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Obamanomics: An economic disaster of untold proportions…

November 23, 2008 Leave a comment

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The Moron and his Wall Street crew thought it might be a good idea to inject trillions of dollars into the failing financial system to stimulate new lending, so they handed out billions to every banker they could find – forced them to accept the money, by some reports.

They stuffed hundreds of billions more into the pockets of central bankers from virtually every nation and on almost every continent – Africa, of course, seems to have been bypassed on this astonishing and unprecedented act of charity.

The financial markets responded by immediately shedding trillions of dollars of wealth.

As fast as the U.S Treasury and Federal Reserve could shovel money out the door, investors’ shoveled it right back in. The withdrawal of liquidity from every market proceeded apace as every market player with the means at hand sought the safest form of investment possible: US treasury bonds.

By last week, Hank Paulson threw up his hands and finally surrendered to the obvious: Mr. Market hates money! And, the wealth destruction we are witnessing results not from too little money in circulation, but too much.

Sisyphean efforts notwithstanding, Mr. Market has made clear society is no longer bound by the laws of scarcity and any interventions made on the premise that such scarcity exists will be rebuffed.

Time to wake up, people!

This is not the economy of the Founding Fathers. In about the same time one of that generation of Americans could travel from Boston to England – three months – China will bring 13 new power generating plants online. The productive capacity at our fingertips is of several orders of magnitude greater than that even enjoyed by mid-Twentieth Century Americans.

Now the Messiah has stepped forward to try his hand at the tasks which bedevil his predecessor. Saturday, Barack Obama announced his intention to spend perhaps as much as $600 billion on a stimulus package with a goal of creating 2.5 million new jobs through the start of 2011, according to the Huffington Post:

“These aren’t just steps to pull ourselves out of this immediate crisis; these are the long-term investments in our economic future that have been ignored for far too long,” Obama said in the weekly Democratic radio address. The economic recovery plan being developed by his staff aims to create 2.5 million jobs by January 2011, and he wants to get it through Congress quickly and sign it soon after taking office.

He called the plan “big enough to meet the challenges we face” and said that it will jump-start job creation but also “lay the foundation for a strong and growing economy.

If the Moron and his band of Wall Street predators imagined fixing a financial system choking on bloated bonuses, record profits and years of easy credit with even more trillions of dollars proffered on the easiest of terms, the Messiah and his Clintonite apostles have now decided the fix for an economy predicted to shed millions of jobs and hundreds billion of dollars in government revenue is to “create” more jobs, and run bigger deficits to do it.

Perhaps, we are incredibly dense, but Mr. Market seems to be saying we need less government, less capital, and less work. But, you keep electing people who seem determined to increase all three!

Give us a clue, people: What the fuck are we missing here?

What the fuck is so difficult about having a society where people spend less of their life immersed in the soul destroying filth of labor, greed and, faceless bureaucracy?

What the fuck is so horrifying about devoting less of your time to the mad scramble to pay bills, balance budgets, and find childcare for your own neglected latchkey children, that you would fight so strenuously to increase the very things that makes these things more onerous?

It is clear to us what Donald Trump gets out of this: he couldn’t find a date if he didn’t own a modeling agency.

And, we know what the Moron and Messiah get out of it: Its great to have everyone stand when you walk into a room; its great to glad hand all your class mates who now lead other nations, and know, deep down inside, you won the biggest prize of all – seven fleets prowling the world’s waters, and enough nukes to burnish the surface of the earth with glass, and precipitate a new glacier age.

But just what the fuck do you get out of it?

How is it improving your sex life?

How does it boost your bragging rights at state dinners?

The Messiah has now embarked on culmination of the very disaster begun by his predecessor. Instead of grasping the fundamental logic of this crisis – that working hours must be reduced; and, that government must be reduced along with this – he has chosen to intensify that crisis.

Resolution of this crisis will now likely be imposed in the harshest and most chaotic form possible, with all the incalculably catastrophic unfolding of events that this implies: The default and bankruptcy of the United States government, and subsequent collapse of global economic activity.

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By all indications this is the end of the world (market) as we know it…

November 22, 2008 3 comments

When the market closed on Thursday the Standard and Poor 500 index announced to anyone savvy enough to understand that the era of stock markets had drawn to a close.

And, not surprisingly, no one marked that moment.

Certainly the major news outlets covered what was a pretty horrendous day, but there is something left unsaid, something so entirely foreboding, so dire about the closing number – 752 – it is quite the fear whose name must not be spoken: Double Top.

This is the largest such formation ever seen in the history of market.

Just to give you an idea of the scale what just occurred on Thursday: the completion of the S&P double top is akin to the opening of the Seven Seals.

Stockcharts.com defines the double top this way:

The double top is a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between.

An innocuous enough definition, one might not understand how this applies to the closing chart of the S&P 500 on Thursday. So we will show you what it looks like when the chart of the S&P 500 is displayed for the years 1929 to 2008:

sp500-1929-2008

Still not impressed?

What you are seeing is the performance of the S&P for the last 80 years. As you will note, somewhere around the mid-1980s the chart start going parabolic – i.e., begins to climb at an unsustainable rate. By the time of the Clinton Administration – about 1995 – the rate of climb became even more unsustainable.

When the market crashed starting in 2000, it fell for 3 years before reaching the bottom.

But, thanks to Washington, and the beginning of the war against Iraq, the market once again rose to the previous 2000 peak by 2007.

This is where the double top finally made its appearance, and, from there, fell to complete itself finally on last Thursday.

Still not so impressive, until you realize a double top is what is known as a major reversal pattern, which is any chart pattern which signals a reversal of the direction of the market.

Since World War II the overall trend of the market has been up.

This pattern says the overall trend will now be down.

We bet you want to know how far down, since all your retirement is invested in the market through personal saving, investments, 401(k)s and 403(b)s, and, state and corporate pension funds.

How far down pretty much determines when, and under what conditions, you may retire in the near or less near future.

Well, to put it bluntly, the chart says don’t bet on any retirement.

It also says: Don’t bet on any mutual funds, banks, or any other financial instruments.

Don’t bet on insurance companies, or, annuities.

Don’t bet on home equity, or, savings.

A double top has clear predictions about what the future holds for the S&P. It may get it wrong this time, but you would be advised not to bet on that either.

Stockcharts has this to say about how bad the current market meltdown will get in all probability:

The distance from support break to peak can be subtracted from the support break for a price target. This would infer that the bigger the formation is, the larger the potential decline.

Support for our chart was in the area of 800. On Thursday, November 20, 2008, the S&P closed below 755 – thus breaking its support and closing at a level not seen since 1997.  The S&P had reached about 1550 at it peak.

Following the method used in the Stockchart quote, we subtract the support, 800, from the peak, 1550, and arrive at the likely target for the S&P in the coming months: 800 minus 750 equals 50.

The last time the S&P was near 50 was about the same time Harry S. Truman was putting his signature to National Security COuncil Memorandum 68.

The S&P chart is essentially saying there has been no real expansion of economic activity since then.It was all smoke and mirrors, as the market will likely demonstrate for us in the coming months.

The S&P chart is essentially saying there will no stock market within a matter of months. It will be gone, and all the capital market connected to it will be gone as well.

Nothing will likely prevent this fall.

We will only be able to avoid the horrendous consequences, but that will require a very aggressive reduction of working hours, and the virtual elimination of government.