Tag: investing

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What You Ought To Know About America’s Unemployment Problem

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Reuters Writes: Help wanted: Obama calls on CEOs to help fix jobless problem

WASHINGTON, Jan 31 (Reuters) – President Barack Obama will meet on Friday with a group of chief executive officers who have agreed to make sure their companies do not rule out hiring people just because their resumes show they have been out of work for a while.

More than 300 companies have agreed to a one-page list of “best practices” for recruiting and hiring people from the ranks of the long-term unemployed – a group that has struggled to find work in spite of an otherwise improved economy. “It’s saying that those who are long-term unemployed should get a fair shot,” said Gene Sperling, Obama’s top economic advisor.

The U.S. jobless rate has remained stubbornly high at 6.7 percent, but Sperling told reporters the rate would be closer to 5 percent were it not for the roadblocks to finding work for those unemployed for six months or more.

Read The Rest Of The Article Here

The whole notion of Obama calling on CEO’s to “help fix jobless problem” is an idiotic notion to begin with. A PR stunt. It’s identical to throwing fire crackers at a massive cargo ship and expecting any sort of a result.

The unemployment problem is a function of the overall economy. Business will start hiring when they hit capacity and start growing again. You might scratch your head and ask, well, isn’t our economy is growing fast? At least that’s what the media keeps telling us.  

NO. Again, the recovery you see is artificial. Driven by credit and speculation. Even the primary beneficiaries of this so called recovery (financial institutions able to borrow money for free) are for the most part not hiring. Why? It’s a complex issue. For some it has to do with technological improvements, for others with outsourcing and even robotics.

Yet, the main issue remains. There is no “TRUE” economic growth and too much uncertainty to warrant any kind of a hiring binge. By anyone.

Then there is the big issue of 6.7% unemployment. The number excludes those who have given up looking for work and those who are underemployed (part time, but want full time). If you add both categories into the pool, the true unemployment number is likely to be between 15-20%. That is a massive problem for the economy that is “supposedly” back to its pre 2007 levels.

Is there a solution? I don’t see it. If anything, the situation is about to get a lot worse. As my stock market work clearly indicates we are on verge of a severe bear market and another economic recession.

This will do nothing but make the unemployment problem a lot worse.     

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The Secret Behind What Drives The Stock Market

InvestWithAlex Wisdom 17

Today’s 5 Minute Podcast Covers The Following Topics:

Reader’s Question: “The economy is doing very well right now and the fundamentals are good. What would be the catalyst for the bear market you talk about? ” – Peter. 

    • The secret behind what drives the stock market. 
    • Why most people get it wrong when it comes to forecasting.  
    • The natural cycles behind all economic and market developments. 
    • How this one little thing can double your portfolio performance virtually overnight. 

Please tweet me your questions @investwithalex

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Stock Market Update, January 30th, 2014. InvestWithAlex.com

Daily Chart January 30, 2014

Summary: Continue to maintain a LONG/HOLD position.

1/30/2014 – The roller coaster ride continues with the Dow Jones ending the day up +110 points or (+0.70%). With gap ups and downs galore.

It is definitely starting to feel like the volatility is coming back into the market. While VIX index is still sitting at relatively lows levels, the market is starting to exhibit signs….  Continue reading “Stock Market Update, January 30th, 2014. InvestWithAlex.com”

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TIMED VALUE is ready. Get Your Copy Today

3d Timed Value Cover 2

 

My investment book is finally ready. I am incredibly excited and proud of it. This is a one of a kind book that talks about my “Timed Value” style of investing and my secret mathematical approach to market timing. If you would be interested in learning more about the book please CLICK HERE to get 2 free chapters and further information.

Book summary…. 

Have you ever wondered if it was possible to generate outsized investment returns by timing the stock market and/or individual stocks with great precision?

If you have, this book is for you.  Financial media and most financial professionals would lead you to believe that such a task is impossible.  Yet, Timed Value challenges this traditional assumption head on by presenting a clear cut case that the stock market is not random,  on the contrary, it is precise.

The book starts by discussing the traditional aspects of “Value Investing”, its hidden secrets and problems.  The second part of the book shifts into the timing aspect by showing the reader the exact calculations needed in order to time the market or individual stocks with stunning accuracy.

