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They Couldn’t Find A Single Syrian That Hates America Anymore?

Bloomberg Writes: Syria Attack Has China Outraged — at U.S.

 

As the U.S. prepares for a potential attack on Syria, China is left in the awkward position of reacting to the news and occasionally justifying opposition to any U.S. action.

This is not new. In early 2012, China joined Russia in vetoing a United Nations Security Council draft resolution condemning Syrian violence and supporting an Arab League peace plan. It was a controversial move at the time, and the criticism was so overwhelming that People’s Daily, the Communist Party’s mouthpiece newspaper, felt compelled to editorialize in favor of China’s veto — after the fact.

That move itself was unusual for a government that rarely feels the need to explain itself retroactively. But on Syria, Chinese leaders appeared unusually sensitive to suggestions that they may have been insensitive to an unfolding humanitarian crisis. Referring to the U.S. as “the military giant,” the paper wrote in February 2012:

“Even if it stays for a while, it will not take protecting lives of local civilians as its primary task. The tragedies that have occurred in Iraq and Afghanistan have proved it.

“Using violence to prevent humanitarian disasters sounds just and responsible. However, aren’t the attacks and explosions that have occurred after the regime changes in the two countries humanitarian disasters?”

Read The Rest Of The Article Here

 

Living outside of the US and watching NBC Nightly News last night, something struck me.  American media is no longer free. I know the media is controlled by corporate interest, but I didn’t realize the extent of the control and the extent of the governmental control until last night.

Basically, half they show they showed dead children followed by crying Syrian men, women and children (of course in some refugee camp) all to a single person saying something to the tune of “America the Great, please help us, you are our only chance for freedom, please defeat Assad, he is killing us, blah, blah, blah”.

What I couldn’t figure out is why there were not able to find one Syrian, not a single Syrian who hates America and/or doesn’t want American intervention.  Wasn’t it just a few years ago there were hundreds of thousands of Syrians in the streets burning American flags and chanting “Death to America”.  And they couldn’t find one Syrian who hates America?  Am I missing something here or did decades of hate turn to love overnight.

You know what this is called? PROPAGANDA.  I grew up in the Soviet Union and I know bullshit when I see it.

Has anyone stopped to ask some questions here.  For example, everyone keeps screaming about ample evidence that Syrian Government was responsible for the gas attack. Apparently there are intercepted phone calls,  direct orders, physical evidence, etc…. Okay, fair enough.  Don’t tell me. Show me. Oh, that’s right, it’s against national security interest to share that information with the American people.

Same song, different day and a different country.  I am sadden by this and what is happening in America.  Another war, another country destroyed, thousands killed. Oh, by the way, here is Senator McCain playing poker  during the Senate hearing in regards to Syria, all while being the number one proponent of going into war. Class act, if you ask me.

mccain-wapo-poker

 

As the Bible says “Put your sword back in its place, for all who draw the sword will die by the sword.”

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Short Term Dow Forecast

BusinessWeek Writes: Anxieties of September Give Markets Reason to Tremble

 September will be September. Forget the fact that the Standard & Poor’s 500-stock index is up 15 percent this year—not far off its record—or that the U.S. market has not had a routine 10 percent correction for more than two years. Never mind howMicrosoft (MSFT) and Verizon (VZ) are throwing billions at deal making. September remains that only month of the year where the Dow Jones industrial average has averaged a decline over the past 20, 50, and 100 years.

Throw in a down and volatile August, and the new month starts anxiously, true to its character. Ed Yardeni of Yardeni Research notes that Investors Intelligence reported a big drop in the percentage of bullish advisers over the past six weeks. The fraction surveyed who saw a correction rose from 28 percent to 38 percent over the period.

“Fear is back on the front page,” says Joshua Scheinker, an adviser with Scheinker Investment Partners of Janney Montgomery Scott. “My clients are so concerned, almost looking for another crisis, whether Syria, the debt ceiling, or interest rates.”

Read The Rest Of The Article Here

 

daily chart Sept 5, 2013

From a short-term purely technical perspective the market looks pretty good here. The market is somewhat oversold.  I am looking for a good rebound into the 15,300 territory on the Dow by the end of September before the resumption of the bear market.

It is not the September, but October and November that are seasonally horrific for stocks. There is a cyclical reason for that and I might talk about in the future. 

Long story short. Expect a rebound here to around 15,300 by the end of September, then a reversal and continuation of the bear market. However, I would be careful here and keep my finger on the trigger in case the market breaks below 14,800.

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KING DOLLAR

invest with alex usd

All bow before king dollar. Those who know me can testify that I have been a dollar bull for a long time. See, I am bullish on something. 

