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Baltic Dry Index Is Breaking Down. What It Predicts For The Markets Might Be Disturbing To Some

Baltic Dry Index, a measure of sea freight prices, is not doing very well. Signaling a worldwide economic slowdown. Down 25% in just two weeks, the index is just 150 points away from a technical breakdown. This works well with our overall stock market premise. Despite governmental claims of accelerating worldwide economic growth, at least the BDI is not buying it.

baltic dry index is breaking down

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Baltic Dry Index Is Breaking Down. What It Predicts For The Markets Might Be Disturbing To Some Google

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Why Are Markets Collapsing…..Jobs Report Was Good.

nasdaq chart

Since markets are performing exactly as our internal forecasts have indicated (to the day), I will tell you.  The markets are not driven by the fundamentals like “the jobs report”. The markets could care less. They have a beautiful mathematical structure within them and as such, they move in perfect mathematical order between the points of force. The fundamentals simply follow. Once you have the mathematical/timing framework down it is fairly easy to calculate, way in advance, exactly what the stock market is going to do. I show you exactly how in my book. Remember, the stock market will be down 10-20% before any fundamental data begins to show any warning signs. If you would be interested in learning exactly what will happen in the stock market over the next 2 weeks or 2 years, please Click Here.   

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Why Are Markets Collapsing…..Jobs Report Was Good.  Google

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Russia Outlines It’s Economic Warfare Plans Against The USA

In no uncertain terms, Gazprom CEO Aleksander Dyukov outlined Russia’s Economic Warfare plans against the USA in case of further sanctions or any further meddling associate with Ukraine.  To summarize….

  • Fundamental Shift & Move From EU/West To Asia/India: As discussed here earlier, Russia is currently making a major push to shift it’s gas and oil markets from the West to the East by signing a number of large longer-term contracts with both China and India.  
  • Move Away From The “PetroDollar” As A Reserve Currency: To demand payments for gas and oil in Euro, Yuan, Rubble, Gold or whatever else…..as long as it is not the US Dollar. As the theory goes,  since the US is heavily reliant on it’s Reserve Currency status for it’s ability to maintain a heavy debt load, any move away from the US Dollar would collapse the US Economy.  

I don’t buy this for the time being. Any such move by Russia will have a very limited impact, if any, on the US Economy or it’s financial markets as a whole. The US Financial System is way too large, too well diversified and there are way too many international players involved in the system to destabilize it that fast. Plus, our mathematical work in the Treasury market doesn’t confirm this either. I would give this a second thought if China decides to join Russia, but such a move would be highly unlikely at this juncture.    

In short, Putin might try, but he will fail. His own economy is on the verge of a collapse and he should pay a little bit more attention to that. In fact, if the US wants to finish off Russia it should collapse the price of oil to $20-30 for about 2-3 years and you will see another 1991 type of a regime change in Russia in short order. 

russia outlines economic warfare plans investwithalex

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<prussia outlines economic warfare plans investwithalex>Russia Outlines It’s Economic Warfare Plans Against The USA Google

 

RT Writes: Gazprom Neft CEO says ditch dollar, look east if sanctions escalate

The oil arm of Gazprom says 95 percent of foreign partners are ready to do business in the euro. The company’s CEO said it could divert exports to Asian markets should the West intensify sanctions.

A study reveals the task in changing currencies is achievable assured Aleksander Dyukov, the Gazprom Neft chief executive.

“This shows that in principle there is nothing impossible – you can switch from dollar to euro and from euro, in principle, to rubles,” as Vedomosti quotes Mr Dyukov.

The Gazprom Neft CEO said it’s important to also study the efficiency of the plan, its probability, and additional losses.

The CEO considers there is a low probability Western banks will reduce cooperation. No one wants geopolitical tension to affect their partnerships. However Gazprom Neft is ready to look to Asian lenders, and raise money in Russia.

“We think Western banks are unlikely to stop cooperating with us, but in any case we have paved a way to Asian lenders as well… plus there is a domestic market,” Dyukov added.