Further, the author shows “HOW” once the stock market structure is understood in its entirety,  the market or individual stocks can be timed with great precision. Not by some arbitrary technique that cannot be replicated, but through the use of modern science and mathematics. Math doesn’t lie and when the market turns/reverses at exact mathematical points of force,  only one explanation remains. The market is not a randomly volatile instrument, but a mathematically precise tool that baffles the mind. 

As such, this “How & Why” stock market timing masterpiece is a must have book for any true market practitioner or those wanting to improve their overall returns. 

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Stock Market Update, January 29th, 2014. InvestWithAlex.com

Daily Chart January 29, 2014

Summary: Continue to maintain a LONG/HOLD position. 

1/29/2014 – The market continued its initial bear market move with the Dow Jones being down -190 points or (-1.19%). 

Further, the market opened up another 100 point gap in the morning, erasing all of yesterdays gains and indicating that the market will eventually come back to close the gaps. No doubt, short term picture remains bearish while the long term picture remains bullish. Raising up questions if this is just a correction or a beginning of anticipated bear market. As my timing work showed, it is highly probable that the bull market topped out on December 31st and what we are witnessing now is the initial stage of the bear market. 

Again, even though the timing work confirms, we must wait for a technical confirmation that the bull market has indeed topped out before taking a short position. As such, I continue to maintain our long/hold position.  

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Why The Bear Market Is Already Here

CNBC Writes: ‘Huge amount of downside’ in S&P: Fleckenstein

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Bill Fleckenstein is not ready to call the top for the market just yet. But pointing to the S&P 500‘s valuation, he says that once stocks do start to fall, the decline could prove extremely painful.

“The [price-to-earnings ratio] is 16, 17 times earnings,” Fleckenstein said on Tuesday’s episode of “Futures Now.” “Why would you pay 16 times for an S&P company? I don’t care about where rates are, because rates are artificially suppressed. Why isn’t that worth 11 or 12 times? Just by that analysis, you’d be down by a quarter or 30 percent. So there’s a huge amount of downside.”

For Fleckenstein, a noted short seller who is famous for making money in the 2008 crash, the Federal Reserve‘s quantitative easing program has led investors to badly misprice stocks.

The Fed “printing money does not make the economy work, but it sometimes makes stocks go wild,” Fleckenstein said. “The reason the stock market did well last year is because the Fed printed $1 trillion.”

Read The Rest Of The Article

Bill is right on the money and while he is not ready to call the top, I am. In one of my previous posts MARKET TOP, I have identified December 31st, 2013 as the top of the bull run from the 2009 bottom.

It has also been my premise all along that fundamentals no longer matter.  Not in terms of identifying some sort of a new stock market environment, but as of right now.  The fundaments do matter a great deal under “normal” circumstances, yet normal circumstances have been greatly distorted by massive infusion of credit into our financial system. 

Credit that drove our stock market prices beyond any reasonable valuation and well above 2000 and 2007 tops. Sure, earnings, P/E ratios and other metrics matter.  Yet, most metrics we revert to today have been distorted by the same credit infusion. Leading to higher earnings and corporate profits. The bottom line is, when credit collapses so will all other metrics.  Do not be fooled, all of this is nothing but an illusion.

As I have said so many times before, my mathematical work shows that we are in for a 3 year bear market that will take us into the 2017 cyclical bear market bottom that started in 2000. Do you need more information and exact price/time targets? My premium subscription service will be available next Monday.  

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More Economic Insanity From The White House

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In his State of the Union address, President Obama announced that he is raising the minimum wage for new federal contract workers to $10.10 an hour. Challenging lawmakers and states to do the same. In essence, hoping that the his action will lead to an eventual rise in nationwide minimum wage.   

Here is the behind the scenes explanation of why he is doing it, why it will not work and why these idiotic economic policies by the FED and by the US Government are killing the US Economy.

Now, prior to understanding what is behind this move, you must be made aware of our overall economic environment. While it seems complex, it is quite easy.

As of right now the US Economy is being pushed and pulled by two opposite forces. Inflation and deflation. How is it possible?

Technically speaking we are in a deflationary environment. It is a naturally occurring cycle where the prices of goods and services go down due to over capacity, credit decline/collapse and stronger currency. If you think about it, deflation is great for both consumers and businesses.

Yet, our Federal Government and the FED’s are terrified of deflation. Why? Because they have a massive pile of debt that they have to pay back. A little over $17 Trillion.

The problem is, there is no way in hell they will be able to pay this debt pack under normal circumstances and no way in hell X 10, in a deflationary environment.

