Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Market Drop

“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.
Billionaire 1: Sam Zell
On Stocks and reality…

This post was published at Zero Hedge on 09/03/2014.

SP 500 and NDX Futures Daily Charts – Getting Sentimental

“Also, it was in 1987 the previous time the Investors Intelligence service said in its survey that Bears fell to 13. Today, Bears fell to 13.3 for the first time since then vs 15.1 last week. Bulls rose to 56.1 from 52.5 and the spread at 42.8 pts puts the difference back in the ‘dangerous’ camp according to II. Above 30 is a ‘worry.’
I want to emphasize that this is not a timing mechanism and is just a SHORT TERM indicator but at least should put to rest the belief that this is somehow a ‘hated’ rally when bears are at a 27 year low.”
Peter Boockvar
“Adversity makes men, and prosperity makes monsters.”
Victor Hugo
I don’t think that the rally is ‘hated.’ But I do think that the stock market and Wall Street have become generally despised and seen as fraudulent. AAPL was a drag on the NDX, ahead of its new product announcements. Everything in this market today smelled of profit taking. And well it could be, given the rocket like bounce that the indices took off the end of the last wash-rinse cycle. And for those who called me foolish in forecasting this bounce, how that’s perma-bearishness working out for you so far?

This post was published at Jesses Crossroads Cafe on 03 SEPTEMBER 2014.

Homebuilder Stocks Getting Hit Again Despite Higher Dow

[note: the DJUSHB Dow Jones Home Construction Index has hit a new low on the day since I posted this report – it’s down almost well over 2% nearly 3% now] Despite what seems to be an inexorably rising stock market, the homebuilder stocks continue their negative divergence from the direction of the general market. In fact, the homebuilder stocks dropped over 1% at today’s market open despite another unexplained ‘pop’ in the S&P 500.
The message of the market is unmistakable: the housing sector is tanking (click to enlarge).
This is despite the fact that 30-yr mortgage rates have come down to their lowest level in a year. That fact that buyers are disappearing is reflected in today’s mortgage purchase applications report from the Mortgage Bankers Association which showed another 2% drop in applications files vs. the previous week and a 12% plunge from a year ago.

This post was published at Investment Research Dynamics on September 3, 2014.

How is Doug Casey Preparing for a Crisis Worse than 2008?

He and His Fellow Millionaires Are Getting Back to Basics
Trillions of dollars of debt, a bond bubble on the verge of bursting and economic distortions that make it difficult for investors to know what is going on behind the curtain have created what author Doug Casey calls a crisis economy. But he is not one to be beaten down. He is planning to make the most of this coming financial disaster by buying equities with real value – silver, gold, uranium, even coal. And, in this interview with The Mining Report, he shares his formula for determining which of the 1,500 “so-called mining stocks” on the TSX actually have value.
The Mining Report: This year’s Casey Research Summit is titled “Thriving in a Crisis Economy.” What is the most pressing crisis for investors today?
Doug Casey: We are exiting the eye of the giant financial hurricane that we entered in 2007, and we’re going into its trailing edge. It’s going to be much more severe, different and longer lasting than what we saw in 2008 and 2009. Investors should be preparing for some really stormy weather by the end of this year, certainly in 2015.
TMR: The 2008 stock market embodied a great deal of volatility. Now, the indexes seem to be rising steadily. Why do you think we are headed for something worse again?

This post was published at Gold-Eagle on September 3, 2014.

Bill Holter-US Broke-Crash Mathematical Certainty

The following video was published by Greg Hunter on Sep 2, 2014
Bill Holter of MilesFranklin.com says a crash of the financial system is on the way. Holter says, ‘I believe that many things that are real will be revalued many multiples higher. Silver and gold I see being revalued eight to ten times higher or more if we have a closure of the banking system and the stock market, a reset so to speak . . . How likely is a crash in the financial system? Holter thinks, ‘From a probability standpoint, whether it’s tomorrow morning or next week, or next month, or next year, mathematically, ask yourself this question: Is the U. S. broke? The answer is yes, the U. S. is broke. There is no way the U. S. can pay the promises, the interest and etcetera on everything that is out there. I’ve seen a number of $240 trillion in total promises and debt. There is no way that can be paid. So, from a mathematical standpoint, sooner or later, there is going to be an all-out collapse. That is a mathematical equation. It is no longer if, it is only a question of when.’

