Over the Long Term the Markets WILL be Up;Invest Accordingly

[Aman A.K.A. Ahamburger]

Ty, is this why your so agitated? HOROWITZ: FORGET AMNESTY, CONGRESS VOTED TO GIVE WELFARE TO ILLEGAL IMMIGRANTS

[Aman A.K.A. Ahamburger]

Jan 13, 2014 22:39:16 GMT -5 Aman A.K.A. Ahamburger said:

I would guess that by the end of 2015 the USA, and NA in general, will be the lone survivors in this economic battle and we will be on the path to help rebuild the world! Manufacturing, robots, renewable energy so that we can supply the world with oil, all these things will play a role in the continuing American Renaissance. It's truly the story of the tortoise and the hair. While everyone thinks that Americans take short cuts, it has been a long slow battle to get to the point that we are at right now. Places like China on the other hand......

Further evidence pointing to a better second half, in the US anyway. While higher oil prices will be a drag, it still falls within the slow and steady.

-Solid U.S. factory output bolsters economy
-U.S. Homebuilder Confidence Rises Most in Almost a Year

[Aman A.K.A. Ahamburger]

Jan 13, 2014 22:39:16 GMT -5 Aman A.K.A. Ahamburger said:

For this not to be a stalling out point, we need to see stellar 2.5%+ growth out of Europe this year. However, Europe's latest numbers aren't looking pretty, and for all the talk about a healing EU economy,.......

China's internal policies are increasing domestic demand for sure, however, there are a lot of credit risks popping up. China is running out of money faster than then are letting on and that is why China's growth is decelerating. The massive property black hole is taking more and more money to fill and there is no way that China can move it's population into a 75% urban population fast enough....

Lets quit beating around the bush and call the situation in the Mid East what it is, an all out war .......

I think we are getting close to a stalling point, like in 1932, but since it's like the 1880-90's it's just going to stay drawn out. We want there to be faster growth, but it's the Great Stagnation and I suspect it could last for at least another 7 years.....

-Eurozone growth stalls, France lags, deflation threatens
-Market exuberance out of touch with frail economy: BIS
-South Korea Industrial Production Dips 2.7% In May
-Singapore manufacturing output down 2.5% in May, dragged down by biomedicals
-Brazil Industrial Production Falls in April for Second Month
-Argentina Bond Battle Enters New Phase

[Aman A.K.A. Ahamburger]

More clear cut evidence of the "frail" global economy. Stay .

-Euro-zone manufacturing slows in June
-European economy vulnerable to geo-political risks, says Oliver
-German Manufacturing Orders Decline on Geopolitical Risks
-Europe Banks Falter as ECB Defers Asset Buying
-Bank of Cyprus Depositors Face New Blow With Share Sale
-China Trust ‘Timebomb’ Ticks as Credit Suisse Sees Rejig

[damnotagain]

[damnotagain]

Cherry picking again?

[bimetalaupt]

Jul 4, 2014 19:51:05 GMT -5 damnotagain said:

Cherry picking again?

DNA,
YES, but a 64.687050306201328% correlation of DJIA to M3 makes me think it all could be fine in the end.

Just a thought,
BiMetalAuPt

[Aman A.K.A. Ahamburger]

May 9, 2014 12:09:35 GMT -5 Aman A.K.A. Ahamburger said:

The OECD hopes Europe is going to grow at 1.2%....

OECD pumps brakes on global economic growth forecast

Europe’s Bad Bank Assets Since 2008 Top $2.5 Trillion

Just how big is Europe’s “bad bank” sector?

On Thursday, Barclays PLC became the latest firm to set one up. The U.K. lender is placing $195 billion of assets into its “non-core” unit

According to our calculations, that means the total value of assets at all the state-backed and privately-held bad banks set up in Europe since 2008 has now gone through the $2.5 trillion mark, making them collectively bigger than J.P. Morgan Chase & Co., which had a balance sheet of just over $2.4 trillion at the end of last year. (All currency conversions have been made at today’s rates.)

