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Is The Market Experiencing A Slow Motion Crash?
Some market observations from Minyanville:
Market Now Experiencing a Slow Motion Crash
On July 1 when the market was down over 300 points and it felt like the
world was just about to end, we put out the following alert: Taking Profits in Inverse ETF Positions in which we closed our inverse ETF positions.
The Dow Jones Industrial Average has rallied almost 600 points in
just seven trading days since that call. The inverse ETFs that we
covered for substantial profits had a powerful reversal just as warned.
In that alert we also wrote the following:“The market is
getting very oversold and the risk is high being long or short right
here. On 5/6/10 the market looked like it was ready to collapse. We then
had a powerful rally off the “Flash Crash” lows. The markets then made a
new low on 5/25/10 before staging another rally. On 6/8/10 the market
made another new low and looked like it was about to collapse but once
again staged a powerful rally. Each time the market looked like it was
about to fall off a cliff, it had some outside force help it rally."Well,
that big rally is happening now because once again a powerful “outside
force” intervened to stop prices from collapsing. Folks, these aren't
natural, free-flowing markets we're dealing with here. If they were,
then the market would more than likely have crashed to the July 2009
lows by now. As much as “they” may try to prevent a collapse to the July
or March 2009 lows, “they” will more than likely fail to prevent such a
crash from happening. In fact, a crash is now happening but in very
slow motion. How do we know? Because the 50-day moving average has
pierced the 200 DMA and the dreaded black cross is now taking place on
the DJIA and the S&P 500. It will soon take place on the NASDAQ
and the Russell 2000. We mentioned in a recent note that often
times during the “death cross” a final rally takes place. That rally
happens because prices have already fallen hard and are often due for an
oversold bounce. We believe this is that final rally before we see
waves of selling and total capitulation take place. When you see the VIX
cross 50 then you'll know that we've just entered the capitulation
phase. If we're correct, and we hope we're not, then we may see intense
levels of fear like that of 1929, 1987, and 2008.We also wrote
the following in that recent July 1 cover your shorts piece: “However,
the bulls are not quite dead yet. Their spirits are still high and there
is hope in the air from what we can tell watching the Bull channel on
TV. The bottom line is to get ready to short the next rally which I’m
hopeful will take us to 10,100 to 10,300 on the DJIA, 1060 to 1080 on
the S&P 500, and 2100-2200 on NASDAQ Composite." The NASDAQ closed
at 2196, the DJIA closed at 10,298 and the S&P 500 closed at 1077 so
all of my upside targets have been met."So what should we
expect next? Our best guess is that we either saw the highs on Friday or
we will sometime early this week. We say this because prices are rising
right into the eye of this market storm. The “eye of the storm” is the
rapidly declining 50 DMA, the 200-day moving average ceiling, the
downtrend line from our April 30 "sell call" (subscription required) and
the 6/21 area of resistance. If the bulls, with the helping hand of the
plunge protection team, can get through all of that overhead
resistance, then you'll know that this storm has safely passed. Only
then will we consider entering any new ETF positions in the program.
Until then, we're staying 100% cash to avoid any damage from this phase
of the global financial hurricane but will be ready to alert you once we
get a fresh, tradable signal.
h/t CB
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..taking all the fun out of trading..
.....yeah, there's high risk being either long or short. And cash moves up in very slow motion. YIPPPEE
this is the process by which money from options is scraped off the table 2 weeks before they expire every month.
I understand the fascination with daily market movements. However, the take-away fact that transcends short-term dynamic trading is this: the USA lacks a fundamental, underlying economy.
That's all one really needs to know. Without the rapid escalation of home prices during the 2002-2007 period, we wouldn't have had the asset base in which to utilize credit leverage in order to fuel consumption.
Stop. End. Of. Story.
Hasn't anyone around here ever visited a ghost town? There's a bunch of former mining towns like this littering the West. Heck, if you're from the east coast, what about Nantucket before it was gentrified? Or, for you mid-westerners, there's always Detroit.
When a city/region/country's underlying economic basis no longer exists, that entity typically ceases to exist as well. The only way out is transformation: capital must be allowed to be destroyed in order to find new sources of return.
The housing credit leverage game is over, yet the entire purpose of each & every policy initiative during the last two years has been to preserve this obsolete model. We've got a long, long ways to go in terms of de-leveraging & de-constructing this huge backlog of malinvestment.