The Seven Year Cycle Of Economic Crashes That Everyone Is Talking About

Large numbers of people believe that an economic crash is coming next year based on a seven year cycle of economic crashes that goes all the way back to the Great Depression. What I am about to share with you is very controversial. Some of you will love it, and some of you will think that it is utter rubbish. I will just present this information and let you decide for yourself what you want to think about it. In my previous article entitled “If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States“, I discussed many of the economic cycle theories that all seem to agree that we are on the verge of a major economic downturn in this country. But there is an economic cycle that I did not mention in that article that a lot of people are talking about right now. And if this cycle holds up once again in 2015, it will be really bad news for the U. S. economy.
Looking back, the most recent financial crisis that we experienced was back in 2008. Lehman Brothers collapsed, the stock market crashed and we were plunged into the worst recession that we have experienced as a nation since the Great Depression. You can see what happened to the Dow Jones Industrial Average on the chart that I have posted below…

This post was published at The Economic Collapse Blog on September 2nd, 2014.

The Great U.S. Retirement Asset Bubble vs Physical Gold Investment

Americans are more deluded than ever as the total value of the U. S. Retirement Market hits a new record. According to the data released by the ICI – Investment Company Institute, total U. S. Retirement Assets in first quarter of 2014 are valued at a stunning $23 trillion, up from $22.7 trillion in Q4 2013.
Not only are U. S. Retirement Assets reaching new record highs, so is the sentiment by its member participants. This report put out by the ICI, ‘Our Strong Retirement System – An American Success Story’ stated:
Americans Report High Levels of Confidence in the 401(k) System
Americans have a very favorable view of the employer-sponsored 401(k) and other DC plans. Such confidence is a powerful indicator of the value American workers and retirees place on the 401(k) system.
In a survey of 4,000 households conducted for ICI in the winter of 2012/2013, 63% of respondents said that they have a ‘very’ or ‘somewhat’ favorable impression of 401(k) and similar retirement accounts (see figure below).38 That support rose to 76% among households that held a DC plan account or an IRA.39 Americans have expressed similarly positive views in surveys conducted since late 2008, despite the stock market decline from late 2007 to early 2009.
It’s nice to know that Americans have a HIGH LEVEL of confidence in their 401K plans. Thus, it makes perfect sense that they continue to invest their hard-earned fiat money into a system that promises them GOLDEN RETURNS. Unfortunately, Americans have no idea whatsoever that they are throwing good fiat money (if there is such a thing) into one of the GREATEST PONZI SCHEMES in history.
I assumed that it was mostly the middle-aged and older Americans that continued to invest in the retirement system. Why wouldn’t they? They see retirement not too far around the corner so it only makes sense to continue contributing.
However, Main Stream Media has also bamboozled the younger folks, as they too have taken the Paper Retirement Asset System….. HOOK, LINE and SINKER. Here is another wonderful piece of propaganda from the same report linked above:

This post was published at SRSrocco Report on Sept 2, 2014.

