just look at the High-Probability, Mean-Reversion strategy’s performance over the past several days while the market was moving lower. A 7.6% return while the S&P has taken a turn for the worse.
Anyone, and I mean anyone, can make money when the market is in bull mode. I see the machismo every day. Analysts who think they have the hidden gem to riches. Touting how great they are during a strong bull rally, but neglecting to remember how they performed (if they even had money in the market) when the market was moving the other way. I see, read and hear it everyday.
And these same analysts who tout gains during bull markets know very little when it comes options and how powerful they can become during any type of market environment. Nor do they want to know.
Anyway, I could go on and on, but I will save it for tomorrow's post.
Short-Term High-Probability, Mean-Reversion Indicator – as of close 5/03/11
click to enlarge
http://static.seekingalpha.com/uploads/2011/5/4/saupload_5_3_11_hpmr.png ‘
Dollar Falls to Three Year Low
Reuters | The yen also hit a six-week high against the dollar.
Is a Liquidity Crisis Brewing in Europe?
CNBC | Do we bailout the banks or do we throw more money at highly-indebted nations?
Report urges U.S. open door to China investment flood Reuters | Tens of billions of dollars of Chinese investment could flood into the United States in the next decade.
Dollar Hits 3 Year Low Against Basket Of Currencies The dollar hit a three-year low against a basket of currencies, as the euro gained to nearly $1.50. Stocks tumbled as energy and materials stocks continued to weaken, and as investors digested weak economic news on the service sector and jobs.
About 1 in 7 in U.S. Receive Food Stamps The number of food stamp recipients was essentially flat in February, the most recent month available, with 44.2 million Americans receiving benefits, according a new report from the U.S. Department of Agriculture.
‘Biggest Story in Market’ Is US ‘Currency Crash’: CEO “The biggest story in the market is the currency crash right now occuring in the US, I think a lot of people are debating whether it is in fact a currency crash,” Keith McCullough, CEO of Hedgeye Risk Management told CNBC.
WSJ Reports Soros, Burbank Selling Gold, Silver, While Paulson Sees Gold Hitting $4,000 In Three Years The rumormill around who is buying and selling precious metals is getting more ridiculous than daily Radioshack LBO speculation.
Let the budget battle begin After two weeks of tumultuous meetings with constituents, Congress returns to a lengthy fight over the nation’s solvency. (Washington Post) [ Or more aptly put, stated another way, the nation’s solvency is over. Now that would be cutting to the chase. After all, it’s a little late for ‘budget bustin’ heroics’. Quite simply, america’s defacto bankrupt with no end in sight, such being the insurmountable nature of same where interest alone is eating progressively into GDP beyond the subterfuge, smoke and mirrors, diversions. Gerson: How serious are we about the deficit? (Washington Post) [ Not much! I mean come on! 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! ‘ … Suckers’ rally to keep suckers suckered: Philadelphia Fed Depresses Economists Durden ‘On Thursday April 21, 2011, 1:32 pm EDT And here comes the first indicator that Q2 GDP is about to be mass revised by everyone, courtesy of Japan, and ongoing inflation pressures: the Philadelphia Fed collapsed from a revised 43.4 (a 27 year high) to 18.5, the lowest since November 2010… This is an especially great opportunity to sell / take profits while you still can since there's much worse to come! U.S. Economy Remains on Life Support Hansen ‘This has been a whirlwind week for intangible monetary policy news which was lead by:
- The Federal Reserve press conference by Chairman Bernanke which contained almost no new economic insights; and,
- An FOMC meeting with no policy changes or insights.
My foggy long range economic view is of a moderately improving economy which is fighting growing fiscal headwinds. My takeaway from from the press conference and FOMC meeting was a fairly strong opinion by Chairman Bernanke that the economy was gaining enough traction to stand on its own without further accommodation.
A deeper look at advance 1Q2011 GDP real growth of 1.8% should quickly dispel this.
The economy is still in recession if the economic effects of the automatic stabilizers are taken into consideration. Automatic stabilizers are automatic changes in the government’s revenues and outlays that are attributable to cyclical movements in real output.
http://static.seekingalpha.com/uploads/2011/5/1/saupload_z_weekly13.png …
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U.S. debt Running in the red: How the U.S., on the road to surplus, detoured to massive debt (Washington Post) [ Detour, towar’, war … thieving, raping, pillaging and plundering … 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! ‘ … Philadelphia Fed Depresses Economists Durden ‘And here comes the first indicator that Q2 GDP is about to be mass revised by everyone, courtesy of Japan, and ongoing inflation pressures: the Philadelphia Fed collapsed from a revised 43.4 (a 27 year high) to 18.5, the lowest since November 2010… This is an especially great opportunity to sell / take profits while you still can since there's much worse to come!
WallStCheatSheet:
- Market Direction : Regardless of the underlying trends, if the market is moving lower, in many instances the market dip can overwhelm any positive, stock- specific factors.
- Profit Taking : Many times investors holding a long position will have price targets or levels, if achieved, that will trigger selling whether positive elements are in place or not.