In fact, I have been advocating for a long time that the US Dollar is one of the best and the most undervalued investments out there. While most people run around screaming inflation and predicting destruction of the US Dollar the reality is quite different.

Yes, the FED is printing or creating a lot of dollars out of thin air. However, those are not real dollars. They are creating credit which is a completely different animal. At the same time there aren’t that many real dollars out there (well, relative to the overall money supply …including credit). 

So, what happens when there is a credit crunch and people need real money to repay the loans? You have guessed it, the value of the dollar goes through the roof.

USD Chart 

Now, this has been an easy and risk free investment strategy I recommended to my parents over 13 years ago.  I simply told them to accumulate/save as many US Dollars as they can and invest them in short term  T-bills and a few other risk free financial instruments. They have and so far they have done very well.  How well?

US Dollar Accumulation & Risk Free Investments:  +67% compounded over the last 13 years.  

While over the same period of time…..

DOW:  +15%

S&P:  +10%

NASDAQ:  -28%

Not bad if you ask me.  Particularly considering the fact that there is absolutely no risk involved and they are not managing an active portfolio. Well, it’s so easy and stress free that they are not managing anything at all.  I will continue to maintain this position for my parents for at least another 3 years.  That is until 2016 stock market bottom and initiation of inflationary environment.

I recommend you do the same. The US Dollar Index looks good from both technical and fundamental perspective. While it doesn’t really matter if you live in the US, any index appreciation gives you that much more for your buck. 

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Shrinking US Trade Deficit

BusinessWeek Writes:  A Shrinking U.S. Trade Deficit—Brought to You by Fracking

fracking invest with alex

Almost entirely on the back of stronger exports, last week the U.S. Commerce Department revised upward its economic growth estimate for the second quarter, from 1.7 to 2.5 percent. Exports from April to June grew at their fastest pace in two years, pushing down the U.S. trade deficit to 2.7 percent of gross domestic product. That’s less than half what it was at its peak of around 6 percent of GDP in late 2005.

Most of the boost in exports came from tangible stuff sold abroad: goods, rather than services. The biggest among them were petroleum products refined from all the crude oil the U.S. is producing—unlocked by fracking. Through June, the U.S. has exported an average of 99 million barrels of petroleum each month over the past year. That’s roughly quadruple the amount the U.S. was exporting a decade ago.

The story of the shrinking U.S. trade deficit is essentially the story of the U.S. oil boom. The last time the U.S. came close to balancing out the trade deficit, at least in terms of its share of GDP, was just after a recession ended in 1991. To feed the broad expansion that followed, U.S. oil imports grew by more than 130 percent over the next 15 years, from 192 million barrels a month in early 1991 to a peak of about 455 million barrels a month in the summer of 2006.

Read the rest of the article here

 

Finally, some good news for a change.  It would be nice to see America become energy independent over the next few decades. Not only is this great from a financial point of view, but a welcome news from a national security perspective. 

I see energy sector as a growth industry over the next few decades. At the same time, investment thesis in this industry is somewhat complicated.  My work clearly shows that the global economy is about to fall into another deep recession or worse. As that happens energy consumption should significantly decrease leading to much lower oil prices.  While international conflicts in the middle east can play a role in destabilizing the market once again and driving prices higher, I wouldn’t worry about it too much. Anything conflict in this area is likely to be short lived.

As fracking technology improves and production yields increase, expect a lot more oil on the world market.  I don’t think I have to tell you what happens when supply increases and demand goes down. A welcome news for the US Economy indeed. Unfortunately, given massive imbalances due to credit finance expansion over the last few decades, it will be of little help to the overall struggling US Economy.

Nevertheless, if you are able to pick winning companies in this sector, they should appreciate significantly. 

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Plenty of Jobs, but Not For You

Yahoo Finance Writes: Plenty of Job Openings, but Not For You

job-alert-investwithalex

At the end of 2004 the ratio of job openings to workers was about the same as today, but the unemployment rate has moved from a tame 5.4% back then to a painful 7.4% today. So why aren’t job hunters snagging those positions and driving down the unemployment rate, as they did in the past?

The “skills gap”

It seems increasingly likely that many people simply don’t qualify for jobs that are open, which highlights the “skills gap” that seems to be developing as laid-off blue-collar workers compete for jobs in a digital-information economy. Manufacturing has lost nearly 2 million jobs since 2006, for example, and while there’s been a modest recovery during the past two years, the odds of reaching the earlier employment peak seem remote. In construction, the real-estate recovery has brought back some jobs, but there’s still another 2-million-job deficit compared with prerecession levels.

