TODAY'S TIPPING POINTS 
| THIS WEEKS TIPPING POINTS | MACRO NEWS | MARKET ANALYTICS | 2012 THEMES |
Subscriber REPORTS - SPECIAL FREE 3-MONTH TRIALS AVAILABLE |
MACRO ECONOMIC & RISK ANALYSIS |
THESIS 2011: Beggar-Thy Neighbor -(OPEN ACCESS - 37 Pages of 217) >> GO
Sign Up for 2012 Thesis -All first six chapters now available - FREE >> SIGN-UP |
 SEPTEMBER 2012: GLOBAL MACRO TIPPING POINT - (Subscription Plan III)
STALL SPEED : Any Geo-Political, Economic or Financial Event Could Trigger a Market Clearing Fall
As we reported last month, Global Economic Risks have taken a noticeable and abrupt turn downward over the last 60 days. Deterioration in Credit Default Swaps, Money Supply and many of our Macro Analytics metrics suggested the global economic condition is at a Tipping Point. Though we stated "Urgent and significant actions must be taken by global leaders and central banks to reduce growing credit stresses" nothing has occurred even after the 19th disappointing EU Summit to address the EU Crisis. Some event is soon going to push the global economy over the present Tipping Point unless major globally coordianted policy initiatives are undertaken. The IMF recently warned and reduced Global growth to 3.5%. This is just marginally above the 3% threshold that marks a Global recession. This would be the first global recession ever recorded. The World Bank is "unpolitically'projecting 2.5%. The situation is now deteriorating so rapidly, as to be impossible to hide anylonger.
MORE>> EXPANDED COVERAGE INCLUDING AUDIO & MONTHLY UPDATE SUMMARY
|
 AUGUST 2012: MONTHLY MARKET COMMENTARY (Subscription Plan II)
MONETARY MALPRACTICE : Moral Hazard, Unintended Consequences & Dysfunctional Markets - Monetary Malpractice has had the desired result of driving Investors into becoming Speculators and are now nothing more than low-odds Gamblers. There is a difference between investing, speculating and gambling. At one time these lines were easy to comprehend and these distinctive groups separated into camps with different risk profiles in which to seek their fortunes. Today investing has become at best nothing more than speculating and realistically closer to outright gambling.
The reason is that vital information is either opaque, hidden or manipulated. Blatant examples such as: the world of off balance sheet debt, Contingent Liabilities, Derivative SWAPS, Special Purpose Vehicles (SPV), Special Purpose Entities (SPE), Structured Investment Vehicles (SIV) and obscene levels of hidden leverage make a mockery out of public Financial Statements. Surely if we get our ego out of this for a moment we can see that stockholders are now nothing more than gamblers? What is worse is that the casino is rigged. With Monetary Policy now targeting negative real interest rates, it is forcing the public out of interest bearing savings and investing, and into higher risk vehicles they would have shunned historically. They have no choice as the Monetary Malpractice game is played against them.
There is an old poker player adage: "when you look around the table and can't determine who the patsy with the money is, it is because it is you." MORE>> |
MARKET ANALYTICS & TECHNO-FUNDAMENTAL ANALYSIS |
 AUGUST 2012: MARKET ANALYTICS & TECHNICAL ANALYSIS - (Subscription Plan IV)
The market action since March 2009 is a bear market counter rally that has completed a classic ending diagonal pattern. The Bear Market which started in 2000 will resume in full force when the current "ROUNDED TOP" is completed. We presently are in the midst of of a "ROLLING TOP" across all Global Markets. We are seeing broad based weakening analytics and cascading warning signals. This behavior is typically seen during major tops. This is all part of a final topping formation and a long term right shoulder technical construction pattern. - The "Peek Inside" shows the detailed coverage available this month.
MORE>> EXPANDED COVERAGE INCLUDING AUDIO & EXECUTIVE BRIEF |
 AUGUST 2012: TRIGGER$ (Subscription - Plan V)
TRIGGER$ publications combine both Technical Analysis and Fundamental Analysis together offering unique perspectives on the Global Markets. Every month “Gordon T Long Market Research & Analytics” publishes three reports totalling more then 380 pages of detailed Technical Analysis and in depth Fundamentals. If you find our publications TOO detailed, we recommend you consider TRIGGER$ which edited by GoldenPhi offers a ‘distilled’ version in a readable format for use in your daily due diligence. Read and understand what the professionals are reading without having to be a Professional Analyst or Technician.
