1/24/2019 – A mixed day with the Dow Jones down 22 points (-0.08%) and the Nasdaq up 47 points (+0.68%) 

As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

Real Investment Advice had a great write up and a number of excellent charts on the subject matter. We highly encourage you to read it in full Charts Both Bulls & Bears Should Consider

Let’s very quickly take a look at just two charts…….

The chart shows extreme overvaluation levels usually seen at important generational market tops such as 1929, 1937, 1964 and 2000. This is nothing new to the followers of this blog as we have been arguing the same with the help of Shiller’s Adjusted S&P P/E Ratio. Recall, that ratio was at its record high (if adjusted for 2000 top distortions) just a few short months ago.

Still, the disconnect gets even worse, a lot worse.

This is the real issue we are dealing with here. For instance, today’s earnings are 40% above 2007 top levels (another bubble top), yet the S&P valuations have doubled since then. That is to say, the disconnect has doubled from pre-financial crisis bubble top.

As the chart above suggests, revision to the mean would entail a 50% haircut for the indices. And we are not even bringing up a massive Earnings Recession anticipated over the next few years. After all, most of today’s earnings are still driven by flood of speculative capital perpetuated by QE and artificially low interest rates.

The real question here is whether or not the stock market will correct the imbalances above or perhaps the FED did, indeed, managed to create a Goldilocks Paradise.

Luckily, you don’t have to guess. If you would like to find out what the stock market will do next, in both price and time, based on our mathematical and timing work, please Click Here 

Please Note: Our latest call was a direct hit. While everyone was panicking our work projected an important bottom on December 27th (+/- 1 trading day) on the Dow at 21,725 (+/- 50 points). An actual bottom was put in place on December 26th at 21,713.

1/23/2019 – A positive day with the Dow Jones up 171 points (+0.70%) and the Nasdaq up 5 points (+0.08%) 

As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

To celebrate today’s swings…….this about sums it up…..

Having said that, if you would like to find out what the stock market will do next, in both price and time, based on our mathematical and timing work, please Click Here 

Please Note: Our latest call was a direct hit. While everyone was panicking our work projected an important bottom on December 27th (+/- 1 trading day) on the Dow at 21,725 (+/- 50 points). An actual bottom was put in place on December 26th at 21,713.

1/22/2019 – A negative day with the Dow Jones 301 points (-1.22%) and the Nasdaq down 137 points (-1.91%) 

As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

Since the stock market is doing exactly what it should be doing, at least according to our forecast, let’s for a day explore the real estate portion of the Everything Bubble. After all, it is finally getting ugly out there.

US Home Sales Get Uglier – But The Good Times Roll On

This housing downturn moved into the scene in 2018, a year when the economy was strong and created 2.6 million jobs. This downturn has been triggered by sky-high prices and rising mortgage rates, not by a recession or job losses. Those events – unavoidable as part of the business cycle are still waiting in the wings.

 

Real Estate inventory is piling up: Housing market unaffordable to most Californians so what happens next?

Price cuts.  Cookies at open houses.  Listings lasting longer than a few weeks on the MLS.  The housing slow down is now officially here.  Delusions usually end up on a direct path with reality.  Housing is always a lagging indicator of underlying economic activity.  People will fight to the bitter end to save their homes.  Unlike the stock market, prices do not adjust overnight.  However, in places like California the weak performance in the stock market last year is going to hit the bottom line for state tax revenues.  It is also giving pause to VC money that was chasing absurd companies with nonsensical P/E ratios in search for the next billion-dollar unicorn.  But little by little inventory is starting to pile up.  People are opting to rent versus buy or in California, or as over 2 million adult “children” have opted to do, move in with their baby boomer parents.  So what does the rise in inventory signal for 2019?

 

Existing Home Sales Plunge 6.4%, Down 10.3% Y-O-Y, Worst Reading in Over 3 Years

• Existing-home sales In the Midwest fell 11.2 percent from last month to an annual rate of 1.19 million in December and down 10.5 percent from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
• Existing-home sales in the South dropped 5.4 percent to 2.09 million. This is 8.7 percent lower on an annual basis. The median price increased 2.5 percent to $224,300.
• Existing-home sales in the West dipped 1.9 percent to an annual rate of 1.02 million in December and are now down 15 percent year-over-year. The median price rose 0.2 percent to $374,400.

Housing has peaked this Cycle

Housing and cars have both peaked this cycle. The slowdown will accelerate.

Fire the Fed?

