Markets & Stocks

(12-29-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 38 S&P fell 6 ,and NASDAQ fell 10 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short but has provided the same pump-priming of the market as most recently seen in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/delaying/prolonging the inevitable reality even as entire domestic u.s. industries are rendered what is tantamount to defunct and with corporate welfare unwisely spent (war crimes, etc.). More reports in defiance of reality, oil prices up, Dollar Slides...,every intelligent analyst/economist knows that the new home sales number from the government is a total lie that will be revised downward later, that the options scandals are pervasive in fraudulent america (100 investigations just tip of the iceberg), oil stocks continue to rally on lower oil prices, as previously on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices,..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $61; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

US '.....going bankrupt'
By Edmund Conway, Economics Editor (Filed: 14/07/2006)

A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.

Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors," he asked.

According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.

The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which have deficits north of 3pc of GDP.

Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy.

"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going broke."

Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.

The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare, which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to demographics.

Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal discretionary spending by 143pc."

The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.

Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."

Commentary: Newsletters react to stock markets' losing week
By Peter Brimelow, MarketWatch 12:04 AM ET Jul 17, 2006
Investors may still be too optimistic
NEW YORK (MarketWatch) -- First, a proprietary word: on Friday night, the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest, stood at plus-23.8%. This was certainly below the 31.4% it showed on Tuesday night, when Mark Hulbert worried, presciently we must say, that it was too strong from a contrary opinion point of view. But it's still above its 12.6% reading at end of June, although, Mark pointed out, the stock market had declined in the interim. And since Mark wrote, the Dow Jones Industrial Average has had three triple-digit down days.

Dow Theory Letters' Richard Russell wrote Friday morning: "If the Dow breaks support at 10,760, I think we could have some nasty action, even some crash-type action." But, perhaps significantly, Russell did not quite hit the panic button when the Dow did indeed close at 10,739 Friday night.

He simply remarked, supporting the contrary opinion view: "Three days in a row with the Dow down over 100 points each day -- you don't see that very often. But still no signs of real fear, no capitulation, no panic -- just down, down, and down. The key consideration here is that there is still no sign of big money coming into this market. In fact, the big money has been leaving this market all year. ... The longer the market continues down without a panic decline, the worse the ultimate panic will be when it arrives."

John D. Rockefeller was once asked why he decided to sell all his stocks just months before the 1929 Wall Street Crash. He explained: One morning, I was on the way to my office and stopped to have my shoes polished. The guy asked my advice about the shares he bought. If people with this kind of talent were now playing the market, I knew there was something wrong.....

U.S. Treasury balances at Fed fell on July 17Tue Jul 18, 2006

WASHINGTON, July 18 (Reuters) - U.S. Treasury balances at the Federal Reserve, based on the Treasury Department's latest budget statement (billions of dollars, except where noted):

The Treasury said there were $192 million in individual tax refunds and $23 million in corporate tax refunds issued.

End Of The Bubble Bailouts A. Gary Shilling, Insight 08.29.06 - For a quarter-century, Americans’ spending binge has been fueled by a declining savings rate and increased borrowing. The savings rate of American consumers has fallen from 12% in the early 1980s to -1.7% today (see chart below). This means that, on average, consumer spending has risen about a half percentage point more than disposable, or after-tax, income per year for a quarter-century.

The fact that Americans are saving less and less of their after-tax income is only half the profligate consumer story. If someone borrows to buy a car, his savings rate declines because his outlays go up but his disposable income doesn’t. So the downward march in the personal savings rate is closely linked to the upward march in total consumer debt (mortgage, credit card, auto, etc.) in relation to disposable income (see chart below).

Robust consumer spending was fueled first by the soaring stock market of the 1990s and, more recently, by the housing bubble, as house prices departed from their normal close link to the Consumer Price Index (see chart below) and subsequently racked up huge appreciation for homeowners, who continued to save less and spend more. Thanks to accommodative lenders eager to provide refinancings and home equity loans, Americans extracted $719 billion in cash from their houses last year after a $633 billion withdrawal in 2004, according to the Federal Reserve.

