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David Rosenberg On A Modern Day Depression Vs Dow 20,000

Tyler Durden's picture




 

From David Rosenberg of Gluskin Sheff

The challenge ahead is one of expectations. I think we win be fortunate to see any GDP growth at all for Q3, and yet the consensus is at +2.2%. The consensus is at +97k on July non-farm payrolls whereas the claims data point to sub-80k. Among the analysts, hope springs eternal that expected revenue growth of +2.6% in Q4 will be enough to generate a +12.1% expansion in bottom-line performance.

To meet that profit forecast, even more cost-cutting will have to come our way (no sooner do we say that than we see this article on page 61 of the WSJ: Steelmaker Presses for 26% Pay Cut). This may be encouraging for profits, but will also come at the expense of labour income, and with that, a sluggish consumer. Concerns over the fiscal cliff have already led to a renewed uptrend in the personal savings rate. The worst drought in the U.S. in a half-century are sending food costs sharply higher, which will severely pinch discretionary outlays, and whatever respite there had been of late from relief at the gas pumps has come to an end (have a look at Price Check: Drought May Hit Grocery Tabs, also on page 61 of the weekend WSJ). Survey after survey shows a sharp turndown in hiring plans as well.

This is looking more and more like a modem-day depression. After all, last month alone, 85,000 Americans signed on for Social Security disability cheques, which exceeded the 80,000 net new jobs that were created: and a record 46 million Americans or 14.8% of the population (also a record) are in the Food Stamp program (participation averaged 7.9% from 1970 to 2000, by way of contrast) — enrollment has risen an average of over 400,000 per month over the past four years. A record share of 41% pay zero national incomes tax as well (58 million), a share that has doubled over the past two decades. Increasingly, the U.S. is following in the footsteps of Europe of becoming a nation of dependants.

Meanwhile, policy stimulus, whether traditional or non-conventional, are still falling well short of generating self-sustaining economic growth. Some investors see this deflationary trendline because it is they that have helped drive the S&P Dividend Aristocrats index (contains large-caps that have consistently raised their payouts over the past 25 years) up 10.5% in the past month and actually touched a new all-time high last week. The likes of Kraft, Wal-Mart, Verizon, Johnson & Johnson, Pfizer and Merck all managed to reach 52-week highs as well. So even in this tough macro and market environment, there are ways to put money to work — in areas of the market that generate a reliable dividend stream for investors and produce a product that people need, not what they want.

Investors must not only screen for earnings visibility, non-cyclicality, dividend payout potential, strong management and high quality balance sheets with a manageable debt maturity calendar, but also for fully-funded pension plans. The S&P 500 space, right now, contains 338 defined-benefit plans, with aggregate obligations of $1.68 trillion but assets of just $1.32 billion, for an unprecedented underfunded liability of $355 billion. So you know the record cash-stash on corporate balance sheets that are often cited as a prime reason to be bullish on Corporate America the real issue is the extent to which shoring up depleted pension funds will compete with stock buybacks and dividend growth in the future. One thing is for sure — a reversion back to the old defined-contribution pensions is clearly coming back into focus as company after company seek out ways to reduce their contribution rates.

DOW 20,000?

Well, this is perfect.

It is amazing how many pundits still believe in stocks for the long run. See The Long-Term Argument for Dow 20,000 on page 6 of the Sunday NYT Money & Business section. Shades of Jeremy Siegel.

So what are we left to conclude?

Last week, we saw the VIX index touch 15. The Investors' Intelligence survey showed there to still be two bulls for every bear in the realm of market newsletters. The put-call ratio had fallen through 1:1 after a 20% decline since early June. The bottom-up consensus of equity analysts see global profit growth of 13.5% for 2013, which is more than a double from the 6.3% projection for this year. The S&P 500 is currently trading much closer to the top end of its year-long 1.100-1,400 band than the low end. And now we see headlines of Dow 20,000 (whatever happened to the other 15,000 points Dr. Siegel promised 13 years ago)? Where exactly is there any sign of capitulation beyond, say, the mutual fund flows data which are illustrating even to the most casual observer that what we are witnessing on this front is little more than a demographic-driven rebalancing of the baby boomer asset mix as the investment lifecycle continues along a secular shift towards capital and cash-flow preservation themes.

The bottom line is that from the spring of 2009 to the spring of 2011, the stock mark doubled, and it doubled principally because of a wild short-covering rally in the financials which were priced for insolvency at the lows. It was a classic 1933-1936 bounce that never saw a new high and never foreshadowed better times ahead. The Great Depression ended nearly a decade later and the next secular bull market did not begin until 1954. And from what history teaches us, secular bear phases do not typically end with headlines about Dow 20,000 but rather with contrarian news like The Death of Equities on the front cover of BusinessWeek back in 1979 (or Awash in Oil on the front cover of the Economist back in 1999, when crude prices were turning in their secular lows).

 

* * *

Of course, for the laugh track, here again is James Altucher from June of 2011, predicting Dow 20,000 as recently as a month ago.

 

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Mon, 07/23/2012 - 17:56 | 2643868 Dr. Engali
Dr. Engali's picture

The thing about it is they are all taking in another source of income under the table. One of them very close to the family just took the five kids and one grandchild to Disney World. It really frosts my balls. I'm slaving away and can't afford to take my three kids and those fucks are living it up.

Mon, 07/23/2012 - 18:00 | 2643880 fonzannoon
fonzannoon's picture

My persona favorite are the ones I see that get out with an 85k pension but manage to get themselves 115k tax free with a note from some ahole. They usually rationalize it by saying "115k is not what it used to be"

Mon, 07/23/2012 - 18:18 | 2643920 HungrySeagull
HungrySeagull's picture

Leave the vets alone though, they earned it in blood.

There are some who are freeloaders and a tip line is availible for SS to check into that.

