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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Wednesday, August 31, 2011

A small glimmer of hope appears

I have very mild optimism that maybe the politicians are starting to get it. I read an article from England, and I quote:

The Liberal Democrat minister said: "It is disingenuous in the extreme to use the current context to argue against reform."
"Banks are in a way trying to create a panic around something which they know has got to happen."
"The governor of the Bank of England and many other people have been arguing that we have to deal with the too-big-to-fail problem."
"We can't have big global banks with balance sheets bigger than British GDP underwritten by the taxpayer; this can't go on and it has got to be dealt with."

Sir, you do and America does, when you include the CDS liabilities that can trigger a cascade failure. That is what you get when you allow such agreements with zero transparency and minimal guidelines from the public.

I have minimal hope since a chorus of people are needed, not just a couple of politicians to bring the underlying problems to a head.
I'll eagerly await other bloggers to dissect if the changes in Britain are real, or another toothless paper tiger.

Monday, August 29, 2011

Market Rally Ahead, then I fear the worst

Back on the US debt downgrade, I called for calm, to NOT dump out of equities that day, in post "Panic Day us downgrade"

The next day I posted looking for the S&P 500 to hit 1250. Hopefully we can finally move to that level now. On Monday the markets broke up higher from the range it was trading in.

Make no mistake, I am in complete fear of the two indicators of a market decline, one I pointed out yesterday, the other from back on August 10th, "Fortune telling charts".

For now its hopefully a rise above S&P 500. I don't think I can stomach another overnight drop in stocks, so if/when we cross 1250, I am going to start lightening up positions across the board except my core gold miners.

I'll post when I finally think it's time to hit it out, for if I am right, thats the last chance we will get for quite a while, maybe 8 months.

good luck!

Sunday, August 28, 2011

This Week in Chart

Today I have only one chart for you, the S&P 500.
Gold is up, but I am still very jittery and remain out of GLD & SLV.
I am still in precious metal miners, not sure of what is in store.
US dollar waffles but remains above all time lows.

The story for me is the US indexes, and I'll use S&P 500 to illustrate.
If you haven't yet, I urge you to read and watch the video this blog post "When to Buy Stocks or get out of the market".

Stock charts, I think are becoming much less dependable, as the massive computer trading machine uses them to manipulate the people in the market. I can't dismiss them entirely. But if I see this chart indicator, so do many people with bigger interests than I.

I am hoping that the market makes a little higher pop this week. Some parts of me think maybe the worst is behind us and the market will waffle around here.

But there is the part of seeing political global unraveling that makes me pessimistic.
The 10 year US treasury notes are at the LOWS of 2008!

And there is my quandary. if the US Treasury rates are ALREADY at a low equal to the market crash of 2008....what is next? Is the worst already here, ready for yet another market move?
It seems strange to even think such a thing when I look around with all the statistics. The baby boomers may soon have no choice but to put their money in the markets as fixed income rates get CRUSHED?.

Something much larger maybe afoot, and in some terms, maybe we are AT the 2008 lows, without the S&P crashing to 666. I can speculate about 2000 possibilities. Best I can say is, watch and see. For some reason I am not NEARLY as panicked when I started this blog in August 2008. I am from the aspect of the global condition, but not as much from market conditions.

To the chart!

Wednesday, August 24, 2011

Friday Ben Bernanke talks, does it matter?

I am very concerned of market reaction Friday and next week after Ben Bernanke speaks. Last year, he talked he announced QE2. Those watching some are predicting QE3 and market rally, others think market will resume fall disappointed in announcement.

I am thinking we will have a muted reaction. Quite likely some decent volatility, but in a week markets will actually be reasonably stabilized. In a nut shell, The Federal Reserve Bank has taken extreme measures and will perpetually do so to avoid an all out market collapse like 2008.

