California: Full Of Millionaires On Food Stamps?
Not quite, but the gap between the rich and the poor in the state continues to widen. This should not come as a surprise to anyone. California is a microcosm of the entire nation.
While a lot of people blame California Governor Jerry Brown, they have got it all wrong. The only people to blame here are as follows. Greenspan, Bernanke and now Yellen. It was this group of charlatans that lowered interest rates into the negative territory and flooded the market with cheap credit every chance they got. With this credit being disproportionately available only to the rich, it is no wonder the income gap continues to widen. As the rich continue to speculate with cheap credit, enriching themselves in the process, the poor continue to suffer. With food stamp use in California increasing 18.4% since 2011.
While most investors will brush this off as irrelevant, you shouldn’t. This is indicative of a much large systematic issue and a rotting underlying economy. This disparity cannot go for much longer. A healthy economy relies on all sectors of the economy performing well. Not just the rich. The bear market of 2014-2017 should make this more evident.
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California: Full Of Millionaires On Food Stamps? Google
California Beats U.S. in Millionaires, Food-Stamp Users
California Governor Jerry Brown, who decries a widening gulf between rich and poor, is campaigning for a fourth and final term presiding over a state that’s outpacing the U.S. in producing both millionaires and food-stamp recipients.
The number of households with more than $1 million in assets gained 3.6 percent since the Democrat took office in 2011, compared with 3.5 percent nationally,according to Phoenix Marketing International’s Global Wealth Monitor. Food-stamp use rose 18.2 percent in the period, almost twice the nation’s 9.4 percent, U.S. Agriculture Department data show.
Brown, 75, who signed a bill to raise California’s minimum wage to $10 an hour by 2016, goes before the state Democratic convention tomorrow unopposed after turning budget deficits into the largest surplus in more than a decade. California’s economic health improved more than 44 other states between the first quarter of 2011 and the second quarter of 2013, according to the Bloomberg Economic Evaluation of States.
“We have an increase in poverty and high-end earners and a decrease in middle class jobs,” said Rob Lapsley, president of the California Business Roundtable, a Sacramento-based group that’s criticized the high cost of doing business in the state. “The governor recognizes this and is starting to address it.”
Jerry Brown, governor of California, introduces his 2014-15 budget proposal at the… Read More
Poverty Increase
Even as its economy improves, the most populous U.S. state saw a broad measure of its poverty leading the nation at 23.8 percent in 2010-2012, and the state auditor has warned that the pension fund for 868,000 current and retired teachers may run out of money in 31 years. Term limits prohibit Brown, who served twice from 1975 to 1983, from seeking the governor’s office after this campaign.
Neel Kashkari, one of two Republicans vying for that party’s nomination for governor, has based much of his campaign around criticizing Brown’s record on poverty and unemployment, and California’s below-average performance in math and reading on the National Assessment of Educational Progress.
“Jerry Brown’s legacy is the destruction of the middle class,” Kashkari told reporters yesterday inSacramento. “He is the caretaker of the status quo.”
Kashkari, a former executive at Goldman Sachs Group Inc. (GS) and Pacific Investment Management Co., managed the U.S. Treasury’s $700 billion bank bailout, known as the Troubled Asset Relief Program, in 2008 and early 2009. He and state Assemblyman Tim Donnelly, a Tea Party-backed Republican from San Bernardino County, have collected the most contributions to run against Brown, according to campaign finance filings.
Economy Critics
“There are two people in California who think that the state’s economy is worse than it was when Jerry Brown took office as governor,” said Dan Newman, a spokesman for Brown’s campaign. “Those are the two Republicans who happen to be running for governor.”
California’s unemployment rate fell to 8.1 percent in January from 12.1 percent in January 2011, the month Brown took office. The decrease of 4 percentage points outpaced a 2.5 percentage point decline in the U.S. unemployment rate in the same period, to 6.6 percent from 9.1 percent. California was tied with Michigan for the fourth-highest jobless rate in December, according to the U.S. Bureau of Labor Statistics.
Assessing a governor’s performance based on three years of economic data is a tricky proposition, said Christopher Thornberg, principal of Beacon Economics LLC in Los Angeles.
