Business / Economic / Financial

[ This link to a somewhat more cumulative blog posts page will precede current days news since most all topics remain current in terms of impact and longer-term effect and can be searched by topical index term more easily. The same is provided since the blog site http://alpeiablog.blogspot.com has just been censored as to size by google which is typical for google as nsa / cia / gov’t shill as more are becoming aware of. The same is true for microsoft, another co. that’s seen their best days and relies on the government to maintain their monopoly. Up to now the better page http://www.scribd.com/alpeia is provided for ease of formatting and clarity thereby while the Washington Post page is the real deal but without formatting http://www.washingtonpost.com/wp-srv/community/mypost/index.html?plckPersonaPage=PersonaComments&plckUserId=alpeia&newspaperUserId=alpeia . The following is the cumulative archive of blog posts / topics for 2010 as the new year starts anew: http://albertpeia.com/December312010postsarchive.htm or PDF formatted version
http://albertpeia.com/December312010postsarchive.pdf ]

‘INSIDE JOB’ Ferguson wins Oscar for Documentary on the unprosecuted massive extant fraud in the (many) TRILLIONS by the frauds on wall street ( and declares with oscar in hand that not one high level wall street exec has been prosecuted … despite ‘earning’ billiions from the fraud ), the commentator / experts recommend getting rid of the corrupt eric holder ( now what do holder and wobama have in common … is it wall street money ………… is it a proclivity for jive-talking / b*** s*** ………all of the above, some of the above ……….. or is it something else …… here’s a hint - UPDATE: MORE CLAIMS OF RACE BIAS AT JUSTICE... CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE... ‘In emotional and personal testimony, an ex-Justice official who quit over the handling of a voter intimidation case against the New Black Panther Party accused his former employer of instructing attorneys in the civil rights division to ignore cases that involve black defendants and white victims ...’ US v. AZ... Cases against Wall Street lag despite Holder’s vows to target financial fraud Washington Post | Obama has promised to hold Wall Street accountable for the meltdown. ) (see this film, I strongly recommend the complete documentary – the following is a preview/summary) http://www.youtube.com/watch?v=ffHFjlqIzKE&feature=related

[Here’s an archived version

’Inside Job’ New Documentary Exposes Wall Street Fraud And How Banksters Continue To Steal Our Money

Web site Link / Path to archived file: http://www.albertpeia.com/insidejob.flv [45mb ]

http://www.albertpeia.com/insidejob.mp4 [ 65mb ] ]

Wobama says daffy gaddafi’s time is up, got to go. The same can be said of wobama et als and his fraudulently failed presidency. Sheen On Obama: “A Coward In a Cheap Suit” [ I think Sheen to be too gentle in his criticism of wobama (Some might reflexively, defensively allege drugs (prescription or otherwise) or any number of the varied personality disorders so prevalent in america … ‘fuzzy, California laid back thinking’, ‘whatever’… Who knows? ) But, that said, wobama’s far worse than just a ‘coward in a cheap suit’. Indeed, Wobama’s a total fraud having been elected under false pretenses; viz., his total, unequivocal, and unfulfilled b*** s*** (those campaign promises) ! Moreover, there has been some persuasive documentation questioning wobama’s citizenship / birthplace placing his eligibility to even hold the office of president in question. ] Amidst the controversy of his wild interview on the Alex Jones Show yesterday, actor Charlie Sheen wasted little time in confronting President Barack Obama on his failure to answer Sheen’s twenty questions concerning 9/11, calling Obama, “a coward in a cheap suit.” A Government Shut-down Imperils the Power of Congress Paul Craig Roberts | Congress could try to protect its loss of the power of the purse by impeaching Obama. Drudgereport: WOBAMA 'IMPEACHMENT' WARNING... ...to announce exploratory committee 'in 10 days' Globalist Shill Barack Obama Asks Business Leaders For Job Creation Ideas Even As He Ships More Of Our Jobs Overseas As Part Of The New One World Economy The other day, Barack Obama summoned a group of business and labor leaders to the White House and “challenged” them to come up with some great ideas for creating more jobs inside the United States.

Public confidence in Obama reaches new low (Washington Post). Six in 10 Americans lack faith in Obama and hold lower esteem for members of Congress, according to the latest Washington Post-ABC News poll. Such stats as this tend to typify scenarios as this where you break every significant campaign promise that got you elected, from endless war (ie., Afghanistan, etc.) to not prosecuting the frauds on wall street, and the growing realization of ‘typical’: Public confidence in Obama reaches new low (Washington Post) Six in 10 Americans lack faith in Obama and hold lower esteem for members of Congress, according to the latest Washington Post-ABC News poll. Such stats as this tend to typify scenarios as this where you break every significant campaign promise that got you elected, from endless war (ie., Afghanistan, etc.) to not prosecuting the frauds on wall street, and the growing realization of ‘typical’:

But still it’s ‘hands off fraudulent wall street’ to theirs, the nation’s, and the world’s detriment. Firms subpoenaed in attempt to regain Fannie, Freddie losses (Washington Post). But there’s a reason:

The following youtube video is well worth the look and explains how and why the frauds on wall street have gotten away with their devastating fraud thus far. The frauds on wall street et als should be criminally prosecuted, jailed, fined, and disgorgement imposed. ( `UPDATE: MORE CLAIMS OF RACE BIAS AT JUSTICE...` `CIVIL RIGHTS PANEL TO PURSUE FED PROBE IN BLACK PANTHER CASE... ‘`In emotional and personal testimony, an ex-Justice official who quit over the handling of a voter intimidation case against the New Black Panther Party accused his former employer of instructing attorneys in the civil rights division to ignore cases that involve black defendants and white victims ...’ `US v. AZ...` Cases against Wall Street lag despite Holder’s vows to target financial fraud Washington Post | Obama has promised to hold Wall Street accountable for the meltdown. ):

‘THE OBAMA DECEPTION’ http://www.youtube.com/watch?v=eAaQNACwaLw&feature=PlayList&p=2EFAB57B44063742&playnext_from=PL&index=0&playnext=1 – well worth a look. [ The Obama Deception Number 1 on U.S. Google Trends ]

While boner and barton are indeed jokes / vegetables that bespeak the single-digit approval rate for congress, obama’s failure to deliver on promises with as well, endless war spending despite defacto bankruptcy of the nation and a watered down nothing financial regulation bill for talking points but little substance, make him as big a joker. This well researched / produced video tells the real story : http://www.youtube.com/watch?v=eAaQNACwaLw&feature=PlayList&p=2EFAB57B44063742&playnext_from=PL&index=0&playnext=1 ‘THE OBAMA DECEPTION’ – well worth the view. [ The Obama Deception Number 1 on U.S. Google Trends ]

‘The Obama Deception’ Censored A viral You Tube upload of one of Alex Jones’ most popular feature films ‘The Obama Deception’ has been censored following a spur of the moment campaign to elevate the movie’s title to the top of the major internet search engines. In light of this development, I provide an archived site version which appears to be complete (but will be compared with earlier version and replaced with same if incomplete) http://albertpeia.com/obamadeceptionhighqualityversion.flv

Then there is the well researched, produced, and informative ‘ESOTERIC AGENDA’ which explains how we’ve gotten to this forlorn point: http://video.google.com/videoplay?docid=-7052400717834950257# For the Same Reason I’ve Included Here a Web Site Archived FLV Version of Esoteric Agenda http://albertpeia.com/esotericagenda.flv

Ethics code urged for Supreme Court (Washington Post) [ Sounds like a plan! Come on! Wake up! After all, what can you expect from two guidos from ‘jersey (alito and scalia, colloquial – note that I have refrained from using what some might consider disparaging terms as w*p*, gui***s, or da***s … and let me state for the record that I truly loved and respected my grandmother who was 100% Italian/Bari,Italy and as well my grandfather/Lake Como,northern Italy with greek ancestral roots and I thereby claim standing/right to posit the criticism in light of my direct experience. ). How ‘bout starting with enforcing laws as to judges, liars, etc., within the very corrupted american illegal system; and, particularly bribes which in one form or another are rampant . I don’t know about Thomas, but I do know about alito and ‘jersey … :

October 15, 2010 (*see infra)

Steven M. Martinez, Assistant Director In Charge
Federal Bureau of Investigation, USDOJ
11000 Wilshire Blvd., Suite 1700

Los Angeles, CA 90024

Dear Sir:

I enclose herewith 3 copies of the within DVD rom autorun disk (which will open in your computer’s browser) as per your office’s request as made this day (the disk and contents have been scanned by Avast, McAfee, and Norton which I’ve installed on my computer to prevent viral attacks / infection and are without threat). I also include 1 copy of the DVD as filed with the subject court as referenced therein (which files are also included on the aforesaid 3 disks in a separate folder named ‘112208opocoan’). The (civil) RICO action (as you’re aware, the RICO Act is a criminal statute which provides a civil remedy, including treble damages and attorney fees, as an incentive for private prosecution of said claims probably owing to the fact that the USDOJ seems somewhat overwhelmed and in need of such assistance given the seriousness and prevalence of said violations of law which have a corrupting influence on the process, and which corruption is pervasive). A grievance complaint against Coan was also filed concurrently with the subject action and held in abeyance pending resolution of the action which was illegally dismissed without any supporting law and in contravention of the Order of The Honorable Robert N. Chatigny, Chief Judge, USDC, District Connecticut. The files below the horizontal rule are the referenced documents as filed. (Owing to the damage to the financial interests of both the U.S. and the District of Congresswoman Roybal-Allard, viz., Los Angeles, the Qui Tam provisions of the Federal False Claims Act probably would apply and I would absent resolution seek to refer the within to a firm with expertise in that area of the law with which I am not familiar).

The document in 5 pages under penalty of perjury I was asked to forward to the FBI office in New Haven is probably the best and most concise summary of the case RICO Summary to FBI Under Penalty of Perjury at Their Request (5 pages) [ ricosummarytoFBIunderpenaltyofperjury.pdf http://albertpeia.com/ricosummarytoFBIunderpenaltyofperjury.pdf ].

The correspondence I received from the Congresswoman by way of email attachment (apparent but typical problem with my mail) along with my response thereto is included on the 3 disks as fbicorrespondencereyes.htm . With regard to the calls to the FBI’s LA and New Haven, CT offices: There was one call to the LA office and I was referred to the Long Beach, CA office where I personally met with FBI Agent Jeff Hayes to whom I gave probative evidentiary documents of the money laundering which he confirmed as indicative of same (he was transferred from said office within approximately a month of said meeting and his location was not disclosed to me upon inquiry). The matter was assigned to FBI Agent Ron Barndollar and we remained in touch for in excess of a decade until he abruptly retired (our last conversation prior to his retirement related to the case and parenthetically, Rudy Giuliani whose father I stated had been an enforcer for the mob to which he registered disbelief and requested I prove it, which I did – he served 12 years in prison, aggravated assault/manslaughter? – and no, there is no Chinese wall of separation – Andrew Maloney’s the one that prosecuted gotti).

In contradistinction to the statement in said correspondence, there is a plethora of information including evidence supporting the claims set forth in the RICO VERIFIED COMPLAINT (see infra). Such includes and as set forth in the case, inter alia,

A judgment had been entered in my favor in the case, United States District Court Case #3:93cv02065(AWT)(USDCJ Alvin Thompson), worth approximately now in excess of $300,000 remains unaccounted for and which could be used for payment to creditors, Los Angeles, etc..
Counsel Robert Sullivan on my behalf documented by way of certification upon investigation that Alan Shiff, USBCJ, had falsely stated a dismissal upon which false statement he predicated a retaliatory and spurious contempt proceeding against me causing substantial damage, and for which he sought Judicial Notice of those and related proceedings as did I in some of my filings.
The Order of Dismissal With Prejudice by Alan Shiff, USBCJ, owing to Defendant Coan’s failure to file anything whatsoever by the court’s deadline causing creditors and me substantial damages: [ Shiff Order of Dismissal With Prejudice on Coan’s Failure to File Page 1 Page 2 ]
Defendant Coan had filed an action against me to prevent me from suing him which necessitated me to fly to Connecticut for a hearing before The Honorable Robert N. Chatigny, Chief Judge, USDC, District of Connecticut, who denied Coan’s requested relief as to Coan but precluded my action against Shiff (although there is no immunity, judicial or otherwise, for criminal acts, ie., fraud connected with a case under Title 11, USC, etc.) . [ transcript in pertinent part - crossexamofcoanbypeia.pdf ]
Newly appointed judge, Maryanne Trump Barry, Donald Trump’s sister, was assigned the RICO case despite the conflict of interest in light of hundreds of thousands of dollars of illegal (drug) money being laundered through the Trump casinos by the RICO defendants, and despite my motion to recuse her which motion she heard herself and denied, and U.S. Trustee Hugh Leonard with whom I met personally refused to join or file a separate motion to recuse and not long thereafter left said office for private practice at Cole, Shotz, et als on retainer with the RICO defendants as his primary client.
Probative and evidentiary documents, affidavits, exhibits, including those turned over to FBI Agent Jeff Hayes in Long Beach, CA, had been given to Assistant U.S. Attorney Jonathan Lacey with whom I met personally at the U.S. Attorney’s Office in Newark, N.J., at which time Samuel Alito was U.S. Attorney, and went over said documents and their probative value with him. Within approximately a month thereafter upon inquiry I was told that Jonathon Lacey was no longer with the office, that the file/documents could not be located, and that there was no further information available concerning contacting him or his location. I thereupon delivered by hand, copies of said documents to the office of then U.S. Attorney Alito, addressed to him, with assurance they would go directly to him. In addition to being inept [ I looked in on the one mob case he had brought, bungled, lost (accidently on purpose?) since I was suing some mob-connected under RICO and the court (I had known / previously met outside of court the judge Ackerman through a client) was absolute bedlam and a total joke since incompetent corrupt Alito brought in all 20 mob defendants (rather than prosecute one or a few to flip them first) who feigning illness had beds/cots in the courtroom along with their moans during testimony and had the jury in stitches. As much as I hate the mob, it truly was funny, if not so tragic.], Alito is also corrupt (and maybe corrupt because he is inept). After a reasonable (but still rather short) time I called to determine the status and was told that Alito was no longer with the Office of the U.S. Attorney, that he was (appointed) a federal judge, and that neither the documents nor any file or record of same could be located. Alito did parley the same / cover-up into quid pro quo direct lifetime appointment to the Court of Appeals, 3^rd circuit, despite the absence of judicial experience or successful tenure as U.S. Attorney (Maryanne Trump Barry as well). This is the same Sam Alito that now sits on the purported highest court in the land. The real application of the illegal rule ‘don’t ask, don’t tell’.

There is applicable insurance / surety coverage and neither LA, nor creditors, nor I should continue to have been damaged by this brazened corrupt and illegal scenario, which should be resolved in accordance with the meaningful rules of law apposite thereto.

Sincerely,

Albert L. Peia

611 E. 5^th Street, #404

Los Angeles, CA 90013

(213) 219-**** (cell phone)

(213) 622-3745 (listed land line but there are unresolved problems with the line, computer connection may be the reason but I hesitate to chance greater non-performance / worsening by their ‘fix’ so cell phone best for contact).

] Group of law professors' appeal comes after controversies involving travel and appearances at political events by several justices.

Why your local Hospital could soon shut down (Ad) http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSILC43/PR [ The instant video from Stansberry and Associates is so well researched and succinctly presented that I’ve archived same on my website; also, because the facts and views presented comport with the facts and views I’ve presented on my site which I believe to be correct. This is a must-view, must-see that I strongly recommend!
The complete url: http://www.albertpeia.com/stansberrysinvestmentadvisory.flv ( 146mb – approx. 1 hr. 17 min. ) http://www.albertpeia.com/stansberrysinvestmentadvisory.mp4 ( 374mb ) Written text of presentation (without pictures / charts) http://www.albertpeia.com/stansberrypresentation.htm ]

‘The Chicago PMI for February climbed to a 20-year high of 71.2. It had only ben expected to come in at 67.5 after a 68.8 reading in January’. [ Come on! Does anyone take anything coming out chicago capone-land seriously…maybe is the answer if you’re a fool. ]

Market Crash 2011: It Will Hit by Christmas Farrell, MarketWatch SAN LUIS OBISPO, Calif. (MarketWatch) — Politicians lie. Bankers lie. Yes, they’re liars. But they’re not bad, it’s in their genes, inherited. Their brains are wired that way, warn scientists. Like addicts, they can’t help themselves. They want to sell stuff, get rich.

We want to believe they’re telling us the truth. Silly, huh? Both trapped in this eternal “dance of death” controlled by programs hidden deep in our brains, telling us what to do, telling us to ignore facts to the contrary — till it’s too late, till a new crisis crushes all of us.

Dow ends at 2 1/2-year high

Joe Bel Bruno explains why stocks climbed to 21/2-year highs and extended their winning streak to a third consecutive week.

Psychology offers us a powerful lesson: Our collective brain is destined to trigger a crash before Christmas 2011. Why? We’re gullible, keep searching for a truth-teller in a world of liars. And they’re so clever, we let them manipulate us into acting against our best interests.

In fact, behavioral science tells us that bankers and politicians are lying to us 93% of the time. It’s 13 times more likely Wall Street is telling you a lie than the truth. That’s why they win. Why we lose. Because our brains are preprogrammed to cooperate in their con game. Yes, we believe most of their lies.

One of America’s leading behavioral finance gurus, University of Chicago Prof. Richard Thaler, explains: “Think of the human brain as a personal computer with a very slow processor and a memory system that is small and unreliable.” Thaler even admits: “The PC I carry between my ears has more disk failures than I care to think about.” Easy to manipulate.

Eternal love story: Your brain’s in love with Wall Street’s brain

Thaler’s a quant, speaks mostly in cryptic algorithmics. So if you really want to know how Wall Street’s con game works on you, Barry Ritholtz, the financial genius behind “Bailout Nation,” recently summarized it in the Washington Post: “Humans make all the same mistakes, over and over again. It’s how we are wired, the net result of evolution. That flight-or-fight response might have helped your ancestors deal with hungry saber-toothed tigers and territorial Cro Magnons, but it drives investors to make costly emotional decisions.”

Humans have something “akin to brain damage,” says Ritholtz. “To neurophysiologists, who research cognitive functions, the emotionally driven appear to suffer from cognitive deficits that mimic certain types of brain injuries. … Anyone with an intense emotional interest in a subject loses the ability to observe it objectively: You selectively perceive events. You ignore data and facts that disagree with your main philosophy. Even your memory works to fool you, as you selectively retain what you believe in, and subtly mask any memories that might conflict.”

Worse, there’s no cure.

Your brain needs to believe lies; Wall Street loves telling lies

Examples: USA Today headline: “Average Bull is 3.8 years: We’re not at 2 yet.” More upside. Wall Street loves it. The Wall Street Journal: “Stock recovery in high gear … S&P500 now speeding toward its next landmark,” double its March 2009 bottom.

Other lies: Inflation and rate rises won’t push China and America over the edge into a new bear recession. That one’s real popular in Wall Street’s echo chamber. Wall Street also cheers every time cable pundits and journalists repeat their favorite statistic: That stocks rally in the third year of a presidency, often more than 20%. Yes, Wall Street loves those 93% lies.

Biggest lie? Wharton’s perennial bull, Jeremy Siegel, of “Stocks for the Long Run” fame, recently told a TD Ameritrade Institutional Conference, “There’s nothing but upside to come …the next several years are going to be good for stocks.”

Yes, one of Wall Street’s favorite co-conspirators is hypnotizing thousands of our best money managers and advisers into believing the lie that this bull market will roar indefinitely. Worse, they’ll use that message to sell naive investors on buying whatever junk Wall Street is selling.

Get the picture? A little conspiracy begins in your head, a conspiracy between your gullible brain and Wall Street’s con men selling hype, hoopla and happy-talk. Listen and you’ll lose. Warning: This little conspiracy is a retirement killer. Remember: It’s odds-on you’re being lied to. So for a few moments, listen to some highly respected contrarians. They’re short-selling this conspiracy, betting that 2011 will hit headwinds before Christmas, turn a cyclical bull rally into a cyclical bear market.

Our brains never learned 2008’s lessons, will fail again in 2011

Remember, we can’t help it. Our brains are defective, biased, manipulated by unseen forces 93% of the time. So blame all the lies, lying and liars on our brain wiring. A perfect excuse. Sure, political dogma and insatiable greed factor into our bizarre mental equations. But your brain is as susceptible to the “great con” as Ben Bernanke, Henry Paulson, Bernie Madoff.

Go back a few years: The subprime credit meltdown was widely predicted years in advance. For example, back in 2007, the IMF’s Chief Economist, Raghuram Rajan, “delivered a stark warning to the world’s top bankers: Financial markets were headed for doom. They laughed it off,” said the Toronto Star. Both Alan Greenspan and Larry Summers were there.

In April 2007, Jeremy Grantham, whose firm manages $107 billion, also warned investors: “The First Truly Global Bubble: From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips; it’s bubble time. … Everyone, everywhere is reinforcing one another. … Bursting of the bubble will be across all countries and all assets … no similar global event has occurred before.”

We knew a crash was coming, Wall Street laughed.

Call it denial, or lying, or just a brain defect, late that summer as the meltdown spread like wildfire, shutting down the economy, our manipulative Treasury Secretary Hank Paulson, a former Goldman Sachs CEO, told Fortune “this is far and away the strongest global economy I’ve seen in my business lifetime.” And Fed boss Bernanke was telling us the subprime crisis was “contained.” Alan Greenspan agreed. He was on tour, making millions hustling his new book of excuses, delusions and lies, “The Age of Turbulence.”

Today, just three years later, the market’s just a shade above its 2000 peak. Adjusted for inflation, Wall Street stocks have lost roughly 20% of your retirement money the past decade. Get it? Wall Street’s a big loser the past decade. And they’ll lose another 20% by 2020. Why? Because 93% of what comes from Wall Street is suspect, can’t be trusted.

Warning: Cyclical bull ends in 2011, new cyclical bear roars back

At the beginning of 2011 USA Today reported a contrarian forecast. Ned Davis Research says the S&P 500 will make a run at the 2007 high of 1,565, but hit a “midyear peak.” Then it will crash as interest rates rise. Davis concludes: “The midyear peak could mark the end of the cyclical bull market that began in March 2009 and the start of a new cyclical bear market.”

Warning, even though your brain doesn’t want to hear it, there is a high probability a new cyclical bear market will begin this summer … and overshadow the 2012 elections.

The Journal’s also warning: “Inflation jitters spread through emerging markets, prompting China’s central bank to raise interest rate for the third time in four months amid worries that a drought threatening the country’s wheat crop will put further pressure on global food prices.”

Wake up America: With commodity prices rising rapidly, all the bizarre rationalizations Wall Street uses to keep Bernanke’s interest rates low are rapidly vaporizing. Yes, Ned Davis’ prediction of a bear will soon be a painful reality.

S&P 500 inflated, worth just 910, get out before it tops 1,500

Grantham also sees inflation and rising interest rates killing the lies, popping the bubble and ending the rally: “As a simple rule, the market will tend to rise as long as short rates are kept low. This seems likely to be the case for eight more months and, therefore, we have to be prepared for the market to rise and to have a risky bias.”

With $107 billion at stake Grantham better be concerned. He predicted the 2008 meltdown, now sees a repeat dead ahead: “Be prepared for a strong market and continued outperformance of everything risky, but be aware that you are living on borrowed time as a bull.”

Yes, the bubble will pop this year says Grantham: “If the S&P rises to 1,500, it would officially be the latest in the series of true bubbles. All of the famous bubbles broke, but only after short rates had started to rise.”

So keep a close watch on those two tipping points in your planning, interest rates breaking to the upside and the S&P closing near 1,500. When inflation pushes interest rates up they’ll choke off this bull market. If you’re active, better stop chasing higher returns, especially emerging markets.

Bottom line: In what sounds like a direct shot at super-bull Jeremy Siegel, Grantham says that GMO’s research warns that “the market is worth about 910 on the S&P 500, substantially less than current levels” just above 1,300.

Then Grantham throws his fast ball right down the middle: “The speed with which you should pull back from the market as it advances into dangerously overpriced territory this year is more of an art than a science, but by October 1 you should probably be thinking much more conservatively.”

Translation: Get the heck out of Wall Street’s stock market casino soon, maybe as early as July 4th, and definitely get out by Christmas, because soon all the lies, lying and liars will stop working. ‘

Stock Concentration: A Different Aspect of ETF Risk Kownatzki ‘ETFs have been all the rage. Ongoing investor interest has prompted an amazing growth of this type of investment vehicle. For most individual investors the traditional ETFs do provide an easy, certainly more cost effective way of diversification and therefore spreading risk among possibly several hundred companies. Many of these ETFs track the major stock market indices such as the SPDR S&P 500 (SPY), SPDR Dow Jones Industrial Average (DIA) and PowerShares NASDAQ 100 (QQQQ).

I have been repeatedly critical of some of the more complex ETFs in the past. Leveraged ETFs (double and triple) as well as inverse ETFs should only be considered by more experienced investors as they generally incur much higher risks. Worse yet, they tend to do a rather poor job at tracking the underlying index or basket of assets, often lagging far behind the expected performance. We discussed this in detail in numerous articles, more recently in Naïve expectations versus actual performance.

By contrast, as long as one invests in the traditional ETFs tracking just the major market indices, one should take comfort from the fact that diversification through the many different companies provides some insurance against individual company risk. Or does it?

Let’s look at an area of risk that’s not all that obvious on first glance: concentration risk.

Whenever I examine a new ETF or Mutual Fund, my first question is always: What are they actually buying and what are their current holdings?

One should do the same before buying any index fund too. Be aware of what the index is actually made of and what the fund allocations are. For instance, looking at the top ten holdings of the Dow Jones ETF (DIA), it is clear that a significant portion of that index, about 10%, is allocated to one company – IBM. Nothing against IBM, but just be aware that this is quite a large allocation in just one stock.

DIA Top Ten Holdings	as of 2-25-11
Components	Weight
IBM	10.08%
Chevron (CVX)	6.39%
Caterpillar Inc (CAT)	6.30%
3M Co (MMM)	5.64%
Exxon Mobil (XOM)	5.39%
United Technologies (UTX)	5.18%
McDonald's (MCD)	4.71%
Boeing Co (BA)	4.43%
Coca Cola Co (KO)	4.00%
Procter & Gamble Co (PG)	3.95%

Granted that the Dow is only made up of 30 companies, that concentration risk is still relatively benign. Much more of a concentration risk has been gathering steam in the NASDAQ 100. The extremely successful company Apple now comprises more than one fifth of the Index, clearly a huge allocation in just one company.

QQQQ Top Ten Holdings	as of 2-25-11
Components	Weight
Apple Inc. (AAPL)	20.47%
QUALCOMM Inc. (QCOM)	5.29%
Google Inc. (GOOG)	4.24%
Microsoft Corp. (MSFT)	3.59%
Oracle Corp. (ORCL)	3.17%
Amazon.com Inc. (AMZN)	2.43%
Intel Corp. (INTC)	1.96%
Cisco Systems Inc. (CSCO)	1.70%
Comcast Corp. (CMCSA)	1.68%
Teva Pharmaceutical (TEVA)	1.68%

Apple (AAPL) has been a huge success and the NASDAQ 100 Index has also been profiting from Apple’s stellar performance in recent years. Without going into detail as to how the component allocation of these indices are calculated, the average investor should at least be aware of the top 10 holdings of these ETFs as they provide some insight into how much or how little the index is actually diversified. Given the larger allocation of Apple in this case has been a huge plus for holders of QQQQ. But the same holders should appreciate that there is a significant concentration risk through this massive holding in just one company. Don’t get me wrong, I love Apple and its products and I am not here to argue as to whether Apple’s astronomical market cap of $320 billion is justified. But the fact that Apple is now more than 20% of the NASDAQ 100 leaves me a bit uncomfortable.

You could consider buying Apple stock directly (if Apple were the “chosen one”) while achieving your desired level of diversification through a broader index like the S&P 500. In that index, comprised of 500 companies, Apple is still the second largest component stock. However, with a weight of just 2.65% it looks more like diversification is actually happening.

SPY Top Ten Holdings	as of 2-25-11
Components	Weight
Exxon Mobil	3.65%
Apple Inc.	2.65%
General Electric Co (GE)	1.85%
Chevron Corp New	1.73%
Microsoft Corp	1.70%
IBM	1.68%
JP Morgan Chase & Co (JPM)	1.51%
Procter & Gamble Co	1.49%
Johnson & Johnson JNJ)	1.39%
Wells Fargo & Co (WFC)	1.39%

Again, I’m not debating the commercial viability of Apple Inc. (although there are those who fear that the absence of Steve Jobs will eventually hurt the long-term prospects of the company). This is rather a heads up for those who might not realize how much of their money is invested in just one stock when they purchase shares in the ETF QQQQ. Always good to know what’s inside the shopping bag…’

BOB PRECHTER: We're Still In A Massive Bear Market And Stocks Will Crash To New Lows Blodget ‘Investors have gotten wildly bullish of late, as the bull market that started in early 2009 keeps driving stocks to new highs. But the pigs are about to get slaughtered, says Bob Prechter, president of Elliott Wave International and editor of the Elliott Wave Theorist. Prechter still thinks the new bull market is just a cyclical "retracement" of some of the bear market losses that we've had since the market crashed in 2008. Prechter expected this retracement to drive stocks 50% above the market lows, but stocks have since soared 30% higher than than he expected. So when the day of reckoning comes, Prechter thinks, it will be even more startling. And Prechter still thinks that stocks will eventually crash to new bear-market lows (read: below 6,800 on the DOW). What makes Prechter think this day of reckoning may come sooner rather than later? Sentiment indicators and other technical analysis. Investor bullishness has now gotten so extreme, Prechter says, that it has exceeded the levels in 2008 before the market crashed. Investors could still get even more bullish, of course, but eventually they'll pay for this optimism. And Prechter's not just bearish on stocks: He thinks oil, silver, and other commodities are absurdly overvalued, too. The only thing he's bullish on is the dollar. And lest he be dismissed as a perma-bear, Bob Prechter is quick to add that he hopes there will come a day when he can come on the show and tell everyone that stocks are finally so crushed and hated that it's a historic opportunity to buy them. When will that be? Stay tuned...’

