U.S. stock market on verge of collapse?

Joules MM1 · 12 October 2012

always enjoy a good theorists hyperbole thread.....add this:

The Jobless Claims Market
Thursday, October 11, 2012 at 11:44AM

The weekly Initial Jobless Claims reading has done a pretty good job mirroring the movement in the US stock market since the bull market began in 2009. Below is a chart of the S&P 500 versus the inverse of the Initial Jobless Claims (seasonally adjusted) reading since March 2009. With the inverse of the claims reading making a new bull market high this week, will the S&P 500 now follow?

http://www.bespokeinvest.com/thinkbig/2012/10/11/the-jobless-claims-market.html

(and a radar date today 12/10/12........lulz.....more majical theory numbers)

Joules MM1 · 12 October 2012

and wot about this one:

http://product.datastream.com/dscha...c8-f3bf-4f84-8d9a-bf06c10efb7f&action=REFRESH

Rick Harrell ‏@MacroRico

Is a rebound in global trade around the corner? Global PMI's showing a tentative trough. Chart: http://bit.ly/OFkDiH

to see the original jpeg click the link

aliceconer · 12 October 2012

Standing from the point of today, the U.S. stock market is still bullish. The Dow has risen nearly 9%; the Nasdaq Composite has climbed nearly 17% and the S&P 500 index has climbed nearly 14%.

Uncle Festivus · 13 October 2012

Joules MM1 said:
and wot about this one:

I recall vaguely recently that someone decided to add up all the global import & export numbers the result being that someone has been telling porkies coz it didn't net out? Probably our usual suspect, the kingdom of 'data to order'?

Uncle Festivus · 13 October 2012

Porper said:
Just goes to show that QE3 was expected and added nothing to an already bullish stockmarket. The same will probably happen when QE4 is announced although markets will probably be at substantially higher levels by then

There won't be a QE4 because, as you know from the FOMC minutes, QE3 is esentially open ended - the 'whatever it takes' Bernanke buckstop? Trouble is they've already spent some $60Billion and the market is 300 pts lower. I'm sure American taxpayers are happy with the value for money they are getting

So in the absence of any reasoning to substantiate the statement "The fact is markets are heading higher so why try and fight it?" I will just do a quick bit of arithmetic and become a disciple of blind believing, and come up with a Birinyi 'target' of another 31% by Oct 2013, for the Dow at 17000?? Is that how it works?

Of course this is all in jest coz I know you can't be serious - are you

Porper · 13 October 2012

Uncle Festivus said:
There won't be a QE4 because, as you know from the FOMC minutes, QE3 is esentially open ended - the 'whatever it takes' Bernanke buckstop? Trouble is they've already spent some $60Billion and the market is 300 pts lower. I'm sure American taxpayers are happy with the value for money they are getting

So in the absence of any reasoning to substantiate the statement "The fact is markets are heading higher so why try and fight it?" I will just do a quick bit of arithmetic and become a disciple of blind believing, and come up with a Birinyi 'target' of another 31% by Oct 2013, for the Dow at 17000?? Is that how it works?

Of course this is all in jest coz I know you can't be serious - are you

Obviously I'm joking Uncle because you are correct. All data out of the U.S, Europe & China is all tweeked to look better than it is.

You are also correct in suggesting "this time is different" and the end is nigh...if I was you I'd go and jump in your bunker before the world implodes. Last comment by me on the subject as I am just going to go and hang myself

Porper · 13 October 2012

Uncle Festivus said:
I will just do a quick bit of arithmetic and become a disciple of blind believing, and come up with a Birinyi 'target' of another 31% by Oct 2013, for the Dow at 17000?? Is that how it works?

Before I head off to the dungeon of life...you may be correct in your prediction there Unc. 17,000 a little too high but should get close.

Joules MM1 · 21 October 2012

oh, blame Jack Welch for all this good news.....

This Is The Biggest Economic Story In The World
Joe Weisenthal | Oct. 17, 2012, 1:45 PM

Read more: http://www.businessinsider.com/consumer-comeback-2012-10#ixzz29ux8pRee

great charts.....

ROE · 21 October 2012

Porper said:
Obviously I'm joking Uncle because you are correct. All data out of the U.S, Europe & China is all tweeked to look better than it

Good figure data to a pessemist is manipulation of data
Bad indicator figures are true data and not manipulated

just like stock, if you invest and stock goes up, you are a genius you know your stuff
but if it tanks, damn manipulations, shorters and HFT that cause it

bad headlines in mass media websites is true but good headlines, they are just main stream, they dont know their stuff must look at blogs and independent sites and youtube, those are true source of information....

