Wall Street Doesn't Care

And they are not embarrassed to tell you they don't.
http://www.cnbc.com/id/40491033

Bulls Are Running

I have repeatedly said "has nothing fundamental has changed" since the Lehman brothers collapse and the subsequent recession and bailouts.

That was not entirely true. Obviously, Government involvement with the large investment and commercial banks is at an all time high. Our government is lending their wealthy players your tax money at nearly 0%, and encouraging them to gamble with it in the stock market. This is a change; not for the better.

Where is all that liquidity, that money, the Fed has pumped into the system? I'll tell you where: in the stock market and the bond market. Both of these markets are bubbles. Stocks are valued as if we are not only going to have a HUGE recovery, but as if growth going forward will be 4-8%. This is ridiculous. Corporate profits are reflecting massive cost cuts during the recession combined with price stability or inflation. This is not sustainable.

Have you seen the rise of the thrift store? Have you notices how average Americans are sick of paying too much for their food and clothing? I know I am. I run in middle to upper middle class circles and nearly everyone I know is either under a great deal of financial stress, or they are extremely cash strapped trying to pay off debt accumulated during the boom.

And don't give me the story that the Chinese consumer is going to save the world. This is just another illusion fat cats on Wall Street float so they can get richer trading overvalued stocks with your tax money. What a load! Really?

What is the primary driver of Chinese growth? Western consumption! They are growing because we have an insatiable appetite for loads of plastic crap and cheap clothing that looks expensive. Chinese per capita GDP in 2009 was $3,700 according to CIA World Factbook.
$3,700. The U.S. per capita GDP was $46,300 (same source). China ranked lower than Iran and Algeria. I know...they have soooo many people.

So let's see...the West is going to pull out of this mess by growing industry and exporting to the rest of the world. By that logic, we would have to be able to manufacture stuff that Chinese people could afford. Too be competitive, we would have to make our products cheaper than theirs! Can you imagine all the high paying jobs this will create?

So, the China story is fiction. Pure fiction, designed to line the pockets of Wall Street bankers with your money. They will once again destroy the value of your 401 (k) with their arrogant government subsidized irresponsible speculation.

So sad. This is what happens when you have a corrupt central banking system. We need nothing short of a financial revolution to save this country.

But the market is up today! NFLX is trading at 75.5X earnings. Green Mountain Coffee Roasters (still under investigation for irregular accounting practices) is trading at 58X earnings and a Goldman Sachs party boy got kicked out of his $30,000/mo Manhattan apartment complex for partying too hard. It's a MAD MAD world we live in.

PBS had a great special about the recession the other day:


Did you see that guys flat screen? Did you see the booze stash behind him while he was sitting on this leather couch? No seriously, I feel bad for the guy. I would rather see unemployment benefits extended and mortgage debt forgiven for the middle class than slick Wall Street traders profiting from government favors. But you know, our government has to have its priorities.

All I can say is: if the Fed keeps up this kind of behavior and the public ever catches on, there will be a revolution in this country.

One More Reason To Avoid Stocks

As if you needed another one!

http://www.cnbc.com/id/40416734

Connecting

There are times when I am able to connect to some source that is not of me. Perhaps this is Spirit, perhaps it is...well, it is whatever you wish to call it.

It is in these times when I am able to post insightful, inspired posts.

Right now, for me, is not one of those times.

I am just not feelin' it.

There are other blogs out there that will share information with you endlessly. Their opinions abound.

I want my posts to be from the heart, the Soul, the Source. Many of them are. However, tonight I find I just do not have inspiration.

Come back please...because I know Inspiration will.

Another War?

This Korean conflict could prove to be very disruptive. The U.S. simply cannot afford another war. On the other hand, we cannot abandon our ally.

Could this be an orchestrated attempt to draw the U.S. into yet another war? If so, is it possibly an attempt to draw our attention away from Afghanistan? Could the Koreans and Al-Qaeda be forming an unholy alliance?

I mean, who would of thought the Nazi's would have partnered with the Japanese?

Scary. I certainly hope we are not headed for WW III.

If China gets upset with us we are in real trouble:

http://online.wsj.com/article/SB10001424052748704008704575638420698918004.html?mod=WSJ_hp_LEFTTopStories

Did The Stimulus Work?

The Wall Street Journal has an excellent collection of charts available this morning.
http://www.marketwatch.com/story/in-charts-cpi-foreclosures-retail-sales-2010-11-19?pagenumber=1
Although I am very critical, and morally and philosophically opposed to the FED's intervention in our economy, I must admit, that their easy money policies appear to have affected the
unemployment rate.

Initial Claims

Declining Job Losses

As you can see, initial jobless claims have fallen dramatically, but they are not back to pre-recession levels. Even though a lot of people are still not finding work, companies are not laying a lot of people off either. This is evident in the "Declining Job Losses" chart.

We can conclude that hiring has not picked up dramatically, but the pace of layoffs has declined dramatically.

Needless to say, I am very surprised with the retail sales numbers. My guess is that they are reflecting the increase in CPI. Consumers are not really buying more stuff, they are just paying more for the stuff they buy. This shows up in the bottom line as increased profits, because the retailers have cut costs dramatically. Due to rising commodity prices, retailers are successfully passing on increased food and energy costs to the consumer. The consumer NEEDS to eat and drive.

Take a look at the CPI and CORE CPI chart:

Notice the big spike in CPI from the March 2009 bottom. Also, notice that CORE CPI, which excludes food and energy has been steadily declining since the beginning of the recession. CPI is actually heading back down again.

PPI is telling a different story. It has fallen off a cliff, again. Chart number 2 from the article shows it is below its worst level of the recession.

The FED has engineered a scenario where companies can profit handily. Their costs (PPI) are falling due to deflation. At the same time, they are successfully passing price increases on to the consumer, because the pace of layoffs has stabilized. This is unsustainable. Why?

Consumers simply have too much debt to be able to be absorb the rising food and energy cost for long. Corporations can only increase prices so much until the higher prices have a significant impact on aggregate demand.

When revenue decreases because deflation and falling demand take their toll, corporations will begin to cut jobs again. Our FED needs to let prices fall. Lower prices will stimulate demand.
Let the tide come in. It will clean off the beach and make room for real value to be created.

Let it be....or we very well might destroy our country, by bankrupting it.

So, did the stimulus work?

NO, it jus delayed the inevitable, while increasing the costs to the middle class along the way.

This Is Our Ally?

Unbelievable!

To the Liberals in this country: be careful who you call extremists. Don't use the word so lightly.