Looking Like A Good Time To Sell Into Strength - Harding ‘Many important global stock markets, including China, Brazil, India and Hong Kong, have been in fairly significant corrections since November, down between 12% and 17%. Their major concerns have been rising inflation and the resulting monetary tightening by their central banks to combat the inflationary pressures...So was this week’s stumble the beginning of a more serious correction? The events and reports this week did provide more evidence that the stock market may be ahead of reality regarding prospects for the economy, and therefore corporate earnings, going forward, which should at least limit the market’s upside potential. Limited upside potential equals more downside risk? It might be wise to lighten up some into strength that may develop over the next few days during the ‘monthly strength period.’

Greenback Armageddon Ahead? Why the dollar is about to crash, with Damon Vickers, Nine Points Capital Management founder, and “The Day After Dollar Crash” author.

Government Promises to Cut Social Security It’s official, national austerity measures are here.

Politicians Slash Budget of Watchdog Agencies … Guaranteeing that Financial Fraud Won’t Be Investigated or Prosecuted As I noted last year, you can tell how interested Congress and the White House are in uncovering the truth by looking at how much money is actually budgeted for investigation.

Will banksters get away with it? Aljazeera | Why have the unions and leftist groups been mostly silent on these issues?

The REAL Unemployment Rate Is 22% The Daily Bail | It remains above 22% with the February update.

Libya’s Turmoil Leads to Highest February Gas Prices in 21 Years ABC News | Crude oil touched nearly $102 a barrel in Asia this morning amid fears that Libya could halt exports.

The Flood Of Money Drowns Out The Value The world is awash in dollars and that is being reflected in the USDX, which are six major currencies versus the dollar. The loss of value is being loudly trumpeted as the IMF says a replacement must be found.

Mob Robbers And Rampant Looting: Is This The Future Of America? Have you ever heard of mob robberies? What happens is that dozens of young people storm a store at the same time, take whatever they want, and then storm out as powerless store clerks watch helplessly.

Price of food is at the heart of revolutions The Independent | No one saw the uprisings coming, but their deeper cause isn’t hard to fathom.

Oil Rises for Second Day as Middle East Turmoil Spreads to Oman Bloomberg | Oil advanced for a second day in New York after turmoil that has cut Libya’s output spread to Oman.

Madoff Says Entire U.S. Government a `Ponzi Scheme’ Bernard Madoff, convicted for organizing a ponzi scheme, criticized the U.S. during a recent telephone interview with New York Magazine.

‘No Plans’ To Cut Speeds As Oil Price Soars Transport officials have denied they are considering cutting speed limits on the roads to conserve fuel, despite the world oil crisis.

“Technical Glitch” Takes Down Australian Stock Exchange After last week we saw the Euronext, the Italian and the London Stock Exchanges crashing and burning, it is now Australia’s turn.

Will The Death Of The Dollar Lead To The Birth Of A New World Economic Order? There is no getting around it. The U.S. dollar is dying. U.S. government debt continues to grow at a very frightening pace and the Federal Reserve is now buying up most of the new debt that is being issued.

ECONOMIC CRISIS ARCHIVE

(2-28-11) Dow 12,226 +95 Nasdaq 2,782 +1 S&P 500 1,322 +2 [CLOSE- OIL $97.07 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $3.33 (reg. gas in LAND OF FRUITS AND NUTS $3.69 REG./ $3.78 MID-GRADE/ $3.88 PREM./ $4.02 DIESEL) / GOLD $1,410 (+24% for year 2009) / SILVER $33.38 (+47% for year 2009) PLATINUM $1,805 (+56% for year 2009) Metal News for the Day / DOLLAR= .72 EURO, 82 YEN, .62 POUND STERLING, ETC. (How low can you go - LOWER)/ http://www.federalreserve.gov/releases/h15/update 10 YR NOTE YIELD 3.41% …..… AP Business Highlights ...Yahoo Market Update... T. Rowe Price Weekly Recap – Stocks / Bonds / Currencies - Domestic / International This Is a Secular Bear Market and The End of Buy and Hold … and Hope MARKET MANIPULATION AND HOW THE LATEST BUBBLE-FRAUD PRE-COMING CRASH IS BEING ACCOMPLISHED 3-11-10 6 Theories On Why the Stock Market Has Rallied 3-9-10 [archived website file] Risks Lurk for ETF Investors The bull market that never was/were beyond wall street b.s. when measured in gold Property Values Projected to Fall 12% in 2010 Jan 31, 2010 The Week Ahead: Risk Is Off the Cliff; Unwind Has Begun Jan 31, 2010 01-13-10 Forecast for 2010 from Seeking Alpha Contributor THE COMING MARKET CRASH / CORRECTION 1-28-10 Maierhofer (01-15-10) 11 Clear Signs Economy Sinking Economic Black Hole 1-22-10: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover Current Economic / Fiscal Charts Trendsresearch.com forecast for 2009 1-7-10 Crash is coming! ‘WORST ECONOMIC COLLAPSE EVER’ Must Read Economic / Financial Data This Depression is just beginning The coming depression… thecomingdepression.net MUST READ: JEREMY GRANTHAM’S QUARTERLY UPDATE 25 January 2010 (850 on the S&P) by TPC The Next Wave of Collapse is Coming Sooner than you think Sliding Back Into the Great Depression ABSOLUTELY, ABSURDLY, RIDICULOUS! SELL / TAKE PROFITS WHILE YOU CAN SINCE MUCH, MUCH WORSE TO COME!

National / World

War, Martial Law, and the Economic Crisis Peter Dale Scott | A quiet agglomeration of military power shows sustained intention.

Government Promises to Cut Social Security Infowars.com | It’s official, national austerity measures are here.

“Day of Rage” in Iraq: 23 Killed by Government Infowars.com | Obama too busy condemning Gaddafi to take al-Maliki to task in Iraq.

Obama Signs Patriot Act Extension New York Post | Allows law enforcement to set roving wiretaps to monitor multiple communication devices.

Ignacio Pena: “Songs for the Fall of an Empire” Infowars.com | Another example of the sort of excellent work submitted to the latest video contest.

A Government Shut-down Imperils the Power of Congress Paul Craig Roberts | Congress could try to protect its loss of the power of the purse by impeaching Obama.

Libyans: No Thanks to Globalist Intervention Kurt Nimmo | Rebel leader stated his country does not want or need help from the United States and its globalist partners.

Obama’s “Humanitarian” Conquest Of Libya Paul Joseph Watson | While his predator drone attacks kill 90% innocents, President suddenly develops a conscience for human suffering

Globalism Pushing Middle Class Standard of Living Down to Third World Levels The Economic Collapse | The truth is that the global economy is bad for America.

Is Barack Obama About To Order The U.S. Military To Invade Libya? As insane as it might sound, the United States may soon be getting involved in another war in the Middle East. According to White House spokesman Jay Carney, “no options” have been taken off the table when it comes to the situation in Libya.

War Uber Alles The United States government cannot get enough of war. With Libyan dictator Moammar Gadhafi’s regime falling to a rebelling population, CNN reports that a Pentagon spokesman said that the U.S. is looking at all options from the military side.

Mob Robbers And Rampant Looting: Is This The Future Of America? Have you ever heard of mob robberies? What happens is that dozens of young people storm a store at the same time, take whatever they want, and then storm out as powerless store clerks watch helplessly.

Infowars.com Takes 1st Place in Alternative News Rating The DBKP Report has listed Infowars.com as the top alternative news and information website in its February, 2011, 80 Alternative News-Information ratings report. DBKP bases its ratings on 3-month average of Alexa worldwide traffic rankings.

Perceptions And Facts About The War On Terror American philosopher and author Robert Anton Wilson, who died four years ago at the age of 74, tried to awaken us to the fact that the “world is not governed by facts or logic,” but by “belief systems.” The priests of power in the United States understand this well, and they have used their knowledge to rule over the ignorant people below them, and keep America in the dark.

Analysis of the Global Insurrection Against Neo-Liberal Economic Domination and the Coming American Rebellion If you think what’s happening in Egypt won’t happen within the United States, you’ve been watching too much TV. The statistics speak for themselves.

UK paying ‘bribes’ to free trapped Britons Britain has been buying off Libyan officials with hefty additional fees in order to expedite the troubled evacuation of UK nationals, according to senior government figures.

Neocon Analysts Push for Invasion of Libya CNN reports the Pentagon and NATO are ready to send troops into Libya under the cover of humanitarian assistance. CNN underscores the situation by stating that reports say Gaddafi will fight to the end and will seek martyrdom.

Inside The Mind Of Charlie Sheen Paul Joseph Watson & Alex Jones | Why the actor is so angry, and why Infowars is involved in the story. Following the controversy caused by Charlie Sheen’s wild and rampaging appearance on The Alex Jones Show, it’s necessary to understand why the actor is so angry, if only to set the record straight on a number of issues that have been misconstrued by the establishment media, as well as explaining why Infowars and Alex Jones are involving themselves with the machinations of the entertainment industry.

Homeland Security To Scan DNA The Homeland Security Department this summer plans to begin testing a DNA analyzer that’s small enough to be easily portable and fast enough to return results in less than an hour.

The Real Revolution As Washington plunges the Middle East and North Africa into chaos, and city by city collapses into the hands of globalist stooges, many have mistakenly interpreted this “change” as a positive transformation.

Obama says Kadhafi must ‘leave now’: White House President Barack Obama said Saturday that Libya’s leader Moamer Kadhafi needs to “leave now,” having lost the legitimacy to rule, a White House statement said.

Rebel army may be formed as Tripoli fails to oust Gaddafi Col. Moammar Gaddafi faced fresh setbacks domestically and internationally early Sunday with opposition forces in eastern Libya preparing to dispatch a rebel force to his stronghold in Tripoli and the United Nation’s imposing military and financial sanctions while raising the specter that the isolated leader could face charges for crimes against humanity.

Globalist Client Regime in Iraq Massacres Protesters Kurt Nimmo | Donald Rumsfeld told the Iraqis democracy can be messy. It can also be bloody.

War Über Alles Paul Craig Roberts | War makes money for the politically connected.

The Real Revolution Tony Cartalucci | We have been given a prepackaged ideal of what “revolution” is supposed to look like.

North Korea threatens US, South with 'all-out war' (AFP) AFP - North Korea threatened "all-out war" in response to exercises by South Korean and US troops due to start Monday and told Seoul to stop cross-border propaganda, upping the rhetoric against its ar...

Gates's warning: Avoid land war in Asia, Middle East, and Africa Christian Science Monitor - In a speech to cadets at the United States Military Academy at West Point, Gates's message was clear: The US military services, as well as the elected and appointed civilians who send them to war, need better ways of foreseeing and preparing for ... Gates Tells US Army to Take New Approach Voice of America Warning Against Wars Like Iraq and Afghanistan New York Times [ Better said, than unsaid; but, methinks a bit late for that in light of pervasively corrupt, defacto bankrupt america’s consummate decline and fall! If only they had listened and not shot at the messenger … things could have been different! ]

Afghan gov't: NATO op killed 65 civilians (AP) [ War criminals winning hearts and minds? … Never gonna’ happen! ]

Ron Paul: Reject the Welfare-Warfare State! During the past few weeks, Congress has been locked in a battle to pass a continuing resolution to fund government operations through September. Both supporters and opponents of the bill – HR1 – claim it is a serious attempt to reduce federal spending. However, an examination of the details of the bill call that claim into question.

Alex Jones Culture Jams The View Alex Jones blasts the truth to The View’s audience of millions, bringing up the slaughter of a million innocents in Iraq, TSA grope down abuse, as well as the collapse of Building 7.

Obama Encircles US War Machine Around Libya President Barack Obama has instructed the Pentagon to reposition U.S. military forces around Libya as the administration prepares to exploit a humanitarian crisis to seize de facto control over the largest oil producing country in the continent of Africa, following the advice of top neo-cons who have urged Obama to use U.S. forces to topple the Gaddafi regime.

Ron Paul 2012: Tea Partiers Choose Congressman Over Sarah Palin For Presidential Bid Congressman Ron Paul has topped a Tea Party presidential straw poll, beating Sarah Palin as the favourite to run against Barack Obama in 2012.

Libyans: No Thanks to Globalist Intervention Following Secretary of State Clinton’s call for intervention, a rebel leader in Libya has stated his country does not want or need any help from the United States and its globalist partners.

Saudi activists eye protests, wait for new cabinet Democracy activists in Saudi Arabia say the government is closely monitoring social media to nip in the bud any protests inspired by uprisings that swept Arab countries, toppling leaders in Egypt and Tunisia.

Obama’s “Humanitarian” Conquest Of Libya Before President Barack Obama even took office, we warned that his administration would continue to follow the Bush-era policy of bankrupting America both financially and morally with new wars, but that these conquests would be done in the name of a humanitarian crisis rather than a pre-emptive assault.

Drudgereport: FADE: OSCAR RATINGS DOWN 10% ...
Injury Added to Insult... [ In terms of production value (rich in content in every way), I believe this to be as good and in my view better than ever as award ceremonies can be without the inimitable Bob Hope. I believe any falloff can be directly attributable to last year the academy’s egregious misstep in over-looking ‘Avatar’ / Cameron presaging a similar fate concerning my clear choice of ‘Inception’ / Nolan ( Truth be told, I’ve yet to see ‘The King’s Speech’ failing to muster any enthusiasm for seeing a film centered around a ‘so-called’ royal trying to over-come a speech impediment, albeit a minor one, regardless of circumstances; viz., stuttering, though I would concede that it was probably well done. We all know of the problems attendant to english royal inbreeding…ho hum… I did find ‘The Black Swan’ superb but attribute same to my own bias and fascination with viewing female ballet dancing). Bob Hope, Academy Awards, ‘passover’ … very funny! ]CIVIL WAR WEEKEND

Armed pro-Gaddafi gangs roll in Tripoli...
...Shooting from ambulances...
GRAFFITI AND BARRICADES...
Gaddafi vows to crush protesters...
Egypt protesters dispersed by force...
Al Qaeda calls for revolt against Arab rulers...
Obama to Gaddafi: Leave now...
UN Security Council passes votes to sanction...

Gas prices surge 17 cents in a week...
Motorist Calls Police Over Rising Prices...
OBAMA: CAN WE DRILL NOW?
LONDON DRIVERS PAYING $9 A GALLON...
Spain reduces motorway speed limit to save oil...

WOBAMA 'IMPEACHMENT' WARNING... ...to announce exploratory committee 'in 10 days'WEST MOVES MILITARY ASSETS AROUND LIBYACharlieSheen Publicist Runs For Hills...
Actor set to sue CBS for $320M, 'mental anguish'...
The Legal Letter...
THE 'TODAY' INTERVIEW... NY MAG: Madoff on Madoff: The Jailhouse Tapes...
Government a Ponzi scheme...

CIVIL WAR WEEKEND...
Anti-Gaddafi forces widen control...
Take town 30 miles from Tripoli...
Security forces defect...
Armed pro-gangs roll in capital...
...shooting from ambulances
ISRAELI'S YOUTUBE SPOOF OF GADHAFI CATCHES ON IN ARAB WORLD...
Police station, state office burning in Oman town...
Tunisia prime minister resigns... Gingrich to announce exploratory committee 'in 10 days' [ Neo-con Dreamin’! I mean, come on … are memories so short they don’t recall him being a total hypocrite, zionist shill, and part of the problem though to his credit, he’s not a mobster and complete joke as is trump! ]

CHICAGOLAND: Lawmaker Suggests BOEING'S Contract Win A Result Of Dirty Politics... [ The contract’s with money the nation doen’t really have anyway; and, the value of the money paid will be worth substantially less by completion; and, no surprise … Chicago hasn’t changed much from the days of capone and is rivaled in terms of corruption by such states as jersey, new york, etc.. ] ‘…“I’m disappointed but not surprised,” Republican Sen. Richard Shelby said. “Only Chicago politics could tip the scales in favor of Boeing’s inferior plane. EADS clearly offers the more capable aircraft.”…’

Congress on course to avert shutdown (Washington Post) [ And just when we thought there was hope … for the nation … the world … How ‘bout a massive furlough program for congress, the judiciary, and the executive branch (except law enforcement). After all, if all of the foregoing along with the likes of pseudo gov’t / connected fraudulent wall street, etc., are not to blame for the debacle we now call america, then who is? They are, period, exclamation point. Massive firings would also do quite satisfactorily! ]

Chinese authorities block Web site, terms (Washington Post) [ It is bad enough that China is essentially a totalitarian communist nation, disingenuously relying upon capitalism for its stellar growth. In light of such and China’s preoccupation with censorship, it is also clear that it’s not so much China’s rise as it is pervasively corrupt / defacto bankrupt america’s demise. In other words, they’re ‘limited’ (by such). But make no mistake, pervasively corrupt, defacto bankrupt america goes to great lengths in suppressing information, truth in favor of what’s spewed out by their propaganda machine which is nonpareil; and then there’s the perpetual illegal wars. ] Chinese authorities continued to tighten controls on Internet use Friday in the face of murky calls for "jasmine rallies" to emulate the anti-government protests convulsing the Middle East and North Africa.

Midwest, Middle East events threaten U.S. (Washington Post) [ Come on! It’s just not there! ‘Seemed’ is the best they can muster and that’s what they’re shooting for … to fool all of the american people/taxpayers (other than insiders) all of the time … see here: Why your local Hospital could soon shut down (Ad) http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSILC43/PR ( The instant video from Stansberry and Associates is so well researched and succinctly presented that I’ve archived same on my website; also, because the facts and views presented comport with the facts and views I’ve presented on my site which not only do I believe to be correct, but are supported by the unequivocal documented facts. This is a must-view, must-see that I strongly recommend! The complete url ( 146 mb – approx. 1 hr. 17 min. ) : http://www.albertpeia.com/stansberrysinvestmentadvisory.flv ) ] Just when the economic recovery seemed to gain momentum, two new threats have emerged that could undermine it.

Don't cut here (Washington Post) [ If not there … then where? I think people are totally out-of-touch with the reality of america’s dire circumstances and impending collapse on as many levels as a nation could face disaster. Denial? If it were only that simple … Why your local Hospital could soon shut down (Ad) http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSILC43/PR ( The instant video from Stansberry and Associates is so well researched and succinctly presented that I’ve archived same on my website; also, because the facts and views presented comport with the facts and views I’ve presented on my site which not only do I believe to be correct, but are supported by the unequivocal documented facts. This is a must-view, must-see that I strongly recommend! The complete url ( 146 mb – approx. 1 hr. 17 min. ) : http://www.albertpeia.com/stansberrysinvestmentadvisory.flv ) ] Topic A: Advocates make the case for funding their favorite federal programs. [ With what? The nation’s bankrupt: Senate Democrats draft cuts in domestic agency budgets (Washington Post) [ Do these ‘too little, too late’ so-called cuts purport to make the nation ‘less bankrupt’? There’s no such thing … absolutely preposterous! And, Kotlikoff thinks so as well, see immediately hereafter… ] The plan will involve accelerating some of the $33 billion in program terminations and reductions included in Obama's proposed budget for next year.

When Pretending Fails to Hide Bankruptcy: Laurence Kotlikoff ( Today in the WashingtonPost.Com ) Laurence Kotlikoff Feb 22, 2011

Feb. 23 (Bloomberg) -- Our country is bankrupt. It’s not bankrupt in 30 years or five years. It’s bankrupt today.

Want proof? Look at President Barack Obama’s 2010 budget. It showed a massive fiscal gap over the next 75 years, the closure of which requires immediate tax increases, spending cuts, or some combination totaling 8 percent of gross domestic product. To put 8 percent of GDP in perspective, this year’s employee and employer payroll taxes for Social Security and Medicare will amount to just 5 percent of GDP.

Actually, the picture is much worse. Nothing in economics says we should look out just 75 years when considering the present-value difference between future spending and future taxes. Over the full long-term, we need an extra 12 percent, not 8 percent, of GDP annually.

Seventy-five years seems like a long enough time to plan. It’s not. Had the Greenspan Commission, which “fixed” Social Security back in 1983, focused on the true long term we wouldn’t be sitting here now with Social Security 26 percent underfunded. The Social Security trustees, at least, have learned a lesson. The 26 percent figure is based on their infinite horizon fiscal- gap calculation.

But the real reason we can’t look out just 75 years is that the government’s cash flows (the difference between its annual taxes and non-interest spending) over any period of time, including the next 75 years, aren’t well defined. This reflects economics’ labeling problem. If you use different words to describe the receipts taken in and paid out each year by the government, you produce entirely different cash flows and an entirely different fiscal gap measured over any finite horizon.

Matter of Language

It’s only the value of the infinite horizon fiscal gap that is unaffected by the choice of labels of language. Take this year’s payroll tax contributions. Let’s call these transfers from workers to Uncle Sam “borrowing” by the government, rather than “payroll taxes,” since the money will be paid back as future benefits. If the future payback isn’t in full (equal to principal plus interest), we can call the difference a “retirement tax.” Presto! With this change of words, our 2011 deficit of about 10 percent of GDP is boosted another five points to 15 percent.

With one set of words, taxes are higher now and lower latter. With the other set of words, the opposite is true. But neither set of labels makes more economic sense than the other or changes what the government takes, on balance, from any person or business in any given year.

This is no surprise. The math of economics rules out an absolute measure of the deficit, just like the math of physics rules out an absolute measure of time.

Bottom Line

The bottom line, then, is that we need to look at the infinite-horizon fiscal gap not just for Social Security, but for the entire federal government. That analysis, based on the Congressional Budget Office’s long-term alternative fiscal scenario, shows an unfathomable fiscal gap of $202 trillion. And covering this gap requires coming up with the aforementioned 12 percent of GDP, forever.

If this gives you the willies, there’s a ready narcotic -- the president’s 2012 budget, which shows that most of our long- term fiscal problem has miraculously disappeared; the fiscal gap isn’t 12 percent of annual GDP. Nor is it 8 percent. It’s now 1.8 percent.

This fantastic improvement in our finances is due, we’re told, primarily to the Independent Payment Advisory Board. This board, to be established in 2014 (after the next election, of course) is charged with recommending cuts to Medicare and Medicaid providers when their costs grow too fast.

Repealing Cuts

We’ve had laws mandating such cuts for years, and they are routinely repealed. Indeed, President Obama signed the latest such repeal last June. But rather than laugh out loud at this cost-control mechanism, the Medicare trustees, three-quarters of whom were appointed by the president, assume in their 2010 report that these cuts will be made -- to the dollar. And the 2012 budget cites the report’s fictional forecast as its authoritative source.

No one takes the 2010 Medicare trustee report’s long-run projections seriously, least of all Richard Foster, Medicare’s chief actuary. Foster added this statement to the end of the report: “The financial projections shown in this report for Medicare do not represent a reasonable expectation…in either the short range…or the long range.”

This isn’t the first administration to conceal our long- term fiscal problem. Back in 1993, Alice Rivlin, then deputy director of the Office of Management and Budget, asked me and economists Alan Auerbach and Jagadeesh Gokhale to prepare a long-term fiscal gap/generational accounting for inclusion in President Bill Clinton’s 1994 budget.

Politics Triumphs

We worked for months on the analysis, but two days before the budget’s release, the study was excised from the budget. We were shocked, but, in retrospect, the politics are clear. The Clinton administration wanted to claim it was fiscally prudent and the study, which showed unofficial debt growing at enormous rates, showed the opposite.

The fiscal gap’s next near appearance in a president’s budget was in 2003. Treasury Secretary Paul O’Neill commissioned Gokhale and Kent Smetters to do the study. It showed a massive $45 trillion fiscal gap -- not a great basis for pushing tax cuts or introducing the prescription-drug benefit for seniors, known as Medicare Part D. O’Neill was ousted on Dec. 6, 2002, and a couple of days later the fiscal-gap study was discarded.

I’m not sure whether censoring the fiscal gap is more dishonorable than fudging it. What I do know is that we can’t assume our problems away and that I expected far better of this president when I voted for him.

--Editors: James Greiff, Steven Gittelson’

]

Libyan ruler clings to power as violence escalates (Washington Post) [ Clings? … As in a tight sweater … or maybe a straight jacket. Wow! Talk about delusional. ] Regime opens fire on protesters; Gaddafi calls supporters to arms (Washington Post) [ Pressure mounts on Gaddafi (Washington Post) [ That he was always a caricature of sorts, there is no question. That he’s totally burned out, there’s also no doubt; though they might argue in his defense that so was failed president dumbya bush … a point well taken … but look at the consequential pathetic state of pervasively corrupt, defacto bankrupt america … with the unlit torch passed to failed president wobama the b (for b*** s***) who pretends, or maybe in his alternate and fake reality just believes it’s lit. That he’s done, also fait accomplis, after 41 years … who cares. That he’s insane … now that’s quite another thing with greater worldwide implications, so, daffy… gadaffy… duck! Gaddafi vows to maintain hold on power Libyan strongman says he'll fight 'until the last drop of my blood' (Washington Post) [ His latter wish is the world’s command. ‘Something there is that doesn’t love a dictator, that wants them down’ … (Excuse me … I was thinking of walls and ‘Mending Wall’, Robert Frost http://albertpeia.com/RobertFrost.htm ). Libya Internet Shut Down Amid Protests, Per Multiple Reports [ Once again, as in Egypt, this, the internet, inherently global in nature is the lynchpin, tampering with or stifling same marking the end of any regime. Let this be a warning; viz., you cannot put the genie back in the bottle! 41 years? Gadaffy duck should duck ‘cause he’s done. I mean, look at him, he’s the singular equivalent of the multiple bushes. He’s totally burnt out (as much or more so than dumbya bush or mubarack) and quite done! ] Reports have emerged late Friday that Libya appears to have shut down its Internet due to widespread protests, less than a month after Egypt did the same. ] With rebels apparently controlling much of the eastern half of the country, the violence engulfing Libya is already the worst in more than a month of unrest that has toppled other regimes. ] He remains defiant even as high-level defections continue to weaken his government and rebels reportedly seize control of key swaths of nation. American evacuees describe 'long ordeal' on ferry (Washington Post) [ I’ve included this headline here, not for the article’s content but rather for the statement of one of said evacuees on network television news that he was told by the u.s. embassy that they’d have to fend for themselves and that they’re on their own. That is an important aspect of the fact-filled video presentation by Stansberry and Associates, infra, except that that will be the almost unimaginable position of the u.s. government when the almost unimaginable but inevitable happens here in pervasively corrupt, defacto bankrupt america. Don’t forget, they and their’s have plundered this nation, its treasury, people and have use each branch of this government to do so. I’ve experienced this first-hand in having to ‘fend for myself’ in what should have been a simple RICO case owing to the venality of those self-interested in the process (bribes, cover-up of crimes, etc. http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm ) ….. Why your local Hospital could soon shut down (Ad) http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSILC43/PR The instant video from Stansberry and Associates is so well researched and succinctly presented that I’ve archived same on my website; also, because the facts and views presented comport with the facts and views I’ve presented on my site which not only do I believe to be correct, but are supported by the unequivocal documented facts. This is a must-view, must-see that I strongly recommend! The complete url ( 146 mb – approx. 1 hr. 17 min. ) : http://www.albertpeia.com/stansberrysinvestmentadvisory.flv ]

Why your local Hospital could soon shut down (Ad) http://www.stansberryresearch.com/pro/1011PSIENDVD/LPSILC43/PR [ The instant video from Stansberry and Associates is so well researched and succinctly presented that I’ve archived same on my website; also, because the facts and views presented comport with the facts and views I’ve presented on my site which not only do I believe to be correct, but are supported by the unequivocal documented facts. This is a must-view, must-see that I strongly recommend! The complete url ( 146 mb – approx. 1 hr. 17 min. ) : http://www.albertpeia.com/stansberrysinvestmentadvisory.flv ]

The U.S. market has had no such worries, and has continued its non-stop bull market to new highs.

It did stumble a bit this week, spooked by the spike-up in oil prices created by the spreading unrest in oil-producing countries, notably Libya. Yet in the week’s decline the Dow and S&P 500 fell less than 3%, hardly a blip on the long-term charts.

Short-term, the next ‘monthly strength period’ has arrived, when the market tends to be positive for the five-day period from the last trading day of the month through the first four days of the following month.

As I have written before, it is a quite consistent pattern. For instance, in 2010 the S&P 500 gained 143 points, or 12.8% for the year, but its gains on just the first three days of each month amounted to 229 points, or 20.5%. The pattern has pretty much continued so far this year, with nice gains in the first weeks of both January and February.

That raises the odds for a return to a positive market next week.

Yet, the events of the past week may have been a warning shot. There had already been enough potential catalysts for a market correction. This week added several more.