TRIGGER$ ALERTS (SPECIAL 2 WEEK TRIAL AVAILABLE - TRIAL - 2 UPDATES PER WEEK)
2 WEEK FREE TRIAL Our Inter-Issue Updates and Alerts are Included with a Monthly Subscription to Triggers. Between issue publication receive updates on Technical Analysis, Economic Analysis and anything note worthy for your trading and investing.
Technical Analysis Alerts would include hitting potential Trigger Points, Pivots orsome progression that requires you immediate attention.
- Economic Analysis Updates alert of any fundamental economic events that may have impact on the markets and what to expect.
- Inter-Issue Updates and Alerts allow us to keep current with the markets and provide a more fluid and stable ongoing market evaluation.
Technical Updates occur twice a week, Alerts as the markets dictate. Sign-up now |
Latest Public Research ARTICLES & AUDIO PRESENTATIONS |
RSS  |
Password: macro
|
 |
 |
 |
 |
Last update:
09/12/2021 5:26 AM |
Postings begin at 5:30am EST
and updated throughout the day |
External Articles: |
Articles open in new window |
"BEST OF THE WEEK " |
Posting Date |
Labels & Tags |
TIPPING POINT or 2012 THESIS THEME |
HOTTEST TIPPING POINTS |
|
|
Theme Groupings |
 |
|
|
|
|
|
|
|
QE3 - First Addition At A Market High -- Extremely Questionable
If QE3 Happens, It Will Be Different Than QE2 And QE1 In One Significant Way 09-11-12 Doug Short via BI
"The reaction function of the FOMC seems to have changed. In my simple terms, QE has never always come with the stock market down YTD -- now, it appears we’ll receive it with S&P up 14%."
That's from a Goldman desk note send around earlier today, and it's a great point.
This chart from Doug Short shows it nicely, that all previous QEs and Twists came during periods when the market was at a low.
So will we wee QE3 on Thursday? We argued NO. John Carney at CNBC says YES.
Carney is correct that the weak state of the economy probably complies with the Fed's previously stated preconditions for easing. That being said, the new twist is the potential ECB gamechanger that could be a real boon in the next few months.
For that reason, a punt 'til December seems likely.

|
09-12-12 |
MONETARY |
CENTRAL BANKING |
LIVING WITHIN OUR MEANS - Developed Economies the Debtor Nations
Jeff Gundlach's Eye-Opening Presentation 'Mirror, Mirror On The Wall' DoubleLine via BI

|
09-12-12 |
GLOBAL
SITUATIONAL ANALYSIS |
2
2- Sovereign Debt Crisis |
GLOBAL RISK - Regional Analysis Suggests High Global Risks
Morgan Stanley's Guide To The 'Twilight Zone' Of The Global Economy 09-11-12 Morgan Stanley Research via BI
 |
09-12-12 |
GLOBAL
RISK |
GLOBAL MACRO |
SECTOR POSITIONING - Morgan Stanley Research Goes Negative
Morgan Stanley's Guide To The 'Twilight Zone' Of The Global Economy 09-11-12 Morgan Stanley Research via BI

|
09-12-12 |
SECTOR ROTATION
DEFENSIVE |
ANALYTICS |
MARKET RISE - Policy, Production and Positioning
Why Have Markets Surged So Much? It All Comes Down To The 3 P's 09-11-12 BoAML via BI
BofAML's Michael Hartnett has an excellent note answering the question: Why is the equity market up so much?
Hartnett chalks it up to the 3 P's: Policy, production, and positioning.
Policy, of course, refers to the actions taken by the ECB (and possibly the Fed) to crank back up the monetary stimulus.
Production refers to the quality of the data, which is no longer surprising to the downside. Weak data is no longer failing to incite treasury buying, as it did not longer ago.
Positioning refers to the fact that investors have been caught on the wrong side of this risk trade. Numerous investors have missed this rally.
