All the events recently, Cyprus, Japan QE, Germany calling for Lisbon treaty changes, Korea and now Boston Marathon bombing all connected. The world is being prepared for a deluge of negative news that will coincide with a controlled demolition of the financial system. In the end THE GOVERNMENT WILL CONTROL AND OWN ALL OR MOST OF THE FINANCIAL SYSTEM. PUBLIC TRADED BANKS WILL BE A THING OF THE PAST. ENTER MAJORITY GOVERNMENT OWNED, MINORITY PUBLIC TRADED QUASI PRIVATE/PUBLIC INVESTMENT.
The market will be a former shell of itself when they are all done. Only the most stable and cash rich/debt free companies in the world will maintain fully listed public companies. It will be like seeing AIG’s, and Fannie and Freddie’s trade everywhere. SOE and GSEs will become common in the marketplace as we get use to government paying the bill to consolidate the entire Financial System. You the tax payer will pay through the endless crises and bailouts and social security will be used to fund the stop gap between the public and private finances.
In the end Government will be massive, bloated, indebted beyond belief, increasingly paranoid super tech police state, that will print money to finance whatever the fuck it wants. All while privatizing profits in the most profitable industries in the world and saying how some capitalist companies are really shinning examples of how it works. Except these people will own the companies that will be the private side of the private/public partnership in the Banks/Investment Banks/Insurance Giants. Assets will be chopped and sold down the block until a major player with enough cash and assets can absorb the punch.
To make matters even more complicated Holdings companies that own private ownership side in banks may begin to buy and merge Tech, biotech, nano-tech with defense industry, oil and gas companies, alternative energy companies will start to merge as an no holds bar match breaks out among the top industry giants to preserve the most valuable assets in the world because cash will be in a crises. It will become a rush to make as much as cash possible in the quickest time frame and in turn transfer that to liquid stable assets as the market literally falls apart sector by sector by industry until entire portions of multinationals are being eviscerated by deflation.
The response will be to endlessly inflate while propping up those companies able to absorb the deflating assets. This all while having a massive tech boom and a hopelessly more indebted, overworked, heavily taxed citizen spends more and more money to just meet the bills every month and put food on the table.
We will have a homeless, the super poor, then poor, then not so poor class of over 65%. While 20% is just meeting middle class living standards making 50 to 100 k a year…about another 10% for those making say 100 k to 250k, 4% making 250k plus. and .98% making million plus and 0.01% owning 80 % of everything globally. That is in dollar amounts today. in 5 years time those numbers may be 5 – 25% higher in terms of average income so for those making 100 gs in 2013 are making 125k in 2018 on the top end….except LOL prices for most essentials will have doubled if not tippled and some commodities will be a damn luxury to use, like oil and gas.
After about 2018 everything will be so consolidated and scripted that the prices of things will level out to make the population think some sense of reality we use to know has been restored and hope will blossom. Only difference is now they own the entire global system. You think the elite have power now, wait 5 years when we have little drones flying around the size of RC helicopters that literally can fill you full of bullets on the spot.
REALITY IS STRANGER THEN FICTION
THE ONLY REAL QUESTION IS?
Will they be successful?
“In order for central banks to achieve their ultimate economic objective – which is growth and jobs – they have to push investors into taking more risk than is justified,” is the somewhat chilling warning that PIMCO’s Mohamed El-Erian gives in this excellent interview with the WSJ. “Central banks are operating through the wealth effect and animal spirits,” El-Erian says peeling back the truth onion, as they prop up asset prices to “artificial levels, in virtually every market.” Worries over the central bankers of the world withdrawing easy money policies too early are “unwarranted,” he notes, adding that he suspects, “they will most likely stay too long and they will consciously make that mistake.” Critically, though, he sends a message that appears to fit with many of our recent discussions (most recently here) that “if these levels aren’t validated by the fundamentals, then investors will get hurt.”
CLICK ON CHART TO ENLARGE
An Eiffel Tower pattern formed in Apple (Apple Eiffel here) and Apple declines over $300 per share. Gold looks to have formed an Eiffel Tower pattern as it became the largest ETF on the planet! (Gold Eiffel here) Long Gold owners are feeling the brunt of that pattern the past few days.
A little bit before the top in 2011 and a 17% decline in the S&P 500 in 5 months, “look alike” patterns were taking place (See look alikes, Dominoes & Slipper slides)
Traders are watching for technical signs that the market is reaching its limit. The answer should be revealed in the next few days.
A scary head-and-shoulders pattern could be building in the S&P 500, and this negative chart formation would be created if the market stalls just above current levels.
Americans are scared.
Their concerns aren’t centered around the possibility of an economic collapse, another down leg in the real estate market, continued deterioration of the labor market, or a US dollar currency meltdown.
With markets at all time highs and financial experts around the world predicting a turn-around in the global economy, a lot of “Mom and Pop” investors who experienced major losses in personal investment funds and home prices during the crash of 2008 are starting to worry, but not for the reasons you might think.
What’s on the minds of many Americans who have sat by watching Wall Street mavens and traders walk away with huge gains over the last four years is that they aren’t getting a piece of the action.
