MikeX

The Next Big Thing: Emerging Asia

Some say while the US will be in a bear market, India will go through ocrrective declines and when US is having a bounce, India will have a bull market that could bring SENSEX to 100,000.

www.tradingstocks.net/...

Why Gold, If Deflation Is the Threat?

Wait until deflation sucks the money off the economy, and people will sell everything including gold to pay off debt which is mostly denominated in USD.


On Oct 02 09:32 AM yellowhoard wrote:

> Gold is where money goes when other investment classes are going
> down.

Jobs Report: Early Analyst Responses

Folks it is a deflationary crash. A bubble that was inflated for 50 years does not go away with a small crash in few months. The credit bubble is deflating. It is still very high compared to GDP. Great Depression happened when the bubble was much much smaller. This time it is big. When it deflates, it will suck the money out of the economy. With no money to earn, companies will go bust. At the current PE levels, these companies are over priced. They need to double their earnings right away. Do you see anyone doubling earnings?

www.tradingstocks.net/...

This bubble is like the South Sea Bubble. Companies are not paying dividend. The bank pays more interest. Why should the price of anything that does not pay a dime go up? Greedy people think they are going to make it in price appreciation. All they think is that the stock will go up and they will sell it to the next sucker who will buy at the top. This is not a win-win scenario. The only recovery is in stock traders mind. They are chasing the price. This is a traders game now. A casino. Everybody in the stock market wants to rob someone else's money. It did not have to be that way. Ideally you should own a business for the income it generates and you could hold it for a long time. But no, in this casino, everybody thinks they are smart, and the guy who buys at the top is the sucker. Nobody cares about him. Do these investors really think they are the smart ones? When DOW hits 1000, most will be humbled. Everybody is in love with the stocks. At the bottom, everybody will hate them. Stocks won't be in the news. Until then, these companies will continue to layoff people to to survive, to keep their stock high. But when stocks are at a bubble like this:

www.tradingstocks.net/...

You can imagine what will happen to jobs when the bubble deflates! Expect MUCH worse numbers in the future.

What Is All the Market Excitement About?

Joseph, term limits do not help. Government has been pushing the crash further and further to let the next administration deal with it:

www.tradingstocks.net/...

The long term solution is to have a monetary system where
1. Banks are not allowed to create money.
2. Interest is forbidden.


On Oct 01 11:31 AM Joseph L. Shaefer wrote:

> What to do besides complain or invoke conspiracy theories? One way
> to rein in the excesses and return the pendulum to the middle might
> be:
>
> 1. Term limits on both Congress AND political appointees in the executive
> branch. We would still have screw-ups but at least they'd be different
> screw-ups -- and lobbyists would have to work ten times as hard to
> get the new kids to play ball. This was the original intent of the
> Founding Fathers, with Jefferson noting that the only check on a
> legislator's folly was knowing he had to return and face those in
> the communities that elected him.
>
> 2. No revolving door between Wall Street and the executive branch.
> Once you go into "service to the people" it must be real service
> rather than a sabbatical where the good ole boys promise you a $10
> million bonus the year you return to the fold for all that time you
> spent "working for peanuts" (like the $191,300 the Treasury Secretary
> makes) to ensure "nobody does anything stupid in DC" -- like tax
> hedge funds, curtail risk, prevent banks from using depositors money
> to trade derivatives, etc. I'd say a 5-year "no compete" variation
> ought to do it: if you oversaw a particular industry, you don't get
> to work in or "consult" to that industry for 5 years.
>
> For those coming from an industry with a "5 seconds is long-term"
> time horizon, that might put some brakes on those coming in for their
> mandatory 2-year stint to protect their cronies, and instead attract
> real overseers, real reformers and executives really interested in
> the daily fate of the American people.

Question for the Fed: Where Has All the Money Gone?

