Did The Fed Just Give The Green Light To Sell The Stock Market? 

Submitted by Tyler Durden on 06/01/2011 21:54 -0400

Remember when the president uttered the magic words back in March 2009, when he said that "profit and earning ratios [whatever the hell those are] are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it" giving the green light for the 2 year bear market rally? Well, if that was global market Risk On, Janet Yellen just gave the Risk Off command. To wit: "forward price-to-earnings ratios in the stock market fall within the ranges prevailing in recent decades, and are well below the early-2000 peak, although corresponding measures for small-cap equities (not shown) appear somewhat elevated....special questions included in the March 2011 SCOOS suggest an increase in the use of leverage by some traditionally unlevered investors (such as pension funds and insurance companies) as well as hedge funds during the previous six months. " Yup: small caps, aka the Russell 2000, aka the Economy according to the Fed's third mandate. Ironically, the Fed realizes the Catch 22 it is caught in, which we noted earlier, namely that stocks are pricing in QE 3, but for QE 3 to happen stocks have to drop 20% from here. Well, this may be the last warning from the Fed.

Consumer Confidence Is Now Lower Than During All Recent Financial Crises And Tragedies 

Submitted by Tyler Durden on 06/01/2011 21:23 -0400

One chart stands out in today's Breakfast with Rosie: the comparison of yesterday's surprisingly weak Consumer Confidence number with comparable prints taken at financial crises and tragedies of the past such as the October 1987 markets crash, Desert Storm, LTCM, the dot com collapse, September 11, Katrina, and Lehman. No surprise: yesterday's was the lowest. And as a reminder, the president's reelection campaign kicks into higher gear in a few months...against the backdrop of the most unhappy popular sentiment in recent years. Just how do QE 3 skeptics believe he will succeed, when still faced with consumer confidence that two years into the "recovery" is lower than during any other previous economic "expansion", even as congress is about to unleash the most brutal wave of fiscal consolidation (aka austerity) in recent American history. 

 

 

 

 

 

"What we’ve got right now is almost near panic going on with money managers and people who are responsible for money. They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy... ...We’re on the verge of a great, great depression. The [Federal Reserve] knows it. We have many, many homeowners that are totally underwater here and cannot get out from under..." - Peter Yastrow, market strategist for Yastrow Origer, June 1, 2011

 

Illustrations Are Not Just Cartoons

June 1, 2011, at 4:23 pm
by Jim Sinclair in the category General Editorial |  Print This Post |  Email This Post

My Dear Friends,
Illustrations are not cartoons. They are teaching tools commissioned and paid for here for your best interest.
The key to gold at $1650 and well above is the fact that there is no economic recovery. Stimulation will have to continue and increase if the Western World is to try kicking the can of a depression worse than anything you can imagine down the road.
They will.
The Skier teaches this process in three illustrations. Please spend some time meditating about what this means to you.
Respectfully yours,
Jim Sinclair

Jim’s Mailbox

June 1, 2011, at 10:09 am
by Jim Sinclair in the category Jim's Mailbox |  Print This Post |  Email This Post

 

 

Gold Stocks Action Providing Technical Confirmation 

CIGA Eric

The technical message in the gold stock sector has begun to confirm the bullish setups in the leveraged markets. This combined setup suggests, like equities, an unexpected bullish outcome this summer/fall.
Junior Gold Miners Index to Gold Ratio:
Junior Gold Miners Index to Major Gold Miners Index Ratio:
Retest of Support As Resistance CIGA Eric
Silver, driven by hyperinflation, will resume its run once the underside kiss (smooch) is complete.
Gold to Silver Ratio:

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Jim Sinclair’s Commentary

QE is QE by any name, to infinity.