There is an opinion that any restrictions by the US directed at halting dollar operations, in the long-term, may lead the United States to a default, Dyukov says.

“The US currency is already loosing positions…The usage of the dollar as an instrument of punishment may decrease its weight as the reserve currency…Taking into account its huge national debt, at some instant there will be a problem with its refinancing as dollar assets will become interesting to nobody,” the top manager said.

In comments on other possible action by the West, Dyukov said that the US oil sale test on March 14 of 5 million barrels from its own strategic inventories could not shake the world oil market from equilibrium.

“Frankly speaking, I don’t know, what they were guided by. But that was made, in my opinion, as shot by shot to the elephant. The oil market, certainly, can be altered, but for that to happen it needs bigger volumes,” said Dyukov.

According to his calculations the minimal amount of oil to be sold in order to affect the world market should be around 3 million barrels a day long-term.

The head of Gazprom Neft supposes that none of the global oil manufacturers is interested in lowering the price. In particular, in the US where the cost of production of hardly extractable oil is high and any reduction in cost of raw materials will cut a projects’ profitability.

The world oil price remains robust as the May 14 futures of the WTI crude stand at $100.60, while Brent is selling at $105.63

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US Congressmen Are Underpaid, Can’t Afford A Decent Apartment?

According to at least one asshole, Rep. Jim Moran (D-Va.), at $174,000/year and multiple other perks, members of congress are being severely underpaid. Despite earning 3.5X median household income, Jim goes on to say…..

 “There are too many members living and sleeping in their offices. And it’s wrong. When you look into it, it’s not that they’re cheap, it’s not that they’re trying to game the system. They can’t afford to live here. It’s wrong.”

After shedding a few tears for our members of Congress I quickly came up with a reasonable solution. Abolish the FED. That way we won’t see asset/price inflation alongside massive bubbles. The best part is, if that happens Jim should be able to afford anything his greedy little heart desires on $174K. 

us congressmen are underpaid investwithalex

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US Congressmen Are Underpaid, Can’t Afford A Decent Apartment? Google

 RT Writes: Congressmen are ‘underpaid,’ can’t afford to ‘live decently’ in DC

Members of Congress make more than three times the median income of an American citizen, but one representative believes it’s not enough.

Speaking with CQ Roll Call, Rep. Jim Moran (D-Va.) said that the $174,000 annual salary lawmakers receive is not adequate enough compensation for their role in the government, to the point that their quality of life in Washington, DC, is affected.

“I think the American people should know that the members of Congress are underpaid,” Moran said. “I understand that it’s widely felt that they underperform, but the fact is that this is the board of directors for the largest economic entity in the world.”

Moran claimed that since lawmakers have to maintain two households – one in DC and one back in their home state – their allotted salary keeps them from living properly and spending time with their families.

Though Moran believes his compensation is too low, it’s still well above the median household income in the United States. As noted by CNN, that number was roughly $51,000 in 2012, statistically the same as the year before but down 8.3 percent since 2007.

According to the Associated Press, Congress has frozen its pay at $174,000 since 2010, and the House of Representatives is moving to keep the freeze in place another year. This approach did not garner the support of Moran, who is proposing an amendment that would grant congressional members a per diem payment to lessen the cost of housing.

“Our pay has been frozen for three years and we’re planning on freezing it a fourth year. … A lot of members can’t even afford to live decently in Washington,” he told Roll Call.

“There are too many members living and sleeping in their offices. And it’s wrong,” Moran added to the AP.“And when you look into it, it’s not that they’re cheap, it’s not that they’re trying to game the system. They can’t afford to live here. It’s wrong.”

Despite his move, Moran admitted to local 

 

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Warning: Tech Stocks Get Hammered….What’s Next?

After two weeks of heavy selling, Nasdaq investors are starting to get worried with put option volume soaring to the levels unseen since the 2010 flash crash.  Still, a lot of traders/investors are not concerned. 

The selloff last week isn’t a cause for alarm, according to BB&T Wealth Management’s Walter “Bucky” Hellwig, who said he wouldn’t be making any large changes to his stock holdings.

