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Michael Clark

Michael Clark
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  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    Look for a bottom around 2019. You can read my other posts as to how I come up with this date. Will it be a Great Depression? Yes. We have a Great Depression every 36 years -- although the 1965-1983 Depression was a low debt depression, which made it possible to inflate during the deflation, giving us both inflation and deflation at the same time: stagflation.

    We have to recognize we are trapped in a boom-bust cycle economy. If you have the boom you also have the bust -- and there is no way you can "think" your way out of it. Bernanke spent his whole academic life trying to find a way out of the 1929-1947 Great Depression. And he used the world as his guinea pig to test his ideas over the last decade. Look where we are now. We should be half the way through this deflation -- and we really haven't even started. We need higher rates, to effect this deflation of prices and deflation of debt.

    IF it is true of thermodynamic nature that 'for every action there is an equal and opposite reaction' should we not consider the possibility that in the financial world 'for every inflation there is an equal and opposite deflation'? IF this is a law of nature, then isn't it a kind of insanity to refuse to recognize it?
    Oct 14 04:44 PM | 1 Like Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    That wasn't you, I'm Howard, that was the British Empire colonialist hoarde. I don't remember Canada ever inflicting a major defeat on America. I do remember us exiling at lot of traitors in the War of Independence to Canada however. A lot of lackeys for British rule.
    Oct 13 08:09 PM | Likes Like |Link to Comment
  • Futures slip in Sunday evening action [View news story]
    Watch the US Dollar. That's what's driving stocks down. QE and ZIRP both were attempts to weaken the Dollar, along with bailing out the banks. If the Dollar keeps rising, the FED won't be able to manage anything.
    Oct 13 03:05 AM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    TeachEnglish: I agree with you. Globalization is over; the National Economy is the new issue. We need to remake the American economy. From the ground up. The global economy is a useless term at the moment. The global economy is a dying body, a fragmenting old form, which central banks all around the globe are attempting to glue back together.

    We are seeing fragmentation everywhere; and plagues; this is the nature of the breakdown of an old idea, when it is breaking into pieces. Rebirth happens below, near the ground, near the source of life, in the local and the national ground.
    Oct 13 12:16 AM | 1 Like Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    Teutonic Knight: I think your word of caution is well-stated. I think many of us who have been accused of being Perma-Bears on this site were in some ways taken in with the assumption that markets were not fixed by the FED, were capable of 'behaving rationally' -- of going both up AND down. The understanding that the FED would 'DO ANYTHING' to keep asset prices from declining -- such as spending $4 trillion plus on this and fixing interest rates at zero -- was not adequately comprehended by those of us who felt the markets were still free to flow in both directions.

    My own feeling (still) is that stocks should have declined about 1-2% per years from 2001-2019. But the fix was in. The FED fixed the game, by spending the future's money to protect the present from the dreaded Deflation. My own view is that this expensive 'fixing of the game' will only delay the inevitable. (I am a technician by training, and a trader by nature -- and my technical idicators did not signal Bear Market Signals after the FED fix was in, so I was mostly a bullish trader from 2009-2014. I did issue calls for selling on 9 September 2014, and then again on 12 September and then again on 23 September.)

    http://bit.ly/1qLlf73

    http://bit.ly/1qLlf71

    http://bit.ly/1rpvYzw

    According to my view of the so-called Business Cycle, we have had 3 growth phases this century, and we are in our third non-growth phase.

    In the Growth Phase 1911-1929, the DJIA (or the index that preceded the DJIA) gained 424%, or about 24% a year.

    Points Average Gain Annual Average Gain
    1911-1929 268 424% 24%

    In the second Growth Phase, 1947-1965, the DJIA gained 386%, or 22%.

    Points Average Gain Annual Average Gain
    1947-1965 678.7 386% 22%

    In the third Growth Phase, 1983-2001, the DJIA gained an extraordinary 915%, or about 51%

    Points Average Gain Annual Average Gain
    1983-2001 9559.52 915% 51%

    During the two non-growth seasons, the story was much different.

    In the first non-growth season, 1929-1947, the DJIA lost 47%, or about 2 1/2 % annually.

    Points Average Gain Annual Average
    1929-1947 -155.99 -47% -3%

    In the secon non-growth season, 1965-1983, the DJIA gained 22%, or a little over 1% a year.