As most investors are aware, investor sentiment has been at levels of bullishness and confidence usually seen near market tops, and the major market indexes are as over-extended above their long-term 200-day moving averages as they usually get without at least a 10% to 12% correction down to retest the support at those moving averages. As noted, many important global stock markets, including China, Brazil, India and Hong Kong, have been in fairly significant corrections since November, and global markets, including the U.S., tend to move in tandem with each other in both rallies and corrections.

Now we have spiking oil prices. The 2003-2007 bull market ended in October, 2007 when the price of oil reached $96 a barrel. The 2007-2009 recession began three months later. After trading briefly above $100 a barrel on Thursday oil pulled back, but was still trading around $97 at the week’s end.

On Thursday it was reported that new home sales plunged an unexpected and huge 12.6% in January. It was not a good start for this year, after 2010 was the worst year for new home sales in almost half a century. Not providing much encouragement for coming months, it was also reported that applications for mortgages are at a 15-year low.

Then, on Friday it was reported that the economy was even weaker than previously thought in the December quarter. Gross Domestic Product (GDP) growth for the quarter was unexpectedly revised down to only 2.8% from the previously reported 3.2%.

These events and reports – turmoil in the oil-producing countries that is more likely to spread than go away; spiking oil prices that tend to cut into U.S. economic growth (and add to global inflation pressures); news that the economy grew significantly slower in the 4^th quarter than previously thought – were more than enough reasons for the market to nosedive this week. But it only stumbled for a few days.

Yet it was enough to cause some concern and nervousness. That could be seen in the sharp drop in bullish investor sentiment, and the upturn in the number of pundits declaring the end of the bull market. The poll of its members by the American Association of Individual Investors (AAII) this week shows the percentage of those who are bullish plunged to just 36.6% from readings above 50% just three weeks ago, and the near record high of 63% in late December.

Sentiment does reverse from high levels of bullishness near tops to increasingly pessimistic expectations as corrections develop.

So was this week’s stumble the beginning of a more serious correction?

The events and reports this week did provide more evidence that the stock market may be ahead of reality regarding prospects for the economy, and therefore corporate earnings, going forward, which should at least limit the market’s upside potential.

Limited upside potential equals more downside risk?

It might be wise to lighten up some into strength that may develop over the next few days during the ‘monthly strength period.’

Ready to Rally or Ready to Blow? The One Indicator That's in the Know Maierhofer, On Friday February 25, 2011, 7:35 pm EST

After publishing this article on Tuesday, a lot of people asked me: 'So, what did percentR tell you about the rally. Is it over?'

Unfortunately the message of this accurate but little-known indicator wasn't as clear as I hoped, but it was nevertheless valuable. Combining percentR with my other tenchnical analysis, I came to the following conclusion (published for ETF Profit Strategy subscribers in the Wednesday update):

'It looks like stocks want to rally and retrace some of the points lost since last Friday.' Based on percentR the up trend may be over, but it's too early to tell. If stocks break out above the safety level outlined in the same update, the rally will be back on track.

Please find below the original article for your reading pleasure:

Low-Risk. The term 'low-risk' has the same appeal in the investment world as the enticing little word 'free' in the advertising world.

Some advertising executives claim that 'free' is the most powerful word in the ad world. 'Low-risk' might be the most powerful concept in the investing universe.

If you read the ETF Profit Strategy Newsletter you are very familiar with the term low-risk entry. If you don't, here's a quick summary and crash course of an indicator that's been 100% accurate over the past 6 months.

Low risk entries for various indexes are identified or triggered by a relative strength indicator called percentR. PercentR is expressed on a scale from 1 - 100. Readings above 80 are considered overbought, readings below 20 oversold. If you read the ETF Profit Strategy Newsletter you are very familiar with the term low-risk entry. If you don't, here's a quick summary and crash course of an indicator that's been 100% accurate over the past 6 months.

Uncannily Accurate

With two exceptions, percentR remained above 80 ever since. The two dips below 80 (yellow circles) on January 19 and 28 triggered a low-risk entry. Even though investors were worried about riots in Egypt, according to percentR it was time to buy.

This bullish low-risk entry is valid as long as the underlying index (in this case the S&P 500) does not close below that day's low (white line). In both instances, the S&P (SNP: ^GSPC) stayed above that low and went on to rally over 5%.

Other Low-Risk Entries

PercentR works with stocks and indexes alike. Similar low-risk entries were identified by the ETF Profit Strategy Newsletter for the Dow Jones (DJI: ^DJI), Nasdaq-100 (Nasdaq: QQQQ - News), Nasdaq Composite (Nasdaq: ^IXIC), and the Financial Select Sector SPDR (NYSEArca: XLF - News) on January 28. The Russell 2000 (Chicago Options: ^RUT) was the weakest index and registered its low-risk entry sooner.

Corrections are Healthy, if ...

Put yourself in a time capsule and zoom back to April 2010 when the major U.S. indexes declined nearly 20% before the promise of QE2 resurrected stocks. There was little conviction then that corrections are healthy. The correction had rattled the investing masses and shaken out many stockholders before the market went on to rally again.

PercentR is the canary in the coalmine that identifies a deeper correction. No significant sell off happens without a failed low-risk entry.

A failed low-risk entry occurs when the indexes close below the low of the day that triggers the low-risk entry (white lines on the chart). The last failed low-risk entry happened in November 2010 when stocks chopped around for a few weeks and ultimately lost about 5%. Another failed low-risk entry flashed a sell signal on August 11 and ushered in a 21 day, 8% sell off.

The Right Tool for the Job

Any craftsman will tell you that there are limitations to any tool, but there's a tool for each job. percentR is the right tool for the current job.

After a parabolic rally, the job at hand is to distinguish whether pull backs are a buying opportunity or a warning signal. Should you buy the dips or step on the sidelines (or even short the market)?…’

The REAL Unemployment Rate Is 22% The Daily Bail | It remains above 22% with the February update.

Libya’s Turmoil Leads to Highest February Gas Prices in 21 Years ABC News | Crude oil touched nearly $102 a barrel in Asia this morning amid fears that Libya could halt exports.

IMF Austerity Measures Lead to Violent Riots in Greece AFP | The confrontation occurred near the finance ministry.

Saudi Arabia Raises Oil Output By 8% To Over 9 Million Barrels Per Day As we reported yesterday, Saudi Arabia which following its latest recreation of Helicopter Ben’s money parachuting experiment to buy its people’s love, suddenly has found itself in a fiscal crunch, has no choice but to increase general oil sales revenues.

It’s Not an Arab Revolution … It’s a GLOBAL Revolution While the revolution in Tunisia, Egypt, Libya and other North African countries may seem like an “Arab revolt”, it’s actually worldwide.

What You Need To Know About Buying Silver At A Time When Even The Canadian Mint Says “It Has Sold Everything It Has” Even as silver performed some unprecedented fireworks today, plunging on what was a margin hike in… crude, the metal continues to trade just below its post-Hunt Brother highs.

Adjusted Monetary Base Goes Vertical Just in case there was any confusion in the interpretation of the M2 chart, here is the latest just released Adjusted Monetary Base.

21 Signs That The Once Great U.S. Economy Is Being Gutted, Neutered, Defanged, Declawed And Deindustrialized Once upon a time… The Economic Collapse Feb 12, 2011 ‘Once upon a time, the United States was the greatest industrial powerhouse that the world has ever seen. Our immense economic machinery was the envy of the rest of the globe and it provided the foundation for the largest and most vibrant middle class in the history of the world. But now the once great U.S. economic machine is being dismantled piece by piece. The U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized and very few of our leaders even seem to care. It was the United States that once showed the rest of the world how to mass produce televisions and automobiles and airplanes and computers, but now our industrial base is being ripped to shreds. Tens of thousands of our factories and millions of our jobs have been shipped overseas. Many of our proudest manufacturing cities have been transformed into “post-industrial” hellholes that nobody wants to live in anymore.

Meanwhile, wave after wave of shiny new factories is going up in nations such as China, India and Brazil. This is great for those countries, but for the millions of American workers that desperately needed the jobs that have been sent overseas it is not so great.

This is the legacy of globalism. Multinational corporations now have the choice whether to hire U.S. workers or to hire workers in countries where it is legal to pay slave labor wages. The “great sucking sound” that Ross Perot warned us about so long ago is actually happening, and it has left tens of millions of Americans without good jobs.

So what is to become of a nation that consumes more than it ever has and yet continues to produce less and less?

Well, the greatest debt binge in the history of the world has enabled us to maintain (and even increase) our standard of living for several decades, but all of that debt is starting to really catch up with us.

The American people seem to be very confused about what is happening to us because most of them thought that the party was going to last forever. In fact, most of them still seem convinced that our brightest economic days are still ahead.

After all, every time we have had a “recession” in the past things have always turned around and we have gone on to even greater things, right?

Well, what most Americans simply fail to understand is that we are like a car that is having its insides ripped right out. Our industrial base is being gutted right in front of our eyes.

Most Americans don’t think much about our “trade deficit”, but it is absolutely central to what is happening to our economy. Every year, we buy far, far more from the rest of the world than they buy from us.

In 2010, the U.S. trade deficit was just a whisker under $500 billion. This is money that we could have all spent inside the United States that would have supported thousands of American factories and millions of American jobs.

Instead, we sent all of those hundreds of billions of dollars overseas in exchange for a big pile of stuff that we greedily consumed. Most of that stuff we probably didn’t need anyway.

Since we spent almost $500 billion more with the rest of the world than they spent with us, at the end of the year the rest of the world was $500 billion wealthier and the American people were collectively $500 billion poorer.

That means that the collective “economic pie” that we are all dividing up is now $500 billion smaller.

Are you starting to understand why times suddenly seem so “hard” in the United States?

Meanwhile, jobs and businesses continue to fly out of the United States at a blinding pace.

This is a national crisis.

We simply cannot expect to continue to have a “great economy” if we allow our economy to be deindustrialized.

A nation that consumes far more than it produces is not going to be wealthy for long.

The following are 21 signs that the once great U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized….

#1 The U.S. trade deficit with the rest of the world rose to 497.8 billion dollars in 2010. That represented a 32.8% increase from 2009.

#2 The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010. This is the largest trade deficit that one nation has had with another nation in the history of the world.

#3 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.

#4 In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world.

#5 The United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

#6 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall.

#7 The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2.

#8 The Bureau of Labor Statistics originally predicted that the U.S. economy would create approximately 22 million jobs during the decade of the 2000s, but it turns out that the U.S. economy only produced about 7 million jobsduring that time period.

#9 Japan now manufactures about 5 million more automobiles than the United States does.

#10 China has now become the world’s largest exporter of high technology products.

#11 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#12 The United States now has 10 percent fewer “middle class jobs” than it did just ten years ago.

#13 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.

#14 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

#15 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

#16 The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.

#17 Half of all American workers now earn $505 or less per week.

#18 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#19 Since 2001, over 42,000 U.S. factories have closed down for good.

#20 In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero.

#21 Ten years ago, the “employment rate” in the United States was about 64%. Since then it has been constantly declining and now the “employment rate” in the United States is only about 58%. So where did all of those jobs go?

The world is changing.

We are bleeding national wealth at a pace that is almost unimaginable.

We are literally being drained dry.

Did you know that China now has the world’s fastest train and the world’s largest high-speed rail network?

They were able to afford those things with all of the money that we have been sending them.

How do you think all of those oil barons in the Middle East became so wealthy and could build such opulent palaces?

They got rich off of all the money that we have been sending them.

Meanwhile, once great U.S. cities such as Detroit, Michigan now look like war zones.

Back in 1985, the U.S. trade deficit with China was about 6 million dollars for the entire year.

As mentioned above, the U.S. trade deficit with China for 2010 was over 273billion dollars.

What a difference 25 years can make, eh?

What do you find when you go into a Wal-Mart, a Target or a dollar store today?

You find row after row after row of stuff made in China and in other far away countries.

It can be more than a bit difficult to find things that are actually made inside the United States anymore. In fact, there are quite a few industries that have completely and totally left the United States. For certain product categories it is now literally impossible to buy something made in America.

So what are we going to do with our tens of millions of blue collar workers?

Should we just tell them that their jobs are not ever coming back so they better learn phrases such as “Welcome to Wal-Mart” and “Would you like fries with that”?

For quite a few years, the gigantic debt bubble that we were living in kind of insulated us from feeling the effects of the deindustrialization of America.

But now the pain is starting to kick in.

It has now become soul-crushingly difficult to find a job in America today.

According to Gallup, the U.S. unemployment rate is currently 10.1% and when you throw in “underemployed” workers that figure rises to 19.6%.

Competition for jobs has become incredibly fierce and it is going to stay that way.

The great U.S. economic machine is being ripped apart and dismantled right in full view of us all.

This is not a “conservative” issue or a “liberal” issue. This is an American issue.

The United States is rapidly being turned into a “post-industrial” wasteland.

It is time to wake up America.’

This is that unmentionable reality as I alluded to earlier on close scrutiny of the data, ‘that stock prices have been manipulated to the upside beyond any and all rational basis‘ and as I previously wrote: Perception vs. Reality: Four Reasons to Remain Cautious on U.S. Equities [ Hey, Abbott … That’s Lou Costello calling him from the other side … Wake up! … Just kidding … but I’m not kidding when I say that contrary to Abbott’s view, infra, if you’re not a successful market timer you should rethink your position as an equity investor. Moreover, in contradistinction to Mr. Abbott’s implication, if you’re not a successful speculator (there are very few), you should rethink your position as a short seller: reason…, you could be wiped out, lose more than your principal, forced to cover (that’s why the same is considered a contrary market indicator, particularly in these manipulated, contrived markets). When I did my MBA thesis (1977, NYU, GBA, Eve.Prog., Finance), a review of the data revealed even then (and much more so now with computer programmed market manipulation) that the market remained biased / propped up (artificially, especially now with computerized manipulation) to the upside for far longer periods of time than for the downside which meant that dollar-cost averaging (through regular, periodic investment, for example), meant you were accumulating shares at higher prices generally for longer periods of time skewing the average cost to the upside (dollar-cost-averaging in declining markets was ok if analysis / forecast saw resurgence based on fundamentals - now absent – which is timing, as even senile wall street / gov’t shill Buffet would attest, that ‘greedy when others are fearful thing’). Abbott discusses perception which is the psychological factor involved in security evaluation / analysis; but investors need not and should become nuts themselves, particularly when as now, the inmates are running the asylum. ] Abbott ‘Perception determines short-term market movements. The difference between perception and reality determines the direction of major market trends. Though I generally try to avoid making macro prognostications, I believe bottom-up analysis can be informative about the current level of stock prices. I want to share what my recent work tells me about where stocks are (and where they might be headed). I will outline some various nuggets of collective wisdom that are taken for granted right now by stock bulls, and I will attempt to demonstrate how reality is likely to differ from these perceptions.

First, a disclaimer. This is not a market timing call. At all times, I stay away from market timing predictions. I think that's a loser's game in the long run. Even if I'm correct about the discrepancies between the following perceptions and realities, there's no saying when people will change their minds or shift their focuses. That said, let's dive in.

Perception vs. Reality #1
Perception: Low Interest Rates, Questionable Bond Outlook Means Stocks are Attractive
Reality: Interest Rates Are Being Artificially and Deliberately Manipulated

It's no secret that the Federal Reserve's low interest rate policy and quantitative easing efforts have held interest rates very low for very long. However, when people talk about stock market implications of bond yields, they rarely mention the fact that bond yields are artificially low. In an unmanipulated market, bond prices and stock valuations should be related, but I regard that connection as highly dubious right now. Investors who say that stocks deserve higher multiples (lower earnings yields) because bond yields are so low may well be setting themselves up for disappointing returns/frustrating losses when bond prices normalize. Again, this isn't a market timing call, and yields may remain low for quite some time. But, eventually this discrepancy will correct itself, and stock performance is likely to suffer at that time.

Perception vs. Reality #2
Perception: Earnings Growth Has Been Strong and Will Remain That Way
Reality: Top-Line Growth Will Have to Pick Up; Cost-Cutting has Run Its Course

Earnings growth has certainly been robust, but much of the strength has come from companies running lean cost structures and wringing as much efficiency as possible out of their employees and their assets. Though the recession has ended, the economy is not yet healthy enough to fuel strong sales growth. Companies can only boost profits by cutting costs and increasing productivity for so long. Therefore, top-line growth will have to play a larger role going forward than it has over the past 4-6 quarters. Whether or not economic growth is strong enough to drive revenue increases is unsure, but the current level of stock prices undoubtedly assumes it is. Any stagnation of the recovery and concomitant sluggish sales will likely hit stock prices.

Perception vs. Reality #3
Perception: European Debt Crisis Drives Short-Term Volatility, but It's Not a Long-Term Concern
Reality: Crisis May Be a Harbinger of What's to Come in the U.S. if States, the Feds Don't Improve Balance Sheets

So far, turmoil in Greece and Ireland has served only as a temporary headwind to U.S. stocks. In keeping with the investment world's increasingly short-term focus, people seem more concerned with what fiscal crises in Europe mean for U.S. stocks over the coming days and months than with what they might mean down the road. I believe that this interpretation misses the mark. Since the U.S. fiscal situtation is generally considered to be stronger than that in many European countries, U.S. federal and municipal debt issuance has been relatively smooth, and interest rates have only risen modestly. If the U.S. doesn't get serious about its fiscal woes, eventually the crisis will arrive on American shores. There's no way of telling when this might happen, but the current level of stock prices seems to imply that it never will.

Here's the problem with that. To fix the federal balance sheet and/or to improve state and municipal balance sheets, legislators will have to raise taxes and/or cut spending. Tax hikes and spending cuts both reduce consumer spending. This hurts growth. There's no way around this. Stocks can certainly continue to rise for some time, but austerity will be bearish if/when it comes. If it doesn't come, we're in for a much bigger crisis some time down the road.

Perception vs. Reality #4
Perception: Everywhere You Look, You See Good Companies at Cheap Prices
Reality: It's Hard to Find Genuine Bargains, but There are Intriguing Short Prospects Everywhere

There is no shortage of stock market commentators who claim that they see bargains everywhere they look. Perhaps I'm not looking in the right places, but I've been having a difficult and increasingly impossible time finding good companies at reasonable prices. I use similar criteria to assess long and short investments, and I find intriguing shorts in lots of sectors right now. This tells me that valuations are stretched. Certainly they can become more so before we get a selloff, but every day that stocks rally, they get more expensive.

I've written on Seeking Alpha about a number of stocks which I regard as expensive (CRM, OPEN, GMCR), and take my word for it: there are plenty more than these whose shares I do not want to own at present levels. A few weeks ago, I also mused about the Facebook-Goldman deal and argued that this valuation is indicative of excessive investor enthusiasm. Bargains are hard to find, and as valuations go up, so does positive sentiment. While this is not a prediction of an impending correction or bear market, it is a message of caution for people who think stocks are cheap right now.

All that said, I always try to consider both sides of any investment issue, and there are some reasons for optimism. Job growth has shown signs of improvement, and some economic data have been increasingly (though not uniformly) positive. The Federal Reserve remains accommodative, and I'm skeptical about whether or not there is political will for austerity. For these reasons, stocks could continue onward and upward. That said, I see too many reasons for caution, and investors are turning a blind eye to these concerns as their complacency rises.’

12 Economic Collapse Scenarios That We Could Potentially See In 2011 What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis.
The Economic Collapse Jan 20, 2011 ‘What could cause an economic collapse in 2011? Well, unfortunately there are quite a few “nightmare scenarios” that could plunge the entire globe into another massive financial crisis. The United States, Japan and most of the nations in Europe are absolutely drowning in debt. The Federal Reserve continues to play reckless games with the U.S. dollar. The price of oil is skyrocketing and the global price of food just hit a new record high. Food riots are already breaking out all over the world. Meanwhile, the rampant fraud and corruption going on in world financial markets is starting to be exposed and the whole house of cards could come crashing down at any time. Most Americans have no idea that a horrific economic collapse could happen at literally any time. There is no way that all of this debt and all of this financial corruption is sustainable. At some point we are going to reach a moment of “total system failure”.

So will it be soon? Let’s hope not. Let’s certainly hope that it does not happen in 2011. Many of us need more time to prepare. Most of our families and friends need more time to prepare. Once this thing implodes there isn’t going to be an opportunity to have a “do over”. We simply will not be able to put the toothpaste back into the tube again.

So we had all better be getting prepared for hard times. The following are 12 economic collapse scenarios that we could potentially see in 2011….

#1 U.S. debt could become a massive crisis at any moment. China is saying all of the right things at the moment, but many analysts are openly worried about what could happen if China suddenly decides to start dumping all of the U.S. debt that they have accumulated. Right now about the only thing keeping U.S. government finances going is the ability to borrow gigantic amounts of money at extremely low interest rates. If anything upsets that paradigm, it could potentially have enormous consequences for the entire world financial system.

#2 Speaking of threats to the global financial system, it turns out that “quantitative easing 2″ has had the exact opposite effect that Ben Bernanke planned for it to have. Bernanke insisted that the main goal of QE2 was to lower interest rates, but instead all it has done is cause interest rates to go up substantially. If Bernanke this incompetent or is he trying to mess everything up on purpose?

#3 The debt bubble that the entire global economy is based on could burst at any time and throw the whole planet into chaos. According to a new report from the World Economic Forum, the total amount of credit in the world increased from $57 trillion in 2000 to $109 trillion in 2009. The WEF says that now the world is going to need another $100 trillion in credit to support projected “economic growth” over the next decade. So is this how the new “global economy” works? We just keep doubling the total amount of debt every decade?

#4 As the U.S. government and the Federal Reserve continue to pump massive amounts of new dollars into the system, the floor could fall out from underneath the U.S. dollar at any time. The truth is that we are already starting to see inflation really accelerate and everyone pretty much acknowledges that official U.S. governments figures for inflation are an absolute joke. According to one new study, the cost of college tuition has risen 286% over the last 20 years, and the cost of “hospital, nursing-home and adult-day-care services” rose 269% during those same two decades. All of this happened during a period of supposedly “low” inflation. So what are price increases going to look like when we actually have “high” inflation?

#5 One of the primary drivers of global inflation during 2011 could be the price of oil. A large number of economists are now projecting that the price of oil could surge well past $100 dollars a barrel in 2011. If that happens, it is going to put significant pressure on the price of almost everything else in the entire global economy. In fact, as I have explained previously, the higher the price of oil goes, the faster the U.S. economy will decline.

#6 Food inflation is already so bad in some areas of the globe that it is setting off massive food riots in nations such as Tunisia and Algeria. In fact, there have been reports of people setting themselves on fire all over the Middle East as a way to draw attention to how desperate they are. So what is going to happen if global food prices go up another 10 or 20 percent and food riots spread literally all over the globe during 2011?

#7 There are persistent rumors that simply will not go away of massive physical gold and silver shortages. Demand for precious metals has never been higher. So what is going to happen when many investors begin to absolutely insist on physical delivery of their precious metals? What is going to happen when the fact that far, far, far more “paper gold” and “paper silver” has been sold than has ever actually physically existed in the history of the planet starts to come out? What would that do to the price of gold and silver?

#8 The U.S. housing industry could plunge the U.S. economy into another recession at any time. The real estate market is absolutely flooded with homes and virtually nobody is buying. This massive oversupply of homes means that the construction of new homes has fallen off a cliff. In 2010, only 703,000 single family, multi-family and manufactured homes were completed. This was a new record low, and it was down 17% from the previous all-time record which had just been set in 2009.

#9 A combination of extreme weather and disease could make this an absolutely brutal year for U.S. farmers. This winter we have already seen thousands of new cold weather and snowfall records set across the United States. Now there is some very disturbing news emerging out of Florida of an “incurable bacteria” that is ravaging citrus crops all over Florida. Is there a reason why so many bad things are happening all of a sudden?

#10 The municipal bond crisis could go “supernova” at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. According to Meredith Whitney, the municipal bond crisis that we are facing is a gigantic threat to our financial system….

“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.”

Former Los Angeles mayor Richard Riordan is convinced that things are so bad that literally 90% of our states and cities could go bankrupt over the next five years….

#11 Of course on top of everything else, the quadrillion dollar derivatives bubble could burst at any time. Right now we are watching the greatest financial casino in the history of the globe spin around and around and around and everyone is hoping that at some point it doesn’t stop. Today, most money on Wall Street is not made by investing in good business ideas. Rather, most money on Wall Street is now made by making the best bets. Unfortunately, at some point the casino is going to come crashing down and the game will be over.

#12 The biggest wildcard of all is war. The Korean peninsula came closer to war in 2010 than it had in decades. The Middle East could literally explode at any time. We live in a world where a single weapon can take out an entire city in an instant. All it would take is a mid-size war or a couple of weapons of mass destruction to throw the entire global economy into absolute turmoil.

Once again, let us hope that none of these economic collapse scenarios happens in 2011.

However, we have got to realize that we can’t keep dodging these bullets forever.

As bad as 2010 was, the truth is that it went about as good as any of us could have hoped. Things are still pretty stable and times are still pretty good right now.

But instead of using these times to “party”, we should be using them to prepare.

A really, really vicious economic storm is coming and it is going to be a complete and total nightmare. Get ready, hold on tight, and say your prayers.’

Poor Recovery: The Problem Is Institutional [ Well it’s true that the problem is institutional as in pervasively corrupt, incompetent, nonproductive in real terms relative to their cost / damage (still no pros on the wall street fraud which is ongoing in terms of the last crisis, the worthless paper marked to anything, and the current bubble fraud that’s high-frequency computerized churn-and-earn high-frequency commissioned / sold into, 360 tons of $100 bills disappear in Iraq, etc.. What do they get paid for?) ( Peter Schiff: Washington a parasite to economy ‘US foreclosures hit record highs in 2010, but that may not be the worst of it. 2011 may be even worse. Meanwhile, JP Morgan Chase exceeded market expectations, announcing a 47% rise in quarterly profits and released details on a $28.1 billion pay and bonus pool. Peter Schiff, the President of Euro Pacific Capital said Washington and Wall Street are becoming one force and are sucking the underlying American dry like a parasite’.); but the problem is structural, as in transfer of jobs, industries, etc. (among the sources of the huge over-compensation to wall street, company executives), never to return in any meaningful sense; and as in the defacto bankruptcy of the nation with insurmountable record debt / deficits or stated another way, broke. Unlike in the past, once beyond the propaganda, rhetoric, and smoke and mirrors / obfuscation, there is no prospective way for america to grow its way out, nor are there funds in real money with which to do it. Quite simply, america’s broke / bankrupt in every which way. ] Loundsbury ‘Harold Meyerson, Op Ed Columnist at The Washington Post, has hit the nail right on the head, in the opinion of GEI. Meyerson says the debate about whether the recession and poor recovery is a cyclical problem or a structural problem is misguided. He says the problem is institutional - - - and is he ever right!

In a column last week, Myerson points out that the devastation of The Great Recession has fallen disproportionately on the blue collar population, those without a college degree. And he traces the rolling over of median family income in this century, not just in the downturn, but since the turn of the century. Even at the peak, in 2007, median family income was less than in 2000.

What Meyerson doesn't point out is that average incomes have faired better in the 21st century and in all of the past 50 years. In fact, average family income has risen more than 2.5 times as much and median income over the last 30 years. Why is this important? Because the more there is a fat tail of ever higher incomes for a few, the greater the difference between average and median income becomes.

Myerson says:

The great sociologist William Julius Wilson has long argued that the key to the unraveling of the lives of the African American poor was the decline in the number of "marriageable males" as work disappeared from the inner city. Much the same could now be said of working-class whites in neighborhoods that may not look like the ghettos of Cleveland or Detroit but in which productive economic activity is increasingly hard to find.

This grim new reality has yet to inform our debate over how to come back from this mega-recession. Those who believe our downturn is cyclical argue that job-creating public spending can restore us to prosperity, while those who believe it's structural - that we have too many carpenters, say, and not enough nurses - believe that we should leave things be while American workers acquire new skills and enter different lines of work. But there's a third way to look at the recession: that it's institutional, that it's the consequence of the decisions by leading banks and corporations to stop investing in the job-creating enterprises that were the key to broadly shared prosperity.

Since Meyerson has chosen income disparity as a cornerstone of his argument, let's look at how incomes have grown over the last 50 years. These are shown in the following graph, not adjusted for inflation.

click to enlarge images [chart]

Real median income and average income seem to grow similarly in the 1950s and 1960s, the growth of average income starts to pull away in the mid-1960s and appears to continue to gain gound for the the next 40+ years. The more average income deviates from median income the more money is found in the high income tail on the distribution curve. This is often called a "fat tail", which is very appropriate in this discussion because that is where the fat cats are. The fat tail has not gotten so because ten times as many people equaled the incomes of the former fat cats, but more because a few fat cats have received 10 times the income. This is exemplified by the often quoted statistic that average CEO salaries were 40x average worker pay 50 years ago and today are more like 400x.

The change income distribution that seems to be appearing in the above graph becomes more apparent in the following graph where real income gains are shown for the last six decades starting with the ten years from 1949 - 1959 (the 1950s) and ending with 1999 - 2009 (the 2000s). [chart]

The 1950s and 60s were real boom years. Starting with the 1970s a lower level of income growth was established, but even that lower level could not be maintained in the 2000s.

After the 1950s every decade has seen average real income grow more than the median. The fat tail has gotten fatter over the past half century in every decade, without exception. Yes the average did decline in the 2000s, but the median declined 76% more!

