Do not watch this video if you have a bad heart, just ate, have no liquor in the house, or are a card carrying member of the “Don’t Worry, Be Happy” crowd.
And I thought I was bearish. What concerns me about this video is his outlook is not half as crazy as those who said we would never be where we are now and despite them being wrong, now say all will be well in the second half of 2009.
World heading for Disruption
”It is conscious at this moment that things cannot go on long as they are; that we are in a crisis of the world’s history which must result in some great disruption. But these fears are the fruit of the restless working of some principle which man cannot control, and hence his fears; they are the confession of the instability of the order on which he relies; and they presage, and in the world’s history have ever presaged, some violent disruption.” JND
WILL A ‘ PORKULUS VIRUS ‘ SPREAD ACROSS THE MARKETS NEXT WEEK ?
Perhaps you’ll recall that last fall there was anticipation that passage of ‘ TARP ‘ would send the markets higher. First Congress refused to pass the bill and the markets turned sour. Soon after it was passed and expectation for a market rise was immediately dashed by one of the steepest market declines in recent decades. It became the ‘TARP VIRUS’ quickly spreading to markets around the World.
Then, last week Geithner rolled out a TARP 2 proposal. Rather than applause, the markets echoed the effect of the first ‘ TARP ‘ and greeted the ‘ SON OF TARP ‘ with an especially nasty one day spill merely upon proposal.
So now we have the assumed cure for the seriously ailing American economy that was passed late Friday night. The Porkulus Bill should be upon the President’s desk Monday or Tuesday for signature. You’ve been following it all and there’s no sense to irritate sensible readers.
It would seem that the markets are prepared to react negatively to the signing of this massive spending bill simply because there’s going to be crowding out within the Bond Market, monetization of the debt and rising interest rates to compete with stock market valuations among problems. But there are other thoughts …….
TECHNICAL ANALYSIS (Possibly useless right now)
These indicators that I follow have become undecided. Some are still in decline suggesting the decline will continue and others are suggesting an advance soon. CLEARLY, ON BALANCE THEY HAVE BECOME INCONCLUSIVE.
It’s possible that we could be in a basing pattern, or within an A-B-C advance that started in November 2008. Or it may simply be a continuation of the decline since October 2007. There’s no way to know how the markets will react to the signing and a lengthy analysis would would be inconclusive to predict short term direction.
Putting everything together that I can draw upon, this is my opinion………
It’s a weak and poorly directed stimulation package more resembling a wish list to reward political interests and strengthen government control. Nevertheless, the markets could perceive that perhaps a plan is taking shape that could improve conditions.
Don’t forget that there are Obama believers awaiting this package that can be fleeced by Wall Street. So don’t dismiss the premise that ‘Fools And Their Money Are Soon Parted ‘ because there’s a lot of people who like him and want to invest upon the big event spending policy that he has promised them.
The charts do support possibility of an A-B-C advance from the Mid-November bottom with the ‘ C’ part (An Advance) just ahead. You can be sure that the federal financial agencies will expend every possible resource to create applause from the stock market upon signing of the Abomination Bill.
As mentioned, it seems that the government has expended enormous resources and effort to set up the illusion of a basing market. They may be able to set the market up to rise into the mid-Spring time frame before resuming the decline.
So the bottom line of my opinion (For amusement purposes) is that after a couple of days upside and a scramble to buy stocks, the market turns down later in the week in a brief powerful decline resembling a plunge, perhaps reaching 6,000 on the D.J.I.A. A trend will remain in place until something makes it change direction and the ‘Porkulus Bill’ does nothing for the nations interest and will cause interest rates to rise exacerbating difficulties.
And from the ruling elite, more fear and call for a “New World Economic Order.” That didn’t take long.
http://ca.news.finance.yahoo.com/s/15022009/24/f-afp-g7-sets-sights-urgent-economic-reform.html
Hello Peter, ” Be angry and do not sin” says the word. About a month ago I wrote concerning my distrust of IOUSA, Mr. Walker and Mr. Peterson. At that time you defended their integrity as you saw it. Since then I have realized technically why I doubted their sincerity and/or wisdom. Here is a letter ( slightly edited) that I sent to the Peterson Foundation-who knows if it will ever get past the least of the secretaries manning the computers.
Dear Mr. Walker and Mr. Peterson,
I watched with interest IOUSA. I have also read quite a number of commentary articles on your work and most folks have high praise for it. However, I came away from watching this movie with an enormous sense of disappointment for your final conclusion was that the American people, we the people, are the ones that you suppose are going to have to pay for all these things that have been swindled from us, And one of the emphatic things that you said the American people would have to do is to produce more savings.
My first incredibly ironic thought and hypothetical question to you all was ‘and where are we going to put our savings, gentlemen? Are we to put them into the banking system!’
I find it quite incredible and quite revealing that you simply do not understand, or what is worse, refused to bring forth the truth that fiscal policy, the possibilty of any just and reliable governmental fiscal policy is 100% dependent upon a nations’ broad monetary policy, and it’s monetary infrastructure and regulation. In the case of the United States the infrastructure is the Fed/Treasury open ended fiat monetary system cornucopia which has empowered the very successful greed that has produced all this national fiscal insanity.