So where does that leave investing? Well, you can simply walk away and not watch resource stocks and in two years or so I still think it works out well as an investment. For those trying to play market timing games, Gold/Silver should fall nicely, and look for buying with a 200 dollar fall or so in gold. Asia today has raised margins, as the world banks gang up on gold.
I am dismayed in their actions, for they give credence to the thought that gold is somehow something to fear against fiat currencies. The world banks should simply treat gold as a non-entity and ignore gold. But politics around Gold continue from the human race's history.

Bottom line: I will likely lighten up positions between now and Friday, and try to sit on my hands for a week or a month until things become less volatile.

Sunday, August 21, 2011

This Week in Charts

Markets are looking very shaky, like I posted on Thursday, no shame in hitting the bids.
I am considering holding for next leg up, and sell.

To the charts!
From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Thursday, August 18, 2011

Selling positions

There is no shame in hitting the bids at this point.
I may today, I'll see how the day goes.

The market is turning much weaker, we could be in for another leg down.

Wednesday, August 17, 2011

Fundamental Global Currency Sickness

Jim Grant does a great job of explaining the crux of the global currency sickness, and that is the US government has sole control of money creation, as the world reserve currency. There is no check and balance in the system. The video is a great view of the currency problems, and debt problems, with ONE exception. I completely disagree with a gold standard.
I am starting to get concerned that these gold bugs will be heard in the global fiat crisis ahead. A gold standard will produce worse economic issues than the current system over time.

I'll create a post directly attacking the gold standard later. You can get a glimpse by reading my series starting with "What is money".

Jim Grant Interview was mid July, notice he was right about pushing out dealing with the US debt crisis.

Tuesday, August 16, 2011

What is 17 trillion between friends?

I have posted some video's from Bill Still before. I am in agreement with him that Gold based money is a horrific money system that will enslave the populous. Every transaction will require a miner tax to quantify work owed (IOU = money). You can read my thread of thinking by starting "what is money".

Bill Still made a very good documentary about the history of money, and how that gold makes a horrible money system. Also how the current debt money system is very bad for the people. In my ideal world the government needs a check and balance to create unlimited funds without requiring bonds. In reality, the government currently creates unlimited funds now, but is tied to debt.

I have come to realize with this post that it is possible that the future isn't as grim as I keep fearing. If the current monetary system just made one simple change, to create money government borrows WITHOUT requiring interest, it may unleash for a while a new prosperity. It is the very debt system the government is bound to that is causing much of the issues. For without the government paying an bankers tax on every dollar it creates, the system would be much better off.

I am concerned however with zero constraint by governments to create money, that the currency could hyper-inflate. But if you think about it, deficit spending over 1.5 trillion interest free vs with interest, how does interest to pay to the banking system make the currency more valid?

What Bill Covers in this report is 17 trillion was loaned into existence during the crisis by the Federal Reserve bank, as reported in a US GAO government report recently released. These loans were at no interest (or near zero) to support world wide the entire banking system. Bill's main point is how come the Federal Reserve bank can create 17 trillion dollars with near no interest, lend it out, and get paid back, but the US federal government - aka - the tax payer - cannot.

The source of Bill's information for 17 trillion can be found on pages 205 and 216, on this report by the US Government Accountability Office.

Lets think about this for a minute.
Above makes no sense, hence, I don't believe the 17 trillion dollar figure. It is likely to be blown up using the money multiplier quoted with regards to fractional reserve lending. I suspect the original number was the TARP, 700 Billion dollars.

For those who believe the system will collapse, in a classic deflation scenario, with the markets going to all time lows, I ask you, read above.

I agree that there are massive deflationary forces keeping the markets volatile and on the downswing. But the next time it looks like 2008, like it did Monday, I have faith in the banking system to do what it takes to ensure they remain solvent. The banking system is now on the ready to avoid 2008 or worse again, ready to create money out of thin air, to deploy to banks and leverage up 10 to 33 times the money given by the Federal Reserve Bank.

For this game will have a significant shift in the year ahead. The world is looking behind the curtain to see the Wizard of Oz is not as magical as one thought. And it is the aspect of trust and confidence, that will become the issue as the government debt load becomes unsustainable in the year ahead.