The most dramatic pattern of change is evident when the data is divided into two halves: 1949 to 1979 and 1979 - 2009. This is done in the following graph: [chart]

For thirty years after World War II the wealth of the country increased in a balanced manner. The average income containing the greater contribution from the top earners of the day, grew at a rate very similar to the income growth of the broader population, represented by the median.

Yes there were "fat cats" and they had significantly larger incomes than the bulk of the population. And these top incomes grew over those three decades, but at almost the same rate as the majority of the populace.

Then something happened. From 1979-2009 it appears that the American pie suddenly got smaller. In the later three decades the real median income growth was less than 10% of the rate seen from 1949 to 1979. And as the pie got smaller, the fat cats took a much larger share. The average income grew at a rate 254% that of the median income. You might say that, as the cow gave less milk, the top of the economic ladder skimmed more and more cream off the top.

Meyerson identifies the force majuere to be corporate America:

Our multinational companies still invest, of course - just not at home. A study by the Business Roundtable and the U.S. Council Foundation found that the share of the profits of U.S.-based multinationals that came from their foreign affiliates had increased from 17 percent in 1977 and 27 percent in 1994 to 48.6 percent in 2006. As the companies' revenue from abroad has increased, their dependence on American consumers has diminished. The equilibrium among production, wages and purchasing power - the equilibrium that Henry Ford famously recognized when he upped his workers' pay to an unheard-of $5 a day in 1913 so they could afford to buy the cars they made, the equilibrium that became the model for 20th-century American capitalism - has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and reduce their wages at home while retaining their revenue and increasing their profits. And that's exactly what they've done.

Meyerson doesn't get into some of the other areas that might be brought to bear on the current condition of the American economy:

He doesn't address the fact that the U.S. ranks below some third world countries in education.
He doesn't discuss the increasing burden of health care, both because costs have been running out of control and because an ever increasing portion of the population is kept from making the contribution they might have otherwise because of poor health.
He doesn't discuss the capture of much potential domestic capital by financial engineers who find it much easier to get rich in a rigged casino than to make money the old fashioned way.

Part of the problem is that Americans have fallen into the way of the easiest path, where, either by credit card or by making quick trades, the desires of the moment are satisfied with no seemingly current cost.

It seems that few want to think about the needs of tomorrow. This is true starting with the masses who kiss off the idea of working hard in school to prepare for what they will need 20 years down the road. This is also true of the "capitalist" who finds that skimming a few percent off each of many deals a year to get quick, large quarterly returns is much easier than investing and building something that will will make much larger returns extending over decades and producing things of real economic utility.

There are a number of things that Meyerson does not address, but if you want to hit one nail at a time, I think he has picked the baddest nail in the plank. He finishes his column thusly:

Our economic woes, then, are not simply cyclical or structural. They are also - chiefly - institutional, the consequence of U.S. corporate behavior that has plunged us into a downward cycle of underinvestment, underemployment and under-consumption. Our solutions must be similarly institutional, requiring, for starters, the seating of public and worker representatives on corporate boards. Short of that, there will be no real prospects for reversing America's downward mobility.

If we were to address all the other issues I mentioned previously and did not address the institutional problem Meterson has identified, we would not ultimately solve our economic puzzle.’

20 Shocking New Economic Records That Were Set In 2010 2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline…The Economic Collapse Jan 14, 2011 ‘2010 was quite a year, wasn’t it? 2010 will be remembered for a lot of things, but for those living in the United States, one of the main things that last year will be remembered for is economic decline. The number of foreclosure filings set a new record, the number of home repossessions set a new record, the number of bankruptcies went up again, the number of Americans that became so discouraged that they simply quit looking for work reached a new all-time high and the number of Americans on food stamps kept setting a brand new record every single month. Meanwhile, U.S. government debt reached record highs, state government debt reached record highs and local government debt reached record highs. What a mess! In fact, even many of the “good” economic records that were set during 2010 were indications of underlying economic weakness. For example, the price of gold set an all-time record during 2010, but one of the primary reasons for the increase in the price of gold was that the U.S. dollar was rapidly losing value. Most Americans had been hoping that 2010 would be the beginning of better times, but unfortunately economic conditions just kept getting worse.

So will things improve in 2011? That would be nice, but at this point there are not a whole lot of reasons to be optimistic about the economy. The truth is that we are trapped in a period of long-term economic decline and we are now paying the price for decades of horrible decisions.

Amazingly, many of our politicians and many in the mainstream media have declared that “the recession is over” and that the U.S. economy is steadily improving now.

Well, if anyone tries to tell you that the economy got better in 2010, just show them the statistics below. That should shut them up for a while.

The following are 20 new economic records that were set during 2010….

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 The price of gold moved above $1400 an ounce for the first time ever during 2010.

#4 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009. This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#5 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#6 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs, which is believed to be a new record low.

#7 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#8 The number of American workers that are so discouraged that they have given up searching for work reached an all-time high near the end of 2010.

#9 Government spending continues to set new all-time records. In fact, at the moment the U.S. government is spending approximately 6.85 million dollars every single minute.

#10 The number of Americans on food stamps surpassed 43 million by the end of 2010. This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#11 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#12 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping. But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

#13 According to the FDIC, 157 banks failed during 2010. That was the highest number of bank failures that the United States has experienced in any single year during the past decade.

#14 The Federal Reserve brought in a record $80.9 billion in profits during 2010. They returned $78.4 billion of that to the U.S. Treasury, but the real story is that thanks to the Federal Reserve’s continual debasement of our currency, the U.S. dollar was worth less in 2010 than it ever had been before.

#15 It is projected that the major financial firms on Wall Street will pay out an all-time record of $144 billion in compensation for 2010.

#16 Americans now owe more than $881 billion on student loans, which is a new all-time record.

#17 In July, sales of new homes in the United States declined to the lowest level ever recorded.

#18 According to Zillow, U.S. housing prices have now declined a whopping 26 percent since their peak in June 2006. Amazingly, this is even farther than house prices fell during the Great Depression. From 1928 to 1933, U.S. housing prices only fell 25.9 percent.

#19 State and local government debt reached at an all-time record of 22 percent of U.S. GDP during 2010.

#20 The U.S. national debt has surpassed the 14 trillion dollar mark for the first time ever and it is being projected that it will soar well past 15 trillion during 2011.

There are some people that have a hard time really grasping what statistics actually mean. For people like that, often pictures and charts are much more effective. Well, that is one reason I like to include pictures and graphs in many of my articles, and below I have posted my favorite chart from this past year. It shows the growth of the U.S. national debt from 1940 until today. I honestly don’t know how anyone can look at this chart and still be convinced that our nation is not headed for a complete financial meltdown….[chart]

14 Eye Opening Statistics Which Reveal Just How Dramatically The U.S. Economy Has Collapsed Since 2007 Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. ‘The Economic Collapse Jan 10, 2011

’Most Americans have become so accustomed to the “new normal” of continual economic decline that they don’t even remember how good things were just a few short years ago. Back in 2007, unemployment was very low, good jobs were much easier to get, far fewer Americans were living in poverty or enrolled in welfare programs and government finances were in much better shape. Of course most of this prosperity was fueled by massive amounts of debt, but at least times were better. Unfortunately, things have really deteriorated over the last several years. Since 2007, unemployment has skyrocketed, foreclosures have set new all-time records, personal bankruptcies have soared and U.S. government debt has gotten completely and totally out of control. Poll after poll has shown that Americans are now far less optimistic about the future than they were in 2007. It is almost as if the past few years have literally sucked the hope out of millions upon millions of Americans.

Sadly, our economic situation is continually getting worse. Every month the United States loses more factories. Every month the United States loses more jobs. Every month the collective wealth of U.S. citizens continues to decline. Every month the federal government goes into even more debt. Every month state and local governments go into even more debt.

Unfortunately, things are going to get even worse in the years ahead. Right now we look back on 2005, 2006 and 2007 as “good times”, but in a few years we will look back on 2010 and 2011 as “good times”.

We are in the midst of a long-term economic decline, and the very bad economic choices that we have been making as a nation for decades are now starting to really catch up with us.

So as horrible as you may think that things are now, just keep in mind that things are going to continue to deteriorate in the years ahead.

But for the moment, let us remember how far we have fallen over the past few years. The following are 14 eye opening statistics which reveal just how dramatically the U.S. economy has collapsed since 2007….

#1 In November 2007, the official U.S. unemployment rate was just 4.7 percent. Today, the official U.S. unemployment rate is 9.4 percent.

#2 In November 2007, 18.8% of unemployed Americans had been out of work for 27 weeks or longer. Today that percentage is up to 41.9%.

#3 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#4 Nearly 10 million Americans now receive unemployment insurance, whichis almost four times as many as were receiving it back in 2007.

#5 More than half of the U.S. labor force (55 percent) has “suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers” since the “recession” began in December 2007.

#6 According to one analysis, the United States has lost a total of approximately 10.5 million jobs since 2007.

#7 As 2007 began, only 26 million Americans were on food stamps. Today, an all-time record of 43.2 million Americans are enrolled in the food stamp program.

#8 In 2007, the U.S. government held a total of $725 billion in mortgage debt. As of the middle of 2010, the U.S. government held a total of $5.148 trillion in mortgage debt.

#9 In the year prior to the “official” beginning of the most recent recession in 2007, the IRS filed just 684,000 tax liens against U.S. taxpayers. During 2010, the IRS filed over a million tax liens against U.S. taxpayers.

#10 From the year 2000 through the year 2007, there were 27 bank failures in the United States. From 2008 through 2010, there were 314 bank failures in the United States.

#11 According to the U.S. Department of Housing and Urban Development, the number of U.S. families with children living in homeless sheltersincreased from 131,000 to 170,000 between 2007 and 2009.

#12 In 2007, one poll found that 43 percent of Americans were living “paycheck to paycheck”. Sadly, according to a survey released very close to the end of 2010, approximately 55 percent of all Americans are now living paycheck to paycheck.

#13 In 2007, the “official” federal budget deficit was just 161 billion dollars. In 2010, the “official” federal budget deficit was approximately 1.3 trillion dollars.

#14 As 2007 began, the U.S. national debt was just under 8.7 trillion dollars. Today, the U.S. national debt has just surpassed 14 trillion dollars and it continues to soar into the stratosphere.

So is there any hope that we can turn all of this around?

Unfortunately, the massive amount of debt that we have piled up as a society over the last several decades has made that impossible.

If you add up all forms of debt (government debt, business debt, individual debt), it comes to approximately 360 percent of GDP. It is the biggest debt bubble in the history of the world.

If the federal government and our state governments stop borrowing and spending so much money, our economy would collapse. But if they keep borrowing and spending so much money they will continually make the eventual economic collapse even worse.

We are in the terminal stages of the most horrific debt spiral the world has ever seen, and when the debt spiral gets stopped the house of cards is going to finally come down for good.

So enjoy these times while you still have them. Yes, today is not nearly as prosperous as 2007 was, but today is most definitely a whole lot better than 2015 or 2020 is going to be.

Sadly, we could have avoided this financial disaster completely if only we had listened more carefully to those that founded this nation. Once upon a time, Thomas Jefferson said the following….

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.’

Tipping Point: 25 Signs That The Coming Financial Collapse Is Now Closer Then Ever The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy.

The Economic Collapse
Dec 17, 2010

The financial collapse that so many of us have been anticipating is seemingly closer then ever. Over the past several weeks, there have been a host of ominous signs for the U.S. economy. Yields on U.S. Treasuries have moved up rapidly and Moody’s is publicly warning that it may have to cut the rating on U.S. government debt soon. Mortgage rates are also moving up aggressively. The euro and the U.S. dollar both look incredibly shaky. Jobs continue to be shipped out of the United States at a blistering pace as our politicians stand by and do nothing. Confidence in U.S. government debt around the globe continues to decline. State and local governments that are drowning in debt across the United States are savagely cutting back on even essential social services and are coming up with increasingly “creative” ways of getting more money out of all of us. Meanwhile, tremor after tremor continues to strike the world financial system. So does this mean that we have almost reached a tipping point? Is the world on the verge of a major financial collapse?

Let’s hope not, but with each passing week the financial news just seems to get eve worse. Not only is U.S. government debt spinning wildly toward a breaking point, but many U.S. states (such as California) are in such horrific financial condition that they are beginning to resemble banana republics.

But it is not just the United States that is in trouble. Nightmarish debt problems in Greece, Spain, Portugal, Ireland, Italy, Belgium and several other European nations threaten to crash the euro at any time. In fact, many economists are now openly debating which will collapse first – the euro or the U.S. dollar.

Sadly, this is the inevitable result of constructing a global financial system on debt. All debt bubbles eventually collapse. Currently we are living in the biggest debt bubble in the history of the world, and when this one bursts it is going to be a disaster of truly historic proportions.

So will we reach a tipping point soon? Well, the following are 25 signs that the financial collapse is rapidly getting closer….

#1 The official U.S. unemployment rate has not been beneath 9 percent since April 2009.

#2 According to the U.S. Census Bureau, there are currently 6.3 million vacant homes in the United States that are either for sale or for rent.

#3 It is being projected that the U.S. trade deficit with China could hit 270 billion dollars for the entire year of 2010.

#4 Back in 2000, 7.2 percent of blue collar workers were either unemployed or underemployed. Today that figure is up to 19.5 percent.

#5 The Chinese government has accumulated approximately $2.65 trillion in total foreign exchange reserves. They have drained this wealth from the economies of other nations (such as the United States) and instead of reinvesting all of it they are just sitting on much of it. This is creating tremendous imbalances in the global economy.

#6 Since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were approximately 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.

#7 The United States now employs about the same number of people in manufacturing as it did back in 1940. Considering the fact that we had 132 million people living in this country in 1940 and that we have well over 300 million people living in this country today, that is a very sobering statistic.

#8 According to CoreLogic, U.S. housing prices have now declined for three months in a row.

#9 The average rate on a 30 year fixed rate mortgage soared 11 basis points just this past week. As mortgage rates continue to push higher it is going to make it even more difficult for American families to afford homes.

#10 22.5 percent of all residential mortgages in the United States were in negative equity as of the end of the third quarter of 2010.

#11 The U.S. monetary base has more than doubled since the beginning of the most recent recession.

#12 U.S. Treasury yields have been rising steadily during the 4th quarter of 2010 and recently hit a six-month high.

#13 Incoming governor Jerry Brown is scrambling to find $29 billion more to cut from the California state budget. The following quote from Brown about the desperate condition of California state finances is not going to do much to inspire confidence in California’s financial situation around the globe….

“We’ve been living in fantasy land. It is much worse than I thought. I’m shocked.”

#14 24.3 percent of the residents of El Centro, California are currently unemployed.

#15 The average home in Merced, California has declined in value by 63 percent over the past four years.

#16 Detroit Mayor Dave Bing has come up with a new way to save money. He wants to cut 20 percent of Detroit off from essential social services such as road repairs, police patrols, functioning street lights and garbage collection.

#17 The second most dangerous city in the United States – Camden, New Jersey – is about to lay off about half its police in a desperate attempt to save money.

#18 In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. More older Americans than ever find that they have to keep working just to survive.

#19 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.

#20 The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November budget deficit on record.

#21 The U.S. government is somehow going to have to roll over existing debt and finance new debt that is equivalent to 27.8 percent of GDP in 2011.

#22 The United States had been the leading consumer of energy on the globe for about 100 years, but this past summer China took over the number one spot.

#23 According to an absolutely stunning new poll, 40 percent of all U.S. doctors plan to bail out of the profession over the next three years.

#24 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#25 All over the United States, local governments have begun instituting “police response fees”. For example, New York Mayor Michael Bloomberg has come up with a plan under which a fee of $365 would be charged if police are called to respond to an automobile accident where no injuries are involved. If there are injuries as a result of the crash that is going to cost extra.

16 Nightmarish Economic Trends To Watch Carefully In 2011 The American Dream Dec 15, 2010 ‘If you only watch the “economic pundits” on television, it can be very confusing to figure out exactly what is happening with the U.S. economy. One pundit will pull out a couple statistics that got a little bit better over the past month and claim that we have entered a time of solid recovery. Another pundit will pull out a couple statistics that got a little worse over the past month and claim that we are headed for trouble. So what is the truth? Well, if you really want to get a clear idea of what is really going on you have to look at the long-term trends. There are some economic trends which just keep getting worse year after year after year, and it is those trends that tell the real story of the decline of our economic system.

As you examine the long-term trends, you quickly come to realize that the U.S. is trapped in an endless spiral of debt, the middle class is being wiped out, the U.S. dollar is being destroyed and America is rapidly becoming a post-industrial wasteland.

Posted below are 16 nightmarish economic trends to watch carefully in 2011. It is becoming exceedingly apparent that unless something is done rapidly we are heading for an economic collapse of unprecedented magnitude….

#1 Do you want to see something scary? Just check out the chart below. Since the beginning of the economic downturn, the U.S. monetary base has more than doubled. But don’t worry – Federal Reserve Chairman Ben Bernanke has promised us that this could never cause inflation. In fact, Bernanke says that we need to inject even more dollars into the economy. So if you are alarmed by the chart below, you are just being irrational according to Bernanke….

[chart]

#2 Thousands of our factories, millions of our jobs and hundreds of billions of dollars of our national wealth continue to be shipped overseas. In 1985, the U.S. trade deficit with China was 6 million dollars for the entire year. In the month of August alone, the U.S. trade deficit with China was over 28 billion dollars. Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

#3 The United States is rapidly becoming a post-industrial wasteland. Back in 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall. Sadly, the truth is that America is being deindustrialized. As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#4 The number of Americans that have been out of work for an extended period of time has absolutely exploded over the last few years. As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#5 The middle class continues to be squeezed out of existence. According to a poll taken in 2009, 61 percent of Americans ”always or usually” live paycheck to paycheck. That was up substantially from 49 percent in 2008 and 43 percent in 2007.

#6 The number of Americans living in poverty is absolutely skyrocketing. 42.9 million Americans are now on food stamps, and one out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government. Unfortunately, many of those that have been hardest hit by this economic downturn have been children. According to one new study, approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.

#7 Many American families have been pushed beyond the breaking point during this economic downturn. Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. The final number for 2010 is expected to be even higher.

#8 The U.S. real estate market continues to stagnate. During the third quarter of 2010, 67 percent of mortgages in Nevada were “underwater”, 49 percent of mortgages in Arizona were “underwater” and 46 percent of mortgages in Florida were “underwater”. So what happens if home prices go down even more?

#9 More elderly Americans than ever are being forced to put off retirement and continue working. In 2010, 55 percent of Americans between the ages of 60 and 64 were in the labor market. Ten years ago, that number was just 47 percent. Unfortunately, it looks like this problem will only get worse in the years ahead. In America today, approximately half of all workers have less than $2000 saved up for retirement.

#10 In the United States today, there are simply far too many retirees and not nearly enough workers to support them. Back in 1950 each retiree’s Social Security benefit was paid for by 16 workers. Today, each retiree’s Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.

#11 Financial assets continue to become concentrated in fewer and fewer hands. For example, the “big four” U.S. banks (Citigroup, JPMorgan Chase, Bank of America and Wells Fargo) had approximately 22 percent of all deposits in FDIC-insured institutions back in 2000. As of the middle of 2009 that figure was up to 39 percent.

#12 The Federal Reserve has been destroying the value of the U.S. dollar for decades. Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power. An item that cost $20.00 in 1970 would cost you $112.35 today. An item that cost $20.00 in 1913 would cost you $440.33 today.

#13 Commodity prices continue to soar into the stratosphere. Ten years ago, the price of a barrel of oil hovered around 20 to 30 dollars most of the time. Today, the price of oil is rapidly closing in on 100 dollars a barrel and there are now fears that it could soon go much higher than that.

#14 Federal government spending is completely and totally out of control. The U.S. government budget deficit increased to a whopping $150.4 billion last month, which represented the biggest November deficit on record. But our politicians can’t seem to break their addiction to debt. In fact, Democrats are trying to ram through a 1,924 page, 1.1 trillion dollar spending bill in the final days of the lame-duck session of Congress before the Republicans take control of the House of Representatives next year.

#15 The U.S. national debt is rapidly closing in on 14 trillion dollars. It is more than 13 times larger than it was just 30 short years ago. According to an official U.S. Treasury Department report to Congress, the U.S. national debt is projected to climb to an estimated $19.6 trillion by 2015.

#16 Unfortunately, the official government numbers grossly understate the horrific nature of the crisis we are facing. John Williams of Shadow Government Statistics has calculated that if the federal government would have used GAAP accounting standards to measure the federal budget deficit for 2009, it would have been approximately 8.8 trillion dollars. Not only that, but John Williams now says that U.S. government debt is so wildly out of control that it is mathematically impossible for us to “grow” our way out of it….

The government’s finances not only are out of control, but the actual deficit is not containable. Put into perspective, if the government were to raise taxes so as to seize 100% of all wages, salaries and corporate profits, it still would be showing an annual deficit using GAAP accounting on a consistent basis. In like manner, given current revenues, if it stopped spending every penny (including defense and homeland security) other than for Social Security and Medicare obligations, the government still would be showing an annual deficit. Further, the U.S. has no potential way to grow out of this shortfall.

The more one examines the U.S. economic situation, the more depressing it becomes. The U.S. financial system is trapped inside a horrific debt spiral and we are headed straight for economic oblivion.

If our leaders attempt to interrupt the debt spiral it will plunge our economy into a depression. If our leaders attempt to keep the debt spiral going for several more years it will just make the eventual crash even worse. Either way, we are headed for a financial implosion that will be truly historic.

The debt-fueled good times that we have been enjoying for the last several decades are rapidly coming to an end. Unfortunately for the tens of millions of Americans that are already suffering, our economic problems are only going to get worse in the years ahead.’

Jobless Recovery?: 25 Unemployment Statistics That Are Almost Too Depressing To Read ‘… Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher. So are you enjoying the jobless recovery? Economic Collapse Blog Dec 4, 2010 ‘Guess what? Unemployment is up again! That’s right – even though Wall Street is swimming in cash and the Obama administration is declaring that “the recession is over”, the U.S. unemployment rate has gone even higher ... Times are really, really tough and unfortunately the long-term outlook is very bleak. We should have compassion on those who are out of work right now, because soon many of us may join them.

The following are 25 unemployment statistics that are almost too depressing to read….

#1 According to the Bureau of Labor Statistics, the U.S. unemployment rate for November was 9.8 percent. This was up from 9.6 percent in October, and it continues a trend of depressingly high unemployment rates. The official unemployment number has been at 9.5 percent or higher for well over a year at this point.

#2 In November 2006, the “official” U.S. unemployment rate was just 4.5 percent.

#3 Most economists had been expecting the U.S. economy to add about 150,000 jobs in November. Instead, it only added 39,000.

#4 In the United States today, there are over 15 million people who are “officially” considered to be unemployed for statistical purposes. But everyone knows that the “real” number is even much larger than that.

#5 As 2007 began, there were just over 1 million Americans that had been unemployed for half a year or longer. Today, there are over 6 million Americans that have been unemployed for half a year or longer.

#6 The number of “persons not in the labor force” in the United States recently set another new all-time record.

#7 It now takes the average unemployed American over 33 weeks to find a job.

#8 When you throw in “discouraged workers” and “underemployed workers”, the “real” unemployment rate in the state of California is actually about 22 percent.

#9 In America today there are not nearly enough jobs for everyone. In fact, there are now approximately 5 unemployed Americans for every single job opening.

#10 According to The New York Times, Americans that have been unemployed for five weeks or less are three times more likely to find a new job in the coming month than Americans that have been unemployed for over a year.

#11 The U.S. economy would need to create 235,120 new jobs a month to get the unemployment rate down to pre-recession levels by 2016. Does anyone think that there is even a prayer that is going to happen?

#12 There are 9 million Americans that are working part-time for “economic reasons”. In other words, those Americans would gladly take full-time jobs if they could get them, but all they have been able to find is part-time work.

#13 In 2009, total wages, median wages, and average wages all declined in the United States.

#14 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#15 The United States has lost at least 7.5 million jobs since the recession began.

#16 Today, only about 40 percent of Ford Motor Company’s 178,000 workers are employed in North America, and a big percentage of those jobs are in Canada and Mexico.

#17 In 1959, manufacturing represented 28 percent of U.S. economic output. In 2008, it represented 11.5 percent.

#18 Earlier this year, one poll found that 28% of all American households had at least one member that was looking for a full-time job.

#19 In the United States today, over 18,000 parking lot attendants have college degrees.

#20 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#21 As the employment situation continues to stagnate, millions of American families have decided to cut back on things such as insurance coverage. For example, the percentage of American households that have life insurance coverage is at its lowest level in 50 years.

#22 Unless Congress acts, and there is no indication that is going to happen, approximately 2 million Americans will stop receiving unemployment checks over the next couple of months.

#23 A poll that was released by the Pew Research Center back in June discovered that an astounding 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the economic downturn began.

#24 According to Richard McCormack, the United States has lost over 42,000 factories (and counting) since 2001.

#25 In the United States today, 317,000 waiters and waitresses have college degrees.

But this is what we get for creating the biggest debt bubble in the history of the world. For decades we have been digging a deeper hole for ourselves by going into increasingly larger amounts of debt. In America today, our entire economy is based on debt. Even our money is debt. We were fools if we ever thought this could go on forever. Just think about it. Have you ever gone out and run up a bunch of debt? It can be a lot of fun sitting behind the wheel of a new car, running your credit cards up to the limit and buying a beautiful big house that you cannot afford. But in the end what happens? It always catches up with you. Well, our collective debt is starting to catch up with us. There is a sea of red ink on every level of American society. It is only a matter of time before it destroys our economy. IF YOU THINK THAT THINGS ARE BAD NOW, JUST WAIT. THINGS ARE GOING TO GET A WHOLE LOT WORSE. A HORRIFIC ECONOMIC COLLAPSE IS COMING, AND IT IS GOING TO BE VERY, VERY PAINFUL.’

Howard Davidowitz on the Economy: "Here Are the Numbers ... WE'RE BROKE!" 11-25-10 ‘The U.S. economy "is a complete disaster," Howard Davidowitz declared here in July, the most recent in a string of dire predictions from Tech Ticker's most entertaining guest.On the eve of Thanksgiving, I asked Davidowitz if he had any regrets, or was ready to throw in the towel given recent signs of economic revival. Are you kidding me? "Here are the numbers...we're broke," Davidowitz declares, noting the U.S. government goes $5 billion deeper into debt every day and is facing $1 trillion-plus annual deficits for the next decade. "In other words, we're bankrupt."As with the economy, Davidowitz is unwaveringly consistent in his views on President Obama, calling him "deranged, dysfunctional and discredited."Results of the midterm election show "the people of this country think we are in a catastrophe," he says. "I'm with them."Check the accompanying video for more of Howard's unfettered opinions and stay tuned for additional clips from this interview. And...Happy Thanksgiving! Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at [email protected]’

Timid Tuesday: Is it Safe? Davis ‘… This is how we pay off our current debts and I think bondholders are simply happy to get anything out of a country that admits it owes $15Tn (1/4 of global GDP) but probably owes closer to $60Tn (entire global GDP) in the form of unfunded liabilities. The funniest thing about this (and you have to laugh) is to see Conservative pundits get on TV and talk about how we need to cut $100Bn worth of discretionary spending to "fix" this (while continuing to spend $1Tn on the military and $1Tn on tax cuts for the top 1% each year). There is no fixing this and even a Republican said you can’t fool all of the people all of the time. THIS HOUSE OF CARDS IS TEETERING FOLKS – PLEASE BE CAREFUL OUT THERE! ‘

17 Things Worrying Investors Lloyd's Wall of Worry

Worry Count: 17

CHINA: 1,330,044,605 people can’t be wrong.

The PIIGS: Fasten your seatbelts. It’s gonna be a long, bumpy, expensive, weird, (insert your own adjective here) freak show of a ride.

CALIFORNIA AND THE OTHER 49 STATES: Not yet as dire as “The PIIGS”. Might I suggest the classier moniker of “The Prosciuttos” for the American basket-case states?

QE II: Gobble?

U.S. ECONOMY: The “Punky Brewster” of the global economic landscape.

UNEMPLOYMENT: Only thing worse than losing your job, losing your unemployment check. At least there’s the holiday season to cheer everyone up (read: heavy sarcasm).

TAXES: Praying to the Financial Market Gods that we don’t have another TARP-like vote fiasco.

OBAMA ADMINISTRATION PART II: Still two years before the Pres. election and the peanut gallery is already pleading for a Hail Mary Pass to get them back in the game.

HFT: Instead of beating up these liquidity supplying traders, let’s honor them with their very own stock exchange. But wait -- with no retail saps to pick-off they will never get that Day 1 opening bell tick. Perfect.

XMAS 2010: As my professor friend Nick says, “Nowadays Americans are dining off of two menus – The Million Dollar and the $0.99 Cent.” And both are pissed about it.

CURRENCIES: Poor Mr. Greenback. Does someone need a hug?

HOUSING CRISIS: Price Stabilization – Are we there yet? Just a little bit more. Are we there yet? Just a little bit more. Are we there yet? Just a little bit more….

INFLATION/DEFLATION: Fed Chief Ben B. comes out swinging from his heels in defense of inflation promotion. Don’t punch yourself out as this one is likely to go the distance.

COMMODITIES: Corrected but still sky high; fortunately these prices are only affecting core, basic, life-sustaining necessities and sparing our electronic gadgets and plus-sized SUVs. Whew!

INSIDER TRADING: Another black eye for Hedge Funds. I estimate that makes black eye number 6,597.

INTEREST RATES: South Korea and China slowly turning up the dial to “11”. On the other hand the U.S. has removed the dial altogether. This never ends well….