Personally, it's hard to see how the US survives this process as a functioning political entity. Whoever ends up holding the tail when the truth needs to be told might be our last unified leader.
I mean, imagine the battle which is going to ensue just to place F&F on the federal balance sheet. (Backgrounder: this is part of the Rep plank for Nov.) On a certain level, I'm looking forward with eager expectation to hear the excuses about why it shouldn't be consolidated. Once even the dumbest citizens begin to sniff out that we're looking @ $2-4T losses on this fiasco, exactly how will they react?
Excellent summary. Yes, debt needs to be cleared from the decks before any growth can resume.
*Serious Question*
What if we're resurrected as a zombie?
Wouldn't you rather be dead, in Heaven with Jesus?
This is what "end of story" really means. The US of A as a concept has played out. Not sure what comes next. Not sure I want to know.
Hasn't anyone around here ever visited a ghost town?
Safer out in the countryside. But there will be millions in cities without a clue of where to go and what to do.
This nation still has too much economic and intellectual power/ability for it to simply go tits up. What we will go through will be more like the decline of the British empire but to a lesser degree as we are not dependent on colonialism. Try reading some US history, which is the story of continuous booms and busts, always with fallacious credit at its core. With the collapse of globalism, I suspect we will see a reemergence of manufacturing simply because we have no other choice. We will lose the ability to import everything and be forced to make our own products once again. This will be aided by the collapse of inancial crime syndicates that withold profits from manufacturing by the horrid misallocation of capital.
History is the story of cycles. The USA is still young and not a totally clapped out, resourceless and lazy nation; it will survive.
I'm sure the Romans thought the same thing, right up to the moment that Alaric breached their gates.
repeat after me..."the markets will not crash....the markets will not crash....<repeat upto infinity>". sarcasm well intended but Bencopter will not let it happen - no use waiting for it. He will buy stocks/bonds with freshly printed money as long as he can....till he can't.
repeat after me..."the markets will not crash....the markets will not crash....<repeat upto infinity>". sarcasm well intended but Bencopter will not let it happen - no use waiting for it. He will buy stocks/bonds with freshly printed money as long as he can....till he can't.
well marc faber also agrees...no significant crash coming...
http://www.youtube.com/watch?v=DA0FsqMlhF0&playnext_from=TL&videos=ZGHgfVVEKRk
Nice link, and thanks for that. But let's not white-wash it. Faber said "some markets". Make sure you're in one of the "some" markets.
He said a lot more too. Again, thanks for the link.
I don't think well see a market crash anytime soon. There's too much false positive information. Like unemployment going down despite rising job losses each month. If the true information were allowed to be told then yes there would be a market crash that would be almost instantaneous. people would stop spending money on anything but necessities. But as long as the Labor department is allowed to work the system we won't see any market crash.
I think the false positive info you speak of isn't what's floating the stock market. It's what is linked to and is used to explain the rallies but what is really behind these rallies comes solely from just a few big players/makers.
RIGHT ON......false positive info is not at all moving the markets .....we would frequently see the headlines ....such as this..
" Stocks up on economic outlook"....and the very next day the following would appear...
"stocks markets down on recovery fears"...
Most of retail is on the sidelines...
... hanging out with her sister, Reality, waiting for someone to invite them back onto the dance floor.
Sadly, all the dancers on the floor are ugly demons that once looked handsome.
Everybody's waiting for the White House to open the QE2 bar and start serving up some more Hopium cocktails
Is it 'free'?
Make mine a double then!
+10
As “unemployment trends show severity of the Depression,” John Williams of Shadowstats Friday made this observation in his subscribers’ commentaries:
“Complicating the outlook, though, are some seriously flawed monthly reports, which have become victims of reporting-system distortions resulting from the severity of the contraction. Modern economic reporting—that of the post-World War II era—was structured using assumptions and modeling for a system enjoying regular, sustainable economic growth, with occasional downticks from inventory-driven business cycles. The system never was designed to handle a structural downturn of the current length and depth. Such has thrown off seasonal factors and even traditional year-to-year comparisons used in assessing the economic environment, let alone fundamental misdirection…”
One of those serious misdirections, says Williams, is that the “big-picture element” does not show disappearing long-term discouraged workers—“an ongoing artifact of the severity of the current economic contraction…in circumstances without modern precedent.”
Says Williams: “The time appears to be at hand for the BLS to put aside political convenience, and perhaps, to headline its U.6 measure as a better reflection of what is happening to the unemployment circumstances in the United States.”
