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Ukraine Imposes Capital Controls. Is Ukraine About To Collapse?

Typically, governments don’t impose capital controls on bright shiny days. They do it right before shit hits the fan. Argentina and Venezuela are perfect examples of that. No doubt Ukraine is on the brink of a political collapse or worse, much worse, economic collapse. With political meddling from EU, US and Russia, this powder keg is about to explode. If you know anything about the region, understand one thing. There is no way in hell, in this universe and the next, that Putin will let Ukraine go to the EU or Western side. As far as Russian government is concerned, Ukraine is still part of the iron “Soviet Union” and will remain so for the foreseeable future. No matter how many tantrums the UE or the US throws. Yet, even with Russia’s support I would expect Ukrainian economy to be flushed down the toilet and soon. Capital controls are never short term and are never good. Expect the worst especially when the Ukranian Government assures otherwise. 

ukraine currency

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Ukraine Imposes Capital Controls as President Meets Putin

Ukraine’s central bank imposed limits on foreign-currency purchases, bolstering a sagging hryvnia after interventions failed to, while President Viktor Yanukovychprepared to meet Russia’s Vladimir Putin in Sochi.

The monetary authority set a monthly cap on foreign currency purchases for individuals and imposed a waiting period of at least six working days for companies and people, according to a statement on its website yesterday. The crisis, in its third month, has rocked the hryvnia, squeezing reserves as authorities struggle to contain a record current-account gap.

With a leak of undiplomatic language from a U.S. diplomat rattling ties with the European Union as they discuss potential aid, Yanukovych traveled to the opening ceremony of the Sochi Olympics where he is to meet the Russian president, who halted payments from a $15 billion bailout after nationwide protests led to the cabinet’s collapse.

“It may be difficult for the central bank to contain the situation until there is more clarity regarding a bailout from Russia or, potentially, from the West,” Ben Griffith, an analyst at Victoria 1522 Investments LP in San Francisco, said by e-mail. “The market needs to know what changes would cause Russia to pull its agreement or cause the Western bloc to step in with assistance.”

Hryvnia, Bonds

The hryvnia, which has fallen to a five-year low of 9 per dollar several times in the past three days, gained 3.6 percent to 8.545 by 12:59 p.m. in Kiev, the biggest gain since September 2009, according to data compiled by Bloomberg. That pared the decline this year to 3.4 percent.

“The decision by Ukraine’s central bank to impose targeted capital controls should bring some short-term relief to the hryvnia,” Neil Shearing, a London-based analyst at Capital Economics, wrote in an e-mailed report today. “But it is unlikely to prevent further falls in the currency over the coming months.”

The yield on Ukraine’s dollar bonds due this June rose 191 basis points, or 1.91 percentage points, to 16.67 percent yesterday, the highest since before the Russian bailout was announced Dec. 17. The rate was 97 basis points lower at 15.70 percent at 2:18 p.m. today.

The cost of insuring the country’s debt against non-payment for five years using credit-default swaps fell 15 basis points to 1,071 after reaching the highest in almost two months yesterday, CMA data showed.

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Ukraine Imposes Capital Controls. Is Ukraine About To Collapse?  Google

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Stock Market Update. InvestWithAlex.com February 6th, 2014

Daily Chart February 6, 2014

Continue to maintain a LONG/HOLD position if invested -OR- be in CASH if not. 

2/6/2014 – Big day in the market with the Dow Jones up 188 points (+1.22%) and the Nasdaq up 46 points (1.14%). 

The question on everyone’s mind is…..has the market bottomed? Is the correction over? 

As of right now and based on my work I see very little evidence of that. Our primary points of force and their price targets remain intact (please see them below). At least for today. We might have to adjust those targets if we are to see strong follow through over the next few trading days, but that is still to be seen. The market opened up with a 60 point gap in the morning, giving us an early indication that it will turn around and go lower (in short order) to close the gap. Further, subsequent move lower to hit our points of force before any sustained bounce from the January-February sell off can take place is highly probable. 

As such, our current position remains intact. If you are in CASH, maintain your cash position while waiting for a technical confirmation that the Bear market has started. Otherwise, maintain a long/hold position.  The long-term trend is still intact and bullish. 

Short-Term Projections:

As of today, I am not adjusting the points of force below. My mathematical work shows two points of force coming in February. Typically we should anticipate a turning point on such dates. (Would you like to see the exact points of force in both price and time? Please +Subscribe to our premium service above). 

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Stock Market Update. InvestWithAlex.com February 6th, 2014 Google

Daily Chart February 6, 2014

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How To Make A Killing In A Deflationary Inflation

InvestWithAlex Wisdom 20Today’s 5-10 Minute Podcast Covers The Following Topics:

Topic: Inflation or Deflation Over The Next 5 Years? How To Allocate Capital To Make A Killing -OR- How To Make A Killing In A Deflationary Inflation.  

    • Inflation or Deflation….what will win over the next 5 years? 
    • Why it is incredibly important for your overall portfolio. 
    • How you should position yourself now. 
    • What steps to take to make a killing over the next 5 years. 

Please tweet me your questions @investwithalex

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

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Revealed: Who Will Win The Inflation-Deflation Battle And Make A Killing

Inflation or Deflation InvestWithAlex

Business Insider Writes: BILL GROSS ‘Be Careful 

In his February investment letter, Bill Gross, the manager of the biggest bond fund around at PIMCO, warns investors to “be careful.”

Why? Gross believes the rally has been fueled by ever-expanding debt.

Now, due to a combination of smaller government deficits and tapering of the Federal Reserve’s quantitative easing program, the rise in debt is slowing, which Gross argues is bad news for risky assets like stocks and good news for bonds.

“Bull markets are either caused by or accompanied by credit expansion. With credit growth slowing due in part to lower government deficits, and QE now tapering which will slow velocity, the U.S. and other similarly credit-based economies may find that future growth is not as robust as the IMF and other model-driven forecasters might assume. Perhaps the whisper word of “deflation” at Davos these past few weeks was a reflection of that. If so, high quality bonds will continue to be well bid and risk assets may lose some luster.”

Read The Rest Of The Article Here

Bill Gross is, of course, right on the money.  

The one question that gets left behind is whether or not we will have inflation or deflation over the next 5-10 years. That is an incredibly important question. A correct answer should greatly impact your overall portfolio allocation over the next couple years. Getting it right would mean outperformance, getting it wrong would only yield severe losses.

Gold bugs, inflationist and hyper inflationist would lead you to believe that hyperinflation is just around the corner, your dollars won’t be worth the paper they are printed on and that gold is about to surge to $100,000 an ounce.

Deflationist would lead you to believe that we are on a verge of an economic collapse, credit collapse, market collapse, great depression and that all asset prices are likely to decline to the tune of 90-95% over the next few years. If this scenario does indeed come true, it would be prudent to invest into a stockpile of canned food, a small arsenal of guns and a container load of ammo.

Who is right?

No one. The reality is somewhere in the middle. Technically we are in a deflationary environment due to a massive credit expansion and the subsequent collapse of that credit throughout our economic system. Basically, we are still feeling the impact of 2007-09 credit defaults, with more defaults coming up over the next few years (due to upcoming recession).   

On the other hand, the FEDs have been printing money like crazy over the last couple of years and distributing it though various channels of the economy. Mostly through financial institutions, speculation and asset price appreciation.   

That is why we are seeing the evidence of both inflation and deflation throughout  the economy. Which one will win out over the next couple of years and how to invest in such an environment?

Please listen to today’s podcast in order to get your answer. 