NORTH KOREA: Here we go again. (and now Egypt, etc.)

Consumer confidence down, LiveLeak.com - Loonie closes above U.S. dollar … dollar for first time closes below parity on Canadian loonie … hey, hey, hey … 'Huge' stock decline — but not yet MarketWatch - Brimelow ‘Commentary: Adens … ‘mega trend’ looks grim … The Adens expect a hyperinflationary collapse … ‘ Oh come on! Manipulated dollar decline with inflated earnings, stock prices thereby, etc., … we’ve seen this all before … the last few crashes … Jobless rate jumps to 9.8% as hiring slows (Washington Post) [ The reality is not a mystery! The nation’s been thrown under the bus for the greater good (wealth) of the very few (frauds on wall street, etc.); wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION: Come on! This is gettin’ even more downright ridiculous (if that’s even possible)! Pending home foreclosure / distress sales up, oil prices (and oil stocks) up, debased dollar down, plus a little familiar ‘better than expected’ thrown in along with prospects of a ‘no-recession bernanke’ market-frothing bull session on 60 minutes and, voila, suckers’ rally into the close to keep the suckers suckered! What’s good for the frauds on wall street is bad for just about everyone else which includes the vast majority of people and businesses, domestically and globally, as current dollar manipulation / debasement ultimately results in higher costs and loss of purchasing power (ie., oil, etc.). Clearly, this is one of those fraudulent wealth transfers to the frauds on wall street et als which will ultimately be paid for by those who least are in a position to afford it, courtesy of the ever more worthless Weimar dollar, etc., inflating earnings, eps, lowering p/e multiples, etc., see infra. This is an especially great time to sell / take profits while you can since there's much worse to come! Previous: Rosy numbers on consumer sentiment, unemployment (far better than private forecasts) from the government prior to the holiday so-called ‘shop till you drop’? How can anyone believe anything they say? Najerian interviewed by Motek chimes in with the reason for good retail cheer; viz., people have stopped paying their mortgages and are using the funds to purchase retail goods; while Davidowitz adds that with record numbers of americans on food stamps, real unemployment at 17+, and wall street giving out record bonuses from their accomplished fraud (with no-recession b.s. bernanke help) of $144 BILLION … the high end stores / jewelers will do well … daaaaah! And, with insiders and wall street frauds selling into the bubble as preceded last crash, this is an especially great opportunity to sell / take profits! Suckers’ rally on light volume, full moon, and government complicity (false data / reports) to keep suckers suckered (easy for the wall street frauds to do with just a mouse click / push of the button – and, they know all those technical trade lines that are easy to program in this current phase of the scam/fraud with the debased dollar). Keep in mind, the totally mindless blather from the ‘cottage industries’ of and fraudulent wall street itself in talking up lower P/E multiples when the same is a direct result of the debasement of the dollar and the consequent manipulation / translation (not real, see Davis, infra) which preceded the financial crisis / last crash. Unemployment, trade, deficit, etc., numbers continue decidedly worse than expected along with other negative data (and in the ‘wrong direction’, that spin accorded ‘down but not as bad as before’ b*** s*** ) yet the market has rallied like no tomorrow with used home foreclosure / distressed sales, though abated owing to ‘foreclosuregate’, the other ‘heralded’ good news. Moreover, the dumbo lemmings of Europe have jumped on the fraudulent defacto bankrupt american crazy train propelled to the precipice also as if no tomorrow. This is about keeping the suckers sucked in with the help of a market-frothing pre-election debased dollar for favorable currency translation and paper (but not real when measured in, ie., gold, etc.) profits which preceded the last crisis, inflating a bubble as in the last crisis to facilitate the churn-and-earn, particularly with computerized (and high frequency) trades and which commissions they’ll get again on the way down. There is nothing to support these overbought stock prices, fundamentally or otherwise. These are desperate criminals ‘at work’. Even wall street shill, the senile Buffett is saying we’re still in a recession (depression) [ Davis: ‘… all profits are inflated by 10% (from falling, debased dollar) and that 10% is the E that gets divided from the P and gives us a much better price/multiple to hang our hats on and that gets investors to BUYBUYBUY …’ The bull market that never was / were beyond wall street b.s. when measured in gold ] This is a great opportunity to sell / take profits (these lower dollar, hyperinflationary currency manipulations / translations to froth paper stocks will end quite badly as in last crash)! This is a global depression. This is a secular bear market in a global depression. The past up moves were manipulated bull (s***) cycles (at best) in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street ‘programmed computerized high-frequency churn and earn pass the hot potato scam / fraud as in prior crashes ( widely reported, high-frequency trading routinely accounts for more than 50% of daily U.S. equity trading volume and regularly approaches 70%. )’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed.The Stock Market's Long Decline Has Begun Smith ]

National / World

Bush nixes Denver visit, citing invite to Assange [ The best thing that’s happened to Denver for quite some time; after all, it’s doubtful that war criminals have suddenly become fashionable, particularly dumb, burnt out morons as dumbya bush. ](AP)

Infowars.com Takes 1st Place in Alternative News Rating Infowars.com | Alex Jones’ other flagship website, Prison Planet.com, came in the number eight spot on the list.

New Google Algorithm is Live: News Aggregators Will Be Punished Eric Blair & Michael Edwards | We can only conclude that they have begun to wage war on alternative news sites.

Neocon Analysts Push for Invasion of Libya Kurt Nimmo | Obama and Secretary of State Clinton are busy building the required attack consensus.

Glenn Beck’s Secret TheAlexJonesChannel | The truth Beck doesn’t want you to know.

Bankster Economist Heralds Third World Hellholes Kurt Nimmo | Mega-bank Citigroup has trotted out its prime economist to send the message.

Rumsfeld doesn’t have the answers (video) Infowars | Rumsfeld couldn’t answer Mancow’s question about WTC 7 but he also couldn’t give an answer on the Opie and Anthony show.

US military ‘fully involved’ in talks on Libya options Agence France-Presse | “The military is fully involved in these discussions.”

Democrat Urges Union Protesters to Get “Bloody” Politico | Political observers have been the lookout for potentially incendiary rhetoric in the wake of the shooting in Tucson.

Neocon Analysts Push for Invasion of Libya CNN reports the Pentagon and NATO are ready to send troops into Libya under the cover of humanitarian assistance. CNN underscores the situation by stating that reports say Gaddafi will fight to the end and will seek martyrdom.

Libyan rebels say control oil fields, honour deals Rebels in eastern Libya said on Friday they now controlled most of the oil fields east of the town of Ras Lanuf, and said they would honour oil deals as long as they were in the interest of the people.

Bankster Economist Heralds Third World Hellholes The banksters are making it known. You’re going to be a pauper. The mega-bank Citigroup has trotted out its prime economist to send the message.

Madison Mayor, Police Chief Demand Explanation Over Walker Suggestion To Infiltrate Wisconsin Protests The Mayor and the police chief of Madison, Wisconsin have both asked Governor Scott Walker to explain comments he made indicating that he had considered employing “troublemakers” to infiltrate and discredit the Wisconsin protests.

Sheen On Obama: “A Coward In a Cheap Suit” [ I think Sheen to be too gentle in his criticism of wobama. Wobama’s far worse than just a ‘coward in a cheap suit’. Indeed, Wobama’s a total fraud having been elected under false pretenses; viz., his total, unequivocal, and unfulfilled b* s* (those campaign promises) ! Moreover, there has been some persuasive documentation questioning wobama’s citizenship / birthplace placing his eligibility to hold the office of president in question. ] Amidst the controversy of his wild interview on the Alex Jones Show yesterday, actor Charlie Sheen wasted little time in confronting President Barack Obama on his failure to answer Sheen’s twenty questions concerning 9/11, calling Obama, “a coward in a cheap suit.” Globalist Shill Barack Obama Asks Business Leaders For Job Creation Ideas Even As He Ships More Of Our Jobs Overseas As Part Of The New One World Economy The other day, Barack Obama summoned a group of business and labor leaders to the White House and “challenged” them to come up with some great ideas for creating more jobs inside the United States.

Trends Journal Predicted Global Anti-Gov’t Protests: What’s Next? It is a matter of record! The spate of seething, youth-inspired Middle East uprisings that are toppling governments, reshaping the geopolitical landscape and roiling world markets blindsided the world’s intelligence community.

Drudgereport: Gaddafi militia open fire on protesters...
UK paying 'bribes' to free trapped citizens...
Gaddafi offers $400 per family as rebels close in...
'Dance, sing and get ready'...
WILL NATO INTERVENE?
American Ferry From Libya Finally Arrives in Malta... USA WILL DROP TO WORLD'S '3RD LARGEST ECONOMY'... OBAMA GIVEN 'IMPEACHMENT' WARNING... Obama signs temporary extension of Patriot Act... [ ‘Wobama the b’ (for b*** s***) ] ...RAILED AGAINST DURING CAMPAIGN OH NO, HUFFPO: GOOGLE ALGORITHM CHANGE HITS 12% OF SEARCH RESULTS... Bush Nixes Denver Visit, Citing Invite To Assange...GADDAFI SHOT?
Libyan uprising closes round Tripoli... Crude breaches $119 in frantic trading...
CA Gas Station: $4.51 Gallon... Feds: Food prices set to jump 3.5%...
'Extreme'... Swiss franc touches record peak against dollar... California's $800K city manager leaves court on gurney… [California’s extreme in this regard as I noted to a college instructor on coming out here, but aren’t they all overpaid, state and federal; indeed, these career gov’t ees have made over-priced gov’t jobs career goals of themselves which even three decades ago was unheard of other than as a sacrifice of earning power- definitely part of the problem – the overpaid, overpriced, overvalued bureaucrats. ] ...$100.00 HIGHEST SINCE 2008
Saudi's $36 billion bid to beat unrest... King offers financial package as opposition calls 'day of rage'...
Nervous China puts security apparatus into overdrive...

Gaddafi loses more Libyan cities...
FORCES DEFY ORDERS...
WH: Obama's 9-Day Silence Due To 'Scheduling Issue'...
Gaddafi relatives fleeing Libya?
State Dept tries to evacuate Americans by boat...
Turkey launches biggest ever evacuation...
AL-JAZEERA LIVE FEED... REUTERS WIRE...OIL PRICE JUMPS 8.5% IN A DAYBig Stock Sell Off... Home Prices Hit Post-Bust Lows in Major Cities...
$4 Gasoline? Yes in California...
Highest Gas Prices in February Since 1990... Iranian warships sail through Suez Canal for first time since 1979...

REPORT: Gaddafi orders sabotage of oil facilities...
Defies revolt with tanks, planes...
In rambling speech, blames 'tyranny of US,' free drugs for youth...
VIDEO: 'I Will Be A Martyr At The End' …(sounds more like an american hero every day; a martyr for himself!) ...
WH: Nothing to say on Libya...
MUSLIM BROS: KILL GADDAFI...
Intelligence agency 'jamming' TV signals...
Witnesses report bodies in streets...
Oil industry worries unrest could spread...
Russia blames GOOGLE for stirring unrest...
Medvedev sees 'fires for decades' in Arab world...
AL-JAZEERA LIVE FEED... REUTERS WIRE...GADDAFI FLEES TRIPOLIUK Foreign Sec: Gaddafi headed to Venezuela...
Chavez gov't denies...
Muslim leaders order followers to rebel...
Tribe threatens to cut oil exports...
REPORT: Military jets attack protesters in Tripoli...
Two pilots refuse, fly to Malta, defect...
Oil companies move staff...
U.S. military chief visits Gulf to urge restraint...
Khamenei: America must be removed from Islamic world...
AL-JAZEERA LIVE FEED... REUTERS WIRE...ON THE BRINK!Qaddafi's son warns of civil war...
Tribe threatens to cut oil exports...
Unrest in Iran, Algeria, Yemen, Morocco, China [and Wisconsin]...
U.S. military chief visits Gulf, to urge restraint... Michelle Obama, Daughters Hit the Slopes on Ski Vacation ...
Vail...
Bidens vacation on Fla Keys...
FLASHBACK: Obama on tough economy: 'You might put off a vacation'...
'Everyone must sacrifice'... RASMUSSEN: OBAMA APPROVAL SLIPS BACK TO 44%... Gov't shutdown threat looms over budget fight...
Geithner Criticizes Spending Cuts...
SANTELLI: BUDGET CRISIS IS NEXT 9/11...

Gas prices skyrocket; up 55 cents from year ago...
Oil prices surge; Brent crude hits 2 1/2-year high...

GALLUP: Number of Solidly Democratic States Cut in Half From '08 to '10... American Held in Pakistan Worked for CIA... Egypt's activists skeptical about army intentions...
...ask West to guarantee reform Wounded Iraq veteran jeered for speaking in Columbia University...
Sen. John Kerry attacked by anti-war protesters... Reporter, camerawoman attacked by black mob... in California
WISC UNIONS OFFER CONCESSIONS
Gov. Walker Says No...
Dem Sen: We'll Stay Away For Weeks...
Court Rejects Madison School Effort to Get 'Sick' Teachers Back to Work...
Fake Doctor's Notes Being Handed Out at Union Rally...
VIDEO: 'Everybody is sick -- of Scott Walker'...
Thousands Pack Capitol Grounds...

Libya: Snipers shoot mourners, killing 15...
REPORT: 120 dead... U.S. Warship Tracking Yacht Hijacked by Somali Pirates... [ I realize there are ‘laws of the sea’ / codified bodies of law within that broad yet very specific category called ‘maritime law’, none of which I know nor care to know (I’ll content myself to knowing and seeing to the enforcement of american law as pertains to me; viz., RICO http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm . I do know that these somali pirates need killin’ and I further believe that open season on them including using their boats in the water for target practice makes sense and certainly is morally justified. I’m tired of hearing about those little weasels … you know, ‘the skinnies’. ]

Some now question U.S. deal that brought Gaddafi back into diplomatic fold (Washington Post) [ Oh, come on! At this point in pervasively corrupt, defacto bankrupt america’s intractable decline, naivity becomes no one! …Money, oil, arms change hands and no one’s the wiser … and those few are again substantially richer … it’s the fatally tragic ‘american tale’… Arms deals still made amid Middle East crackdowns (Washington Post) You bet your bippy … a raison d’etre, so to speak. ]ABU DHABI, UNITED ARAB EMIRATES - As Libya's Moammar Gaddafi ordered attacks on his own people this week, thousands of arms sellers from the United States and other countries hawked their aircraft, riot gear and rifles to Middle Eastern buyers at the Persian Gulf's preeminent arms show.

Julian Assange must be extradited to Sweden (Washington Post) [ Julian Assange to be extradited to Sweden Infowars.com [ No surprise here. As I’ve previously written, I’m against the censorship since one always, in the final analysis, must discern truth from falsehood, information from disinformation, reality from propaganda. In truth, I found it somewhat shocking and more than surprising that of all places ‘to escape to’, Assange chose Orwellian england, puppet to the u.s. and guarantor of servility to u.s./zionist interests, such is their own desperate circumstances. What was he thinking? ] WikiLeaks founder Julian Assange is to be extradited to Sweden to face allegations of rape and sexual assault. Assange will appeal, his legal team confirmed. If this is unsuccessful, he will be extradited to Sweden in 10 days. ] LONDON - Britain will honor Sweden's request to extradite WikiLeaks founder Julian Assange to face sex-crime allegations, a British judge ruled Thursday.

Oil prices on the rise (Washington Post) [ And except when and for fraudulent / false / manipulated data, everything else down, dirty, and dismal: AP Business Highlights: February 24, 2011, ‘New-home sales in January drop 12.6 pct WASHINGTON (AP) -- Sales of new homes fell significantly in January, a dismal sign after the worst year for that sector in nearly a half-century.New-home sales dropped to a seasonally adjusted rate of 284,000 homes last month, the Commerce Department said Thursday. That's down from 325,000 in December and less than half the 600,000-a-year pace that economists view as healthy…’ (Washington Post) New-home sales fell more than forecast / FHFA: Home prices fell in fourth quarter Pro-government forces, rebels engage in battles for territory (Washington Post) [ The big story here, lost on mainstream media, was the manipulated stock / oil price fraud based upon false rumor of daffy gaddafi not ducking and having been shot. Remember: there’s no place for reality in pervasively corrupt, defacto bankrupt america and on fraudulent wall street particularly. STOCKS MAKE HUGE TURNAROUND ON STUNNING COLLAPSE IN OIL: BASED SOLELY ON NOW KNOWN TO BE FALSE TWITTER RUMOR! [ Don’t be surprised if the frauds on wall street initiated the rumors; their fraudulent manipulations have included far worse … put them in jail where they belong, with fines, disgorgement! ( ‘…an apparently Twitter-borne rumor started making the rounds that Qaddafi had been shot! There was no basis for it, but oil simply collapsed…’ ) ] Weisenthal, On Thursday February 24, 2011 Thank Twitter-borne rumors of Qaddafi's death for the fact that markets totally didn't get crushed today…’ ] Militiamen, mercenaries hit cities near capital while protesters seized air force base; U.S., other Western powers consider responses to situation. Gaddafi loyalists launch counterattacks ] Crude prices broke through the $100-a-barrel threshold as violence in Libya continued to shake markets.

Senate Democrats draft cuts in domestic agency budgets (Washington Post) [ Do these ‘too little, too late’ so-called cuts purport to make the nation ‘less bankrupt’? There’s no such thing … absolutely preposterous! And, Kotlikoff thinks so as well, see immediately hereafter… ] The plan will involve accelerating some of the $33 billion in program terminations and reductions included in Obama's proposed budget for next year.

When Pretending Fails to Hide Bankruptcy: Laurence Kotlikoff ( Today in the WashingtonPost.Com ) Laurence Kotlikoff Feb 22, 2011

Feb. 23 (Bloomberg) -- Our country is bankrupt. It’s not bankrupt in 30 years or five years. It’s bankrupt today.

Matter of Language

This is no surprise. The math of economics rules out an absolute measure of the deficit, just like the math of physics rules out an absolute measure of time.

Bottom Line

Repealing Cuts

Politics Triumphs

--Editors: James Greiff, Steven Gittelson

Pro-government forces, rebels engage in battles for territory (Washington Post) [ The big story here, lost on mainstream media, was the manipulated stock / oil price fraud based upon false rumor of daffy gaddafi not ducking and having been shot. Remember: there’s no place for reality in pervasively corrupt, defacto bankrupt america and on fraudulent wall street particularly. STOCKS MAKE HUGE TURNAROUND ON STUNNING COLLAPSE IN OIL: BASED SOLELY ON NOW KNOWN TO BE FALSE TWITTER RUMOR! [ Don’t be surprised if the frauds on wall street initiated the rumors; their fraudulent manipulations have included far worse … put them in jail where they belong, with fines, disgorgement! ( ‘…an apparently Twitter-borne rumor started making the rounds that Qaddafi had been shot! There was no basis for it, but oil simply collapsed…’ ) ] Weisenthal, On Thursday February 24, 2011 Thank Twitter-borne rumors of Qaddafi's death for the fact that markets totally didn't get crushed today…’ ] Militiamen, mercenaries hit cities near capital while protesters seized air force base; U.S., other Western powers consider responses to situation. Gaddafi loyalists launch counterattacks ] Crude prices broke through the $100-a-barrel threshold as violence in Libya continued to shake markets.

STOCKS MAKE HUGE TURNAROUND ON STUNNING COLLAPSE IN OIL: BASED SOLELY ON NOW KNOWN TO BE FALSE TWITTER RUMOR! [ Don’t be surprised if the frauds on wall street initiated the rumors; their fraudulent manipulations have included far worse … put them in jail where they belong, with fines, disgorgement! ( ‘…an apparently Twitter-borne rumor started making the rounds that Qaddafi had been shot! There was no basis for it, but oil simply collapsed…’ ) ] Weisenthal, On Thursday February 24, 2011

Thank Twitter-borne rumors of Qaddafi's death for the fact that markets totally didn't get crushed today.

But first, the scoreboard:

Dow: -39.13
NASDAQ: +16.16
S&P 500: -1.03

And now, the top stories:

The "day" really started around 2:00 AM ET, when oil exploded higher in London trading. It was a vicious move, which sent instantly sent US futures sharply lower. The dollar got clubbed as well.

(Rewinding for a moment, it was a generally bad day in Asia, with India, once again, taking the most abuse).

Other than the fact that generally markets were down, Europe was fairly quiet.

In the US the talk was oil, oil, oil. Everyone had something to say the impact of rising oil on the US economy, and the effect it would have on the consumer. Qaddafi spoke pre-market and sounded insane again.

Futures were clearly lower in the very early going. Mediocre earnings from Target and GM didn't help at all. But then a strong initial claims report did help modestly.

Still, stocks were down all day until just after 2:00 PM ET, when an apparently Twitter-borne rumor started making the rounds that Qaddafi had been shot! There was no basis for it, but oil simply collapsed. It helped that around the same time there was talk of the US cracking open its Strategic Petroleum Reserve. Markets turned around violently on the news. Gold and silver slid as well.

And that was basically it.

Think inflation is going to be a major problem? Click here for 10 companies that will do great if inflation skyrockets >‘

February 22, 2011: Mohamed A. El-Erian, CEO PIMCO predicts a period of, at best, stagflation; which of course is bad for stocks (and worse).

That House You Bought 10 Years Ago Is Worth Exactly The Same Now As It Was Then Depew ‘The chart below shows the median price for existing homes, which is down 3.7 percent year-over-year to $158,000. Some interesting things to note about this:

1) While existing home sales increased 2.7 percent, the percent of home sales which were distressed rose to 37 percent, an incredible amount if you stop to think about it.
2) Also, 32 percent of the existing home sales transactions were for cash.
3) Oh, and if you were thinking that the housing bubble collapse has exterminated all speculative activity in the housing market, consider that 23 percent of all sales went to buyers classified as "investors."
4) Finally, while the inventory of existing homes available declined to a little less than 8 months' worth at the current pace of sales, if you factor in the high percentage of distressed sales along with the fact that the National Realtors' Survey doesn't account for inventory listed by banks and private agents... well, you can see where this is headed. [chart]’

The U.S. Dollar Is No Longer a Safe Haven Daily Trader ‘The winds of change appear to be blowing! Some 6 months ago when world financial markets took fright, the average punter would rush headlong into the safety of the USD and US Treasuries.However, something different is now playing out. The USD has been broadly weaker against the "average" paper currency in the world. Yes that is correct, the USD has done rather badly against other currencies since the Egyptian crisis took hold. Over the last few days whilst the Libyan drama has progressed into a full blown crisis and perhaps a prelude to civil war, the USD has again depreciated against a broad basket of currencies. Note the behavior of our Proprietary Currency Index below (16 currencies against the USD). It is only a few "pips" away from breaking to a multi-month high. [chart]Now what if we do see the index above break to a new high and the USD Index to a multi-month low? What would be the implications for other markets like equities, commodities and Treasuries?As far as commodities go it does not take a rocket scientist to work that one out. I don't think a break in the USD would be very supportive for higher US Treasury prices.........after all when have rapidly rising commodity prices been positive for Treasuries?As for equities, well I think it is going to be highly dependent on which sectors you are in. I find it difficult to believe that commodity sensitive sectors like basic materials and energy would weaken. With correlations across stocks breaking down I think the coming months will be very favorable to diligent inflation-oriented stock pickers.’

Stocks Slide as Key Moving Averages Fail to Hold Suttmeier ‘…The ValuEngine Valuation Warning was at an extreme last Friday, and technicals were overbought on daily charts.
The 10-Year Yield -- (3.489) This yield tested its 50-day simple moving average at 3.446 on Wednesday after holding my weekly pivot at 3.529. The 200-day simple moving average is 3.007.
Comex Gold -- ($1410.8) Tested $1417.5 this morning above my monthly risky level at $1412.4. Gold is now overbought on its daily chart with the 50-day at $1373.5 and quarterly and semiannual risky levels at $1441.7 and $1452.6.
Nymex Crude Oil -- ($98.48) Tested the $103.41 this morning above my annual pivots at $99.91 and $101.92. My monthly pivot is $91.83 with semiannual and quarterly risky levels $107.14 and $110.87.
The Euro -- (1.3747) The 50-day is 1.3416 with my weekly risky level at 1.3868.
ValuEngine Valuation Warning -- A ValuEngine Valuation Warning occurs when more than 65% of all stocks in the ValuEngine universe are calculated to be overvalued. On Friday 68.6% of all stocks were overvalued, which was the highest of the year. Today 61.2% of all stocks are overvalued.
The Technical Warning -- All major equity averages ended last week with extremely overbought conditions noted on their weekly charts. This week’s weakness will keep all weekly charts overbought with the exception of Dow Transports, which has declining weekly MOJO.

We are below all of this week’s pivots; 12,401 Dow Industrials, 1345.0 SPX, 2831 NASDAQ, 2405.1 NDX, 414.82 Utilities, 5241 Dow Transports, and 815.37 Russell 1000 and 483.39 SOX.

Key Levels for the Major Equity Averages

The Dow Industrial Average (12,106) -- Closes below the 21-day simple moving average at 12,134 targets the 50-day at 11,851. My monthly value level is 11,759 with daily and weekly risky levels at 12,257 and 12,401.
The S&P 500 (1307.4) -- Closes below the 21-day simple moving average at 1314 targets the 50-day at 1286. My quarterly value level is 1262.5 with daily and weekly risky levels at 1331.3 and 1345.0.
The NASDAQ (2723) -- Given a close below the 50-day simple moving average at 2721 the risk is to my monthly value level at 2611. Daily, weekly, and quarterly risky levels are 2793, 2831 and 2853.
The NASDAQ 100 (NDX) (2301) -- Given a close below the 50-day simple moving average at 2293 the risk is to my monthly value level at 2234.7. Daily, weekly, and quarterly risky levels at 2360.00, 2405.10 and 2438.3.
Dow Transports (4986) -- Closes below the 50-day simple moving averages are 5130 indicated risk to my monthly pivot at 4962, which was tested on Wednesday. My quarterly value level is 4671 with my annual pivot at 5179 and weekly pivot at 5241. A close this week below the five-week modified moving average at 5098 shifts the weekly chart profile to negative.
The Russell 2000 (799.64) -- Tested its 50-day simple moving average at 795.71 with this week’s pivot at 815.37. My quarterly value level is 765.50 with my weekly pivot at 815.37 and daily risky level at 836.03.
The Philadelphia Semiconductor Index (SOX) (444.27) -- Is approaching its 50-day simple moving 436.31. My monthly value level is 398.44 with a quarterly risky level at 465.93.

More Bad News on Housing -- Existing Home Sales rose in January, but the increase was led by rising foreclosures and all-cash buyers. According to the National Association of Realtors prices home prices slumped to a nine-year low. Foreclosure sales accounted for 37% of the seasonally adjusted annual rate of 5.36 million homes. Another 32% were sold in all-cash transactions. The decline in home prices was 3.7% year over year.Housing problems include tighter lending standards including a larger down payment, and higher mortgage rates. The potential inventory of existing homes remains quite high and banks have been slow to foreclose. High unemployment is still cited as an issue.
Some Key Points From the FDIC Quarterly Banking Profile for the Fourth Quarter of 2010

The FDIC List of Problem Banks rose by 24 to 884 from 860, which is 11.5% of the 7,657 FDIC-insured financial institutions.
Loan balances fell by $51.8 billion in the fourth quarter on loan write-downs, payoffs, and the slow generation of new loans.
The Deposit Insurance Fund (DIF) narrowed its deficit to $7.4 billion from $8.0 billion. The total cost of bank failures through 2013 is projected to about $100 billion.

Libya’s Turmoil Leads to Highest February Gas Prices in 21 Years ABC News | Crude oil touched nearly $102 a barrel in Asia this morning amid fears that Libya could halt exports.

IMF Austerity Measures Lead to Violent Riots in Greece AFP | The confrontation occurred near the finance ministry.

Jobless youths trigger concerns in UK Press TV | A drought of entry-level jobs means door to work is closed to many young people.

Crude breaches $119 in frantic trading Brent crude had breached $119 a barrel during a period of frantic trading around 0745 GMT as industrial needs were hedged and traders exploited an explosion of upside momentum.

Stagflation 2011: Why It Is Here And Why It Is Going To Be Very Painful Are you ready for an economy that has high inflation and high unemployment at the same time? Well, welcome to “Stagflation 2011″. Stagflation exists when inflation and unemployment are both at high levels at the same time.

Oil Is Making Another Gigantic Move, And Now US Futures Are Getting Hammered Crude is having another huge. Brent is near $120. WTI is over $101. The spike happened right when London trading open.

Socialism Gone Apes**t: Obama Wants To Use Proceeds From $20 Billion Fraudclosure Settlement To Reduce Underwater Mortgages [ Yet he still reneges on his promise to prosecute the wall street frauds. ] Ever wonder why the banks have been stowing away cash as if in anticipation of a torrential rainy day?

ECONOMIC CRISIS ARCHIVE

National / World

Media Demonizes Gaddafi as Pentagon Prepares Attack Kurt Nimmo | Pentagon has announced it is looking at “all options.”

SPLC Report Lumps In We Are Change With Neo-Nazis, KKK Steve Watson | Suggets that grassroots citizen journalist group has “driven people to murder.”

Gas Prices Set to Rise Nearly 40 Cents in Coming Days Kurt Nimmo | Saudi Arabia in talks to boost oil production as situation in Libya deteriorates.