Shadowstats reveals analysis based on statistical reality. Investors owe a debt to John Williams.
+1, couldnt agree more.
The concept of the business cycle has been shown to be inadequate. That's why Keynesians are in such a mess cherry-picking quotes from their bibles, and Austrians can only say "I told you so" with no proposed solutions.
Economics is broken, and we need independent people to say so.
I see by the 'junk count' that at least one person can not stomach the truth.
Shadowstats has proven more reliable and useful than ANY gov't statistic. I can't quite figure out, other than pure wishful thinking, why anyone even bothers with the offical gov't numbers.
Go ahead and junk me too - then avoid having to defend the indefensible by not replying, coward.
You are assuming that bad news would crash the market and that low unemployment would be bullish. That is the very same mistake that has squeezed the bears for 16 months now.
Ponder about this and maybe you will find yourself on the right side of the tape. The tape is never wrong - opinions are.
Sometimes the tape is wrong, hence APC at $100,000 per share.
You won't see the crash coming, guru500.
These guys are good at what they do. They don't telegraph their punches like a rank amateur.
No.
http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets
PPT paid schill in denial bout their existence... isn't that ironic ;)
There's nothing mysterious or alien-like about the attempt to stimulate and protect the market. You really think they're just sitting back doing nothing? Now, you sound crazy.
No.. spare us from your ability to plug your ears and close your eyes tightly.
LOL, thanks for the Monday late-afternoon-early-evening comedy.
They are just delaying the wave of reality that is building, i.e., the weakness in the financial world and the fact that the debt is almost immeasurable. The resentment and the reality are just getting bigger and bigger.
The truth is breaking out all over.
There is worldwide awareness of what’s going on; people realize they are not getting a fair shake. And people are becoming politically active, particularly the young people. If you don’t take Zbigniew Brzezinski conclusion but his analysis, an article on LewRockwell.com today is really helpful. I love to hear Brzezinski talk; he’s brilliant.. I don’t know why, with that kind of genius, he ends up with a totalitarian solution.
The Global Political Awakening and the New World Order by Andrew Gavin Marshall
http://www.lewrockwell.com/orig10/marshall7.1.1.html
Thanks, JR.
I might have missed it.
Karl Marx may have beat Brzezinski to this idea by a cool 100 years:
"The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society... Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeoisie epoch from all earlier ones."
Capitalism may very well have sown the seeds of its down destruction.
Ask GW Tarpley about ZBig
Is ..............The ........................Market ........................Experiencing..................... A....................... Slow.................. Motion.................. Crash?
You just took one in the jugular man!
http://www.youtube.com/watch?v=kaTD2VsUDtw
YES, sir.
The Market ... *and* the rest of US economy. As well as corresponding economies in Europe.
:-) Sounds like the old Bob & Ray "Slow Talkers of America" radio bit.
This market reminds me of what the Catholics think purgatory is all about.
Too late for "purgatory" stage. It will be the slow motion hell.Total financial madness with no exit.
Electronic money will be claimed VOID. Only *metal* gold and paper-printed dollars will be legal tenders for all debts. This is the only way to make the economy ... to be fair.
I'm afraid the feds will do exactly the opposite.
Gold will always be exchangeable (even if not legal) but the feds really want all transactions to be electronic -- and reportable.
Yes. And coupling with computer-electronics idolatry in USA today - THAT is the problem.
can you elaborate? Now i'm interested
Get thee to a nunnery.
Your mother's down here with us, Karras. Would you like to leave a message?
Volume seems kind of light for it being the kick off of earnings season. What reason does the market need to trade?
Thoughtful stuff for those who actually trade I guess.
I just count gold and silver coins. That is easier and the downside is quite limited.
All assets not nailed down around here (including all that chattel from China imports) is on the block. I've called dealers from flea markets and antique malls to come and bid on what's left. Carry it out, give me a hand full of fiat. That "money" gets traded for PMs, ammo, seeds, and stuff to trade with.
If it happens, it happens. If it doesn't, well... you know the rest.
November elections? Phhht. No matter. New crooks for old.
Market up? Down? What matters is the current fiat price of corn flakes at Kroger.
Gospel there Rocky!
Hooooh, boy. Look at the junkin' goin' on.
Thanks for the moral support there, my man.
As for the rest of you:
Whassamatta? Can't handle the ramblings of a tired old man?
Post your dissent, you cowards! You junk, you punk!
You never dissent to anything, and junk people regularly.
