Heads up please. In working through the longer term data, i had to go through some of the last of the immediacy stuff due to cross links. Within the immediacy data sets there are clear indications
of a major [damaging] earthquake on west coast of america (MOST likely
north america due to angular momentum issues of planetary alignment) and
more probably than not, in the PNW perhaps down to mid CA. This quake
shows as being completed with problems, *such as yet more [wedding
interruptions] by August 3, however the data accretion patterns point to the
last two days of July as the point of impact and largest number of after
shocks. Damages are indicated to include [roadways] and [bridges] such that [transportation/movement] is [restricted (in some places)] for months afterward. Water flows are also to be affected and even altered for long time (months/years) which is how i found it. By noting the odd number of longer term indicators for [water pathways change] in the data accretion patterns for November and onward in 2010. A significant majority of these traced back to something in the immediacy data that turned out to be this pending earthquake in very late July.
Probably i am wrong though. In any case thought to let y'all know. Will try to speak to George Noory about it tonight (7/26/2010) on Coast to Coast AM. Probably just because i do this, it wont happen. Here's hoping pies bake without interruption.
clif (posted 7/26/2010)
2. The Japan effect from the 80ies is perfectly repeated by China's major bubble only that the stock market bubble has already burst.
In his latest letter to subscribers, Shadowstats' John Williams dissects recent economic data, and after providing yet more evidence that after the recent period of "bottom-bouncing at a low-level plateau of business activity" the economy has once again entered a double dip. Overall, it has cost the US taxpayers several trillion in debt (which will never be repaid), and a major hit to the value of the paper in their wallets, just to play the game of extend and pretend for a just under 18 months. The positive effects of the sugar high are now gone, leaving just the negative, one of which is the propaganda spin engulfing the entire legacy media complex whose survival depends on the ongoing perpetuation of the Ponzi lie that all is well. And courtesy of Mr. Williams we have prima facie evidence of precisely why formerly reputable channels such as CNBC are in the process destroying their credibility and causing an exodus of viewers, with the few remaining viewers remaining primarily for the opportunity to heckle the openly lying talking heads. To wit from Shadowstats: "Let me recount two personal experiences. Back in late-1989, I contended that the U.S. economy was in or headed into a deep recession. CNBC had me in to discuss my views along with a senior economist for a large New York bank, who was looking for continued economic growth. Before the show, the bank economist and I shared our views in the Green Room. I outlined my case for a major recession, and, to my shock, his response was, "I think that pretty much is the consensus." We got on the air, I gave my recession pitch, and he proclaimed a booming economy for the year ahead. He was a good economist and knew what was happening, but he had to put out the story mandated by his employer, or he would not have had a job. More recently, following an interview on a major cable news network (not CNBC), I was advised off-air by the producer that they were operating under a corporate mandate to give the economic news a positive spin, irrespective of how bad it was." And now you know that watching stations like CNBC for anything more than just comedic value is hazardous to your health and wealth.
John Williams criticism is even harsher:
Further complicating the outlook is a more traditional issue: pronouncements by some economists on Wall Street and financial reporters in the popular media, who act as shills for the needs of Wall Street and political Washington. While there are a number of fine and honest economists and financial reporters in their respective fields, there also are those — often very heavily publicized — who spew Pollyannaish nonsense aimed at affecting public sentiment and/or the financial markets during troubled economic times.
I know from other personal experiences that these circumstances are commonplace. A simple example of recent distortion was yesterday’s positive hype over an unexpectedly-low weekly jobless claims number. Widely known — at least I have discussed the matter frequently — is that the Department of Labor cannot adjust the weekly claims numbers meaningfully for regular seasonal variations. Accordingly, reporting around holidays invariably results in unusually large and unexpected swings in the weekly numbers. Yesterday’s data covered the onset of the Fourth of July weekend. It would not be at all unusual to see a similarly-meaningless reverse-gyration in next week’s release.