The only way out of this mess is through inflation or war. That is why the FEDs have been working overtime printing money and trying to inflate our debt (and our money) away. With mixed results.

Hence the reason behind our current deflationary and inflationary forces. Forcing some prices (ex: food) to go up while other prices to decline or collapse (ex: asset prices or services).

The bottom line is, the Government needs inflation at any cost. This brings us to President Obama’s pledge or push to increase nationwide minimum wage. Again, it has nothing to do with getting people out of poverty and everything to do with inflating away national debt and destroying the dollar.

Yet, unemployment (or true unemployment) remains high and in such an environment wages will have to stay low. No matter what President Obama does, he has very little pull in free markets and when there is a readily available oversupply of work force, wages will stay where they are.

The bigger issue here is blatant destruction of the US Economy and the US way of life through pure economic stupidity. What you are witnessing now is the end of the road and an eventual collapse of the house of cards that is the US Economy. 

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More Economic Insanity From The White House

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What You Ought To Know About Economic BS

AP Writes: State of the US economy: strongest since recession

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WASHINGTON (AP) — The U.S. economy is showing more strength than at any time since the Great Recession began six years ago.

Employers are hiring. Home prices, sales and construction have surged. Corporate profits and stocks have hit records. And consumers have picked up their spending.

The economy has yet to fully recover from the most devastating crisis since the Great Depression. But it’s getting closer — a point President Barack Obama was expected to highlight in his State of the Union address Tuesday night.

The propaganda machine continues to hum along. Let me remind you that the so called “Great Recession” was caused by the insane economic policies of the US Government. Mind you, they continue the same policies today, yet on a much larger scale.

— JOBS

Job growth has been remarkably steady in an uneven recovery. Employers have added at least 2.1 million jobs in each of the past three years, creating momentum that could help the economy gain speed in 2014. Each new job puts more money in the hands of people to spend. That’s why consistent job growth can give more traction to the recovery. The unemployment rate has plunged from 7.9 percent to 6.7 percent over the past year. That’s down from a 10 percent peak in October 2009.

Still, the benefits of more hiring have been muted so far, in part because much of it has been concentrated in the low-wage industries of hotels, restaurants, retailers and temp workers. Also, millions of jobless Americans have stopped looking for work. Once people without jobs stop their searches, they’re no longer counted as unemployed. As a result, the unemployment rate can fall in a way that overstates the health of the economy.

WOW, really. I am not even sure where they are getting their numbers. While the government claims the unemployment is at 6.7%, in reality, that number is much higher. With people giving up on finding work and prolific “underemployment” the real rate is most likely to be around 15%. Hence, no pay growth.  

— HOUSING

Real estate is rebounding. Home prices have climbed 13.7 percent over the past 12 months, according to a Standard & Poor’s index released Tuesday. Sales of existing homes totaled 5.09 million last year, the best such performance since 2006, the National Association of Realtors said last week. Home industry experts say the gains should continue this year, though at a slower pace because higher mortgage rates and home prices will make buying less affordable for some.

Sure, real estate has rebounded, but make no mistake. This has very little to do with an underlying economic health and everything to do with massive credit infusion and to a certain extent speculation in the sector. Once the bubble pops again, and it will, housing will decline below 2010-11 lows.

— CONSUMER SPENDING

The spending of consumers, which fuels about 70 percent of the economy, is starting to return to its pre-recession levels. The Conference Board said Tuesday that its consumer confidence index rose to 80.7 this month, well above last year’s average of 73.3. Retail sales bumped up 4.2 percent in 2013, the fourth straight annual increase. Roughly 15.6 million autos were bought last year, an 8 percent improvement and the highest total since 2007. Historically low inflation and interest rates have kept food and clothing affordable. And according to the Gallup Organization, average daily consumer spending rose $16 to $88 last year.

Fair enough, but consumer spending is a simple function of the economy. When the economy goes up, so does the consumer spending. Yet, keep the following in mind. Today’s economic recovery is driven primarily by credit infusion and speculation. As the result, consumer spending is being artificially levitated. When easy credit and speculation goes away, consumer spending will not only decline, but collapse.

— STOCKS

The Dow Jones industrial average enjoyed a monster 2013, climbing 28 percent. Corporate profits are at their highest share of the economy in the 66 years of tracking by the government. Shares were bolstered by a Federal Reserve bond-buying program that is now being wound down. The eventual end of the program, paired with weak growth in China and troubles in Argentina and Turkey, help explain the 4.1 percent decline in the stock market since the start of this year.