What a hypocrite.
FYI, bright guy, all my junks are accompanied by comments.
I don't do sport junking, drive-by junking, or whatever one wants to call it.
You have more friends here than punk junkers Rocky.
Me too re doing nothing but wanting to count my coins, lol... And getting older too...
But, I am in a lot of other investments as well.
...
JUST noticed Johnny Bravo is back! Good to see you here JB. We have not had any gold threads in awhile (bad price action maybe?). JB! I have been tracking your VXX you mentioned a few weeks ago. A few sniper shots per year. THAT'S why I like to have you around. Offer up good stuff and be nice.
Yup,
It costs so little to prepare for a possibility except time and a little bit of cash. The cost of not being prepared for a possibile outcome is misery.
So keep the canned goods rotating, the garden growing and organizing stuff. Let the numb nuts that are happy in paycheck to paycheck live their lives while they can. Not anyone's problem when it goes bust from people's inability to use exponential varibles in math. If they are this dumb when times are good, why would you possibly want to keep them around when things get bad.
Will you cover me while I weed my garden?
Trade you two chickens and a quart of 'shine.
The greatest insult is to be... ignored.*
*ME2 reference**
**that's Mass Effect 2 for you nubes
You talking about gaming stuff? Now that's some stimulating stuff -- and addictive.
I gave it up with Asteroids, it was pin ball before that.
http://www.play.vg/games/4-Asteroids.html
Woah! You're showing your age there. You seem to be one of those that should click the ad I keep seeing for maturesingles.com on ZH. I must say I am tempted to click it and find me a cougar ;)
P.S. Astroids is still kind of fun for us youngens.
Actually, I played a few after Asteroids, but never got hooked on the cartoon-style games like Pac-Man, etc. Loved the old space battle themes. Wish I had all those rolls of quarters back! Gaming is like gambling in that I know I need to stay away from it. I have an addictive streak but am lucky to be aware of it. I'm 62 now so the early 80s was a great time for me in my prime. Enjoy it while you have it.
Gaming is like anything with lots of garbage and a few gems.
But consider this: anything with a steep learning curve and challenges you to push yourself toward repeated failure so that you might excel could be good for preventing old timers disease. ME2 has an original and provocative storyline, lots of puzzles and problem solving with time pressures, reflex tests, and if you don't think playing a game like this requires a lot of learning and practice to master, then passive reading and passive viewing of non-interactive-just-tell-me-what-to-think-feel stuff... sorry, I'm just tired of hearing about how bad games are from those who suck at 'em and prefer the dry sponge approach to entertainment.
Right behind ya Rocky.
Who cares how many 'earth credits' it takes to get a (insert useless consumer item here).
Barton Biggs? was he not the midget bad guy in the tv series Wild,Wild West?
Dr. Loveless.
Right up there with Batman's Penguin.
impatient
DUPLICATE
Relax, Titanic is sinking (11 Oscars). Next stage of USA's life will be like the keyword from another movie "Wall Street-1". That keyword is "Anacond Steel". The bunch of problems will be like *Steel Anacond* - the invisible beast, pressing like an iron anacond - till all juice and life went out. Evey day. Every day - bad news.
That is why this proccess is called a de-pression.
Raise your hand if you miss Jeff Macke.
"Dennis , I'm going to speak to you like a
child."
Is this the same Jeff Macke that was long build-a bear?
(Waves both hands) "I do! I do!"
This is the way the world ends, not with a bang but a whimper.
I'm getting a deck chair and a beer to watch it burn, anyone in?
count me in
Stockin' up on "necessities" for the show
Been stocking up for awhile! Looks like the porch is going to have more spectators than maybe we earlier thought.
Actually I'll be watching from my condo's balcony and from ZH, etc.
They are now starting to chase junkers like Yellow Freight, up 77%...
Robot, is there subliminal promoting going on here on zh?? premarket today I was reviewing YRCW as a short term trade. was going all in with my lunch money.
But one look at yoy revenue -55+% and debt for equity done last year with retail stock representing only 10% of co..
well I opted for that Chinese lunch special..
heck could of make a killing today just ignoring the fundamentals on YRCW and buy buy..
oh DEAR
We've Been in a slow-motion economic crash ever since June, 2007. Call it what you will (take your pick): "de-leveraging", "balance sheet repair" or any of a number of propaganda euphemisms. It's all the same. The global economy has been in a slow crash that began like a boulder rolling off a summit of debt that occurred just as the very first Bear Stearns hedge funds collapsed. Since that time it's just been a slow grind down as the dominos fall, punctuated by massive dousings of liquid sugar which has temporarily reversed the process. But we have many dominos left. And ominously, the pattern of progression has been from little dominos to big dominos.