Bill Still's video report #24

Bill explains his position on changing debt money system

Monday, August 15, 2011

This Week in Charts

I said enough on Thursday's post titled "Market thoughts month to years ahead".
One thing I realized since then is the view is too USA centric. This time around the problems will come from Europe and other western countries. This will make the events and effects much different than 2008 since America won't be leader of problems.

And as such, the shape, form, and timeframe makes me very unprepared to make any good thoughts on when this starts. Tomorrow? Really who could know with such limited information.

Anyway, for this week, not panicking Monday was good, buying Rare earths was great. Selling my GLD, the jury is still out.

To the charts!

Thursday, August 11, 2011

Market thoughts month to year ahead.

Back in June 24th, I posted that there maybe a Major Rally ahead. That did come true. But the markets rallied WAY to far to fast, as I posted on July 1st. I had hoped for a nice upswing in July, until the bear market return mid August, that's when I started to post much less on this blog.

Once August came, a freaking crazy downswing ensued, SPX 1350 down to about 1100 in a couple of weeks. Woosh, all gains for the year and beyond gone, taking the markets to levels back to 1998. How's that for a nice loss 13 years of profits...AGAIN.

I do have some hope for the next 1 month into possibly next year. For example, Europe is banning short selling of some banks in France, Spain, Italy, and Belgium. I am quite positive the Federal reserve bank is up to illegal (either explicitly or Bill Clinton level splitting hairs of what does the word "is" mean.) Plus, the market has not been this oversold since 9-11-01! These items are sowing a market to firm up, but also setting the stage for the final market swan dive. How these governments get away interfering with private business on a whim is frankly outrageous, and stupid.

People may look at the recent market fall as a possible 2008 repeat. I seriously doubt it. Back then pretty much the world sat on their tuckus and just followed America without serious questioning. When the stuff hit the fan in Sept 2008, the rest of the world plunged with America, completely blindsides by the wall street games.

This time around, the governments are fully and painfully aware of the house of cards they have built. Instead of facing the core problems the financial world faces and fixing them, the governments decided to do more pretending. First and foremost abolishing Great Depression era accounting practices of valuing assets using "mark to market" accounting. To date, the fantasy accounting is still used to value companies. If things were normal, accounting would be too. It is not.

Then we have good old man of the year 2009, Ben Bernanke, who has made it his life's mission to work in the exact seat he is in now, and to play out his doctorate paper, that he, a single man, can prevent the Great Depression from happening. That he alone, has the secret sauce, and the rest of the world is idiots. His belief system is Keynesian ecomonics, and I for one, believe it is dead wrong.

What he is doing is adding to extend and pretend. All that is truly being done between government debt, Bernanke Quantitative Easing (raw money printing), and fictional accounting is to double down on the problems of 2008 making them exponentially worse.

What Mr. Bernanke is missing is, this is not 1929-1939. Technology will expose the fraudulent system he supports. The banking system is very sick at it's core, and it doesn't know it. See my post on how technology will undo the existing system.

For now, the reality is, the governments will do one last , heroic feat to thwart the market implosion. The only question is when. Will the markets hit much lower lows THEN the heroics begin? Or has the markets seen a bottom to build from for months or possibly a year to come?

I am betting on bottom is in, or near in for months, and re-evaluate if I think we may make it into February 2012 or so.
Whatever the timeline, this is the final act that I have been concerned over since August 2006. For general investing, I still maintain a mixture of cash and resource investments, as posted will be most prudent.

I post this now, to allow me to refer back to these thoughts in a few months, or maybe 9 months from now. In the near term, I still own natural resources, sold all GLD, DGP, but I kept my gold miners as a gamble.

I await Gary of the smart money tracker to inform me of when it is safe to enter GLD and the next play. The stocks I have now are my "long" from here, I have completely different stocks than Gary, but in general, a rising market rises all stocks, and from that perspective its the same play.