Market Ratio Messages

Using monthly charts I want to update more big picture views of where we stand in the financial markets. This is just a brief summary [edit; okay it’s not so brief. In fact it had to be ended abruptly or else it would have just kept on rambling] and not meant as in depth analysis with finite conclusions.
I was listening to Martin Armstrong talk about his ‘economic confidence’ model and realized that the way he views gold is similar to the way I do (and very dis-similar to the way inflationists and ‘death of the dollar’ promoters do). I don’t love the way he writes, and I usually avoid these weird interview sites, but checked it out (linked at 321Gold) anyway and found him enjoyable to listen to.
Anyway, this prompted another big picture look at gold vs. the S&P 500 and as with the shorter-term views, the picture is not pretty.
Well, it is pretty if you have patience and no need to promote gold as a casino play. Gold will be ready when gold is ready and that will not be until confidence in policy making and by extension the stock market, starts to unwind.
Gold vs. SPX has meandered out of a long Falling Wedge (blue dotted) with 2008′s Fear Gap still lower. On the big picture the risk vs. reward is with gold over the stock market. But it is a funny thing about big pictures; they move real sloooow. A fill of that gap may not feel so good to anyone vested in an immediate conclusion to gold’s bear market vs. SPX.

This post was published at GoldSeek on 2 September 2014.

Wall Street’s Bull Has a Problem

Figuring out how to write ever creative versions of headlines that say the market is hitting a new high is commanding a lot of energy in newsrooms these days. What should be commanding more energy in the newsrooms is writing about the market structure that is underpinning this ‘bull’.
On Friday, TheStreet.comwent with the headline ‘S&P Books Best August Since 2000.’ Bringing up the year 2000 is a bit like bringing up the Hindenburg during an air show. The year 2000 marked the peak in Wall Street’s dot.com bubble, whose bust erased 78 percent of the Nasdaq stock market over the next two and one-half years.
Wiped-out Nasdaq investors were eventually to learn that much of this so-called bull market was a highly orchestrated fraud by some of the biggest firms on Wall Street. The fraud worked like this:
Research analysts at marquee firms like Salomon Smith Barney and Merrill Lynch issued knowingly false research reports urging small investors to buy young, unproven companies while calling the same stocks ‘crap’ or a ‘pig’ in private emails. When new tech or dot.com companies went public, favored big clients at Wall Street firms were instructed when to buy on the opening day of trading at rising prices to make the stock appear to be in high demand. This fraud on the market is called laddering.

This post was published at Wall Street On Parade on September 2, 2014.

Market Turning Points

Current position of the market
SPX: Long-term trend – In 1932 and 1974, the 40-yr cycle was responsible for protracted market weakness. The current phase is due this year but where is the weakness? Has man (Federal Reserve) finally achieved dominance over universal rhythms or has it simply delayed the inevitable?
Intermediate trend – The correction is over and what is most likely the final phase of the uptrend (before a more serious correction) is underway.
Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discusses the course of longer market trends.
APPROACHING AN IMPORTANT HIGH?
Market Overview
According to the Trader’s Almanac, September is the weakest month of the year. What better time for the stock market to have a long overdue correction of intermediate scope. I indicated under ‘Long-term trend’ above, that the heretofore predictable 40-year cycle rhythm had sorely disappointed the bears, this time. Will the month of September do likewise? Perhaps not! There are some sound reasons why bearish expectations will be at least partially redeemed in the near future. Let’s examine some of them:
The weekly MACD approaches the beginning of the month in a state of double negative divergence. This reflects price deceleration on an intermediate scale. Of course, this is not a final verdict! The MACD is still in an uptrend and, if it continues to move up, could nullify the divergence. However, the daily MACD also exhibits negative divergence and, judging by its histogram which has started to decline over the past four days, it may also be losing its upside momentum.

This post was published at Gold-Eagle on September 2, 2014.

Jared Bernstein Confirms That Austrians Aren’t Paranoid

For years a growing number of self-identified Austrians have been warning that the USD’s days as the world’s reserve currency are numbered. For example, I myself recently wrote:
I believe that the U. S. dollar, U. S. Treasuries, and the U. S. stock market are all overvalued – in a ‘bubble,’ as they say…
If and when the U. S. dollar bubble bursts, we will see prices rise not just because of what Bernanke (and now Yellen) have pumped in since 2008, but because of the rush of dollars flowing back to the U. S. that have accumulated from years of trade deficits. At that point, the Fed will have to decide: Does it wreck the U. S. financial sector and broader economy in order to save the dollar (comparable to what Volcker did in the late 1970s, only on a much grander scale)? Or will it go the way of several other central banks in history, and run the printing press until the game ends? Either way, it’s going to be ugly.
Often in reaction to such dire predictions we Austrians will hear critics say, ‘Oh give me a break, you guys are paranoid! Gold bugs have been warning about hyperinflation since 1971. What other currency are people going to use? The euro? The ruble? The dollar is here to stay.’