Exclusive Interview: Charlie Sheen To Appear On The Alex Jones Show 2PM EST Paul Joseph Watson | Actor to set the record straight on exaggerations, misinformation and outright falsehoods concerning his private life and career.

Big Brother: The Orwellian Nightmare Come True Mark Dice | Tremendous advances in technology often come unforeseen consequences.

Media Demonizes Gaddafi as Pentagon Prepares Attack As we reported yesterday, the United States has specific instructions to intervene militarily in Libya under the cover of providing humanitarian assistance. Less than 24 hours after our report, the Pentagon has announced it is looking at “all options” in dealing with the Libyan crisis. In short, it is drawing up plans to intervene.

Charlie Sheen Unleashes On TSA Actor Charlie Sheen unleashed on the TSA during a wild radio interview on The Alex Jones Show today, raging that he would eat the hands of any TSA worker who tried to touch his children, in response to the story that TSA agents harassed travelers and groped children in Savannah train station earlier this month after the passengers had left the train.

Gas Prices Set to Rise Nearly 40 Cents in Coming Days Earlier this week, market analysts warned that the price of gas may reach $5 by the end of summer. Now they are saying we could see that price by Memorial Day as the situation in Libya deteriorates.

SPLC Report Lumps In We Are Change With Neo-Nazis, KKK The Southern Poverty Law Center has a history of declaring any protest group it sees as “anti-government” as an “extremist” hate group, without justification. Today it continues that trend with the publication of a report that throws in We Are Change members nationwide with racist Neo Nazi groups and Ku Klux Klan factions.

Governor Walker: “We Thought About” Infiltrating Wisconsin Protesters With Troublemakers During a prank phone call in which he believed he was talking to billionaire philanthropist David Koch, Wisconsin Governor Scott Walker admitted that state authorities had “thought about” using troublemakers to infiltrate the crowds demonstrating against his effort to eliminate collective bargaining rights, proving once again that the use of agent provocateurs to discredit legitimate protesters is a common political ploy.

FLASHBACK: Gaddafi – Obama Is Friend, Black Man From Our Continent Of Arab Descent He said, “Now, ruling America is a black man from our continent, an African from Arab descent, from Muslim descent, and this is something we never imagined – that from Reagan we would get to Barakeh Obama.”

Ethics code urged for Supreme Court (Washington Post) [ Sounds like a plan! Come on! Wake up! After all, what can you expect from two guidos from ‘jersey (alito and scalia, colloquial – note that I have refrained from using what some might consider disparaging terms as w*p*, gui***s, or da***s … and let me state for the record that I truly loved and respected my grandmother who was 100% Italian/Bari,Italy and as well my grandfather/Lake Como,northern Italy with greek ancestral roots and thereby claim standing/right to posit the criticism in light of my direct experience. ). How ‘bout starting with enforcing laws as to judges, liars, etc., within the very corrupted american illegal system; and, particularly bribes which in one form or another are rampant . I don’t know about Thomas, but I do know about alito and ‘jersey … : October 15, 2010 (*see infra)

Steven M. Martinez, Assistant Director In Charge
Federal Bureau of Investigation, USDOJ
11000 Wilshire Blvd., Suite 1700

Los Angeles, CA 90024

Dear Sir:

A judgment had been entered in my favor in the case, United States District Court Case #3:93cv02065(AWT)(USDCJ Alvin Thompson), worth approximately now in excess of $300,000 remains unaccounted for and which could be used for payment to creditors, Los Angeles, etc..
Counsel Robert Sullivan on my behalf documented by way of certification upon investigation that Alan Shiff, USBCJ, had falsely stated a dismissal upon which false statement he predicated a retaliatory and spurious contempt proceeding against me causing substantial damage, and for which he sought Judicial Notice of those and related proceedings as did I in some of my filings.
The Order of Dismissal With Prejudice by Alan Shiff, USBCJ, owing to Defendant Coan’s failure to file anything whatsoever by the court’s deadline causing creditors and me substantial damages: [ Shiff Order of Dismissal With Prejudice on Coan’s Failure to File Page 1 Page 2 ]
Defendant Coan had filed an action against me to prevent me from suing him which necessitated me to fly to Connecticut for a hearing before The Honorable Robert N. Chatigny, Chief Judge, USDC, District of Connecticut, who denied Coan’s requested relief as to Coan but precluded my action against Shiff (although there is no immunity, judicial or otherwise, for criminal acts, ie., fraud connected with a case under Title 11, USC, etc.) . [ transcript in pertinent part - crossexamofcoanbypeia.pdf ]
Newly appointed judge, Maryanne Trump Barry, Donald Trump’s sister, was assigned the RICO case despite the conflict of interest in light of hundreds of thousands of dollars of illegal (drug) money being laundered through the Trump casinos by the RICO defendants, and despite my motion to recuse her which motion she heard herself and denied, and U.S. Trustee Hugh Leonard with whom I met personally refused to join or file a separate motion to recuse and not long thereafter left said office for private practice at Cole, Shotz, et als on retainer with the RICO defendants as his primary client.
Probative and evidentiary documents, affidavits, exhibits, including those turned over to FBI Agent Jeff Hayes in Long Beach, CA, had been given to Assistant U.S. Attorney Jonathan Lacey with whom I met personally at the U.S. Attorney’s Office in Newark, N.J., at which time Samuel Alito was U.S. Attorney, and went over said documents and their probative value with him. Within approximately a month thereafter upon inquiry I was told that Jonathon Lacey was no longer with the office, that the file/documents could not be located, and that there was no further information available concerning contacting him or his location. I thereupon delivered by hand, copies of said documents to the office of then U.S. Attorney Alito, addressed to him, with assurance they would go directly to him. In addition to being inept [ I looked in on the one mob case he had brought, bungled, lost (accidently on purpose?) since I was suing some mob-connected under RICO and the court (I had known / previously met outside of court the judge Ackerman through a client) was absolute bedlam and a total joke since incompetent corrupt Alito brought in all 20 mob defendants (rather than prosecute one or a few to flip them first) who feigning illness had beds/cots in the courtroom along with their moans during testimony and had the jury in stitches. As much as I hate the mob, it truly was funny, if not so tragic.], Alito is also corrupt (and maybe corrupt because he is inept). After a reasonable (but still rather short) time I called to determine the status and was told that Alito was no longer with the Office of the U.S. Attorney, that he was (appointed) a federal judge, and that neither the documents nor any file or record of same could be located. Alito did parley the same / cover-up into quid pro quo direct lifetime appointment to the Court of Appeals, 3^rd circuit, despite the absence of judicial experience or successful tenure as U.S. Attorney (Maryanne Trump Barry as well). This is the same Sam Alito that now sits on the purported highest court in the land. The real application of the illegal rule ‘don’t ask, don’t tell’.

Sincerely,

Albert L. Peia

611 E. 5^th Street, #404

Los Angeles, CA 90013

(213) 219-**** (cell phone)

] Group of law professors' appeal comes after controversies involving travel and appearances at political events by several justices.

16 miles away, Saudi Arabia's watchful eye looms over Bahrain unrest (Washington Post) [ I’m sure they are… with a microscope at that. Saudis Worried Protests Will Hit Home - saudi arabia; talk about do nothing hypocrites. How does one family claim ownership of all the oil reserves of a sovereign nation; I suspect only when foreign corporations say so For the sake of the saudi Arabian people, more than just protests should come to fruition! ] AFP | Saudi royal warns Arab world uprisings could cause harm unless they reform. Bahrain authorities launch surprise attack on protesters [There’s the america and saudi Arabia effect; far less than democratic and far more deadly in the mideast among other places; talk about hypocrites. How does one family claim ownership of all the oil reserves of a sovereign nation as the saudis; time for the saudis to go the way of dictator Mubarak and take the war criminal americans with them. ] Los Angeles Times Tear gas canisters bombard sleeping protesters in Manama's Pearl Square. At least two men are reported killed Video: Bahrain protesters look to emulate Egypt revolt euronews Riot Police Attack Bahrain Protesters Voice of America ‘Saudi Arabia sending troops to Bahrain’ Saudi Arabia is sending troops to Bahrain in a move to crack down on pro-democracy protesters who took to the streets in the capital Manama, a political analyst says. [SAUDIS TOLD OBAMA 'NOT TO HUMILIATE MUBARAK' [ Sounds like they’re hearing footsteps…Previous:Egyptian capital teeters on anarchy Mubarak asks cabinet to resign as anti-regime protests intensify (Washington Post) [ Mubarak should have been looking in the mirror as he asked his cabinet to resign … 30 years is a long time, and coincidentally, time for him to go. In Egypt: Access denied (Washington Post) [The day part of the Internet died: Egypt goes dark [I disagree! Part of the internet didn’t die, but rather the order to so darken the nation heralded the demise, at 30 years and counting, of the so-called leadership in the persona of Mubarak. Time for him to go! After all, he’s been in a position, with Egypt among the only Mideast nations to have signed a peace treaty with israel, to have stepped up with substantial credibility in taking a strong position against israeli transgressions, violations of international law / u.n. resolutions, war crimes, etc., which beyond soft-touch, he failed to do. And, of all places, he sends his family to Orwellian england; he still loves those colonial masters … how pathetic. I mean, 30 years … how free-flowing does anyone think the election process is at this point … and one could ask the same regarding the entrenched powers that be in pervasively corrupt, defacto bankrupt america, to be fair. Then there’s saudi arabia; talk about do nothing hypocrites. How does one family claim ownership of all the oil reserves of a sovereign nation; I suspect only when foreign corporations say so. The only Mideast nations showing backbone are Turkey, Lebanon, and Syria, and, of course the perennially propaganda painted bad-boy Iran among possibly some of the smaller emirates, ie., Qatar, etc., (I lack sufficient information regarding these other nations). ] (AP) Internet cutoff fails to silence Egypt protests (AP) - ]

]

A steep challenge for Arab world (Washington Post) [ I’m sure the rest of the defacto bankrupt world would love to have the lagging problem of the Arab nations of rich real assets as opposed to the fake fraudulent worthless paper assets the so-called ‘rest of the world’ is ‘sporting’. Economist: United States Worse Off than Greece Dr. Laurence Kotlikoff is an economics professor at Boston University. He says the Treasury and the government are fudging the national debt numbers. Kotlikoff says the United States is bankrupt and we don’t even know it. Howard Davidowitz on the Economy: "Here Are the Numbers ... WE'RE BROKE!" 11-25-10 ‘The U.S. economy "is a complete disaster," Howard Davidowitz declared here in July, the most recent in a string of dire predictions from Tech Ticker's most entertaining guest.On the eve of Thanksgiving, I asked Davidowitz if he had any regrets, or was ready to throw in the towel given recent signs of economic revival. Are you kidding me? "Here are the numbers...we're broke," Davidowitz declares, noting the U.S. government goes $5 billion deeper into debt every day and is facing $1 trillion-plus annual deficits for the next decade. "In other words, we're bankrupt."As with the economy, Davidowitz is unwaveringly consistent in his views on President Obama, calling him "deranged, dysfunctional and discredited."Results of the midterm election show "the people of this country think we are in a catastrophe," he says. "I'm with them."Check the accompanying video for more of Howard's unfettered opinions and stay tuned for additional clips from this interview. And...Happy Thanksgiving! Aaron Task is the host of Tech Ticker. You can follow him on Twitter at @atask or email him at [email protected]’ Timid Tuesday: Is it Safe? Davis ‘… This is how we pay off our current debts and I think bondholders are simply happy to get anything out of a country that admits it owes $15Tn (1/4 of global GDP) but probably owes closer to $60Tn (entire global GDP) in the form of unfunded liabilities. The funniest thing about this (and you have to laugh) is to see Conservative pundits get on TV and talk about how we need to cut $100Bn worth of discretionary spending to "fix" this (while continuing to spend $1Tn on the military and $1Tn on tax cuts for the top 1% each year). There is no fixing this and even a Republican said you can’t fool all of the people all of the time. THIS HOUSE OF CARDS IS TEETERING FOLKS – PLEASE BE CAREFUL OUT THERE! ‘
] Despite the rich resources in the region, Arab nations lag behind rest of world economically.

Economic forecast (Washington Post) [ And you can take that to your local insolvent bank…or not even your local insolvent bank; but rather, your non-local insolvent bank that’s still carrying the toxic assets/paper/securities now marked to anything by way of FASB rule change, professional criminal courtesy via congress, as the the wall street frauds cash out for hard fiat currency. What do you expect them to say? This wasn’t even a recession to be, as per forecast. They haven’t the slightest clue what they’re doing other than the ‘narcotic effects’ of the non-stop printing press fiat currency ‘feels good’ and buys time, politically. ] White House policymaker predicts that the recovery should continue despite oil prices, European crisis.

Pressure mounts on Gaddafi (Washington Post) [ That he was always a caricature of sorts, there is no question. That he’s totally burned out, there’s also no doubt; though they might argue in his defense that so was dumbya bush … a point well taken … but look at the consequential pathetic state of pervasively corrupt, defacto bankrupt america … with the unlit torch passed to wobama the b (for b* s*) who pretends, or maybe in his alternate and fake reality just believes it’s lit. That he’s done, also fait accomplis, after 41 years … who cares. That he’s insane … now that’s quite another thing with greater worldwide implications, so, daffy… gadaffy… duck! Gaddafi vows to maintain hold on power Libyan strongman says he'll fight 'until the last drop of my blood' (Washington Post) [ His latter wish is the world’s command. ‘Something there is that doesn’t love a dictator, that wants them down’ … (Excuse me … I was thinking of walls and ‘Mending Wall’, Robert Frost). Libya Internet Shut Down Amid Protests, Per Multiple Reports [ Once again, as in Egypt, this, the internet, inherently global in nature is the lynchpin, tampering with or stifling same marking the end of any regime. Let this be a warning; viz., you cannot put the genie back in the bottle! 41 years? Gadaffy duck should duck ‘cause he’s done. I mean, look at him, he’s the singular equivalent of the multiple bushes. He’s totally burnt out (as much or more so than dumbya bush or mubarack) and quite done! ] Reports have emerged late Friday that Libya appears to have shut down its Internet due to widespread protests, less than a month after Egypt did the same. ] With rebels apparently controlling much of the eastern half of the country, the violence engulfing Libya is already the worst in more than a month of unrest that has toppled other regimes. ]

Bad News - Bullish Wall of Worry or Sell Signal? Maierhofer, On February 23, 2011, ‘When I published this article 10 days ago I received much criticism. After the biggest two-day sell off since August 2010, the commentary might be helpful in determining whether this is another flash in the pan mini correction or the onset of something more serious.If it's too obvious, it's obviously wrong. More often than not, this proverbial Wall Street adage has the last laugh. What's the prevailing consent on Wall Street? What's suspiciously obvious today?

- The Fed is here to help. As long as there's QE2 (or QE3, 4, etc,) prices will go up.

- January was positive. As January goes, so goes the year.

- This is the third year of the Presidential Election Year Cycle. There hasn't been a negative third year since 1939.

- There's no catalyst to send stocks higher.

While Wall Street analysts are trying to one up each other's positive forecasts, the Fear Index, VIX (NYSEArca: VXX - News) has fallen to a 3 year low. The last time the VIX was at a similar level was in April 2010, just before a literally fear-inspiring 17% correction and the May 'Flash Crash' (see chart below).The ETF Profit Strategy Newsletter didn't subscribe to the prevailing optimism in April 2010 and warned that: 'The message conveyed by the composite bullishness is unmistakably bearish. The pieces are in place for a major decline.'Does that mean that the bottom will fall out again within a matter of days? Not necessarily, but now is certainly not the time to be married to your holdings. Tight sell stops are warranted because any minor correction could turn into a large one. Why?

New Bull Market, or Mother of all Bear Market Rallies?

The devil's in the long-term trend. If we are in a new bull market, any dip would present a buying opportunity. If we are in the mother of all bear market rallies, every rally is a trap and represents a selling opportunity.How can one determine whether we are in a new bull market, or a bear market rally? [chart] It's said that bull markets climb a wall of worry. No doubt there was extreme pessimism surrounding the March 2009 lows. That's one of the reasons the ETF Profit Strategy Newsletter sent out a strong buy signal on March 2, 2009.But pessimism at the bottom doesn't equal a wall of worry. In fact, following the initial bout of disbelief, investors embraced the rally rather quickly. In late 2009, sentiment readings became frothy, in January 2010 they rivaled 2007 extremes (stocks fell 9%), and in April 2010 they exceeded 2007 extremes (stocks fell 17%).About two thirds of the rally from the 2009 lows was accompanied by optimism. This is no wall of worry.

Glass Half Full Outlook

Think about it, even the truly big problems - unemployment and falling real estate (NYSEArca: IYR - News) prices - were sugar coated from the very beginning. The unemployment problem was charmingly called 'jobless recovery' and falling real estate prices were simply ignored.The Case-Shiller home price index is down four months in a row, but nobody is bothered. A few days ago, MarketWatch ran an article: '10 reasons to be bullish on housing.'Courtesy of the continuing real estate conundrum, the FDIC closed 157 banks in 2010, and 14 thus far in 2011. According to a Wall Street Journal article, the top 10 U.S. owned banks had $13.8 billion in unrealized losses.Those are not reflected in earnings numbers as long as financial institutions (NYSEArca: XLF - News) believe the investment will later rebound. Guess what? Banks are pretty darn sure prices will reclaim their 2006 all-time highs.In addition to the $13.8 billion in unrealized losses, the top 10 U.S. banks owned $360.7 billion in illiquid, hard to value assets (called level 3 assets). While paper earnings appear solid, it appears as if banks are hiding skeletons in their closets. But who cares, stocks (NYSEArca: VTI - News) are up.

Anomaly Explained

Ben Bernanke has openly admitted that asset inflation, or the wealth effect from rising stock prices, is the objective of QE2. Obviously, the money flow from the Federal Reserve over banks into the stock market has been the driving force behind this monster rally.Much of the Fed money has been funneled into commodities. Since QE2, net speculative positions in wheat and copper have doubled, oil soared 115%, soybeans 40% and corn 15%. Rising commodity prices are putting the squeeze on lower income Americans and will eventually lower profit margins for the materials sector.It's quite likely that this ripple effect will spill over into the retail (NYSEArca: XRT - News), technology (NYSEArca: XLK - News), and consumer discretionary sector. From there it's just a matter of time until it hits the broader Dow (DJI: ^DJI), S&P (SNP: ^GSPC) and Nasdaq (Nasdaq: ^IXIC).Contrary to its objective, QE2 has also sent interest rates soaring. Higher interest rates tend to encourage the money to flow from equities into bonds. Higher interest rates put pressure on bond and stock prices alike.

Early Detection

The trend is your friend, but the trend is a fair-weather friend and can turn at any given time. The trend doesn't announce its intention to change direction. It switches back and worth as it pleases without your permission.Courtesy of your friend the trend, everybody is a genius in a bull market ... and a nave misguided trend follower when prices drop without prior notice.There is no foolproof way to find out when the market is about to change directions. There are, however, ways to put the odds in your favor.Watching support levels has proven a very effective way. A few months ago 1,170 was a crucial support level highlighted by the ETF Profit Strategy Newsletter. The S&P tested this level no less than five times, but never broker below it and rallied over 10% since.Just recently, 1,270 was such a support level. The S&P tested it twice before moving into the 1,320 range. The market is dynamic and can change swiftly; therefore, it's the market that dictates support levels, not us. We just identify and use them…’

How Confident Are Consumers in the Future of the Economy? Harding ‘This is the time of the month when the consumer surveys come out measuring confidence in the economy’s future. There are three large surveys: Conference Board, Gallup, and the University of Michigan. They all try to measure our belief with regards to the future, and specifically whether or not we feel like spending our money. Today Gallup and the Conference Board came out with mixed results. On Friday the University of Michigan/Reuters survey comes out. (It has been showing a rising trend for the last four months.)Gallup does their own survey of 3,434 respondents. The result was that consumer confidence hasn’t improved for a year:[chart]Asked whether the economy was getting better or if it was poor, respondents answers were unenthusiastic at best:[chart][chart]The Conference Board had a different take on the future:[chart]That sure looks good but, looking closely: Optimism is no better now than it was a year ago, also suggesting that little progress has been made economically over the past 12 months. Up to this point in 2011, there seems to have been a relatively great amount of optimism about the US economy going forward. Whether last week’s deterioration in consumer confidence is the beginning of a new trend or just a short-term aberration remains to be seen. Also, from the Conference Board’s press release: Those stating business conditions are “good” increased to 12.4 percent from 11.3 percent, while those claiming business conditions are “bad” was unchanged at 39.6 percent. Consumers’ assessment of the labor market was also more positive than in January. Those saying jobs are “plentiful” rose to 4.9 percent from 4.6 percent, while those stating jobs are “hard to get” decreased to 45.7 percent from 47.0 percent. Consumers’ short-term outlook was more optimistic than in January. Those expecting business conditions to improve over the next six months increased to 24.4 percent from 24.0 percent, while those anticipating business conditions will worsen declined to 10.4 percent from 12.2 percent. This is their best reading in three years.I don’t know if this makes a difference, but the Conference Board just fired its former pollster and hired Nielsen instead. They surveyed 3,000 respondents. Their survey is billed as a leading indicator.Who do you want to believe? With 43.6 million Americans, or 14.1% of the population on food stamps, relatively flat wage growth, and a dour unemployment picture, I don’t think that only 17.3% of Americans feeling better about their future income potential versus the prior reading of 15.3% really means that much. Ditto with the percentage of those seeing business conditions improving going from 11.3% to 12.4%. 39.6% of respondents said they are worse, and the rest, or 48% see no change or have no opinion. Another way of saying this is that 87.6% of the respondents didn’t have a positive view of business conditions.The Conference Board’s statement that “Consumers’ appraisal of present-day conditions improved moderately in February” is true but I would question its relevance. At such low levels of enthusiasm among its respondents, a point or two doesn’t mean much. If you step back and look at what these results reveal, it doesn’t look to me as if consumers are more optimistic about the future. To say otherwise is just spin. I think Gallup has the better view right now.’

Double Top in Cyclicals? Elfenbein ‘The stock market is getting knocked again today, but the pain isn’t evenly spread out. Who’s up for another look at the relative strength of cyclicals? Great, me too! As long-term readers know, one of my favorite metrics to follow is the Morgan Stanley Cylical Index (^CYC) divided by the S&P 500 (^SPX). This is far from a comprehensive analysis, but it is a quick-and-dirty look at the “mind of the market.”Since late August, the market’s rally has been disproportionally powered by cyclical stocks. In fact, the ratio of the CYC to the S&P 500 reached an all-time high on February 11 (my data goes back to 1978).The ratio hit a previous peak on January 10 and, soon after, cyclicals dropped off sharply. I quickly jumped on this and thought it was the end of the cycle. Wrong! The ratio soon rallied and peaked on February 11, just a hair above the level for January 10 (0.8442 to 0.8441).The CYC is down again today (although many energy names are up). If today’s numbers hold up, the ratio will close below the low made on January 21.The reason these cycles are so important is that once they get going, they often last for a few years. Put it this way, if the Dow had kept pace with the CYC since the low from two years ago, the Dow would be over 24,000 today.[Click to enlarge] [chart] ‘

Will Oil Spike Renew Interest in Clean Energy Commodities? Handwerger ‘Many of the great declines in the stock market over the past 30 years have been related to oil (United States Oil (USO)). This week we have seen the major indices plummet on geopolitical chaos throughout North Africa, especially the large oil-producing Libya, as investors returned to gold (SPDR Gold Shares (GLD)), silver (iShares Silver Trust (SLV)), and oil. As the market reached record overbought territory, any excuse could begin a significant pullback in equities (SPDR S&P 500 (SPY)).

Investors are monitoring key assets in Egypt (Market Vectors Egypt Index (EGPT)). If either the Suez Canal or Sumed Pipeline come under attack, then we will see a major oil spike, possibly worse than in the late 1970s. Already Iran has taken advantage of the chaos and passed into the Mediterranean, further escalating potential conflicts between Israel (iShares MSCI Israel Cap Invest Mkt Index (EIS)) and the Iranian Allies of Hezbollah and Syria who want to take back control of the Golan Heights. This Middle Eastern instability may have deeper consequences and I don’t believe it will end anytime soon. In fact, it may even eventually spread to Saudi Arabia where the royal family maintains weak control and extremists are gaining popularity. In late January in an article entitled, Will Gold, Oil Prices Soar on Revolts in Tunisia, Egypt? I wrote about the domino effect hypothesis, stating that chaos would not be contained in Tunisia and Egypt. This spread of chaos, causing volatile power vacuums, could have a significant impact on gold and oil, especially now that the domino hypothesis is being confirmed. [chart]

At the end of January investors returned to precious metals. Gold has been on sale every six months. A January phenomenon occurs when mutual funds and institutional investors reposition their holdings, sometimes allowing investors to buy a sector on sale. At the end of January, gold and silver found support as geopolitical conditions worsened. The recent Libyan crisis has caused oil to jump which in turn has caused a decline in equities.

As much as the financial crisis and record government spending has helped gold soar to record highs, terrorism and war have been major drivers of the price since September 11, 2001. The Middle East possesses approximately 65% of the world’s oil reserves, and Egypt in particular has two key assets which effect the global oil trade: the Suez Canal and the Sumed Pipeline. Many analysts did not expect Libya to fall into civil war. Reports are showing that oil exports are being curtailed, sending oil into new 52-week highs.

The “Sputnik” moment which President Obama spoke about in his State of the Union address may come faster than expected out of necessity. Washington is actively pursuing supply of North American heavy rare earth assets to fast-track into production as top-secret defense technologies depend on it. Sanctions on China from the WTO will not be enough to meet the growing demand. Even China, which produces over 97% of the rare earths, has expressed interest in heavy rare earth assets globally. Hyundai, the latest company on the electric-car scene, recently commented that it was pursuing a rare earth supply as well.

Economies are growing and demand has increased since the last major Iranian Revolution in 1979 when oil spiked higher. An oil spike now could be much more detrimental 32 years later. The world is more dependent on fossil fuels and many nations are struggling with slow growth and huge debt burdens. An oil spike could cause a major setback for the global economic recovery unless governments initiate major alternative energy and clean energy programs. I believe these current events will create a more significant push into clean energy, non carbon energy. A few commodity sectors may benefit including uranium (Global X Uranium ETF (URA)), lithium (Global X Lithium ETF (LIT)) and rare earths (Market Vectors Rare Earth/Str Metals ETF (REMX)).

President Obama has released this year’s budget and it was shocking. Many analysts were surprised by the huge amount of capital allocated to clean, alternative energy in order to spur innovation and job growth. In the recent budget, a $7500 tax credit will be given to car buyers who purchase an electric car. Obama has a goal of putting 1 million electric vehicles on the road by 2015. Many analysts are predicting about a 10% increase in cars sold due to this legislation. However, tensions are escalating as Iran sticks out its tongue at Israel by passing through the Suez Canal. Oil prices could spike as turmoil spreads through North Africa and the Middle East. Legislators are sending a message that they want to wean themselves off of Middle Eastern oil and look into clean and independent energy.

Investors should expose themselves to the potential supply-demand constraints and rise in oil prices by purchasing developers with major assets in these clean energy mineral sectors or by diversifying into these newly created ETFS, such as REMX or LIT, which track these sectors. As oil spikes, these clean energy commodities should receive a renewed interest by legislators and investors who believe in clean energy power generation.’

North African Turmoil Could Rocket Crude to $220 Fox Business | May cause crude to spike from about $97 a barrel today to $220 a barrel.

Oil touches $100 a barrel as Libya standoff worsens Reuters | Oil surged to a 28-month high of $100 a barrel on Wednesday.

Wall Street Shares Fall Sharply Amid Libyan Unrest New York Times | Political turmoil in the Middle East and North Africa continued to haunt financial markets

Korean Bank Run Spreading: Eighth Bank Closes Following “Massive Withdrawals” The quietest bank run that has so far completely evaded mainstream attention, that of Korea, is spreading, and an eighth bank has now shuttered after “Domin Bank, a savings bank with a capital adequacy ratio below 5 percent, voluntarily decided yesterday to suspend its operations temporarily because of massive withdrawals.”

Keiser Report: Fed’s Reign of Terror This time Max Keiser and co-host, Stacy Herbert, talk about the Fed’s reign of terror and an economist’s warning of revolution in America as Obama’s budget robs from the poor to give to the rich. In the second half of the show, Max talks to William D. Hartung, author of Prophets of War, about the cost of corporate welfare to the U.S. military industrial complex and the role of this welfare in the current Middle East unrest.

Highest Gas Prices in February Since 1990, Attributed to Libya Turmoil Weekly gas prices skyrocketed, according to the Department of Energy, driven by the popular revolts spreading across the Middle East.

ECONOMIC CRISIS ARCHIVE

National / World

Libya air raids death toll hits 1,000 Press TV | Hospitals have no electricity and no medicines.

WORLD AT WAR ARCHIVE

WORLD NEWS ARCHIVE

North African Turmoil Could Rocket Crude to $220 If the turmoil paralyzing parts of the Middle East and North Africa brings oil production in Libya and Algeria to a standstill, it could cause crude oil to explode to $220 a barrel, derailing the global economic recovery.

US & EU Prepare to Buy Off Post-Revolution Governments With Billions in “Aid” (Taxpayer Money) While the United States and Europe orders its own scum public to accept massive public spending cuts along with higher taxes on top of soaring inflation and food prices, it concurrently prepares to buy off post-”revolution” governments in the Middle East and North Africa with billions in “aid” (taxpayers’ money) in order to install fresh puppets who will graciously buy huge quantities of arms from the US-EU-Israeli military-industrial complex.

