ALBERT EDWARDS: Everyone Is Still Way Too Optimistic, And The S&P Is Going To Lose 65%

September 30, 2011

BREAKING: Societe Generale’s uber-bearish strategist Albert Edwards is still… bearish.

Despite the big selloff, he’s still convinced that everyone is too optimistic. Ultimately, he sees the market losing about 65% of its value from here.

It’s simple:

We still hear a lot of nonsense about equity valuations and I certainly don’t like feeling left out. Our belief that US equities are still overvalued is based on Tobin’s Q, Shiller, Graham & Dodd’s and cyclically adjusted PE measures. Investors ignore these at their peril. Those who take reassurance that the current 12m forward S&P PE of 101⁄2x is cheap should take a look at the chart below. The forward PE may be back down at the same level as the low of the last bear market, but 1) we are on peak earnings, and 2) the Ice Age secular trend of lower PE lows in this secular valuation bear market will mean that we move to single-digit PEs in this, the third post-bubble recession.

Those who do not believe this can happen are still choosing to ignore the reality that has unfolded before their eyes since 2000. In phase 3 of the Ice Age we would apply a 7-8x forward multiple to recession-depressed forward earnings of say $70-75/sh. That gets us pretty close our 400 S&P target. Unbelievable and ridiculous? They said that about our 11⁄2% US T-Note forecast this time last year!

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BOOM: One Of The Best Economic Forecasters Calls For A “New Recession” In The US

September 30, 2011

Lakshman Achuthan of ECRI told Bloomberg Radio this morning the US is “tipping into a new recession.” He told Tom Keene that a recession is the “overwhelming message coming out of our forward-looking indicators.”

And more ominously: “It is not reversible.”

“There is virtually nothing that can be done to avert what is going to happen,” he said. Achuthan cites “dozens of leading indexes for the U.S.” and “contagion in what is going on among those leading indicators. It’s wildfire, it’s recessionary, it is not reversible.”

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Venezuelan Bonds Rally On Chavez’s Health Problems

September 30, 2011

Sometimes a company’s stock rallies when a bad CEO leaves or canned, like just recently.  But this is a bit harsh, unless you are a Venezuelan:

Venezuelan bonds rallied the most in three months on speculation President Hugo Chavez’s health is deteriorating and will prevent him from running for re-election, paving the way for a reversal of policies that have fueled the fastest inflation in the Americas.

Yields on benchmark 9.25 percent dollar bonds maturing in 2027 fell 41 basis points, or 0.41 percentage point, to 15.35 percent at 12:58 p.m. New York time, according to data compiled by Bloomberg. El Nuevo Herald reported last night that Chavez would undergo dialysis to treat possible kidney failure. Chavez, who revealed in June that he was battling cancer, dismissed the Herald report as “rumors” in a phone interview on state television today.

Chavez has nationalized parts of the oil, metals, cement and utilities industries since taking office in 1999 while imposing currency and price controls in a bid to contain annual inflation that has surged to 26.5 percent. Venezuela has the second-highest overseas borrowing costs among emerging-market countries after Belarus, according to JPMorgan Chase & Co.

“The market’s reacting to the news that this could be the end of his regime,” said Kathryn Rooney Vera, an emerging markets analyst at Bulltick Capital Markets in Miami. “If he were to die, it would bring increased volatility in asset prices because, what’s going to come next? Anything is better than Chavez, but the transition from the Chavista regime to anything else will be tumultuous.”

This could be a great opportunity for Venezuelans to take back their democracy, reclaim their freedoms and get back on the path to prosperity.

Judicary Deals A Pair Of Aces, Obama Regime Gets None

September 30, 2011

Two court losses for the Obama Regime should be on your radar.

First, a federal district court in Alabama upheld major portions of that state’s new immigration law, often referred to as “the Arizona law on steroids.” Portions of the law went into effect yesterday, including provisions that require immigration status checks of public school students, that allow police to investigate and hold suspected illegal immigrants without bond, and that make it a felony for an illegal immigrant to do business with the state.

Seconds was DOMA, a federal district court in California rejected the Obama Administration’s contention that the provisions of DOMA are subject to heightened scrutiny in the context of immigration law. The court credited the argument by the House Bipartisan Legal Advisory Group (the group that  took over from DOJ when Obama made his decision not to defend DOMA this summer) the lawsuit is foreclosed by a 1982 decision. That 1982 decision upheld an immigration official’s ruling that the individuals in question “ha[d] failed to establish that a bona fide marital relationship can exist between two faggots.”

DOMA sec. 2, which creates a federal definition of marriage is also on its way to the Supreme Court.

CNN 90% Sees Economy Under Obama, As Poor

September 30, 2011

Seems a little low too me. America’s Gone A Little Soft … Doesn’t like Communism like they used to.


Three years after a financial crisis pushed the country deep into recession, an overwhelming number of Americans – 90% – say that economic conditions remain poor.