Uncle Festivus · 22 October 2012

Porper said:
Obviously I'm joking Uncle because you are correct. All data out of the U.S, Europe & China is all tweeked to look better than it is.

No, it's not tweaked - it's the methodology & assumptions that are flawed - a big difference.

Uncle Festivus · 22 October 2012

Joules MM1 said:
oh, blame Jack Welch for all this good news.....

This Is The Biggest Economic Story In The World
Joe Weisenthal | Oct. 17, 2012, 1:45 PM

Read more: http://www.businessinsider.com/consumer-comeback-2012-10#ixzz29ux8pRee

great charts.....

Then why open ended QE if things are so good??

Several data show record highs already - to go higher would be bubble territory?

Company earnings already peaked = 200 pt tickle down or BTFD?

The last hurrah.........

white_goodman · 22 October 2012

Uncle Festivus said:
Then why open ended QE if things are so good??

Several data show record highs already - to go higher would be bubble territory?

Company earnings already peaked = 200 pt tickle down or BTFD?

The last hurrah.........

they need to re-inflate the housing market and further reduce unemployment, theyve been quite open about this

Uncle Festivus · 22 October 2012

Sell before the 'fiscal cliff'?

http://www.bloomberg.com/news/2012-...to-sell-for-gains-before-unfriendly-2013.html

Tax cuts first enacted during George W. Bush’s presidency and extended in 2010 are set to expire Dec. 31. Unless Congress acts, the tax increases along with automatic federal spending cuts will combine to form the so-called fiscal cliff. Taxes on the top 1 percent of U.S. households would increase by an average $120,537, according to a study by the nonpartisan Tax Policy Center.

Federal taxes on ordinary income will rise to as much as 39.6 percent from 35 percent. Long-term capital gains rates will increase to a maximum 20 percent from 15 percent, plus an additional 3.8 percent for high-income earners as a result of the 2010 health-care law.

The opportunity for individuals to transfer up to $5.12 million --- or $10.24 million for couples -- free of estate taxes and gift taxes also is set to expire at the end of the year and drop to $1 million. Legislation enacted in 2010 raised the lifetime estate-and-gift-tax exclusion for 2011 and 2012.

With about 10 weeks left in the year, taxpayers waiting for a decision from Congress before making investment moves may run out of time. Lawmakers won’t address tax and spending issues until they return to Capitol Hill after the Nov. 6 election.

Uncle Festivus · 22 October 2012

white_goodman said:
they need to re-inflate the housing market and further reduce unemployment, theyve been quite open about this

25% of house sales is 'distressed', and they are the properties that actually make it to market - there is still a massive amount of distressed properties on banks 'off-ledger' books.

House prices inflated by luxury sales....

Employment -

....in nearly the four years, since President Obama took office in January 2009, only 827,000 people have been added to the labor force, while during that same time period, 8,208,000 have been added to those not in the labor force.

"These figures reveal several troubling trends: That the jobs market is not keeping pace with U.S. population growth; that not enough younger Americans are joining the labor force to account for retirement among an ageing population; and that a large number of workers have become so discouraged that they simply stopped looking for work and left the labor force entirely. These factors pose serious fiscal challenges for the United States. A historically low labor force participation rate””together with an ageing population and a record number of people drawing federal welfare benefits””puts severe strain on the federal budget in both the near and long term."

UPDATE: Senator Jeff Sessions, the ranking member of the Senate Budget Committee, comments: “The essential point of this chart is not simply how many people are employed or unemployed, but to illustrate that more and more people are simply not part of the U.S. labor force. This confirms that we are on the wrong track. It is unsustainable to have such a large and growing number of people who are not part of the productive economy. This is not a political argument, but a description of the underlying instability in our economy that has so many Americans worried about the future. The question is what can we do to reverse these trends and start moving in the right direction.”

Longer term -

Uncle Festivus · 22 October 2012

Corporate profits have peaked?

Corporate Profits as a share of GDP. It's a pretty rough approximation of corporate profit margins, and it shows that margins are very close to an all-time high. Not only are they at an all-time high, but they're way out of line with recent decades.

Read more: http://www.businessinsider.com/fisc...te-profits-and-deficits-2012-10#ixzz29zU2KPxA

Knobby22 · 22 October 2012

Uncle Festivus said:
Corporate profits have peaked?

View attachment 49411

Corporate Profits as a share of GDP. It's a pretty rough approximation of corporate profit margins, and it shows that margins are very close to an all-time high. Not only are they at an all-time high, but they're way out of line with recent decades.

