Friday, June 19, 2009

Coming Market Crash: Time To Review

Yesterday this analyst had the bizarre experience of watching two consecutive and conflicting items on the evening Television news:
  • A well respected economic forecasting organization is expecting Australian domestic real estate prices to rise by around 19% over the coming three years.
  • Over one million homeowners in Australia have fallen behind in their mortgage payments in an environment where one of the country's largest banks has just moved to raise its mortgage interest rates.

Question: If 2 above is a fact, then how can 1 above be possible? (more)

Net Federal Gov't Savings

The U.S. government announced yesterday it will auction a record $104 billion in debt next week. Despite obvious warning signs that the world has had its fill of American paper, the Treasury will forge ahead: $40 billion in 2-years Tuesday, $37 billion in 5-year notes Wednesday and $27 billion in 7-year garbage on Thursday.

They must “get it.” Last week’s sharp rise in 10-year yields was as sure a sign as any that investors everywhere are getting cold feet. A prudent government would take a break… let things cool off. But there’s no rest for Uncle Sam, or his Treasury. They’ve got the mother of all Ponzi schemes to run:

The government chalked up a $189 billion budget deficit last month alone, another record and the eight-straight monthly deficit. We suspect they’d love to take a break from force-feeding the market notes and bonds, but they can’t… the Treasury will have to auction $2 trillion in debt this year just to keep the lights on.

(An interesting aside… funny how government savings started circling the bowl at the precise moment the gold standard was abandoned.)

Who Is Really Behind the GM Bankruptcy?

The bankruptcy of General Motors (GM) is very similar to the collapse of the twin towers of the World Trade Center on 9-11. Both catastrophic events are described in the controlled media as having occurred due to natural forces, while actually they are both the results of sabotage carried out by insiders. In both cases, the people who brought down the operation were Trojan Horses, people who had bought their way into positions of control in order to destroy them. The people behind the destruction of GM and the WTC are corporate raiders of the worst kind. (more)

Gerald Celente on Banking Overhaul

S&P 500 Long, Medium, and Short Term

Starting out from the long term and working our way to the short term, below is a technical analysis of the S&P 500 index. The rally that began in 2003 produced a bull market (defined a series of higher highs and higher lows), that lasted until October of 2008 and resulted in a gain of almost 100% when measured from its low, at about 800, to its high at about 1550. The market went from a bull to a bear market after October 2008, making a trend of lower lows and lower highs. In the summer of 2008, the market crashed into the fall of 2008, followed by a sharp rally, and then another crash that took the index into a low at 666 in early March of 2009. The subsequent rally from early March in the context of the long term looks more like a reaction than a trend. I say that because of the sharpness, almost “panic” buy nature of the rally. It resembles the “panic” sell that preceded it. Of course, this rally can be the beginning of a new bull market. Or it could be a reaction in a longer term bear market. (more)

David McAlvany in Paris: Hey, Where Is The Middle Class?

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Wall Street Journal, June 19, 2009

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