 

Mon, 07/23/2012 - 18:25 | 2643938 fonzannoon
fonzannoon's picture

@HungrSeagull

I walk around NYC all the time and see dumpy out of shape cops who would duck behind me in a second if something went down. How in the hell are these vets not promised these jobs as soon as they come back? How are these dumpy cops walking past these vets panhandling for change everyday? What the hell is going on?

You figure even that ass Schumer would have stumbled on to this idea by now to grab a few votes.

Mon, 07/23/2012 - 21:18 | 2644308 g speed
g speed's picture

but the vets won't turn on the people or pepper spray young ladies--so --no job.

Mon, 07/23/2012 - 18:30 | 2643956 Dr. Engali
Dr. Engali's picture

Who is messing with the vets?

Mon, 07/23/2012 - 18:34 | 2643963 fonzannoon
fonzannoon's picture

I am not saying anyone is messing with them, except maybe the system as a whole. I am just making a point that seems obvious. these guys seem so much better fit for those jobs than the imbeciles I see.

Mon, 07/23/2012 - 18:40 | 2643977 Dr. Engali
Dr. Engali's picture

Yeah I knew you weren't messing with the vets. Hungry Seagull seems to think we are.

Mon, 07/23/2012 - 18:44 | 2643981 fonzannoon
fonzannoon's picture

Yeah that junker is lurking around.

Mon, 07/23/2012 - 19:35 | 2644091 Overfed
Overfed's picture

Everybody who feels sorry for "the poor" needs to go live in the shitty part of town for awhile. I have. I can tell ya' that 99% of the people that I've met who were getting gubmint cheese are a bunch of feckless, lazy shitbags.  I know two whole families, three generations in one case, who are all on SSI/disability, and they all are doin' cash deals on the side. Buying and selling cars, selling their presription meds, fencing stolen shit. They're ALL doing it.

Mon, 07/23/2012 - 17:54 | 2643860 Winston Churchill
Winston Churchill's picture

Out of how many.What  % ?

The ones I know its  75>100$ bogus.

Mind you,I've seen a major sea change in peoples attitude since the banks

got bailed out, after fucking everyone else..

What sauce for the goose.....

Mon, 07/23/2012 - 18:10 | 2643907 blunderdog
blunderdog's picture

This is a big point.  I'm not about to start ripping off the dole programs, but I don't really fault people for having noticed that all the richest folks are a bunch of criminals and scumbags.

If you want to be rich and successful, you *should* emulate the folks who've already made it. 

Just find a way to rob people without breaking any laws and you're set.

Mon, 07/23/2012 - 18:20 | 2643923 fonzannoon
fonzannoon's picture

One of my best friends wives is a teacher. They get free healthcare and she is on track for a huge pension. Another one works for a big bank. He has been killing it the last ten years. I was discussing this with them (I am in neither situation) and they both basically agreed that I got the shitty end of the stick and thats just how it goes. When the bottom falls out and they realize I prepared for it that wil just be how it goes.

 

Mon, 07/23/2012 - 20:49 | 2644248 surf0766
surf0766's picture

Then let them kiss your butt and walk away laughing.

Mon, 07/23/2012 - 19:45 | 2644115 WillyGroper
WillyGroper's picture

2 for me & they walked away from fine paying jobs. 1 was even in the paper as a CRE, the other is so bombed out on ssri, anxiety & sleep medication after seeing a medicare dr. for 10 min. once a quarter,  she takes out payday loans @ 169% interest. She'll end up in a ditch. Diabetic too. Yup, we're paying for them, but some are truly disabled. Can't paint everyone with the same brush.

Mon, 07/23/2012 - 17:52 | 2643850 Getting Old Sucks
Getting Old Sucks's picture

Well my sister and her husband faked it, and I know three people in my building are faking it, and a couple at a beach I frequent are faking it.  Love to start a poll here as to how many people you know are faking it.  I think an annual review of disablitlity with an observation threat is in order.  What the hell, SSDI is bankrupt in 2017 or earier anyway.  Ready for a new SSDI employment tax everyone?

Mon, 07/23/2012 - 17:59 | 2643876 Rainman
Rainman's picture

Insanity is ok for disability checks....everyone is now eligible.

Mon, 07/23/2012 - 18:08 | 2643900 Getting Old Sucks
Getting Old Sucks's picture

Waffle, waffle, gogi, gogi, gogi.  How much do I get?

Mon, 07/23/2012 - 23:59 | 2644572 jumbo maverick
jumbo maverick's picture

ALL the motherfuckers are faking it. I know a black guy that just screams and yells at everyone so he can get his way. He has nothing physically or mentally wrong with him
He knows if he can act like a big enough ass bag he will just get the rubber stamp on whatever he wants just so nobody has to deal with him.
A lady I know at the county social services told me that this guy ain't even allowed on the property anymore, now remember this is a social services agency that employees mostly liberal mindset people.They just mail him his check. Everybody is happy. They don't have to deal with him and he gets his free money. This is how he lives life.
Fuck him. Fuck the system that caters to him. And fuck that one guy I know that had a corvette while he was getting food stamps. I get so mad makes me wanna holla! Fucking frauds. The whole lot.

Mon, 07/23/2012 - 17:57 | 2643869 SpeakerFTD
Mon, 07/23/2012 - 18:40 | 2643976 Lednbrass
Lednbrass's picture

Thanks for the link, I was looking for a report like this.

If anyone has a link to numbers from SSA showing monthly new disability claims or changes in the number of recipients to back up the 85K number in the article it would be greatly appreciated.

Mon, 07/23/2012 - 18:37 | 2643971 kito
kito's picture

rich bagg, take two red pills and call me in the morning......you really are naive....perhaps you can explain away the enormous rise in disability claims over the past several years? 

Mon, 07/23/2012 - 20:48 | 2644245 surf0766
surf0766's picture

It is a joke getting on the roles now. I know 2 who were approved and should not have been.