EXCELLENT timeline re the crisis Caviar.
It was clear to me when the Bear hedge funds went down that the fix was in for the big downturn.
Also agree re big dominos are next...
+ $1190 (or so)
We had this same cross in 2005, market moved sideways then went much higher into 2006 2007. What happen from here, who knows. One thing I do know retail have left and won't be comming back. The banks get the rally going with the free fed money, then after the market has risen 70% the media say time to jump back in. They try and get retail to step in and take the inventory from the banks.
IT'S ALL RIGGED AND I THINK THE PUBLIC HAS SEEN ENOUGH.
Bernanke's answer is more credit LOL
http://news.yahoo.com/s/nm/us_usa_fed_bernanke
How do you find credit worthy borrower's after this fiasco? There are non left. As I posted from an earlier report, 1 in 4 Americans have a FIASCO(FICO) lol score of less than 599. You can't borrow when you are in Bankrutpcy, foreclosure, out of work, underemployed, etc....
Bernanke is a complete and utter moron. How he got re-appointed I will never fully understand, other than the fact that our Congress is a bunch of morons to boot.
This whole thing is going to end badly unless they get a lump sum of money into the people's hands to get out of debt.
Borrow till it hurts bitchez!
I already learned how much it hurts after having to start my college loan repayments...lube would have been nice.
There is little difference between GM and USA, aside from scale.
Recalcitrant UAW? NEA, SEIU,...
Ruinous incentives and mkt interference? Cash for clunkers, housing tax credits, ...
Underfunded UAW pension? Social security, public sector pensions, ...
FAS 106 healthcare? Medicare, medicaid, ObamaCare, ...
Uncompetitive products and brands? no comment necessary, ...
Bad management? Obama, Bush, Pelosi, Reid, Frank, Dodd, McCain, ...
Ignorant Board of Directors? Ignorant American voters, ...
I could go on but there's no reason to. GM is the canary in the coal mine. If you can't see that, you've got your head up your ass.
It took GM longer to fail than expected, but I never had any doubt it would. I have equal conviction that the present system is going to fail.
For those that think the PPT is this omnipresent force trafficking in the equity market daily..purchasing baskets of equities on down days...
I submit: Conspiracies are good for gathering conversation. But entirely mental masturbation.
More importantly sentiment has drastically changed. Breadth is increasing. Gonna be an ugly week for shorts and the cash in the mattress types.
I've no doubt you thought the same thing on 12-May and 17-June, ...
Leo?
Sure, from oblivious to ominous.
Who's sentiment has changed? 20 years of playing the markets and I've never, ever seen it this messed up. Ever. There are no value plays, no investments, just gambles.
I couldn't begin to explain how throwing your money down the hole is going to work out. But do what you want, you are a big boy, you signed the phonebook of terms and conditions for the trade account so it's in your court.
However Cheer leading certainly isn't going to fix it or make the "horse" race faster. All that flim flam is called is "pump and dump". Since it'll just be you and HFT's, feel free to flip as much as you like. The market doesn't need my capitalization or blessing otherwise to run into the ditch. Seems to be doing that just fine on it's own.
"I just count gold and silver coins. That is easier and the downside is quite limited."
Famous last words...
+1198.... errrr... 1158.... ummm... 958? 658 maybe???
Prosperity Strangled by Gold?
458...errr....258....hmmm....058.... Nice looking isn't it
Nice call at 1197.10 Johnny Left Hand.
Wait, so this all makes sense to you?
What does Barry Ritholtz think about this ????????
TD.
It would be interesting to see a graph with the volumes thet brought the Dow down 300 points and the volume that again brought it up by 600....
It's called stockcharts.com
Updated DOW charts etc.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
How much cash from these huge "Deficits" is being used to prop up shares and markets that nobody wants to hold or buy.The "illusion" can,t last for ever,buy Gold while its available for purchase.
Of course this is all good news to the skeptics..... It's a confirmation of something that we all hold dear.... Delivering bananas to the apple market....? What can you say...? Traveling ten miles to make a one mile trip..? I'll keep my mouth shut because I'm going to sell you the gasoline.....