At least we can now drop any pretense that America and the Evil Empire of the 1980's are in any way different - central planning: check; complete media subjugation: check; power to the (unionized) workers: check; "free" healthcare for all - check; the only difference is that the hegemonic kleptocrats in the US, i.e., the banking elite, are sophisticated enough to keep the plebs distracted and while enjoying their last years of power in a collapsing regime, are rapidly transferring whatever remaining pockets of wealth in US (and global) society are left to their own private safes in undisclosed locations. We know how things ended for the once great USSR - it should provide a great roadmap for what is coming to the US.
And while we are on the topic of John Williams, who remains the only accurate tracker of M3 now that the Fed deems this monetary aggregate irrelevant, here is his latest commentary on the inflation-adjusted M3. It's ugly:
Plotted below is the year-to-year change in real (inflation-adjusted) M3 (updated for the Fed’s revisions) versus U.S. recessions, as recognized by the National Bureau of Economic Research. Whenever annual real change in M3 has turned negative, the economy always has fallen into recession, or if already in recession, the economy has entered a period of intensified downturn, usually within six to nine months of the initial M3 downturn. The signal for economic trouble ahead is the annual real M3 growth first turning negative, as happened in December 2009.
Jim Grant, one of the most respected voices in the financial industry, joins Zero Hedge and others, who see that the only choice the Federal Reserve has now that the temporary and shallow reprieve from the clutches of the deflationary depression is over, is to print more money in the form of another iteration of QE. Whether this will be another $2.5 trillion, like last time, which was the price of an 18 month delay of the inevitable, or a $5 trillion concerted global effort, as Ambrose Evans-Pritchard believes, is irrelevant: the only option the central printers, pardon, bankers, have left is to flood the market with yet more worthless paper (keep an eye out on the doubling in the price of gold the second QE2 is publicly announced, which will also double as the obituary for all fiat paper). In an interview with Bloomberg TV, Grant says that the first order of business tomorrow when the Fed's new additions officially join their new groupthink perpetuating employer will be "to try once more to print enough dollars to make something happen in the U.S. economy.” The ever-sarcastic Grant manages to completely skewer Janet Yellen, Steve Diamond and Sarah Bloom Raskin, to ridicule the Fed's 100% track record of not only focusing on the wrong thing time after time, but getting the response consistently wrong with 100% precision, and also manages to makes fun of the Fed's credentialed WSJ lackeys, who courtesy of the Fed's "editorial" control over the reporting process, get a direct line into leakable Fed strategy.
By Eric Sprott And David Franklin, Sprott Asset Management
Wither Green Shoots
With the summer now upon us, the "Sell in May and Go Away" adage has proven itself true once again. The major market indexes are all turning downward, and while they haven’t dropped enough yet to warrant panic, we certainly want to be positioned properly if this trend continues into the fall. The market tea leaves are no longer sending mixed signals either – most of the new data is decidedly bearish. So what happened to all the ‘green shoots’? What happened to the strong recovery the market rally was promising?
Economic data released over the past two weeks have decimated any remaining belief in a lasting economic recovery. Slowdowns are appearing in the US, Europe, Japan and even China. Auto sales, housing starts, employment, consumer confidence, factory orders, consumer purchase intentions - just about every aspect of the economy that can be measured, is showing decided weakness.
Of particular interest to us over the past year has been the GDP forecasts released by The Consumer Metrics Institute in Colorado ("CMI"). CMI caught our attention with their real time tracking of consumer retail sales data. Consumer spending represents 70% of GDP, and that spending can provide great insight into the workings of the underlying economy. CMI’s retail sales data has indentified a long, negative contraction in the economy based on their data set for the last 180 days. This was confirmed most notably in Walmart’s poor first quarter sales results when CFO Tom Schoewe stated, "More than ever, our customers are living paycheck to paycheck."1 If that sentiment applies to other large retailers, it doesn’t bode well for 2010 GDP.