“For all the stocks that have done really well, there’s a trader that will say, ‘I want to nail down some of these profits,’” said Hellwig, a senior vice president at BB&T Wealth, which oversees $17 billion. “One day of sloppy trading isn’t going to cause us to change direction.”

Should you be worried?  

Absolutely!!! Listen, most market participants and pundits anticipate a typical market correction (at worst) before this “cyclical” bull market continues. However, that is not what our timing and mathematical work shows. On the contrary, it indicates that a large bear market in equities is just around the corner. When it starts it will quickly retrace a significant portion of the 2009-2014 bull move. If you would be interested in learning exactly when the bear market will start (to the day) and its internal composition, please Click Here.

As such, use market’s action over the last few weeks/days as a warning shot. 

 

fab 5 stocks

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Warning: Tech Stocks Get Hammered….What’s Next?  Google

Bloomberg Writes: Technology Traders Head for the Exit as Put Trades Surge

Two weeks of selling in the Nasdaq 100 Index, where valuations are double the rest of the market, has sent anxiety among options traders to the highest levels since the flash crash four years ago.

More than 1 million put options on anexchange-traded fund tracking the Nasdaq index changed hands on April 4 as investors sought protection during a 2.7 percent drop in the gauge. That’s the most trading in bearish contracts since May 7, 2010, the day after $862 billion was erased from the value of U.S. stocks in a matter of minutes. King Digital Entertainment Plc has slid 16 percent since going public March 26.

While the selloff has been orderly this time, technology shares with valuations twice as high as the rest of the market are being hit as traders dump the biggest winners of the bull market. The Nasdaq 100 fell the most in two years on April 4 with declines in all but four stocks. Traders took shelter in shares such as Coca-Cola Co. (INDU) and McDonald’s Corp.

“The market is preparing itself for further trouble and going to more GE instead of gee-whiz type of companies,” Matt McCormick, who helps oversee $11 billion as a portfolio manager at Cincinnati, Ohio-based Bahl & Gaynor Inc., said in a phone interview on April 4. “Their valuations are inexcusable.”

Investors have shifted money out of Internet and biotechnology stocks and favored companies with stable dividends and earnings. General Electric Co., which pays shareholders 3.4 percent (GE), is up 1.4 percent in the past month, while Tesla Motors Inc. (TSLA), Facebook Inc. and Netflix Inc. slumped more than 16 percent. The Nasdaq 100 has rallied 239 percent in five years.

Lehman Brothers

In Asia, Tencent Holdings Ltd. slumped to a two-month low today, and a gauge of Internet companies erased its advance for the year. European technology companies fell the most, with Alcatel-Lucent SA losing 3.1 percent and Nokia Oyj sliding 2.8 percent. Nasdaq 100 futures declined 0.7 percent at 6:31 a.m. in New York today.

The selloff boosted options trading as investors looked for strategies to protect equity holdings from declines and speculate on future swings. More than 2 million contracts on the PowerShares QQQ Trust changed hands on April 4, the most since Lehman Brothers Holdings Inc. filed for bankruptcy in 2008.

“We’re still seeing a significant number of put buyers” in the QQQs, Kurt Ayling, a technology, media and telecom desk analyst at Susquehanna Financial Group LLLP, said in an April 4 phone interview. “People are still putting a lot of protection on the Nasdaq.”

About $480 million was withdrawn last week from the PowerShares QQQ Trust ETF, data compiled by Bloomberg show. The fund ranks as the fourth-largest in the U.S. with $47 billion in assets, data compiled by Bloomberg show.

Price-Earnings

The Nasdaq Composite (CCMP) Index trades at 31.8 times reported earnings of the companies in the index. That’s almost twice the ratio for the S&P 500, which trades at 17 times earnings. The Nasdaq 100 Index of the biggest technology stocks sank 0.9 percent for the week after surging 35 percent in 2013.

“It feels like maybe a large liquidation in a tech fund,” Larry Peruzzi, senior equity trader at Cabrera Capital Markets in Boston, said in an e-mail. “The move seems excessive for profit taking.”