Mon, 07/23/2012 - 22:28 | 2644422 Cosimo de Medici
Cosimo de Medici's picture

With your attempt to disparage Rosenberg because of his ethnicity, you invite karma to do you a bad turn.  Perhaps you'll be denied SSDI as payback.  Given that necessity is the mother of invention, you might discover heretofore unknown physical abilities while learning to dumpster dive, so perhaps it's a blessing in disguise.  Sound cold and heartless?  Racist fuckheads reap what they sow.  There isn't enough sympathy to go around, nor enough taxpayer money.  Decent people don't want to sweat and toil just so racist people like you can stay on the planet, contributing nothing but bile.  No soup for you.

Mon, 07/23/2012 - 17:45 | 2643832 resurger
resurger's picture

The yids dont gamble among them selves, they gamble with others.

if the above is not clear, then "All your money belongs to the yids, corporates, the satan worshippers etc"

And yes, illusions are nice, id say Dow 60K, aspire people.

Mon, 07/23/2012 - 17:49 | 2643846 Heroic Couplet
Heroic Couplet's picture

Yes, this is what collapse and depression look like. Really swell that someone can state that.

Mon, 07/23/2012 - 18:13 | 2643848 geminiRX
geminiRX's picture

The Dow will go to 20,000 because capital has to flow somewhere. When capital flees government (public debt) - it will flow to private industry with good balance sheets. Capital flows in a crisis will not all go into private sector but set off a commodity boom as well. This how Martin Armstrong (if I have interpreted him correctly) has laid it out, and something that seems to make sense when you look potential global capital flows. Money will be directed to things which display confidence/safety (something that is rapidly deteriorating with government debt)

Mon, 07/23/2012 - 19:20 | 2644048 Sockeye
Sockeye's picture

Private industry? What is ths you speak of? What industries aren't sucking off of and dependent on the government teat?

Mon, 07/23/2012 - 19:37 | 2644093 geminiRX
geminiRX's picture

Apple
Exxon Mobil
Cenovus, Husky
Petrochina
Goldcorp
Agnico Eagle

Some would say government handouts and bailout stupidity enhance Apples bottomline, but their sales overseas may not support that thesis. There are really good stocks out there that have green balance sheets larger than government - what is it about this that doesn't inspire confidence?

Mon, 07/23/2012 - 17:52 | 2643855 virgilcaine
virgilcaine's picture

Buy when Rosie is flipping burgers and  not before then!

Mon, 07/23/2012 - 18:02 | 2643883 francis_sawyer
francis_sawyer's picture

The way I see it... If you watch CNBS or read any headline financial news, that's all these MF's do every day is flip burgers, serve it to you with a 'kosher' dill pickle on a fucking stale bun, & tell you it's nutritious & appetizing...

Mon, 07/23/2012 - 17:55 | 2643862 yogibear
yogibear's picture

CNBC needs to turn up the circus atmosphere another notch.

Transform to the Hooters Business Channel. They certainly have the woman for the new business channel.

Buffet and all the rest of the CEOs would be more than happy to fly the woman around.

Get rid of Cramer and replace him with a nice looking female.

 

 

 

Mon, 07/23/2012 - 21:37 | 2644342 TrainWreck1
TrainWreck1's picture

Put Cramer in thigh-highs and a thong.

Play Deliverance music and let a bunch of hill people chase him around the studio.

 

SuWEEEEEEEeeeeeeeeee

 

Mon, 07/23/2012 - 17:56 | 2643866 q99x2
q99x2's picture

Harpo's on drugs dude.

Mon, 07/23/2012 - 17:58 | 2643871 FieldingMellish
FieldingMellish's picture

I believe in a 20000 Dow. I also believe in $10 milk and $5 bread and $8 gas and...

Mon, 07/23/2012 - 18:00 | 2643878 max2205
max2205's picture

The pot is boiling now

Mon, 07/23/2012 - 18:01 | 2643882 eurusdog
eurusdog's picture

They are so sure. That means we are headed lower.

Mon, 07/23/2012 - 18:07 | 2643895 The Alarmist
The Alarmist's picture

I'm with Harry Dent on Dow 3000.

Mon, 07/23/2012 - 18:13 | 2643911 Missiondweller
Missiondweller's picture

See my post below.

Mon, 07/23/2012 - 18:07 | 2643896 hedgeisforpussies
hedgeisforpussies's picture

monetary policy works when rates are >3%. market principle KIS- keep it simple. look at japan. they have been qe-ing for the last 12 years and it did not help. so just shut up and wait until dow 6k and stop talking about ben, fed,puts, qe, btft and others. multipls will expand when pe of sp hits 7. one has to be an idiot to think that 13 is low pe. 

Mon, 07/23/2012 - 18:08 | 2643898 booboo
booboo's picture

"They are so sure. That means we are headed lower."

But that also means that they know that we know that they are sure which means it's heading higher, but then again, if we know that they know that we know that they know.....ah fuck it, I don't know anything and thats been pretty safe bet so far.

Mon, 07/23/2012 - 18:10 | 2643901 devo
devo's picture

There are enormous demographic changes (e.g. baby boomers) that make the 20k thesis entirely wrong. Can't look at fed printing and record corporate profits (due to layoffs) and conclude a bullish case. It's amazing such poor logic and myopic views can dominate the mainstream. I am thinking Dow 8,000, and I'm not a perma-bear. That's just reality.

There are technologies (fracking, etc) that could open up the economy. That would be the bullish case. US Silica is one stock I like...very undervalued. I'm picking at stocks like that...avoiding the big names, they are all overbought (e.g. MO at $36? Really?)

Mon, 07/23/2012 - 18:14 | 2643913 fonzannoon
fonzannoon's picture

Devo the baby boomers IMHO are the only ones who cashed in on the 80's and 90's in the market and are the only ones still holding onto hope for the 10% annual S&P returns. They still have not figured out how skewed those numbers are. Some will cash out if they need to. The rest will sit there and collect the dividends. I am not saying your forecast is wrong I just that that generation is staying dug in to the market like a tick.