CMI also predicted 2010 Q1 GDP growth at 2.62% all the way back in November 2009. It took nearly seven months for the actual US GDP data to eventually be released, but when it finally did (after three revisions, no less) it turned out that CMI’s prediction was bang on. Interestingly, when the real data came out, CMI founder Rick Davis noted that the inventory component underlying the 2.7% Q1 GDP growth figure had moved from 1.65% up to 1.88% – meaning that the bulk of GDP growth, almost 66%, actually came from inventory swings rather than consumer demand. No wonder factory orders fell out of bed this past week! With the re-stocking complete, there aren’t enough new orders to clear the fresh inventory. And if two thirds of Q1 growth came from inventory swings (or just plain re-stocking etc.), it makes us wonder what we can realistically expect from the next two GDP announcements. CMI provided the following guidance for the balance of the year, stating that "We expect GDP growth to be flat for the second quarter, but with inventory adjustment reversals absolutely killing the reported ‘growth’ number just four days before the U.S. mid-term elections." If that turns out to be correct, it will be unfortunate timing for the elections.
An important question to ask is whether the March ’09 rally was really justified at all. Were the green shoots real? Or was the market just looking for a way to justify the effects of government-induced ‘easy money’? The stock market is supposed to be an efficient, forward-looking indicator after all – and the rally that began in March ’09 was supposed to signal a robust recovery. So where’s the recovery? From the time the term ‘green shoots’ was first uttered by Ben Bernanke on March 15, 2009, the S&P 500 rallied 36% to June 30, 2010 and by as much as 60% to April 26, 2010. If the green shoots were really just the early indications of weeds, was the market wrong to appreciate so dramatically?
There is little doubt that much of the stock market action during the past 12 months has defied traditional market rules. Nowhere is this more evident to us than in the banking stocks. We’re still scratching our heads on the whole sector. Readers may remember an article we wrote in November 2009 entitled "Don’t Bank on the Banks" in which we discussed the hazard of leverage in the banking system. If you gauge our conclusions by what actually transpired in the banking sector as a whole, we were essentially correct. Of the 986 bank holding companies in the US last year, a total of 980 of them LOST MONEY.2 And that’s even after all the government bailouts the sector received. Hmmmm. Robust banking recovery? Not a chance. However, the remaining six banks, all of which are "too big to fail", did manage to earn a combined $51 billion in 2009, sending their stocks soaring as a result. So despite 980 out of 986 bank holding companies returning nothing but red, the sector actually fared pretty well from a market perspective. Does this make any sense to you? Here we have an entire sector that is essentially broken; where a mere handful have maintained profitability not from their own strength but thanks to the taxpayers’ bailouts; and where the government is now aiming the most powerful of their regulatory reforms – and the market decides to pile into their respective equities?
A highly amusing exchange occurred earlier on CNBC when guest Damon Vickers of Nine Points Capital had an unexpected moment of truthiness and turned some heads when he said that "unless the plunge protection team comes in over the next couple of days, the markets are looking very dicey here." When a disgusted Joe Kernan asks if Vickers was making a joke about the PPT, the response is "absolutely not - it's common knowledge that the government steps in and does things to step on the gas and buy stock here and there." To which Byron Wien has a strong retort: "I don't believe it." All that and much more in the clip below. In the meantime, the market is sure having a field day with stocks as once again bad news are discarded and the smallest glimmer of positivity serves as a springboard for yet another ramping short covering spree.
Submitted by Brandon Ferro, Managing Member of Hevea Partners
Some Market Thoughts worth Sharing
Historical market data that suggest our current situation resembles very scary periods in times past (i.e., the 1929 crash to be specific) is beginning to pile up.
Let's look at the set up from the perspective of charts.
Here are historical bear markets, indexed to 100% (100% = bull market peak).
It's quite easy to see that the current bear market that began in late April has been more ferocious than the average bear market through history at this juncture of its development.
In fact, this bear market looks an awful lot like the way the 1929 crash shaped up. While other individual bear markets have fallen faster and by a greater amount, they were all short-term crashes, such as the 1987 crash and the 1998 Asian Financial crisis crash.
As such, they ended very quickly. The current one, however, seems to be more drawn out, again looking very similar to the 1929 crash represented by the red line.