“It’s kind of silly to think that the governor of any state, much less California, has that kind of impact on an economy,” Thornberg said by telephone.
‘Rationality, Centrism’
He said Brown has helped steer the Legislature, which is run by Democrats, toward “rationality and centrism.” Brown has been prudent on state spending, Thornberg said. The governor hasn’t taken on the more important task of restructuring California’s tax system, which depends heavily on incomes of high earners, he said.
California’s economic health improved 6.65 percent on the Bloomberg’s state index between the second quarters of 2012 and 2013, ranking fifth among the top eight. The index measures mortgage delinquencies, personal incomes, tax revenues, employment, home prices and stock values. Idaho was first at 8.33 percent, followed by Colorado, Michigan and Kansas.
“By coming in and taking the approach of good fiscal governance, the governor has put things on a stable path,” said Lapsley of the Business Roundtable. “But now, what you see across all economic data is more high-income earners with most of the new jobs being created in the service sector. That’s not a sustainable future for California.”
Millionaires Grow
California had 777,624 households with at least $1 million in assets in 2013, up from 750,686 in 2011, according to Rhinebeck, New York-based Phoenix Marketing. The Golden State had 1.9 million households that used food stamps in 2013, up from 1.6 million in 2011, according toAgriculture Department data.
Brown in 2012 led a successful campaign to increase taxes on earnings of more than $250,000 for seven years and to increase the state sales tax by 0.25 cent per dollar for four years. The money was to be earmarked for public schools.
Brown proposed spending $45.2 billion for kindergarten through 12th grades in the year beginning July 1, up 25 percent from $36.2 billion in his 2011 budget. Still, California continues to lag behind most states in the U.S. Education Department’s annual report card, the National Assessment of Educational Progress. California eighth graders outscored five other states inmathematics and six other states in reading in 2013, according to the assessment.
Social Services
As Brown boosted funding for schools, his budgets have been more generous for social services. Brown proposes spending $28.8 billion on health and human services in the year beginning July 1, up 36 percent from $21.1 billion in his first budget.
As Brown prepared to sign the minimum-wage measure in Los Angeles last September, he committed to narrowing the gap between the wealthy and underprivileged.
“It’s my goal and it’s my moral responsibility to do what I can to make our society more harmonious, to make our social fabric tighter and closer and to work toward a solidarity that every day appears to become more distant,” Brown said.
Goldman Sachs Needs To Distribute Their Chinese Shares To Fools. Issues A Buy Recommendation
I write about China and their economic situation extensively. Please type in “China” into the search bar on the right to see all of the data. With it’s massive credit bubble, real estate bubble, lagging stock market, falling currency and a slew of other problems, Goldman Sachs believes right now is the great time to buy China. Certainty, with all the bad news and Chinese stock market “under performance” it might seem as if right now is a good time to buy China. After all, the god of investment banking, Goldman Sachs thinks so.
Don’t be a fool.
Goldman Sachs will be selling China while you are buying there idiotic forecast. With the US Bear Market and a severe recession of 2014-2017 starting now, it would be very difficult for the Chinese stock market to exhibit any sort of a bull market. Not impossible, but highly unlikely. Remember, Chinese credit collapse, defaults, real estate collapse and Yuan decline are all in early stages of development. So, read between the lines here and sell China.
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Goldman Sachs Needs To Distribute Their Chinese Shares To Fools. Issues A Buy Recommendation Google
Bloomberg Reports: China Stocks Seen Rallying 24% at Goldman on Valuations
Goldman Sachs Group Inc. is sticking with its recommendation to buy Chinese stocks, the biggest losers worldwide this year, after valuations fell to the lowest level in a decade versus global peers.
“Given how share prices have corrected and given where the valuations are, from a risk-reward standpoint we still think we can make a positive case on Chinese equities,” Kinger Lau, a strategist at Goldman Sachs, said in an interview inHong Kong on March 4. He predicts theHang Seng China Enterprises Index (HSCEI) will climb to 12,000 in the next 12 months, a 24 percent advance from last week’s close, versus the brokerage’s December forecast for the measure to reach 13,600 by the end of 2014.