Leaked Memo: Government Considering Deploying Special Forces Troops On The Streets With Police The British government is considering plans to deploy crack trained SAS commandos onto the streets to work alongside police in “counter-terrorism surveillance teams”, according to a leaked memo unveiled by the Times Of London today.

We Called It: Forecast Of Huge Public Worker Protests, Age Of Rage, Oil Price Surge Unfolds Having often been accused of exaggerating, engaging in alarmism or outright fabrication by the establishment media, our regular readers will indulge us for tooting our own horn on the fact that we predicted the public worker demonstrations now happening in Wisconsin, along with the rage spreading across the Middle East, as well as soaring oil prices in June last year, and indeed as far back as February 2008.

US & EU to Buy Off Revolution Governments with Taxpayer Money Paul Joseph Watson | Public told to accept massive public spending cuts, higher taxes and soaring food costs while money is sent to purchase new dictators.

Oil Prices Skyrocket After Williams’ Latest Revelations Kurt Nimmo | The corporate media is getting Americans accustomed to the prospect of gas at $5 or more a gallon.

Seattle Business Refuses To Serve TSA Agents Paul Joseph Watson | Nationwide revolt against naked body scanners and invasive groping carried out by predatory thugs goes viral.

Defiant Libya Tony Cartalucci | The globalists want Qaddafi out and his defiance has conjured an almost tangible.

Milbank: Rush Limbaugh's unfair food fight (Washington Post) [ I’m no fan of limbaugh’s which can easily be discerned from my web site and posts thereon. But, truth be told, I’ve become even less a fan of the wobamas who have revealed themselves as so typically jive-talking b* s* that to most rational, civilized people, they’d be embarrassed. But not the wobamas the b (for b* s, their middle name). As I’ve said before, like water off a duck’s back is the effect of deserved criticism on wobamas and their ilk. They have become part of the problem, not the solution. Almost any criticism, by almost anybody is criticism deserved and welcomed (I previously excepted the BP scenario which was in my view undeserved criticism of wobama. But that’s it! I’m with Limbaugh on most any criticism of the wobamas. `Drudgereport: Michelle Obama, Daughters Hit the Slopes on Ski Vacation ...`
`Vail...`
`Bidens vacation on Fla Keys...`
`FLASHBACK: Obama on tough economy: 'You might put off a vacation'...`
`'Everyone must sacrifice'... RASMUSSEN: OBAMA APPROVAL SLIPS BACK TO 44%... Gov't shutdown threat looms over budget fight...` `DEBT NOW EQUALS ENTIRE ECONOMYOBAMA AGENDA IS OVER` `Obama refers to himself as 'The Gipper'… [ Riiiight! …anything you say wobmama the b for b s*… or maybe the bipper, the chipper, or the yankee clipper (the new joltin’ joe) …sounds like he’s losing it! ] ...` ]

Deaths of four Americans reflect increasing violence of Somali piracy (Washington Post) [ Drudgereport: `U.S. Warship Tracking Yacht Hijacked by Somali Pirates... [ I realize there are ‘laws of the sea’ / codified bodies of law within that broad yet very specific category called ‘maritime law’, none of which I know nor care to know (I’ll content myself to knowing and seeing to the enforcement of american law as pertains to me; viz., RICO` http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm `. I do know that these somali pirates need killin’ and I further believe that open season on them including using their boats in the water for target practice makes sense and certainly is morally justified. I’m tired of hearing about those little weasels … you know, ‘the skinnies’. ]`

On Obama's jobs tour, unemployed have little voice (Washington Post) [ This of course is so true. That wobama’s done there’s no question. Indeed, despite the rhetoric, separate terms, hasn’t he proven to be, and isn’t wobama just a continuation of the NWO / NAFTAite regimes that landed the nation here in this foul, pervasively corrupt, defacto bankrupt position. How different are america’s entrenched corrupt bureaucracies / ‘leaders’ from the dictators and their corrupt bureaucracies being deposed today. If only wobama wasn’t the typical, jive-talikin’ wobama the b (for b*** s***) he is and did what he ran and was elected on, the outcome for fallen america would have been substantially better, though still dire, than that which lies ahead.

Obama’s 2012 Budget: Tool Of Class War Paul Craig Roberts | Continues Wall Street’s war against poor & middle classes. ] White House officials were unable to give a single example of him interacting, even in private, with a person who had recently lost a job.

State budget woes draw more protests (Washington Post) [ Obama joins Wisconsin budget battle Democratic lawmakers flee state in attempt to block anti-union bill (Washington Post) [ Looks like capital hill can pick up a few pointers from ‘dem dems … fleeing the state, that is … except in their case it’ll be fleeing the nation-state, or what’s left of same. Drudgereport: Michelle Obama, Daughters Hit the Slopes on Ski Vacation ...
Vail...
Bidens vacation on Fla Keys...
FLASHBACK: Obama on tough economy: 'You might put off a vacation'...
'Everyone must sacrifice'... RASMUSSEN: OBAMA APPROVAL SLIPS BACK TO 44%... Gov't shutdown threat looms over budget fight... DEBT NOW EQUALS ENTIRE ECONOMYOBAMA AGENDA IS OVER Obama refers to himself as 'The Gipper'… [ Riiiight! …anything you say wobmama the b for b*** s***… or maybe the bipper, the chipper, or the yankee clipper (the new joltin’ joe) …sounds like he’s losing it! ] ...Debunking the 'Debunking Myths of U.S. Collapse' Post Ridder [ Stated another way, the collapse of the (dis)united states is at hand. Now, let me state, that doesn’t mean america will disappear from the face of the earth, but the reality truly is ‘death from a thousand cuts’. It’s not just China’s rise, but america’s decline and fall with the concomitant relative rise of other nations, regions. Quite simply, and historically factual reality has proven, nation-states cannot and have not survived the multitude of negative, destructive, and self-destructive things america has done and prosper as a leading nation. From perpetual war, to pervasive corruption, fraud, criminality across all stratum including institutions, government of american society, to what I believe as well to be an evolved genetic bias of inherent criminality/mental illness which is ill-adapted to the strictures of a more enlightened 21st Century by way of near instantaneously available information, with truth and factual reality being america’s greatest enemy. In support of the foregoing I will reiterate reasons, infra.] Debt relief for states proposed (Washington Post) [ I’ve heard of the ‘blind leading the blind’, but the ‘bankrupt borrowing from the bankrupt’ seems to be a nouveau american phenomenon destined for ‘clichedom’. Previous: Governors plan painful cuts amid budget crises (Washington Post) [ This truly is a disaster in the making, with consequences even more dire than the grim outlook set forth by Meridith Whitney, if that could even be fathomed. It’s really going to be all that bad…see infra, The Economic Collapse, ‘#10 The municipal bond crisis could go “supernova” at any time. Already, investors are bailing out of bonds at a frightening pace. State and local government debt is now sitting at an all-time high of 22 percent of U.S. GDP. According to Meredith Whitney, the municipal bond crisis that we are facing is a gigantic threat to our financial system….“It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States and certainly the largest threat to the U.S. economy.” Economist: United States Worse Off than Greece Dr. Laurence Kotlikoff is an economics professor at Boston University. He says the Treasury and the government are fudging the national debt numbers. Kotlikoff says the United States is bankrupt and we don’t even know it.

Obama: US needs better math, science education (AP) [Well, one thing we absolutely know as true is that there’s at least one person in america in need of better math skills and his name is’ wobama the b’ (for b*** s*** - despite campaign promises to the contrary he actually ramped up war spending also despite defacto bankruptcy of the nation – bush, if only it was just his math skills, ramped of war spending while cutting taxes … to his base, a wobama’s on the same page – how totally pathetic both of them are / were) … but let’s not kid ourselves, from capital hill to wall street, etc., math skills are indeed lacking. ]

Alan Greenspan Takes Credit For The Financial Crisis Levin “The morning after we learned of the news,” Greenspan said of the Dow Jones plunging 6.98 percent that day in September 2008, “I was able to look myself in the mirror and say, ‘Hey, not bad.’” Sure, if he’d tried just a little harder he could’ve done better– 10 percent would’ve been a dream– but really, all things considering, not bad! Solid B+ work. [NYU via BI]

Internet tool shows French web surfers 'Jewish-curious' (AFP) - AFP - An Internet tool that flags up popular search words has spontaneously revealed a deeper trend: French web surfers' exceeding curiosity about whether their politicians are Jewish. [ To their credit, at least in France it might matter … to america’s discredit and self-destruction, it doesn’t even matter … as Buchanan aptly put it ‘capital hill is occupied israeli territory and just proved it again with the foolhardy veto of the un resolution condemning illegal israeli settlements. ]

] The standoff in Wisconsin over budget cuts spread to other states on Tuesday as union leaders began to organize protests in other capitols and Democrats in a second state, Indiana, effectively staged a walkout.

Gaddafi vows to maintain hold on power Libyan strongman says he'll fight 'until the last drop of my blood' (Washington Post) [ His latter wish is the world’s command. ‘Something there is that doesn’t love a dictator, that wants them down’ … (Excuse me … I was thinking of walls and ‘Mending Wall’, Robert Frost). Libya Internet Shut Down Amid Protests, Per Multiple Reports [ Once again, as in Egypt, this, the internet, inherently global in nature is the lynchpin, tampering with or stifling same marking the end of any regime. Let this be a warning; viz., you cannot put the genie back in the bottle! 41 years? Gadaffy duck should duck ‘cause he’s done. I mean, look at him, he’s the singular equivalent of the multiple bushes. He’s totally burnt out (as much or more so than dumbya bush or mubarack) and quite done! ] Reports have emerged late Friday that Libya appears to have shut down its Internet due to widespread protests, less than a month after Egypt did the same. ] With rebels apparently controlling much of the eastern half of the country, the violence engulfing Libya is already the worst in more than a month of unrest that has toppled other regimes.

I knew there was something especially (but typically) not right in Friday’s (and Thursday’s) trade; and, sure enough, it was a full moon Friday as per lunar calendar (a must in today’s markets owing to the prevalence of lunatics / criminally insane on wall street).

Have Stocks Really Moved Sideways Since 2000? McCurdy ‘Last week, we reviewed the inverse secular relationship between stocks and the price of gold. Stocks have been in a secular downtrend since the bull market from the 1980s terminated early last decade, while gold has been in a secular uptrend. Many analysts do not like to label the current secular environment in stocks as a bear, instead referring to it as a "sideways" market. Indeed, a quick review of the S&P 500 index monthly chart shows that it has essentially bounced sideways for the past 11 years.

[Click all to enlarge]

[chart}
Since the secular peak in 2000, the S&P 500 has produced a compound annual return of 0.6%, so any long-term investors who bought at the top would appear to have broken even. Have they really? It is important to note that we are talking about nominal values and returns. When you compare stock market performance to hard assets like commodities and gold, you see a very different picture.

[chart]

[chart]

Since 2000, the S&P 500 index has experienced a persistent decline in terms of the Continuous Commodity Index (CCI) and the price of gold. The CCI ratio chart has decreased by 72% and the gold ratio chart has decreased by 82%. Suddenly that "sideways" market doesn't look so sideways. If you extend both charts back to the beginning of the previous secular bull market in equities, you see what you would expect: A persistent rise in stock market valuations until the secular peak early last decade (note that we have replaced the CCI with the CRB index in the following chart for display purposes, since the available CCI data do not cover the entire secular bull).

[chart]

[chart]
Both ratio chart downtrends are currently healthy, with the CCI ratio recently experiencing another long-term breakdown and the gold ratio forming a consolidation pattern since early 2009. Until these secular declines form confirmed bottoms, the secular bear market in stocks will remain in control.

[chart]

[chart]
Despite mainstream assertions to the contrary, the issues that led to the market crash in 2008 have not been materially addressed. Our historically excessive public and private debt remains, festering beneath the surface of this "strong" economic recovery. As usual, we have chosen the quick fix route and kicked the proverbial debt can down the road, hoping that the underlying problems will somehow cure themselves without requiring us to make the hard choices that have always been required in the past. The continuing strength in the gold market indicates that no such magic resolution process is currently underway.

[chart]

When was the last time a strong, healthy secular uptrend in gold provided an all-clear signal for the economy and suggested that the structural problems that have been plaguing it during recent years have been resolved? The answer to that question is never. Perhaps this time is different. We will see.’

Weighing the Week Ahead: The Beat Goes On Miller ‘…The explanation is much simpler. The Beat Goes On.

The grocery store's the supermart, uh huh.
Little girls still break their hearts, uh huh.
And men still keep on marching off to war
Electrically they keep a baseball score
{Refrain}
Grandmas sit in chairs and reminisce
Boys keep chasing girls to get a kiss
The cars keep going faster all the time
Bums still cry, "Hey buddy, have you got a dime"

Sonny & Cher may not have been market gurus, but the song captures the current market action. The "drums keep beating."

… The Bad There was some important bad news for the economy. The story is rarely one-sided. There is a continuing problem on several fronts, a widely known "wall of worry" that is already reflected in current market prices.

HOUSING SALES OVERSTATED. The most important bad news of the week came from the CoreLogic Year-end Summary of Trends. I read their reports, and so should you. Calculated Risk has a nice summary, showing that the existing home sales from the National Association of Realtors may be overstated by 15%. Consistent and aggressive critic (another of our featured sources) Barry Ritholtz has this take.
RETAIL SALES. This was a big disappointment.
INITIAL JOBLESS CLAIMS. The highly volatile series moved higher, but the trend continues lower. It is not good enough to improve the employment picture…’

Correlating U.S. Demographics, Trade Deficits and Employment Lounsbury’ Recent analysis found that the U.S. trade balance deficit for manufactured goods was the equivalent of almost 29 million jobs over the past 19 years. The analysis referred to these as exported jobs.

What if some of the manufacturing jobs had been retained? How would U.S. employment have been affected? Would we have anything like the high unemployment rates experienced over the past two years?

The following analysis shows that the U.S. simply didn't have the population needed to produce what we have been consuming. The trade deficit is actually a demographic problem as well as a global competition problem for the U.S.

Labor Participation Rate

First let’s look at the labor participation rate over the past 60 years.

click to enlarge images

[chart]

Over the last 25-30 years the institution of two wage-earner households became entrenched and the labor participation rate rose above 65% as of 1985. In 2010 the participation rate fell back below 65% as a result of severe employment dislocations produced by The Great Recession.

The following graph focuses on the years starting with 1992. Two arbitrary areas are identified by the author, a “peak” participation rate and a “healthy” rate. These arbitrary definitions may be subject to debate.

[chart]

These two definitions are used to examine counterfactual participation rates in the following discussion.

Manufacturing Jobs Have a High Multiplier

In the previous article a graph was presented which showed the number of manufacturing jobs “exported” each year starting with 1992. What was not discussed in the previous article is that jobs have multiplier factors. If one person receives a wage much of that money is spent and that creates additional jobs. For each person working in a particular job, other people are employed in support industries. The total of all these additional jobs is what comprises the jobs multiplier. The mathematics can be reviewed here.

The multiplier varies for different types of jobs and is determined by collecting experimental data in the actual economy. Manufacturing jobs have high jobs multipliers. A table of jobs multipliers is shown in the following table:

[chart]

A number of data sources have been reviewed for the value of the manufacturing job multiplier in the U.S. These are shown in the following table.

[chart]

Active links from the table:

Connecticut.gov

Economic Policy Institute

Content First

Washington State.gov

California.gov

A jobs multiplier of 3.0 means that each job represents a total of three jobs: the original job plus two others that exist only because that original job is there. One estimate for all employment is an average multiplier of 1.9. For manufacturing the multiplier is close to 3. For every manufacturing job gained or lost directly, two other jobs, on average, are gained or lost.

For the rest of this article we will use the multiplier of 2.9. Using that value, the number of jobs lost each year since 1992 because of the trade deficit for manufactured goods has been calculated and is shown in the following graph. The lowest line represents the number of direct manufacturing jobs exported. The second line is the number of dependent jobs lost and the top line is the total number of jobs, direct and indirect, that were exported.

[chart]

What If All “Jobs Exported” Had Been Retained?

If all the direct and indirect jobs that have been ‘exported” had been retained, what would the unemployment picture have been forth past 18 years? This is displayed in the following graph.

[chart]

There are two shaded areas in the graph. The blue area encompasses all the commonly accepted values for NAIRU. The salmon area defines where labor shortages would occur, the lower the percentage the greater the shortage.

The red line shows the counterfactual case calculated for the “exported jobs” being retained and the labor participation rate staying at the peak (67%). The green line shows the counterfactual unemployment rate provided the participation rate actually experienced is used.

A reasonable conclusion from this graph is that, to retain the number of jobs estimated, labor would have to be imported or the labor participation rate would have to rise above the all-time peak. Without some combination of those two factors there would have been labor shortages 14 of the last 16 years (1994-2007)

Note: NAIRU refers to a Milton Freeman defined term: Non-Accelerating Inflation Rate of Unemployment

What If “Jobs Exported” Had Been Reduced by Half?

The next counterfactual situation examined is the case where half of the “exported jobs” were retained each year. The following graph shows the official unemployment rate average each year (blue), with two counterfactual unemployment rates.

[chart]The red line shows the counterfactual case calculated for ½ of the “exported jobs” being retained and the labor participation rate staying at the peak (67%). The green line shows the counterfactual unemployment rate provided the participation rate actually experienced is used.

What If 25% of “Jobs Exported” Had Been Retained?

The following graph shows official and counterfactual unemployment rates if 25% of the “exported jobs” had been retained.

[chart]

Even if 75% of the “exported jobs” had occurred, the U.S. would still have had labor shortages almost in seven of the past 19 years. The unemployment rate would have been below 4% for1997-2000 and 2005-2007. If the labor particpation rate had remained at peak (67%) throughout this time period, there would have been labor shortages only in the last four years of the 2oth century.

Caveats

There are many assumptions to be questioned in this analysis. A few are listed here:

Would our trade surplus in services have been less (thereby reducing service employment) if there had been no deficit for goods?
Would FDI (foreign direct investment) in the U.S. have been less? See Elliott Morss. FDI in the U.S. creates jobs.
Would the FDI by the U.S. have been reduced to offset any loss of FDI in the U.S.?
Is the multiplier for manufacturing jobs accurate for the type of manufacturing that was "exported"?
Are the assumptions about peak and healthy participation ratios really appropriate?

I expect there are many more open issues here and I expect that readers will eagerly point them out to me.

Conclusion

The U.S. has been on a consumption binge. The examination discussed here indicates that the country has been living beyond its means to produce what it consumes. That doesn't even consider that we have to import more than half of the energy used. If the production of even part of the production of goods that have been imported over the lat 14 years had been retained domestically, there would not have been enough labor available to fill the jobs that would have been required.

So the U.S. has been living beyond its means in three ways:

Beyond its means to provide energy used;
Beyond its means to pay; and
Beyond its means to produce what it consumes.

Further work is in progress to examine:

How much more labor force participation would have been needed to prevent labor shortages from occuring; or
How much labor would have had to have been imported; or
What combinations of the two would have done the trick.

There is one additional area being studied: How does the undocumented worker influx that has occurred over the past two decades interact with these labor requirement scenarios.

More articles on this topic will be forthcoming in the next few weeks…’

Buy the Dips or Sell the Rally - The One Indicator that Knows Maierhofer, February 22, 2011, 5:51 pm ‘Low-Risk. The term 'low-risk' has the same appeal in the investment world as the enticing little word 'free' in the advertising world.Some advertising executives claim that 'free' is the most powerful word in the ad world. 'Low-risk' might be the most powerful concept in the investing universe.If you read the ETF Profit Strategy Newsletter you are very familiar with the term low-risk entry. If you don't, here's a quick summary and crash course of an indicator that's been 100% accurate over the past 6 months.Low risk entries for various indexes are identified or triggered by a relative strength indicator called percentR. PercentR is expressed on a scale from 1 - 100. Readings above 80 are considered overbought, readings below 20 oversold.If you read the ETF Profit Strategy Newsletter you are very familiar with the term low-risk entry. If you don't, here's a quick summary and crash course of an indicator that's been 100% accurate over the past 6 months.Low risk entries for various indexes are identified or triggered by a relative strength indicator called percentR. PercentR is expressed on a scale from 1 - 100. Readings above 80 are considered overbought, readings below 20 oversold.

Uncannily Accurate

A picture says more than a thousand words and the chart sheds more light on the value of percentR. As you can tell by the red line, following the W bottom in November (not shown in the chart), percentR spiked above 80 (first yellow circle) around S&P 1,210. This was the initial buy signal. [chart]With two exceptions, percentR remained above 80 ever since. The two dips below 80 (yellow circles) on January 19 and 28 triggered a low-risk entry. Even though investors were worried about riots in Egypt, according to percentR it was time to buy.This bullish low-risk entry is valid as long as the underlying index (in this case the S&P 500) does not close below that day's low (white line). In both instances, the S&P (SNP: ^GSPC) stayed above that low and went on to rally over 5%.

Other Low-Risk Entries

Corrections are Healthy, if ...

'Corrections are healthy' is one of many ambiguous Wall Street sayings. If you judge the current 'bull market' purely on this statement, this market is one sick puppy - there hasn't been more than a 2.5% correction in nearly a quarter - and needs a serious correction to be jolted back into healthy territory.Put yourself in a time capsule and zoom back to April 2010 when the major U.S. indexes declined nearly 20% before the promise of QE2 resurrected stocks. There was little conviction then that corrections are healthy. The correction had rattled the investing masses and shaken out many stockholders before the market went on to rally again.PercentR is the canary in the coalmine that identifies a deeper correction. No significant sell off happens without a failed low-risk entry.A failed low-risk entry occurs when the indexes close below the low of the day that triggers the low-risk entry (white lines on the chart). The last failed low-risk entry happened in November 2010 when stocks chopped around for a few weeks and ultimately lost about 5%. Another failed low-risk entry flashed a sell signal on August 11 and ushered in a 21 day, 8% sell off.

The Right Tool for the Job

Any craftsman will tell you that there are limitations to any tool, but there's a tool for each job. percentR is the right tool for the current job.After a parabolic rally, the job at hand is to distinguish whether pull backs are a buying opportunity or a warning signal. Should you buy the dips or step on the sidelines (or even short the market)?The ETF Profit Strategy Newsletter consistently monitors percentR as part of measuring the health of the market and sends out special alerts when a low-risk entry (or failed low-risk entry) has been triggered. Considering today's sell off, it sure will be valuable to see what percentR has to say. Buying opportunity or time to sell?’

"Are Your truly dead?" The IMF, Watson and Schrodinger's Cat. [ On forbes, of new york / new jersey the hotbed of mob / wall street fraud and corruption and leading sinkhole of the nation, and of failed capitalist tool fame, do they waste an article and time on fraud / spam as a matter of course. I get a few or more of these routed to my spam box each day. Moreover, invariably upon visiting the forbes site / article my anti-virus picks up and blocks numerous malicious adware, url, etc., queries (it’s become pathetic the number and amount of s**t, ads, scripts that are crammed into some web pages these days); and, almost invariably, coming from the forbes ny / nj faux capitalist tool sight, all for nought! What a waste of time forbes et als are! ]

US Taxpayers Give $150 Million to Post-Revolutionary Egypt Zero Hedge | Taxpayer funds go to buy the love and admiration of a society in transition.

Obama’s 2012 Budget: Tool Of Class War Paul Craig Roberts | Continues Wall Street’s war against poor & middle classes.

Geithner Helping the Chinese? Reuters | Diplomatic cables lay bare China’s growing influence as largest U.S. creditor.

Insider Report: US Government Will Confiscate Gold When It Touches $2000 It’s no secret that the US government is broke, the US dollar is crashing and losing credibility globally, and the IMF, China, France and others have publicly stated their desire to eliminate the dollar as the world’s primary reserve currency.

Barclays bank forced to admit it paid just 1% in corporation tax in 2009 Barclays Bank has been forced to admit it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits.

Obama’s FY 2012 Budget Is A Tool Of Class War Obama’s new budget is a continuation of Wall Street’s class war against the poor and middle class. The effect of the Federal Reserve’s “quantitative easing” on inflation, interest rates, and the dollar’s foreign exchange value are yet to hit. When they do, Americans will get a lesson in poverty.

Is China Hoarding Gold In Anticipation Of A Global Financial Implosion? 10 Facts About Gold Fever In China That May Surprise You China officially has gold fever. Chinese demand for gold in 2011 is being called “explosive” and “voracious”. China imported five times as much gold in 2010 as it did in 2009, and this year gold sales in China are projected to easily set another new all-time record.

Valuations for Five Major Banks with Bearish Warnings Bauer ‘…The general market is currently over-valued, over-bought and is showing signs of deterioration, especially in the area of breadth. Interest rates are on the rise and inflation is already a serious problem. This means that you must consider holding cash or perhaps taking bearish positions…’

World Oil Prices Soar After Libyan Unrest

VOA News | World oil prices rose sharply on Monday as violence in Libya sparked worries that energy supplies could be disrupted.

Max Keiser on Revolts: Americans Joining Middle East Uprising Trend

Dozens of people have been reported killed in the Libyan capital Tripoli overnight as violence continues to spread across the country. Key administrative buildings have been set on fire, with thousands of anti-government activists still on the streets calling for an end to the 41-year rule of Colonel Gaddafi. To find out more about how the Middle East upheaval is impacting global economic patterns, we’re joined live now by RT’s financial guru Max Keiser…

Oil Jumps to Two-Year High, Gold Reaches $1,400 on Mideast; Stocks Decline

Oil rose to a two-year high and gold rallied for a sixth day surpassing $1,400 an ounce, as tension in the Middle East escalated. Stocks fell for the most in a month as Eni SpA led companies with operations in Libya lower.

The Simple Reason A Bahraini Revolution Could Trigger A Brand New Financial Crisis

As if geopolitical instability in the Mideast weren’t inherently reason enough for investors to worry, here’s another angle to consider.

Ongoing Overnight Short Squeeze Takes Silver To Fresh 31 Year High

Silver takes out $33.10, hitting a fresh 31 year high, as the relentless short squeeze leads to more body bags, and the only flight to safety currency is now the non-dilutable one (with gold on the verge of $1,400).

Wall Street Shares Fall Sharply Amid Libyan Unrest New York Times | Political turmoil in the Middle East and North Africa continued to haunt financial markets

Europe Stocks End Lower As Libya Worries Escalate Dow Jones | The Stoxx Europe 600 index shed 0.6% to close at 285.38.

Gold, Silver, Crude Oil Sharply Higher As Violence in Libya Climbs Forbes | Stand-off in Libya has triggered renewed speculation in precious metals and crude oil prices.

Cables show China used debt holdings to press US Leaked diplomatic cables vividly show China’s willingness to translate its massive holdings of US debt into political influence on issues ranging from Taiwan’s sovereignty to Washington’s financial policy.

Oil Goes Berserk In Electronic Trading As WTI Passes $98 As Zero Hedge advised in early January when the severity of the Maghreb revolution was made all too clear to anyone not willing to stick their head in the CNBC sand, oil could well be the buy of a lifetime ahead of a downward spiral of unprecedented geopolitical proportions.

Parabolic Flight To Silver, As April Crude Touches $98.48, Irrelevant Dollar Unch There was a time, long ago, when the dollar was a flight to safety instrument. Those days are gone. DXY barely budging as the overnight session begins, while silver has already put $34 in the dust. Last: $34.26 and parabolic.

Central Economic Planning at its Worst Last week, the Financial Crisis Inquiry Commission (FCIC) presented its results to the Financial Services Committee. As with most other politically-appointed commissions, the results of the FCIC’s investigation were easy to predict.

National / World

Gaddafi Defies Revolt With Tanks, Planes Libya’s Muammar Gaddafi used tanks, helicopters and warplanes to fight a growing revolt, witnesses said on Tuesday, as the veteran leader scoffed at reports he was fleeing after four decades in power.

Libyans say Gaddafi “butcher”, flick V-for-victory The Libyan side of the Egyptian border was controlled on Tuesday by anti-Gaddafi rebels armed with clubs and Kalashnikov rifles who welcomed visitors from Egypt, a Reuters correspondent who crossed into Libya reported.

Middle East Uprisings: Order Out of Chaos Kurt Nimmo | An Islamic consolidation of power will feed the paranoia of the West and initiate the plan for a new war.

Globalists Seek To Hijack Middle East Revolution To Topple Iran Paul Joseph Watson | US military-industrial complex looks to exploit demonstrations to weaken Ahmadinejad’s regime.

Wisconsin’s economic protests will spread as health care costs bankrupt states Mike Adams | Today’s pharma-centric medical system would rather kill the patient than lose its monopoly.

Commodities Explode as BP Prepares to Evacuate Staff From a Burning Libya Zero Hedge | Is this one of those “who could have possibly seen it coming” moments?

Libya Conquered in the Dark Tony Cartalucci | The Egyptian and Tunisian protests are entirely the result of Western meddling.

Libya air force bombs protesters heading for army base Haaretz | Libyan military aircraft fired live ammunition at crowds of anti-government protesters in Tripoli.

Gaddafi flees Tripoli as protesters set the Libyan parliament building alight Mail Online | Anti-government demonstrators breached the state television building and set government property alight.

Gaddafi’s Israel Threat Linked To Libya Riots? Is it merely a coincidence that less than a week after Libyan leader Muammar Gaddafi threatened Israel by calling on Palestinians to capitalize on the wave of popular uprisings in the Middle East by massing peacefully on the borders of the Zionist state, his own regime is teetering on the brink of extinction following massive anti-government riots in Benghazi and Tripoli?