Best regards,
Econolicious
By the way, I was one of those "bad boys" that was involved in delivering Idaho to the Maine "potatoe" market back when that was the active market at the NY Merc..... I gotta tell you, I miss the "good-'ol-days"....
Try trading the Idaho/Maine arb if you want to have some fun.....
Ciao,
Eco
The government spends trillions to protect the physical borders of the country, i do not see why some people can not believe that they would spend the same to defend the financial markets as well.
unionbroker
"The government spends trillions to protect the physical borders of the country"
700 odd bases in 165 countries, which border of the US are Iraq, Afghanistan, Pakistan, and Costa Rico on?
I was making point that the stock market is just as much a national securiy issue as any other war or threat to the u.s.
Bingo. That is exactly how they see it. A National Security risk.
LOL.. good one!
And we can all see how successful they are in protecting the border... to the tune of approximately 20 million illegal immigrants.
Besides.. the market illusion can only be propped up as a side show...not the main attraction. The main attraction always must generate a massive storm of spectators to generate revenue.
Either this thing has to be so awesomely attractive or so disgustingly vile that people will continue to watch it.
If the market is boring, stagnant and not sexy.. there is no reason to prop it up anymore unless there's another cash magnet elsewhere.
IMF is warning the US could face a double dip.
In IMF speak this means, get the fuck out of dodge. US is absolutely, no question, no matter how massive the propaganda and the illusion might be, going to enter into a full BLOWN DEPRESSION.
Do I need an invitation from "Minyanville" or other to go short? Might be too late then.
walküre
'going to enter into a full BLOWN DEPRESSION."
You been in a Coma last few years?
the short term cash infusion helped.
the fact that 40 million can still live on electronic food stamps helps, it's not visible.
just wait .. until the bills ... cannot be covered.. you haven't seen nothing yet.
it was a bad recession .. then it got worse... alot worse.
Would "slow motion crash" be the same as a "controlled descent"?
Bingo. Kudos. Head of the class.
The banks are range bound. If we ascend or descend too quickly, humpty dumpty has a great fall. And, since Ben can't generate meaningful inflation (or doesn't have the stomach to), we're left with but one choice.
There is no presumption of success with the policy. This is simply an effort to buy time while the banks get rid of toxic assets and attempt to fortify the coming storm (the other side of the eye of the current hurriane?). (It's also why politically we can never have anything pass that would split banks into their banking and investment parts, because that is the lynch pin for our immediate destruction of them). Unfortunately, the plan will fail as their ability to offload assets is slower than the downturn in the real economy.
My guess is that we have a showdown between the federal government/GSEs/FED/TBTF and state/local governments over property taxes. Of course, like everything else, until states get their financial houses in order, they're slaves to uncle sugar. We can foreclose on all those fannie and freddie mortgages, but then uncle sugar cuts off our funding. Oops. We'll see.
I hope that political inaction and confusion are ultimately our benefactors. Hopefully, a stalemate will lead to inaction, which will be insufficient to keep it going at a rate that keeps banks heads above water. Of course, even if they're underwater we still need some authority figure to understand, acknowledge, and shut the doors.
I phreaking love Minyanville.
Maybe people are finally starting to realize that credit = debt. When I say "credit", you say "debt"...
"Credit" _____ cards
"Credit" _____ crisis
"Credit" _____ availabilty
"Credit" _____ rating
There's a lot more that can be added, of course....
The use of the word "credit" instead of "debt" is akin to using words like "bathroom tissue" instead of "toilet paper." <Hat tip to George Carlin, R.I.P.>
ha
What Bernanke and friends don't get is that the market could go to 36,000 but still not affect Main Street. Real economic activity is jobs, purchases, exchanges of goods and services, not this bullshit proxy metric called a stock market and which is clearly manipulated.
Main Street continues to sink. The jobs picture stinks. The wages/salary picture stinks. The debt picture stinks. Retail sales tax receipts (which are the REAL measure of current economic activity) stink.
You think because someone puts a chocolate coating on a turd that it's still not a turd? Wake up, people. The market is not the be-all and end-all of the economy. It's a proxy metric, that when left alone, can give clues about the real state of the economy. But when it's constantly manipulated, it has no more relation to reality than Alice in Wonderland.
Sure, some of you may make some money personally in this market going up or down but do you think that Main Street will remain a sea of tranquility forever with ever worsening future prospects? What good will that "money" do you when the people on the street decide to hang you from a Wall Street lamp post by your neck tie?