Overall, there are about 4.4. million job openings, according to Labor Dept. data. That works out to 2.8% of the labor force, the same as it was at the end of 2004. With 11.5 million Americans looking for work, you’d think they would quickly grab all the jobs that are open.

Read The Full Article Here

Based on my research I do not see how the employment situation will improve any time soon. If anything,  I believe that unemployment is being under reported throughout government data.  There are just way too many people who are working part time jobs, but who would like to find a full time job.

From a macro economic perspective I do not see anything that would change or reverse this trend. Quite the opposite. With upcoming US Recession, decline in the stock market and continuation of credit defaults, I do not see how the employment situation can improve.

On top of it all you have multiple other trends such as outsourcing and robotics that are taking jobs away.  As such, I expect the employment situation to remain the same in the best case scenario or deteriorate significantly if the US economy slips back into the recessionary environment as I anticipate.  Bottom line is, if you have a full time job……treasure it. 

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American Prosperity Now Depends On Attacking Syria?

The Exchange Writes: Hesitation on Syrian Strike Threatens Economic Recovery

america2

President Obama’s vacillation on Syria—first delaying military action and then booting the decision to Congress—poses grave threats to U.S. prosperity.

Imminent military action, especially in the Middle East, instigates fears of shortages and panic in oil markets. Two years ago, oil prices jumped to more than $110 in anticipation of the U.S. action in Libya but then subsided when the worst did not happen to oil supplies.

With mounting evidence that Syria used chemical weapons, oil prices again jumped, and a prolonged debate in Congress could push gasoline above $4.00. That would dent Detroit’s resurgent auto sales, shelve investment decisions across manufacturing, and weigh on already flagging new home sales.

Should the Congress approve military force, Iran could attack Israel or cut back on oil production, permanently pushing up prices. However, once U.S. strikes begin, if those consequences don’t materialize, oil prices should fall back.

The article continues….

The president exacerbated near term fears by first vacillating after Syrian President Assad crossed his red line, and then asking Congress to vote the week of September 9.

Had Obama acted quickly on his own authority, or at least called Congress back into session immediately, the period of uncertainty would have been cut from at least a month to one week.

Extended uncertainty can wreck havoc on investment and consumer spending, and potentially tank the economy.

They behave so badly, despite U.S. protestations, because from Obama is viewed as weak and naïve. By leading from behind internationally and failing to act forcefully against protectionism that harms American workers, he has emboldened those nations’ to give lip service to international rules and then do whatever they please.

Meanwhile, the U.S. recovery drags along at a paltry 2 percent, while China grows at 7.5 percent, and Japan and Germany recover.

If the liberals and Tea Party block U.S. military action, that vote will mark the end of the United States of America as a prosperous nation with the resolve to lead.

Read Full Article Here

So, there you go folks.   This is one of the dumbest things that I have ever read. Apparently American prosperity and economic growth doesn’t depend on innovation, hard work, fiscal discipline and sacrifice that have made this country so great, but now depends on bombing Syria back into the stone age.  

The scary part is, this is normal and legitimate thinking for millions of Americans today. Maybe they are onto something. While at it, perhaps the US should bomb the rest of the countries as well. Just imagine how much economic growth and wealth it will bring to our nation. Plus, it will show everyone once and for all how much resolve we truly have. Crazy!!!  

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WARNING!!! Is The Philippine Economy/Stock Market About To Collapse?

Philippine Inquirer Writes: PH “different” from troubled Asean peers, say report

 

The Philippines, Southeast Asia’s fastest-growing economy, can differentiate itself from its regional peers that are grappling with slowing growth and deteriorating external balance sheets, based on a common theme cited by international researchers in the past few days.

Although election spending was a factor behind the better-than-expected 7.5-percent gross domestic product (GDP) growth of the Philippines for the second quarter, a pace matched only by China, some of the reports cited some downside risks

“The local economy’s resilience in the face of external turbulence reinforces our view that the Philippines is somewhat differentiated from its peers not only by having a structural current-account surplus but also by having local growth drivers, mainly public spending and private investments, to lean on. The latter may be traced to local economic authorities’ ability to pursue accommodative policies given a benign inflation outlook and manageable public debt,” New York-based think tank Global Source said in an Aug. 30 commentary written by Filipino economists Romeo Bernardo and Marie-Christine Tang.

In a separate research, Credit Suisse said: “We think the Philippines offers the best macroeconomic prospects out of the Asean-4 economies,” referring to the four emerging markets of Southeast Asia that also included Thailand, Indonesia and Malaysia.

Read the rest of the article here

As of right now the Philippine economy is in a very dangerous situation. I say dangerous by simply relying on the Philippine Stock Exchange (PSEi) stock chart.  The chart looks horrific. It looks as if it is about to break down to the downside ………BIG TIME. 