But the housing bubble is deflating rapidly. I expect at least a 20% decline in median single-family house prices nationwide, and that number may be way understated. A bursting of the bubble would force many homeowners to curb their outlays in order to close the gaps between their income and spending growth. That would surely precipitate a major recession that would become global, given the dependence of most foreign countries on U.S. consumers to buy the excess goods and services for which they have no other markets.

That is, unless another source of money can bridge the gap between consumer incomes and outlays, just as house appreciation seamlessly took over when stocks nosedived. What could that big new source of money be? And would it be available soon, given the likelihood that house prices will swoon in coming quarters?

One possible source of big, although not immediate, money to sustain consumer spending is inheritance. Some estimates in the 1990s had the postwar babies, who have saved little for their retirement, inheriting between $10 trillion and $41 trillion from their parents in the coming decades. But subsequent work by AARP, using the Federal Reserve’s Survey of Consumer Finances for 2004 and previous years, slashed the total for inheritances of all people alive today to $12 trillion in 2005 dollars. Most of it, $9.2 trillion, will go to pre-boomers born before 1946, only $2.1 trillion to the postwar babies born between 1946 and 1964, and $0.7 trillion to the post-boomers.

Furthermore, the value of all previous inheritances as reported in the 2004 survey was $49,902 on average, with $70,317 for pre-boomers, $48,768 for boomers and $24,348 for post-boomers. Clearly, these are not numbers that provide for comfortable retirements and, therefore, allow people to continue to spend like drunken sailors.

What other assets could consumers borrow against or liquidate to support spending growth in the future? After all, they do have a lot of net worth, almost $54 trillion for households and nonprofit organizations as of the end of the first quarter. Nevertheless, there aren’t any other big assets left to tap. Another big stock bonanza is unlikely for decades, and the real estate bubble is deflating.

Deposits total $6.3 trillion, but the majority, $4.9 trillion worth, is in time and savings deposits, largely held for retirement by financially conservative people. Is it likely that a speculator who owns five houses has sizable time deposits to fall back on? Households and nonprofits hold $3.2 trillion in bonds and other credit market instruments, but most owned by individuals are in conservative hands. Life insurance reserves can be borrowed, but their total size, $1.1 trillion, pales in comparison to the $1.8 trillion that homeowners extracted from their houses in the 2003-2005 years. There’s $6.7 trillion of equity in noncorporate business, but the vast majority of that is needed by typically cash-poor small businesses to keep their doors open.

Pension funds might be a source of cash for consumers who want to live it up now and take the Scarlett O’Hara, “I’ll worry about that tomorrow” attitude toward retirement. They totaled $11.1 trillion in the first quarter, but that number includes public funds and private defined benefit plans that are seldom available to pre-retirees unless they leave their jobs.

The private defined contribution plans, typically 401(k)s, totaled $2.5 trillion in 2004 and have been growing rapidly because employers favor them. But sadly, many employees, especially those at lower income levels, don’t share their bosses’ zeal. Only about 70% participate in their company 401(k) plans and thereby take advantage of company contributions. Lower paid employees are especially absent from participation, with 40% of those making less than $20,000 contributing (60% of those earning $20,000 to $40,000), while 90% of employees earning $100,000 or more participate.

Furthermore, the amount that employees could net from withdrawals from defined contribution plans would be far less than the $2.5 trillion total, probably less than the $1.8 trillion they pulled out of their houses from 2003 to 2005. That $2.5 trillion total includes company contributions that are not yet vested and can’t be withdrawn. Also, withdrawals by those under 59½ years old are subject to a 10% penalty, with income taxes due on the remainder.

With soaring stock portfolios now ancient history and leaping house prices about to be, no other sources, such as inheritance or pension fund withdrawals, are likely to fill the gap between robust consumer spending and weak income growth. Consumer retrenchment and the saving spree I’ve been expecting may finally be about to commence. And the effects on consumer behavior, especially on borrowing and discretionary spending, will be broad and deep.