May 15, 2014 0:17:30 GMT -5 Aman A.K.A. Ahamburger said:

And the headwinds are getting stronger.. Stay

-China property slowdown to hurt Australia
-Eastern Europe’s analysts are furiously slashing their economic forecasts

German industrial production falls by 1.8%
German exports and imports fall in May

[Aman A.K.A. Ahamburger]

This is a big part of what I have been saying for the last year or so, and especially since January of this year.

El-Erian: 'Notable complacency' over geopolitical risks

The market is complacent about the geopolitical risks flaring up across the globe, according to Mohamed El-Erian. The former chief executive at money manager Pimco said in a CNBC interview on Monday that while recent events in Ukraine and Gaza are tragic, the market does not believe they will have spillover effects across the world. "The market says even if there are spillover effects, it doesn't matter. Earnings are strong and the Fed is there," he said. "I think there is notable complacency in the market as to how much worse it can get. It has been rewarded in the past, so investors are conditioned." Nonetheless, El-Erian said the risks are heightening due to radicalization in global conflicts.

[Aman A.K.A. Ahamburger]

Nothing but slow growth. Must be why the bond market is saying no inflation, eh ?

IMF Cuts 2014 Global Forecast After Slowdowns From China to U.S.

[jarrett1]

The VIX says the fix is in...for an UP market!

[Aman A.K.A. Ahamburger]

Nice to see you decided to come up for some air. Since we are basically even for the year, so far, I'm happy with the position I'm in.

[jarrett1]

                                                                   




                                                  18,000 12/31/2014

[Aman A.K.A. Ahamburger]

Keep the dividends flowing and my cash pile growen'!

[Aman A.K.A. Ahamburger]

Jan 13, 2014 22:39:16 GMT -5 Aman A.K.A. Ahamburger said:

For this not to be a stalling out point, we need to see stellar 2.5%+ growth out of Europe this year. However, Europe's latest numbers aren't looking pretty, and for all the talk about a healing EU economy,.......

China's internal policies are increasing domestic demand for sure, however, there are a lot of credit risks popping up. China is running out of money faster than then are letting on and that is why China's growth is decelerating. The massive property black hole is taking more and more money to fill and there is no way that China can move it's population into a 75% urban population fast enough....

Lets quit beating around the bush and call the situation in the Mid East what it is, an all out war .......

I think we are getting close to a stalling point, like in 1932, but since it's like the 1880-90's it's just going to stay drawn out. We want there to be faster growth, but it's the Great Stagnation and I suspect it could last for at least another 7 years.....

Jul 8, 2014 23:39:07 GMT -5 Aman A.K.A. Ahamburger said:

May 9, 2014 12:09:35 GMT -5 Aman A.K.A. Ahamburger said:

The OECD hopes Europe is going to grow at 1.2%....

OECD pumps brakes on global economic growth forecast

May 15, 2014 0:17:30 GMT -5 Aman A.K.A. Ahamburger said:

And the headwinds are getting stronger.. Stay

-China property slowdown to hurt Australia
-Eastern Europe’s analysts are furiously slashing their economic forecasts

German industrial production falls by 1.8%
German exports and imports fall in May

Euro zone recovery? Italy back in recession; German factories falter

So much for the euro zone recovery. Italy, the region’s third-largest economy, is back in recession and factory orders in Germany, the alleged engine of European growth, were worse than expected.

Italy’s grim gross domestic product estimate, released Thursday morning by Istat, the national statistics agency, raises the spectre of long-term stagnation in the euro zone. The Italian economy contracted by 0.2 per cent in the second quarter after a fall of 0.1 per cent in the first quarter, fulfilling the technical definition of recession – back to back contractions.