The index of Chinese shares in Hong Kong lost 10 percent this year through last week, the most among 93 global benchmark indexes tracked by Bloomberg, as factory gauges pointed to a slowdown in the economy and concern grew that more companies will struggle to repay debt after the nation’s first onshore corporate bond default on March 7. The gauge trades at a 45 percent discount to the MSCI All-Country World Index, the most in a decade.
China’s leaders are trying to balance clampdowns on the shadow-banking industry and local-government debt with measures to support growth in the world’s second-largest economy.Shanghai Chaori Solar Energy Science & Technology Co. (002506) became the first company to default in China after failing to pay full interest due last week on onshore bonds.
Relative Value
The Hang Seng China index is valued at 1.1 times net assets, the biggest discount since September 2003 to MSCI’s global index, which has a multiple of 2. The H-share measure slid 1.7 percent to 9,540.10 as of 1:41 p.m. in Hong Kong.
BlackRock Inc. today named Helen Zhu as head of China equities, luring the New York bank’s chief China equity strategist away from Goldman Sachs. The appointment takes effect on April 7 and Zhu may start managing funds later this year, BlackRock said in a statement. The New York-based firm is the world’s largest money manager, overseeing about $4.3 trillion.
Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Agricultural Bank of China Ltd. all trade at about the same level as their net assets, while Bank of China Ltd. has a price-to-book ratio of 0.8. The four lenders are the nation’s biggest by market value.
“Any clear and concrete policy measures in terms of dealing with shadow banking loans and local government debt would likely be positive catalysts for banks,” Lau said. “Valuations for Chinese banks have already priced in a very significant crisis scenario.”
Regulated Borrowing
Premier Li Keqiang told the National People’s Congress last week that China will develop a regulated regional borrowing mechanism, after local-government liabilities surged to 17.9 trillionyuan ($2.9 trillion) as of June 2013 from 10.7 trillion yuan at the end of 2010. Authorities have also started a cleanup of the $6 trillion shadow-banking industry and identified sectors of the economy in need of consolidation.
While Chinese banks’ non-performing loans rose by 28.5 billion yuan in the last quarter of 2013 to 592.1 billion yuan, the highest since September 2008, bad loans only accounted for 1 percent of total lending, the China Banking Regulatory Commission said Feb. 13.
Bank valuations currently imply a non-performing loan ratio of about 7 percent, Lau said.
Global Outlook
An improving global economic outlook may also be a catalyst for a rally in Chinese shares, Lau said, declining to name specific stocks.
The World Bank raised its 2014 growth forecasts for advanced nations in January to 2.2 percent from 2 percent, while cutting its estimates for developing nations to 5.3 percent from 5.6 percent. China is the world’s biggest exporter.
China last week retained a target for 7.5 percent growth in 2014 for the $9 trillion economy. Gross domestic product expanded 7.7 percent in 2013, the same pace as in 2012.
A purchasing managers’ index from HSBC Holdings Plc and Markit Economics dropped to a seven-month low of 48.5, the companies said March 3. A similar gauge from the government with a larger sample size fell to 50.2, the lowest since June, a report showed March 1. Numbers above 50 signal expansion.
Overseas shipments unexpectedly declined 18.1 percent in February from a year earlier, customs data showed March 8, compared with analysts’ median estimate for a 7.5 percent increase. Producer prices fell 2 percent, the most since July, according to a statistics bureau report yesterday, extending the longest decline since 1999.
Share Slump
The Hang Seng China gauge has tumbled 16 percent since Noah Weisberger, a New York-based analyst at Goldman Sachs, predicted on Dec. 2 that the H-share measure would rally 18 percent by the end of 2014.
Goldman Sachs’s forecast formed part of a trade recommendation in which the bank told investors to buy Chinese stocks while selling copper as a bet that commodities would lag the rally in equities. Goldman Sachs called the trade its fourth top recommendation for 2014.
Is China Beginning To Collapse?
I have been warning on China for at least a few years. Today, China’s “Grow At Any Cost” policy is starting to unravel. Earlier today Chinese stocks took a 2-3% hit, CSI 300 Index hit a five year low, the Yuan fell 0.2% and overseas shipments plunged 18.1% (vs +7.5% estimate).
Cracks in the foundation or beginning of a collapse?
