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Here’s my analysis of the U.S. stock market. Not having to study anymore for CFA exam or dissertation does leave me with a lot more free time.First we have very high…http://raphaelkahan.blogspot.com/2009/10/stock-market-update.html

Here’s an interesting essay regarding stock market manipulation, it will make your stomach turn:During the past few weeks we have serialized a 30,000 word story about a network of market miscreants that includes disreputable financial analysts, prominent financial journalists, associates of the Mafia, some of America’s best-known hedge fund managers, and Michael Milken, the famous criminal from the 1980s. The story focuses on the travails of Dendreon, a company with a promising treatment for prostate cancer, but it describes market machinations that have affected hundreds of other companies, and it contains a larger message about the the “deep capture” of our nation’s media and regulatory bodies.Now we publish the full, 15-chapter story as a single document….http://www.deepcapture.com/the-story-of-deep-capture-by-mark-mitchell/

And to continue a set from the last thread …#######################There is a discussion up in the thread which I’ll place back here, specifically when it comes to future market evolution and the influence of the wall of liquidity injected by the fed eteCA writes :”There seems to be a subtle shift occurring in the atmosphere of the market … a reduction in bullish optimisim and a return of creeping fear. Risk appears to be raising its ugly head – just in time for Halloween. If the Dow has to make a correction to allow for the outcome of reduced earnings ahead – then a significant loss must be factored in from current levels.”Michelle responds :”I think that subtle shift is a return to fundamentals, i.e. future revenues, economic rebound, etc. Excess liquidity has been mopped up and as I see it stocks are unable to propel higher. As you may remember, I sold half my equity position early last week and won’t buy back in until I see solid evidence that retail investors are willing to buy, and I don’t believe that will happen unless we have a 7-10% correction.”Chignos responds :”Why should anyone believe a “return to fundamentals” is in the cards at all when the Federal Reserve’s balance sheet is so opaque that no one knows if there are any fundamentals?”Independent contractor responds :”When you stop and think about it, what is fundamentally different between now and March – other than a ton of liquidity (much more debt), more unemployment, tanking demand from both consumers and business, lower real estate prices, and more foreclosures on the horizon, which equals more problems for bank balance sheets?The jobs picture is worse and there is no demand. Wall Street is playing a giant game of musical chairs with itself and the average inwestor is sitting on the sidelines.”So, I asked this question :”Now, who knows ? How much of that (more than $1 trillion) excess liquidity announced by the Fed n March, has already been used ? Has anybody seen a report somewhere which tries to make an estimate ? And who knows if the Fed will not make a renewed announcement of another trillion within the next twelve months ?”So here’s my conclusion about future market evolution and my 2 cents about where to “invest” now :In the current context, I wouldn’t be surprised if equities continue to appreciate by another 30% in the next 12 months, nor would I be surprised if they drop by 50% in that same period.The same is valid for bonds and commodities.In this period of maximum opacity, the best guess is to be 100% cash (a mix of dollars and foreign currencies and a bit of gold as a necessary hedge against the inherent risk of Fiat collapse).Based on fundamentals, I thought all asset classes were already overvalued in March. None of the fundamentals have changed, as the only thing that happened was a mere transfer of credit from the private to the public, which evidently doesn’t change anything fundamentally. The rest is the same, we’ve passed the Minsky point, total credit isn’t growing anymore, and how fast will it eventually deflate will only depend on how efficient and willing governments will be at slowing down the process.We’ve now entered an era of maximum financial instability : ultra shortened business cycles (one, maybe 2 years).The evolution of the markets in the comming decade is going to look like a lightning rod. The only thing that’s certain, is that it goes tumbling DOWN from the sky to the earth). But what path it takes to get there is anybody’s guess.Reply to this comment By ChrisL on 2009-10-27 15:54:09###############There are several ways to look at this:1) Accept the reasoning of NR that we are entering a rather boring new period. In fact, the gang at PIMCO have been talking up the concept of the New Normal, and it boils down to there being relatively few investment opportunities that will return what people have been expecting over the past several years.2) Brace for the coming financial melt-down hinted at by ChrisL above. There is a lot of merit to this concept as long as the markets remain relatively free, but one could make an argument that there currently is a lot of manipulation, with even more on the horizon, designed to keep the vast majority of us complacent with what is happening even while our pockets continue to be picked in our new kleptocracy.3) Brace for something worse, as it is only a matter of time before the looted masses figure out they have been had and the whole social order in the Western World collapses, in which case it doesn’t really matter where we put our money.I forget who said they would keep their money in cash right now. I guess that works if you think the ‘cash’ will actually be worth something. You might be better served to buy a house or a piece of land, a few guns and some gold.

http://ftalphaville.ft.com/blog/2009/10/27/79826/glds-mysterious-disappearing-gold-bar-list/

