S&P 500 Update

Wow!  What a day for the world equity markets.  EU ministers have just cured all the financial problems of Greece and the other 26 EU countries with just a stroke of their pens.   Let's see how long the euphoria will last.  Already there are cracks in the dike coming from Germany's central bank.

 

U.S. Consumer is Spending Again

Preliminary Real GDP for the 3rd Quarter came in at 2.5%, which is up from 1% for the 2nd Quarter of 1.3%.  On the surface that looks very encouraging.  Let's take a peek beneath the surface.  What do we find?  Well, personal income increased at a whopping 0.9% versus 4.6% for the 2nd Quarter.  That's not good at all.  Further, disposable income increased at 0.6% versus 3.9% for the 2nd Quarter.  Still no good!  Finally, consumer spending increased at 4.9% versus 3.7% for the 2nd Quarter.  Yes, the consumer is back with the income.  How is the consumer being able to spend?  Oh, take on more debt.  You would of thought the consumer would have learned something from 2008.  I guess memories are just short lived.

Message of Hope for Bears

A reader over at SlopeofHope posted the following "market analog" comparing 2008 with 2011.  I thought given today's EU fantasy driven market (all has been resolved in Europe and the world) that it would provide a useful roadmap going forward. 

Arab Spring

Libya's transitional leader says Islamic Sharia Law will be the "basic source" of all law.  You may want to become very familiar with what constitutes "Sharia Law." 

Do You Know the Difference Between a Democracy and Republic Form Of Government?

Soaring Prices Push Queen Elizabeth Close to Fuel Poverty

Yes, you read the title correctly about the Queen Mother.  The Queen, herself, prowls the corridors, switching off lights, a Buckingham Palace employee reported.  The Queen Mother is coming perilously close to joining millions of her subjects in “fuel poverty” as energy bills for her four palaces and a draughty castle absorb a rising share of her income.  To make matters worse, the Queen’s government has since frozen her income, while her average energy bill has risen 20%.  No, I am not pulling your leg on this one.  I am just not that creative to make this stuff up.  See the following article entitled, "Soaring Prices."  She is not asking for donations from her subjects at this time, but donations can be sent to the "Master of the Household” at Buckingham Palace.   

What Percent Are You?

Informative site from the Wall Street Journal that provides your percentile income rank based on your "Adjusted Gross Income." Just click-on "What Percent Are You?"

Bear Trend: It Is What It Is!

Upcoming College Bubble

Student loan debt outstanding is over $800 billion, which of course is higher than credit card debt outstanding.  Worse yet, student loan debt will exceed $1 Trillion next year. Is a college degree worth it?  Watch the video, especially if you have children thinking about attending college. 

Biden 2016? "I'll Make Up My Mind On That Later"

Yes, Joe Biden is thinking about making a run for President in 2016.  This guy just doesn't know when to quit.  But then again, it is Joe Biden.  The name that keeps on giving!

If Solyndra Made Your Blood Boil, Wait Until You Hear about Fisker Automotive

ABC New reports that Fisker Automotive, an electric car company,  received a $529 million federal government loan guarantee.  It is assembling its first line of cars in Finland.  Fisker is saying it could not find a facility in the United States capable of doing the work.  (Yes, you read it correctly.  Finland will be the recipient of 500 manufacturing jobs, not America.)

"Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company as a bright new path to thousands of American manufacturing jobs.  But two years after the loan was announced, the job of assembling the electric car has been outsourced to Finland."  What I can I say; it is simply Biden being Biden!

It is not a "Left/Right" Issue!

I totally agree with Dylan's guests.  Finally, we, who have been saying this same thing for years about financial fraud coming from the Fed and Wall Street, are gaining creditability.  Watch the video and see if you agree.

Visit msnbc.com for breaking news, world news, and news about the economy

EMA Strategy

The bottom-line is that the market’s primary trend is down, which is based on the EMA Strategy.  As long as the 15-week EMA remains below the 40-week EMA, downward trend will remain in force. 

I know many of you are looking at the market since October 4 and are wondering if the bears have lost their nerve.  The majority of market pundits on CNBC and Fox Business are saying the worse is over.  This reminds me of my conversation many, many years ago that I had with the late Robert Edwards, who with John McGee wrote the bible on technical analysis, entitled “Technical Analysis of Stock Trends.”  I was doing my thesis on technical analysis for the completion of my MBA at the Zicklin School of Business, CUNY Baruch College.  My question to Mr. Edwards was how do you handle the daily financial and global news that goes into making investment decisions.   His response was: “always be objective.”  He went on to explain that once he had identified the primary trend of the market, say bearish, he only focused on bearish news.  That is, only focus on reason why the market is suppose to go down.  And, if the trend were up, he would focus on only reasons why the market should go up.  Also, he indicated that he never read the current edition of the Wall Street Journal.  He would save them for the week and read them over the weekend.  I asked, of course, why?  And, he responded that he always wants to be as objective as possible.  He said that we all bring our own biases for why the market should behave the way we think it should behave.  Therefore, he did not want his own biases to influence his investment judgment.  His focus was entirely on listening to what the market was saying, not the Wall Street Journal.  He also indicated that when he charts, he would do so in a “blind format.”  That is, not knowing the chart names.  Why?  He wanted to be as objective as possible and not being influenced by his own biases in regard to the company he was analyzing. 

Therefore, my advice, which was gained many years ago from Robert Edwards, is to simply focus on all the reasons why this market should being going down, because we know that the primary trend is bearish.  Forgot about all that noise from those “Bulltarts.”  As a matter of fact, don’t watch Bloomberg News, CNBC, or Fox Business.  Simply focus on what the EMA Strategy is saying!

You Are Hired!

Now, this is a college student that I would hire in a second!  Definitely not one of those "OWS" types.

Marc Faber Gets It: Eliminate Keynesian Policies, Adopt Austrian Policies

Wall Street Has Bought Congress for $1.1 Billion (How Does That Make You Feel?)

European Financial Stability Facility

The start of another week and European stock futures are up nicely.  The reason is more promises by Germany and France that the European Financial Stability Facility (EFSF), or toxic bank (As I call it, or better yet, European Stability Sure to Fail.) will save the day.  It will simply take, say, a trillion dollars or more to put "Humpty Dumpty" back together, which of course Europe does not have.

Repeat Performance: Back By Popular Demand

If you didn't watch this video the first time, you just might want to take three minutes of your time and do it now.

Sarbanes-Oxley: Criminalization for False Accounting Statements

There have been multiple bank failures by public companies that filed balance sheets under penalty of criminal prosecution just weeks before they failed.  These banks had balance sheets that showed perfectly, healthy institutions.  The FDIC has documented dozens of bank failures, privately-held and publicly-traded, where those balance sheets were proven to be factually false, as the losses have been 20%, 30%, 40% or even more just a few weeks later.   It is beyond comprehension that the assets in question could have actually lost 30% or 40% of their value within that period of time.  The only explanation is that these financial statements were indeed falsified.  Sarbanes-Oxley makes this a criminal matter.  Where are the indictments against the CEOs of these institutions?  But, then again, I guess Sarbanes-Oxley doesn’t pertain to banks. 

It's All Ok. Trust Me!

Thoughts

I have been thinking about what my feelings and reactions will be to those that did not heed the economic and financial facts of an eminent market collapse when it does occur.  I know there will be “gnashing of teeth” and outright hatred for all "Bears."   However, I will take solace in the simple fact that I have done my best to forewarn investors of the debacle.  For that, I will only have pity on the ignorance of all those investors (lemmings) who simply insisted that the market could only go up. 

DJIA Running into Resistance at These Levels