Money was used to write off bank losses. More of that will happen. What does that mean? It means money is dissapearing at record speed. When we default, when we pay of debt, money dissapears. Banks create money when we borrow. When we pay back it is gone. That is how deflation hits when the borrowing stops. This is a deflationary crash. It is caused by the credit inflation of the last 50 years. Economy is addicted to bank credit. When credit expansion stops, economy stops. Explained:

www.tradingstocks.net/...

Stocks May Not Fully Correct Until 2010

Don't stay in the market as it corrects! It is a deflationary crash! The crash is going to worse than Great Depression! The problem is too big to solve. Housing numbers are a death spell for the economy! Buckle up, we are going down fast. Home sales are the engine of this economy! When we borrow, banks create new money. They do not lend existing money.

Here is how banks create money:

www.tradingstocks.net/...

New money makes the economy good. Whatever good days you have seen in your life was because people borrowed more and more exponentially! Read about the way government and the FED uses home sales as a way to create money and inject into economy:

www.tradingstocks.net/...

This is why the government is trying to propel the home prices up again! They don't want affordable housing! They want EXPENSIVE HOUSING. Home prices MUST go up and we MUST keep buying faster and more to sustain the fake recovery. That is not happening. The crash will be worse than Great Depression. Some are shorting the market:

www.tradingstocks.net/...

Deflation is a MAJOR threat now! All the money FED prints is not making a blip in inflation! There is still a bubble in housing and stocks. It is a bubble that was inflated for 50 years! make no mistake, it will deflate.

www.tradingstocks.net/...

GDP requires exponentially more borrowing for each unit of increment. That is not going to happen. As deflation sucks the money out of the economy, people will SELL EVERYTHING to pay off debt. Gold, Silver, Currencies, Stocks, Houses, anything. And they will buy USD. Why? Debt is denominated in USD. To pay it off you have to have USD. Debtors! Go to cash while you can. Sell all assets now before the crowd does.


On Oct 01 01:41 PM Mistrofan wrote:

> Chirs - it is frustating to predict. taking the David Rosenberg point
> we should have been up only 15-16% by now from the bottom (DJIA around
> 7400-7500) - and that would have been a "normal" case for where the
> economy is right now. But we are up 50%! So, according with Rosenberg
> a correction is brewing and imminent.
>
> But I can also se your point: and maybe no one explained properly.
> When we reached 6440 on DJIA maybe the market overshoot on the downside.
> Maybe we cycle low should have been only 9000 on DJIA. And if that
> is the case, what we have seen last 6 months was nothing else then
> a reversion to the mean (the "mean" of a bad bear market - as categorzied
> by me as -30%). And then I would agree with you that markets can
> stay in a cyclical recovery for another 12-18 months.
>
> But the current credit crash is not a "normal" even for the bad bear
> markets: we had a credit growth explosion over the last 20 years.
> And that is the main problem. Because now we have a credit contration
> is is going to bring, sooner or later, the credit exposure wher it
> should be. What we are seeing is for sure the worst credit crunch
> since '29-'32.
>
> So, for me, another crash of the stock markets is in fromt of us
> - and for those of you looking for exact numebrs I am expecting DJIA
> to reach 5000 before we enter again into a secular bull market.<br/>
>
> When we will reach that 5000? most certainly not this cycle - and
> probably the next one (2012 probably).

Asset Class Rebound: Enjoy It While It Lasts

All assets will crash. Go to USD. That is the only place to be in the near future. Deflation is sucking the money out of the economy. The problem is too big to solve. Housing numbers are a death spell for the economy! Buckle up, we are going down fast. Home sales are the engine of this economy! When we borrow, banks create new money. They do not lend existing money.

Here is how banks create money:

www.tradingstocks.net/...

New money makes the economy good. Whatever good days you have seen in your life was because people borrowed more and more exponentially! Read about the way government and the FED uses home sales as a way to create money and inject into economy:

www.tradingstocks.net/...

This is why the government is trying to propel the home prices up again! They don't want affordable housing! They want EXPENSIVE HOUSING. Home prices MUST go up and we MUST keep buying faster and more to sustain the fake recovery. That is not happening. The crash will be worse than Great Depression. Some are shorting the market:

www.tradingstocks.net/...