This post was published at Mises Canada on August 31st, 2014.

Options Reveal 7 Ways Stocks Can End 2014

Very few things can be known for sure about the future; and even when something is known for sure, the word sure is open to interpretation. Certainly, one can be reasonably sure that the sun will rise tomorrow, though technically even that it is not 100% certain.
It is possible to be sure about the future of the stock market – perhaps not quite as sure as tomorrow’s sunrise – but sure nonetheless. As the Lobour Day holiday is upon us, and with the final trading months of the year now approaching, we may find it helpful to take some time to consider what we actually know for sure about the stock market, inasmuch as we can be sure of anything.
To determine what we know for sure regarding the final months of 2014 for the stock market, we must make a prediction. In order for that prediction – or any prediction – to have value, the accuracy of the prediction must be properly disclosed.
For example, based on centuries of historical data one can predict with nearly 100% accuracy that the sun will rise tomorrow. However, to simply state ‘The sun will rise tomorrow’, without citing a historiucal basis for the claim, and without interpreting those historical results to disclose the expected accuracy of the prediction, the statement is worthless. Anyone who has ever had to reassure a toddler that the sun will rise again knows the importance of providing a basis for the claim.
Baseless predictions about the future of the stock market are no better than baseless predictions regarding the sunrise. On the other hand, any prediction that has an edge, even if it is a small edge (for example, a 51% likelihood of being correct) can be valuable to a trader so long as the trader is aware of the expected accuracy.

This post was published at ZenTrader on August 31, 2014.

Stock Market Tops & Gold Manipulation Suits

Mainstream press pundits are themselves surprised at the bull market the world has seen in stocks, and many are beginning to note that, soon enough, investors themselves will grow wary about investing in the stock market.
The price of gold bullion since March has come down approximately $100 per ounce, and since 2011 the price has fallen from nearly $2,000 an ounce to its current price of approximately $1,300. The story is similar for silver, which fell from its high of $49 in April 2011 to today’s price of $19.50. Many analysts on mainstream press have indicated that the gold bull market is through, but the evidence points towards the contrary.
Behind the headlines of a record breaking stock market, news about suspected gold price manipulation has caught the attention of many. As the New York Times writes of an ongoing hearing regarding the claims:
At a 40-minute hearing, lawyers for more than 20 plaintiffs gathered in Federal District Court in Manhattan to coordinate their linked lawsuits against the five banks that make up what is known as the London gold fix. The suits, filed by hedge funds, private citizens and public investors like the Alaska Electrical Pension Fund, contend that the banks have used their privileged positions as market makers to rig the price of gold to their benefit.

This post was published at GoldSilverBitcoin on August 28, 2014.

Stock Markets in their Third Bubble Since 2000

The S&P 500 just passed the 2,000-point psychological threshold, an absolute record for that index, created in 1950 and comprising the 500 largest companies traded on the U. S. stock market, thus being more representative than the famous Dow Jones Industrial Index, with its 30 companies. This new record would seem to show that the U. S. recovery is under way… but let’s step back a little in order to evaluate these numbers.
As can be seen on this 1950-end of 2013 graph (reaching 1,600 points), the S&P 500 has been quite erratic since the 2000s, with two bubbles that burst! But let’s get back to the ’80s… Back then was the triumph of Ronald Reagan’s ‘conservative revolution’, which led to a vast liberalisation of the economy with whole sectors being allowed to compete (air transportation and telecoms, notably), while at the same time income tax was reduced, thus encouraging wealth creation. Sound growth takes place and the United States comes out of the ’70s crisis on the way to two wealth producing decades.
In all logic, the S&P 500 starts to rise in 1982, with the 1987 October crash being just a glitch quickly forgotten. But, starting in 1995, the trend picks up, with the start of the ‘internet bubble’. Much hope is placed in the nascent network and heads are spinning a little too much. The bubble burst, beginning of 2000, and the S&P 500 went from a peak of 1,527 to a trough of 800 in 2002, almost down by half.