Lurches in technology shares have become more common in the last two months as traders reassess equities that have posted annual gains of 25 percent since 2009. Losses accelerated on April 4 as the Nasdaq 100 slid 2.7 percent and a measure of biotechnology shares tumbled 4.1 percent. The Standard & Poor’s 500 Index fell 1.3 percent.

Biggest Declines

Nasdaq 100 stocks with the 10 biggest declines on April 4 had rallied an average of 134 percent in 2013, according to data compiled by Bloomberg. Among them are Micron Technology Inc., Netflix and Tesla, which saw their shares triple or quadruple last year.

Concern that the retreat will worsen has made options more expensive. The Chicago Board Options Exchange NDX Volatility Index, tracking contracts on the Nasdaq 100, jumped 11 percent on April 4 to 18.79, a three-week high.

The volatility gauge is now 35 percent higher than a similar measure for the S&P 500, thebiggest gap since 2007, data compiled by Bloomberg show. That shows investors are more concerned about declines in Internet and biotechnology shares than the overall market.

No Alarm

The selloff last week isn’t a cause for alarm, according to BB&T Wealth Management’s Walter “Bucky” Hellwig, who said he wouldn’t be making any large changes to his stock holdings. The retreat may be a short-term reversal after the S&P 500 hit a record, he said in an April 4 phone interview from Birmingham, Alabama.

“For all the stocks that have done really well, there’s a trader that will say, ‘I want to nail down some of these profits,’” said Hellwig, a senior vice president at BB&T Wealth, which oversees $17 billion. “One day of sloppy trading isn’t going to cause us to change direction.”

Even after the drop, Tesla shares are still up 41 percent in 2014 and Micron is up 3.8 percent. The Nasdaq 100 ETF, known by its ticker QQQ, has slipped 1.8 percent this year to $86.37.

Seven of 10 most-owned options on the fund are bullish. April $89.63 calls, with a strike price 3.8 percent above the close, had the highest open interest, followed by $90.63 and $91.63 calls expiring at the same time.

Further Valuations

Excessive valuations mean further gains in technology stocks will be harder to come by, said Sean Sun, an equity research analyst at Santa Fe, New Mexico-based Thornburg Investment Management Inc.

Amazon.com Inc. (AMZN), an online retailer, trades at 572 times reported earnings while Netflix, an Internet video-subscription service, is valued at 141. About 15 percent of the Nasdaq 100 companies have a price-earnings ratio of 35 or more, data compiled by Bloomberg show.

“These are tech stocks trading at high valuation levels already, even with the selloff,” Sun said by phone on April 4. Thornburg oversees over $90 billion. “With the selloff accelerating, sentiment has turned more negative and given that, who knows where it ends.”

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The Groundwork For Russian Invasion Of East Ukraine Is Being Laid Out

I continue to believe Russia will go into East Ukraine one way or the other. It appears that Moscow has changed their supposed direct military invasion approach to a more settled “independence movement” from within. At the end of the day, it’s all the same. A large group of pro-Russia activists have seized a number of government buildings in the industrial city of Donetsk, declaring region independence.  Now, it is just a matter of time before Donetsk region holds a referendum to become a part of Russia. I would expect this to play out throughout the rest of the East Ukraine. 

Further, I would define this action as a brilliant strategical move by Russia. If this works, you will see Russia take over East Ukraine without crossing the border and without firing a single shot. Should the Ukraine’s interim government send in the troops to protect it’s interests, you will see Russia go in under the pretext of “protecting ethnic Russians”. It appears as if Russia, once again, outmaneuvered it’s Western counterparts in the region. It will be interesting to see how the West reacts once East Ukraine falls under Russian control. One thing is for sure, the stock market is not pricing this in……just yet.  

Groundwork for russian invasion of Ukraine investwithalex

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The Groundwork For Russian Invasion Of East Ukraine Is Being Laid Out  Google

Activists declare Donetsk republic after capturing regional administration in Eastern Ukraine

In the eastern Ukrainian city of Donetsk, a group of activists have declared their region independent from Kiev. This comes after protesters stormed a local government building last night.

