The market is started to run into loads of overhead supply and is starting to look toppy after this recent run up. Right now the risk/reward favors shorting the market once again. As I see it we are getting ready to embark on the 5th down wave of this recession/depression.
Here is a good video of British Prime Minister Gordan Brown getting destroyed about the British debt. Yes, this is Britain, but we are right there with them in this mess.
Thursday, March 26, 2009
Thursday, March 12, 2009
Unintended consequences is Washington.......
“The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple. It operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives. Society in contrast is a complex, evolving, high-feedback, incentive-driven system. When a simple system tries to regulate a complex system you often get unintended consequences.”
-Andrew Gelman
Congress definitely fits Mr. Gelman’s definition of a simple system. I can’t think of a body of people operating with more ignorance than Congress. The information they act upon, is provided by the 17,000 lobbyists that wine and dine them on a daily basis. Corporate lobbyists, PACs, unions, and special interests buy their votes. Their time horizons are less than a few months.
They are constantly running for re-election, raising money and handing out goodies to their constituents. The only feedback they care about is their standing in the polls and the amount of money they’ve raised from “donors”. Their incentives are poor and not aligned with the needs of the American people. They are not willing to do what is right for the country because they have no incentive to do so. Their only incentive is to get re-elected by insuring that their district gets as much pork spending as possible. They do this by selling their votes to the highest bidder.
Some possible grounds for the unintended consequences are the world’s complexity, human stupidity, self deception, hubris and biases. Merton’s five possible causes were:
1. Ignorance (It is impossible to anticipate everything, thereby leading to incomplete analysis)
2. Error (Incorrect analysis of the problem or following habits that worked in the past but may not apply to the current situation)
3. Immediate interest, which may override long-term interests
4. Basic values may require or prohibit certain actions even if the long-term result might be unfavorable (these long-term consequences may eventually cause changes in basic values)
5. Self-defeating prophecy (Fear of some consequence drives people to find solutions before the problem occurs, thus the non-occurrence of the problem is unanticipated)
Ignorance, error, and immediate interest sound like a perfect motto for the U.S. Congress, Federal Reserve, and Treasury. When media pundits, pompous economists, self proclaimed “experts”, and corrupted politicians assure you that they have the solutions to all of our problems they are practicing the most evil form of hubris. The arrogance and self importance of these people is an insult to the intelligence of all Americans. They put their unproven theories into practice by committing trillions of taxpayer funds. They are only concerned about the next election cycle and not about the long-term consequences of their ignorance and ignorance of crucial facts. The accumulation of blunders over the decades by government has led to unintended consequences that could bring down our country. Recent developments will have disturbing consequences for all Americans.
The sum total of all that has been done and all that will be done will eventually lead to a hyperinflationary bust. The money supply is being expanded too rapidly, fiscal stimulus spending will be borrowed from foreigners, the dollar will fall as foreigners refuse to accept 2% for 10 years, and the Federal Reserve will react too late just like they did when this crisis began. This overstimulation of the economy will lead to a panic out of dollars and into real assets. The government will attempt to control the situation by confiscating gold as they did in the 1930s and Americans will be forced to surrender more liberties. In periods of economic and social upheaval - war, revolution, or dictatorship become possibilities. The average American needs to wake up from their materialistic stupor and understand the risks that lie ahead. An educated concerned citizen is our only defense against tyranny. Orwellian governmental policies will be inflicted upon the populous. Seek out those who are telling the truth. David Walker, Boone Pickens, Ron Paul, Mike Shedlock, Doug Casey, and John Mauldin are among the truth tellers.
-Andrew Gelman
Congress definitely fits Mr. Gelman’s definition of a simple system. I can’t think of a body of people operating with more ignorance than Congress. The information they act upon, is provided by the 17,000 lobbyists that wine and dine them on a daily basis. Corporate lobbyists, PACs, unions, and special interests buy their votes. Their time horizons are less than a few months.
