Archive for the ‘Financial News’ Category

The FED is Creating Wealth out of Thin Air

Thursday, May 23rd, 2013

Hocus Pocus.

The FED has succeeded in creating a huge Stock Market rally by magically applying printers ink to endless rolls of paper. At least $ 85 Billion/ month out of thin air.

Can this last?

I have been sitting on the sidelines, watching this phenomenon.

A lifetime of economic rules, and logical economic forecasts have been turned upside down.

Used to be that the Market would signal the economic future six months in advance.

If the market went down, you could expect a weak economic future, and visa versa.

When you have a market driven by $ Billions every month, prices are driven by a printing press, and not by economic fundamentals.

The fundamentals are not that good, and certainly not as wonderful as the market rally of 2013.

I may have missed the ride up, but I learned many years ago, that you do not “PLAY” the market. You either invest, or you speculate/gamble( another way of describing a non professional trader)

Bottom line, dear friends. Be Very Careful.

The Market is not what it appears to be.

It has turned into a huge Ponzi scheme, and you the average middle class schnook will end up holding the bag.

Maybe not today, maybe not tomorrow, but it’s coming to a trading account near you

BEWARE!!

2013 NOT A CLIFF, BUT A VERY SLIPPERY SLOPE

Sunday, December 23rd, 2012

The current” Bull Market” galloping along on Wall Street, is now approaching 4 years and counting.

In the context of a very sluggish, limping U S economy, this “Bull Market” defies  conventional logic.

The markets gains have been fueled by several  non sustainable factors.

A gluttony of government expansion and spending coupled  with the various Q E ‘s ( so far 1-2-3-4) has injected unprecedented amounts of paper currency  into a very stagnant economic climate.

Corporate earnings have increased, not by business expansion, but by payroll shrinkage. The P/ E  ratios and earning per share have come at the expense of steady high unemployment.

As 2012 comes to a close, many companies have pared their overhead a low as functionally plausible. They  will be hard pressed to provide any semblance of  earnings growth going forward as they were able to provide in the past 2 or 3 years.

Beginning in 2009, the Fed initiated Q E 1  to buy distressed mortgage securities, later expanding it to include purchase of treasury bonds, all with newly printed $ ‘s.

The bond crisis in Dubai in late 2009 in which a default was narrowly averted, signaled a       “Every thing is not o k ” sign that the World economy was becoming over  extended.

In 2010 the flush of the massive U S stimulus  was beginning to fade.

The economic stability of Greece became a concern, followed by economic woes in Ireland, Spain, Italy, and Portugal.

The Government of France became Socialist, and the French economy has displayed  signs of distress.

The struggling World economy has spread to all corners of the Planet, with the fissures being  disguised behind  massive amounts of paper money being printed by Central banks ,  to keep money  cheap.

Since mid 2011, the economy has moved laterally yet the Bull Market continues to defy reality.

It is frightening to think that the softening World economy has spread despite  almost $ 90 billion per month of Fed spending on QE 3 & 4,the Euro Central Bank pledging unlimited bond support, and similar actions  being pushed by central banks of Japan and England.

The central bank of China has been forced to instigate several stimulus infusions to bolster the sagging growth of  Chinese businesses.

The GDP a Myth of Biblical Proportions

Saturday, October 29th, 2011

     When the Government dilutes the money supply by printing fiat currency, the result is inflationary.

     In the case of the Federal Reserve , the printing presses are running so fast and furious, that they have already worn out 2 sets of printing presses in the 3 years of the Obama  reign.

     The inflationary pressures are a constant push on prices and a depressant on the purchase power of the American dollar. It takes more and more dollars to buy less and less items.

     Anyone who is responsible forgoing to the grocery store, realizes that the same number of shopping bags, now cost more almosrt weekly, and they also note that much of the packaging has been changed to shrink the amount in the package , while attempting to hide behind a larger box or other creative packaging.

     Yesterday, the Government announced an increase of 2.5% in Gross Domestic Production(GDP) for the 3rd quarter of 2011.

     That announcement coupled with the  European bail out of Greece (another fiasco, that will result in more and more bailouts, and  more and more unbacked paper currency in Europe..Inflation is a many splendid thing..or not!) , sent the stock market soaring.

     It always suprises me, that the so called sophisticated traders and investors can misread the news so dramatically.

     The inflation that is creeping into our economy makes everything more expensive, resulting in more spending for the same items. Hence an increase in GDP….What? We are being burried under paper, our standard of living is dying one paper bill at a time, and the world rejoices at the wonderful news.

     No double dip recession, the economy is growing!

     No default in Greece, the presses are working overtime around the world.