    Points Average Gain Annual Average
    1965-1983 190.71 22% 1%

    In neither of these non-growth periods did the FED mortgage the future to protect the bad debt that almost always accompanies the top of a business cycle (take these dates back into the late 1700's and see they are also largely accurate as Growth and non-Growth cycles.

    Business cycle tops: 2001, 1965, 1929, 1893, 1857, 1821 (began 1817), 1785...). In those days there was an understanding that economic extremes (such as debt bubbles, and housing and land speculation bubbles) needed to be balanced and discourage, and not encouraged. This time, the FED is so afraid of the results of balancing and discouraging naked speculation and risk that they are leading such imbalances, cheering it on, encouraging it.

    Anyway. in June 21, 2001, the DJIA was trading at 10715.43. It is my belief that the markets will return to the average for non-growth periods. This is why I am viewing 8787 as a possible target on the DJIA for 2019 -- and average of a loss of 1% each year for 18 years.

    There is many assumptions built in to this picture. The first assumption is that my Day-Cycle, Night-Cycle theory is accurate, and not simply an illusion of an addled man's old mind, which I admit is a possibility. This vision of reality was given to me in a religious-revelation, the type of which today is very mistrusted. So, first one must accept that my cycles accurately describe reality. I have written a long book about this, as you know, TURN OUR THE LIGHTS -- I mention it here for others who may be interested.

    The second major assumption is that stock prices will return to their average. Clearly the Business Cycle expansion 1983-2001 did not return to the average; it gained twice as much as the average gain for both 1911-1929 and 1947-1965. This suggests expecting a reversion to the average is not guaranteed.

    Your point: will the FED continue to print money from the future to continue the BERNANKE EXPERIMENT to defeat the Great Depression, which, so far, has failed clearly, except in terms of stock prices. I'm not sure the FED has learned its own limits. I also think they may attempt to fix things again. But I can't see howa continued swimming against the tide will do anything but delay Judgment Day. Look at Japan. Japan is us, is us all if we keep fighting against the 'natural' process of growth by day, growth by Summer, and decay by night, decay and deflation by Winter.

    Sorry for being so long-winded. I am convinced that, should my vision be grasped by those in power, we could eliminate much waste and sorrow and, eventually, much debt enslavement, that would make management of economic cycles more rational and more fair.
    Oct 12 09:43 PM | 2 Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    Agree with you on the US Dollar, Howard. But how is the FED going to weaken the Dollar? QE and ZIRP have been in place for many years now; the weak dollar has not spurred inflation or a recovery. The FED has problems seeing the big picture. Not the global picture; they see that fine. But the big picture in terms of Time Cycles. The FED seems to think it is the only job of the US to act as the global marketplace. Spend, spend, spend. However, extremes flow into opposite extremes. The strong dollar is going to trigger an era of SAVING in the US, saving to pay off debts. This is exactly what America needs. It will not be good for the Global Economy. But the concept of the Global Economy is periodical in focus -- having topped as an idea in 1929, 1965, and again in 2001. The Global Economy as a concept will take back-seat to the idea of National Economies (that fearful "protectionism" paradigm dreaded by the globalists) as the struggle for existence between nations is resumed again, and gains asendency through 2019. "Protectionism" is a necessary stage in the recovery of national economies, as is higher interest rates -- and the protection of local currencies -- the mirror image of the race for lower interest rates to fuel trade advantages in the expanding 'Global Economy phase'.

    You write: "U.S/Canada relations are the worst in my memory." You must be young. Relation between the US and all of its allies (except the UK) were at rock bottom in 1983, much worse than today. But wait until 2019; they will be much worse than today.

    In 1983, the US and the UK were planning World War III as communism was winning all over the world, in Asia, in South America, and also in Europe (hearts and minds were very anti-American).
    Oct 12 09:04 PM | Likes Like |Link to Comment
  • Market Timing Report: 10-20% Correction Due To Extreme Sentiment And Leverage [View article]
    ISIS will grow and continue to become more destructive of the world we built from 1983-2001. In 2001 this world (the creation) began to die. It will continue to die from 2001-2019. Isis will get stronger. Ebola and the other plagues of Revelation will continue to get stronger. Isis is a new form of World Fascism, last visiting us beginning in 1929.

    In 1965-1983, it was World Communism that destroyed the world built by the Creators 1947-1965.

    In 1929-1947, it was World Fascism that destroyed the world built by the Creators 1911-1929.