The number, reported Friday in a new CNN/ORC International Poll, is the highest of Barack Obama’s presidency and a significant increase from the 81% who said conditions were poor in June.

The persistent pessimism indicates that Americans are feeling a level of hardship in line with the official statistics. Unemployment stands at 9.1%, economic growth is barely above stall speed, and the housing market remains tied in knots.

Solar Energy School Propaganda 101

September 30, 2011

The Obama administration’s crony green subsidy scandal is erupting like a solar flare in Washington. But do you know what your kids are learning in their environmental education classes about this red-hot taxpayer eco-scam? Chances are: not much.

Instead, the U.S. Department of Energy and the Democratic apparatchiks at the National Education Association are disseminating solar power propaganda masquerading as math and science curricula.

Titled “Solar Power and Me: The Inherent Advantages,” the lesson plan for middle-school and high-school students directs them to “take note of how solar energy is incorporated into the infrastructure of various cities nationwide and write a short essay about how they would encourage solar energy use in their own town.”

A worksheet labeled “All About Solar!” makes the blanket assertion that solar technologies are “a sound economical choice as they can reduce or eliminate exposure to rising electricity rates, or even eliminate one’s need to pay an electrical bill! In addition, solar panels can be a smart long-term investment, with many solar vendors offering 20-30 year warranties on their products.”

It’s elementary. The government shouldn’t be in the business of picking any eco-winners or losers. “Too Green To Fail” redistributes wealth from viable private projects to pipe dreams, forces higher taxes and energy costs on everyone, and rewards partisan funders at public expense. Teach your children well. They’re inheriting the bill.

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Anwar al-Aulaqi, U.S.-born cleric linked to al-Qaeda, reported killed in Yemen

September 30, 2011

The U.S.-born terror mastermind Anwar al-Awlaki has been killed, Fox News confirms.

Yemen’s Defense Ministry said Friday that the U.S.-born Al-Qaeda cleric Anwar al-Awlaki has been killed.

The Yemeni ministry provided no details in the statement, which appeared on one of its website.

Yemeni security and tribal officials said an air strike thought to have been carried out by U.S. aircraft on Friday targeted a convoy of cars traveling in the eastern province of Marib but could not say whether al-Awlaki was in the convoy.

The 40-year-old al-Awlaki is believed to have inspired and even plotted or helped coordinate some of the recent attacks on the U.S., including the failed Christmas Day 2009 bombing of an airliner heading for Detroit, Michigan, and the also unsuccessful plot to send mail bombs on planes from Yemen to the United States in October.

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Truth Telling Joe, Slo Walking Joe, Slo Talking Joe …

September 30, 2011

Joe’s mouth tells the truth.

Vice President Joe Biden told Florida radio station WLRN on Thursday that voters should hold President Barack Obama, not former President George W. Bush, accountable for the poor state of America’s economy.

Conservative PAC American Crossroads circulated the startling statement Thursday afternoon, expecting it will take Democratic campaign strategists by surprise.

“Right now, understandably — totally legitimate — this is a referendum on Obama and Biden and the nature of the state of the economy,” Biden said…

DEMINT: Venture Socialism

September 30, 2011

Good title, great read, don’t let the title get up down … Rush agrees. Green energy, Democrat slush funds, Obama donor payoffs.

Biden let’s the truth slip out: BIDEN: Obama, not Bush, to blame for economy…

Obama: ‘I Don’t Think Ethics’ Was My Favorite Subject… You jest don’t you?

Obama agenda is about shoveling cash to cronies

The demise of Solyndra, the bankrupt solar panel company showered with more than a half-billion dollars in stimulus loans, exposes the fatal flaw of President Obama’s jobs plans.

Government officials rushed $535 million to Solyndra because the Obama administration was determined to make the company the centerpiece of its green agenda regardless of the law of supply and demand. Billions more have been wasted by politicians betting on favored companies and making Washington bigger, using the brute force of government to force liberal preferences into the economy. Mr. Obama calls them “investments,” but this is really venture socialism.

The entire purpose of the $825 billion stimulus bill was to sink government money into politically advantageous projects. Once the federal coffers were opened, the venture vultures eagerly descended. Obama bundler and major Solyndra backer George Kaiser, who splits his time between Oklahoma and California, explained it this way in a July 2009 speech in Tulsa: “There has never been more money shoved out of the government’s door in world history and probably never will be again than in the last few months and the next 18 months. And our selfish, parochial goal is to get as much of it for Tulsa and Oklahoma as we possibly can.”

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Rick Perry To Bernanke: Stop Printing Money

September 30, 2011

A day after Ben Bernanke called the unemployment situation in the U.S. a “national crisis,” Presidential-hopeful and former Republican frontrunner Rick Perry blasted the Fed Chairman for printing money.  Perry added Bernanke would not be reappointed if he became president, replaced with “someone that thinks the private sector should stimulate the economy, not printing money at the Fed.”

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