What is worth noting is that despite the fact that we witnessed a mini-crash in May and a $1T support package for Europe thereafter, the current tape action is still as weak as it is and is leading to the set up in these charts I'm discussing.
Despite the latter events, one of which was supposed to be cathartic to an over-bought market and the other supportive to global economic stability, we're still hanging on the edge of a cliff it seems.
Now, let's specifically compare the 1929-1942 bear market, which began with the 1929 crash and largely ended with US engagement in WW2, to the 2000-2010 period, which has seen two massive bear markets with two major rallies of 100% and 85% in between.
It is amazing how closely these charts resemble themselves in terms of price action and the timing of each cycle’s respective moves. It seems to me that the only major difference is the order in which events seem to be playing out.
For instance, they had their crash quickly while we have avoided ours for 10 years with profligate monetary policy and government spending.
It seems to me that the market is now recognizing that the game is up; no amount of additional money, bailouts or otherwise can prevent the system from collapsing under the weight of all the debt that has been allowed to build. That's why it seems as if the far end of the black line is on the cusp of doing what the red line did on the left side of this chart in 1929.
Again, the same events, just reversed - politicians unwittingly took austerity measures in 1929-1930 that caused a depression and they're doing the same thing now, just 10 years later than expected.
If you look at the dotted black line, it represents the absolute low of the 1929-1932 depression, a roughly 85% decline in all on a monthly basis. For context, this correlates to roughly 230 on the S&P500.
Question is, their bear market ended when we entered WW2; is Iran and Israel the catalyst for a similar situation in 2012 when this analytical work suggests our bear market could end? They could theoretically pull the world into their mess given the resources at stake and the emergence of a resource rich country in China.
Which brings me to the S&P500 / Gold ratio chart.
Historically, the value of the S&P500 relative to the price of gold reaches a bottom at roughly 28% (all-time low = 19%). The ratio is currently 94%.
Assuming a gold price of $1,500 or $2,000 (reasonable given fundamental backdrop) suggests an S&P500 value of 375-500.
Isn't it crazy to see how the market cycles vs. the price of gold through history? This is the third major secular bear market for stocks relative to gold over the past 110 years and it shows up decisively in the chart.
If you believe that everything reverts back to its mean and even overshoots (i.e., when you stretch the rubber band too hard in one direction it has to snap back even harder in the other), then the unprecedented explosion in the market vs. the value of gold in 2000 (almost 6.0 on the chart) relative to other historical peaks at the top of secular bull markets (1929 and 1966) suggests greater upside than $1,500-$2,000 for gold and more downside than 375-500 for the S&P500.
Further, the SPX / Gold ratio chart is where we form our timing thesis of 2012 being a potential bottom for this secular bear.
Notice how troughs in the S&P500 relative to the price of gold have typically taken 12-13 years to play out. The S&P500 put its peak in relative to gold 10 long years ago in 2000. We sure are close.
Let's also look at the valuation on the market (Price-to-Earnings ratio or P/E) when it has typically reached major, major bottoms which have led to new periods of prosperity and huge, secular bull markets.
Typically, the P/E on the S&P500 has reached b/t 6x-8x earnings per share (rolling Shiller 10 year average), well below the current ~19x.
Notice how the “generational low” in February 2009 (dark black), which preceded the 85% rally over the past year, was probably not the generational low everybody thought it was - the P/E on the market never went below 14x. Also note the P/E at the 2003 lows (white).
If we assume $70 in S&P500 earnings per share in 2011 (mild recession in 2H10 and 2011) and use a 6x multiple you get an S&P500 value of 420.
To really nail the overall thesis for you here is a comparison of the P/E ratio on the market during major, long-lasting, secular bear markets.
We are just 2.3 points away from that critical -10 threshold on the ECRI WLI which at least historically, has guaranteed a recession. Just the freefall itself is vertigo inducing, and the number's release at 10:30 Eastern is what pushed the market even further lower as bullish indicator after indicator collapse.2.Iran vs Israel/America is on a save path to war as the escalation of events is mandatory after the new imposed sanctions. With the new frictions between USA and Russia we can be sure that they will semi secretly support Iran and deliver even weapons as they have a lot to win starting with a substantially higher oil price to big weapon deals. The situation is rather poised to go very quickly to an attack as time is from now on the enemy of Israel. They tried to win over one former ally by having a secret meeting with Turkey but that did not work out at all it seems.
