Friday, January 29, 2016

Stocks Leap 400 Pts Because BOJ Begins Negative Interest Rates?

This is stunning! Wall St sent stocks skyrocketing today because BOJ's Kuroda decided to try negative interest rates. More experimental monetary policy! Remember Mr. Bernanke's "unprecedented measures"? That's an admission that they are using us all as their economic experimental guinea pigs! Unproven economic policy without accountability! Eventually, one of them will bring a calamity!

Thursday, January 28, 2016

Earnings Suggest Recession

from Marketwatch today:

Bellwether CAT Sales Decline 23%

Caterpillar is the world' largest manufacturer of industrial equipment, so when sales decline, it's an indicator of global economic weakening. Even still, a decline that large, of 23%, is a huge red flag!

Wednesday, January 27, 2016

Leading Economist Predicts Recession in 2016

Dr. Mark Skousen, who has a Ph.D. in  economics, and has been named as one of the world's leading economists, said the following on January 21st:

“Gross output (GO), the new measure of U. S. economic activity published by the Bureau of Economic Analysis, slowed significantly in the 3rd quarter of 2015. And the Skousen B2B Index actually fell slightly in real terms in the 3rdquarter. Both data suggest the possibility of a mild recession developing in 2016...
"In nominal terms, the adjusted GO growth rate declined from 6.3% in Q2 to 2.3% in Q3. In the same period GDP fell from 6.0% to 2.7%, illustrating the higher degree of volatility of GO compared to GDP (see chart below).  The higher volatility indicates that GO might be a better indicator of economic activity than GDP, since GO includes economic activity that GDP leaves out.”

Here's his own headline:

Tuesday, January 26, 2016

Wall St Journal Op Ed Spells Out Risks

"The Fed’s monetary policy of extraordinarily low interest rates helped create the asset bubbles in stock and commodity prices that are now bursting. In retrospect, the Fed’s rate hike last month will likely be viewed as monetary malpractice. None of this is likely to forestall turmoil in credit markets. Investors are wise to be worried... This year is likely to be one of financial crises in industries and countries around the world.
Gerald O'Driscoll, former vice president at The Dallas Fed, posteed op-ed at The Wall Street Journal,

So how does the current sell-off compare to previous market crashes? Here's a look! 

Dow Rises 300 Points on News of "earnings recession"!

From JP Morgan chief equity strategist Dubravko Lakos-Bujas, who cut his forecast for the S&P 500 for this year by a whopping 200 points! Oooooooh! 
"The risk-reward for equities is deteriorating. There is increasing risk that elevated volatility starts incurring enough technical damage to market psychology and spills over, negatively impacting investor, consumer and business sentiment, resulting in a lack of risk taking, and eventually creating a negative feedback loop into the real economy. Going forward we see equity risk remaining asymmetric to the downside given:
  1. rising risk of US earnings recession,
  2. diverging central bank policies and a Fed that is trying to tighten causing USD to strengthen,
  3. US manufacturing sector already in recession territory and non-manufacturing sector continuing to decelerate,
  4. deteriorating macroeconomic backdrop with China posing a significant risk to global markets,
  5. credit spreads widening and high yield approaching recession levels,
  6. late cycle dynamics,
  7. continued elevated volatility likely to impact sentiment—VIX has been averaging ~20 for the last 6 months"
 And on that news, the Dow is UP nearly 300 points today! Go figure! 

Monday, January 25, 2016

Dr. Hussman Tells It Like It Is! How Dare He!

I loved this today:
"With respect to the market as a whole, I’ve periodically observed that market crashes typically only emerge after the market first loses something on the order of 14%, rebounds from its initial loss, and then breaks that prior support. That support level remains about the 1820-1850 area on the S&P 500. After selling down to that level last week, the market staged a nearly obligatory dip-buying advance, aided by a parade of central bankers brandishing their large but ineffectual bazookas at the World Economic Forum in Davos."

Based upon historically reliable data, Dr. Hussman suggests that a recession is now the most likely outcome. Look out below! Dow closed down 209 points, with the S&P just about 20 points from the previous support level that represents the crash point.