Financial topics

[aedens]

http://www.atimes.com/atimes/World/WOR-01-140114.html

[gerald]

"Sooner or later everyone sits down to a banquet of consequences."
- Robert Louis Stevenson

http://www.zerohedge.com/news/2014-01-1 ... nge-sp-450

Terrifying Technicals: This Chartist Predicts An Anti-Fed Revulsion, And A Plunge In The S&P To 450

"Let us review the sample examples from the previous charts. Every effort to jam an ideology or a plan down the throat of the world only creates the opposite of the intended effect. I would maintain that this is one of the few lessons from history that can be relied on.

If the Federal Reserve is trying to force feed us prosperity then the inevitable blowback will be adversity. If the Fed is trying to compel the most dramatic economic recovery in history, then the blowback may well be the deepest depression in history. If the Fed is trying to enforce confidence and optimism then the blowback will be fear and despair. If the Fed is trying to force consumers to spend then the blowback will be a collapse in consumer confidence."

[aedens]

http://seekingalpha.com/author/richard-zeits/articles

[Higgenbotham]

http://www.zerohedge.com/news/2014-01-1 ... nge-sp-450

Terrifying Technicals: This Chartist Predicts An Anti-Fed Revulsion, And A Plunge In The S&P To 450

http://www.zerohedge.com/sites/default/ ... _ICAP6.jpg

His chart shows this to be a wave "5" where the December 31 high was wave 1 of wave "5". Using that numbering system, I was proposing last weekend that wave 1 might be all of wave "5". There are now good reasons to think it won't be. The only adverse news toward the end of the week seemed to be that investors were disappointed with the GE and Intel earnings but it only caused a mild setback, not the kind of thing that indicates a high. It would not surprise me at all if his proposed January 30, the day before Bernanke's term expires, is the end. I have several projections that get to that date independently of how he gets to it. One is the Lindsay low low high from November 16, 2012 to June 24, 2013 to January 30, 2014. There was also a Lindsay low low high from October 4, 2011 to November 16, 2012 to December 30, 2013 that started to work but has apparently failed. I do think the end of this is very close. It's ironic that even people who think this will end extremely badly believe it has a little bit more to go.

The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximise the suffering, and also ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and more urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a record 12,894,650 shares sold on 25 October; precisely the same number were bought.) The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price within the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.

The ruthlessness of the rise of the Bernanke bull market makes this incident look like child's play. I think Zimmerman is wrong in that he "only" expects the adverse reaction to take the S&P 500 to 452. The liquidation of the relatively placid Coolidge Bull market was on the order of 92%; the liquidation of the Bernanke bull market should be higher - in excess of 99%. I think will be liquidated to zero because it has made the large corporations dependent on lobbying, false accounting and printed money to make profits. It might be hard to imagine that a company such as GE can't be profitable on a standalone basis but all hard evidence seem to point in that direction. Consider the following for example:

General Electric is not only one of the largest defense contractors in the world, and one of the largest banks in the world through GE Capital, but it also owns NBC Universal and its entire spectrum of network and cable TV stations. Each network just happened to spread panic simultaneously, saying the US economy would collapse if a massive trillion dollar bank bailout wasn’t enacted. GE received $140 billion in taxpayer bailout money.

http://www.whiteoutpress.com/articles/q ... etails213/

[Higgenbotham]

http://pro.stansberryresearch.com/1310P ... IQ118/Full

Now, of course, our politicians believe that through policy and currency manipulation, they can simply avoid paying any of these costs. They can order the Federal Reserve to prevent interest rates from ever rising to a level that would cost the American people anything. They believe they can manage the economy, so the debts of Fannie and Freddie won't go bad. They believe (without any proof whatsoever) that they can stimulate the economy by even more deficit spending, so that it grows faster, allowing tax revenues to produce a surplus. Repaying these debts, they say, will be easy and painless.

But you know better, my friend. You must know better. The wages of sin must be paid. And they will be paid.

[gerald]

Higgenbotham -- Boy aren't you a bearer of bad news, I hope you are wrong, but a fear you may be correct.

[John]

http://pro.stansberryresearch.com/1310P ... IQ118/Full

Now, of course, our politicians believe that through policy and currency manipulation, they can simply avoid paying any of these costs. They can order the Federal Reserve to prevent interest rates from ever rising to a level that would cost the American people anything. They believe they can manage the economy, so the debts of Fannie and Freddie won't go bad. They believe (without any proof whatsoever) that they can stimulate the economy by even more deficit spending, so that it grows faster, allowing tax revenues to produce a surplus. Repaying these debts, they say, will be easy and painless.

But you know better, my friend. You must know better. The wages of sin must be paid. And they will be paid.

We Now Know the Exact Time and Day the U.S. Dollar Will Officially Collapse:
July 1st, 2014
On this date, U.S. House of Representative Bill “H.R. 2847” goes into full effect, making it essentially impossible for Americans to protect their savings. You now have only 6 months to prepare…

We'll have to check in with this guy on July 2nd.

[Higgenbotham]

We Now Know the Exact Time and Day the U.S. Dollar Will Officially Collapse:
July 1st, 2014
On this date, U.S. House of Representative Bill “H.R. 2847” goes into full effect, making it essentially impossible for Americans to protect their savings. You now have only 6 months to prepare…

We'll have to check in with this guy on July 2nd.

It's an ad, but he might still qualify as the "gloomiest person in the world" or at least in the top 10. Despite it being an ad, he makes some good background points that others aren't making as the printed money sort of temporarily fogs up the reality of the situation. That probably wasn't one of them.

[Higgenbotham]

Higgenbotham -- Boy aren't you a bearer of bad news, I hope you are wrong, but fear you may be correct.

Your fear may be well founded. This chart comes from Hussman's Weekly of Januuary 13. It's GDP adjusted for inventory fluctuations - government reported figures. I added the trendlines. All evidence seems to point to the fact that QE bought nothing but a temporary low growth rate back to a steeply declining trendline and if the next move is to the lower bound of the trendline at -4% we will almost surely be correct. The growth in Real Final Sales in this so-called recovery has peaked and hovered at levels that have been consistent with the start of recessions over the past 25 years. That seems to be Hussman's reason for adding the horizontal red line.

wmc140113c.png (84.57 KiB) Viewed 3156 times

[Higgenbotham]

http://blog.markdcook.com/?p=667