[Aman A.K.A. Ahamburger]

To continue from the last post, the entire EU essential came to a halt this quarter. German bunds started to trade at less than 1% and serious comparisons are being made between the EU and Japan. The "punishing" sanctions that we're supposed to "cripple" the Russian economy have backfired. To the point that Hungarian Prime Minister Says the EU 'Shot Itself in Foot' with Russia Sanctions So much for geopolitical issues being a "non-issue".

The Chinese property market is essentially coming apart at the seams, causing Hong Kong to report negative growth for the current quarter. Meanwhile, China is holding military drills with central Asian countries - why? Because the Islamic state is a massive problem that the media is not fully representing.

The plus side - US manufacturing employment is growing at the fastest pace in 30 years. Oil and gas production is at a 30 year high and the flight to safety will allow the federal reserve to taper off the rest of their asset purchases. In the event of an international depression - caused by geopolitical events - interest rates will stay very low with the flight to safety on, even if the benchmark rate rises for credit funding channels. The other amazing thing to think about is that once the fed has tapered, trillions of dollars will need to find home. Which means that during the international depression, the USA will have a massive war chest for tons of projects.

[Aman A.K.A. Ahamburger]

While I think this author is a bit negative on the outcome, he's making some very valid points - all of which were brought up in January of this year because they were trends that started forming last year.

A long, hot summer - but globally we are returning to darkness of the Middle Ages

In June, the world appeared to be a relatively peaceful place with the exception of Syria. Many articles were written in June about the centenary of the Sarajevo assassination. The general theme was that although the world is not always stable, the notion that there might be wars with new countries created, old ones collapsing and resulting mass expulsions of populations, was far-fetched.

By September, no one can be too sure.

The speed of geo-political change has been mesmerising.

An extreme Sunni Muslim group called Isis emerged in Iraq, sweeping through the country, killing 'infidels' as it went. Just as we digested this ghastly spectacle, the Israeli-Palestinian conflict, which had been relatively quiet for a few years, erupted in Gaza with diabolical results. In Syria, the killing continued.

Then, in Eastern Europe, Russian separatists in Ukraine shot down a civilian airliner, escalating dramatically the stakes in eastern Ukraine. Two thousand people have been killed thus far in Ukraine. Now Russia, naturally, sees itself surrounded by enemies.

Sanctions against Russia have hit German economic confidence, driving the major power in Europe backwards. Deflation stalks large parts of the eurozone and without the German economy to pull it out of recession, the French economy stalled. This week, we see that the upshot of no growth in France has been the second major government reshuffle in a year.

[Aman A.K.A. Ahamburger]

One of the things I have been talking about since January this year is a stall, as you can clearly see a couple posts back. All you have to do is google "Eurozone Stall" and you can see how many writers are eight months behind. A claim further backed up by Frances second GDP reading for their second quarter, eurozone manufacturing, and consumer spending. But hey China's manufacturing came in at a "healthy" 50.5 last month.. Five years into a recovery this is NOT good news.

Further building on a trend I have been talking about for 18 months or so - the China real estate bust/depression - Economists Kaiji Chen of Emory University and Yi Wen of St. Louis Federal Reserve tackled this issue in a recent working paper.

Unless you have been living under a rock you know that the Mid east is officially in a full scale war now - as I have been saying since Jan it would be, again, welcome to eight months ago. What gets me is that the media and many people in the west still don't get that the Arab countries have been funding the wahhabist mujahideen. It amazes me that so many still hold onto the ill-conceived notion that all these groups out there with different acronyms, aren't all part of the same wahhabist school of thought.

If the overwhelming evidence from the deepcapture site that Jarret posted wasn't enough to make you see the truth, than maybe the Arab Bank Found Liable for Hamas Terrorist Attacks will open your eyes.

The bottom line, over the long term the markets will be up - invest accordingly.

[Aman A.K.A. Ahamburger]

I have been outlining during the past year how the trends in the global economy have been pointing to the trends outlined in January in this thread. It can be summed up by Global officials to issue communique warning of economic risk

The last thing to become apparent....

