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Friday’s Drop Was Just a Hint Of What’s Coming
The economic gaming continues in the US.
On Friday it was announced that consumer confidence hit its highest level in nearly six years. Indeed, the last time we saw confidence in the economy as this reading was July 2007…
Here’s a riddle… how can consumer confidence be so high when:
- Household wealth remains 45% lower than it was before the Crisis?
- Incomes are falling?
- Prices are generally rising?
Technically we’re all poorer than we were before 2008 happened. Most of us are making less money. And we’re spending more just trying to get by thanks to higher food, energy, and healthcare prices. Heck, housing is now even soaring again, pricing most beginning homebuyers out of the market.
And yet… supposedly we’re all feeling much better about things. Either we’re all delusional… or the data is being massaged to look better than reality.
Against this backdrop, Bernanke continues to talk about how removing stimulus could damage the “recovery.”
This is extraordinary.
We’re five years into a financial crisis. The typical business cycle is 10 years. So just based on historical cycles alone we should be witnessing a roaring recovery by now. And yet, the Fed Chairman is worried that removing stimulus (which is now north of $85 billion by the way) would damage the “recovery.”
Folks this entire mess is one big house of cards that is getting ready to collapse again. The Fed doesn’t have an exit plan. It never had a plan to begin with except to leave the paperweight on the “print” button. The fact that they’re still talking about a recovery five years and $2+ trillion after the Crisis hit makes it clear they’re losing control.
The market is beginning to sense this as Friday’s collapse indicates. As I’ve stated many times in the past weeks, stocks were ready to correct. Friday we got a hint of what’s coming:
Investors take note… now is the time to be prepping for a market correction. As Friday’s action showed, when it comes, it’s going to be fast and violent.
For insights on preparing for a market collapse visit us at:
http://gainspainscapital.com/protect-your-portfolio/
Best Regards
Graham Summers
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There are many signs that the system is becoming unstable, but calling a crash is a fool's game. Keep in mind that the central banks still have their printing presses.
http://dareconomics.wordpress.com/2013/06/03/around-the-globe-06-03-2013/
" The typical business cycle is 10 years."
I've read it is more like 7 or so. 91 to 01 was a record, so 10 years is not typical.
SBTFD!!!!! (sell before the frickin dip)
For me a good indicator of the economy is the high street restuarant business, partly for the reason her indoors can't cook for toffee. A slap up meal out with her is quite literally a slap up meal with her storming out half way through. Nowadays when out with the bit on the side it is very noticable that the restuarants are barely holding their heads above water and this despite keeping menu prices fixed even though the owners are forking out north of 10% on their produce from last year for fear of losing even more customers.
People who used to eat out twice a week now eat out once or twice a month. Yes i feel this is a good indicator of the current economy.
The Rapes of Worth
F'in brilliant, dontgoforit! +1... I'll be using it!
i disagree with the fast and furious outcome, though bear market nonetheless. the Fed is ready to deal with a V shaped crash, they have all the tools, they can cancel trades, reliquify traders who get margin calls (not you, them) and they can punch up phanthom buy orders for S&P futures from their trading desk at Marriner Eccles. they're not ready to handle the grind lower, such as Nasdaq in 2000 (which came about after Greenspittle raised interest rates?) imagine what would happen now if rates jumped even slightly? it was a long tough grind lower, every day, and every rally was crushed, technical support levels vanished. and stocks with no earnings (this time phantom engineered earnings) were suddenly held to real world valuations. bingo
My income over here is going up up up, my RMB is becoming worth more, and said RMB is invested in non-risky 5% bonds that always pay out... beating inflation.
In 2009 I was broke, today I'm sitting on a nice little fortune. :)
have you figured in 10% inflation per year or are you using the lying governments figures.
The "Western World" really seems like it is fundamentally broken.
Is that you Jonny Corzine?
Like the hands of a broken clock, Graham will just keep repeating the Chicken Little mantra and then claim "brilliance" when it finally hits the 2009 lows. SAVE IT.
It sounds like you have fallen prey to the charlatanism of the Lizard of Oz.
"Technically we’re all poorer than we were before 2008 happened"
Practically too.