President Trump’s frustration with the Federal Reserve’s (minuscule) interest rate increases that he blames for the downturn in the stock market has reportedly led him to inquire if he has the authority to remove Fed Chairman Jerome Powell. Chairman Powell has stated that he would not comply with a presidential request for his resignation, meaning President Trump would have to fire Powell if Trump was serious about removing him.

The law creating the Federal Reserve gives the president power to remove members of the Federal Reserve Board — including the chairman — “for cause.” The law is silent on what does, and does not, constitute a justifiable cause for removal. So, President Trump may be able to fire Powell for not tailoring monetary policy to the president’s liking.

By firing Powell, President Trump would once and for all dispel the myth that the Federal Reserve is free from political interference. All modern presidents have tried to influence the Federal Reserve’s policies. Is Trump’s threatening to fire Powell worse than President Lyndon Johnson shoving a Fed chairman against a wall after the Federal Reserve increased interest rates? Or worse than President Carter “promoting” an uncooperative Fed chairman to Treasury secretary?

Yet, until President Trump began attacking the Fed on Twitter, the only individuals expressing concerns about political interference with the Federal Reserve in recent years were those claiming the Audit the Fed bill politicizes monetary policy. The truth is that the audit bill, which was recently reintroduced in the House of Representatives by Rep. Thomas Massie (R-KY) and will soon be reintroduced in the Senate by Sen. Rand Paul (R-KY), does not in any way expand Congress’ authority over the Fed. The bill simply authorizes the General Accountability Office to perform a full audit of the Fed’s conduct of monetary policy, including the Fed’s dealings with Wall Street and foreign central banks and governments.

Many Audit he Fed supporters have no desire to give Congress or the president authority over any aspect of monetary policy, including the ability to set interest rates. Interest rates are the price of money. Like all prices, interest rates should be set by the market, not by central planners. It is amazing that even many economists who generally support free markets and oppose central planning support allowing a government-created central bank to influence something as fundamental as the price of money.

Those who claim that auditing the Fed will jeopardize the economy are implicitly saying that the current system is flawed. After all, how stable can a system be if it is threatened by transparency?

Auditing the Fed is supported by nearly 75 percent of Americans. In Congress, the bill has been supported not just by conservatives and libertarians, but by progressives in Congress like Dennis Kucinich, Bernie Sanders, and Peter DeFazio. President Trump championed auditing the Federal Reserve during his 2016 campaign. But, despite his recent criticism of the Fed, he has not promoted the legislation since his election.

As the US economy falls into another Federal Reserve-caused economic downturn, support for auditing the Fed will grow among Americans of all political ideologies. Congress and the president can and must come together to tear down the wall of secrecy around the central bank. Auditing the Fed is the first step in changing the monetary policy that has created a debt-and-bubble-based economy; facilitated the rise of the welfare-warfare state; and burdened Americans with a hidden, constantly increasing, and regressive inflation tax.

We Couldn’t Agree More…..

A positive week with the Dow Jones up 711 points (+2.96%) and the Nasdaq up 186 points (+2.66%)

As we have been saying, the stock market remains at an incredibly important juncture. Things are about to accelerate in an unexpected way. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

Things are getting rather confusing/complicated.

Stock Market Margin Debt Plummets Most Since Q4 2008

We wrote about this many times before Margin Debt Horror Show Gets Even Scarier The second chart tells a scary story. Despite most recent unwind margin debt today is nearly double of what it was at 2007 pre-financial crisis high. And make no mistake, it will most definitely act as jet fuel to the downside. But it gets worst……

Global Debt Surpasses 244 Trillion Dollars As “Nearly Half The World Lives On Less Than $5.50 A Day”

The borrower is the servant of the lender, and one of the primary ways that the elite keep the rest of us subjugated is through the $244,000,000,000,000 mountain of global debt that has been accumulated.  Every single day, the benefits of our labor are going to enrich somebody else.  A portion of the taxes that are deducted from your paycheck is used to pay interest on government debt.  A portion of the profits that your company makes probably goes to servicing some form of business debt.

And most Americans are continuously making payments on their mortgages, their auto loans, their credit card balances and their student loan debts.  But most people never stop to think about who is becoming exceedingly wealthy on the other end of these transactions.  Needless to say, it isn’t the 46 percent of the global population that is living on less than $5.50 a day.