At least one has the guts to speak outGo RoubiniIn the commercial real estate business at the highest levels in NYC here is the scoop1. A jobless recovery is no recovery at all2. at some point the fed must raise rates3. then the economy will tank worse than before—the second leg of the W will be worse than the firstwdm223

There is significant misunderstanding about gold – even amongst experienced analysts and commentators.A few quick points:1) China is experiencing significant inflation and will no doubt suffer higher levels if the yuan-dollar peg is not loosened. Therefore, gold and silver are very good for Chinese and Asian investors.2) Gold has been in a bull market in dollars, pounds and euro’s. Therefore, it is attractive as a rising investment simply for this reason.3) A main driver for gold investments is NOT the expectation of US inflation. It is the expectation of serious currency risk in the global system.4) Gold may become an important component of the basis for some new Middle Eastern currencies in the future. Furthermore, an increasing number of central banks may increase their gold holdings as a stabilization step (incl. China).5) Gold and oil are acting as surrogate “hard currencies” while fiat currencies are depreciating in value.Notice that none of these arguments rely upon inflation or deflation in the USA as a basis for investing in precious metals.You want the sad truth? Here it is. As the West drowns in excessive money printing, Asian investors are acquiring more and more gold. This represents a real (and permanent) transfer of wealth from the West to the East. The attacks by Kenynesian-based economists on the gold price (via the Fed’s secret actions) are nothing short of idiotic.PeteCA

1) China is experiencing significant inflation [because of] the yuan-dollar peg.3) A main driver for gold investments is NOT the expectation of US inflation. It is the expectation of serious currency risk in the global system.Thus, USA investors are NOT buying gold? The main gold-price driver is foreign buyers other than Chinese?

I keep going back to the massive debt pyramid. As far as I know, there has NEVER been a country and a people who have put so much of their past consumption on the credit card. On top of that we made future promises to ourselves on top of running up debts beyond our ability to service. There is no way this ends this easy.We have so much past consumption to pay off. So much income has to be devoted to repayment that there just isn’t any left for other things. And much of what we have leveraged is either used up, like fuel, clothing, medical, vacations or needs to be maintained like autos and homes. We have really dug one big hole.And as the public debt rises, there are consequences in the future with either repayment (increased taxes) or inflation. Both remove disposable income from the public. There is no way that borrowing more money by the government, spent on frivolous things like bailing out the TBTF banks, Cash for Clunkers or Down payments for Dummies will pump this dead horse back up and put it back on the race track.The down turn of the economy is affecting the states, counties and cities in a very negative way. Sustaining services has already become difficult to impossible so taxes and fees and tickets have gone up dramatically to no avail. Yet during the *good* times, the states, counties and cities not only didn’t put away a rainy day fund but they borrowed by not adequately funding the public pension systems or the educational system or any other system. So now we have expenses waaaaaaay beyond our ability to repay just to maintain what we have.The layoffs from every conceivable place are contributing to the foreclosures and lowering retail sales which add to the layoffs. There is NO way that this problem has been ameliorated with more government debt. Only shortly postponed.Dr. Roubini is right.ANDAdd to this the insanity of the still unregulated banks raising interest and penalties on credit cards.When a person or a business’ income is inadequate to service the debts incurred, this has historically been dealt with thru defaults and bankruptcies. Massive debt default can not be cured by more debt. Even at Zero Interest! Especially when the banks keep all the benefits of low interest rates and slip the knife into the consumer.We are having deflation in housing and commercial rents but the job losses are out pacing the benefits and so is the rise in commodities. The cost of living isn’t declining even though a lot of assets are and so are the quantity and quality of the jobs and income sources in the country. Nothing the government has done so far has fixed any of the above issues. In fact some of what they have done will only make the eventual outcome worse.SODEBT is going to continue to collapse! IF the government prints enough dollars to more than fill the holes made by the collapsing debt, this will cause commodity prices, like gold and copper and wheat to continue to rise or at a minimum stay high. . This will just accelerate the debt collapse. So in effect creating a race to the bottom.I guess gold could benefit from this but in the end, if it does, the entire economic world as we know it will have been destroyed, so what is it that your gold, valued in US$, will buy you?If the government slows down the printing presses, gold and most other commodities could get hit hard as the dollars in existence will be more valuable as balance sheets get decimated by the collapsing debt.The government is in the worst of all positions where nothing they do at this point will have positive effects and most everything they do will cause harm to WE the People. I just don’t see how this ends positively.If gold holds its value or goes way up we are all screwed. I sure wouldn’t want any one to know I had any if that happens.

It is only stupid if you look at it through the lens of rational, perhaps capitalistic business. If you look at it through the lens of brute political power, it makes perfect sense.GMAC is needed to finance GM autos. GM autos are needed to keep union autoworkers employed. Union autoworkers were a major financial and electoral bloc supporting the recent Democratic party wins, so a favour is due.Brute politics will always trump rational economics.

