Obama Down

Strike the pose … Laser focus on jobs??? What happened?

Surprised it’s that high? : Obama’s Economic Approval Plunges to 35%…

Let’s hike taxes, somehow someway : Preps end run around Congress to hike cell phone tax…

It’s for the children … Obama wants to tack on $5-a-year phone tax to fund high-speed Internet in schools – critics blast ‘end run’ of Congress and ‘endless expansion of program at the expense of rate payers’

And what will Congress say … cue the crickets!!!

Hindenburg Omen strikes back, everybody out?  :  Dow skids 200…

Why Stocks Go Down

FED: Inflation low now, but could become ‘excessive’…

Stocks tumble…

Well there is the Hindenburg Omen …

When the money printing doesn’t work, then what. No choice but to stop propping up the stock market, which is where the newly minted money is going, too buy stocks. They are trying to generate the “wealth effect” which is no longer working with people.

 

Unprecedented : 6th Hindenburg Omen In 8 Days Sends Stocks Slumping

When the reality doesn’t matter and money printing is all that holds you up, and then they stop …

The current cluster of Hindenburg Omens is the most concentrated on record and today just made it worse. Critically, the Hindenburg Omen’s underlying construction is indicative of a market in deep confusion with momentum, advancers, decliners, new highs, and new lows all in divergence. For the 6th day in the last 8, the market has flashed another warning that all is not well in this ‘most levered ever’ equity market.

The red lights are blinking out to you …

Hidenburg Omen.

 

It’s Going To Be Huge

Azizonomics blog writes:

A small note on the frankly hilarious news that the Dow Jones Industrial Average smashed through to all-time-highs.

First of all, while stock prices are soaring household income and household confidence are slumping to all-time lows. Employment remains depressed, energy remains expensive, housing remains depressed, wages and salaries as a percentage of GDP keep falling, and the economy remains in a deleveraging cycle. Essentially, these are not the conditions for strong organic business growth, for a sustainable boom. We’re going through a structural economic adjustment, and suffering the consequences of a huge 40-year debt-fuelled boom. While the fundamentals remain weak, it can only be expected that equity markets should remain weak. But that is patently not what has happened.

In fact, it has been engineered that way. Bernanke has been explicitly targeting equities, hoping to trigger a beneficent spiral that he calls “the wealth effect” – stock prices go up, people feel richer and spend, and the economy recovers. But with fundamentals still depressed, this boom cannot be sustained.

And so on it goes …

GOLDMAN: The Next 24 Hours Will Be Critical For The Global Economy

Carl Sagan – Pale Blue Dot

Goldman’s Dominic Wilson is out with a new note offering guidance to investors on whether to finally jump off the stock market, and get more bearish.

Here’s the key threshold:

We think that risk assets are likely to move higher as long as US data remain consistent with GDP growth of somewhat more than 2%.

The next several hours may be decisive…

Given more mixed news in March, and the likelihood that weather-related boosts will fade in the month or two ahead, the stakes have been raised for the releases over the next 24 hours. At the risk of oversimplification, if the ISM and global PMIs bounce convincingly, we think the market is likely to be able to make fresh highs. If instead we see a second month of declines, we are likely to turn more cautious.

So basically, the time if nigh, starting with the Chinese PMI tonight, and ending with US ISM numbers tomorrow morning.

Oh, and of course, this just leads up to what will be a massive week for data, ending with the Jobs Report on Friday.

Enjoy the rest of your weekend!

Rough Market?

Everyone keeps wondering when this Teflon market is finally going to crack.

Here’s one chart, via Doug Kass, that more and more people are paying attention to.

It’s the S&P 500 (red line) vs. the ratio of the Dow Transports vs. the S&P 500 (blue line).

The idea among some “Dow Theorists” is that when the Transports get very weak (relatively) it’s a sign that the market as a whole is doomed to fall.

It is pretty stark the gap that’s opened up this year. At a minimum it at least shows that some parts of the market are getting roughed up by the rise in oil prices.