 

Mon, 07/23/2012 - 18:25 | 2643939 FieldingMellish
FieldingMellish's picture

Unfortunately they are getting perilously close to switching to bonds. Many have already started. Since they are most likely buying the top of the bond market (even if they aren't, the income stream is now only a dribble) they are probably selling equities lower than they should. Some may cling on but most are going to be "advised" to switch to annuties or bond ladders as that is the "safe" thing to do. 30 years of 2% doesn't sound safe to me.

Mon, 07/23/2012 - 18:34 | 2643959 devo
devo's picture

If they retire and food/gas continue to rise, they won't have a choice but to cash out. That is looking likely. I'm sure the dumb ones will sit, but I think anyone savvy from that generation is getting out. I'm not talking the next year. I think this is going to happen over the next 10-20 years. Add to it the fact that millenials (a) don't have jobs and (b) distrust finance, and I see 8,000 before 20,000. These profits are driven by cheap money and labor cuts, and neither of those two is sustainable. Does the rest of the world pick up our slack? It's a zero sum game to some extent, so maybe it'll be death by 1000 paper cuts instead of drastic/painful.

Mon, 07/23/2012 - 18:10 | 2643908 Deep79
Deep79's picture

Rosenberg has become a joke. One minute he's bearish, and the next "he sees the light at the end of the tunnel".

He is no better than the scum on CNBC. he has an agenda. If you had listened to this guys calls, you would be living on the corner of the street ina cardboard box.

He seems bearish agian, but last month he saw "light at the end of tunnel".

This guy is a joke.

Mon, 07/23/2012 - 18:26 | 2643947 yogibear
yogibear's picture

CNBC is first in monkey business worldwide. No wonder viewers have been dropping off.

This just adds to the silliness. Replace Cramer with the rally monkey

http://www.monkeymatters.com/trellix/rally_monkey.jpg

Pay the monkey in bananas . He'll also be able throw things much better. Give him darts to throw for the stock of the day.

 

 

 

Mon, 07/23/2012 - 18:12 | 2643910 Missiondweller
Missiondweller's picture

Anyone see Harry Dent on CNBC today predicting Dow 3,000.

 

I've been laughing at this tool for 10 years after he predicted Dow 40,000.

Now he holds the same view as me. I have a sick feeling of cognitive dissonance and must rethink everything!

Or maybe its just the stopped clock being right twice a day..

Mon, 07/23/2012 - 18:15 | 2643916 fonzannoon
fonzannoon's picture

Missiondweller you need to rethink your views now. May I direct you to the Aim Dent Demographic funds to reinforce my point?

Mon, 07/23/2012 - 18:35 | 2643967 Missiondweller
Missiondweller's picture

Looking at his ETF, it looks about as bad as his old fund that failed.

 

Are you saying I should give him another look? Or that I'm right to laugh at him and question Dow 3,000

 

BTW Dow 3,000 is not so crazy especially if Gold goes up to 3,000. It would be the Dow/Gold ratio going back to 1:1 which has happened a few times in the last 100 years.

For more on my thinking:

http://macrowealthpreservation.blogspot.com/2012/07/three-graphs-explain...

 

Mon, 07/23/2012 - 18:42 | 2643979 fonzannoon
fonzannoon's picture

I guess what I am saying is you don't want that guy on your side. He is that bad. No disrespect to you. I actually used to think that too until Kito convinced me of the almighty dow. I believe this is how he phrased it...

come on Fonzannoon!!!...it would take tomorrow for you to see that? there is absolutely no good reason for the dow not to be half of what it is if it werent for zirp (zero interest rate policy) and deficit spending to keep the pretend gdp growth so whopping high at 1 percent......equities are the last bastion of the feds wealth effect...without the mighty dow coloring americas tv screens with green, the country would be destroyed.....pension funds destroyed, 401ks destroyed, banks destroyed.......its all ben has left. there is no real employment, there is no housing, there is NOTHING LEFT EXCEPT THE MIGHTY DOW!!!!!!!!!!!!!!!!!!!.....................

Mon, 07/23/2012 - 19:19 | 2644047 Missiondweller
Missiondweller's picture

Agreed.

 

In my OP my point was that is was disturbing that Dent had a similar outlook. I agree w/o ZIRP and QE it would still be 6K rather that 12K. I'm not so sure that the Fed can keep the farce up forever though.

 

I don't even invest in stocks, just sit on my stacks of gold & silver. I'd be a buyer at Dow 3,000 though.

Mon, 07/23/2012 - 18:56 | 2643998 surf0766
surf0766's picture

At some pint 3000 will equal 40,000 or so we will be told. And the idiots who believe everything is fixed now will believe them.

Mon, 07/23/2012 - 18:24 | 2643934 ejmoosa
ejmoosa's picture

We could have DOW 200,000 with inflation.  And we could still be in a depression.  They are NOT mutually exclusive.

Mon, 07/23/2012 - 18:26 | 2643943 MarsInScorpio
MarsInScorpio's picture

So where's the news? I've been calling this the Second Great Depression since 2007.

 

Too bad I'm not a celebrity, or I could be making money for being the first one to get it right . . . anyway, remeber me - this is where you heard it first; the rest are just playing catch up.

-30-

Mon, 07/23/2012 - 18:36 | 2643970 tony bonn
tony bonn's picture

the economic dependency is the plan of the 1% to enslave the 99%.

anyone who thinks that this depression had any other purpose is a fucktard.....it was engineered pure and simple for a simple goal - enslavement. and it was decades in the making.

Mon, 07/23/2012 - 20:52 | 2644255 surf0766
surf0766's picture

The plan is global marxism.

Tue, 07/24/2012 - 05:51 | 2644849 ghenny
ghenny's picture

No the plan is global crony capitalism:  A rigged market for the rich.  Marxism went out with the stone age.  Crony capitalism is the new mantra to keep the sheeple on the plantation as cubicle serfs.