They are constantly running for re-election, raising money and handing out goodies to their constituents. The only feedback they care about is their standing in the polls and the amount of money they’ve raised from “donors”. Their incentives are poor and not aligned with the needs of the American people. They are not willing to do what is right for the country because they have no incentive to do so. Their only incentive is to get re-elected by insuring that their district gets as much pork spending as possible. They do this by selling their votes to the highest bidder.
Some possible grounds for the unintended consequences are the world’s complexity, human stupidity, self deception, hubris and biases. Merton’s five possible causes were:
1. Ignorance (It is impossible to anticipate everything, thereby leading to incomplete analysis)
2. Error (Incorrect analysis of the problem or following habits that worked in the past but may not apply to the current situation)
3. Immediate interest, which may override long-term interests
4. Basic values may require or prohibit certain actions even if the long-term result might be unfavorable (these long-term consequences may eventually cause changes in basic values)
5. Self-defeating prophecy (Fear of some consequence drives people to find solutions before the problem occurs, thus the non-occurrence of the problem is unanticipated)
Ignorance, error, and immediate interest sound like a perfect motto for the U.S. Congress, Federal Reserve, and Treasury. When media pundits, pompous economists, self proclaimed “experts”, and corrupted politicians assure you that they have the solutions to all of our problems they are practicing the most evil form of hubris. The arrogance and self importance of these people is an insult to the intelligence of all Americans. They put their unproven theories into practice by committing trillions of taxpayer funds. They are only concerned about the next election cycle and not about the long-term consequences of their ignorance and ignorance of crucial facts. The accumulation of blunders over the decades by government has led to unintended consequences that could bring down our country. Recent developments will have disturbing consequences for all Americans.
The sum total of all that has been done and all that will be done will eventually lead to a hyperinflationary bust. The money supply is being expanded too rapidly, fiscal stimulus spending will be borrowed from foreigners, the dollar will fall as foreigners refuse to accept 2% for 10 years, and the Federal Reserve will react too late just like they did when this crisis began. This overstimulation of the economy will lead to a panic out of dollars and into real assets. The government will attempt to control the situation by confiscating gold as they did in the 1930s and Americans will be forced to surrender more liberties. In periods of economic and social upheaval - war, revolution, or dictatorship become possibilities. The average American needs to wake up from their materialistic stupor and understand the risks that lie ahead. An educated concerned citizen is our only defense against tyranny. Orwellian governmental policies will be inflicted upon the populous. Seek out those who are telling the truth. David Walker, Boone Pickens, Ron Paul, Mike Shedlock, Doug Casey, and John Mauldin are among the truth tellers.
Something to think about.........
“The law of unintended consequences is what happens when a simple system tries to regulate a complex system. The political system is simple. It operates with limited information (rational ignorance), short time horizons, low feedback, and poor and misaligned incentives. Society in contrast is a complex, evolving, high-feedback, incentive-driven system. When a simple system tries to regulate a complex system you often get unintended consequences.”
-Andrew Gelman
Congress definitely fits Mr. Gelman’s definition of a simple system. I can’t think of a body of people operating with more ignorance than Congress. The information they act upon, is provided by the 17,000 lobbyists that wine and dine them on a daily basis. Corporate lobbyists, PACs, unions, and special interests buy their votes. Their time horizons are less than a few months.
They are constantly running for re-election, raising money and handing out goodies to their constituents. The only feedback they care about is their standing in the polls and the amount of money they’ve raised from “donors”. Their incentives are poor and not aligned with the needs of the American people. They are not willing to do what is right for the country because they have no incentive to do so. Their only incentive is to get re-elected by insuring that their district gets as much pork spending as possible. They do this by selling their votes to the highest bidder.