Both. Listen, China is unlikely to collapse or unravel within a short period of time. Whatever happens will take a considerable amount of time due to massive Government interference. To see how long, we must once again look towards the US Stock Market & Economy. The bear market and recession of 2014-2017 will take 3 years to complete. During that time Chinese exports are bound to slow down even more. In addition, with anticipated credit market blow ups it is unlikely China will be able to continue to expand it’s credit at break neck speeds of the last few years. Indicating a further slowdown and a subsequent collapse.
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Is China Beginning To Collapse? Google
Bloomber Reports: China’s CSI 300 Plunges to Five-Year Low on Export Slump :
China’s CSI 300 Index (SHSZ300)plunged to the lowest level in five years and the yuan weakened as an unexpected drop in exports spurred concern that the world’s second-largest economy is slowing.
The index of the largest Chinese stocks slid 3.3 percent to 2,097.79 at the close, the lowest since February 2009, while the Shanghai Composite Index tumbled 2.9 percent, the most since June. The yuan fell 0.2 percent to 6.1385 per dollar. Money-market rates slumped to a 21-month low amid speculation demand for cash is diminishing as economic growth weakens.
Overseas shipments plunged 18.1 percent in February, compared with analysts’ median estimate for a 7.5 percent increase, as distortions from the Lunar New Year holiday made forecasting more difficult. Investors are looking for policy guidance from this month’s National People’s Congress in Beijing amid concerns over slowing growth, a flood of new share sales and geopolitical tension between Russia and Ukraine.
“There’s a slew of bad news today — lousy economic data, IPOs may be restarting, the policy meeting is ending soon with no surprises and the Ukraine situation isn’t helping,” said Xu Shengjun, an analyst at Jianghai Securities Co. in Shanghai. “The market is being dragged down by all these factors, I don’t see any positive stories today.”
Growth Target
Jiangxi Copper Co. led declines for material producers, slumping 5.8 percent as copper prices on the Shanghai exchange plunged by the 5 percent daily limit. China is the biggest consumer of commodities from copper to iron ore and rubber.
Poly Real Estate Group Co. tumbled 4.8 percent after the developer reported a 8.4 percent drop in sales for last month. A weaker yuan is boosting dollar borrowing costs for Chinese developers already grappling with a domestic property-market crackdown and slowing sales.
The drop in exports highlights the challenges for Premier Li Keqiang in achieving this year’s economic growth target of 7.5 percent. Li announced the goal last week at the opening of the annual meeting of the NPC, a pace unchanged from last year. Imports rose 10.1 percent from a year earlier, leaving a trade deficit of $23 billion, the biggest in two years.
China’s consumer price index rose 2 percent in February from a year earlier, the smallest gain in 13 months, data from the National Bureau of Statistics showed yesterday. Producer prices (CHEFTYOY) fell 2 percent, the most since July.
Cheapest Valuation
“The inflation and PPI numbers signal a lack of demand from consumers and industries, while the export number is way below expectations even after discounting the Chinese New Year effect, so investors are concerned,” said Du Liang, an analyst at Shanxi Securities Co. in Beijing. “I reckon the sell-off will get some support at the 2,000 level” on the Shanghai Composite index, which closed at 1,999.07 today.
The CSI 300 trades at 7.7 times projected 12-month earnings, the lowest level since at least 2007, according to data compiled by Bloomberg. Today’s tumble is the biggest since a cash crunch in China’s interbank market dragged down the index by 6.3 percent on June 24. The gauge slipped another 0.5 percent in the following three days, then rallied as much as 16 percent through mid-September.
The Hang Seng China Enterprises Index (HSCEI) fell 1.8 percent, dragged down by a 4 percent loss for Anhui Conch Cement Co. The Bloomberg China-US Equity Index slid 1.3 percent on March 7.
The yuan has weakened about 1.4 percent in 2014. The People’s Bank of China lowered the dailyreference rate by 0.18 percent, the most since July 2012, to 6.1312 per dollar today.
The cut in the yuan fixing “is significant, coming on the heels of poor trade data, and suggests a possible policy push to weaken the yuan to help exporters,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. “This would mean rising risks to more downside.”