    Does anyone see a pattern here? As for the price of oil, I would look at the sharp rally in the US Dollar as the main 'cause', and the suggestions of coming American interest rate hikes. I do believe that the Saudis are working with us to a point regarding ISIS -- they know they can't defeat ISIS without Western military. However, as Constatin points out, ISIS is winning. Surgical bombing never wins a war by itself.

    QE had two objectives (major objectives): 1) to bail out the banks (stealth bailout); and 2) to weaken the US Dollar in an attempt to fueld more inflation of asset prices, of which commodities were a prime target.

    If the US Dollar continues to strengthen, the FED goals are broken.
    Oct 12 06:21 PM | 2 Likes Like |Link to Comment
  • The Wrong Idea About Inflation [View article]
    About 10,000 by 2019 (the Dow). Let's take another (closer) look:

    My data is based on average gains and losses during this century's Day-Cycles (growth seasons) and Night-Cycles (non-growth seasons). Here's the numbers:

    Day Cycles

    Points Average Gain Annual Average Gain
    1911-1929 268 424% 24%
    1947-1965 678.7 386% 22%
    1983-2001 9559.52 915% 51%

    Day-Cycle 3502.0733 1725% 97%
    Totals:

    During the two Night-Cycles (that have been completed) during the Twentieth Century, buyiing the Dow Jones Industrial Average would have given approximately these returns:

    Night Cycles
    Points Average Gain Annual Average
    1929-1947 -155.99 -47% -3%
    1965-1983 190.71 22% 1%
    2001-2019 TBD TBD TBD

    Night-Cycle 17.36 -25% -2%
    Totals

    So, Night-Cycles averaged an annual loss of 1% per year in 1929-1947 and 1965-1983. The Dow traded at 10715.43 on 21 June 2001. So I'm thinking a similar average decline would bring it back to about :

    8787.

    THis assumes a reversion to the average, of course. At the moment this seems like a major assumption. Time will tell.
    Oct 12 02:27 PM | Likes Like |Link to Comment
  • The Wrong Idea About Inflation [View article]
    Excellent. "The counter-intuitive response is the correct one..."

    Highter interest rates, in this context, is the counter-intuitive response. And the correct one. Not to preserve the disaster we are in (lower rates do that), but to lay the ground-work for a true recovery. We expand by spending; we lay the ground-work for a real recovery by saving. Global Economy by Day; National Economy by Night.
    Oct 12 02:16 PM | Likes Like |Link to Comment
  • What's Going On? Stock Markets, Bond Markets And The Economy [View article]
    rndog:
    You may be right.

    My calculation was just an estimate. Your note made me look at my data more closely. My data is based on average gains and losses during this century's Day-Cycles (growth seasons) and Night-Cycles (non-growth seasons). Here's the numbers:

    Day Cycles

    Points Average Gain Annual Average Gain
    1911-1929 268 424% 24%
    1947-1965 678.7 386% 22%
    1983-2001 9559.52 915% 51%

    Day-Cycle 3502.0733 1725% 97%
    Totals:


    During the two Night-Cycles (that have been completed) during the Twentieth Century, buyiing the Dow Jones Industrial Average would have given approximately these returns:

    Night Cycles
    Points Average Gain Annual Average
    1929-1947 -155.99 -47% -3%
    1965-1983 190.71 22% 1%
    2001-2019 TBD TBD TBD

    Night-Cycle 17.36 -25% -2%
    Totals

    So, Night-Cycles averaged an annual loss of 2 % per year in 1929-1947 and 1965-1983. The Dow traded at 10715.43 on 21 June 2001. So I'm thinking a similar average decline would bring it back to about (and you are right, it's not near 10,000):

    6858.

    I stand corrected. Of course, this assumes that this Night-Cycle will revert to the average, which is a very large assumption, especailly considering how monetary policy has countervened the preposed decline to this point.

    But, the Japanese stock market lost 78% of its value after its housing bubble popped. Greenspan and Bernanke understood that you could spend trillions of future earnings to delay the decline. But did they eliminate the decline, or only delay it?
    Oct 11 10:04 PM | 1 Like Like |Link to Comment
  • What's Going On? Stock Markets, Bond Markets And The Economy [View article]
    Public behavior changes. During the growth season (such as 1983 - 2001), spending is the issue, and debt spending is the conclusion. However, as the non-growth season progresses (such as 2001-2019), public behavior shifts from spending to saving. Appetite for risk and speculation diminishes; concern for safety grows. The belief that 'debt is good' is transformed into the belief that 'debt is bad' -- people stop borrowing, and attempt to pay down existing loans, and save money for the coming catastrophe. The picture of the future dims and turns dark. With the picture of asset prices collapsing, no one wants more debt for more such assets; people want saved money to protect them.