From a purely technical perspective, if it breaks down below 5,700 level, the Philippine economy and the Philippine stock market is in huge trouble. There is no support of any kind until it reaches down to about 4,000 level.  From my experience,  I would put a chance of a breakdown here and a subsequent significant decline at about 80%.

philippines-stock-market

 Better chart here: http://www.bloomberg.com/quote/PCOMP:IND

What does all of this technical mambo jumbo means for average people. The stock market is a leading indicator. If the Philippine stock market breaks down as I anticipate above,  the Philippine economy will follow and slow down significantly.

The fundamental picture supports this thesis as well.  Due to an upcoming economic slowdown in the US, rising interest rates and a recent (substantial) move in the Philippine Peso, I would anticipate the Philippine Stock Market and the Philippine economy to break to the downside soon. Unfortunately, that would lead to either a significant slow down or even a recession in the country. 

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US Real Estate At A Turning Point. Act Now.

Bloomberg Writes: One Number to Explain a Confusing Housing Recovery

Housing-Decline-225x300

 

Reading the tea leaves in the housing market can be a confusing task.

Today we learned that pending home sales fell in July. Last week the news was that new home starts are down, too. But at the same time, serious delinquencies have hit a five-year low. For those of you who want a big picture view to gauge what’s going on, Trulia has a number for you: 64 percent. That’s how close the housing website says the market is to being back to normal.

To calculate the all-in stat, Trulia’s chief economist, Jed Kolko, combines three main factors: construction of new homes, sales of existing homes, and homes that are delinquent or in foreclosure. He then sees how far those those stats have come from the bottom of the market to a “normal,” prebubble pace. Existing home sales are the closest to normal, up to 94 percent of the original pace. But builders are putting up new homes at less than half the regular rate. Foreclosures and delinquencies, on the other hand, have fallen enough to make up more than half of the ground they lost in the downturn.

The results put the market in what Kolko calls the third phase of the recovery. The first stage started in 2009, when the sales and construction bottomed out. The second stage began in 2012, when home prices reached their low point. And this third phase, Trulia says, began this spring, when tight inventories loosened and mortgage rates started to rise.

At this point, the main issue holding the market back from fully recovering is household formation, or as Kolko puts it: “When young adults finally start moving out of their parents’ homes.” That in turn would spur the construction and sales of new homes and push the market closer to a full recovery.

Listen, there is no confusion at all. This is how the bear market works. First, a significant leg down (2006-2009) in real estate followed by a rebound (2009-now). The rebound acts as a “Trap” of sorts that reassures investors that the market is much better now and is about to recover. When everyone is sucked in, the trap is set and the market (Real Estate Market in this case) begins a massive leg down.

What you are seeing now and why a lot of people are “confused” is the topping out and a reversal process in the real estate market. In simple terms, watch out below. The US Real Estate Market is about to crater big time over the next few years. Don’t be in it, unless you have to. 

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3 Reasons Bond Investors Should Worry

CNBC Writes: Pimco: 3 reasons bond investors should chill

 

Bond investors are sweating bullets. In 3½ months, the 10-year yield has risen from about 1.6 percent to over 2.9 percent, before cooling off in recent days. And on Thursday, bond expert Jeffrey Gundlach made the case that the 10-year yield could reach 3.1 percent by end of the year.

As yields rise, bond prices fall, so the move in yields has been very painful for those who have owned bonds, and investors are heading for the exits. Bond funds saw outflows of $36.5 billion in the first 22 days of August, according to TrimTabs. Bond giant Pimco saw $7.4 billion worth of outflows in July alone, and double that in June.

But Tony Crecenzi, Pimco executive vice president, market strategist and portfolio manager, believes that the bearishness has gotten overdone. On CNBC’s “Futures Now” on Thursday, he made the case that “yields will move lower from here,” and he provided three reasons why.

1: Economic fundamentals don’t support these yields

Crescenzi said that yields could rise a bit more due to technical reasons, but the fundamentals don’t support it.

After all, “what’s priced into the bond market is the idea that the economy, in 2014, will accelerate,” Crescenzi said.

But he throws cold water on the rosy economic picture that some are drawing. “Bond investors will begin to reassess whether or not the optimistic forecasts, including the Fed’s own forecast, will come true.”

Indeed, many have questioned the accuracy of the Federal Reserve’s forecast for 3 to 3.5 percent GDP growth in 2014. On Tuesday, Krishna Memani, OppenheimerFunds’ chief investment officer of fixed income, said on “Futures Now”: “The economic growth that we’re looking for in the Fed’s forecasts is probably a bit overstated,” and for that reason, he, too, sees rates dropping.