If we break the lows set on Monday, when I posted DONT PANIC!, It may be then time to panic. Lets hope the market forms a bottom here and now, until the next swan dive, hopefully in 2012.

Wednesday, August 10, 2011

This market may be in for serious trouble

The Federal Reserve said D. Nathan Sheets quit as the central bank’s chief international economic adviser after almost four years in the position and a day before policy makers meet.
The Fed, in a statement today in Washington, didn’t say why Sheets, 46, is leaving the institution.


Sheets is using annual-leave days between now and his official departure date of Sept. 9


The departure means all three of Bernanke’s top staff advisers have left their positions or announced their departures in the last 13 months.

Obviously, I have no inside information. But on the surface, this looks REALLY bad. Sheets wanted out immediately on Monday, August 8th. So much so, he basically walked away.

There are many theories that come to my head, first and foremost actions are being taken that we are not aware of that he wants no part of.

I am adding this to my "Financial Ground Zero" series, as I believe in the year ahead, it will become clear why Bernanke's team are leaving.

The markets may be worse off than I thought....

Tis Just a Flesh Wound

From WebSufinMurfs FinancialBlog2

Fortune telling charts, revisited

Historically, for those reading this blog over the years, it is obvious that I have an opinion that the stock market and financial markets are not stable, and will not be stable until several things come to pass. Among them, return to accounting practices in place from the great depression through 2008, diligently enforce existing laws, and gain control over US debt issues.

Unfortunately, these items get harder to face the more America and the world avoids core problems.

With that backdrop of a negative view, it isn't a far leap for me to dig back into this blog to find some post to foretell a market decline is to ensue.

However, there is one post that very much sticks out to me, using charting to "indicate market turning points". Back on June 6th, 2011, I posted an entry using charts foretelling of the return of a down market. The post was titled "This week in fortunetelling charts".

What makes this post different than other negative posts is it focused on using chart trend lines to indicate a turning point to watch. On that date, the markets crossed this threshold. I suggest you read the post. This indicator seems to be one of the earliest of all the indicators I have looked at. The biggest indicator to me is documented on the post "When to buy stocks or get out of the market". That indicator to me is the ultimate indicator, one that I believe may cross in the next four weeks.

Below is an update of the Fortune telling chart I posted on June 6th, in hindsight, as dead on as could be asked. Look at the full post for historical comparisons.

At this point I am looking for a market bounce to lighten up on some stocks, one which I can only hope that comes. S&P 500 @ 1250 at this point would be a welcome gift.

Monday, August 8, 2011

Panic Day - USA Downgrade

The market cover story for the panic today is a downgrade of US treasuries by Standard and Poors to AA+, a major milestone along the road the US is on. While this is a significant event, one that I have feared since 2006, it isn't unexpected.

Spending at the deficit rate the US has is hardly surprising that the US debt machine is going to be questioned. With that said, who cares the US enjoys being best of the worst, and there is nothing else big enough to turn to. This IS a step today that deserves entry into my series of "Financial Ground Zero" events. But I don't think it is time to panic.

The day the news tells you to panic, and buy gold, should be the day to NOT panic and NOT buy gold. The day to PANIC was the last 6 months or so of me hemming and hawing that this entire market rise is bullshit. Now is too late to panic.

DO NOT RUN INTO THE LIGHT! It is a trap. :)

I am not stating sell all gold holdings, but the day that gold spikes is hardly the day to buy, it is a day to sell. I am selling portions of my GLD, SLV, and other holdings TODAY. I am keeping my gold miner stocks, AVL, in hopes they recover nicely if the market does too. Matter of fact, I am buying a bit of AVL today, but that isn't for the nervous types. AVL is below 4 bucks today, much lower than it's high near 12. Update: Also covering many shorts, 50% or more.

My two cent advice is lighten up on gold TODAY, buy stocks you have loved to have had purchased before, but now are cheap, and keep a decent portion in cash for the rest of the week.