- Interest Rates : Certain valuation techniques (e.g. Discounted Cash Flow and Dividend Discount Model) integrate interest rates into the value calculation. Therefore, a climb in interest rates has the potential of lowering stock prices – even if the dynamics surrounding a particular security are excellent.
- Quality of Earnings : Sometimes producing winning results is not enough. On occasion, items such as one-time gains, aggressive revenue recognition, and lower than average tax rates assist a company in getting over a profit hurdle. Investors value quality in addition to quantity.
- Outlook : Even if current period results may be strong, on some occasions a company’s outlook regarding future prospects may be worse than expected. A dark or worsening outlook can pressure security prices.
- Politics & Taxes : These factors may prove especially important to the market this year, since this is a mid-term election year. Political and tax policy changes today may have negative impacts on future profits, thereby impacting stock prices.
- Other Exogenous Items : Natural disasters and security attacks are examples of negative shocks that could damage price values, irrespective of fundamentals.
Obama’s victory lap (Washington Post) The killing of bin Laden offered hope of instant renewal. [ Only wobama aficionado Mr. Milbank could latch onto this propagandist Orwellian dream and call it victory. Sounds like he’s shootin’ for a job in this failed presidency/administration as others, including from the Post, have done and made. 10 Reasons 2011 Is Feeling More and More Like 2008 Jensen ‘The market ended April as it began, grinding up on low volume, ignoring increasingly worsening energy prices, continued turmoil in the Middle East and slowing worldwide economic growth. To me it feels like we are in the calm before the storm. More specifically, it eerily feels like the months before the financial crisis and meltdown of 2008. The similarities are striking to me and think the market is ignoring the signs of an impending and significant pullback over the summer.
Here are ten reasons 2011 is starting to feel so much like 2008.
- Gas prices are rising rapidly and starting to impact consumer spending and sentiment. On Thursday, gas prices hit this highest level since July 31st, 2008 and have risen every month since last August, up over 30% since the “Arab Spring” commenced in Tunisia. Consumer discretionary stocks are particularly vulnerable. Avoid high priced retailers like Lululemon (LULU) and Under Armour (UA) as well as retailers focused on demographics especially vulnerable to high gas prices, such as Abercrombie & Fitch (ANF).
- Despite numerous federal programs (mostly failed), the housing market remains moribund. Prices continue to fall across most markets in the United States, albeit at a slower rate than 2008 and in the immediate aftermath of the financial crisis. New housing starts are bumping along at record lows and are contributing little to job growth.
- The Federal Reserve continues to be behind the curve. In 2008, the subprime loan problem was “contained”. In 2011, Bernanke can’t seem to see any signs of inflation despite rapidly rising energy and food prices (they are not “core” components of the Index Blind Ben places his faith in, after all) or all through the commodity complex.
- In 2008, we were fighting military actions in two Middle Eastern countries; Iraq and Afghanistan. In 2011, we are still fighting in Iraq and Afghanistan and have added ½ a war in Libya, which we have outsourced to NATO. Given the quickening pace of unrest in that volatile area of the world and our incoherent policy .. However, given the worsening events in the region, a higher floor for oil prices has been established in the short and medium term.
- World food prices increased dramatically in the 1st and 2nd quarter of 2008 creating a global crisis and causing political and economical instability and social unrest in both poor and developed nations. The price of wheat has gone up 75% in the last year and many foodstuffs have more than doubled in price over the last twelve months. In 2008, this produced food riots in many developing countries. In 2011, we have uprisings throughout the Middle East ..
- In May 2008, the market was worried about which was the next financial institution to fall after the Bear Stearns debacle. In May 2011, the market is waiting to see what European sovereign state will be the next to need a bailout after Greece, Ireland and Portugal and what the ramifications will be for the credit markets.
- In 2008, gold hit $900 an ounce in January of that year and $1000 an ounce for the first time in March 2008. In 2011, gold and silver just hit all time highs last week with gold hitting $1535 an ounce and silver in a distinct bubble at $50 an ounce.
- As in 2008, U.S. GDP growth was anemic in the first quarter. In 2008, economic growth clocked in at .6% in Q1. In 2011, GDP growth was better at 1.8% but show a significant slowdown from the previous quarter.
- As in 2008, the fiscal and monetary policies of the United States have led to a decline in the value of its currency. Despite significant problems in Europe and Japan, the dollar index just hit its lowest point since July 2008. This is a major contributor to the increasing inflation ..
- In 2008, China, the world’s third largest economy, instituted a series of measures to curb growth in order to address increasing inflation and the beginnings of a property bubble. The Shanghai Index fell over 10% in the first half of 2008. In 2011, ..the Shanghai Index has been flat despite the S&P being up approximately 15% over the same time period ]
SPX Pullback History: 2009-2011
[chart http://static.seekingalpha.com/uploads/2011/5/3/saupload_spxpullbacks09_11050311.png ]
CHART OF THE DAY: Watch the US Debt Set a 60 Year Record
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