Deflation is a MAJOR threat now! All the money FED prints is not making a blip in inflation! There is still a bubble in housing and stocks. It is a bubble that was inflated for 50 years! make no mistake, it will deflate.

www.tradingstocks.net/...

When money supply deflates, people sell EVERYTHING to pay off debt. Nothing can escape now. USD is the money that all debt is denominated in. When debt is paid of USD supply deflates. There will be scarcity of USD. FED is not printing enough money yet. Creditors won't let the FED do that so easily.

Winds of Change: Harbingers of Correction Emerging

What correction? The crash is going to worse than Great Depression! The problem is too big to solve. Housing numbers are a death spell for the economy! Buckle up, we are going down fast. Home sales are the engine of this economy! When we borrow, banks create new money. They do not lend existing money.

Here is how banks create money:

www.tradingstocks.net/...

New money makes the economy good. Whatever good days you have seen in your life was because people borrowed more and more exponentially! Read about the way government and the FED uses home sales as a way to create money and inject into economy:

www.tradingstocks.net/...

This is why the government is trying to propel the home prices up again! They don't want affordable housing! They want EXPENSIVE HOUSING. Home prices MUST go up and we MUST keep buying faster and more to sustain the fake recovery. That is not happening. The crash will be worse than Great Depression. Some are shorting the market:

www.tradingstocks.net/...

Deflation is a MAJOR threat now! All the money FED prints is not making a blip in inflation! There is still a bubble in housing and stocks. It is a bubble that was inflated for 50 years! make no mistake, it will deflate.

www.tradingstocks.net/...

A V-Shaped Rally Does Not Equal a V-Shaped Recovery

Great Depression had a big rally at the beginning too:

www.tradingstocks.net/...

They declared recession was over.
They said economy was growing.
They said production was increasing.
Traders were back in game.
Then it collapsed.

S&P 500 Support Levels

93% bulls. Everybody believes they will make money when the stocks go up:


That's little too crowded. Support may break now.

Valuations Ahead, Not Behind

Earnings is bad. But nobody is saying why. Let me explain you how this monetary system works:

When we borrow, banks create new money! They do not lend existing money.

Here is how banks create money:

www.tradingstocks.net/...

New money makes the economy good. Whatever good days you have seen in your life was because people borrowed more and more exponentially! Read about the way government and the FED uses home sales as a way to create money and inject into economy:

www.tradingstocks.net/...

This is why the government is trying to propel the home prices up again! They don't want affordable housing! They want EXPENSIVE HOUSING. Home prices MUST go up and we MUST keep buying faster and more to sustain the fake recovery. That is not happening. We don't borrow and the banks do not lend, thus new money is NOT being created. Bank credit is deflating. The crash will be worse then Great Depression. Some are shorting the market:

www.tradingstocks.net/...

Deflation is a MAJOR threat now! All the money FED prints is not making a blip in inflation! There is still a bubble in housing and stocks. It is a bubble that was inflated for 50 years! make no mistake, it will deflate.

www.tradingstocks.net/...

You don't have to think hard about earnings and business in this environment. Money supply is shrinking. Bank credit dissapears the same way it was created. making money will be a challenge for any company! It is not possible to increase earnings to sustain a sensible PE ratio in this environment.


On Sep 24 01:47 PM User 143167 wrote:

> $74 on 2010 is too good to be true. The highest S&amp;P500 earnings
> were around $90, with 35 from the financials and 55 from others.
> The financials will have only half of their best earnings in 2010,
> that is $18, so the non-financial earnings have to be $56 to make
> it $74, which means the non-financial operating earnings will make
> a historical new high in 2010! Day dreaming!

Doug Kass: A Self-Sustaining Recovery?

John is absolutely right. Jobs number is a lagging indicator. It reflects how bad the situation has been. Terrible. But the housing numbers are a death spell for the economy! Buckle up, we are going down fast! Home sales are the engine of this economy! When we borrow, banks create new money! They do not lend existing money.

