This page has been archived and commenting is disabled.
These Three Economic Bellwethers Indicate Danger Lies Ahead!
The markets are holding up based on hope for more stimulus from the Fed and ECB this week (Fed FOMC is Tuesday and Wednesday, the ECB meeting is on Thursday).
This is a very dangerous environment. We are entering the seasonal period in which stocks typically do poorly (May-November). Earnings guidance is falling. And even the massaged GDP number for 1Q13 was lower than expected.
In simple terms, we are getting multiple signs that the economy is slowing and heading towards recessionary territory. This is happening at the precise time that stocks are holding up on hopes of more stimulus.
The rising bearish wedge pattern in the S&P 500 that we noted last week remains in play. It should be resolved this week. However, multiple economic bellweathers are already warning DANGER DANGER!
Below is a price performance chart for the S&P 500 against Fed EX (postage and shipping), Arcelor Mittal (steel), and Caterpillar (machinery). As you can see, the real economy is falling. But stocks keep holding up.
We’ve seen this kind of divergence between stocks and the economy before in 2008. We all know how that ended.
For more market commentary and investment insights, visit us at
Best Regards,
Graham Summers
- advertisements -
Brilliant but, I would add that Gold will always have an intrinsic value!
nice. +1.
It amazes me that some people believe the economy will not crash. It already DID implode in 2008. At that time, the Fed's Quantitative Easing, was the government's hyperinflationary cure. It amounts to a band-aid on a bullet wound. When the economy resumes it's correction, which began almost 5 years ago, it will be MUCH worse because of the additional trillions created in the iterim. Add to that equation hundreds of millions of sheeple-citizens that are unprepared and oblivious to the reality we face and this will result in a complete societal collapse. Who knows exactly when this storm will make landfall? A storm can have multiple computer tracks. However, one thing is certain, this storm continues to grow in size and strength.
I think we're due for a 15-20% correction somewhere between May and October 2013. Then the FEDskies will print like bats out of hell in the fall and winter and everyone will be amazed at how the beast, with a fatal head wound, is healed and sits up on the autopsy table. And the whole world will follow the beast (once again) saying "See, you can't kill this goddamed thing!" And then, in about 1-2 years, the reckoning. The real one with all the trumpets and bad noise.
"It's getting exciting now."
--Tyler
Thanks for narrowing it down for us....
Graham is still doucheiest
Gee your sarcasm skirt is showing... I thought I was narrowing it down. The $SPX ascending wedge triangle is less than "textbook." In fact it sucks. An ascending wedge should have 5 moves and this...this I don't know. It looks like whoever analyzed it dropped two hits of sunshine acid. If this is a 5 wave ascending wedge then I'm a giraffe.
I say horseshit to that. These bankers get in frot of the problem. They can print up as much as they like - And walla...Problem solved, for the moment. We wil see Dow 20K before real risk sets in. I say this to my absolute shame.
Right. The short term fix actually makes the long term collapse much, much worse. Had the economy (especially the banks) been allowed to correct, then the malinvestment and bad debt would have cleared by now and we would be on a sustainable path of real economic recovery. Instead, the short term political expedience minded powers, supported by various entrenched interests that stood to lose billions, fucked up our whole economy long term just so they wouldn't lose the big bucks they so richly deserved to lose (wall Street) and get thrown out of office (Washington).
Too bad we got the government we deserved when there is a sizable mninority of us, like here on ZH, that were screaming from the rooftops five years ago, and have been proven right, yet will still go down with the ship when the whole thing collapses.
You can't fund ruinous immoral wars, set up the police state and pay Bankster bonuses as the top 5% steal from the rest of us if you had a correction which cleared out the malinvestment. The crooks are supposed to go broke when the bubbles burst -however, while the going was good, the crooks took over the country, solidifying their control of the media, Wall Street and the government as they smartly put their crony quislings ito power by completely taking over both the Demorctic and Republican parties. These are real, real smart crooks- evil sociopathic geniuses who clearly understand Machiavelli and Orwell and have also followed the roadmap set forth in the Protocols of the Learned Elders of Zion. Now don't get me wrong, I'm not saying it's the Joos -there are plenty of other Illuminati type families with apparently ancient bloodlines who appear to be running things. Are they reptilians? Who knows. Nothing would surprise me anymore.
Phraseology of the day:
Legalized Criminal Behavior.
Oxymoron or not?
Yup. 1st class goes down with Steerage. But that whole could have changed course/should have slowed down ten nautical miles back is all icebergs under the bow. No help for it now. Get a double martini at the bar, pull up a deck chair and listen to the house band play "Abide With Me." You'll feel better.
Correction: ZHers are anything but "sizeable". The masses are clueless in both knowledge and news, relying on "statistics" while answering, "Yes, the government should do more to help folks." Deficit? Tax the rich (check). SS/Med - Increase payouts. Bond bubble (Is that a new James Bond movie?) M ost folks get their economics from tv where mean, old penny pinchers are always bitching about spending instead of "helping people".
I do think, however, that we may avoid a crash. The power to manipulate, obfuscate, postpone, paper over, extend, etc is incredible. The dollar will continue losing 2-3% a year, prices will creep higher, salaries will stall due to robotics, AI and new technologies and folks will eventually accept a lower lifestyle.
Just heard on CNBC that many FED "chairmen" think inflation is too low and we need...more stimulus. I rest my case.
\
Tango,
Let me spell out for you what you just said in ENGLISH:
"The Politically connected elite banksters will run unabated for another, oh lets say, 50% more SPY upside - Then things will get a little wishy washy...But thanks for the post jus the same!
+1
I wonder if a bellwither fit up Bernankys arse.
QUICK, I better subscribe to this publication before this great offer expires !
Only problem is........Graham is been shouting FIRE for the last 3 years and guess what ? NOTHING.
Haven't we all? "The other shoe" must be coming from Pluto!
Yeah, Bob Prechter is guilty of repeated early calls as well. it's probably cost both of them many subscribers. Calling market tops is almost impossibly difficult. And being early or late as we all know is the same thing as being wrong.
Typically nasty weather!
In simple terms, we are getting multiple signs that the economy is slowing and heading towards recessionary territory.
What a quaint sentiment.
The economy crashed.
QE fingers in their ears kept most from hearing.
QE hands covered their eyes.
They have kept their own mouths shut out of fear.
One of these lines is not like the other... As the count would say.. 1..2.. 2 more months to collapse ah ha ha
Bellwether
DANGER, WILL ROBINSON!
http://www.youtube.com/watch?v=REvmhBO99I4
tickle Graham's ass with a feather
Particularly nice weather.
Is your wife a goer, eh?
No, but Graham is on the prowl with downvotes. No sense of humor.
No, but she's a good little earner.
perhaps it does have something to do with the weather on wether the bellwethers will roll over.
Hellwether? Very hot, but getting hotter.
Time to shave the cats. Hot weather, you know.
Time to bathe mother!
(Bates Motel postcard)
sellweather
.....if ever!
Or I could draw that top line differently and make it look however I want. Maybe the dreaded rising wedgie followed by the inevitable swirly. Stay tuned.
Meh, matrix metrics.