A US-Iran showdown loomed closer early Friday, July 2, when president Barack Obama signed into law a series of energy sanctions, the toughest yet, for arresting Iran's nuclear weapons program. Iran's defense minister Gen. Ahmad Vahidi warned that searches of its ships or planes would have "dire consequences" for world security and the Middle East in particular.
The law drafted by Congress shuts US markets to firms that provide Iran with refined petroleum products, such as gasoline and jet fuel, invest in its energy sector, or provide financing, insurance or shipping services. Non-US banks doing business with blacklisted Iranian entities, primarily Islamic Revolutionary Guard Corps organizations, will be banned from US markets.
These measures complement and strengthen the new UN Security Council sanctions and European measures and will hit every Iranian. The oil-rich country Islamic Republic imports 40 percent of its refined oil needs because of its own inadequate refining capacity. Any investors in projects for developing this sector would be punishable under the new US law.
Earlier, Gen. Vahidi warned world powers against implementing certain UN sanctions: "As regards inspection of (Iranian) ships, there are one or two countries which pursue the issue and have made some comments about it and this indicates that these people don't pay any attention to security issues in the region and the world," said.
Tuesday, June 26, debkafile's military sources reported the arrival of the USS Nassau-LHA-4 at the head of a strike group of amphibian craft to the Gulf of Aden-Red Sea sector with 4,000 Marines aboard, including special units trained in operations behind enemy lines. Our sources disclosed that their presence caused Tehran to hold back the ships destined for breaking Israel's sea blockade of the Gaza Strip for fear they would be intercepted and searched as UN sanctions permits. To read article click here.
The Speaker of the Iranian parliament (Majlis) Ali Larijani and the Revolutionary Guards commander Gen. Ali Fadavi have both threatened harsh reprisals against all vessels, including American warships and oil tankers sailing through the Persian Gulf and Straits of Hormuz, for any attempts to search ships or planes carrying cargoes to Iran.
The new US law will make shipping and insurance costs for Iran's gasoline imports prohibitive. They are the first sanctions to bite really deep into Iran's economy and hit the Guards' commercial empire. Their control of refined oil imports is a major source of revenue and those profits provide funding for their operations, the foremost of which is the development and manufacture of nuclear weapons.
debkafile's Iranian sources have no doubt that Iran will not take the new penalties lying down and will strike back - possibly, in the first instance, by impeding Persian Gulf shipping carrying Saudi and Gulf oil out to the United States, Europe and the Far East, with immediate effect on world oil prices.
Interception of an Iranian ship suspected of carrying contraband energy products could well spin into a showdown.
President Obama indicated that this time the United States is determined to follow through on its punitive measures against Iran. As he signed the new sanctions, he said: "There should be no doubt, the US and the international community are determined to prevent Iran from acquiring nuclear weapons. The new sanctions would strike at its capacity to finance its nuclear program." He went on to say, "If Tehran persists in its course, the pressure will continue to mount and its isolation continue to deepen."
Tick...tick...tick - Israeli Mistake, Confusion, and a chart
After speaking with George Ure about the current events as of today, and having run into a wall of confusion, and misunderstanding between us over certain forecasts and the language and the tension values, i thought it wise to post this small article and a chart in aid of the confusion, either to increase, or decrease.
The issue is the July 11th break into 18 and a half hours of release language. George, and apparently others, are under the impression that some big 'thing' would happen on that date. This may well be the case, however, note that the release language (all the downward slanting lines in the charts below) continues all summer as punctuations to building tension. So the pattern from July 11th through to November 8th is one of building tension and then release of tension, almost on a daily basis. Note that this is the USUAL state of our charts for the planet. What is unusual is that we have been in a very long period of building tension for these past few months. What is also unusual is the 'tipping point' that is forecast to occur over 4 days in November from the 8th through the 11th inclusive. Then what is even more unusual is that the release language continues unabated, without deviation for over 2 months, from November 11th through to January 23rd. Please note some slight distortion in the charting software related to fonts alters the dates placement visually. The above dates are from the raw data, not from charting.