Repo Rate
The seven-day repurchase rate, a gauge of funding availability in the banking system, fell 12 basis points to 2.30 percent, according to a fixing published by the National Interbank Funding Center. A one-year rate swap that exchanges fixed payments for the floating seven-day repo dropped as much as 15 basis points to a four-month low of 4.26 percent, data compiled by Bloomberg show.
Slowing inflation may give leaders more space to support growth if needed as they gauge the effects of the nation’s first onshore corporate-bond default.
Shanghai Chaori Solar Energy Science & Technology Co., a solar-cell maker, said March 7 it wasn’t able to make an interest payment due that day in full, providing the first default in China’s onshore bond market. Chaori’s experience may be a sign the government is backing off from its practice of bailing out companies with bad debt.
More Defaults
China should allow companies to default on their bonds, an external supervisor at the Bank of China said March 8.
“We need to be more accepting and allow such defaults to happen,” Mei Xingbao told reporters during a meeting of the Chinese People’s Consultative Conference in Beijing. “The debtor must be responsible for his own debt. He must tell the investors that there is risk involved in the product.”
China Southern Airlines Co. slid more than 3 percent in Shanghai and Hong Kong trading after the carrier said it sold seven tickets for the Malaysian Airline System Bhd. flight that has gone missing.
Malaysia stepped up efforts to locate the jet that may have crashed in the Gulf of Thailand with 239 people on board, focusing on oil slicks. The prospect of terrorism arose after Austria andItaly said passports used by two male passengers were stolen from their citizens. The flight was a codeshare with China Southern.
BlackRock Hire
BlackRock Inc. named Helen Zhu as head of China equities, luring the strategist away from Goldman Sachs Group Inc. to increase coverage of this year’s worst-performing stock market.
Zhu covered Chinese companies traded in Hong Kong and yuan-denominated stocks in the mainland as Goldman Sachs’s chief China equity strategist. She forecast in December that the Hang Seng China index would climb about 20 percent by the end of this year. It has since tumbled 16 percent and is the biggest loser among global benchmark equity indexes tracked by Bloomberg.
“China has been a difficult market to trade and difficult for all strategists to get right,” Hao Hong, the chief China equity strategist at Bocom International Holdings Co., said by phone from Beijing. “That said, Zhu is a good hire as she has done this for a long time. It shows BlackRock’s commitment to the Chinese region.”
Warning: The Real Reason Behind This Minimum Wage Increase Push
With massive imbalances building up all over the place and with the asset inflation/speculation gaining speed, the US Government desperately needs one thing…..
Wage Inflation.
Even though the FED pumped a tremendous amount of money into our economy (over $1 Trillion in the last 3 years alone) they have been fairly unsuccessful in getting the unemployment number low enough were wage inflation kicks off. This is a big problem because their entire “flood the market with credit” premise relies on inflating everything away. If wages do not increase, their entire plan collapses. With most of the credit flowing to “asset inflation” as opposed to “economic/wage inflation” the FED is troubled.
Of course, a little too late. At this stage, wage inflation will do very little to stem the upcoming stock market collapse and a severe recession within the US Economy. What bear market? Please click here to read the bear market report.
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Warning: The Real Reason Behind Minimum Wage Increase Push Google
Get ready for a bigger push in Washington to raise the minimum wage
Cities and states have taken the lead on raising the minimum wage in the absence of Congressional action but that could potentially change after the 2014 midterm elections.
“Democrats really see this as a winning issue” in the November midterm elections, says Steven Greenhouse, labor and workplace reporter at The New York Times. They “are trying to hit this hard…as a way to erase losses” associated with Obamacare,” Greenhouse tells The Daily Ticker.
Democrats also see raising the minimum wage “as an important way to lift the wages of millions of American workers,” says Greenhouse.
The current federal minimum wage is $7.25 an hour — which, after adjusting for inflation, is about 30% less than it was 46 years ago.
President Obama and many Democrats want to raise the minimum to $10.10 an hour by 2016, which would boost the earnings of some 16 million Americans. The Congressional Budget Office says the wage hike would reduce poverty for 900,000 Americans but also eliminate 500,000 jobs — a conclusion that Republicans are using to argue against the hike.