Analysts' Forecasts and Brokerage-Firm Trading
THE ACCOUNTING REVIEW Vol. 79, No. 1 2004 pp. 125–149 Analysts’ Forecasts and
Brokerage-Firm Trading Paul J. Irvine Emory University University of Georgia
Collectively, these results suggest that analysts can generate higher trading commissions through their positive stock recommendations than by biasing their forecasts.

(12-28-06) Stocks drop still only modestly relative to reality with suckers bear market rally still intact as the wall street fraud continues to suck the suckers in; ie., as the Dow Jones industrial average fell 9.05, S&P fell 2.11 ,and NASDAQ fell 5.65 , all very commissionable on heavy volume, as in final pre-election result push for bush, which fell very short but has provided the same pump-priming of the market as most recently seen in 1999 which ended quite badly even without the exacerbating effects of huge unsustainable and debilitating debt/deficits deferring/delaying/prolonging the inevitable reality even as entire domestic u.s. industries are rendered what is tantamount to defunct and with corporate welfare unwisely spent (war crimes, etc.). More reports in defiance of reality, oil prices up, Dollar Slides...,every intelligent analyst/economist knows that the new home sales number from the government is a total lie that will be revised downward later, that the options scandals are pervasive in fraudulent america (100 investigations just tip of the iceberg), oil stocks continue to rally on lower oil prices, as previously on pipeline explosion in Nigeria, spill in Gulf, and sanctions for Iran, and sharp FALL in oil prices.....riiiiight!.....predictions of disappointing retail sales even with fire-sale discounted prices,..... Highest increase (2%) in 30 years for the wholesale price index, and as well, the core ppi (1.3%), GDP growth less than expected at 2%, dollar sharply lower, oil prices up, building permits down, all unexpectedly bad but great news in the fraudulent alice-in-wonderland lunatic world of wall street. New Record Quarterly Trade Deficit initially spurred lunatic market rally along with obfuscating but very commissionable merger activity. Core inflation a very unexpected unchanged .....riiiiight!.....spurs superstitious, devoid of reality, santa rally. Investment Banks Post Record 2006 Profit .....daaaaah! Churning and earning on worthless paper, where is that commission dollar coming from even as america has ceded solvency/leadership in every economic measure. Even at the lofty record numbers the indices are worth roughly half their value based on precipitous fall of the dollar in only 5 years with further downside to go. Superstitious ‘Santa Claus rally’.....riiiiight! High oil price rally.....riiiiight! Total bulls**t ! Retail sales up a very unexpected 1%, riiiiight, at the same time inventories of such goods rising substantially (do you think they’re booking sales to ‘straw men/companies’.....I do!) and oil inventories down. Fake employment numbers (from the government.....riiiiight!) the impetus for previous b.s. rally despite falling sentiment and uptick in unemployment. The ism services index (financed by unsustainable deficit/debt spending and pushing/commissioning worthless paper) and jawboning/bulls**t from the housing industry (the end is near.....riiiiight!), obfuscating mergers continued to cloud the picture, closely-watched core-PCE deflator had risen a more than expected 0.2%, second sub-50 reading on manufacturing activity in as many sessions-the November ISM index unexpectedly fell to 49.5 (consensus 52.0), Chicago PMI fell to its lowest level (49.9%) in October, and below the 50 level, indicating contraction, crude prices up (OIL PRICES RISE ABOVE $63 A BARREL...), DOLLAR RESUMES SLIDE, Fed Chairman Bernanke & Co. cheerleading/jawboning/bulls**t, 3.2% decline in new home sales, oil inventories down and oil prices up, oil producers shun the dollar, Russia and Opec shift revenues into euros, yen and sterling..., all very bad news anywhere but in the fraudulent alice-in-wonderland world of wall street. Durable goods orders fell sharply, sentiment down, but supposedly used home sales rose slightly (riiiiight.....who says; the realtors/government who have been talking up this bubble market?) albeit at sharply lower prices. DOLLAR PLUNGES TO NEAR 15-YEAR LOW In other words, no good news to justify the ridiculous up move by the alice-in-wonderland frauds of wall street. Worthless dollar, triple