Mon, 07/23/2012 - 18:38 | 2643974 Rich Bagg
Rich Bagg's picture

Hooknosenberg whines and complains for a living.  I shit bigger than him.

 

 

Mon, 07/23/2012 - 18:44 | 2643982 beatus12
beatus12's picture

The very harsh reality is N. America is never coming

back. It will be a very slow but absolute decline due

entirely to demographics amplified many times by debt.

Sorry folks but it's the truth.

Mon, 07/23/2012 - 19:08 | 2644017 michigan independant
michigan independant's picture

http://duckduckgo.com/?q=stranded+costs those from the mid 80's will remember

Mon, 07/23/2012 - 19:11 | 2644019 JR
JR's picture

Fat And Furious: Obama Pushes Food Stamps In Mexico | Investors Business Daily, 7/20/12 

"Welfare: As if being 'food stamp president' weren’t enough, Barack Obama’s administration is partnering with the Mexican government to make sure Mexican nationals living in the U.S. don’t miss out. Ay caramba!" ...

Stephen Frank’s California Political News and Views replies:

The United States is broke—we are $16 trillion in debt and running a deficit of about $1.3 trillion a year.

Yet, President Obama has decided to use Mexico to assure illegal aliens steal your tax dollars and use food stamps meant for hungry Americans.

“He also asks a few pertinent questions, such as how many “noncitizen immigrants” have been enrolled in SNAP in each of the last 10 years and whether the Mexican government is distributing SNAP outreach information within its own borders in addition to its consular offices in the U.S.

Is this information being distributed to aid Mexican nationals who have come to America, or is it being used as a giant carrot to promote more to come? And isn’t it a premise of our immigration policy that those who immigrate to the U.S. be able to support themselves financially?”

In an Obama world criminals from foreign nations can sneak into ours and receive free food, education and health care.  At the same time, he is protecting them from our criminal laws.

Who does Obama represent, Americans or criminals from other nations?

http://capoliticalnews.com/2012/07/22/fat-and-furious-obama-pushes-food-stamps-in-mexico/

_________________________________________

Writes Frank this week in related Depression news to the California cities in or on the verge of bankruptcy:

California real unemployment is about 21%, closing in on Spain’s’ 24.9%:

We are in a Depression and government is lying to us about the severity of the financial collapse and the lack of jobs.

“If they were accounted for, California’s unemployment rate would be closer to 21 percent, and instead of 2 million Californians being out of work, the number would be more like 4 million, according to the U.S. Bureau of Labor Statistics. Yes, there were more jobs, but the total number of Californians employed actually fell in June by more than 17,000.”

The Brown/Munger/union answer is higher taxes and fewer jobs.  Crazy.

The first step out of the mess is to admit the truth:  Big government must shrink, taxes must go down and job killers like Cap and Trade, AB 32, unions and illegal aliens.

It is time to end the choo choo train and repeal the billions in losses we will have with the Obama “Exchanges” for health care—the Feds can’t pay, we sure cannot.

First count all the unemployed—stop lying Sacramento.

http://capoliticalnews.com/2012/07/22/california-real-unemployment-is-about-21-closing-in-on-spain%E2%80%99s%E2%80%99-24-9/

Mon, 07/23/2012 - 19:09 | 2644023 Mad Mad Woman
Mad Mad Woman's picture

Neil Barofsky's new book "Bailout" comes out tomorrow. It will be very interesting reading.  This is the book that the Obama administration is not happy that it is coming out now. I can't wait to get it and read it!!

Mon, 07/23/2012 - 19:12 | 2644030 Conman
Conman's picture

http://www.bloomberg.com/news/2012-07-23/pfizer-j-j-alzheimer-s-drug-fai...

Can the dow stay green tomorrow with 2 components looking to open red? dun dun dunnnnnn. itll be a fun futures ramping night to watch for sure.

Mon, 07/23/2012 - 19:24 | 2644059 GoBadgers
GoBadgers's picture

How did everyone miss the joke?

James Altucher

Enough said?

Mon, 07/23/2012 - 19:34 | 2644088 fuu
fuu's picture

Which one of you is James?

Mon, 07/23/2012 - 20:16 | 2644170 chump666
chump666's picture

America is f*cked

100% blame?  The Fed.  0% rates and inflation, yes inflation is destroying wealth from the bottom to the middle.  The reason stocks have NOT pushed higher is that companies (geared) are being shafted as credit line rates (real) are still going up ward + insurance + operation costs + gas prices + food etc etc etc - profits = lame companies with a dividend bubble.  Hardly enticing.

 

Mon, 07/23/2012 - 20:41 | 2644233 JR
JR's picture

Jeff Nielson, Senior Precious Metals Analyst for SilverGoldBull.com., explains it all in “U.S. Retail Collapse Accelerates.” Here is a short excerpt:

“The relentless campaign by the U.S. government to transform its own Middle Class into the Working Poor has been an unmitigated success. Using the numbers of the Corporate Media itself, only about 10% of the U.S. population presently qualify as ‘middle class’, now actually a smaller segment of the total population than the wealthy Americans who tower oppressively above them.  …

“Of course the ‘collapse’ to which I’m referring didn’t just start last month, or even last year. It began in earnest with the Crash of ’08, and has continued unabated since then. The ‘propaganda-concocted "recovery"’ of government and media has been nothing but a cruel hoax, designed to placate the growing suffering of the Working Poor, and goad them into more overspending with the malicious lies that "things are getting better".

“The truth is the exact opposite. During every month of this sham-recovery, the real rate of inflation (as provided by John Williams of Shadowstats.com) has exceeded the percentage increase in retail sales (which are always unadjusted for inflation). Translation: every month of this 'recovery' U.S. retailers have been selling less and less goods. This leads to another extremely obvious question: how can a consumer economy claim to be experiencing a ‘recovery’ when it sells less and less goods each month, to consumers with ever-smaller incomes (and ever-larger debts)?”