Here is how banks create money:

www.tradingstocks.net/...

New money makes the economy good. Whatever good days you have seen in your life was because people borrowed more and more exponentially! Read about the way government and the FED uses home sales as a way to create money and inject into economy:

www.tradingstocks.net/...

This is why the government is trying to propel the home prices up again! They don't want affordable housing! They want EXPENSIVE HOUSING. Home prices MUST go up and we MUST keep buying faster and more to sustain the fake recovery. That is not happening. The crash will be worse then Great Depression. Some are shorting the market:

www.tradingstocks.net/...

Deflation is a MAJOR threat now! All the money FED prints is not making a blip in inflation! There is still a bubble in housing and stocks. It is a bubble that was inflated for 50 years! make no mistake, it will deflate.

www.tradingstocks.net/...

Recovery is a myth. An entire population cannot borrow and prosper.

On Sep 24 12:26 PM John Galt wrote:

> > Kass: I agree with Bill Gross that the strongest economic headwind
> to growth over the next few years is the consumer. After decades
> of aspirational spending, the consumer is likely moving back towards
> the post Depression legacy of trying to maintain their status quo.
>
>
> All that debt is deflationary. We OVER spent and BORROWED in the
> last decade, and now we have to pay it off. Unless we borrow even
> more from the future to live in the present ( Keynsians). At some
> point though all that debt has to be paid off.
>
> The thing that bothers me, is duringthe campaign you had people like
> Michelle Obama telling everybody that they were worse off than people
> 30 years ago, and that they deserve MORE stuff. Deserve MORE stuff?
> The savings rate was negative, people were OVER consuming... NOW
> comes the period of less consumption and MORE savings. Whoops.<br/>

A Teflon Rally Running on Volume Fumes

It is a counter trend rally. Trend is down. The crash will go into history books. These guys have predicted tops and bottoms so far:

www.tradingstocks.net/...

The big picture says we are at the top of a major (400 years in fact) bull market. The crash will be one for the history books:

www.tradingstocks.net/...

What Will the Fed Report Today?

FED is not going to tighten anything. Credit bubble is deflating. They MUST inflate! FED has been inflating credit for the last 50 years.

At last Affordable Housing is here, but the government wants to propel prices right up again. Why is that?

In the past economy seemed to be doing OK solely due to credit inflation that FED has fostered. FED made it easy to borrow. America borrowed and spent. When we borrow money, banks create new money and give it to us. They do not lend existing money. new money injected into the economy makes the government look good. Here is how banks create money.

www.tradingstocks.net/...

Why does it matter? Well, all of our money supply is bank credit. It is borrowed money. It needs to be paid back as principle + interest. The interest portion is not even created yet. Borrowing MUST increase exponentially so that principle+interest amount exists in the economy so that people can earn it and pay back what they owe. What happens when borrowing stops? Deflationary crash occurs. Debt problem:

www.tradingstocks.net/...

FED and the US government are running a ponzi scheme that is about to stop now. There is a limit to how much people can borrow. To make it last what did they do? They allowed people to deduct mortgage interest from income tax. That made mortgage more attractive. So people borrowed more and injected new money into the economy. This new money makes the current administration look good. In fact, they guarantee a future bankruptcy but who cares. As long as they get re-elected...

Government talked about the American Dream and Affordable Housing. Now home prices are becoming affordable, but instead of celebrating, they are scared to death, they are trying to inflate prices again. Now you know why. But it won't work. Home prices are down, sales volume is down. After prime borrowers were exhausted, they changed the rules to allow sub-prime borrowers get big mortgages. Now sub-prime is exhausted and the crash has started. 8K tax credit won't work. Home prices must increase exponentially to sustain a recovery. Recovery is a myth. Crash continues. Stocks are a bubble, greatest bubble ever!

www.tradingstocks.net/...

S&P 500 Earnings: Biggest Decline on Record

Earnings picture is worse today:

www.tradingstocks.net/...

(bottom of the page)

Yet the stock market is 50% higher :-)