And it's for this last point that there seems to be a desire to want to hear that this can go on longer.
All the big analysts are being asked this how much longer question, and they're generally answering that it can go a bit higher.
Here's Goldman's Dominic Wilson
With the summer rally extending, the key question is whether markets can still move higher. On balance, we think they can, but the risks are rising. The rally so far has been driven mostly by policy and its impact on compressing risk premia. While there is more event risk as decisions shift from the ECB to governments, we expect OMTs to be activated in the next few weeks and we anticipate a shift to QE3 this week. These moves are likely to keep the forces for easy financial conditions in place. What will now be needed is more evidence of cyclical improvement from the US and global data. News there has been more disappointing. Our view is that it will look somewhat better over the coming weeks. If that occurs alongside the policy tailwind, we think markets should move higher even from current levels. Without it, we doubt they can.
|
09-12-12 |
RISK-On-Off |
ANALYTICS |
INFLATION - Global Food Price Index
Jeff Gundlach's Eye-Opening Presentation 'Mirror, Mirror On The Wall' DoubleLine via BI

|
09-12-12 |
GLOBAL INDICATORS
INFLATION PRESSURES |
24
24 - Food Price Pressures |
MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - Sept 9th- Sept. 15th, 2012 |
|
|
|
EU BANKING CRISIS |
|
|
1 |
ECB - SMP 2.0 (OMT) Not Really True Sterilization
The Truth About The ECB's Plans To 'Sterilize' Its Purchases Of Government Debt 09-09-12 BI
When the ECB announced its new plan to buy peripheral government debt in Europe (for the purpose of reducing yields) there was some concern over the fact that the purchases were going to be "sterilized."
In theory what this means is that if, say, the ECB goes out and buys 50 billion EUR worth of sovereign debt, then somewhere else it will remove 50 billion EUR from the system so as to avoid inflation (and placate the Germans).
Some people wondered: What assets will the ECB sell in order to finance these purchases.
But the market was clearly not worried about this sterilization news, as evidenced by the big market surge on Thursday and Friday, as investors realized that "sterilization" is mostly for show, with little real impact on the amount of money in the system.
In a note from last December, JPM's Greg Fuzesi explained how the ECB engaged in bond sterilization (this was in reference to the old SMP program, but the gist is the same.
When the ECB purchases peripheral government bonds through its Securities Markets Programme (SMP), it pays for these by creating new bank reserves (i.e., through the modern form of printing money). In terms of its balance sheet, both assets and liabilities increase. The purchased peripheral bonds are held as assets in the SMP category and are matched on the liability side by a larger amount of bank reserves. In the first instance, the new reserves are added to the current accounts that commercial banks hold at the ECB. In this form, the reserves are fully liquid as they count towards meeting banks’ reserve requirements and they can be used to settle interbank payments.
The way the ECB has chosen to sterilize these reserves balances is to encourage banks to shift them from the fully liquid current accounts into fixed term deposits, which are just another form of reserves. The ECB could offer these at any maturity but has chosen a short maturity of just one week (likely for operational reasons). The deposits are auc- tioned through a tender procedure, which requires banks put in bids, stating the amount they are willing to tie down for the one week period and the interest rate at which they are willing to do so. The maximum interest rate that the ECB is willing to pay is the main policy interest rate, and it be- gins by picking the cheapest bids until it has met its target level.
So basically, the "sterilization" just means that banks commit to keep some cash at the ECB for a fixed period of time, so it doesn't technically enter the system. And since that money at the ECB is liquid and guaranteed it's not a problem.
As for whether the sterilization really matters, the answer is: Not really.
First, it does not shrink the ECB’s balance sheet back to its original size, as would be the case if the ECB sold other assets to finance its SMP purchases. It is of course debatable whether a larger central bank balance sheet is a source of concern per se (e.g., of the inflationary sort). But, even if it is, the sterilization method used by the ECB clearly does not address this concern.
