http://www.zerohedge.com/news/big-reset-2012-and-2013-will-usher-end-scariest-presentation-ever
An interesting read....
Run your cursor over the box at the bottom of the page to read the actual publication. (Find the arrow)
gh
Saturday, June 2, 2012
Friday, June 1, 2012
Still no jobs. Still no demand.
U.S. stock index futures open down sharply this morning on news of poor job creation. The usual politicians will point at the president and claim it is his fault. I beg to disagree. The problem with the economy is the result of thirty years of economic sabotage by the neoliberal economic mindset that got it's start in the early 1980's and the "Reagan Revolution". Those were the times when it became fashionable to attack the unions and to make people work for less. After decades of lower wages, decreased benefits, the offshoring of manufacturing in the search for even lower paid workers, and constant economic stimulus each time there was the threat of a slowdown we find ourselves as individuals and as a nation deep in debt.
The jobs are the thing. The neoliberals, if you aren't aware, are the supply siders. They think that if wages get low enough business will create jobs. I am a demand sider. I ask, why would any businessman create jobs if there was no market for the things those jobs would make? And if there is a push all over the world to cut the wages of the people, how do we expect them to buy stuff?
If science and technology devises ways of saving labor and therefore cost of production who gets the benefit of those increases in productivity? The business owner gets those benefits in a world that will not give a worker a raise in pay. But who buys the things that a business will make or sell? Workers.
Henry Ford paid his assembly line workers more than his competitors. Because he could. And because he wanted his workers to buy his cars. It worked. The years when labor was strong were the years when things were good.
Debt is not working anymore. The workers and the middleclass went deep in debt in order to keep their standard of living where they thought it should be. The limit to debt has been reached.
The baby boomer generation is looking at retirement with not enough to live on. We are in saving mode now. But our retirement funds are in the stock market. Because that is where Reagan and the business interests wanted us to be. So we all have a vested interest in keeping stock valuations high. Isn't that convenient. We all have a vested interest in keeping corporate America profitable so their stock price stays high and so we have a nestegg. (But how do we cash it out?) So we are all susceptible to the talk that panders to business. We will vote to cut taxes on business even as that means our public benefits will get smaller. We will vote for politicians that want to do away with the minimum wage in an effort to bring our wages down. So that business stays profitable. We will vote for those who want to do away with our social safety nets. Social Security and Medicare are in their sights. Anything to cut taxes on business and give them next quarters profits. But where does it end? If the whole world is intent on cutting the share that workers receive where does the demand for goods come from? And what is the purpose of an economic system if not to facilitate the distribution of goods to as many people as possible. What is the purpose of any political system if not to facilitate the distribution of prosperity to as many as possible? If money represents wealth how come so many are intent on keeping that wealth in the hands of the few? And who is supposed to buy stuff if not the people? The race to the bottom is coming to an end. The whole world wants to sell stuff to Americans. Everybody can't be a net exporter. Somebody has to import!
Instead of the failed policy of cutting the workers wages maybe we should look at it from the perspective of getting as many people as possible more of the benefits of a modern economy. The money is out there. It is just in fewer and fewer hands. And they won't let go without a fight.
I suspect that we will have to let things get much worse before we, as a nation and as a world, will have the collective sense to take back what we once took for granted. I only fear that we will be led astray by demogogues and fearmongers and our search for scapegoats.
When will we see?
The jobs are the thing. The neoliberals, if you aren't aware, are the supply siders. They think that if wages get low enough business will create jobs. I am a demand sider. I ask, why would any businessman create jobs if there was no market for the things those jobs would make? And if there is a push all over the world to cut the wages of the people, how do we expect them to buy stuff?
If science and technology devises ways of saving labor and therefore cost of production who gets the benefit of those increases in productivity? The business owner gets those benefits in a world that will not give a worker a raise in pay. But who buys the things that a business will make or sell? Workers.
Henry Ford paid his assembly line workers more than his competitors. Because he could. And because he wanted his workers to buy his cars. It worked. The years when labor was strong were the years when things were good.
Debt is not working anymore. The workers and the middleclass went deep in debt in order to keep their standard of living where they thought it should be. The limit to debt has been reached.