    Think about it. Your sense that we have deleveraged means debt doesn't matter (public and/or private) IF WE KEEP INTEREST RATES AT ZERO. But that is an untenable option. We have had interest rates very low, and then at zero, for nearly 13 years now. And the global economy IS NOT and cannot grow. There are processes we must go through to get back around to the organic growth season.

    It is untenable to keep interest rates at zero for the rest of eternity -- and that is what our current leadership is suggesting we must do. We cannot protect bad debt by hiding it in government or central bank spreadsheets. It must be destroyed. Japan is not and will not recover without destroying all the bad debt Japanese banks incurred with their housing bubble. Housing bubbles destroy economies, one after another. They always have and they always will. The refusal to see both sides of the debt/interest rate equation is deadly and is what is currently destroying us.

    Expansion is always only temporary. Expansion is always followed by contraction, debt destruction, and a change in emphasis from SPENDING to SAVING. This transition is organic, and happens even if our leaders resist it. It is happening now.

    We were warned we could escape deflation, depression if only we did not descend into a world destroying protectionsim. But protectionism is a stage, not a negative option. Protectionism is a stage in the recovery process. Self-sufficiency is a philosophy tied to protectionism. Self-sufficiency turns into back on the idea of the Global Economy.

    The Global Economy apex occurs at the end of the Growth Season (from 1911-1929; from 1947-1965; from 1983-2001); then its opposite has its cycle, the National Economy, which is a process enagled by protectionism, self-sufficiency, higher interest rates, strength in the local currency, saving wealth over spending wealth.

    One side is not right absolutely. There is a season to spend and there is a season to save. Higher rates, and a focus on saving, is what we need now to save our national economy.
    Oct 11 07:31 PM | 1 Like Like |Link to Comment
  • All Five Major Averages Ended Last Week With Negative Weekly Charts.  [View instapost]
    Richard: I'm convinced the stronger dollar is the catalyst of this correction. What is your take on the Dollar? What is your take on the Japanese Yen? I have shortsell signals for the yen this weekend.
    Oct 11 07:12 PM | Likes Like |Link to Comment
  • The Wrong Idea About Inflation [View article]
    Tack et al (welcome back, Lawrence):

    You can only grow the economy during the 'growing season'. NOTHNG can be done to grow the economy during the non-growing seasons (...1929-1947, 1965-1983, 2001-2019...). Much of the manic mistakes we make with both monetary and government policy in an attempt to help force growth in the non-growth season stems from the fact we believe we can do what is not possible.

    2001-2019: raise rates slowly, raise taxes, destroy debt, encourage 'slow growth' through savings. Lower the liquidity level. Use taxes to fund social programs without government taking on new debt. The failure to grow the economy during non-growth seasons is no one's fault.

    Prepare for the next growing season: 2019-2037.

    We can't 'figure out' how to beat deflation. If we have inflation (or what I call the 'Growth Season') we have deflation. The first is breathing out; the latter is breathing in. We NEED both parts of this unified process. Protecting debtors with good money from the future is a horrible idea. Debtors are chance-takers, gamblers. When they win, they win. We cannot protect them from losses. That is a huge moral hazard; and that is FED policy in this Night-Cycle.

    The stock market's current correction comes from the strong dollar, which is implying higher interest rates in America. This is a good thing, a needed thing. The Dow will decline to about 10,000 by 2019.
    Oct 11 02:44 PM | 1 Like Like |Link to Comment
  • The Fed: There Is No Bubble, There Is No Timeline, There Is No Exit Strategy [View article]
    I'm not buying gold. But SPY has lost some significant ground in the past week; in fact all the gains of 2014 are gone.
    Oct 10 11:56 PM | Likes Like |Link to Comment
  • The Fed: There Is No Bubble, There Is No Timeline, There Is No Exit Strategy [View article]
    I agree. I think that it was Wall Street that figured out out to pass the risks of tranches and CDO's off to investors, and figured out how to pass risk generally off to US taxpayers -- as long as they have people in power (in the FED and Treasury) who support this.

    But I do agree with what you say.

    The liars and cheaters have been in power a long time.
    Oct 10 11:54 PM | Likes Like |Link to Comment
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