Second, viewed from the perspective of the banking system, purchases of peripheral government bonds by the central bank remove a risky asset and replace it permanently with highly liquid reserves (whether these are subsequently sterilized or not). In addition, the sterilization operation ties the funds down for only a very short one-week period and these can still be used as collateral at other ECB refi- nancing operations. Hence, the sterilization itself does not neutralize the impact on the banking system’s balance sheet, which has become permanently more liquid. Whether this, in itself, encourages banks to lever up in other ways (e.g., by making other risky investments or aggressively growing their loan books) is debatable. But, in any case, the sterilization does not fully reverse the changes.
So it's just technical accounting stuff. The ECB can buy unlimited volumes of sovereign debt, provided the country whose debt its buying remains in good compliance with reforms.
|
09-10-12 |
ECB |
1
1- EU Banking Crisis |
SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] |
|
|
2 |
DEBT JUBILEEES - Historically the Way Out
138 Years of Economic History Show that It's Excessive PRIVATE Debt Which Causes Depressions 09-09-12 George Washington via Zero Hedge
The National Bureau of Economic Research has published a new paper analyzing 138 years of economic history in 14 advanced economies, which proves that high levels of private debt cause severe recessions.
As summarized by Business Insider:
Through a series of tests run on a sample of 14 advanced economies between 1870 and 2008, Mr Taylor establishes a link between the growth of private sector credit and the likelihood of financial crisis. The link between crisis and credit [i.e. private debt] is stronger than between crises and growth in the broad money supply, the current account deficit, or an increase in public debt.
Over the 138-year timeframe Mr Taylor finds crisis preceded by the development of excess credit, as in Ireland and Spain today, are more common than crisis underpinned by excessive government borrowing, like in Greece. Fiscal strains in themselves do not tend to result in financial crisis.
The study shows that excessive private debt is a much more accurate and consistent predictor of financial crisis than the amount of public debt. (However, high levels of public debt exacerbate the problems caused by massive private debt, since governments which are already “in the red” have little ammunition left with which to help out the economy.)
The NBER study validates what Steve Keen has been saying for years: excess private sector debt is the main driver of deep recessions and depressions. And yet Ben Bernanke and all other mainstream economists literally believe that the amount of private debt doesn’t matter and isn’t even important to quantify.
Angry Bear writes:
[Consumers certainly rang up too much debt.] But that ignores the really massive runup: financial corporations’ debts. Starting at a little over 10% of GDP in 1970, they hit almost 80% by 2000, and when the crash hit they were over 120% of GDP — a 10x, order-of-magnitude increase over 40 years.
The basic story is very simple. It goes like this (in my words):
• Banks (and shadow banks) make money by lending. Bankers have every incentive to increase their loan books, even by extending questionable loans, because bankers don’t personally bear the eventual, down-the-road losses from loan defaults — they’ve gotten their money already.
• When banks run out of real, productive enterprises to lend to — enterprises that can pay back loans and interest from the production and sale of real goods that humans can consume — they start lending to speculators (gamblers) who are buying financial assets in hopes that their prices will rise.
• That lending — extra money being pumped into the system — does indeed drive up the price of financial assets, far beyond the value of the real assets that (according to most economists you listen to) supposedly underpin those financial assets’ value.
• Eventually people realize that the value of financial assets far exceeds the value of real assets — and far exceeds the capacity of the real economy to service the loans that drove up those financial asset prices. Prices of financial assets plummet, borrowers default because there just ain’t enough real income to service the loans, financial-asset prices plummet some more, all in a downward spiral — with all sorts of collateral damage to the real economy.
There’s your (economy-wide) Ponzi scheme. Households and nonfinancial businesses definitely participate (the financial industry makes it almost irresistible not to), but it’s driven by the financial industry, and a huge proportion of the takings go to players in the financial industry.
What’s the Solution?
We are in a bit of a pickle. As Keen warns:
[We’re going into] a never-ending depression unless we repudiate the debt, which never should have been extended in the first place.
What’s the solution? To remember history.
Specifically, we’ve known for over 4,000 years that debts need to be periodically written down, or the entire economy will collapse.
The ancient Sumerians and Babylonians, the early Jews and Christians, the Founding Fathers of the United States and others throughout history knew that private debts had to be periodically forgiven.
Debt jubilees are a vital part of the Christian and Jewish faiths. And the first recorded word for “freedom” anywhere in the world meant “debt-freedom”.
As some of the leading modern economists argue, forcing big banks, bondholders and other creditors to write down some of their bad debts is the only way out of our economic malaise.
Note: If you want to know learn about Minsky’s economics, read Steve Keen, not faux Minskyian |
09-10-12 |
GLOBAL
RISK |
2
2- Sovereign Debt Crisis |
RISK REVERSAL |
|
|
3 |
CHINA BUBBLE |
|
|
4 |
JAPAN - DEBT DEFLATION |
|
|
5 |
BOND BUBBLE |
|
|
6 |
CHRONIC UNEMPLOYMENT |
|
|
7 |
GEO-POLITICAL EVENT |
|
|
8 |
GLOBAL EXPORT - First A PMI SLowdown, Now EXPORTS
These Charts About The Global Economy Will Give You Cold Sweats 09-05-12 BI


|
09-10-12 |
GLOBAL GROWTH |
17
17 - Shrinking Revenue Growth Rate |
TO TOP |
MACRO News Items of Importance - This Week |
GLOBAL MACRO REPORTS & ANALYSIS |
|
|
|
US ECONOMIC REPORTS & ANALYSIS |
|
|
|
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES |
|
|
|
QEX - World Awash in Liquidity
Two Days Ahead Of More QE, JPM Finds That World Is Already "Drowning In Liquidity" 09-10-12 JP Morgan's Michael Cembalest via Zero Hedge
JPM says 77% of investors expect with be a NEW QE round (mostly MBS) between $200 and $500 billion in QE, the world is, also in the words of JP Morgan, drowning in liquidity. In other words, according to the central planners, not only is debt the fix to record debt, but liquidity is about to be unleashed on a world that is, you guessed it, already drowning in liquidity. The bad news: everything being tried now will fail, as it did before, because nothing has changed, except for the scale, meaning the blow up will be all that more spectacular.
From JPM's Michael Cembalest:
It has been a strange year. If you were concerned about the global economy this year, you were right:
- Leading indicators of manufacturing, such as new orders, are weakening just about everywhere
- Chinese, Korean and Taiwanese exports are slowing sharply; China may be growing at only 6%
- European growth is ~0%, with the periphery in recession. Germany business surveys also fading
- Last week’s US jobs report was weak across the board (payrolls, work week, labor force participation and wages)
- US capital spending trends are slowing (e.g., capital goods orders ex-aircraft)
- Countries like Brazil are showing signs of industrial fatigue due to an overly strong currency in 2010-2011
- The US election does not look like it will bring clarity to the US fiscal/debt ceiling divide (polls show Democrats keeping the White House and Republicans keeping the House of Representatives)
- US housing is staging a modest recovery, but it’s not a game-changer given its smaller contribution to employment
- Corporate profits are high, but the trend in EPS revisions is negative and profits growth is slowing
However, global equity markets have done well, up 13% so far in 2012. The bottom line: with the world drowning in liquidity, the right portfolio moves this year have been to take advantage of low equity valuations, look through all the economic weakness and expect that continued monetary stimulus will eventually bear fruit. We have done some of that but not as much as we might have, and as things stand now, global equity markets have outperformed what I had expected. The world’s Central Banks have made it clear that inflating their way out is preferable to the alternatives, an environment that is conducive to risky assets that are priced very cheaply, until and unless they lose control of inflation.
For those confused, Cembalest only added "unless" out of political courtesy, because as even the Fed itself admitted last night, first via St. Louis Fed's James Bullard and soon everyone else, the Fed has finally been exposed as being nothing but a puppet tool of politicians, who in turn have always been sponsored muppets of Wall Street (Who can possibly forget Chuck Schumer telling Bernanke to "get to work Mr. Chairman"). In other words, we now know politicians run not only fiscal, but monetary policy. How to hedge against this apocalyptic proposition? Simple. Cue Kyle Bass: "Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple." |
09-11-12 |
MONETARY |
CENTRAL BANKING |
|
|
|
|
Market Analytics |
TECHNICALS & MARKET ANALYTICS |
|
|
|
It's Different This Time: PMIs And Global Stocks 09-10-12 UBS via Zero Hedge
The fundamental backdrop, in the shape of economic lead indicators and earnings momentum, has been deteriorating: manufacturing PMIs for the US, China, Japan, Korea, the Euro zone, and the UK are all now sub-50, and consensus earnings growth estimates for 2012 have been halved in recent months. What has this meant for Global Equities? Well, as UBS notes, in the last three months, very little. The MSCI AC World index is up more than 12% from the 4 June low. That markets have rallied while fundamentals have deteriorated in this manner is unusual. Historically, equity market rebounds have tended to coincide with a trough in PMIs and earnings momentum – that is, when PMIs have stopped going down and the pace of earnings downgrades slows (waiting for PMIs to recover to 50 or for earnings momentum to turn positive is usually too late). Markets now appear to be taking their cues from central bankers: potential policy actions are becoming a sort of ‘lead indicator of the lead indicators’, if you will. Given the recent rally, in addition to underlying macro weakness, policy action - and effective action at that – has become increasingly important for investors. Without it this recent rally could end up looking more like a false start than a head start.
UBS: PMIs and Global Equities…
We have taken a long-run series of selected manufacturing PMIs from around the world (US, Euro zone, China, Japan and Korea). The vast bulk of the early history comes from the US, with some countries’ data not starting until the 1990s or even later. We have simply weighted by current GDP weights – this will only give us an estimate, but our composite measure does seem to move closely with the US ISM over the last decades.
We have circled the nine periods that we think were major turning points in the indicator since 1973 (trying to reduce some of the noise in mid-cycle volatility).
Historically, the trough in Global Equities performance has tended to coincide with the trough in the PMIs (chart 2).

But this time round the rally has occurred ahead of the turn (chart 3).
And earnings momentum has been sharply negative (and worsening) over the last three months as markets rallied. June, July, and August all saw deteriorating momentum (Chart 6),

the result of which has been a near-halving of 2012 consensus earnings growth estimates (Chart 7).
Of course, if policymakers do follow through with drastic actions that reduce Euro zone break-up risk or drive an acceleration in US or Chinese economic growth, then PMI and earnings stabilisation will follow. If this is the case then equity markets will have gotten a nice head start in the last few months. However, given the recent rally, in addition to underlying macro weakness, policy action - and effective action at that – has become increasingly important for investors. Without it this recent rally could end up looking more like a false start than a head start.
Source: UBS |
09-11-12 |
PATTERNS |
ANALYTICS |
CANARIES - PE'S Disconnected
Do You Believe In P/E Miracles? 09-10-12 Zero Hedge
Since The Dreme (Draghi Scheme) began shortly after the EU Summit, the P/E multiple on the S&P 500 has risen by a faith-defining 2x. This is the largest three-month rise in this indicator-of-indifference-to-reality since the initial burst rally off the March 2009 lows. Meanwhile, the actual earnings consensus is being marked down further, heading for an earnings recession as we pointed out last week. It seems investors are too afraid not to believe in P/E miracles or perhaps it is just faith that central banks have it all under control and their 'promises' are as good-as-gold.
The S&P 500 seems 'managed' to a certain level - no matter what that means for EPS or P/E multiples, the spice must flow market must rise... (a 2x multiple increase since Draghi's initial utterances post EU Summit

As if the divergence was not enough, the 3 month rise in the S&P's P/E ratio (lower pane) is its highest since the initial V-bottom recovery in 2009...

Charts: Bloomberg and JPMorgan |
09-11-12 |
FUNDAMENTALS EARNINGS
PATTERNS
CANARIES |
ANALYTICS |
CANARIES - Particpation Index Suggests Consolidation or Pull Back Ahead
Participation Climax 09-07-12 Swenlin at Decision Point
For a month we have been waiting for a news event to trigger a break up or down out of the narrow, miserable trading range. Thursday brought "positive" news regarding new plans to deal with the European debt crisis. It was the kind of news we refer to in shorthand as pure BS. Or as Macbeth said: "It is a tale told by an idiot, full of sound and fury, signifying nothing."
Specifically, a debt problem cannot be solved until the debtor begins running a budget surplus that allows him to begin retiring the debt. Period. Printing money ain't going to do it, but the geniuses who run the world know better. So the market is constantly on edge, waiting for the next bright idea for ending the crisis with no pain. The news comes, triggers a brief rally (a lot of short-covering). Then reality sets in again. On the chart below we can see the effect these swings between fantasy and reality have had on price.
On Thursday we got a nice market rally, and the Participation Index-UP reached climactic levels. The Participation Index (PI) measures short-term price trends and tracks the percentage of stocks pushing the upper or lower edge of a short-term price trend envelope. The PI has no breadth or volume component -- it is strictly derived from price movement. In this article we will only be addressing Participation-UP.
Climactic activity on the PI is generally in the 60 to 80 range, and climaxes generally signal that the immediate advance is ending and that there will be a period of consolidation or correction -- a pause to refresh, so to speak. There are instances where price just keeps rising after indicators climax, but that kind of price power is normally associated with the beginning of a new bull market. Thursday's climax is more likely a signal that the news-induced advance is nearly over.
Conclusion: The S&P 500 has advanced about 13% since the June low, but it has been a choppy ride because the news suffered from a lack of sustainability. Climaxes of the Participation-UP have been occurring at or near short-term tops, and I think that will prove to be the case this time as well. |
09-11-12 |
PATTERNS
CANARIES |
ANALYTICS |
CANARIES - Hong Kong Profit Warnings & US Market Volume Tell the Story


|
09-10-12 |
FUNDAMENTALS EARNINGS |
ANALYTICS |
COMMODITY CORNER - HARD ASSETS |
|
|
|
|
|
|
|
THESIS Themes |
FINANCIAL REPRESSION |
|
|
|
CORPORATOCRACY -CRONY CAPITALSIM |
|
|
|
GLOBAL FINANCIAL IMBALANCE |
|
|
|
SOCIAL UNREST |
|
|
|
CENTRAL PLANNING |
|
|
|
STATISM |
|
|
|
CURRENCY WARS |
|
|
|
STANDARD OF LIVING |
|
|
|
So Much For The Benefits Of College In America's "New Normal"? 09-09-12 Zero Hedge
Continuing with the theme of the secular shift in the labor pool (not cyclical, as the Fed still mistakenly believes: it will take it at least one more year to understand it has been wrong about this aspect of the New Normal economy too, just as it was wrong for decades about the Flow vs Stock debate), it is not only men who are fresh out of luck. As a reminder, we observed earlier that the labor force participation rate for men has just dropped to an all time low. It turns out there is another class of workers whose participation rate is at the lowest in series history: that of "25 year olds with a Bachelor's degree and higher", i.e. college grads. At 75.5%, it is the lowest since this data has been kept by the BLS. But not all is abysmal in America's labor force. While the share of workers with a college degree has plunged to all time lows, a bright spot can be found when observing the labor force participation rate of those who never bothered with college, and for whom high school was their last known degree-granting institution. At 59.9%, the participation rate is well of its 2012 lows of 59.0% and steadily rising, in fact, to borrow a term from the housing bulls, it may well have "bottomed". Now there is some truly great news for the future of America's highly educated workforce.

None of the above, however, matters to hordes of young, impressionable wannabe college grads for whom college is the only hope out there, no matter the cost. Sadly, the cost is rising exponentially, and as we showed recently, total Federally-funded student loan debt outstanding is now at all time highs.

Luckily, the cost of the debt is at record lows. Sadly, the principal will still need repayment, as cohort after cohort of unemployed students will soon find out, and also find out that there is no discharge of student debt in bankruptcy: it is, indeed, the proverbial gift that keeps on taking. |
09-10-12 |
CATALYST DI EDUCATION |
STANDARD OF LIVING |
GENERAL INTEREST |
|
|
|
TO TOP |
Learn more about Gold & Silver-Backed, Absolute Return Alternative Investments
with these complimentary educational materials |
Tipping Points Life Cycle - Explained
Click on image to enlarge
TO TOP
 |
YOUR SOURCE FOR THE LATEST
GLOBAL MACRO ANALYTIC
THINKING & RESEARCH
|
TO TOP
|