So, knowing that the September 11th attacks on the money center of the planet by TPTB (we call this the 9/11 event), had a tipping point that lasted about 4 hours, followed by 12 hours of release language, before returning to building tension language as the planet tried to sort things out the next day, we can base our speculations on what may occur given the values that we have forecast for release and building tension language trends. .
Now, on July 11th, the 'crocodile teeth pattern' of daily building tension, followed by release tension, returns. This lasts in a general way until the tipping point on November 8th forms. The daily release of tension does not purge from the total build up of tension completely so the general trend is one of a building tension continuum through to November 8th.
In addition to the chart below, note that the collector programs that we run that collect daily language and compare it to forecasts, has a sudden jump from .9% fulfillment to over 9.8 % in the 'israeli mistake' language. So it appears as though the Israelis are going to attack Iran within a short period of time, perhaps within the next 30 days. This would fit with the release language on the 11th of July, or any of the subsequent release language episodes for the rest of that month. One can also allow monkey mind to speculate that the 12 days of torment for the Obama administration minions over the first 12 days of August *could* be provoked by the israeli mistake having been initiated in the weeks prior.
I had a failure of imagination in that i could not conceive of the Israeli mistake (attack on Iran) as taking *months* to lead to the overwhelming response, i.e. global thermonuclear war. This was a failure on my part. In speaking with George, we were able to noodle up a scenario whereby it does take several months following the Israeli mistake launch before the multinational thermonuclear response could/would/does occur. This then does fit the current chart (from a speculative, monkey mind perspective), in that a July attack on Iran produces a November global thermonuclear war as the Allies take on the TPTB and their stooges, the Israelis and the American Military Empire.
Being a human, this idea that TPTB trick the populace of the planet into yet another useless war over religion by the religious in servile slavish worship of the irreligious does not sit well with me. I had repeatedly thought that the Terra entity involvment within the November tipping point could well be the clue that it was to NOT be horrific, species ending war, but rather would be some giant earth changes such as the Pacific tectonic plate cracking that we are also expecting. Or even, giant radiation from the sun.
However, the recent and very large jump in magntitude of the language forecast for the 'israeli miske', sub set 'active war launch', is too much to ignore. So without regard as to how long it may take, or the many other ramifications, the data streaming in now suggests that the [israeli mistake] that leads to so much planetary misery is on, and likely soon.
Please note that the temporal markers along the way to the [active attack phase (of israeli mistake)] have all been met, and the largest, and closest to the actual manifestation of the [israeli mistake] was the [ranking general faux pas (mal mots)] that we have just seen fulfilled in these most recent news stories about Obama and his General McCrystal.
So my position has altered in that it is seeming more likely by the day that the [israeli mistake] is 'on' and soon. Many of the critical elements now in place are not able, from a military logistics view point, to be maintained for too long in place before their usefulness degrades below acceptable levels.....therefore, certain conclusions need to be drawn appropriately.
As you may note from the chart below, the period from July 11th through to the tipping point of November 8th through the 11th is both very short, and extremely 'toothy'....as may be expected of the time between the skirmish (the israeli mistaken attack on Iran), and the resultant global thermonuclear war.
Also note, we could be wrong about the 'whats' and 'whys' of the building tension and release tension points....there is always consistent hope for that as we get the details wrong repeatedly. However, the temporal marker of the ranking general in deep shit came from the same data set that produced the israeli mistake forecast. So......take it all as speculative, until it is not.
Now it is up to you to decide what will occur, and how. After all, it is the mass of humans who run this planet, though they may not rule it, they can shut down and stop anything they choose when they choose, by simply *not* cooperating with stupid bullshit from the 'system'...aka, TPTB.
Chart is annotated.