This post was published at Gold Broker on Aug 28, 2014.

Keynesian Fairy Tale Alert: Establishment Citadel – Council On Foreign Relations – -Peddles Helicopter Money Plan

Folks, take economic cover. There is already a rabid financial mania loose in the land as reflected in the irrational exuberance of the stock market, but, in fact, the fairy tale economics fueling the current financial bubble is fixing to leap into a whole new realm of lunacy. Namely, an out-and-out drop of ‘helicopter money’ to the main street masses.
That’s right. The Keynesian brain freeze has so deeply infected the Wall Street/ Washington corridor that the grey old lady of the establishment, the Council On Foreign Relations, has lent the pages of its prestigious journal, Foreign Affairs, to the following blithering gibberish:
It’s well past time, then, for U. S. policymakers – as well as their counterparts in other developed countries – to consider a version of Friedman’s helicopter drops….. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
I have actually checked, and, no, the publishing arm of the Council on Foreign Relations has not been hacked by writers from the Onion. This monetary insanity is for real!

This post was published at David Stockmans Contra Corner on August 29, 2014.

A day of reckoning has arrived to retiring Americans: 63 percent of Americans that start working by the age of 25 will be dependent on Social Security, relatives, or charity by the time they hit 65.

The notion of retirement is a fairly new one outside of wealthy circles. For most of civilized history, people worked until they died. Not a glamorous way to go but that is simply the course of human history. Only until recently with the emergence of the middle class was there a general semblance that retirement may be accessible to all. However looking at actual figures reflects a very different picture. It is hard to get a perfect balance sheet as to where older Americans stand today since there are many differing resources floating out in the market. Yet one thing is consistent and that is, older Americans are entering into a major day of reckoning with not enough. Older Americans are woefully unprepared for what lies ahead in retirement. Many are basically at the mercy of Social Security, family, or charity. Not exactly the retirement paradise Wall Street started pitching to the masses starting early in the 1980s. The reason this has gone on for so long is the political system is co-opted by big money. Over this period of time real substantive reforms could have occurred. Instead a generation has passed and many have nothing to show for it even with the stock market at record highs.
Retirement plan number 1: have no savings
Everyday roughly 6,000 Americans hit the age of 65. Too bad 36 percent of Americans have nothing saved for retirement. The typical cost of medical service for someone 65 and older and living 20 more years is $215,000. Given that many have nothing, they are simply one medical event away from the poor house. This is why programs like Social Security and Medicare are protected with such fury by older Americans. In many ways, this is their only form of wealth in retirement. Most do not participate in the Wall Street casino.
Some interesting figures regarding older Americans:

This post was published at MyBudget360 on August 29, 2014.

Massive 60% Stock Market Correction Coming: ‘Period Of Extreme Turmoil’

The confidence game is almost up warns Prudent Bear Fund President David Tice. And when the economic recovery and stock market build-up is finally revealed for the conjecture that it really is we’ll have a sell-off of unprecedented proportions.
Markets could soon face a fall of up to 60 percent, two experts told CNBC on Wednesday.
A jolt to international confidence in central banks will lead to a 30 to 60 percent market decline, David Tice, president of Tice Capital and founder of the Prudent Bear Fund, told CNBC’s ‘Power Lunch.’ When this happens, he said, markets will face a ‘period of extreme turmoil.’
This crash will be precipitated, he said, by a disillusionment with the Federal Reserve’s ‘confidence game,’ which will then see inflation rise, and the Fed scramble to raise rates…

This post was published at shtfplan on August 28th, 2014.