Reports Suggest Libyan Airforce Is Using Fighter Jets To Fire At Protesters Reports have begun circulating that suggest the Libyan airforce is attacking protesters with live ammunition from jets. Are these the desperate last throws of tyrants or propaganda from the elite overlords hanging them out to dry?

‘Bilderberg Hand’: Deadly chaos in Libya, Bahrain as Wave of Rage spreads Regional expert Adrian Salbuchi says that global dominance groups are behind the wave of revolts.

In Libya Revolution, nearly 400 killed The International Federation for Human Rights says as many as 400 pro-democracy protesters have been killed so far in the popular Libyan Revolution.

Globalists Seek To Hijack Middle East Revolution To Topple Iran While the current global revolt sweeping across the Middle East and North Africa is born out of a universal human cry for freedom, food security and a decent standard of living, it is important to understand that the global elite are waiting in the wings to exploit the chaos as an opportunity to re-order the geopolitical landscape in their image, particularly by exploiting the demonstrations as a vehicle through which to weaken and topple the Iranian government.

The Popular Uprising in Egypt. The Military Machine Remains Intact. The Political Status Quo Prevails The same group of Egyptian generals running Cairo presently formed the backbone of the Mubarak regime. There has been no real change in government. The military junta represents a continuation of the Mubarak regime. The previous so-called civilian administration and the Egyptian High Council of the Armed Forces are virtually the same body.

Protests spread to Libyan capital, troops defect ABC News | Demonstrations have begun in Tripoli and witnesses say security forces are using live ammunition and tear gas on protesters.

Mubarak and Ben Ali comas: What would Tacitus say? The Times | Will desposed dictator syndrome become contagious?

Egyptians Return to Street to Push Army on Reforms WSJ | Hundreds of thousands of Egyptians rallied Friday to celebrate former President Hosni Mubarak’s ouster.

The Middle East and Then the World Activist Post | The globalist fueled color revolutions are attempting to profoundly transform entire regions of the planet in one sweeping move.

Bahrain uses UK-supplied weapons in protest crackdown Guardian | The British government has launched a review of arms exports to Bahrain.

Alex Jones: NWO orchestrated protests RT America | Protests were orchestrated by the NWO and use this as fury in the streets to roll in another layer to the police state.

Why can’t the US legalize drugs? There’s ‘too much money in it,’ Clinton says Raw Story | Asked by Denise Maerker of Televisa what she thought of drug legalization, Clinton said it was unlikely to work.

Public Worker Protests Spread From Wisconsin to Ohio In what union leaders say is becoming a national fight, protests against legislation to restrict public employees’ collective-bargaining rights spread from Wisconsin to Ohio.

The Middle East and Then the World Beginning in North Africa, now unfolding in the Middle East and Iran, and soon to spread to Eastern Europe and Asia, the globalist fueled color revolutions are attempting to profoundly transform entire regions of the planet in one sweeping move.

CIA Coup-College: Recycled revolutionary “props” Tony Cartalucci | Suspicious similarities between Egyptian unrest and known US-backed uprising in Serbia.

The Hidden Weakness of Natural Health Laws Brandon Turbeville | The U.S. has seen increasing interest in natural healthcare, vitamin and mineral supplements.

Libya defiant as hundreds of protesters feared dead Guardian | Witnesses describe ‘massacres’ as Libyan troops shoot unarmed demonstrators in Benghazi

Iran Naval Ships to Cross Suez Canal on Monday Reuters | Two Iranian naval ships will sail through the Suez Canal to the Mediterranean on Monday.

Will The Great Firewall Of China Prevent Tomorrow’s Beijing “Jasmine Revolution”? Zero Hedge | There are postings from Chinese activists calling for protests in major cities.

Widow: Pentagon aide Wheeler ‘killed by hitman’ UK Daily Mail | Prominent Washington aide John Wheeler was assassinated by a hitman in a targeted killing, his widow has claimed.

Arrested US official is actually CIA contractor (AP) ‘…Davis, a former Special Forces soldier who left the military in 2003, shot the men in what he described as an attempted armed robbery in the eastern city of Lahore as they approached him on a motorcycle. A third Pakistani, a bystander, died when a car rushing to help Davis struck him. Davis was reportedly carrying a Glock handgun, a pocket telescope and papers with different identifications…’

Libya, Bahrain, Iran, Yemen and Other Arab Governments Killing Protesters Mubarak was not the only brutal dictator in the Arab world.

Bahrain uses UK-supplied weapons in protest crackdown The British government has launched a review of arms exports to Bahrain after it emerged that the country’s security forces were supplied with weapons by the United Kingdom.

Libya unrest death toll reaches 84: HRW At least 84 protesters have lost their lives and hundreds wounded in Libya in three days of pro-democracy protests in the African country, Human Rights Watch (HRW) says.

Gadhafi's hold on Libya weakens in protest wave (AP) Deep cracks open up in Moammar Gadhafi's regime after more than 40 years in power, with diplomats abroad and the justice minister at home resigning, air force pilots defecting and a fire raging at the main government hall after clashes in the capital Tripoli. Protesters called for another night of defiance in Tripoli's main square despite the government's heavy crackdown.

Rumsfeld says $2.3 Trillion never lost, just untracked (yeah … riiiiight! Untracked into their pockets … untracked WeAreChange | Activists confront Rumsfeld on missing Pentagon funds.

Muslim Brotherhood Cleric Calls for Fatwa on Gadhafi UPI | “It is not heroism to fight your people and to hit them with missiles,” Qaradawi said on al-Jazeera.

Muslim Brotherhood: Gaddafi’s son wounded, dictator has fled International Business Times | The report says Gaddafi, his wife and daughter have fled the country.

Medvedev Warns “Fanatics” Will Take Over Middle East Kurt Nimmo | Says color revolution will not be tolerated in Russia.

Medvedev: Revolutions Could Lead To “Disintegration” Of Middle East Paul Joseph Watson | Aftermath of revolts could “set the region on fire for decades to come,” warns Russian President.

Defiant Gaddafi vows to die as martyr Reuters | Gaddafi vowed to die in Libya as a martyr in an angry television address.

Police Would “Absolutely” Use Force On Wisconsin Protesters Paul Joseph Watson | Despite publicly condemning Governor Scott Walker’s proposal, troopers would obey orders to crush dissent.

Alex Jones: The “Justin Biebler” Rant Infowars.com | Alex talks about real heroes, not manufactured plastic heroes pushing carbon taxes.

Rising food prices nearing danger point: World Bank World Bank president Robert Zoellick warned leaders of the top global economies Saturday that the world is reaching a danger point where soaring food prices threaten further political instability.

UNREST IN THE MIDDLE EAST Bahrain military retreats after shootings (Washington Post)

U.S. vetoes Security Council resolution denouncing Israeli settlements (Washington Post) [ `Drudgereport: Hillary Clinton: Israeli Settlements 'Illegitimate'… [We know that hill … We’ve known that for quite some time along with their illegal nukes, war crimes, etc…The whole world knows that hill… so don’t just talk about it … DO SOMETHING! ] ... Yes! … in pervasively corrupt, defacto america’s self-defeating, self-destructive way they are doing something …`U.S. vetoes Security Council resolution denouncing Israeli settlements … Sounds like a plan! … right! ]

SEC names Sean McKessy to head new whistleblower office (Washington Post) The appointment sets off alarm bells among whistleblower advocates. [ Indeed it should, regardless of ‘who’. In pervasively corrupt, defacto bankrupt america there is always that pre-calculation: juice / no juice, payer (bribes/contributions) / non-payer, potential after gov’t job opportunity / no job opportunity, etc.. Video: Why Isn’t Wall St. in Jail? [ This truly will prove to be the story of the century (albeit an abbreviated one and a turning point toward america’s intractable decline) owing to what will ultimately be the lynch-pin of global economic / financial collapse ushering in an era of great scarcity in more ways than can be imagined. The pervasively corrupt, defacto bankrupt american nation / government has literally underwritten this massive fraud at the expense of the vast majorities directly and indirectly, precluded prosecution while obfuscating the substantial crimes, literally becoming accomplices thereby. There is absolutely no excuse for what is essentially a defalcation and abrogation of duty. I was watching a somewhat obscure film recently which (though elsewhere on this page and site I’ve set forth alarming crime statistics clearing showing america as number 1 in all categories by wide margins) which set forth the statistic that america has 85% of the world’s serial killers (and I’d go further in saying it is likely that america has a similar lead in war crimes, etc.) ] MSNBC | Cenk Uygur talks to Matt Taibbi about his latest Rolling Stone article. …… I mean, give me a frickin’ break! Let’s get real here … probably the most egregiously dangerous years for whistleblowers were the clinton years when even potential whistleblowers were targeted; ie., Mary Mahoney, former clinton security team members, etc., see http://albertpeia.com/bodycount.htm ie., Mary C. Mahoney: 25, murdered at the Georgetown Starbuck's coffee bar over the 4th of July '97 weekend. She was a former White House intern who worked with John Huang. Apparently she knew Monica Lewinsky and her sexual encounters with Bill Clinton. Although not verified, it has been said that Lewinsky told Linda Tripp that she did not want to end up like Mahoney…Steve Willis, Robert Williams, Todd McKeahan & Conway LeBleu: Died Feburary 28, 1993 by gunfire at Waco. All four were examined by a pathologist and died from identical wounds to the left temple. All four had been body guards for Bill Clinton, three while campaigning for President and when he was Governor of Arkansas.They also were the ONLY 4 BATF agents killed at Waco…, etc. but the bushies / cia / wall street are comparable and as well in some different, more subtle ways; ie., discrediting, false charges, etc.. ] The appointment sets off alarm bells among whistleblower advocates.

A frayed alliance: Obama and unions Wis. budget impasse deepens (Washington Post) [ Frayed? How ‘bout flayed, fillet, and souffled … Or, screwed, nude, and double chewed … Drudgereport: OBAMA BACKS UNION UPROARPELOSI BACKS PROTESTERS: 'I STAND IN SOLIDARITY'...

DEBT NOW EQUALS ENTIRE ECONOMYOBAMA AGENDA IS OVERObama refers to himself as 'The Gipper'… [ Riiiight! …anything you say wobmama the b for b*** s***… or maybe the bipper, the chipper, or the yankee clipper (the new joltin’ joe) …sounds like he’s losing it! ] ... BUDGET WOES FORCE STATES TO CONSIDER ABOLISHING '12 PRESIDENTIAL PRIMARIES...
STATE BUDGETS ON THE BRINK: CA, TX, IL, NY, NJ... WISC GOV: 'NOT GOING TO BE BULLIED, INTIMIDATED'...
Orders state troopers to bring Dems to Capitol...
'There Is Fear For Scott Walker's Safety'...
Dem Sen: We'll stay away for weeks...
WALKOUT: Milwaukee Schools closed; teachers call in 'sick'...
REPORT: Average city teacher compensation tops $100,000...
PAPER: GET BACK TO WORK!
DNC playing role in protests...
Jesse to the Rescue: Jackson rallies protesters...
'A real Martin Luther King moment'...
Union Fight Heats Up...
Republicans vow to cut spending in state capitols...
Protests Spread to Ohio...
Michigan...
'Coming To Minnesota'...
Idaho offical target of threats over education reform plan...
Egypt in America? 'Day of Rage' Hits Wisconsin over state unions...
Madison schools closed; 1,100 teachers call in 'sick'...
Obama: 'Assault on Unions'...
Obama-founded OFA spearheading effort to defeat bill...
Boehner: 'Suspend these tactics'...DEMS FLEE STATE HOUSE
SENATE DEMOCRATS FOUND -- AT A RESORT IN ILLINOIS!
Gov. Walker calls on Dems to return, vote...
Protesters, supporters clash in Ohio over union bill... Activists swarm Boehner's Capitol Hill home; Chant 'don't tread on DC'.. Carney: Stimulus 'Goals Have Been Met'...
GALLUP: Unemployment hits 10%...
Feds Borrow Additional $29,660/Household Since Obama Signed Stimulus...
Ratings Downgrades Loom for Cash-Strapped States... Hillary Clinton: Israeli Settlements 'Illegitimate'… [We know that hill … We’ve known that for quite some time along with their illegal nukes, war crimes, etc…The whole world knows that hill… so don’t just talk about it … DO SOMETHING! ] ...

Offended Mubarak refuses calls from Obama... Ahmadinejad: Obama can't spell his own name (True … it’s ‘w o b a m a’ with ‘the b for b*** s***’ his surname … he’s so pathetic and a total caricature / joke!) ... Egypt's protests flare despite military warning...
Libya set for 'day of anger'...
Thousands of police confront protesters in Yemen...
Riot police storm Bahrain camp; 2 reported dead...
ABCNEWS Correspondent Beaten...
100 Egyptians reach Italy amid Arab exodus...
CARTER: Muslim 'hood nothing 'to be afraid of'...
PAPER: Senate hearing turns into farce as American ignorance on Egypt revealed...USA TO REBUKE ISRAEL AT UNPoll: Majority of Republicans Doubt Obama's Birthplace... Agents Shot in Mexico...
WORRIES OBAMA OFFICIALS...
ICE IN VICE...
GAO: Feds have 'operational control' of 44% of border; just 15% 'air tight'... DAY 3: 'Watson' the computer creams human 'JEOPARDY!' champs... REPORT: Steve Jobs receiving treatment at cancer center... PAPER: 'Reportedly sicker than previously admitted'... ISSA MAKES A MOVE: New subpoena seeks records on sweetheart loans...U.S. Government Shuts Down 84,000 Websites, ‘By Mistake’

'Kill Switch' Internet bill alarms privacy experts...
GOP BLASTS FCC NET RULES...

TSA agents busted at JFK for stealing $160,000 from bags...

Hillary Clinton donors indicted... Man mugs 96-year-old -- for $5... France Wants New Global Finance System; End of Dollar Dominance... Fannie, Freddie bailout: $153 billion and counting... GALLUP: Unemployment at 10.3%... Muslim Bros plan political party...
Present Two Faces...
Pakistan Islamists warn of protests if US prisoner freed...
SECSTATE JR: Sen Kerry arrives in Pakistan, expresses 'regret', 'sorrow'...GADDAFI TELLS PALESTINIANS: REVOLT AGAINST ISRAELWorld Bank: Food prices at 'dangerous levels'...Gov't Motors to pay out $189 million in bonuses; some workers to get 50% payoffs.. Deficit Expected to Jump to $1.65 Trillion...
...'slow train wreck coming'
BUDGET BLOWOUT: How big is $3.73 trillion? $12,000 from each American...
ANALYSIS: $1.5 trillion tax hike over 10 years...
AIRLINES: New fees would be $2 billion tax increase on flyers...
Sessions: Obama failed on budget...
Long Spending Fight... Produce prices to skyrocket with freeze in Mexico, Southwest...
Clothing Prices to Rise 10% Starting in Spring... China Replaced Japan in 2010 as Number 2 Economy...
China plans Colombian rail link to challenge Panama canal...The March On Berlusconi... Berlusconi indicted in prostitution probe...

Malware 'Aimed at Iran Hit Five Sites'...

Mubarak 'falls into coma after final speech'...
Egyptian military orders last protesters out of 'Liberation Square'...
Consolidates power...
Delivers ultimatum... Boy wrestler forfeits match to female opponent... [ What a homo! Wow! I feel sorry for those guys she actually beat (20 of them – her record was 20 and 13) … they’ll probably never get over it … nor should they … I have to rethink my regard for Iowa, Iowa state wrestling now presuming such stalwart championship teams to be the products of out-of-state imports … as for the guy who forfeited, he could have easily and gently taken her down (you can easily do that with a lesser opponent), got her in a double grapevine and grind her in a certain way into the mat, and when she was in the throws of convulsive orgasm, she’d unwittingly arch her back, thereby pressing her own shoulder blades to the mat, thereby pinning herself, thus enabling the homo to say in a manner of speaking that he was making heterosexual love not war with her ……… how pathetic and preposterous this was … and, let me remind the homo that God doesn’t care that you wrestle a girl who wants to wrestle! ]

]

House approves dramatic cuts in federal spending Vote sets up showdown with Dems; threat of shutdown looms (Washington Post) [ As they say on SNL, ‘What’s up with that?’. Come on! Wake up! That doesn’t even cover the interest on a $14 trillion debt. And, how disingenuous of the author to write, ‘largest cut of its kind since WWII’… Not in percentage terms by a long shot! … Timid Tuesday: Is it Safe? Davis ‘… This is how we pay off our current debts and I think bondholders are simply happy to get anything out of a country that admits it owes $15Tn (1/4 of global GDP) but probably owes closer to $60Tn (entire global GDP) in the form of unfunded liabilities. The funniest thing about this (and you have to laugh) is to see Conservative pundits get on TV and talk about how we need to cut $100Bn worth of discretionary spending to "fix" this (while continuing to spend $1Tn on the military and $1Tn on tax cuts for the top 1% each year). There is no fixing this and even a Republican said you can’t fool all of the people all of the time. THIS HOUSE OF CARDS IS TEETERING FOLKS – PLEASE BE CAREFUL OUT THERE! ‘ ] After all-night debate, House votes 235-189 to approve plan to cut $60 billion in federal funding in what'd be the largest cut of its kind since WWII.

The Four Horsemen of the Dow: Dave's Daily ‘No, I wasn't alive to watch the Four Horsemen of Notre Dame play football but I did watch the DJIA today. As you know this is a "price weighted" index. Four companies that rose today were among the priciest: BA, CAT, CVX and TRV. The rest were mixed to flat. Imagine if TPTB added AAPL or GOOG to the index. But, for most Americans, the DJIA is what they see most every day if they care. Cynically, as some say, it's just "window dressing for the tourists" to wit the current headline at the WSJ: "Stocks Close at 2 ½ Year High". Does it really matter that four stocks accounted for the positive headline? If, you're looking deeper into what's really going on in markets, sure it should. But many investors aren't that curious especially when interest rates remain near zero and POMO is ubiquitous encouraging investors to take more risks. No matter unemployment shows no sign of improving, housing is still in the dumps and key strategic countries (Bahrain, Libya, Egypt, Yemen, Algeria and Tunisia) are all aflame. There wasn't any economic data today other than Bernanke defending his policies. And, there was little earnings news. The dollar was weak and most commodities were strong while bonds sold-off. In case you're interested I'll be doing a webinar for SFO Magazine "Around the World with ETFs". You may register here to listen and comment for free. Volume for an options expiration day was light but perhaps ahead of a three day weekend is understandable. Breadth was pretty flat per the WSJ.’

Stock Melt-Up Continues to Ignore Warnings [ While I generally warn against short-selling as an investment strategy for all but the most successful speculators (there are very, very few), if there ever was a time to try your luck at same, that time is now! We’re now beyond the absurd in these overbought, overvalued, contrived, manipulated markets. See also, Dave infra, ‘…Further, the Philly Fed (riiiiight … that global hub of manufacturing activity) came in much higher than expected although inside the numbers the prices paid vs prices received disparity was the greatest since 1979. That wasn't a great time for corporate profits. Even though there's some "discussion" within the Fed over the effectiveness of QE operations another heavy dose of POMO was released to trading desks again Thursday. …’ Why Isn’t Wall Street in Jail? Matt Taibbi | Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them. This is a not too big to fail, but a too willing to pay bribes to jail - reality. (This really is beyond the pale, particularly when they trumpet prosecution of $225 million in medicare frauds while wall street’s continuing fraud in the trillions remains unprosecuted – there is no excuse whatsoever – pervasively corrupt, defacto bankrupt america is done!). ] Minyanville ‘Suttmeier, chief market strategist at ValuEngine.com: The stock melt-up has the major equity averages above this week’s pivots putting the focus on the Nasdaq and its quarterly risky level at 2853. The Dow Transports broke above the potential double-top. Stocks are ignoring the ValuEngine Valuation Warning and extreme overbought technical market indicators. The 10-Year yield failed at my weekly risky level at 3.568 after holding my annual value level at 3.791 last week. Comex gold is above my annual pivot at $1356.5 and closed above its 50-day simple moving average at $1372.2. Nymex crude oil remains below my semiannual pivot at $87.52, but is now oversold. The euro is above its 50-day simple moving average at 1.3377 with this week’s risky level at 1.3636.

New Highs for the Move for the Major Equity Averages

The Dow Industrial Average (12,288) remains extremely overbought and closed above its weekly pivot at 12,274 testing 12,303.16. The 21-day simple moving average rises to 12,063 with today’s risky level at 12,399.
The S&P 500 (1336.3) closed above its weekly pivot at 1335.6, setting a new high for the move at 1337.61. The 21-day simple moving average rises to 1306.1 with today’s risky level at 1344.4.
The Nasdaq (2826) closed back above this week’s pivot at 2811 with my quarterly risky level at 2853. The 21-day simple moving average rises to 2756 with today’s risky level at 2840.
Dow Transports (5286) tested and held its weekly pivot at 5206 on Tuesday, then breaks above its January 18 high at 5256.80 to 5306.54 on Wednesday. Today’s risky level is 5317.
The Russell 2000 (828.37) is above its weekly pivot at 811.80 with its July 2007 high at 862.00. Today’s risky level is 837.39.

We continue to trade under a ValuEngine Valuation Warning -- Sixteen of 16 sectors overvalued with only 32.4% of all stocks undervalued on Wednesday, below the 35% threshold by this measure. This also means that 67.6% of all stocks are overvalued.

10-Year Note -- (3.619) Is between my annual value level at 3.791 and my weekly risky level at 3.568.

Comex Gold -- ($1375.3) My annual pivot is $1356.5 with the 50-day simple moving average at $1372.2 with my monthly risky level at $1412.4.

Nymex Crude Oil -- ($85.00) Continues to trade below my semiannual pivot at $87.52 and is now oversold on its daily chart with today’s value level at $82.85.

The Euro -- (1.3567) Still above its 50-day simple moving average at 1.3377 with my weekly risky level at 1.3636.

Housing Starts and Permits Remain Soft -- Housing Starts increased 14.6% in January, but the gain was entirely due to a 77.7% increase in the multifamily sector. Single family starts declined 1.0% to a 413,000 annual rate with single family permits down 4.8%. Overall building permits declined 10.4%.

More Information From the NAHB Housing Market Index -- If you look at the National Association of Home Builders Housing Market Index going back to 1985 it never went below 20 until October 2007. During the 1988 to 1992 mini-crisis the lowest reading was 20 in January 1991. For the current popping of the housing bubble this index peaked at 72 in June 2005, when the CEOs of the publicly traded home builders described the housing market as the best they have ever seen.

Back in June 2005 ValuEngine had the home builders extremely overvalued and I noted their weekly price charts were extremely overbought. I wrote a piece calling for a summer 2005 peak for the home builder stocks, which proved to be a prudent market call. The NAHB HMI has been 20 or below since September 2007 and has been between 13 and 16 the past nine months. The exception was a 22 reading in the height of the $8,000 first-time homebuyer tax credit in May 2010.

The Mortgage Bankers Association reported that their weekly Mortgage Applications Survey decreased 9.5% with the Refinance Index down 11.4%, to the lowest reading since July 3, 2009. The Purchase Index decreased 5.9%, and is 18.2% lower than a year ago. A major drag is attributed to the above 5% mortgage rate, up nearly a full percentage point from the October 2010 low, in the midst of when Fed Chief Bernanke was touting that the pending QE2 program would push longer-term yields lower to help consumers. The only thing that QE2 has done is inflate an equity market to an overvalued and overbought inflating financial bubble!

The minutes from the latest Fed Meeting indicates that unemployment and tight credit conditions continues to be a drag on the housing market. History repeats: Housing peaked in mid-2005 and the recovery has been nil. Community banks peaked at the end of 2006, and Bank Failure Friday continues. Regional Banks peaked in March 2007, and toxic assets remain in the banking system. Fed policy with that ridiculously low funds rate and QE2 is masking problems that will still plague the US economy for the next several years.’

January Weather's Economic Impact: Catalyst for Overdue Market Correction? [ As pointed out infra, the Index of Leading Indicators was up only a miniscule .1% . All components are particularly vulnerable to manipulation, false reporting, and outright fraud, particularly in light of the absolute desperation of those involved in the reporting along with to whom and of course the fraudulently manipulated to the upside stock prices which are a significant component and the ultimate bootstrap, so to speak. The election also figured prominently in the manipulation and even if believed (I don’t), still not so hot and a far more grim scenario is but around the corner. That scenario is : Reality! Investopedia: What Does Composite Index of Leading Indicators Mean? An index published monthly by the Conference Board used to predict the direction of the economy's movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy. These 10 components include:
1. the average weekly hours worked by manufacturing workers
2. the average number of initial applications for unemployment insurance
3. the amount of manufacturers' new orders for consumer goods and materials
4. the speed of delivery of new merchandise to vendors from suppliers
5. the amount of new orders for capital goods unrelated to defense
6. the amount of new building permits for residential buildings
7. the S&P 500 stock index8. the inflation-adjusted monetary supply (M2)
9. the spread between long and short interest rates
10. consumer sentiment ] Kaminis‘As we suspected, January weather is proving to have hampered economic activity. Blizzards and super storms rampaged across much of the nation last month, and economic reports are now showing the effects born to the economy. The latest such report, and broad reaching measure to make this case, is Leading Economic Indicators, but we've also seen data from companies like FedEx (FDX) offering good reason to adjust expectations and portfolios. As a publisher, I can give you firsthand testimony to the economic effects of January's weather. Almost all of my advertisers have reported dead business through the month, which has weighed on our own cash flow as well. January offered a rude awakening as to just how perilous are the operations of small businessmen, who have weathered the worst part of the recession, but are still just scraping by, and with little leeway for error.Economic reports should continue to prove out that the harsh weather that battered all of the country in January, especially the population concentrated Northeast, provided a speed bump to economic growth. The few January reports that have reached the wire to-date offer enough support to our case, but the stock market has not shown ill-effect as yet.The Leading Indicators Index, just reported for January, showed only a 0.1% increase. The meek result compared against December's revised 0.8% increase and November's 1.1% rise. The Conference Board, which puts the LEI together, reported that while the economic trend is expansionary, current economic conditions remain weak. The cumulative change in the LEI over the last six months is a solid 3.0%. However, the Board reported that the Coincident Economic Index, which measures current conditions, rose just 0.1%, following a 0.3% increase in December and 0.2% rise in November. Furthermore, the Conference Board's Lagging Economic Index dropped 0.1%.The factors behind the softness in January were listed as weaker housing permits and poor labor market indicators. We've posited here before that the weather likely played a role in weird results from the Labor Department last month, if not keeping depressed job searchers buried at home. We've likewise warned that the weather might throw off January's housing data, some of which has already been released, with more to come next week.Other reports have more clearly depicted the sad season we describe here. Industrial Production, reported Wednesday for January, produced a 0.1% decrease where economists were looking for a 0.5% increase. Capacity Utilization also confounded economists, falling to 76.1% from a revised 76.2% rate in December. Economists were looking for an improvement to 76.3%. Now, Industrial Production actually softened partly due to lower utility production on warmer average temperatures in January, which is a counter to our argument. Though, Factory Production in isolation and excluding motor vehicle production, rose modestly 0.1%, agreeing with our theory somewhat.
The softer data piles on. The month's Housing Starts data showed a slippage in permitting activity, as the pace slowed to 562K, from 627K in December. Furthermore, single-family home authorizations fell 4.8% to 421K. The pace of single-family housing starts also fell 1% to 413K. January's Retail Sales (and sales excluding autos) rose 0.3%, but both figures missed the economists' consensus expectations for 0.5% increases.As economists seem to have overlooked the weather in January, they have likely conveyed a certain optimism to strategists, who have likewise guided portfolio managers and analysts. As more data points are reported for January, and if they are reported significantly off, then stocks could sell off briefly over the short-short-term on a shift in understanding.Indeed, some companies have been directly impacted by the weather already, and others will likely report earnings impact in their Q1 releases. FedEx cut its projected fiscal third quarter EPS forecast to a range of $0.70 to $0.90, from $0.95 to $1.15, due to in part to "winter storms." Analysts had been looking for EPS of $1.02 on average, based on Bloomberg's data. Whether directly or indirectly, and based on my anecdotal witness, I think we can expect companies to report weather impacted results for this quarter. With economists, strategists and analysts potentially all off the mark, there's risk to stocks.Given the January weather is not an ongoing issue, you can look for analysts to blow off any negative surprises, and to guide investors to stick with their recommendations as they also save face. The weather is still considered a temporary and insignificant factor in valuation (though that's increasingly debatable given climate change), and so any damage to stocks should be only a trading hit that might open opportunities for long-term buying interests in good names. However, most technical charts, including those by our technical analyst, show a market overdue for a correction. Thus, perhaps we have here a catalyst.’

February 18, 2011: Market Summary [Caveat: This market is worse than overbought. This market is fraudulently manipulated, overvalued as preceded all other crashes and this time will be no different and in some ways worse owing to the structural shift away from pervasively corrupt, defacto bankrupt america. ] Investopedia ‘The past several weeks have been very difficult for traders who believe that the markets are headed for a pullback. It seems like any signs of weakness have been quickly overcome by the bulls and the markets continue to chug along as they race to new highs. While it is prudent to preach caution when the markets are in such a strong uptrend, the simple fact is that there is no evidence yet of a market top. It is wise for traders to respect this strength and simply recognize that the environment is overbought. In his famous quote, John Keynes stated that “the markets can remain irrational longer than you can stay solvent.” …’