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Revealed: Who Will Win The Inflation Deflation Battle And Make A Killing  Google

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4 Reasons Why The US Unemployment Rate Will Be At 20% By 2017

Hey, don’t hate the messenger. I am just a financial analyst with a knack for accurately predicting financial markets and overall economies. If you really need someone to blame, I have got a few peeps for you.  You can start with Bush, Obama, Greenspan, Bernanke and every member of Congress/Senate over the last 15 or so years.

It was their irresponsible fiscal management that has led us all into this predicament.  Let’s take a look.

Reason 1:  Today’s Unemployment Reading Is Not Very Accurate

UNRATE_Max_630_378

As per Chart 1, according to the Bureau of Labor today’s unemployment rate stands at 6.7%. However, this number alone doesn’t show a clear picture. It excludes a number of categories. Primarily, those working part-time, but looking for a full time job and those who have given up looking for any sort of a job, exiting the labor pool completely. Perhaps waiting for a better time.   

unemployment rate 2 investwithalex

Now, if you take a look at Chart 2, you will note that the total unemployment rate (including the people above) is at around 12.5%. I believe that is a much better representation of today’s unemployment number. Particularly, when you take distrust in our Government’s statistics into consideration.

In conclusion and according to our Government’s own numbers, the true starting unemployment number  should be at 12.5% and not 6.7%.  I can argue that the overall number is technically higher, but to be conservative let’s go ahead and stick to 12.5%.  

Reason 2: Upcoming Bear Market (2014-17) Will Throw The Economy Into A Severe Recession

This has been my fundamental view for quite a bit of time. Today’s economic “recovery” is nothing more than an illusion driven by massive amounts of credit pumped into our economy by the FED . If you are counting, 3 Trillion over the last 3 years alone while maintaining a negative interest rate environment.

Listen buddy, there is no free lunch.  If you think that these actions to save the US Economy from the “Great Recession” of 2007-09 will be without consequences, you are gravely mistaken.  A few weeks ago my mathematical timing work has confirmed that December 31st, 2013 was indeed the top of the bull market that started in March of 2009. The bear market will last over the next 3 years and take the Dow Jones into the 9,000-10,000 range.  Ushering in a severe US recession.

In such a recessionary environment we should anticipate massive labor force losses as businesses give out pink slips by the millions. Just like they did in 2007-09.

As such, we should anticipate the unemployment rate to go much higher. Let’s be EXTREMELY conservative and assume that the upcoming recession will only retrace 50% of the 2010 unemployment high of 18% as per Chart 2.

This puts our true unemployment projection at 15.25% by 2017 bear market bottom.

Reason 3: ObamaCare

I wrote a detailed analysis about this yesterday. The Congressional Budget Office on Tuesday said that the Affordable Care Act will contribute to the equivalent of 2 million workers out of the labor market by 2017, as employees work fewer hours or decide to drop out of the labor force entirely. 

doctor-obamacare-investwithalex

With the US labor force being roughly 155 Million people, a cool 1.3% of people will lose their jobs in one form or another due to ObamaCare alone. Thanks Obama.  

However, if you read my analysis on February 4th, you would note that I effectively argued that ObamaCare losses are likely to be close to 4 million jobs and not 2 million. Effectively putting additional job losses at 2.6%.

We are now at 17.85% unemployment by 2017.

Reason 4: Productivity Gains, Technological Improvements, Outsourcing & Robotics

It costs about $2.5/hour to outsource your job to either India or the Philippines. Robotics are pushing the envelope for blue color workers and some products out there can achieve a $2.81 hourly run rate…..today. With constant improvements in this new field, some estimate the hourly cost to be down to about $1.50/hour over the next few years.

How can anyone compete with that? Well, you can’t.

Further, productivity gains and other technological improvements will have a significant impact as well. Again, let’s be on the safe side and assume the 4 points above will cost an additional 3 Million in job losses or 2% of the total labor force by 2017.

Putting us at 19.85% true unemployment by 2017 bear market bottom.  