deficits, stock/options scandals/corruption, as some speculate that fed is behind purchases/manipulation (through proxy) of worthless american paper now being shunned by more rational market players abroad. MARKETS ROCKED BY LONG OVERDUE BUT STILL MODEST RELATIVE TO REALITY SHARP SLIDE IN DOLLAR...There has never been a time since 1929 when stock prices and p/e ratios were so irrationally high for this point in a bull cycle in this indisputable secular bear market, particularly with the existing unprecedented structural economic problems, ie., trade and budget deficits, worthless dollar, scandals, fraud, corruption , etc.. In fact, unemployment unexpectedly rose substantially and consumer sentiment unexpectedly but similarly realistically fell, both very negative exept in the fraudulent alice-in-wonderland world of wall street. Indeed, the housing bubble bursting with ie., unexpected 14% decline in starts/permits, etc., led to rally in the fraudulent alice-in-wonderland world of wall street. Obfuscating mergers help preclude detection of this massive and pervasive fraud which defies analysis owing to these mergers. New talking pointing: dell numbers exceed expectations depending upon ongoing government scrutiny of their accounting practices.....riiiiight! More contrived manipulated markets and data well as that previous unexpected rise in that global hub of manufacturing activity, New York (worthless paper is their real product, etc.) …..riiiiight!….. underpins fraudulent up move. Reassuring Fed speak, also known as b**l s**t, along with IPO’s (get the suckers in at the highs as in late 90’s market bubble), and shrugging off pervasive stock/options fraud as at, ie., KB Homes, etc., leave stocks ridiculously higher. Nations leaving the worthless dollar in droves for currencies backed by value and for precious metals. Based on the self-interested statement of typical fraud american and fed rep, we hear once again the wishful thought that housing has bottomed.....right! [Reality/Truth: US housing slump deepens, spreads]. Home depot rallies despite lower than expected results and lower guidance for the year.....right! Who is stupid enough to believe anything the fraudulent criminal americans say. They are printing worthless dollars like mad. Consumer sentiment actually previously fell and there was nothing but wall street lunacy to prop the fraudulent market. The republicans who lockstepped with war criminal dumbya bush deserved to lose. The frauds on wall street now looking for the new corporate welfare program for which to sell the sizzle ie., stem cells, etc.. The know-nothing pundits are now saying the up move without any rational basis is predicated upon the the falsity that gridlock in washington is welcomed and good because no regulation of, ie., fraud on wall street, etc., can be passed. How about a tax on stock trades to come directly from the traders' (traitors/frauds) bottom lines and provide a disincentive for the churn-and-earn fraud which is tantamount to a wasteful tax on the economy. Even token Christian paulison from jew fraud wall street couldn't stem the tide against the blatent zionist/neocon/bush co failure accross the board as the wall street frauds show record profits financed, albeit indirectly, by huge deficits, both trade and budget. Obfuscating mergers blur the picture to provide cover for up move talking points in defiance of reality. Stagflation and full employment revisions pre-election.....riiiiight. Productivity comes in at a less than expected 0 (inflationary). The only surprise should have been that the number wasn't negative. The pundits are now saying that the market/wall street fraud is in a state of denial regarding economic fundamentals and that the market is substantially overbought, overvalued, overfrauded, over, etc., the manufacturing index coming in lower than expectations. Consumer sentiment unexpectedly fell.....daaaaah. Pre-election core inflation rate report good …..riiiiight…..but savings rate still negative and walmart sales/profits/outlook substantially below expectations but what the heck, they’re wallstreet lunatics/frauds and reality is no problem. Despite pre-election deficit spending, GNP comes in a less than expected paltry 1.6% increase with worthless falling dollar the catch-22 precluding reality avoidance and the worst yet to come. More nations leaving the worthless dollar as reserve currency even as frauds on wall street reach new highs (What are they smoking? Coking? or like the dollar just cracking) based on corporate welfare flows with money the nation doesn't have pre-election (record deficits). Housing prices continue their sharp decline as bubble deflates. GM only lost 115 million. Ford lost 5.8 billion and must restate earnings back to year 2000 is a bullish sign in the fraudulent alice-in-wonderland lunatic world of wall street. Typical pre-fed meeting rally to provide a cushion for any negative pronouncements which reality would require but are seldom forthcoming by the accommodative frauds who have similarly embraced unreality. Indeed, the gutless wimps of wall street think they're "tough" when they fraudulently take the market higher despite a clearly contrary fact based reality. Caterpillar relates the pervasive reality and the frauds on wallstreet intimidate same with sell off, ignoring pervasive options scandal/fraud and rallies Merck despite lower than expectation results.....riiiiight! Election year corporate welfare to prime the pump and the mock stock market with money the nation doesn’t have (increasing already huge deficits). CPI figures (upon which government inflation adjusted payment obligations are based) lower than expected…..riiiiight! Intel earnings/revenues down sharply but according to the lunatic frauds on wall street, beat expectations and stock rallies along with yahoo which as in the pre-dot com bust days says better days are a coming….. riiiiight Core inflation rate which is closely watched by the Fed exceeds all expectations. Fraud Merrill Lynch has really been pushing and commissioning that worthless paper and reports record earnings, despite having produced nothing and for very little if any value added (that ill-gotten money has to come from somewhere-your pockets?). The big economic report awaiting scrutiny was the monthly trade deficit which was expected to narrow but in fact INCREASED to 69.9 billion. The alice-in-wonderland lunatic wall street frauds rallied on the news as the dollar precipitously fell. The Fed Chairman said there is a "substantial correction" in housing, which will probably shave about 1% off growth in the second half of the year. The Institute of Supply Management said its services index fell to 52.9 in September -- the lowest level since April 2003. Great News….. riiiiight!..... Consumer Confidence Higher Than Expected... riiiiight!..... and housing starts were down sharply but not-as-bad-as-expectations game in play US Existing Home Sales Fall 0.5% in August; Sales Price Drops Existing-home prices fall for 1st time in 11 years along with fed jaw-boning pre-election that inflation has been licked .....riiiiight …..despite printing worthless dollars like they’re going out of style because they really are! Fed did nothing and stocks rallied, pre-election.....riiiiight! What about the reality of u.s. debt service at a record unsustainable $2 billion per day on a revolving $2 trillion charge account with ie., China, etc.. The fact that foreclosures are up and that there is projected new trade deficit record, fake government inflation numbers for election year purposes, housing starts down 6% means little to the alice-in-wonderland lunatic frauds of wall street and the so-called pundits including yahoo below. Almost all computerized volume is and must be considered heavy, manipulated, economically wasteful volume [stocks move contrary to rational analytical facts (ie., exceeded lowered expectations, things so bad interest rates can’t rise, exceeded expectations, no earnings but outlook extraordinary, the fed says booo as they print more worthless dollars to finance deficits, etc. ) is money in the bank for the frauds on wall street when they unwind said irrational positions ]. Philadelphia Federal Reserve announces that its broadest measure of manufacturing activity fell to a negative reading for the first time since April 2003, leading economic indicators fall .2%, and previously fell .1% though expected to show an increase, and in addition to the larger than expected 4.1% drop in July existing home sales to its lowest level in over two years and lifted inventories to record levels , new home sales fell 4.3%, and a larger than expected 2.4% decline in July durable orders which are negatives anywhere but in the alice-in-wonderland lunatic world of wall street where same is greeted as good news as also follows with b**l s**t from Yahoo (which didn’t even reference the record unanticipated trade gap):

There is nothing to rationally justify the previous up move or mixed results in the market other than what is tantamount to a negative, and based upon spurious data from the government; ie., fake government numbers said total PPI rose a smaller than expected 0.1% (consensus 0.4%) in July, which was well below the 0.5% jump in June, while the more closely watched core rate (ex-food and energy) unexpectedly (RIIIIIGHT!) fell 0.3% (consensus +0.2%) -- the first decline since October and the largest drop since a 0.5% decline in April 2003. Home Sales Decline in 28 States, D.C.. Real estate prices down/stagnant. But housing stocks…..up.....riiiiight!.....in the fraudulent "alice-in-wonderland" lunatic world of wall street where down is up and up is down. Martin Crutsinger, AP Economics Writer, previously wrote,” U.S. Trade Deficit Falls 0.3 Percent in June to $64.8B, Offsetting Jump in Chinese Imports. Dell Recall Stems From sony Production Flaw WASHINGTON (AP) -- America's trade deficit showed a slight improvement as strong global growth pushed U.S. exports to a record level. That helped offset a surge in Chinese imports and record crude oil prices. The deficit declined 0.3 percent in June, compared with May, dropping to $64.8 billion, still the fifth largest imbalance on record, the Commerce Department reported Thursday. The deficit is running at an annual rate of $768 billion through the first six months of this year, putting the country on track to see a fifth straight record imbalance. Last year's deficit was $716.7 billion. Prior considerations remain apposite in this clearly overvalued market. The frauds on wall street feel compelled to continue their tradition/superstition/fraud tactic of buying on the rumor and selling on the news (fact) of the Fed’s temporary pause in rate hikes. You see, the facts/news do not rationally warrant holding dollar based securities/stocks but provide a means to scam the stupid money, to the benefit of the wall street frauds/scammers and smart money. Yahoo previously commented: Friday was a wild day on Wall Street with early gains fueled by an encouraging July jobs report being wiped away as the return of concern tied to an economic slowdown outweighed the potential of a pause in tightening at Tuesday's Fed meeting. Before the bell, nonfarm payrolls rose a less than expected 113,000 and the unemployment rate rose for the first time since November, suggesting the labor market is losing steam and reinforcing the view that the economy is on track for a soft landing. To wit, fed funds futures were pricing in a 44% chance....., to which I responded, Wild..... I’ll give you wild: GM says their quarterly loss was $3.4 billion and not 3.2 billion as reported; Ford says their loss was $200 million dollars more than they previously reported and will now join gm in worker buyouts; but both GM and Ford will now offer built-in ipods which should substantially help their core business of building cars; meanwhile, options/accounting scandal/subterfuge occurring at the apple ipod (anything but computers) company. Analyst says GM good news now behind it (past/discounted), yet stock still rose upon said analysis …..riiiiight….. daaaaah! Apple Computer Inc. warned Thursday that it may have to revise its profits dating back to 2002 in a worsening stock option scandal, maybe even suspension, that has cast a harsh light on Silicon Valley's compensation practices. Don’t forget that GDP growth slowed substantially and below expectations at 2.5% which in the alice-in-wonderland lunatic world of wall street is of course good news. Stagflation? The fact is that no rational investor would choose dollar based stocks/securities when they could get less risky/liquid (approx.) 5% yielding cds, money market instruments, short-term treasuries/funds, etc.. However it’s not rational investors that are racking up commission dollars trading in and out of stocks like termites eating away at the huge capital funds which they control. Nothing constituting real value would account for the fraudulent rally mode this and other days. Highly leveraged obfuscating mergers/acquisitions, also very commissionable (investment bankers/brokers), and historically have more often than not ended quite badly; oil prices now above $60; yes, as in the last crash, they will get fooled again’ as stocks up sharply in the fraudulent alice-in-wonderland lunatic world of wall street where down is up and up is down. The stock market has never been so backward-looking. Indeed, amazingly, the pundits/analysts are even talking SEASONAL considerations in their fraud in the inducement which is the height of absurdity (such things are discounted well in advance in a rational market). The once objective, fact-oriented Barrons publication has now become a shill for the continuing fraud on wall street. Bush no conservative says Buckley (who also says that in Europe bush’s failed war policies would have required his expected resignation).....daaaaah!; neither are the hillbillies clintons and papa hillbilly bush. CNN's DOBBS BLASTS U.S. ISRAEL POLICY... BUCHANAN: 'Israel policy violates international law, is un-American and un-Christian'... The government is also catching on and playing the “better than expectations” game with the still very substantial deficit numbers, clouded by the use of social security funds used in the general fund rather than allocated for the defacto bankrupt social security system where they belong. ! Remember, leading economic indicators are down .6 percent continuing an ignored (by wall street frauds) downward trend/weakness extending back to the summer, 2005. Options scandal as was inherent in the (fraudulent) dotcom bust is extent and under way in nasdaq particularly. Spotlight on the Stock Option Scandal-The share prices of companies involved in stock options backdating have held up well compared to the broader market. But shareholders might be in for a rougher ride. Plus, why the Nasdaq has its hands full. I previously warned be very skeptical of up-coming government/corporate/collaborative/wall street data inasmuch as they are quite desperate and have proven [ie., illegal Iraq war/occupation, 911 attack(for the neocon contrived pearl harbor effect)/who ordered NORAD to stand down?/who were the pre911(within days) short-sellers?/ and the twin towers implosion, the missile that hit the pentagon precisely in the area that housed the army investigators who announced days before the opening of an investigation into a substantial pentagon fraud, etc.] that the truth is no obstacle when falsity is expedient and the lunatic frauds on wall street will try to tell you what’s up is down and what’s down is up. Lou Dobbs gets paid a lot of money to keep track of such things and doubts the verity of the government numbers. He is riiiiight! The catch-22 is that the defacto bankrupt u.s. is printing worthless paper (so much so that they’ve stopped reporting M3) and borrowing beyond sustainability, which is hyperinflationary despite false government numbers (ie., core inflation number to fraudulently decrease yield to ibond holders, etc.). Higher interest rates to prop worthless dollar and finance deficits inevitable despite wishin', hopin', and lyin’ to the contrary; foreclosures up, housing down, default notices up 67% (particularly in california, ie., orange, la, ventura, counties etc.) nationwide. Don’t forget: the equity in housing has been stripped out of real estate by way of the refinancing boom, which artificially stimulated the economic numbers while ultimately leaving buyers with debt exceeding actual property values. There is substantial downside bias in light of real economic considerations, particularly beyond the moment/trading day given that this bull (s**t) cycle in this indisputable secular bear market is over. Remember: more contrived wasteful commissions to the wall street frauds, the level and percentage of which should be examined in light of computerization and decreased costs attendant to same especially since only A Small Fraction Of What wall street Does Is A Net Positive For The Economy (New Investment Capital), The Rest Is Tantamount To A (Economically) "Wasteful Tax" (On The Economy) via 'churn and earn' computerized programmed trades.

Financial News Courtesy Of CNN - Analysis/Commentary By Al Peia (No Affiliation)

World Indices Weekly Closing Prices

AT&T Closes BellSouth Deal After FCC OK
AP - AT&T Inc. completed its $86 billion buyout of BellSouth Corp., the largest telecommunications takeover in U.S. history, shortly after the Federal Communications Commission unanimously approved the deal on Friday.

Dow Closes Above 12,500 for First Time
AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

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Financial News Courtesy Of CNN - Analysis/Commentary By Al Peia (No Affiliation)

World Indices Weekly Closing Prices

AT&T Closes BellSouth Deal After FCC OK AP - AT&T Inc. completed its $86 billion buyout of BellSouth Corp., the largest telecommunications takeover in U.S. history, shortly after the Federal Communications Commission unanimously approved the deal on Friday.

Dow Closes Above 12,500 for First Time AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.

AT&T Closes BellSouth Deal After FCC OK
AP - AT&T Inc. completed its $86 billion buyout of BellSouth Corp., the largest telecommunications takeover in U.S. history, shortly after the Federal Communications Commission unanimously approved the deal on Friday.

Dow Closes Above 12,500 for First Time
AP - Wall Street surged higher Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.