Given that opposition, President Obama decided to institute the wage hike for federal contractors by executive order, effective next January. Eighteen states have instituted a minimum wage that’s higher than the national minimum. Washington leads with $9.32 an hour and SeaTac, a city south of Seattle, has the highest minimum wage in the country at $15 an hour.
Greenhouse says he’s interviewed many minimum wage workers who say they can’t support themselves, no less their families, making just $8 or $9 an hour. And many of those workers are household breadwinners who are educated and not the teenager flipping hamburgers in a summer job, which has been the conventional image of minimum wage workers.
“More educated workers are making just $7, $8 or $9 dollars and hour,” says Greenhouse. Many have finished high schhool and a growing percentage have some college credit.
But is raising the minmum wage the best way to support those workers?
Some economists argue that increasing the earned income tax credit would be more effective because it would shift the burden from employers to the government.
“Republicans really don’t want to do it because that would cost the govenrment billions of dollars,” says Greenhouse. “That is a heavier political lift than raising the minimum wage,” which is why Democrats are focusing on minimum wage, says Greenhouse.
A recent Wall Street Journal/NBC News poll found that 63% of Americans support raising the minimum wage to $10.10 an hour. Seventy-seven percent of Democrats supported that level, while 47% of Republicans did. Support overall declined above $10.10 an hour.
Credit Bubble Of Mass Destruction Continues To Inflate
It seems as if humans are incapable of learning from their past mistakes. Particularly, the Ivy League Economists and Governments.
“The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates.”
Just think about how staggering of a number that is. $100 Trillion. That is what happens when governments do everything in their power to avoid financial collapse. The problem is, any such financial collapse is brought forward by this same credit. By increasing global debt levels by $30 Trillion since 2007 top, the fools running the show have raised the stakes to unimaginable levels. When the debt collapse finally comes (as it always does), there will be hell to pay. With the bear market of 2014-2017 just around the corner, this credit bomb is about to go off.
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Credit Bubble Of Mass Destruction Continues To Inflate Google
The stock of public debt securities reached $43 trillion in June 2013, about 80 percent higher than in mid-2007. Debt issuance by non-financial corporates grew at a similar rate, albeit from a lower base,” analysts Andreas Schrimpf and Branimir Gruic said in the report released on Sunday.
The BIS noted that since the financial crash of 2008 there has been a shift in how money is borrowed — increasingly through debt markets rather than bank lending. With the financial sector curbing lending and opting for more deleveraging, governments have issued debt in their place to kickstart their economies and bail out the financial sector.
The sheer scale of global debt markets is going to remain a very significant factor in the future, according to Bill Blain, a senior fixed income broker at Mint Partners, who predicts that it will keep growing as long as there is demand. He said that new regulations ensure that the financial sector will remain in a “trough” but governments would keep the trend going despite reining back on spending.
This rise in debt issuance only poses a problem if inflation was to rise sharply while there was still slack in the economy, according to Peter Chatwell, an interest rate strategist at Credit Agricole Corporate. This would then force central banks to tighten policy forcefully and destabilize the recovery, he added.
Schrimpf and Gruic noted that sluggish lending from the financial sector – who traditionally lend to international markets – has left a dent in cross-border investment in global debt securities. The share of debt securities held by cross-border investors either as reserve assets or via portfolio investments fell from around 29 percent in early 2007 to 26 percent in late 2012, they said.
“This reversed the trend in the pre-crisis period, when it had risen by 8 percentage points from 2001 to a peak in 2007. It suggests that the process of international financial integration may have gone partly into reverse since the onset of the crisis,” they said in the report.
This is a “headache” for policy-makers, according to Kit Juckes, global head of foreign exchange strategy at Societe Generale. Banks are increasingly drawing their business in to their home countries – a move that is not helpful for growth, and reflects investor and bank caution as a result of the great recession and the European peripheral crisis, he said.
“It isn’t healthy to see money flow less freely around the global economy, but on a positive note, this is likely to be ever so slowly reversed and normalized in the years ahead,” he said, adding that as deleveraging enters its final stages “re-globalization” instead of deeper “balkanization” would occur.
5-Year Market Cycles & Weekly Update. A Must Read. Trust Me.