CONCLUSION:

When we get there, the US Government will never admit to this number and will use every accounting trick in the book to hide the reality. Yet, you know better dear reader. Just like today’s unemployment number of 6.7% is not indicative of today’s true unemployment picture, 2017’s true number will be hidden behind the veil of “Economic BS”.  

What can you do? Other than ensuring that your job is safe…..absolutely nothing.  That is the sad part.  As far as I am concerned the scenario above is already baked into the cake and there is nothing anyone can do. Even praying to Jesus Christ won’t help. 

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4 Reasons Why The US Unemployment Rate Will Be At 20% By 2017 Google

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Why Is Donald Trump Freaking Out? He Knows What Will Happen In The Real Estate Over The Next Few Years. It’s Time You Find Out As Well.

housing bubble

Today’s 5-10 Minute Podcast Covers The Following Topics:

Reader’s Question: “I am thinking about buying a house, the prices are up significantly in my area over the last few years, should I do it now or wait?”  – Lili, Maryland. 

    • The Secret Behind Today’s Real Estate Prices. 
    • What The US Government Doesn’t Want You To Know About Real Estate. 
    • What Will Happen Next. Trust Me, It Is A 100% Certainty Now. 
    • What You Should Do To Save or Make A Lot Of Money Over The Next Few Years. 

Please tweet me your questions @investwithalex

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

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Warning: Why Does CNBC Wants To Destroy Your Wealth

CNBC Idiots

CNBC Writes: Why long-term investors should buy this selloff 

After a year of steady and quite remarkable gains, fear has crept back into the stock market. Concerns about the U.S. economy have joined emerging market weakness and jitters about the Federal Reserve’s stimulus reduction to send the S&P 500down 6 percent from the high reached Jan. 15. But savvy traders are advising long-term investors that this selloff is presenting a terrific opportunity to buy stocks at a discount.

“If you’re a long-term investor, now’s the time to be allocating,” said Rich Ilczysyzn, senior commodities broker at iiTrader. “I know there’s a lot of pension fund capital waiting to be allocated. They may wait for a specific trigger, maybe 5 percent, or maybe 10 percent. But it’s not going to give the retail guy a lot of time to jump on. And what’s going to happen is, people are going to miss the absolute bottom.”

Read The Rest Of The Article Here

Only the pump and dumpers or the idiots in the financial media can say that a mere 6% selloff is a “buying opportunity of a lifetime”.  I think that teach that phrase in the stock broker school to be repeated like a retarded parrot. Well, I guess I shouldn’t expect anything else from CNBC, a perpetual BS machine.

I would admit to one thing. It was quite entertaining to watch CNBC on huge down days in 2008 and 2009. To watch their “deer in the headlights” faces as they whined while trying to figure out why the collapse was happening. According to them, no one saw it coming.

WRONG, dear talking heads. Plenty of people saw it coming, including myself, and have tried to warn others. Yet, no one wanted to listen. We have the exact same situation today. That is fine by me. That is human nature and I have no desire to shove my work or opinion down anyone’s throat.   

At the same time, one reality remains. The stock market is incredibly overpriced.  Particularly, if you take credit and speculation into consideration.  The most important point to understand here is that corporate earnings over the last 5 years have been driven by the same credit infusion (by the FED to the tune of $85 Billion a month + negative interest rates) that spilled into the stock market. When this QE goes away and/or when the velocity of credit slows down, both happening now,  the stock market as well as the earnings will collapse.

Leading to a significant recession and a massive amount of wealth disappearing into thin air. As I have already mentioned on this blog a number of times,  my mathematical work has confirmed that the bull market has already topped out on December 31st, 2013 and the bear will take us into the 2017 bottom. I am not sure if I can be any more clearer than that.

As such, if you want to listen to retards on CNBC (no offence to the genuinely challenged community) telling you that this is a buying opportunity of a life time, go for it.  Just ask yourself, where were they when the real buying opportunity presented itself in the March of 2009. 