All actions today may be wrong. Buying gold, selling gold, buying or selling stocks. But the smart player does not run with the masses, it runs against it. Balance that thought with resisting going full steam in front of the train, more prudent to edge out there, get a toe hold.

This actually could be the beginning of the worst fear I have had since 2006, an assault on US economic basis and loss of faith. But I can't bring myself to believe it has started already.

With that said, the market could easily go down a bit more. Just I am not sure what "worse" news is out there after the US Treasury has been downgraded. My assumption is an avalanche of following downgrades by others are to come this week, so I can't see the market doing a stellar rally into it.

In the end, trade what you think is best, look around, my opinion is my own, and should not be seen as advice for what you should do, see the link on the right for disclaimer.

Good luck!

Thursday, August 4, 2011

Market Crash?

Today's market decline seemed anti-climatic to me. Frankly, I didn't even care. It is amazing to see how watching the market as close as I have since 2006 has abused me so much, I view today just an anomaly.

The market may have bottomed today, positioned for a snap back rally. The S&P 500 may hit 1300, maybe even a little bit higher. But you only have to look at three historical records to have your own answer for what is in store over the years to come in the markets.

1) Watch my GUIDE about timing the market for long term traders. I myself foolishly ignored this indicator back in 2009. I respect it. I advise you do too. History has shown it to be best market indicator to follow. It is positioned for a market sell signal. Also look at Monday's warning shot.

2) Look at Japan's market history. Their markets have not advanced in 20 years. If you put money in the market in Japan 20 years ago, your still waiting to get back all your money. Japan followed "Keynesian Economists" to use paper and political games to fix their economy. America's demographics and problems are following Japan, and as such, Japan is a good indicator of our future success.

3) The market WILL NOT BOTTOM until the US government follows the steps I have quoted many times before. This includes returning the accounting standards to 1941-2008 standards. Fictional accounting does not work, it may make it legal for insolvent companies to remain operating, but it fixes nothing with the sickness within. Also government must enforce the law and get it's own fiscal house in order. NONE of this will happen without a crisis that will make 2008 seem like fun, unfortunately.

I still maintain the best long term investment is a mixture of fixed income (US debt) and key resources (gold, energy, rare earth metals, food). This will protect your savings from a deflationary collapse OR a currency crisis. Read here for a full reasoning of mixed investments.

I will be quick to lighten up on Gold with weakness, which may have started today. Once a panic passes, Gold will correct before resuming it's multi-year climb.

NOTE: Shorting the market will be a fools game, the final end game may be beginning. There will only be house rules. In 2008 there was bans on shorting, changing of accounting rules, government taking over companies, all sorts of games. This time around, the gloves will come off and the free capital markets will no longer be capitalism based by the time this is done.

If you have not done so, visit my new reader page and read.

Monday, August 1, 2011

This Week in Charts

Day late dollar short. I am still very busy with work, but will try to keep up the chart thing.

Big changes recently. Congress agreed to not increase spending. They call it cuts. I call it BS. Granted, it may be a step in the right direction. But I suspect this agreement won't have teeth and washington will revert to it's old ways.

Time will tell.

The republicans want to stop spending NOT because it's wasteful. Far from it! The republicans have run up more government debt than democrats hands down until Obama came along.

They want to choke the economy - just enough - to do a nice pile on Obama next year.
While I do think cutting spending in military and other areas of waste. I fear, and expect the FIRST thing to get cut is the poorest of the poor, weakest of the weak programs.

That is very unfortunate, for thats probably the ONLY services the government should have aside from minimal defense spending!

Oh well, back to the charts. I don't like what I see, and I am getting nervous. I think I'll be hitting out of positions tomorrow, atleast lighten up. I am torn on Gold, maybe parabolic rally time.

Surprisingly, Bond rates are going down, not up. And I do expect the dollar to firm up, possibly for the next year! My friend John Chinnock has been saying that forever.....I think we may finally be there.

Good luck, to the charts!

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2