Again, everything associated with the stock market has been goosed by the FED and their “unlimited” money supply. That includes corporate profits and emerging markets. It is similar to living a high life while maxing out your credit cards. Eventually the bills will come due and the cards will be maxed out. When that happens, there will be hell to pay in all financial markets. As I have stated so many times before, my mathematical work indicates that the bear market has already started and it will take us into the 2017 bottom.

It is prudent that you get yourself ready.

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Stock Market Update, January 28, 2014 InvestWithAlex

Daily Chart January 28 2014

Summary: Continue to maintain a LONG/HOLD position. 

1/28/2014 – The market rebounded nicely today with the Dow Jones being up +91 points or (+0.57%). Is this the bottom of the first or “initial sell off”? It is hard to say. While it looks promising the short term picture remains bearish.

If you look at the five day chart above you will note two gaping holes on Jan 23rd and 24th. As I have mentioned many times before, the stock market tends to close such gaps before any sustained bear or bull moves can take place. Since our work indicates that the Bull market from 2009 bottom has topped out on December 31st, 2013, the market must jump back into that territory and close the gap before a sustained bear market move can take place. As such and based on my calculations, a rally from this point on into the 16,400 on the DOW would make perfect sense.  

With that said, there is nothing left for us to do except sit on our hands and wait for some sort of a confirmation. I believe we are still weeks away from such an event. It is too early to go short and it is prudent to remain long in case the analysis above is incorrect. 

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Criminal Negligence Behind The US Economy

Talking Numbers Writes: Here’s why the Fed is trapped: Ron Paul

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Ron Paul has a warning for the markets: The Federal Reserve Bank is the source of today’s market instability and it will likely get worse.

As the Fed begins its two-day policy meeting on Tuesday, world markets are being rattled by two major issues: credit market instability in China and a further taper of the US monetary stimulus.

Former congressman Ron Paul believes that Ben Bernanke is going to avoid responsibility for additional tapering and foist it on his successor, Janet Yellen. He believes the Fed has its back against the wall – if it tapers any more, emerging markets will spin out of control; if it continues buying bonds at the same monthly pace indefinitely (which is expected to be $75 billion this month), US and world markets could find themselves overvalued and susceptible to a big drop if and when the music stops. The US dollar’s role as a reserve currency is part of the reason this could be a global problem, according to Paul.

“We create money out of thin air to the tune of billions and billions of dollars,” says Paul. “Then we spend it in places like China and they monetize that debt. It’s a worldwide phenomenon. Everybody has mal-investments and overinvestments and all the problems built-in. The weakest economies are going to crack first. But, eventually, I think everybody’s going to suffer from the massive monetary inflation that’s been going on, not only for the last 10 years but probably 30 years.”

I have a lot of respect for Ron Paul for one simple reason. He was the only politician in the US Congress to speak the truth about our economic predicament. Well, either that or all other politicians are idiots without an ounce of economic understanding. Judging by what they are doing to the country I think it’s the latter.   

His assessment of our economic situation is right on the money.  The FED is the problem that has distorted most of our financial markets and most of our pricing mechanisms to an amazing degree. Everywhere you look, you will find discrepancies. From the stock market to the car loan market. Everywhere.

Even though most people view our current economic situation as “typical”, it is anything but that. The FED is, indeed, backed into the corner. That is what happens when you blow financial bubbles on a massive scale. They cannot take the stimulus away. If they do, most financial markets around the world will ferociously collapse. If they don’t, the markets will simply stagnate as the velocity of credit/money slows down. Making the situation worse in the long run.

Of course, most people don’t see that. Even our own president.

President Barack Obama spoke repeatedly last year about the need to avoid what he called “artificial bubbles.” He praised Yellen for “sounding the alarm early about the housing bubble” when he announced her nomination for the job of Fed chairman on Oct. 9. “She doesn’t have a crystal ball, but what she does have is a keen understanding about how markets and the economy work,” he said.

Wrong, Mr. President. We are already in a massive speculative bubble driven by a massive amount of credit and by the FED. Bigger than 1929, 2000 or 2007.  Will the markets collapse as they did back then?  My mathematical and timing work says NO, but the main issue persists. While it might not take the form of a severe market collapse, the economy will have to suffer for decades to come under the weight of today’s economic mismanagement. 

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