Weekly Update & Summary: March 8th, 2014
The market continued its bull move with the Dow Jones being up +108 points (0.67%) and the Nasdaq being up +28 points (0.65%) for the week. Structurally, the market left another gap at 16360 (in addition to the one last week at 16,100). Plus, there are a number of gaps going all the way down to 15,500. All of them are to be closed during the upcoming bear market leg.
Fundamental & Market Analysis:
Last week we looked at the 17 year alternating Bull and Bear market cycles and why this Bear market that started in 2000 will complete itself only in 2017. Today, I would like to take a quick look at the 5-Year Cycle and the reason for today’s bull market.
Particularly, let’s take a look at the two most recent 5-Year Cycles and how they apply to today’s stock market.
#1: 5-YEAR CYCLE 1994 Bottom To 2000 Top.
This cycle started on December 9th, 1994 and completed on January 14th, 2000. During this time the stock market moved 8269 points in 1287 trading days. In calendar terms, the cycle took 5 Years and 36 Days to complete. We all know what happened afterwards.
#2: 5-YEAR CYCLES 2002 Bottom to 2007 Top
This cycle started on October 10th, 2002 and completed on October 11th, 2007. During this time the stock market moved 7098 points in 1259 trading days. In calendar terms, the cycle took 5 Years and 1 Day to complete. We all know what happened afterwards.
TODAY’S-5 YEAR CYCLE 2009 Bottom to 2014 Top ?
This cycle started on October 6th, 2009 and is scheduled to complete itself on XXXX. As of today, the stock market moved 10036 points in 1260 trading days. In calendar terms, we are exactly at 5 years. The questions here is as follows….
Are we currently developing the 5 cycle or are we in the cyclical bull market? If yes, when will this cycle top out and what’s next?
While I have the exact answer, unfortunately, that answer is available to my premium subscribers only. Please Click Here.
Now, the sample above is just two cycles. There are many more. Here are just a few from off the top of my head. 1924-1929, 1932-1937, 1961-1966, 1982-1987.
In summary, 5-Year cycle is an incredibly important cycle and represents one completed growth cycle within the stock market. When it completes, the market tends to shift gears and change trends. In some of my earlier forecasts I have suggested that the Dow topped out on December 31st, 2013 ushering in the bear market of 2014-2017. That should make it very clear what happens next. If you would be interested in an exact breakdown, please visit our Subscriber section.
Macroeconomic Analysis:
The situation in Ukraine continues to escalate.
With the US, the EU and Russia throwing out insults and threatening sanctions against each other, this situation might very well become the “fundamental” tipping point for the market as early as next week. Today, I would describe the situation as a tightrope balancing act. It might die down over the next couple of weeks, but it might also escalate to unimaginable level. Fast. Whatever happens, this is not a good sign for Russia/US relationship going forward.
It would be interesting to see if the point of force described in the Mathematical & Timing section below would be the same point where things between the US and Russia escalate further.
Technical Analysis:
The overall technical picture is clearing up.
Long-Term: The trend is still up. Market action in January-February could be viewed as a simple correction in an ongoing bull market.
Intermediary-Term: Since February 5th, intermediary term picture shifted from negative to positive. Giving us a technical indication that both the intermediary term and the long term trends are up. Yet, that in itself can be misleading as per our timing analysis discussion below.
Short-Term: Short-term trend has turned bullish as well.
While all 3 trends are bullish, this might be misleading. Please read our Mathematical and Timing Analysis to see what will transpire over the next few weeks.
Mathematical & Timing Analysis:
(*** Please Note: This time around about 90% of the information contained within this section has been deliberately removed as it contain too much technical information. Particularly, exact dates and prices of the upcoming turning points. As well as trading forecasts associated with them. I deem such information to be too valuable to be released onto the general public. As such, this information is only available to my premium subscribers. If you are a premium subscriber please Click Here to log in. If you would be interested in becoming a subscriber and gaining access to the most accurate forecasting service available anywhere, a forecasting service that gives you exact turning points in both price and time, please Click Here to learn more.Don’t forget, we have a risk free 14-day trial).
XXXX
Date Target: XXXX
Price Target: XXXX
XXXX
Hence, I suggest the following positioning over the next few days/weeks to minimize the risk while positioning yourself for a forecasted market action.