Percent growth invest with alex

2: Inflation is not coming back

While Gundlach compared the recent rise in rates to the rate rally in 1994, Crescenzi said the present situation is markedly different.

“What 1994 was about was the last big battle against inflation expectations,” Crescenzi said. “When the economy began to accelerate from the 1991 recession, people started to say, ‘Well hey, more growth means more inflation. Why can’t the inflation rate get back to 4 and 6 percent again?’ Then Alan Greenspan came in and stomped on the bond market with big rate hikes to say there isn’t going to be an inflation acceleration like there used to be in the ’70s and ’80s.”

Because “that inflation battle has been fought,” the Fed doesn’t need to hike rates in order to tamp down the rate of economic growth and thus reduce inflation, according to Crescenzi. That means that a full repeat of the 1994 bond catastrophe-in which yields rose nearly 2 percentage points in three months-is unlikely.

3: Investors are misreading the Fed

Crecenzi believes there’s an “80 percent chance” that the Fed will begin to taper its qualitative easing program in September. But he thinks investors are misreading when the Fed will raise their Federal funds rate.

Again, because the Fed doesn’t need to worry about inflation expectations getting out of hand, Fed Chairman Ben Bernanke has no need to hike short-term rates as Greenspan did. “Unlike 1994, there won’t be rate hikes to reinforce the rise in interest rates,” Crescenzi said. So according to Crescenzi, “there won’t be a rate hike until 2015 and the earliest, and we think 2016.”

Any rise in rates would be investor-directed, then-and since the economy will not be as good as investors expect, he does not expect to see rates get pushed higher.

In fact, by the end of the year, this bond guru sees rates falling back to the low to mid 2s on the 10-year.

The points outlined in the article above are important and must be addressed. As I have mentioned in my previous article  “The Most Important Financial Story No One Is Talking About”  interest rates on a 10 Year T-Note have increased 100% over the last 12 months. That is a huge move. Should the investors be worried? I think so. Let’s take a look and take away their argument.

1. Economic fundamentals don’t support these yields: Oh yes they do. I don’t think the market is pricing in growth, I think the market is pricing in upcoming defaults and beginning of an inflationary environment.

2. Inflation is not coming back: That is kind of a definitive statement. My work is showing that inflation is just around the corner and will start to accelerate in 2016. I think the bond market is starting to price that in as well.

3. Investors are misreading the Fed: This is not about the Fed. This is simply following the market and trying to determine what the future holds. The Fed has an imaginary control, not a real one.

The bottom line is this. As I have indicated in my previous post I believe the interest rates have bottomed in July of 2012 and are now starting their multi decade climb higher. Yes, the rates are likely to decline here (pull back) only to resume their climb upwards within a short period of time. Of course, this will have huge negative consequences on the overall economy, the stock market and real estate.  

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Should McDonald’s Share Billions in Profit With Fast Food Workers?

Daily Ticker Writes: McDonald’s Should Share Billions in Profits With Fast Food Workers: Labor Organizer

 

When 250,000 people marched on the National Mall 50 years ago they demanded among other things a hike in the minimum wage from $1.25 to $2 an hour. Today thousands of fast food workers are holding a one-day strike in cities across the country, demanding a wage of $15 an hour. That’s equivalent to the $2 an hour protestors called for in 1963, after adjusting for inflation.

Fast-Food-Workers-Strike1

Organizers report that workers have walked off their jobs in 60 U.S. cities today, including New York City where 500 striking workers took over a McDonald’s at 5th Avenue near 34th Street, and the Empire State Building.

In addition to a $15-an-hour wage, protestors want the right to form a union without intimidation or retaliation from their employer.

Kendall Fells, the organizing director of Fast Food Forward, which is overseeing the New York City campaign, tells The Daily Ticker that these workers are not demanding that Congress raise the minimum wage but that the companies that employ them pay a living wage.

Read the rest of the article here:

What is happening to American capitalism? Why does everyone want a handout and/or a bailout. Why should you earn $15/hour when the market is only willing to pay $7.25/hour.  Why should corporations share profits with workers when the shareholders (the real people who took the risk) are left behind?

At least for now, corporations like McDonald’s should not worry about any traction in this movement. At the same time, these companies should

1. Fire striking workers.

2. Replace them with robots. Which is already starting to happen.

As for  the workers in question. Do yourself a favor and get a better skill set, a better job and a better pay. Any excuse that limits you ability to do so, is just that, an excuse.  Stop being lazy, get off your ass and do what you need to do in order to improve your life. 

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