People are really patient if they think there is hope for the future so you better hope that they continue to hope for the future. Because when they stop they will come for those most visible to them as the perpetrators of their woes - anyone wealthier than them.
Making some cash in this market, either up or down, is fine. But if core structural problems don't get solved, you better migrate to some remote island soon before you become the primary target of lynch mobs.
"You think because someone puts a chocolate coating on a turd that it's still not a turd?" - Visions of Carl draining the pool in Caddyshack. hehe. Thanks.
The government paints the big-picture of Main Street with obfuscation to hinder analysis.
Mish on Friday posted The Center on Budget and Policy’s compilation: Tax Measures Help Balance State Budgets. It begins: In 2009, 12 states have increased sales tax revenues by such means as raising rates, expanding the tax base to cover previously untaxed goods and services, and administrative changes.
Mish adds that since then, there has been “a big tax increase in New York City, other sales taxes hikes in New York, a huge sales tax increase in Los Angeles county California, sales tax increases in North Carolina, and no doubt many others that I missed.”
Says Mish, “Same-store-sales, tax hikes, user fee hikes, special taxes, etc., all combine to paint a misleading picture of what is really happening with retail sales. …
”To top this picture off, it took $trillions in stimulus just to finally stabilize (at best) retail sales. The key question everyone should be focusing on is "What's Next?"…
“The Fed and Congress can only force so much demand forward before pent-up demand collapses. A 33% plunge in consumer plans to buy a new home should be proof enough. …
”What will California do in the next wave down? Raise sales taxes to 15%? … “
http://globaleconomicanalysis.blogspot.com/2010/07/did-retail-sales-rise-or-did-tax-rates.html
LOL, most of the articles here are great - most of the people who post need a clue, yes the world is against you and thats why you keep losing money trading, it has nothing to do with the fact you keep selling the lows. The dow rally is a great opportunity to get short again, stop whinging about the great conspircy to scam your money, just be a little smarter in your trading. Look at Japanese equities in the 90's, most of you will go broke being right.
The market is becoming the side show.
It's either not pretty or ugly enough. Either way, people will stop paying attention and stop paying to watch (play) it.
Market could go up 50% or drop 50% from here. When it doesn't affect as many as it used to, it will not matter.
People need jobs to buy food and pay a landlord. That's the bare minimum.
No jobs, no economy.
I wonder how many poor sods still have stocks in a 401k that allows them to bail, but are hanging on for The Recovery?
What happens will matter to them and it won't be in slow motion. On one hand I sympathize, but on the other -- fk'm, I got my own worries.
Just ordered my Plunge Protection Team T-Shirt. Cool.
http://www.creativedestruction.us/
Priceless! I kinda liked “PONZI” on a Pepsi cap!
LOL, most of the articles here are great - most of the people who post need a clue, yes the world is against you and thats why you keep losing money trading, it has nothing to do with the fact you keep selling the lows. The dow rally is a great opportunity to get short again, stop whinging about the great conspircy to scam your money, just be a little smarter in your trading. Look at Japanese equities in the 90's, most of you will go broke being right.
Actually in terms of DXY, the markets are up YTD.
DXY YTD up 9%
DOW YTD down 2%
SP YTD down 3.5%
NAS YTD down 3.1%
Sometimes Nominal value can mislead you in the wrong direction.
Thats everyone oblivious to the upside for another few weeks...again.
Thats everyone oblivious to the upside for another few weeks...again.
So the Market is really trying to break that 1080 level that was a technical point from the last fall in late June. Short squeeze at that level, or psychological?
For some time I have been talking about the world capacity for purchase of debt. Here is one of the first articles I have seen which provides some insight.
http://www.nytimes.com/2010/07/12/business/global/12refinance.html?_r=1
The US is very vulnerable to the exit of buyers. Raising rates substantially to attract buyers is not really a sustainable option. Also I have talked about the amount of what I called "slack" in the Treasury purchase pipeline. To me it made sense for the Primaries to use reserves towards Treasuries, but my guess was a max around $30B for the first quarter.
It has been suggested that this outflow may be as high as $200B towards treasuries after the FED stopped MBS transfers for Q2. If true $200B per quarter is unsustainable, especially given the amount of issuance as a trend over the first 9 months of FY2010 and the need for banks to position reserves for future losses.
The US was not the focus of the article, so we should add the FED selling MBS (yet more debt) into the market place.