The baby boomer generation is looking at retirement with not enough to live on. We are in saving mode now. But our retirement funds are in the stock market. Because that is where Reagan and the business interests wanted us to be. So we all have a vested interest in keeping stock valuations high. Isn't that convenient. We all have a vested interest in keeping corporate America profitable so their stock price stays high and so we have a nestegg. (But how do we cash it out?) So we are all susceptible to the talk that panders to business. We will vote to cut taxes on business even as that means our public benefits will get smaller. We will vote for politicians that want to do away with the minimum wage in an effort to bring our wages down. So that business stays profitable. We will vote for those who want to do away with our social safety nets. Social Security and Medicare are in their sights. Anything to cut taxes on business and give them next quarters profits. But where does it end? If the whole world is intent on cutting the share that workers receive where does the demand for goods come from? And what is the purpose of an economic system if not to facilitate the distribution of goods to as many people as possible. What is the purpose of any political system if not to facilitate the distribution of prosperity to as many as possible? If money represents wealth how come so many are intent on keeping that wealth in the hands of the few? And who is supposed to buy stuff if not the people? The race to the bottom is coming to an end. The whole world wants to sell stuff to Americans. Everybody can't be a net exporter. Somebody has to import!
Instead of the failed policy of cutting the workers wages maybe we should look at it from the perspective of getting as many people as possible more of the benefits of a modern economy. The money is out there. It is just in fewer and fewer hands. And they won't let go without a fight.
I suspect that we will have to let things get much worse before we, as a nation and as a world, will have the collective sense to take back what we once took for granted. I only fear that we will be led astray by demogogues and fearmongers and our search for scapegoats.
When will we see?
Friday, May 25, 2012
Fractals
Here is another concept familiar to charts watchers of technical anaylsis and students of human nature as it applies to trading.
Fractal
From Wikipedia, the free encyclopedia
For the popular art form, see Fractal art.
This audio file was created from a revision of the "Fractal" article dated 2005-06-16, and does not reflect subsequent edits to the article. (Audio help)
Figure 1a. The Mandelbrot set illustrates self-similarity. As you zoom in on the image at finer and finer scales, the same pattern re-appears so that it is virtually impossible to know at which level you are looking.
Figure 1b. Mandelbrot zoomed 6x
Figure 1c. Mandelbrot zoomed 100x
Figure 1d. Even 2000 times magnification of the Mandelbrot set uncovers fine detail resembling the full set.
A fractal is a mathematical set that has a fractal dimension that usually exceeds its topological dimension[1] and may fall between the integers.[2] Fractals are typically self-similar patterns, where self-similar means they are "the same from near as from far"[3] Fractals may be exactly the same at every scale, or as illustrated in Figure 1, they may be nearly the same at different scales.[2][4][5][6] The definition of fractal goes beyond self-similarity per se to exclude trivial self-similarity and include the idea of a detailed pattern repeating itself.[2]:166; 18[4][7]
As mathematical equations, fractals are usually nowhere differentiable, which means that they cannot be measured in traditional ways.[2][6][8] An infinite fractal curve can be perceived of as winding through space differently from an ordinary line, still being a 1-dimensional line yet having a fractal dimension indicating it also resembles a surface.[1]:48[2]:15
The mathematical roots of the idea of fractals have been traced through a formal path of published works, starting in the 17th century with notions of recursion, then moving through increasingly rigorous mathematical treatment of the concept to the study of continuous but not differentiable functions in the 19th century, and on to the coining of the word fractal in the 20th century with a subsequent burgeoning of interest in fractals and computer-based modelling in the 21st century.[9][10] The term "fractal" was first used by mathematician Benoît Mandelbrot in 1975. Mandelbrot based it on the Latin frāctus meaning "broken" or "fractured", and used it to extend the concept of theoretical fractional dimensions to geometric patterns in nature.[2]:405[7]
Two different charts::::
Is there a difference in these charts? They are the same stock. The first is a 4 day chart of 5 minute bars. The 2nd is a 6 year chart where each bar represents a week.
Trading using technical analysis is effective over many timeframes. It is up to the trader/investor to find the timeframe that fits their personality and risk tolerance.
Just thinking,
gh
Thursday, May 24, 2012
Take Two
Here are a couple charts of the Russell smallcaps as reflected in the IWM fund.
Someone was talking on CNBC this morning about how bad the chart looked with the recent break of the neckline on a "head and shoulders" pattern in this chart.
The market has seemed relatively weak lately. Relative to the recent lackluster strength. The selloff has not been particularly urgent taken in a larger context however. The short term trend is down now. However, IF this market goes up and goes up above the recent highs it will surprise many participants. And markets seem to alway surprise the greatest number.
A long term buy would be above the triple top in the smallcaps.
Don't add to losers. Control risk.
gh
Addendum: I frequently remember the story from the original "Market Wizards". One of the traders was asked what the secret was. He threw the charts on the floor and stood on the table to look down at the chart. Another way of stressing the import of the big picture.