The world has never seen anything like this mountain of debt ever before, and one of the central themes of The Economic Collapse Blog is that all of this debt will ultimately destroy our society.  According to the Institute of International Finance, the total amount of global debt is now  “more than three times the size of the global economy”…

Forget traditional re-sets (inflation or defaults). This giant debt can only be serviced through a war that will end us all. Those who follow my work know exactly when this life ending nuclear WW-3 starts. No free lunches. Yet, at least for the time being, you can rejoice.

The stock market hasn’t started a year this strongly since 1987

Much has been made about the performance of stocks so far in 2019.

Small-cap stocks, as gauged by the Russell 2000 index RUT, +1.04% , are off to their best start to any year in the past 32 years, boasting a gain of 8.8% over the past 12 trading sessions, according to Dow Jones Market Data. That’s outpacing the large-cap S&P 500 SPX, +1.32% the U.S. stock-market benchmark, which is up 5.2% over the same stretch — a performance, however, that likewise is the strongest 12-day start to a calendar year in 32 years.

The Dow Jones Industrial Average DJIA, +1.38% is up 4.5% over the same period, while the Nasdaq Composite Index COMP, +1.03% has logged a 6.8% advance.

Is it a reason to cheer? Perhaps it would be if not for the fact that the gains are the strongest since 1987, when the Russell popped 11.87% over the first 12 trading days and the S&P rallied 11.22%. 1987 is a year that lives in infamy on Wall Street.

As Wall Street’s old wives’ tale goes, “As goes the January, so goes the rest of the year”. Can that possibly be true in today’s crazy market?

Luckily, you don’t have to guess. If you would like to find out what the stock market will do next, in both price and time, based on our mathematical and timing work, please Click Here 

Please Note: Our latest call was a direct hit. While everyone was panicking our work projected an important bottom on December 27th (+/- 1 trading day) on the Dow at 21,725 (+/- 50 points). An actual bottom was put in place on December 26th at 21,713. 

The National Security Agency Is A Criminal Organization

Paul Craig Roberts

Years before Edward Snowden provided documented proof that the National Security Agency was really a national insecurity agency as it was violating law and the US Constitution and spying indiscriminately on American citizens, William Binney, who designed and developed the NSA spy program revealed the illegal and unconstitutional spying. Binney turned whistleblower, because NSA was using the program to spy on Americans. As Binney was well known to the US Congress, he did not think he needed any NSA document to make his case. But what he found out was “Congress would never hear me because then they’d lose plausible deniability. That was really their key. They needed to have plausible deniability so they can continue this massive spying program because it gave them power over everybody in the world. Even the members of Congress had power against others [in Congress]; they had power on judges on the Supreme Court, the federal judges, all of them. That’s why they’re so afraid. Everybody’s afraid because all this data that’s about them, the central agencies — the intelligence agencies — they have it. And that’s why Senator Schumer warned President Trump earlier, a few months ago, that he shouldn’t attack the intelligence community because they’ve got six ways to Sunday to come at you. That’s because it’s like J. Edgar Hoover on super steroids. . . . it’s leverage against every member of parliament and every government in the world.”

To prevent whistle-blowing, NSA has “a program now called ‘see something, say something’ about your fellow workers. That’s what the Stasi did. That’s why I call [NSA] the new New Stasi Agency. They’re picking up all the techniques from the Stasi and the KGB and the Gestapo and the SS. They just aren’t getting violent yet that we know of — internally in the US, outside is another story.”

As Binney had no documents to give to the media, blowing the whistle had no consequence for NSA. This is the reason that Snowden released the documents that proved NSA to be violating both law and the Constitution, but the corrupt US media focused blame on Snowden as a “traitor” and not on NSA for its violations.

Whistleblowers are protected by federal law. Regardless, the corrupt US government tried to prosecute Binney for speaking out, but as he had taken no classified document, a case could not be fabricated against him.

Binney blames the NSA’s law-breaking on Dick “Darth” Cheney. He says NSA’s violations of law and Constitution are so extreme that they would have to have been cleared at the top of the government.

Binney describes the spy network, explains that it was supposed to operate only against foreign enemies, and that using it for universal spying so overloads the system with data that the system fails to discover many terrorist activities. http://www.informationclearinghouse.info/50932.htm

Apparently, the National Security Agency values being able to blackmail citizens and members of government at home and abroad more than preventing terrorist attacks.

Unfortunately for Americans, there are many Americans who blindly trust the government and provide the means, the misuse of which is used to enslave us. A large percentage of the work in science and technology serves not to free people but to enslave them. By now there is no excuse for scientists and engineers not to know this. Yet they persist in their construction of the means to destroy liberty.

Indeed….