Meanwhile, bull market deniers, in the face of overwhelming evidence of a bottom as evidenced by price trends, continue to cling to literally anything that leaves the door ajar towards revisiting the March lows and below. They are even resorting to delving back to the 1930's for any glimmer of hope. It should be obvious by now to everyone that transposing current price action onto a graph of the 1930's bear market makes it rather obvious that that is not going to happen.

Every bear market / major correction in the stock market since the Great Depression has been compared to the 1930s bear market rally, but never once has it repeated!

Quick Technical Analysis - The Dow spent early June distributing along 8,800, which gave plenty of time to put on short positions with tight stops. The key chart trigger was the lower high at 8,600 which targeted a break of 8,200. The pattern size is 400 points which projects to 7,800 before the next expected bounce. The overall pattern size is about 650 which projects to 8,200 minus 650 = 7,550, which is pretty close to the original projection of April 26th for the target for the Correction AFTER the peak around 8,750. The chart is also showing an head and shoulders price pattern witch the same measuring move.

UK Housing Bear Market Recap

Stealth Stocks Bull Market Analysis Recap - Consistency and Certainty.

However, following the ever growing fraud estimated at more than $10 trillion perpetrated by those running the world's major financial institutions that had brought the financial system to brink of collapse during September / October 2008, which was only prevented when the tax payers were forced to underwrite the fraud and cover the losses of figment asset valuations that allowed bank officers collectively to bank billions if not trillions in bonuses by utilising "mark to fantasy".

The government, through what should be more accurately termed as "Quantitative Inflation" than "Quantitative Easing," sanctioned £75 billion in the initial print run, which will have a multiplier effect through fractional reserve banking and leverage of anywhere from between X10 to X20 the amount, depending on how it filters through the economy. Therefore, the £75 billion increase in the money supply implies the supply of credit should jump by anywhere between £750 billion to £1.5 trillion, but more probably in the region of X10 at £750 billion over the next few months, with expectations of several more doses of "Quantitative Inflation" during 2009 that seeks to devalue the British Pound towards parity to the U.S. Dollar.

Protectionism on the Rise

One of the primary reasons why the 1929 crash resulted in the Great Depression was because of the rise of protectionism and the collapse of global trade.

IMF Revises UK GDP Forecast. Again.

The IMF has revised its GDP forecast for the UK economy for 2009 from -1.5% (November 2008) to -2.8%, and the forecast for 2010 is now +0.2%. The forecast still seems overly optimistic in the light of UK fourth quarter GDP contraction of -1.5%. The IMF has a good track record of being WRONG, with overly optimistic forecasts that are continuously revised lower.

The fourth quarter GDP crash of 1.5% is far higher than expected and explains why the government panicked, as evident by the deep interest rate cuts from 5% to 1% in just 4 months. The rate cuts are in addition to the £1 trillion banking sector bailout liabilities. The rate of contraction at 1.5% per quarter implies an annualised collapse in the UK economy of 6% which would amount to loss of national income of £72 billion, against which the government has so far committed £40 billion in the form of tax cuts, industry support and stimulus packages. However, the deviation from the trend of 2.5% growth per annum puts the gap at an additional £30 billion per annum.

Printing money has never EVER been the answer, history is littered with the political elite opting to take the short-term quick fix at the direct cost of the long-run. In today's Britain the clear objective is for the Labour Government to work towards the May 2010 election deadline which has prompted policies that are destroying Britain's wealth and future growth which has been reflected in the crash in sterling against all major currencies of more than 30%, for the government cannot hide money printing from the currency markets. Similarly U.K. debt has been marked lower in the wake of the increased liabilities of the banking system that the taxpayer is guaranteeing.

The time bomb continued to tick under the bankrupt banks - how long could the banks hide the truth from the market that they were insolvent? The article of September 9th (BANKRUPT Banks Wiped Out by Tulip Backed Securities, Is China Cheap?) in response to email queries of "should I buy banks now?" , clearly pointed out that banks should be avoided as the banking crisis had yet to hit the financial markets let alone the economies which were also soon expected to fall off the edge of the cliff as the second phase of the credit crisis kicked into gear. Meanwhile the more asset prices fell, the more loss making illiquid positions forced more asset sales and therefore more deleveraging, which culminated in the crash of 2008. Deleveraging is not over and therefore suggests much lower asset prices during 2009.

UK Government Debt Levels Explode Higher

CURRENT UK HOUSING MARKET ANALYSIS AND FORECAST TRENDS

UK Housing Market Background and Re-cap.

To counter the economic slump, the Labour Government appears to have thrown all caution to the wind and embarked on a huge series of debt fuelled spending programs that are likely to witness UK public debt soar well beyond the 40% GDP limit, in fact taking account of the Bank nationalisations and capital injections public sector debt has already passed well above 50% of GDP to date. The consequence of unrestrained borrowing is potentially highly inflationary and manifesting itself in the crash of sterling that has plunged against major currencies by more than 30% as investors expect further interest rate cuts in the coming months. These cuts look set to achieve and possibly break below the 1% interest rate target, as the 6 months of paralysis at the Bank of England have been replaced by PANIC actions under direct government dictats to act.

Crude Oil Inflation Hedge Unwinding and the Recession.

Many of the readers of my articles over the last year at Market Oracle will have seen this trend unfold as sustainable amounts of borrowing exploded into unsustainable liabilities due to the collapse of the bankrupt banks. Therefore this article seeks to analyse how Britain has come to towards an increased risk of bankruptcy and what action can be taken to avoid a currency collapse that is the consequences of state bankruptcy.

Emergency Budget 2008

Mervyn King, through a number of TV interviews during the day, set out to to reassure the financial markets as to why the Bank of England cut interest rates by a near unprecedented 1.5% last week instead of during the previous 6 months and why the Bank's outlook has changed so much since August. He stated: