Trading Fall and Spring Market Disasters
by Roger Wiegand
Posted originally 21 August 2009
Our technical and fundamental forecasting suggests we get a double whammy in the equities markets throughout the world during fall of 2009 and later-spring-early-summer of 2010. While the fall event could be a nasty one, the June-July, 2010 smash has potential to be infinitely worse.
SINCE OUR WORK IS USED by traders and investors preferring differing cycles, markets and goals, we are discussing these things to offer risk-protection ideas. We all search constantly for new trades to make money. However, our focus here is to strongly warn about loss of capital. This is even more important right now than any new ideas on making money.
Obviously, we’re offering a strong degree of supposition and maybe some flat-out guesstimates. But, after watching the global and more importantly our American political circus and evil events from New York trading houses and banks we’re getting a grip on forthcoming events.
To accept our forecast here are some expectations
1. The Obama Administration is determined to see it through to the bitter end on its reckless spending in Health Care, Cap ‘n’ Trade, TARP, Monetization of U.S. Bond Markets and the continuing saga of Digitizing-Printing gazillions of U.S. Dollars. We see nothing to make this administration change their ways. On Fox News last evening a responsible reporter said, “Obama will crash-and-burn implementing his specious policies going to the bitter end. He is so determined to jump-push everyone off the cliff, we can almost guarantee he’s a one term president.”
We say the president is just a puppet for global bankers and corporate directors. He will not waver, as he will do just as he is directed to do; like all former presidents in recent years. These gang members want centralized power and 100% government control. They will first get chaos and then something far worse if they persist and it goes too far.
2. Market pundits, analysts and other alleged brilliant observers romantically believe in and are enamored with the “Green Shoots Theory.”
The mindset of these folks is to “make the quarter look good and to hell with the long view.” Unlike their Asian counterparts they think the annual calendar is composed of 90 days. While China has a 100 year plan, USA CEO’s think in terms of weeks and seasons and about how quickly they can escape with millions in stock options before everything takes a suicide swan dive over Obama’s cliff.
3. The same news gang firmly tell us China is hot and doing well and will continue to do so. China will be the savior of the entire economic world as they hold all necessary ingredients for a booming economy. China has some fantastic numbers for growth.
China is now in three massive bubbles: (1) Real Estate (2) The Stock Market, And, (3) A Pyramid of Debt. When this baby blows, and it will very soon, they will lead the world over the edge and into the abyss. After all, on the daily trading clock, they are first up after the Aussies. Chinese exports are dead and their organic growth is organ-donations-seizures-sales. They are toast just like the rest of the world.
4. A laundry list of phony stats including unemployment, inventories, consumer sentiment, GDP reports, and solidity in banks and corporations coupled with Washington’s abomination policies will save our collective rear ends.
National USA unemployment is 20% not 10%. And, it’s going to get a whole lot worse. Inventories were temporarily sold-off to the bone demanding more short term production. Who is going to buy this newer junk? Who has credit? No one except the money-printing government and that ends sooner rather than later.
5. The Iraqi-Afghan War is winding down and the newer, spreading Afghan war is under control.
Yesterday more violence erupted in Iraq and destroyed free elections in Afghanistan as the rebels wrecked 800 voting places. This regional mess has gotten worse not better and was an ill-advised adventure at best. We say the USA and their compatriots walk away just like in Vietnam.
6. The Middle Eastern conflicts are subsiding as the Administration’s newer policies are working.
Our president has succeeded in destroying relations with Israel, while pandering to Middle Eastern criminals responsible for most of these problems over centuries. Don’t take sides here just look at the facts. For years the USA has Kow-Towed to the Sheiks to ensure the flow of oil. It sure worked well didn’t it? Witness 9/11 and about 100 other similar examples. The only thing these folks understand is brute force and cruelty. This is why WW III is coming to a theater near you about 2012 when global economic forces instigate new world war for power and oil.
7. Energy prices along with supply and demand figures tell us this mess is over and we can relax. (See answer for number six above).
8. Global Warming is a huge threat to the world therefore we must crush the broken USA economy with new reckless tree-hugger spending, or else we all go up in smoke by next Sunday afternoon.
Goromania and Global Warming are just another tremendous scam to create a problem and make the taxpayers pay for it. The next ice age is scheduled for 2040. These dolts in their infinite wisdom missed seeing-counting a North Pole iceberg the size of Greenland.
9. While the states within the USA are struggling with dire economic problems right now, the president says no help for you and gives the TARP billions to bankers who just park it to replenish their broken balance sheets. Since those bankers are now made whole, of course all is well and they will go lend like crazy.
Bankers are sitting on all the cash as they need to stay alive. They are not lending it to anyone as the good credits won’t borrow and the bad credits can’t pay it back. So, the crooked banksters just luxuriate in their new-found stolen taxpayer wealth waiting for the next trading-scam-opportunity. No loans, no business, broken consumers, hello depression.
10. While the USA GDP and that measure of other nations have entered points of no return, we can blunder our way out of this mess by printing more dollars and bonds while persuading non-USA countries to keep giving us credit and buying our valueless paper.
Excuse me but the Asians and others are frantically working to shed USA paper and avoid buying more to escape and remain solvent. Our splendiferous leaders like Geitner, Paulson, and Chopper Ben were-are passing new paper debt from one pocket to the other. These idiots told us they’ve done this already to the tune of $300 Billion and yes they won’t do it any more. Quick get a shovel or my shoes are covered in a flash.
11. Since Germany is the economic engine of Euroland and they have all under control they will lead us out of this desolation along with China as we all march forward to the old paradigms.
We mentioned where China is headed. Germany was smarter and has less public debt but they are still stuck in the socialist paradigm and worse, their export customers are vanishing. They fall too, but just not as hard as the rest.
12. Since the food and grain futures have sold down of late, there is plenty of food to go around and don’t worry about having only a one month corn-bin supply, or our suspect threatening weather.
The world is headed for a food-drought induced shortage disaster. Once again Pollyannas speak of this week, or this month and cannot even see the intermediate view of the next 18 months. Yes, prices fell with the current no-spendy depression. However, people have to eat and they have to eat every day. The bigger picture spells a disaster of wasted water, grain, under-production and major shortages. Yet, Washington promotes corn-ethanol. Idiots.
13. Obviously since food and grain markets are under control other growers are doing well. (See number 12).
14. And of course if this is true, clean water is available in prodigious amounts for years to come.
China has a major, major clean water emergency. 1/3rd of China is fried with no water. Parts of the USA are going the same way. The Great Lakes were historically low the past few years and Atlanta’s public water supply was literally down to days remaining last year. Now in California, a veggie-growing area the size of Rhode Island has been water-deprived by tree huggers to save a two inch minnow that the birds will eat anyway. This is a major blow to veggie growers, employees and consumers of that produce. Good clean water is increasingly scarce and expensive. Intelligent ideas from government are most scarce of all.
15. The auto industry is now back on track as the government is providing free down payments to unqualified car buyers with its “Cash for Clunkers Program.” Naturally, this idea is proceeding smoothly as government failed to pay the dealers for incurring that debt in hopes of being repaid.
Government Motors will crash and burn after the Cash for Clunkers Program screws the dealers with non-payments or long-delayed payments. Did those dealers actually believe they would be reimbursed by the Obama administration? Who will buy a $40,000 electric car that stops after 100 miles? A consumer with no credit? Ford and the Asians are the last men standing. They are all losing money despite the news. Count the debts and their sales and you’ll get the real picture.
16. The USA service economy composed of laundry services, convenience store employment, grass cutting, sewing, in-home child care, government employment, and taking-out each others trash should really make those green shoots bloom to the sky.
USA real GDP to debt crossed over the River Of No Return above 6%. Now it’s at 12% waiting for the crash. I’m sure we will all pay our $1500 per month health care bills from lawn cutting earnings.
17. The new health care program allegedly gives free services to 50 million non-payers and it won’t cost us any more money. In fact the cost of health care will go down. We’ll make those naughty insurance companies pay and that’s where we get the cash, along with some new taxes of course.
First of all, among the 50mm described, only 23mm are poor and deprived of any insurance. The rest don’t want it, and prefer to spend money on better investments and bills. Next, even if 23mm were dumped into a new system, where are those doctors and nurses to administer this care? No where. They can’t be found as they didn’t even enter medical school. Come back in ten years-maybe.
18. This new health care plan will be a dandy as we will find new medical staff fully-trained with years of experience to service those 50,000,000 million new patients.