Australia’s Carry Trade and how “we (the unwashed taxpayers) are going to be royally screwed by “OUR” Central Bank (RBA):http://www.debtdeflation.com/blogs/http://www.theage.com.au/opinion/foreign-speculation-on-our-currency-is-a-bubble-set-to-burst-20091025-heo5.htmlhttp://www.smh.com.au/opinion/foreign-speculation-on-our-currency-is-a-bubble-set-to-burst-20091025-heo5.htmlBureaucrats just love to screw the proletariat – it just makes them feel so warm and tingly and,… politicians just love screwing everybody because it is their nature to do so.So y’all American’s out there, et al, don’t feel lonely and isolated, we are all getting screwed..And Organized (highly) Crime in Australia is alive and well – it is called the Officially Sanctioned Telecommunication Industries, and all that hangs off them.Ho hum

Our leaders and are people just don’t get it!Buy a new car=more debtBuy a new home=more debtContinue with the credit cards=more debtIn the present crisis, the theme of the day should be “save, pay off your debt, reduce your expenses” while the insolvent institutions are allowed to fail (in an orderly manner) and replaced by smaller less risky ones which are required to operate with complete transparency, honest accounting procedures and rational risk manangement. If the consumer would just demand this from our leaders we may have a chance to avert the next crisis. Of course, I’m not holding my breath!

Speaking of walls of liquidity…Garet Garett in “The People’s Pottage.”The fourth line was a doctrine invented and promulgated by New Deal economists—the doctrine ofperpetual unlimited public debt. What difference didit make how big the debt was? It was not at all like adebt owing to foreign creditors. It was something weowed only to ourselves. To pay it or not to pay it meant only to shift or not to shift money from one pocket to another. And anyhow, if we should really want to pay it, the problem would be solved by a rise in the national income. Many infuriated people wasted their time opposing this doctrine as an economic fallacy. But whether it was a fallacy or not would be entirely a question of the point of view. From the point of view of what the New Deal has called the fetish of solvency it was a fallacy.But from the point of view of scientific revolutionarytechnic it was perfectly sound, even orthodox. Fromthat point of view you do not regard public debt as aproblem of public finance. You think of it only inrelation to ends. A perpetual and unlimited debt represents deficit spending as a social principle. It means a progressive redistribution of wealth by will of government until there is no more fat to divide; after that comes a level rationing of the national income. It means in the end the cheapening of money and then inflation, whereby the middle class is economically murdered in its sleep. In the arsenal of revolution the perfect weapon is inflation.”Beware of New Deal 2.0!

I’ll say it again …You are assuming our government actually wants to fix things and restore the natural order as we have come to expect it over the past century, but it is currently being led by a group who have publicly said they are here to change things to a new America. If you are John or Jane Q Public, change can be good and change can be bad. Chances are it will be bad, since the agenda is chock full of items that are designed to limit the lifestyle choices you used to make. Just think of what Cap-n-Trade alone will do to the lifestyle of the average American. Better eat that steak while it is still affordable. I prefer mine to be safe, legal, and rare.But change doesn’t happen overnight, and successful change will take at least another election cycle. That is why they want things to look as ‘normal’ as possible through 2010.The only winners here are public officials, who have carved the US into a series of fiefdoms the likes of which have not been seen since the western Roman empire was divvied up among the various lords and vassals who offered up their ‘protection’ to the poor serfs who were expected to toil and provide at any case.In short, it is not in the political class’ interest for financial sanity to be restored to the land, therefore it will never happen.We are doomed.

“At that point gold may be worth $30,000 US$ but what will that do for you?”Wrong er, respectfully stated. Gold never changes its value: when the USD collapses it is done and gone; albeit finished.Gold then becomes the King of barter, silver the Queen and then potatoes for tomatoes, corn and or a chicken, for one hours toil, or for fixing a fence but in an environment where that paper, aka USD, worthless and but a fading memory, lines the outhouse walls to keep out the cold winds of winter.People respect Gold and other demand items for it can be trading on its own merit and no politician, bureaucrat, or international “expert” can attach his/her lack of integrity thereto. IOW, Gold stands alone, er, as King. Its value remains simply in terms of demand and the contract established between the Parties.Time then slows and as so, a new milieux blankets the void, out of which the ‘unexpected’ (unseen) trends emerge to cut the fabric and to weave the new future.People have had their wish and it proved untenable. Time to pay the piper. “Too Late”, she screamed.Ho hum

This is an extension of the esteemed professor’s remarks which many here should find interesting: http://boombustblog.com/Reggie-Middleton/1188-The-Next-Step-in-the-Bank-Implosion-Cycle.html

This blog seems to get a good ammount of visitors. How do you get traffic to it? It gives a nice unique spin on things. I guess having something real or substantial to post about is the most important factor.