You said and IOUSA described again and again that we ( hah!), or the government, went into deficit again and again and failed to put on the books of the nation the trillions of true liabilities. Well, gentlemen, how could they ( we, hah!) do that, may I ask? How could they possibly DO that? Where did these trillions come from to produce such deficits? By what means have the parasitically embedded powers of Washington and New York been able to get the funds for this fiscal debauchery of the people of the United States ? The silence of you two and Mr. Bradley on this subject on CNN was stifling: and this silence was not missed by millions of Americans. You want us to put our ACTUALLY WORKED FOR savings into the most predatory and parasitical and fraudulent banking system that the world has ever known, AGAIN?
You men, you Americans, need to repent and go and talk to Ron Paul and learn some economics of justice.
It is absolutely ridiculous for you to present what you have sponsored without straightforwardly saying that there is no possibly remedy for fiscal responsibilty without absolutely fundamental monetary reform. As you both surely know, many are beginning to feel the need for the criminal prosecution of the rather large kahal that has structured this system in order to profit famously off the labors of the people of the USA for this past century, along with as much as can be recovered by way of restitution from their estates, here and abroad, The problem is for you at least, Mr. Peterson, that you happen to be one of the ones who profited most prolifically by this system. After having learned this and that you have publically stated , apparently, (see W.Greidner, the Nation) that you will ’sacrifice’ one third of your vast wealth for your program and foundation only makes me wonder what you have done to get “rewarded” into spending your waning days running around the country promoting this fiscal ‘update’ on how the vast majority of Americans have been swindled and deceived, as well as having been publically encouraged and enticed into personal financial mismanagement by their supposedly trustworthy public servants and their appointees. ( remember Greenspan and ARMs). Then you have the audacity to promote a generational conflict as you blanketly condemn the baby boomer generation as being the ‘culprit’, not even acknowledging that 40% or more of that generation,s households have ZERO net worth, and the ‘victims’ are their children and their grandchildren and beyond. This is a monstrously fraudulent condemnation. I for one, am not impressed by your level of ’sacrificial’ benificence nor your sincerity.
. You gentlemen really need to repent to ” Nature’s God” and confess to the American people. You apparently have purchased the stage to do it upon.
Yours Truly, Fred Brechtel
Fred,
You bring up a good point. Where indeed will any new savings go? Whom do you trust?
Not enough Americans even know about the Gold & Silver alternatives or know that it’s a medium of exchange more to be trusted.
For those who do, much will end up in back yards again – and I’m not advocating that – which does not much for our economy anyway.
You can’t trust government – absolute power and all that , and has become more absolute since 9/11 and now since this crisis.
You can’t trust free enterprise because we are moving more toward socialism. Some Businesses have no choice but to make bad choices since government practically requires them to.
Regards,
Roger.
The Right Wing Republican conspiracy to discredit Barack Obama.
Yes, the republican party is in a life and death struggle to minimize the democratic party. Why? Because if Obama is successful in turning around the economy, the democrats will gain many more seats in the US congress and the republicans will become a very weak minority party.
So, what is happening now is that all the guns are out, and unfortunately some of these guns are gold bugs who write articles on promoting gold, silver, platinum and uranium. And many of these people are good people that are just misguided. Nevertheless, they are wrong and the economy will recover and ironically PMs will soar, even if Obama is successful.
The goal of the republican party is to transfer wealth into the hands of the wealthy, regardless of where they take it from. Grandich will not like this, but the goal is “anti Christ-like”. Please remember that Christ was crucified because he complained too often and too passionately about how the wealthy took advantage of the lower classes by fleecing them. Now, the democrats are not much better but but we have little choice.
Gold will rise and the republican gold bugs will become wealthy. It would be better if they were a little more centrist and compassionate.
Sincerely,
Peter, In this video, he is no more negative then you, Casey, Schiff, Roubini, Rogers, etc. All on the same theme.
# 4 Fred Brechtel …. Bravo, Accolade for a truly novel economic opinion on the premise that budget reform is not possible without monetary reform which is the root of the problem. It’s a bolt of lightening that the system is so dysfunctional we cannot save in traditional assets or institutions. As worthy as Mr. Walker’s effort is, it’s an exercise in futility at this late stage without monetary reform.
#6 Frank O’Neil – There is no conspiracy to discredit Barack Obama. IT IS AN OPEN EFFORT. We don’t want him to succeed because he has a socialist agenda to destroy free enterprise and the Capitalist system of distribution.
Please no paranoia about the matter, just tell us how deficit spending is going to help the American economy, Explain how the government can create wealth and how it benefits the nation when industries and institutions are nationalized.
He’s been in office less than a month and look at the damage done so far. Everything that the government touches turns to dirt and it has always been that way.
is the show going to be canceled?
Nice point about this, good summary.