If You Are A Trader: XXXX
If No Position: XXXX
If Long: XXXX
If Short: XXXX
CONCLUSION:
An incredibly important week is coming up. Above, I have described the point of force, various possibilities and exactly what you should do in each case. With increased volatility, multiple interference patterns and an incredibly important long-term turning point we must be very careful and risk averse here. Those anticipating the moves and those who can time them properly will be rewarded appropriately.
Please Note: XXXX is available to our premium subscribers in our + Subscriber Section. It’s FREE to start.
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5-Year Market Cycles & Weekly Update. A Must Read. Trust Me. Google
Did Western Governments Pay For Snipers Who Killed Dozens Of People In Ukraine? Disgusting!!!
Russia wants an investigation. As I reported earlier in the week, a leaked phone call (authenticity confirmed) between the EU foreign affairs chief Catherine Ashton and Estonian foreign affairs minister Urmas Paet suggests that there is clear evidence that the same snipers were killing people on both sides. Both civilians and police. Further, the call suggests that the snipers were hired by Maidan leaders…..the people behind this so called “revolution”, the same people who were clearly financed by the West.
If proven true, this is a new low for both the US Government and their EU counterparts.
You can read my previous report on the subject matter as well as listen to the above mentioned phone call HERE.
In addition, please see the article below for more information.
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Did Western Governments Pay For Snipers Who Killed Dozens Of People In Ukraine? Disgusting Google
Russia calls for OSCE probe into Kiev sniper deaths
Moscow (AFP) – Russian Foreign Minister Sergei Lavrov on Saturday called for an OSCE investigation into who was behind the deaths of dozens of people in Kiev last month in attacks by snipers, saying the truth could no longer be “covered up”.
Lavrov’s comments came after Estonia’s top diplomat told EU foreign policy chief Catherine Ashton in a phone call leaked this weak that the then-Ukrainian opposition to president Viktor Yanukovych may have been involved in the attacks.
“The latest information about the so-called snipers case can no longer be covered up,” Lavrov told a news conference in Moscow with his Tajik counterpart.
“We have proposed that the OSCE (Organisation for Security and Cooperation in Europe) takes up an objective investigation of this and we will ensure there is justice.
“There have been too many lies, and this lie has been used too long to push European public opinion in the wrong direction, contrary to the objective facts.”
Western states have blamed Yanukovych’s now disbanded elite riot police force for much of the killing that rocked in Kiev in February.
However Russia has strongly emphasised the leaked phone call between Estonian Foreign Minister Urmas Paet and Ashton as evidence for its argument that the new post-Yanukovych government in Kiev is made up of dangerous extremists.
Lavrov’s call for a full probe indicates that this is an issue Russia will not allow to drop, risking new tensions with the West.
In the audio of the February 26 call, whose authenticity was confirmed by Estonia, Paet told Ashton he was informed in Kiev that “they were the same snipers killing people from both sides.”
Dozens of protesters and around 15 police officers were killed in the attacks.
Paet, who had held talks with Ukraine’s new leaders on February 25, added: “It’s really disturbing that now the new coalition, they don’t want to investigate what exactly happened.”
Why Everyone Should Just Chill Out & Go Grab A Beer
The video below shows how Europe’s borders changed over the last 1,000 years. Making today’s action in Crimea/Ukraine/Russia not only inconsequential, but kind of ridiculously unimportant. Relax Obama. Go Grab A Beer.
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Investment Joke Of The Day. Einstein Dies And Goes To Heaven
Einstein dies and goes to heaven only to be informed that his room is not yet ready. “I hope you will not mind waiting in a dormitory. We are very sorry, but it’s the best we can do and you will have to share the room with others” he is told by the doorman.
Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. “See, Here is your first room mate. He has an IQ of 180!”
“Why that’s wonderful!” Says Albert. “We can discuss mathematics!”
“And here is your second room mate. His IQ is 150!”
“Why that’s wonderful!” Says Albert. “We can discuss physics!”
“And here is your third room mate. His IQ is 100!”
“That Wonderful! We can discuss the latest plays at the theater!”
Just then another man moves out to capture Albert’s hand and shake it. “I’m your last room mate and I’m sorry, but my IQ is only 80.”
Albert smiles back at him and says, “So, where do you think interest rates are headed?”