Economy: Second Derivative, A Short Math Lesson …

This is a post on how they do it. Just an example, not really up to date data, it is for learning afterall. … For up to data, that you either need to do it yourself, or pay people to do it for you.

The stock market is very sensitive to a calculus concept called “the second derivative.” It’s not that hard to grasp, and I’m certain that if you keep reading you will have no trouble at all understanding it.

How fast are we going? In a car, we measure that speed in miles-per-hour (MPH) here in the USA. Think of your speed as the “first derivative.” Now think about how it feels to be going 70 mph in three different scenarios:

1. Cruising at 70 as you drive across Kansas.
2. Accelerating from 0 to 70 as you enter the freeway after a rest stop.
3. Slamming on the breaks when you see an idiotic deer frozen in your headlights while going 100.

In scenario 3, at some point your speed will drop to 70 as you break. But it feels completely different from the other two 70′s, right? That’s the second derivative in action. In each case, you are going the exact same speed. One is fun as you zoom up. One is dull as you cruise. And one is harrowing as you break and pray that you won’t die.

The same is true for our economy. The actual speed is not as important as how fast the speed is changing and in which direction. After a recession, the stock market rockets up. As the economy cruises along at a steady speed, the market can continue to creep upward. When a recession sets in and the economy decelerates rapidly, the market falls.

Look at it this way, economy acceleration(that’s the second derivative), both plus and  minus, shows the direction of the economy, is the economy expanding, minus is contracting.

So, how do we measure the speed of the economy? You can measure it in various ways. The “official” way is to use Gross Domestic Product (GDP), but GDP is unsatisfying because it is only published once per quarter and with a long delay.

Savvy investors like to use the amount of money that the federal treasury is raking off of paychecks each day because that number is published every business day. It is also a good speed measure since the number of people working and getting paid is a very good indicator of how well the economy is doing.

So, instead of miles-per-hour that we use in our car, let’s use tax-dollars-per-year to measure the speed of our economy:

Now let’s calculate the second derivative. Don’t panic! It’s not that hard. We don’t even need to use calculus. In fact, we are just going to do simple arithmetic. Let’s look at the chart:

So you see, the second derivative is the time rate of change of the economy.

The chart starts at the left just under 10%. That’s how much we sped-up in 2000 compared to 1999. Here is the calculation:

1999 taxes = 1,261,750,000,000
2000 taxes = 1,381,625,000,000

1,381,625,000,000 – 1,261,750,000,000 = 119,875,000,000

So, the treasury raked in $119,875,000,000 more dollars in 2000 than it did in 1999. To find the percentage, we divide that gain by the 1999 total:

119,875,000,000 / 1,261,750,000,000 = 9.5%

Easy, right? Now when we do that calculation for each year, and then plot it on the chart above, we get a second-derivative chart. A chart that shows us how much the economy accelerated or decelerated from year-to-year. That’s all there is to it.

So, on the first chart, it didn’t look like anything important was happening in 2007. But on the second chart, it was clear that tax collections were in decline. That was a good early warning for the recession which was about to begin.

Note: the charts above are based on the federal government’s fiscal year, which begins in October, rather than January.

See the upturn?

More here:

Fitch Ratings Agency cuts Portugal credit rating to junk on Thursday

European Socialism, what Obama wants for America, is crashing and burning …

Fitch ratings agency has cut the credit standing of bailed-out Portugal by one notch to BB+, junk-bond status because of its high level of debt and weak economic outlook.

Fitch said the rating has a negative outlook, meaning it could be lowered again, citing Portugal’s “large fiscal imbalances, high indebtedness across all sectors and adverse macroeconomic outlook” for the downgrade.

Any Fitch rating of BB is deemed speculative quality – or “junk” in market slang – while a downgrade typically increases the borrowing costs as the country concerned is now deemed a bigger risk.

In early Thursday afternoon trading, the benchmark Portuguese 10-year bond was trading with a yield or rate of return for holders of 11.036 per cent, up from 10.944 per cent at the close on Wednesday. The stock market was down 0.82 per cent. …