     The real tragedy of this fiscal disaster is that  there is abundant paper and ink. Perhaps the presses will overheat and refuse to continue printing, or perhaps society will decide that accepting printed paper in exchange for food and shelter is a bad idea,-

The Relationship of Economics to History II

Friday, September 23rd, 2011

Economics is a way of keeping score.

Economics is the way we are able to feed ourselves.

Economics is the engine that drives history.

The quest for quantitative gain, either in wealth or sustenance has been the propellant for most wars,  the march of  invading armies, and the annexation of  neighbors lands.

Economics is the fuel which drives society.

From the beginning of human history, people banded together first in clans, and ultimately in tribes and later nations, all with the original need to feed and protect.

To control the source of food and to allocate its distribution was an economic power that could decided life and death.

As society evolved, the symbiotic relationship  economics and history strengthened.

Today, the state of our economy has once again devolved to a more basic level. The days of indiscriminate spending on increasingly absurd possessions are fast disappearing.

Now we have turned into a dependent society.

We expect to be taken care of,,

Thank god for Obama and his Progressive minions.

Our needs are no longer our responsibility.

Pay my heating bills.

Buy my food.

Provide my health care.

Subsidize my rent.

Pay me not to work.

Life is good.

Life is easy

etal……

Do Not Believe the Wall Street Rally

Friday, August 12th, 2011

My dear friends,

I have told you a number of times during the past 24-36 months, ” do not believe the short term  rallies in the market.”

The economy is in bad shape, and still needs another 18 months to bottom out.

This is assuming that Obama does not get reelected.

If he wins a second term, all bets are off.

When I say bottom out, the last part of this shakeout will be the worst part. As a people we Americans are very adaptable, and have a short memory.

They have gotten us used to a lower standard of living. Gas at 3.75 a gallon is better than 4.25, but still better part of .80-.90 higher than last year.

We are told to drive less, to carpool, and to stock up on sweaters for the winter.  …And  we do it, setling into a less comfortable standard of living.

We are told the rest of the World will love us again if me freeze in the winter, sweat in the Summer,  eat less , and stock up on foods that are generic, and cheaper, meanwhile less fresh and healthy.

Well the rest of the world does not love us, and eating cheap fatty foods is well represented in the spreading rear ends of the American population.

I don’t want to be cold in the winter. I don’t like bulky sweaters. I’ve worked all my life and feel that i’ve earned the right to wear what I want, and heat and air condition my surroundings any way that I choose.

All we have to do is find or keep a job, and pray that inflation and a dropping Stock Market doesn’t wipe out what little we have leftafter loosng our homes.

Sell this bill of goods to someone else.

Beware the Market, especially if the Tax and spend party wins again and does its thing.

America we are in trouble

Perceptions of Our Future * The Good * The Bad * The Very Ugly* View #1 The Good

Monday, July 11th, 2011

                                           

                                       VIEW # 1 THE GOOD

Word leaders have an epiphany and come to the realization that keeping interest rates artifically low , is having the effect of destroying their currencies.

Cheap money and flooding the markets with unbacked paper currency is having the effect to diluting the wealth of their citizenry.

The resulting creeping inflation is lowering the living standards worldwide.

This is  creating scarcity as more paper chases a finite amount of consumables, including food, fuel, and clean water.

The realization that we are creating a scenario where bailouts will continue to grow, leads out wise leaders worldwide, to make a series of dramatic fiscal decisions, beginning with a return to a gold backed currency.

Interest rates are allowed to rise, and ” Too Big ti Fail” becomes ” Too Big and Expensive to Save.”

The Federal Reserve is closed and a return to Fiscal Responsibility is reluctantly agreed to by the President and Congress.

There are massive protests, and disruptions in the economy resulting in the Government downsizing for the first time in 100 years.

Useless and duplicate departments are closed.

Many taxes are lowered or eliminated.

40% of Federal employees are let go.

The Military closes 90 % of foreign bases, and brings the troops home.

The war on drugs is ended, and crime rates in Mexico, and the United States drops radically.

Controlled devaluation of the dollar  is instituted, and much of out national debt is brought into line by the painful readjustment of our economy to a sustainable level of work and direct reward.

When our entreprenurial spirit is allowed to grow without heavy regulations, our economy begins to respond.

Our GDP embarks upon a decade of unprecedented growth, reaching 6-7% a year, and ushering the new Golden Age of Civilization.

Is This 1937 or 2011 Deja Vu Part II

Thursday, June 9th, 2011

With QE2 ending at the end of June, the Treasury Department will be forced to go back to global markets in order to sell Treasury Bonds.

Interest rates are sure to rise, dealing a severe blow to the already fragile recovery.

Federal Reserve Chairman, Ben Bernanke’s Qualitative Easing plan has failed to stimulate economic growth, but has done a masterful job of encouraging inflation and a weakening dollar.

Armed with a printing press, and some  obsolete economic theories, he  is fated to  become a Quixotic figure  in World history.

A printing press should be used for printing books, instruction manuals and even Bibles, but not to stimulate free enterprise economic growth and investments.

The insidious  inflation is having the result of disrupting economic growth, rather than encouraging it.

How can an entreprenure invest in a new enterprise when inflation makes price stability questionable.

This coupled with increasingly stringent government regulations and the onset of Obamacare have done a masterful job of strangling the economy.

According to a recently released report, the combined public and private sectors of our economy spend upwards of a $2 billion just on interest on all our debt.

The borrowed money which this interest services, has been spent on consumption rather than capital investment.

This is leaving nothing available for real growth or new creations.

QE2 has done nothing but service our debt and given a momentary artifical bounce in an otherwise floundering economy.

The current and proposed future taxes which are being piled upon the “wealthy” (ie the entreprenure) is making the  economic recovery  increasingly reminiscent of a black hole.

More Later

Is This 1937 or 2011 Deja Vu all over Again

Thursday, June 9th, 2011

Well dear friends, QE2 is comming to an end,

What does that really mean, and what has all the fuss been about?

We put cute names and labels of earth shaking actions to make them pallatable to the average person, but the real intention is to hide the reality of what is happening.

QE2 or Quantitative Easing is another way of saying that the United States Federal Reserve has printed $ 600 Billion out of thin air and used this freshly inked paper to purchase 85 % of the Treasury Securities issued in the past 6 + months.

This giant Ponzi scheme has allowed the Fed to keep interest rates artifically low while flooding the market with inflationary paper, which has been used to pay the interest on our national DEBT.

What? We are printing money out of thin air, and using this to buy our own bonds?!!

As of June 30th, this program will end.

Now what!

How will we be able to continue selling $Trillions of new Treasury securities and record low rates of interest?

The answer is we won’t.

After this program ends, we will have to look to foreign buyers.

China, Saudi Arabis, possibly France and other Euro nations, as well as some hostile people with huge petro dollars such as Iran, Venezuela, et al.

Will these foreign nations be willing to lend us money at depressed interest rates.

HELL NO!!!

The days of cheap money are destined to come to a swift end.

5%, 6%,and higher are in our immediate future, and the drag on a very fragile economy will drag us to the precpice of a precipitous drop.

More later,

Counting the Budget Deficit in Real Numbers!

Saturday, April 16th, 2011

The fiscal disaster which is the U S Federal budget, and the tidal wave of debt( Tsunami,sorry I have dated myself) which is threatening our Nation, is a well documented reality.

I have been listening to the arguments between Liberal and Conservative pundits, and there is one serious problem with both sides of this debate.

Both sides acknowledge that the  budget deficit is approx $1.7 trillion this yeat, and a $ 13-14  trillion unfunded debt also exists.

O K , I acknowledge the reality of our fiscal horror show.

BUT, what is 1.7 trillion? How about letting the public know the real number. Try $ 1700 billion. Yes thats right, the glib $ 1.7 trillion deficit in real dollars is 1700 BILLION,  of 1,700,000 MILLION.

Those numbers are all the same,but the spelled out number is truly staggering. 1.7 trillion is 1700 Billion .

How about our acknowledged debt of $ 14trillion. This is where our debt ceiling is right now. 14 trillion is 140,000 Billion dollars. A number which gives me a headache to comprehend.

Yet Obama and the Democrats are treating it as monopoly money and throwing around 1.6 or 14 trillion  without really telling you the desperation of the numbers.

Take a minute or possibly a hour and try to actually write out the number longhand.

Blows your mind doesn’t it

Cooking the Books to Manipulate our Perception

Friday, March 4th, 2011

Much of the statistics which the Main Stream Media presents to us as “gospel” , is actually “good” news based upon group – think.

 Highly misleading statistics based upon  political expediency.

This morning , the unemployment statistics reflected 180,000 + new private sector jobs created and an unemployment rate that fell to 8.9 %.

This is great news and heralds  a further steps towards economic recoveryand a renewal of the American dream!!! 

Yay!!!

Let the good times roll !!!

WRONG !!

The reduced 8.9 % unemploment represents only the number of people actually drawing unemployment cheks.

How about those who’s unemployment insurance has expired.

How about those unemployed who have given up on looking for work.

How about people who have been forced totake part time jobs , or “1099” off the books low wage employment.

The shameless agenda , constantly fostered upon an unsophisticated public, is irresponsible  and down right unethical  if not criminally misleag.

Wall Street embraces the Government statistics, while Main Street continues to plod along, bewildered by the facts and the continuing lack of jobs, and the insidious encroachment of real inflation( including food and transportation costs).

“Never the Twain Shall Meet”