Margin Debt & Trends

The debate over the pending crash in the stock market seems endless. Whether or not margin debt as reported by the NYSE has relevance any more is an interesting question in a world in which the retail investor has abandoned investing (decline in liquidity). The real marginal buyers are hedge funds and some banks while the cash buyers remain central banks. The make-up of the market has changed and the interest rates are well below even many dividends. So talking about total margin debt nearing $500 billion cannot be compared just on a nominal basis.

This post was published at Armstrong Economics on August 27, 2014.

Managing Expectations: Part III of III: Picking Mining Stocks In A Bear Market

In the first part of this three-part series, I discussed the importance of cycles such as four-year presidential elections and the life of a gold mine, and how they play into our investment strategy here at U. S. Global Investors. Part II dealt with statistical diagnostic tools, in which I strived to simplify the definitions of standard deviation and mean reversion and explain how they’re applied.
The third part of this series on managing expectations is devoted to fundamental resource stock evaluation. I’ll discuss some of the statistical tools we use to pick quality stocks during a treacherous bear market, such as what we’ve seen in gold stocks the last three years.
Let it be known, however, that, though our approach might vary slightly depending on the condition of the market, we fervently seek to pick the best stocks at the best price and execution.
How I Learned to Respect the Bear
The traditional definition of a bear market is when broad stock market indices fall more than 20 percent from a previous high – which sounds like a catastrophe, but is in fact ‘normal’ market behavior. According to self-professed ‘investing nut’ Ryan Barnes, a contributor for Investopedia, ‘bear markets… are a natural way to regulate the occasional imbalances that sprout up between corporate earnings, consumer demand and combined legislative and regulatory changes in the marketplace.’
Think of bear markets, then, as the gradual transition from warm summers into frozen winters. Trees lose their leaves, snow and ice blanket the ground, many animals – the bear the most notable – hibernate for the season. All life seems to take a breather. But just as you can always count on spring to emerge and, with it, new life, you as an investor can count on the market to rebound with fresh vigor.
As you might have known, the tail end of ‘winter’ is when you want to take part in the inevitable recovery. If the market never had a winter season, if it were perpetually trapped in an endless summer, investors would be hard-pressed to find an ideal entry point.
It’s easy to determine when winter becomes spring. But what about the end of a bear market? How do you know when it’s bottomed and the optimal buying time has been reached?
CLSA consultant Russell Napier, in his now-classic 2009 book Anatomy of the Bear, describes the determinants of the end of a bear market:
‘The bottom is preceded by a period in which the market declines on low volumes and rises on high volumes. The end of a bear market is characterized by a final slump of prices on low trading volumes. Confirmation that the bear trend is over will be rising volumes at the new higher levels after the first rebound in equity prices.’
Look at the chart below. You’ll see that, in three decades, the Philadelphia Gold & Silver Index (XAU) has never had a losing streak for more than three years.

This post was published at Gold-Eagle on August 25, 2014.

The Winner-Take-All Economy

When the majority of Americans examine the world around them, they see a stock market at record highs and modest apparent improvement in the economy, but, as John Hussman notes, they also have the sense that something remains terribly wrong, and they can’t quite put their finger on it.
Exceprted from John Hussman’s Weekly Market Comment,
According to a recent survey by the Federal Reserve, 40% of American families report that they are ‘just getting by,’ and 60% of families do not have sufficient savings to cover even 3 months of expenses. Even Fed Chair Janet Yellen seemed puzzled last week by the contrast between a gradually improving unemployment rate and persistently sluggish real wage growth.
We would suggest that much of this perplexity reflects the application of incorrect models of the world.
Before the 15th century, people gazed at the sky, and believed that other planets would move around the Earth, stop, move backwards for a bit, and then move forward again. Their model of the world – that the Earth was the center of the universe – was the source of this confusion.
Similarly, one of the reasons that the economy seems so confusing at present is that our policy makers are dogmatically following models that have very mixed evidence in reality.

This post was published at Zero Hedge on 08/25/2014