Nielson concludes: “The worsening economic collapse engineered by several successive U.S. regimes (at the guidance of their Bankster Overlords) is about to produce an economic cataclysm for Americans which will make the Great Depression seem like a day at Disneyland. Indeed, in the don’t-worry-be-happy world of the U.S. propaganda machine and its beloved ‘recovery’ every day is like a day in Disneyland.”

http://lewrockwell.com/orig13/nielson2.1.1.html

Mon, 07/23/2012 - 21:42 | 2644349 chump666
chump666's picture

I agree.

The illusion of equity markets to justify "recovery" via the Fed is so bizarre and abnormal it does indicate that they are 'sick' mentally.  Equities are capped, the tightest  range for months thanks to the QE3 hysteria and then USD buying outta Asia (equity markets therefor sell).  Also there is the BTFD range that has to be sponsored by Fed feeding HFTs.  I know Conspiracy theory there, but Wall Street is NOT long, HFTs seem to be able to support the 50/100 moving averages like clock work on bad days.  And they can't be taking in huge profits becuase they are not leveraged.  Very strange trading on EUR and US stocks. 

Everything is broken.  Can't see this lasting for much longer.

Mon, 07/23/2012 - 22:17 | 2644405 VallejoVillain
VallejoVillain's picture

Man.....I've been feeling lately...especially this year that i've been struggling to make ends meet. I live so frugal. My big bill is the house payment. Something just isn't right. Only time I really leave this house is for work. I used to have extra money to go out and do stuff. Just seems like things are definitely getting more expensive. Whats scary and makes me think long and hard....is I am paid well. Hats off to the hardworking men and women with kids making it happen each day. How does the government expect people to continue.....when will we be taxed for breathing free air?......taxed for sunlight?

Mon, 07/23/2012 - 22:38 | 2644440 CCanuck
CCanuck's picture

Who told you the air was free!!!!

Carbon Credit Bitchez!!

Mon, 07/23/2012 - 21:38 | 2644344 g speed
g speed's picture

666 isn't that like a ponzi?  dollars in with stocks sales and dollars out through dividends?

Mon, 07/23/2012 - 22:00 | 2644356 chump666
chump666's picture

pretty much.  earnings have been very poor and the dividend surge would suggest that companies are hording to throw back into stock buying sans profits.  so yeah the market is a value-less bubble supported by strange btfd trades.  look at the range.  the dax goes down over 2.00% the dow claws back under 1.00%.  last year, the dow would be 200 points neg on European selling.

so, US markets will be hit with payback ala 1987 style.  a crash is coming.

Mon, 07/23/2012 - 20:25 | 2644184 mark7
mark7's picture

"Increasingly, the U.S. is following in the footsteps of Europe of becoming a nation of dependants."

Must be one of those Republican pampered fucks talking from his fancy mansion (inherited). USA is 19th century, Dickesian rigid class society except with healthcare used as a form of financial torture against middle class. American dream is a myth.

How ironic, ancestors from Europe immigrated to America to gain more possibilities but now it is the opposite. Poor kid in Sweden or Germany has much better changes to rise up economically than some poor kid in Baltimore or Los Angeles. He will get a good education practically for free all the way to university level and health care system is adequate without needing to declare personal bankrupcties.

Mon, 07/23/2012 - 21:45 | 2644354 Jack Burton
Jack Burton's picture

Don't tell the truth "mark7", they don't want to hear the truth. They want lies. We who have spent time in Sweden or Germany know what dead end societies they are, what terrible socialist health care they have. We know how a person can never get ahead because of socialistic systems.

I know from living in Sweden that people have no hope to find a good job. No hope to get good health care. No hope of ever making it. Sweden is a socialist hell hole, I know because I have spent time there. Also in Germany it is the same. A dead economy where hard work is punished.

We know America is the only land of opportunity. Look at Romeny, he made it here. Only losers would prefer to live in socialist Germany of Sweden. Life there is dreary and hopeless, while in America we all can make it with just a little hard work.

"This message brought to you by the US corporate elite, who know what is best for you!"

Mon, 07/23/2012 - 23:45 | 2644558 GOLDTEETHSILVER...
GOLDTEETHSILVERFILLINGS's picture

Where did you live in Jail? Sweden makes the U.S. look like Vietnam in 1968.

Follow the yellow brick road...

Mon, 07/23/2012 - 20:25 | 2644189 JamesBond
JamesBond's picture

we are cycling through recessions within a broader depression

 

-007

Mon, 07/23/2012 - 20:26 | 2644196 orangegeek
orangegeek's picture

20,000 Dow?  Maybe in 50 years after primary wave 3 down.

 

http://bullandbearmash.com/index/djia/daily/

Mon, 07/23/2012 - 21:00 | 2644273 dolph9
dolph9's picture

If the boomers think they are going to dump their stocks and debt on me, while they sip Pina Coladas in retirement communities where they think they're going to live forever, they are sorely mistaken.

They will soon find their "investments" to be worthless, and there isn't going to be any ambulance to take them to the hospital and back.

They'll be reduced to hiring blacks to scrub their asses (the same ones they were going to try to fashion in their own image through affirmative action).  We'll see how well that goes.

Mon, 07/23/2012 - 23:28 | 2644532 GlomarHabu
GlomarHabu's picture

Oh yeah. Stand by to get plastered. How are you gonna stop the last great revolutionary generation .. read up on the huge societal changes in 1968.

You can't touch us.

Mon, 07/23/2012 - 23:46 | 2644560 dwdollar
dwdollar's picture

Just a heads up.

Boomer retirement communities are excellent resources for open wifi networks.

That is, if you can get past the gate. They don't seem to trust that outside world they so fondly pat themselves on the back for creating.