So what will the FED do when faced with a world liquidity crisis? The FED will have to decide what is politically possible, while tring to stem the tide of exiting capital.
Mark Beck
Another excellent post Mark. I always pay attention to your posts, you clearly do your homework.
Keep writing!
has anyone noticed that both propaganda megaphones changed their rhetoric as of this morning ?!
now they are questioning everything: china, volume ....
goddammit stop scaring me with this shit
I don't have enough gold yet
I have to say, I'm tired of the dramatic crash rhetoric. We should be so lucky. Nope, a country with the horsepower of the US is going to decline slowwwwly. I think it will decline gradually enough that there will be time enough for significant restructuring to occur underneath the radar. It's happening right now and has been for a while. Entrepreneurs will embrace the times to come. Those who are afraid will keep trying to get the government to bail them out... or they'll stockpile cartridges, canned food, and bullion and retire to obscurity (which fringe dropouts have been doing forever).
And, I do think gold is in a structural bull. But it may have seen most of what it will offer. But, the crowd that worships it as a safe haven when paper currency collapses is, in my view, watching too much television. Given their paranoia about governemnt (which is, admittedly, justifiable) why would the government cede control of currency to a diverse group of sociopathic homesteaders? What if our risk of electrical grid collapse is greater than currency collapse?
I think gold would be pretty hard to use as a currency in their post cash world. Wouldn't staple items like sanitary water, medicine, food staples, etc. be more valuable than gold? I'd rather have an ability to offer benefit to my community (water purifiers, fire starters, battery rechargers, first aid supplies, vodka).
I'm more afraid of us turning into an Eastern Europe than Armageddon.
Just some thoughts.
Go read some Austrian Economics at www.mises.org. Also try Hunter Smith, Charles Goyette, and G. Edward Griffin all available at Amazon.
Why? You need some serious history lessons, dude. You are living in a bubble of them most recent 50 years, which ain't gonna cut it.
As for gold, it isn't fringe dropouts retiring to the countryside and expatriating to other countries. The rich and well educated are. Some of the largest American business people and bankers have homesteads outside the US for tax and other reasons.
I'm sorry, it seems like you have some disagreement with my points. But your syntax is too shitty. I can't decypher what you are trying to say. If you have a point, make it. Don't just list a bunch of books for me to read. Make your points yourself. I'm happy to be enlightened.
Sovereign collapse is almost never about horsepower and either having it or not having it.
It is always about two things; political adventurism, and internal civil cohesion.
You can hold it together only as long as the politicians can be backed into a corner by the rule of law. Once civil society erodes enough that the rule of law is suddenly the legal exception, the game is over and it is over very quickly. One night of flames and a few assassinations and it's done and gone.
They'll still deliver the mail the day after, but something important was already done and gone.
It'll be a faster crash now that Congress has forgotten the unemployed. Next moved is
to cash in 401ks. Penalties? Who cares.
I took the 401K penalty last year. It actually wasn't that bad overall, considering the matches we had been given. We got all of our origional money out, save for a bit that we cannot pull out until job change due to plan rules.
I have absolutely ZERO regrets about that decision, either.
Not really slow motion. More like a fitful descent at lethal ground speed into a cloud of shrapnel.
My analogy is that the engines of the economy have died, and they died a while back, and this thing can glide but it cannot fly. What you think is lift and control is actually turbulence. Hard spots in the air. You feel them, you think they mean something is working, but they mean only that the economic air is irregular with bumps and random drafts.
We are seeing turbulence, and calling it signs of lift, and clinging to this as if it's going to save us.
Well. It's not.
We are in a controlled, unpowered descent. There is no up, there is only down. It is controlled only in that the pilots are still searching for a runway to land on. They won't because there isn't any safe place left. They are going to fly this broken thing either onto the Hudson River, or into a building, or into the side of a mountain. They don't have much control as it is, all they can do is bump the flaps to make the frame bounce, steer is subtle ways in slightly different directions, all this keeps people thinking someone in the cockpit is at the controls and making it fly. Okay, they are at the controls and they keep trying. But unless they can ignite the engines, we're toast.
Personally, I think they are out of fuel. I don't think there is any more flight, ever. Not this generation, anyway. maybe not this century.
I really like that analogy. Well done.
And unfortunately, jets glide only somewhat better than cinder blocks.
Here's the view from the cockpit.
http://www.youtube.com/watch?v=SrnVrw6Wfnw
Cougar, I wouldn't want to sit next to you on a plane!
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