Mass demonstrations against the country’s new leadership started peacefully on Sunday, but the situation quickly escalated.

Pro-Russian protesters in Donetsk have seized the local power building, including the headquarters of the Security Service of Ukraine and proclaimed the creation of a People’s Republic of Donetsk.

Ukraine’s police and security services have not interfered, although officials in Kiev are threatening punishment for the rioters.

Protesters have erected barricades around the Council building.

 

Pro-Russian activists guard a barricade set at the Ukrainian regional Security Service building on the eastern city of Donetsk on April 7, 2014.(AFP Photo / Alexander Khudoteply)

Pro-Russian activists guard a barricade set at the Ukrainian regional Security Service building on the eastern city of Donetsk on April 7, 2014.(AFP Photo / Alexander Khudoteply)

 

Today at 12:20 local time, a session of the people’s Council of Donbass (Donetsk region) took place in the main hall of the Regional Council and unanimously voted on a declaration to form a new independent state: the People’s Republic of Donetsk.

The Council proclaimed itself the only legitimate body in the region until the regions in southeast Ukraine conduct a general referendum, set to take place no later than May 11.

“The Donetsk Republic is to be created within the administrative borders of the Donetsk region. This decision will come into effect after the referendum,” the statement said.

The Council in Donetsk issued an address to Russian President Vladimir Putin, asking for deployment of a temporary peacekeeping force to the region.

“Without support it will be hard for us to stand against the junta in Kiev,” said the address.

“We are addressing Russian President Putin because we can only entrust our security to Russia,” the statement said.

 

Screenshot from ustream.tv user artem77

Screenshot from ustream.tv user artem77

 

Rallies in support of the federalization of Ukraine continue in a number of cities in southeast Ukraine. Thousands of citizens have joined the protests, demanding the earliest possible federalization of the country.

Ukraine’s Ministry of Interior said that last night unknown persons stormed the Security Service of Ukraine building in the city of Lugansk and seized a weapons warehouse there. During the night’s clashes, nine people were reportedly injured.

 

Pro-Russian activistshold a rally in front of Ukraine's regional security service of Ukraine in Lugansk on April 6, 2014.(AFP Photo / Igor Golovniov )

Pro-Russian activistshold a rally in front of Ukraine’s regional security service of Ukraine in Lugansk on April 6, 2014.(AFP Photo / Igor Golovniov )

 

In the city of Kharkov protesters erected barricades around the buildings of the city and the regional administrations and the regional headquarters of Security Service of Ukraine.

There were brief clashes between supporters of the federalization of Ukraine and pro-EU demonstrators in downtown Kharkov. Protesters on both sides used fire crackers and stun grenades.

A demonstration against political repression in Ukraine has also being held in the southern regional center of Odessa.

 

Pro-Russian activists near the Kharkov city administration.(RIA Novosti / Chekachkov Igor)

Pro-Russian activists near the Kharkov city administration.(RIA Novosti / Chekachkov Igor)

 

The chiefs of security agencies of Ukraine are reportedly heading to the cities engulfed in protests.

The interim secretary of the National Security and Defense Council of Ukraine, Andrey Parubiy, together with acting head of the Security Service of Ukraine, Valentin Nalivaichenko, are set to visit Lugansk. Interim Deputy Prime Minister Vitaly Yarema will visit Donetsk and acting Interior Minister Arsen Avakov has reportedly already arrived in Kharkov.

The coup-appointed acting president, Aleksandr Turchinov, has threatened that counter-terrorist measures could be taken against those who take up arms against the Kiev authorities, RIA news agency reported. On Thursday, the Ukrainian parliament will tighten laws regarding separatism and could possibly ban certain parties and organizations , Turchinov warned.

“What happened yesterday is the second stage of the special operation of the Russian Federation against Ukraine,” announced Turchinov in an address televised on Monday, sharing that an “anti-crisis command was set up last night” to deal with the crisis, Interfax-Ukraine reported.