Mon, 07/23/2012 - 21:11 | 2644283 sgorem
sgorem's picture

Didn't read the article yet, don't have to. We've been in a DEPRESSION since 2005 (although we didn't know it until 2008. Look the fuck around. IS YOUR FINANCIAL SITUATION BETTER, OR WORSE? If it wasn't for credit, we'd all be in a pile of shit, which most of us are. The survival strategy is a double edge sword. You can be either debt free for the forseable future(10-20 years), or you can rack the fuck up the credit cards. They can't squeeze blood out of a turnip because they already have!  Obummer sucks,(along with Mittens, Clinton, Nixon, Reagan, and of course the Bush Cartel), the US government with it's corrupt, bought puppet politicos suck and need terminated, one way or another. If you're not there yet, just sittin on the fence, then I await your post's in the comming months about your "situation". Buy GOLD/SILVER, guns/ammo(before the Liberals try and outlaw or take more of our FREEDOMS ORDAINED BY THE CONSTITUTION OF THE UNITED STATES!) FUCK YOU UNCLE SAM! and the Donkey YOU road in on.............assholes

Mon, 07/23/2012 - 22:06 | 2644388 ghenny
ghenny's picture

YOu can't eat Gold or Silver and believe me the politicians will find a way to prevent you from using any stash of either to bypass their fiat currencies.  So go for land and crops.  Cheap right now and the real deal.

Mon, 07/23/2012 - 22:10 | 2644391 ghenny
ghenny's picture

YOu can't eat Gold or Silver and believe me the politicians will find a way to prevent you from using any stash of either to bypass their fiat currencies.  So go for land and crops.  Cheap right now and the real deal.

Mon, 07/23/2012 - 23:24 | 2644527 GlomarHabu
GlomarHabu's picture

These articles are read for reasons other than granite and granular evaluations of the world markets. It's mind pablum. You,me and all the contributors enjoy the congregation,making comments, and venting but you are entirely correct. Reading the articles isn't necessary, a point I have tangentially made in almost every post I make.

ZH looks at data available to all and reaches ZH conclusions. The fact that the data is all bogus, from private and public companies, from the government and from every source you can name is now ,or should be, a self evident truth. I mean didn't we just experience the shocking,yes shocking news of Libor? The cascade of crap coming our way regarding "factual data" is never ending. Just how many years worth of articles were written using bogus gumby numbers. GIGO is the term and it  matters litttle if it is omission or comission that produces an article with a conclusion totally void of reality.

Yeah, it doesn't matter because we no longer have anything close to honesty in government or finance.

Mon, 07/23/2012 - 23:36 | 2644544 jomama
jomama's picture

you had me until your liberal rant.  

buying into the false dichotomy - puppet show doesn't lend your post much credence.

Mon, 07/23/2012 - 21:08 | 2644286 Sun and Moon
Sun and Moon's picture

Dow 20,000 is possible in the next 10-20 years. But $50 Big Macs are also possible in the same timeframe.

Both brought to you courtesy of Ben Bernanke and his Incredible Money Machine.

Mon, 07/23/2012 - 21:20 | 2644314 billsykes
billsykes's picture

James Altucher is a complete failure, as a writer, as a investor (lookup SEC OTCBB fillings), and demonstatably as a talking head.

I don't even watch bloomberg anymore since meeting some of the guys that come on the station as "experts" with their "expert" advice and running around the world giving speaches. 

But hey, I am like everyone else here that shake our heads at how these guys can make a living.

Imagine for a moment if guys like him wore clown makeup, at least it would be funny.

Like this nutbar:

http://www.youtube.com/watch?v=f3QMasO4mR8

watch a couple of seconds then Fast forward to the 1min mark

 

http://www.youtube.com/watch?v=6dbj0zR-mg4

 

 

Mon, 07/23/2012 - 21:29 | 2644329 Shizzmoney
Shizzmoney's picture

20,000 for the DJIA?  It's lucky it goes to 14K AFTER QE3 (which I have a $500 bet on that the DJIA WON'T go to 14K w/o QE3)! 

13K seems to be the benchmark right now...and everytime it hits 13, something bad happens or the Market corrects itself because in reality, if you look at the fundamentals, it should be at 10K or 11K.  And that's ONYL because corporations are "hoarding cash".  God forbid they would actually try and spend it; they can just complain to the goverment to do that for them (hence why, Mr. Dow 20K, corporations are having their best recessionary cycle, ever.  The Fed and the Government is subsidizing losses in asset and stock prices through money printing and Treasury buying at the expense of savers and workers' incomes).  See: Health Care stocks after ObamaCare.

Plus, the majority of this gain, are from TBTF banks, who have grown 21% during Obama's tenure.  BAC went from $5.00 to $6.23 (Operation Twist).  JPM is also up. 

What happens when the shoe finally falls off the other foot with these guys?  What happens if BAC goes under $5 for an extended amount of time?  What happens if Oil goes to $160 in the winter?

Unless we come up with some miracle, I only foresee two potentials for the DJIA in the next 12 months: either slow gains, or big losses. 

Mon, 07/23/2012 - 22:03 | 2644380 ghenny
ghenny's picture

So which is it a Depression or Dow 20,000?  I can see there being a depression for the 90% in this country and a DOW 20,000 for the other 10% who will be able to cash in on strong DOW companies earning a lot of their sales and profits abroad (probably mostly outside Europe).  After all there are still billions of people in the rest of the world that aspire to a middle class lifestyle and may start approaching it with the help of our multinationals.  That could mean big earnings and profits for our companies while most of our middle class falls off a cliff.  In such a situation people who own stocks, mostly the top 10% could do very well while most of rest of our people who have only their houses and wages suffer.

Mon, 07/23/2012 - 22:53 | 2644475 web bot
web bot's picture

Altucher and Sullivan... what a class act.. like Forhorn Leghorn and the Coyote.

Mon, 07/23/2012 - 22:49 | 2644478 chump666
chump666's picture

China fudge is in from the drug lords fav bank

Mon, 07/23/2012 - 22:59 | 2644487 john milton
john milton's picture

We are going to see the biggest ZH

Short Squeezing...in history..

bullet ben will strike (althought we been pricing in QE 4 and 5)

Mon, 07/23/2012 - 23:08 | 2644497 GOLDTEETHSILVER...
GOLDTEETHSILVERFILLINGS's picture

QE Louis VIII

Follow the yellow brick road...