Prepare for More Money Printing: Analyst Published: Wednesday, 1 Jun 2011 | 6:42 AM ET
Jessica Hartogs
Investors should prepare themselves for a third round of quantitative easing, Simon Maughn, co-head of European equities at MF Global, told CNBC Wednesday.
“The bond market is going in one direction which is up-falling yields which is telling you quite clearly the direction of economic travel is downwards. Downgrades. QE3 (a third round of quantitative easing) is coming,” said Maughn. “The bond markets are all smarter than us, and that’s exactly what the bond markets are telling me.”
“What’s interesting in the bond markets over the last couple of sessions is, you’ve seen human traders trying to step in and call this turn in the market the same way that equities have done … and they have just been mowed down by the quant funds which are all about leverage, all about momentum and are betting on bond prices going up,” added Maughn.
Once again, the United States will step up as the marginal buyer of bonds, said Maughn.
"One more big injection of cash into the bond market should take you through at least the summer season into the beginning of the fourth quarter.”
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Dreaded Double-Dip Is Here

June 1, 2011, at 7:13 am
by Greg Hunter in the category USAWatchdog.com |  Print This Post |  Email This Post

Greg Hunter’s USAWatchdeog.com


Dear CIGAs,

I have been telling you the economy is not in any kind of real recovery for more than a year.  Sources I have been quoting have been proven right, and all the economic cheerleaders dead wrong.  Reuters reported yesterday, “Data showing a double-dip in home prices, pessimistic consumers and a slowdown in regional manufacturing raised concerns on Tuesday that the economy’s soft patch could become protracted.” (Click here to read the complete Reuters report.) “Could become protracted?” It is protracted, and now the data is suggesting the economy is getting ready for another cliff dive.
Let’s concentrate on what has been a huge driver of the economy—housing.  A double-dip in housing could start a daisy chain of very bad news for the big banks exposed to derivatives and residential real estate.  According to the latest S&P/Case-Shiller home price report released yesterday, prices hit a new low in the first quarter–plunging 4.2% in just three months!  If you look back six months, prices are off nearly 8% according to Case/Shiller.  If you look on the chart on the first page of the Case/Shiller press release (click here), it clearly shows a double dip in housing.  That is exactly what was predicted nearly a year ago on this site.  One of the many people I quoted was renowned banking analyst Meredith Whitney who said last June, “Unequivocally, I see a double-dip in housing.  There’s no doubt about it . . . prices are going down again.” (Click here to read my original post from a year ago.) At the time, many people thought Ms. Whitney was being overly pessimistic.  In fact, her dire prediction has come true.  This is despite the more than $2 trillion spent in QE1 and QE2 (printing money out of thin air to buy government and private debt) by the Federal Reserve.  QE1 &QE2 helped fuel the stock market and artificially held mortgage interest rates at absurdly low levels and, yet, housing continues to crash.  Good call Ms. Whitney!
Another one of my favorite people to quote is economist John Williams of Shadowstats.com. He has been warning about a sinking economy for months and has been saying any good news is nothing more than “bottom bouncing.” In his most recent report, Williams said, “Most major economic reports in April disappointed consensus expectations and either were flat or negative for the month—including real retail sales, industrial production, housing starts and durable goods orders.  Where first-quarter GDP growth slowed versus the fourth-quarter, the stage is set for the GDP to turn negative, again, sometime in the next two quarters, reflecting what would become an official double-dip recession.” Housing has been an unqualified disaster with housing starts and new home sales off 75% from the 2005 peak.  Existing home sales are off nearly 30%, and of the homes that are sold, nearly 40% are foreclosures.  Four in 10 homes sold as distressed properties do not signal a healthy economy—just the opposite.
More…

The Ticking Time Bomb






Horror for US Economy as Data Falls off Cliff



Bob Chapman: The Euro-Debt Crisis: Greece, Portugal, Spain. The Debts are Unpayable. Once the Lending Stops the Bottom Falls Out. 



Easy Way Out.


 
“America Will Be Dismembered By Its Creditors”



77,000 federal workers paid more than governors.



Endless Quantitative Easing