Someone was talking on CNBC this morning about how bad the chart looked with the recent break of the neckline on a "head and shoulders" pattern in this chart.
The market has seemed relatively weak lately. Relative to the recent lackluster strength. The selloff has not been particularly urgent taken in a larger context however. The short term trend is down now. However, IF this market goes up and goes up above the recent highs it will surprise many participants. And markets seem to alway surprise the greatest number.
A long term buy would be above the triple top in the smallcaps.
gh
Addendum: I frequently remember the story from the original "Market Wizards". One of the traders was asked what the secret was. He threw the charts on the floor and stood on the table to look down at the chart. Another way of stressing the import of the big picture.
Wednesday, May 23, 2012
Todays action is bullish.
I've been out working on a project all day. Bought some GoldCorp on the price action early this morning. The tape in Oil and Gold and the Indexes say UP.....
Looking forward to the next few days...
Even that dog Facebook didn't look too bad. We'll see.....
gh
Looking forward to the next few days...
Even that dog Facebook didn't look too bad. We'll see.....
gh
Saturday, May 12, 2012
Tea leaves! May 12, 2012
The stock markets seem weak lately. I don't see much buying in the intraday price movements. The latest weakness increased following the employment report a couple weeks ago. Those numbers showed a continuing lack of job creation in the US economy. After all this time one would expect jobs to show up. This further enforces the notion of a "structural" employment problem. I think this structural problem that they talk about is due to the hollowing out of the middleclass and the polarization in income that has occurred over the last 20 years or so. When people don't have money to spend and they have gone deeper in debt than they should, they don't spend. Another significant part of the "structural" problem is demographics. The baby boomer generation is starting to retire. And those that haven't retired are facing the prospect of retiring with inadequate money to retire on. Add to this the talk of the insolvency of the Social Security system and there is an urgency to save.
And given the above points and considering the fact that the US Federal Reserve has used up much of their stimulative ammunition with little result is it any wonder to expect weakness in corporate profits on the horizon. Remember, the stock markets are FORWARD looking. Profits may be strong now, but what will the future look like. On the world stage there is the increasing likelihood that China is experiencing a slowdown and is at risk of a full blown crash due to the property price run-up that they have had.
With all that being said there are points that indicate a lack of selling urgency in the stock markets. So far at least. The volume has not increased to a level that indicates any kind of panic. But the panic comes as the downtrend continues. So it is early. In my opinion I would not be long of the markets until they make new highs and stay there for a couple weeks at least. I point this out in the small cap chart in this post..... A move higher would be very surprising and for that reason would be a good reason to buy. When a market has every reason to go down, and then goes up, is bullish. Regardless of MY personal opinion!
Here are some charts.
It is folly to trade from the long side when the markets are trending down. (That is another reminder to myself!)
Control risk.
gh
And given the above points and considering the fact that the US Federal Reserve has used up much of their stimulative ammunition with little result is it any wonder to expect weakness in corporate profits on the horizon. Remember, the stock markets are FORWARD looking. Profits may be strong now, but what will the future look like. On the world stage there is the increasing likelihood that China is experiencing a slowdown and is at risk of a full blown crash due to the property price run-up that they have had.
With all that being said there are points that indicate a lack of selling urgency in the stock markets. So far at least. The volume has not increased to a level that indicates any kind of panic. But the panic comes as the downtrend continues. So it is early. In my opinion I would not be long of the markets until they make new highs and stay there for a couple weeks at least. I point this out in the small cap chart in this post..... A move higher would be very surprising and for that reason would be a good reason to buy. When a market has every reason to go down, and then goes up, is bullish. Regardless of MY personal opinion!
Here are some charts.
Control risk.
gh
Friday, May 4, 2012
Where will those fleeing the Euro go?
The Euro is heading for a cliff. What will those still holding Euros do to save value? Gold has been week lately... Dollar is looking strong. Stocks weak. Oil is falling fast. Gasoline going down.
Does the market see demand destruction?
We could see another flash crash soon.....Or not....
France is going to elect a socialist president in the coming days. This is the backlash against the "austerity" programs in Europe. Will the Eurozone break up over the desire to print money vs. the mostly German wish to hold the currency up at the expense of the rest of Europe???
Here is the chart.
Control risk.
gh
Does the market see demand destruction?
We could see another flash crash soon.....Or not....
France is going to elect a socialist president in the coming days. This is the backlash against the "austerity" programs in Europe. Will the Eurozone break up over the desire to print money vs. the mostly German wish to hold the currency up at the expense of the rest of Europe???
Here is the chart.
gh
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