Jan 13, 2014 22:39:16 GMT -5 Aman A.K.A. Ahamburger said:

I would guess that by the end of 2015 the USA, and NA in general, will be the lone survivors in this economic battle and we will be on the path to help rebuild the world! Manufacturing, robots, renewable energy so that we can supply the world with oil, all these things will play a role in the continuing American Renaissance. It's truly the story of the tortoise and the hair. While everyone thinks that Americans take short cuts, it has been a long slow battle to get to the point that we are at right now. Places like China on the other hand......

....has started to surface. All thanks to a recovery financed by business and private capital.

American Exceptionalism Thrives Amid Struggling Global Economy

The U.S. is proving to be an oasis of prosperity in the midst of a troubled world economy.

The solid performance by the U.S. contrasts with what’s happening in much of the rest of the world. The euro area’s economy stagnated in the second quarter and is suffering from the softest inflation in five years, while a consumer-tax increase in Japan triggered its biggest economic contraction since 2009.

[Aman A.K.A. Ahamburger]

Just a quick recap of the global stall trends laid out in January:

Europe growth - stalling, inflation non existent, rising nationalism.. Yep

China's disastrous economy - hanging on because of fake invoices, growth slowing to a decade low, big developers out of the RE market, housing prices starting to fall y-o-y.. Yep.

Middle East war spreading out - have you seen the news?

The US economy - the shining light in the darkness; 3.5% what? Manufacturing and oil production where? Housing recovery still intact? Yes.

"Black Swans" the could exasperate the stall scenario? Yep. Putin turning the Mid East war global by destabilizing, and of course superbugs!

Thank God for North America as we move into all of this coming to a head.

[Aman A.K.A. Ahamburger]

-David Cameron: Red lights are flashing on the global economy
-Beijing Home Prices Drop for First Time in 2 Years on Discounts

[Aman A.K.A. Ahamburger]

Usually I go into my predictions for the coming year about this time, a bit late this year due to family stuff..

I realized however, there is no need to go into a big long post because all that is going on this year is the trends from 2013 and 2014 are coming to a head. How everything - outlined in the last few posts if you need a refresher - plays out this year is going to map the future.

One tibit of new information I found that sheds some light on the meltup in 2013.. Retail investors chasing returns has never ended up well, and my gut wasn't wrong about corporate profits topping out in 2013. In other words, the market is right - the average investor has brought greed into the game. Good long term investors know the old saw about when greed enters the market.

[jarrett1]

www.hcplive.com/physicians-money-digest/personal-finance/How-to-Identify-Mutual-Funds-Most-Likely-to-Outperform-the-Indexes

[Aman A.K.A. Ahamburger]

An interesting perspective from...

Bull market is ‘closer to the end’ than investors think

Jim Stack is the president of Whitefish, Montana-based InvesTech Research, which is on the Hulbert Financial Digest’s Honor Roll of top newsletters over the past 15 years, and Stack Financial Management, which manages more than $1 billion of investors’ money. He’s been cautious for some time, as we wrote last January.

Now, in a special alert, he suggests that subscribers cut their equity exposure to 76% of their holdings, from 80%, and put the rest in cash....

....

Other things give him pause:

Margin debt has peaked and begun to fall. “Past peaks in margin debt have led or coincided with the start of past bear markets,” he wrote in InvesTech Research.

Professional investors are extremely bullish, with bearish sentiment under 14%, “the fewest bears since 1987, just before the crash,” he told me.

Corporate profits topped out more than a year ago, but S&P 500 earnings per share continued to rise until recently. That discrepancy is often an early-warning sign.

Although the S&P 500’s current multiple of 19.9 times earnings is slightly below the average when interest rates are below 3%, that will make stocks especially vulnerable when rates do rise. And the median U.S. company trades at its highest valuation of the past 65 years, according to the noted finance scholar Kenneth French of Dartmouth College.