Some possible grounds for the unintended consequences are the world’s complexity, human stupidity, self deception, hubris and biases. Merton’s five possible causes were:
1. Ignorance (It is impossible to anticipate everything, thereby leading to incomplete analysis)
2. Error (Incorrect analysis of the problem or following habits that worked in the past but may not apply to the current situation)
3. Immediate interest, which may override long-term interests
4. Basic values may require or prohibit certain actions even if the long-term result might be unfavorable (these long-term consequences may eventually cause changes in basic values)
5. Self-defeating prophecy (Fear of some consequence drives people to find solutions before the problem occurs, thus the non-occurrence of the problem is unanticipated)
Ignorance, error, and immediate interest sound like a perfect motto for the U.S. Congress, Federal Reserve, and Treasury. When media pundits, pompous economists, self proclaimed “experts”, and corrupted politicians assure you that they have the solutions to all of our problems they are practicing the most evil form of hubris. The arrogance and self importance of these people is an insult to the intelligence of all Americans. They put their unproven theories into practice by committing trillions of taxpayer funds. They are only concerned about the next election cycle and not about the long-term consequences of their ignorance and ignorance of crucial facts. The accumulation of blunders over the decades by government has led to unintended consequences that could bring down our country. Recent developments will have disturbing consequences for all Americans.
The sum total of all that has been done and all that will be done will eventually lead to a hyperinflationary bust. The money supply is being expanded too rapidly, fiscal stimulus spending will be borrowed from foreigners, the dollar will fall as foreigners refuse to accept 2% for 10 years, and the Federal Reserve will react too late just like they did when this crisis began. This overstimulation of the economy will lead to a panic out of dollars and into real assets. The government will attempt to control the situation by confiscating gold as they did in the 1930s and Americans will be forced to surrender more liberties. In periods of economic and social upheaval - war, revolution, or dictatorship become possibilities. The average American needs to wake up from their materialistic stupor and understand the risks that lie ahead. An educated concerned citizen is our only defense against tyranny. Orwellian governmental policies will be inflicted upon the populous. Seek out those who are telling the truth. David Walker, Boone Pickens, Ron Paul, Mike Shedlock, Doug Casey, and John Mauldin are among the truth tellers.
-Andrew Gelman
Congress definitely fits Mr. Gelman’s definition of a simple system. I can’t think of a body of people operating with more ignorance than Congress. The information they act upon, is provided by the 17,000 lobbyists that wine and dine them on a daily basis. Corporate lobbyists, PACs, unions, and special interests buy their votes. Their time horizons are less than a few months.
They are constantly running for re-election, raising money and handing out goodies to their constituents. The only feedback they care about is their standing in the polls and the amount of money they’ve raised from “donors”. Their incentives are poor and not aligned with the needs of the American people. They are not willing to do what is right for the country because they have no incentive to do so. Their only incentive is to get re-elected by insuring that their district gets as much pork spending as possible. They do this by selling their votes to the highest bidder.
Some possible grounds for the unintended consequences are the world’s complexity, human stupidity, self deception, hubris and biases. Merton’s five possible causes were:
1. Ignorance (It is impossible to anticipate everything, thereby leading to incomplete analysis)
2. Error (Incorrect analysis of the problem or following habits that worked in the past but may not apply to the current situation)
3. Immediate interest, which may override long-term interests
4. Basic values may require or prohibit certain actions even if the long-term result might be unfavorable (these long-term consequences may eventually cause changes in basic values)
5. Self-defeating prophecy (Fear of some consequence drives people to find solutions before the problem occurs, thus the non-occurrence of the problem is unanticipated)
Ignorance, error, and immediate interest sound like a perfect motto for the U.S. Congress, Federal Reserve, and Treasury. When media pundits, pompous economists, self proclaimed “experts”, and corrupted politicians assure you that they have the solutions to all of our problems they are practicing the most evil form of hubris. The arrogance and self importance of these people is an insult to the intelligence of all Americans. They put their unproven theories into practice by committing trillions of taxpayer funds. They are only concerned about the next election cycle and not about the long-term consequences of their ignorance and ignorance of crucial facts. The accumulation of blunders over the decades by government has led to unintended consequences that could bring down our country. Recent developments will have disturbing consequences for all Americans.