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Warning: Why Does CNBC Wants To Destroy Your Wealth Google

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Daily Stock Market Update. InvestWithAlex.com February 4th, 2014

Daily Chart February 4, 2014

Continue to maintain a LONG/HOLD position if invested -OR- be in CASH if not. 

2/4/2014 – A fairly slow bounce day in the market with the Dow Jones being up 72.44 points (+0.47%) and the Nasdaq being up 34.5 points (+0.86%). 

As of right now there is no indication in my mathematical work that this particular bear leg from the December 31st, 2013 top is over. I have a number of points of force showing a lower Dow Jones before an eventual turn around and a bounce. I advise that you continue to maintain our In Cash -or- Hold/Long position as we wait for the bear market confirmation. 

While such a stance might cause further short-term losses, it is the most prudent thing to do from a long-term trading strategy.

Short Term Update:  My short-term update includes exact points for force and anticipated turning points in both price and time. If you would be interested in knowing when the market will turn around….please visit our premium Subscriber section. 

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Daily Stock Market Update. InvestWithAlex.com February 4th, 2014 Google

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Shocking Truth Finally Comes Out. ObamaCare Will Destroy 4 Million Jobs. The Government Itself Confirms.

doctor-obamacare-investwithalex

Business Insider Writes: CBO: Obamacare Will Lead To 2 Million Fewer Workers In The Labor Force By 2017

The Congressional Budget Office on Tuesday said that the Affordable Care Act will contribute to the equivalent of 2 million workers out of the labor market by 2017, as employees work fewer hours or decide to drop out of the labor force entirely. 

The reduction in the numbers of hours worked projected by the CBO will lead to the equivalent of 2 million fewer workers in the labor force in 2017. That number will rise to about 2.5 million in 2024. Previously, the CBO had estimated the equivalent of 800,000 fewer workers by 2021.

Read The Rest Of The Article Here

What a fucking disaster.

I use the rule of TWO to either multiply or divide the data coming out of the US Government. It give me a much more accurate data. For instance, when the government wants its data to look favorable, multiply it by 2 to get a more accurate read and vice versa.

For example, multiply the current unemployment rate of 6.7% by 2 and you end up with 13.4%. As far as I am concerned, a much more accurate representation of unemployment when you take part timers and those who have given up looking for work into consideration.

The Congressional Budget Office just announced that the Affordable Care Act will contribute to the equivalent of 2 million workers out of the labor market by 2017. Since they want this data to look as favorable as possible, go ahead and multiply it by 2 to get a more accurate indicator. What does that mean?

The Government itself just admitted that ObamaCare will cost 4 Million jobs.
I am speechless.

As far as I am concerned any regulation that destroys jobs, hurts businesses and slows economic growth is an evil law. Period.  I am afraid, due to the upcoming recession (based on my timing work) the net job losses due to ObamaCare will be much more than 4 Million jobs.

What pisses me off more than anything is complete economic incompetence at every level of our government. They have consistently done nothing but exacerbate our economic problems.

Disappearing middle class, massive debt, wars, credit bubbles, real estate bubbles, corporate earnings bubbles, stock market bubbles, upcoming recession and dim economic future is a clear indication of that. Sad. 

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Shocking Truth Comes Out. ObamaCare Will Destroy 4 Million Jobs. The Government Itself Confirms. Google

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Who Makes More Money, Investors or Speculators?

InvestWithAlex Wisdom 19Today’s 5 Minute Podcast Covers The Following Topics:

Reader’s Question: “Is it better to be a long-term investor or a speculator. Who makes more money?”  – Robert Casper, TX 

    • Why This Is The Wrong Question To Ask. 
    • The Secret Truth Wall Street Doesn’t Want You To Know. 
    • Who Makes More Money. 
    • Who Should You Be In Order To Maximize Your Returns.  

Please tweet me your questions @investwithalex

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!