Ukraine’s interim Foreign Minister Andrey Deschitsa announced on Monday that if the situation in the eastern regions escalates, the coup-appointed government in Kiev will take “much harsher” measures than those on the reunion of the Crimea with Russia. Deschitsa gave an assurance that members of the government are already working with local authorities.

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What Today’s Business Headlines Say About Our World Will Shock You. I Know They Infuriated Me.

business headlines about our world

With the amount of stupidity out there sometimes I wonder how we have made it this far as a human race. Pure dumb luck must have played an important role. I present you with today’s glimpse…..

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What Today’s Business Headlines Say About Our World Will Shock You. I Know They Infuriated Me.  Google

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Stock Market Update. April 4th, 2014. InvestWithAlex.com

daily chart April 4th 2014t

A massive down day with the Dow Jones down 160 points (0.96%) and the Nasdaq down a bone crushing 110 points (2.60%). 

On Monday, both the WSJ and CNBC stated that statistically April is the best month to be LONG. Apparently, April has missed the memo thus far. In fact, you wouldn’t have been caught off guard if you were following our mathematical and timing work within our subscription section.  Not only was this sell off predicted a long time ago, but what comes next is as clear as night and day as well. Plus, believe it or not, today’s sell off had nothing to do with the jobs report, as my post at the open indicated. 

In particular, the Nasdaq and the iShares Nasdaq Biotechnology (IBB) took the brunt of the beating with IBB collapsing 4.01%. While most market pundits will view this in a typical “buy the dip” kind of mentality, this is so much more than that. It will be just a matter of time before the S&P and the Dow begin to play catch up. Remember, as our mathematical and timing work shows, the bear market of 2014-2017 is just around the corner. As I have mentioned yesterday, it will pay off to be very conservative here.

If you would be interested in learning exactly when the bear market of 2014-2017 will start (to the day) and it’s internal composition, please Click Here. 

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Stock Market Update. April 4th, 2014. InvestWithAlex.com  Google

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Idiots Can’t See Bubbles Through The Bubble Forest

I am constantly amazed how people can look at today’s market and declare that the market is cheap or as this gentleman puts it… “market have pockets of silliness”. Sure, it’s all fun and games until stocks get slammed 20-40% on the downside. Which is exactly what is going to happen over the next few years according to our mathematical and timing work. I have already discounted the notion that markets are cheap based on the P/E ratio or any other similar nonsense. Click Here To See The markets are, indeed, in a massive speculative bubble perpetuated by a huge amount of credit. In other words, everyone maxed out their borrowing ability to speculate in the stock market. When such environments end, stocks tend to collapse.

That is exactly where we find ourselves today. As mentioned earlier, our mathematical work clearly shows a bear market and a severe US Recession between 2014-2017. If you would be interested in learning exactly when this bear market will start (to the day) and it’s internal composition, please Click Here.  

can't see bubbles investwithalex

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Idiots Can’t See Bubbles Through The Bubble Forest  Google

The Daily Ticker Writes: Market has “pockets of silliness” but is “far away from a bubble”: Howard Lindzon

Even as U.S. markets flirt with new highs, Stocktwits Chairman Howard Lindzon has only 40% of his portfolio invested in stocks. But this conservative approach can’t be attributed to concerns about a market bubble: “We’re as far away from a bubble as possible,” he says in the video above.

Lindzon believes there are pockets of “silliness” right now and chooses to invest in stocks that he can “explain to his children,” including Charles Schwab (SCHW), Interactive Brokers (IBKR) and robot maker iRobot (IRBT).

“There’s enough good companies to own,” he declares. “I am bullish on stocks.”

He’s avoided some of the sectors that have risen just as sharply as they have fallen — namely biotechs — and explains that a “stealth” rotation has been happening — investors are moving away from momentum stocks to previously unloved sectors like banks.

He admits that this market may seem “confusing” to many investors but he steadfastly dismisses talk that today’s indices resemble the dot com era.

“This is a very different environment from 1999,” he says.