Mon, 07/23/2012 - 23:36 | 2644545 john milton
john milton's picture

nope, that shine thing will be replace with new shiny thing.. as an old football player, i got gold in my teeth, silver in my hair and lead in my ankles...so no worries

Mon, 07/23/2012 - 23:29 | 2644534 jomama
jomama's picture

never heard that one before

Mon, 07/23/2012 - 23:08 | 2644498 silverdragon
silverdragon's picture

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is it’s natural manure.

Mon, 07/23/2012 - 23:30 | 2644536 GlomarHabu
GlomarHabu's picture

Praise the Lord and pass the ammo. It's way ,way overdue.

Tue, 07/24/2012 - 01:42 | 2644710 DarthVaderMentor
DarthVaderMentor's picture

What we need now to start the ball rolling now is a good old fashion massive cyclone run up the East coast.......

Tue, 07/24/2012 - 02:16 | 2644748 the tower
the tower's picture

"last month alone, 85,000 Americans signed on for Social Security disability cheques"...

So in one month, 85,000 people became disabled? In my book disabled means you lost a leg or something.

Or is this the government's way to keep unemployed people off the books so they can claim 10% unemployment, instead of 25%?

By the way, the people I know that are on disability are living it up. Traveling all over the place, running small businesses on the side (unofficial of course).

 

 

Tue, 07/24/2012 - 09:11 | 2645159 boiltherich
boiltherich's picture

Tower, it's a bit of both actually. My father was helping a friend reroof a building in the summer he was 53, he was paid for the work, and when he fell and shattered about 10 bones in his foot and legs the outlook was for a couple years of surgeries and post op therapy, with never getting full use back. The property owners insurance paid for some of it, but the bulk was workman's comp and SS, and by the time he was 56 it was clear he would walk with a cane for life and might be on pain meds for years to come. He is already at a huge disadvantage in the job market being 56, add this new disability and the chances of getting sustainable employment become virtually nonexistent in a county with chronic high unemployment. So they turfed him off to SSD at $875 per month. Well, the USA now has chronically high unemployment/underemployment, so the reality is that they have a choice, they can accept a lower standard of what is "disabled" or they can have an army of people with zero income growing at more than 100,000 per month. And the reality is that an "able" person is one who is physically and mentally fit enough to work so that they can support themselves. In an economy where employers can afford to be so choosy that ANY physical or mental defect essentially disqualifies one from employment then they should be eligible. Call it a program of unemployment where there is no limit on the number of weeks you can collect, it is just semantics whatever you name it anyway.

Tue, 07/24/2012 - 11:04 | 2645109 boiltherich
boiltherich's picture

Dow points are nothing more than a numerical expression of the total market cap for all stocks. If you have X number of companies listed times the number of shares at a price per share you come up with the average whether we are looking at Dow, NYSE, NASDQ. The point is that though it is a score card it is still and expression of market value in FRN's. Given that we can see that there is no inconsistency between a Dow 20,000 and a deep recession or full blown depression, it merely means the FRN's in question are so devalued that that the market can double in price (as opposed to value) even as other metrics of the economy tank.

There is also nearly no connection between market share prices and the Main Street economy anyway, the stock markets are secondary markets. After all, the original issue and sale the price of a corporate share is nothing but a bet between two parties gambling on what that share will do in future. A poor economy might reflect in the price of a share because of perceptions about how the company might fare in a given future economic scenario, but bad economic news is actually bullish for many companies, and a terribly run company might go up on take over hopes, short covering, or any number of reasons. Because of this the equity markets are a very poor barometer of the general health of business.

The only real connection between share price and economy aside from the one time first sale in the primary market, IPO's, is that quite a lot of the savings of the public are "parked" in equities as savings for retirements and college funds and other expensive but predictable costs we experience. I would debate the wisdom of "saving" for the future by parking funds in what amounts to a casino, but given the other options available for the increase or safety of aggregate savings it is hard to fault the average man with little or no financial training. Because there is very little out there in the way of return for the risk you now have to take to invest I am surprised the market is not a lot higher. Especially since the Fed has been supporting share prices via trillions in backdoor bailouts that would have been considered criminal manipulation, unthinkable 5 years ago.

The further equity market averages go above their fair values the worse off the economy really is. I say that because any value above what is a fair price is just a measure of the debasement of the currency. The more they debase FRN's to prevent, or rather HIDE a depression, the higher the stocks go, that does not make them more valuable, it just makes them more costly in dollar terms, in real exchange and purchasing power terms they have been going down the whole time.

Tue, 07/24/2012 - 10:13 | 2645300 boiltherich
boiltherich's picture

By the way, for the arguments about SNAP on page one, we have SNAP because family, friends, and churches either would not or could not do the job.  I do not use SNAP, but I can say I have no family to fall back on, and I have no friends close enough to beg from, I would rather starve than step foot in a palace of superstition, and I am sick and fucking tired of fat assed Reichwingers blaming the poor for their poverty when the VAST majority are hard working and ethical people who are better people than anyone at ZH, in government, or certainly the welfare queens of Wall Street who haul down 10 times what the SNAP program distributes in basic nutrition.

Ten of the top 12 cities in poverty in the USA have more than 50% of their kids living below the poverty line and you cannot arrange any argument even in a Neocon head that can rationally describe that as the fault of any individual or racial group, when that many live in poverty it is societies fault, your and mine, government and racist republicans.  And, by the way, poverty is rising, it would be far worse without the safety nets.  These are people we are talking about and those that hate them because they are poor have only themselves to blame.  When was the last time you reached out to help?  Or, did you only help in small ways those that you approved of?  Our society will either live or it will die, if you think you can survive it as a anarchist survivalist with rations and preparations for this you are crazier than batshit.  Even if you can keep your pulse going somehow there will not be anything left worth living for.

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