How bad could the next bear get? “I’m not looking for [it] to be a generational bear market like the last two,” he said. The S&P 500 lost almost half its value from 2000 to 2002 and nearly 57% from late 2007 to March 2009.

A more likely outcome, he said, was for the S&P 500 to retrace about half of its bull market gains. If March 2 was the peak, that would mean it could fall to around 1,400, roughly a 35% decline.

Stack doesn’t think investors should bail out completely in anticipation of that. “Reduce the risk of your portfolio without abandoning the bull market,” he said. “Make your portfolio more defensive.”

He sights rates as the main area of concern while ignoring the fact banks are collapsing in Europe, China's RE market is following Singapore's, and we are on the brink of a third word war. But I couldn't agree with him more that for the time being, kash is king.

[Aman A.K.A. Ahamburger]

Anyone who reads this thread regularly knows that Corporate profits falling for first time since 2008 as GDP stays at 2.2% is confirmation of the trends from '13 &'14 coming to a head this year.

Further cementing this fact is how far the war in the mid east has now spread out, and how weak China is getting at the foundation.

Stay

China Construction Bank Profit Falls for First Time Since 2009

[Aman A.K.A. Ahamburger]

Feb 18, 2015 11:09:47 GMT -5 Aman A.K.A. Ahamburger said:

Usually I go into my predictions for the coming year about this time, a bit late this year due to family stuff..

I realized however, there is no need to go into a big long post because all that is going on this year is the trends from 2013 and 2014 are coming to a head. How everything - outlined in the last few posts if you need a refresher - plays out this year is going to map the future.

One tibit of new information I found that sheds some light on the meltup in 2013.. Retail investors chasing returns has never ended up well, and my gut wasn't wrong about corporate profits topping out in 2013. In other words, the market is right - the average investor has brought greed into the game. Good long term investors know the old saw about when greed enters the market.

Nobel Winner’s Math Is Showing S&P 500 Unhinged From Reality

According to Tobin’s Q, equities in the U.S. are valued about 10 percent above the cost of replacing their underlying assets -- higher than any time other than the Internet bubble and the 1929 peak.

Valuation tools are being dusted off around Wall Street as investors assess the staying power of the bull market that is now the second longest in 60 years. To Andrew Smithers, the 77-year-old former head of SG Warburg’s investment arm, the Q ratio is an indicator whose time has come because it illuminates distortions caused by quantitative easing.

“QE is a very dangerous policy, in my view, because it has pushed asset prices up and high asset prices, we know from history, are very dangerous,” Smithers, founder of Smithers & Co. in London, said in a phone interview. “It is very strongly indicated by reliable measures that we’re looking at a stock market which is something like 80 percent over-priced.”

80% seems a bit excessive for an overvalued number. But without a doubt, a slow economic recovery in the US - with parts of the world in a depression, China on the brink, and a global conflict breaking out, surely doesn't warrent a "normal P/E" ratio. It without a doubt doesn't justify the Case-Shiller P/E that we are seeing right now, and it without a doubt signals that the market is telling us that average investors are chasing returns - even more so in China.

Stay .

[Aman A.K.A. Ahamburger]

Mar 28, 2015 23:53:37 GMT -5 Aman A.K.A. Ahamburger said:

Anyone who reads this thread regularly knows that Corporate profits falling for first time since 2008 as GDP stays at 2.2% is confirmation of the trends from '13 &'14 coming to a head this year.

Further cementing this fact is how far the war in the mid east has now spread out, and how weak China is getting at the foundation.

Stay

China Construction Bank Profit Falls for First Time Since 2009

U.S. corporate profits sink 5.9%, biggest drop since 2008

On top of that:
-Another bombing today in Saudi Arabia at a Shittie mosque and the Mujahideen has taken control of a civilian airport in Libya.
-Europe still hasn't come close to dealing with their debt problem.
-China has started to divest from their own banks!
-The US continues - and WILL CONTINUE see - nothing but slow and steady recovery, as demonstrated by the negative first quarter reading. Yes, that's correct, the US is still RECOVERING from the crisis of '08 - which is why some people still believe there is no recovery.