The sum total of all that has been done and all that will be done will eventually lead to a hyperinflationary bust. The money supply is being expanded too rapidly, fiscal stimulus spending will be borrowed from foreigners, the dollar will fall as foreigners refuse to accept 2% for 10 years, and the Federal Reserve will react too late just like they did when this crisis began. This overstimulation of the economy will lead to a panic out of dollars and into real assets. The government will attempt to control the situation by confiscating gold as they did in the 1930s and Americans will be forced to surrender more liberties. In periods of economic and social upheaval - war, revolution, or dictatorship become possibilities. The average American needs to wake up from their materialistic stupor and understand the risks that lie ahead. An educated concerned citizen is our only defense against tyranny. Orwellian governmental policies will be inflicted upon the populous. Seek out those who are telling the truth. David Walker, Boone Pickens, Ron Paul, Mike Shedlock, Doug Casey, and John Mauldin are among the truth tellers.
Thursday, March 5, 2009
Why I don't listen to CNBC!!!
This video shows exactly why I don't listen to a word that CNBC says.
They are always so wrong it is funny.
They are always so wrong it is funny.
Wednesday, March 4, 2009
rebound?
Today we had a small rebound. However, the main thing to remember is the market is still looking very week and we have not seen the kind of fear and irrational selling that usually marks a tradeable bottom. Yes, the market is oversold. But there is no law that says oversold can't become more oversold.
Short Term: Bullish
Intermediate Term: Bearish
Long Term: Bearish
Short Term: Bullish
Intermediate Term: Bearish
Long Term: Bearish
Tuesday, March 3, 2009
Good Video
This video was made in the fall of 2007. Not a bad prediction right?
Right now the futures are up about 50 points on the Dow. If we don't have a strong intraday rebound today it is VERY bearish for the markets and I expect continued downside to around 650 on the S&P short term until see some real panic.
Have a good day.
Right now the futures are up about 50 points on the Dow. If we don't have a strong intraday rebound today it is VERY bearish for the markets and I expect continued downside to around 650 on the S&P short term until see some real panic.
Have a good day.
Monday, March 2, 2009
close to temporary bottom......
Here is just one of my charts showing that we are close to a temporary bottom.
Remember this is temporary. Which is why my short term trading signal is bullish.
Remember this is temporary. Which is why my short term trading signal is bullish.
Wow, market is moving right where predicted.....
To anyone reading this blog......I hope you listened to me and sold your shares when I clearly told you to. This market is bad. It is only going to get worse. However, on the bright side, I do expect the market to move higher in the short term, up to a week. This should provide an opportunity for you to unload your shares before it is to late. With the move down last week and today we have basically confirmed my suspicions that the S&P will bottom somewhere in the 400s and the Dow somewhere near 4000.
This is going to be/already is the first depression this country has seen since the 1930s. If you don't believe it you are really, really wrong and need to have your head examined. Some people say....."well it is time to buy because stocks are cheap". NO!! Stocks are not cheap. If you value the stock market on a P/E basis the market would have to fall to around 515 on the S&P just for stocks to be as cheap as they were during the 1974 recession. We need to fall to nearly 350 on the S&P to get as cheap as the Great Depression. So, when so and so tells you on CNBC, CNN, or Fox News that it is time to buy stocks, don't listen. They are just flat out wrong.
Here is an update of the carnage:
Short Term: Bullish
Intermediate Term: Bearish
Long Term: Bearish
"Blaming speculators as a response to financial crises goes back at least to the Greeks. It's almost always the wrong response."
-Larry Summers
This is going to be/already is the first depression this country has seen since the 1930s. If you don't believe it you are really, really wrong and need to have your head examined. Some people say....."well it is time to buy because stocks are cheap". NO!! Stocks are not cheap. If you value the stock market on a P/E basis the market would have to fall to around 515 on the S&P just for stocks to be as cheap as they were during the 1974 recession. We need to fall to nearly 350 on the S&P to get as cheap as the Great Depression. So, when so and so tells you on CNBC, CNN, or Fox News that it is time to buy stocks, don't listen. They are just flat out wrong.
Here is an update of the carnage:
Short Term: Bullish
Intermediate Term: Bearish
Long Term: Bearish
"Blaming speculators as a response to financial crises goes back at least to the Greeks. It's almost always the wrong response."
-Larry Summers
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