Read more: http://www.businessinsider.com/fisc...te-profits-and-deficits-2012-10#ixzz29zU2KPxA

Is that what it really means? or is it just that they control more of GDP than in the past. e.g. even sandwich shops are corporate now (subway).

white_goodman · 22 October 2012

how quaint...

the reduction in the participation rate is what would be expected with an ageing boomer population, starting a graph at 2009 the start of the crisis is pretty dumb and doesnt represent the story whatsoever... unemployment is coming down in the US, you can argue over the figures however you want, but Unemployment Rate = LF - E/LF.
Regarding property theres a hell of a lot of inventory in some of the hardest hit areas, no argument. Look at MBS pricing, housing starts, housing finance, active involvement of the Fed at the long end of the curve.. the objectives are clear... The Fed is TRYING to inflate out of the mess, the arguement is whether it will work. My opinion is that it will until it wont, they are sitting on too many assets (bonds) that its going to be ugly when it hits the market.

looking at your next post it is true govt deficit spending/monetary stimulus has been a large driver of current corporate profits, looking at Richard Koos hypothesis, this was needed with regard to the amount of corporate/personal deleveraging.. However the assumption here is when deficit spending falls we are all effed, which may be true however corporates are sitting on so much cash which is parked on the sideline due to expectations/confidence. When deficit spending starts decreasing id logically expect this to be in light of growing business investment, deploying capital etc, ie govt saving offset by private investment

Uncle Festivus · 22 October 2012

white_goodman said:
how quaint...

the reduction in the participation rate is what would be expected with an ageing boomer population, starting a graph at 2009 the start of the crisis is pretty dumb and doesnt represent the story whatsoever... unemployment is coming down in the US, you can argue over the figures however you want, but Unemployment Rate = LF - E/LF.

Huh?? The second chart starts at 1975! The first chart was just Obamas' effort.

U3 doesn't tell the real story, more of a political metric. If that's the figure that makes you happy then go with with it, but it's not what is happening in the real world.......even U6 is still 15%.....

white_goodman said:
.. However the assumption here is when deficit spending falls we are all effed, which may be true however corporates are sitting on so much cash which is parked on the sideline due to expectations/confidence. When deficit spending starts decreasing id logically expect this to be in light of growing business investment, deploying capital etc, ie govt saving offset by private investment

They may have more cash but they are still net debtors. Only a handfull, of the SP500 companies at least, are net creditors. Why wouldn't they take advantage of essentially 'free' cash? It's just a pity it goes into buy-backs & bonuses rather than productive assets?

The problem will come when inflation takes hold, as per the charts in Joules MM1 Jack Welch post, and the Fed will have to reluctantly start raising rates. That is, unless the NBER realises they are already in a recession......

white_goodman · 22 October 2012

Uncle Festivus said:
Huh?? The second chart starts at 1975! The first chart was just Obamas' effort.

U3 doesn't tell the real story, more of a political metric. If that's the figure that makes you happy then go with with it, but it's not what is happening in the real world.......even U6 is still 15%.....

View attachment 49412

They may have more cash but they are still net debtors. Only a handfull, of the SP500 companies at least, are net creditors. Why wouldn't they take advantage of essentially 'free' cash? It's just a pity it goes into buy-backs & bonuses rather than productive assets?

The problem will come when inflation takes hold, as per the charts in Joules MM1 Jack Welch post, and the Fed will have to reluctantly start raising rates. That is, unless the NBER realises they are already in a recession......

facepalm.jpg..

did you expect the non labour force to decrease over a period of 40 years when the population increased? Do you even understand the numbers and what they represent? This is the participation rate for the US:

PR= LF/Total working age Population

and what im saying is the natural decrease as was the natural increase prior is largely attributable to age demographics.. Now youve showed me a chart where unemployment rate (Unemployed/LF) has been reducing, which is exactly the plan of the Fed, Bernanke has largely abandoned inflation/price targeting more for economic central planning.. which is bad long term, and imo quite different from the practices of our own RBA (acknowledgement of imperfect knowledge/unintended consequences)

The problem isnt so much reluctantly raising rates its having to raise rates and game the market whilst slowly offloading all its long end treasury exposures.. I have large doubts

Uncle Festivus · 22 October 2012

white_goodman said:
facepalm.jpg..

did you expect the non labour force to decrease over a period of 40 years when the population increased? Do you even understand the numbers and what they represent? This is the participation rate for the US:

PR= LF/Total working age Population

What are we talking about - the participation rate or Not in labour Force figures?? My charts refer to NiLF......?

U.S. stock market on verge of collapse?

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