Welcome to the "new normal"

[flow5]

DDs were 77 percent of TDs in 1959. They fell to 10 percent in 2008.  10 trillion dollars of un-spent and un-used savings. 

Bankers, Congress and economists, have simply not been able to think and to fashion our financial institutions in a systems context. From a system’s standpoint, the non-banks and commercial banks are not competitive, but have a relationship that can be mutually beneficial to the economy.

It is obvious that deposits which have been saved, cannot be beneficial to the economy unless they are invested. As long as savings are held in the commercial banks in whatever form, these deposits are not financing investment, or indeed anything; their transactions velocity is zero.

If on the other hand these deposits are transferred through the non-banks (conduits between savers and borrowers), they are put to work (savings are matched with investments). Such use of deposits does not change the volume of deposits in the commercial banks (nor the volume or type of their earning assets), merely the ownership of existing deposits within the CB system.

The activation of these deposits increases employment, the demand for various goods and services, and the opportunities of the commercial bankers to make bankable loans. The “”loan pie” is not a fixed entity; it grows when the economy grows.

The commercial banks do not, and cannot, loan out existing deposits. The commercial banks in dealing with the nonbank public, including the U.S. government, create new deposits in exchange for the earning assets which they acquire. I.e. loans equal deposits, ceteris paribus. And all time (saved), deposits are derived from demand deposits.

The commercial banks can force a contraction in the size of the non-banks and create liquidity problems in the process, by outbidding the non-banks for the public’s savings (or by remunerating the commercial bank’s excess reserve balances in Oct 2008). This process is called dis-intermediation, an economist’s word for going broke.

The reverse of this operation, cannot exist. Transferring saved deposits through the non-banks cannot reduce the size of the commercial banking system. Deposits are simply transferred from the saver, to the non-bank, to the borrower, etc.

I.e., Bankrupt U Bernanke destroyed the non-banks by inverting the short-end segment of the wholesale funding yield curve - for just the non-banks, in their borrow-short, to lend-long, non-inflationary, savings-investment paradigm (83 percent of the lending market pre-Great Recession).

Then the FDIC "Approved Temporary Unlimited Deposit Insurance Coverage for Noninterest-Bearing Transaction Accounts” which added to the outflow of the NB's funds. And there was a world-wide “flight-to-safety”.

The 1966 S&L credit crisis is the paradigm.

[flow5]

Albert Einstein quipped "Insanity is doing the same thing over and over again - expecting different results"

That's what the Fed does. 1st qtr. 2011, 1st qtr. 2014, 1st qtr.2015.

Roc's in M*Vt = roc's in N-gDp (proxy for all transactions in Professor Irving Fisher's "equation of exchange").

The roc in the proxy for inflation fell by 2/3 (from Jan 2013 until Dec 2014), the roc in the proxy for real-output fell by 1/2 (from July 2014 until December 2014). Go figure.

[Aman A.K.A. Ahamburger]

One thing though, there has been growth in every year you listed, flow. To me the insanity was the boom and bust cycle that has preceded what is now the longest and slowest recovery in United States history. 

I thought about something while reading your post. The fact that the Federal Reserve was created in response to a crisis means that it has always been in the reactionary position - especially because no one has taken the time to adjust policy to try and correct the cycle up until 2008. (Insanity)‎ Which again brings us back to the fact that we have now seen close to six years of slow, painful growth. 

Change is never easy or fun, but the only way to make true economic progress is to have sustained periods of economic growth. ‎ The analogy that I would use to describe this privately funded recovery that is going on is a snowball effect. What's going to be very interesting to see is if and when the US keeps growing slowly, even though the world is in a "tribulation."

Nice to see ya, flow.