The market’s record-breaking spree has raised a new fear in many American households—dread that they are missing out on big gains.
When stock prices collapsed in 2008, the bear market wiped out half of the savings of Lucie White and her husband, both doctors in Houston.
Feeling “sucker punched,” she says, they swore off stocks and put their remaining money in a bank.
This week, as the Dow Jones Industrial Average and Standard & Poor’s 500-stock index pushed to record highs, Ms. White and her husband hired a financial adviser and took the plunge back into the market.
“What really tipped our hand was to see our cash not doing anything while the S&P was going up,” says Ms. White, a 39-year-old dermatologist in Houston. “We just didn’t want to be left on the sidelines.”
Ms. White and her husband, Mark Villa, a reconstructive surgeon, are joining other individual investors in overcoming their fears after watching stocks recover all the ground lost during the financial crisis and more.
The story goes that a wealthy financier named Bernard Baruch was having his shoes shined one fine morning in 1929. As the final rag and polish were being put on his leather Oxfords, Baruch’s shoeshine boy, aware of his Wall Street reputation, began sharing stock tips and providing him with a financial news summary of the previous day’s events. Legend has it that Baruch promptly returned to his office, called his firm’s senior broker and ordered him to sell everything. The broker, no doubt shocked, questioned the decision.
Baruch reportedly replied, “when shoe shine boys are giving out stock tips, it’s time to get out.”
We’re still below recession levels in every important respect except the stock market.
News came out this morning that Housing starts topped estimates (Housing starts here) Is this news already built into prices? Can this good news overpower the pattern below?
CLICK ON CHART TO ENLARGE
The DJ Home Construction index declined almost 90% from 2005 to 2008, leading the broad market lower. Since its 2008 lows it has reflected a ton of relative strength when comparing it to the S&P 500.
The rally off the 2008 lows created a bearish rising wedge, which suggests a decline in prices two-thirds of the time. The index may have double topped at its 38% retracement level at (1) in the chart above. The index has broken support of this bearish rising wedge recently which must be respected.
The rise in this index and housing in general has been of great benefit to the economy and broad markets over the past few years and the news is positive this morning at well. Are we looking at buy the rumor sell the fact? Can today’s good housing news over power the pattern that has been created?
Personally I believe the Power of the Pattern, which is a collective picture created by the worlds investors/traders (not me) is the news to pay the most attention too!!!
“At a time when firings are at record lows and job openings are rising at a double-digit annual rate, the number of people quitting their current job for greener pastures elsewhere is on a discernible uptrend. All this points to higher wage growth ahead, and frankly, this is a good thing for society.
“But the flip side is that as the labor share of the national income pie mean reverts off its all-time lows, we are likely to see profit margins pinched.
“This is the big risk – margin compression affects the ‘E’, while inflation, insofar as the tight historical relationship with final prices holds, even if to a smaller degree this time around, affects the P/E.”
Here’s a quick look at some of the recent disappointing data:
- Headline industrial production increased 0.4% in March. ButMacroEconomic Adviserswrites that this was because “unusually cold weather in March (a 2-standard-deviation event), following normal temperatures in February, led to a surge in utilities IP that added roughly 0.5 percentage point to the change in total IP.”
- America’s manufacturing Renaissance also looks to be a way off. In April the Empire Fed manufacturing survey fell to 3.05 missing expectations.
- Retail sales unexpectedly fell 0.4% in March. Part of this was because of temporary factors like adverse tax conditions, and delayed tax returns. But Nomura pointed out that the downward revisions to sales in the last two months showed that “consumer adjustment to lower disposable income at the start of the year has begun.”
- Moreover, consumer confidence also missed expectations and fell to 72.3 in April, from 78.6 in March.
- Housing, which has been a huge part of the economic recovery, is also showing signs of stalling. Building permits are down, homebuilder confidence is down, foreclosure starts are up, and capacity constraints among mortgage lenders are also impacting the recovery.
- And of course there is the jobs report, which showed that only 88,000 new jobs were created in March, very shy of expectations for 190,000. The unemployment rate fell to 7.6% but this was because of a decline in the labor force participation rate.
It’s a historical pattern.
resented with no comment.
(h/t Andy Y)
Panic in the gold and silver pits of the Comex.
Gold and silver see the worst two day drop in 30 years.
“I think the last $20 has been margin selling. The market is falling like a knife. People are saying, Get me out now,” Phoenix Futures President Kevin Grady said. ”You’re also seeing people selling energy profits to pay for metals losses. You’re seeing a tremendous amount of gold liquidation today.”
Golden Warning ~ What Crashing Gold Meant in Recent Past #n3
Business Insider/Matthew Boesler, data from Bloomberg
- IMF lowers world, U.S. growth forecasts
- Italy in grips of liquidity crisis, Confindustria warns
- Germany’s Debt in 2012 Rises on Bailout Payments, Building Reserves
- Putin Calls for Stimulus Plan After Recession Alarm (Russia)
- China local authority debt ‘out of control’
- Grand jury dings San Mateo County for failing to rein in soaring pension costs
- California Pension May Ask for 50% Boost to Close Gap