(See number 17 above). Also, would you spend $250,000 on an 11 year medical education when you see where this national mess is headed? Hell no! Go work at Goldman Sachs where the average employee can earn $750,000 per year trading and drinking coffee. Just graduate from high school, understand how to bet and play cards and find a Goldman insider to refer you for a trading job.
19. California just got cash from someone so their troubles are over and gosh, those guys are even paying back their IOU’s due in September; one month early! They must be all economically healed again.
Who knows where they got the money? It doesn’t matter as they will not pay it back anyway. Further, this state returns to its prior emergencies in 30-60 days. The rental trucks are going one way-out of California just like from the Midwest rust-bucket states. After California goes BK watch for New York, New Jersey, and Florida. Maybe Nevada beats them all and files first.
20. The new CEO of AIG told us this morning during a Bloomberg exclusive report he will pay back the billions borrowed from taxpayers and make that company whole as we all dance happily into the economic sunset together.
Since personal and corporate buyers of insurance are going broke and canceling policies right and left, this certainly seems like a logical plan. AIG will be borrowing more TARP funds and they could hit the BK drain anyway.
21. Naturally, the top dictators of our world from North Korea, the Middle East (take your pick) along with Chavez, Fido and other South American Leader-Guys And Gals will not foment trouble for the USA but instead buy into Obama’s fig leaf, Neville Chamberlain appeasement strategy. Wow! Maybe KGB’s Putin will come to the White House with flowers instead of missiles.
The good news here is whoever among this dictator menagerie makes a naughty move first, will be hammered into the dust by the most powerful military in the world-the USA. And, Israel will not standby waiting for Obama’s blessing to attack Iran. It’s probably all over before he wakes up for breakfast.
22. The industrial rust-bucket Midwest will regain its former employment glory with millions of new higher-paid manufacturing jobs as in the “North Shall Rise Again.”
We suggest that like the City of Detroit, now returning to the woodsy, agrarian wild, so will the rest of the Midwest. People are leaving the state for work at lower pay. Never again will the Midwest contain that manufacturing might of the 1890’s to 1960’s. The American auto industry has moved to non-union locations in the south and out of the country. They cannot afford Obama wages and benefits. We noticed this week the very high class University of Michigan is extending more student loans to fill their colleges. Those kids do not have the money for tuition, room and board. If the U of M did not help them there would be lots of empty seats at the U this fall.
23. Consumers will find work and since they are 70% of the economy we can for sure expect them to come-on-down with billions in new spending for Chinese junk supporting USA retailers and Asian exports forever.
Watch for a major back-to-school fall retailing disaster. Unemployment will rise for at least another three years, or even longer. Jobless consumers can’t buy anything. They get food stamps and utility shut- offs. Asian exporters are finished. They have no western buyers for their stuff and the Asian organic home-grown consumer is just a myth.
IF YOU BELIEVE THESE FANTASIES you’ll believe anything. We’re in a world of hurt but this does not mean we go down with Obama’s ship. Here are some ideas for preserving your property and your capital:
• Get ruthless in elimination of personal debt. Go through your expenses and check book culling out and stopping as much fluff as possible.
• Own physical gold and silver. If you have a slim budget start with one silver coin and work your way up from there.
• Fill-up the pantry at home. Store some water.
• Keep 30-90 days of cash in your hand in the house.
• Own a generator. The grid is coming apart at age 50, or higher. There is no money for repairs.
• Sell your cars and get a pick-up truck. Pay cash if possible.
• Plant a garden.
• Network with friends and neighbors to help each other. Give to charity to the best of your ability.
• Get out of the stock market except for precious metals shares and trades. Most all paper trades are open to being wrecked by an imploding system.
• Good shorts are major stock markets, retailers, the US Government, any government programs, real estate and its taxes, urban area living, and trusting the general news.
Financials crashed in fall 2008 with Lehman. Recovery began with TARP May, 2009: During this month of August we have more of a dead cat bounce ahead with a big smash in Mid-September. While precious metals and their shares are off this August 20, 2009, for the intermediate term (next 90 days) the trend reverses and moves to rallies.
Keep in mind, if you own paid for stuff it will most likely remain in your hands; not in somebody else’s. That includes gold and silver.
Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive earlier. Time is short.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert.