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« Our Hollow GDP | Main | One Interesting Insight From CES »

Monday, January 10, 2011


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Mish "Get out of the Australian dollar".
If their stock market crashes, won't their currency and possibly Australian treasuries take off? What am I missing?


Nope: In the last few years the Australian Dollar and Australian Stock market have been moving in more or less lock-step. E.g.,$XAD&p=D&st=2005-01-01&en=1961-01-01&id=p07388970302


Behold the carry trade (AUD/JPY):$XAD:$XJY&p=D&yr=3&mn=0&dy=0&id=p51996428768

Account Deleted

ES Chart before opening bell


mama where is your short all the world is up up

Mamma Boom Boom

ds, you are bs. Show me where Mamma said to go short.

You need to grab your shoulders and jerk your head out of your rectum. It's a great day.


It's april fools day again

To all Ellidiots and Roger look alikes, there is hope for you: 12/31/2012 is the end of day's. But first I will enjoy S&P 1500+.

Please let me know when P3 down starts, Then I go on vacation with your "short" money.

It's april fools day again

And where is Shogun Neo-pussy-sue, I'm sorry, neo-tzu with his complex useless kung-fu labeling. Another one bites the dust. Veni, vidi, arrivederci! Next please...

Hank Wernicki

Platinum Update :

About 20 + points !

Bottom Tick to go Long


Hank Wernicki

Platinum Up 27 points !


Mamma Boom Boom

Rep. Brady (D – PA) has promised to introduce new legislation to criminalize any political speech which could be perceived as incendiary, and other Democrats suggested that there should be a blanket ban on all speech and symbols which might be conceivably interpreted as incendiary against members of Congress.


Rep. Louise Slaughter (D – NY) insisted that the FCC should work hard to restrict political speech that “could incite people,” adding that “no one owns the airwaves” and that she clearly felt the FCC was not doing enough to regulate political commentary nor to sanction those whose criticism were unacceptable to her.


Just to let others know, worth checking out - free technical analysis and trading calls for S&P 500, Hang Seng, ASX 200, AUD, EUR. Great stuff.


Alot of people think we are doomed, but there are still great ways to make money. Even while the economy is collapsing around us.

I subscribe to the guy from australia and his FFT economic newsletter at that guy has called many big events before they have happend, including the stock market crash in 2008 and the current financial collapse of the US. (currently happening) I found him from a friend last year, and he has some important work.

His oil calls are insane, and I have been making good money with them. He is well worth a look, if you want to keep two steps ahead of the sheeple out there.

I am worried about my financial future. Is anyone else nervous out there?


I am sad to see people here selling newsletters and such - come on, this site is a little better than a sales site - right??

SO you are worried about stuff emma - well, then why would you bother to post here - Wouldn't you be investing your way out of this - and too busty to bother posting anywhere??

Come on. World ain't gonna end.



Joe, been reading the Shaara series on WWII, quite interesting what they went through.


a friend of mine just finished a trial subscription(not a sales pitch)for robert mchugh. he informed me we just completed a phi mate cluster from robert mchugh. this is what he called a second phi mate top date today. the cluster is complete. he is confident this is a major top in the u.s. markets.



"Rep. Louise Slaughter (D – NY) insisted that the FCC should work hard to restrict political speech that “could incite people,” adding that “no one owns the airwaves” and that she clearly felt the FCC was not doing enough to regulate political commentary nor to sanction those whose criticism were unacceptable to her."

Right up there with Postal Worker, sythetic natural gas and military intelligence. If no one owns the air waves, why does she want to control them? What a fool.


Hank Wernicki

8:11 am

I'm getting a top here today for the ES near 1280

probably will short soon



Slaughter thinks she is god since only she can determine which criticisms are unacceptable to her. I guess when her Democratic colleague (Ex-Rep. Paul Kanjorski, D-Pa) uses this rhetoric it will be OK:

"That Scott down there that's running for governor of Florida," Mr. Kanjorski said. "Instead of running for governor of Florida, they ought to have him and shoot him. Put him against the wall and shoot him. He stole billions of dollars from the United States government and he's running for governor of Florida. He's a millionaire and a billionaire. He's no hero. He's a damn crook. It's just we don't prosecute big crooks."


Until this crap is stopped on both sides it is all a bunch of smoke and mirrors. Each side trying to get an advantage over the other.


Palin responded today with an 8-minute video and in it she says . . . "especially within hours of a tragedy unfolding, journalists and pundits should not manufacture a blood libel that serves only to incite the very hatred and violence they purport to condemn. That is reprehensible.”

I guess Palin has never heard that "blood libel" refers to an anti-Semitic accusation from the Middle Ages that Jews killed Christian children to use their blood to make matzoh for Passover.

She has got to be the dumbest public figure in America.
She just keeps digging a bigger "hole" for herself to climb out of. Unreal.


Palin is a well-known person, lively, beautiful, athletic, and brave. She is just the sort of person who can use colorful phrases and change them. Languages evolve. Well known and popular people can help change them. "Blood libel" may well have taken on a new meaning. Works for me. Anyway, how often are references to blood in matzoh made these days? Not too.


"Palin is a well-known person, lively, beautiful, athletic, and brave. She is just the sort of person who can use colorful phrases and change them." - - - George

I find your praise of Palin interesting in that you failed to mention her being INTELLIGENT.


Intelligence is a vague word. If you're talking IQ, I'd guess she's average, maybe slightly higher than average. But there are lots of high iq people who are dull or fearful or unproductive or unimaginative.

Palin is colorful and passionate and very popular among lots of folks. I have no problem with her using the phrase "blood libel." I think most people understand exactly what she's trying to say... many people agree with her sentiment... and I for one wouldn't be surprised if she has, pretty much single-handedly, changed the lexicon. Which is fun.

Mamma Boom Boom


All this proletariate pablum is just side stepping the real issues facing this country:

We have very poor government in this country and have for a long, long time.

Obama and everyone else in power that could make a difference are scared shitless of the banks. Nothing gets corrected and instead Obama piles massive debts on hard working Americans to keep the illusion pulsing along:

From Hussman's web page today. The old Austrians got it right.

Illusory Prosperity - Ludwig von Mises on Monetary Policy
"Credit expansion cannot increase the supply of real goods. It merely brings about a rearrangement. It diverts capital investment away from the course prescribed by the state of economic wealth and market conditions. It causes production to pursue paths which it would not follow unless the economy were to acquire an increase in material goods. As a result, the upswing lacks a solid base. It is not a real prosperity. It is illusory prosperity. It did not develop from an increase in economic wealth [i.e. the accumulation of savings made available for productive investment]. Rather, it arose because the credit expansion created the illusion of such an increase. Sooner or later, it must become apparent that this economic situation is built on sand."
Ludwig von Mises, The Causes of Economic Crisis (1931)
Historical note - The U.S. stock market lost more than two-thirds of its value over the following year
If one looks back to the recent housing crisis, it is clear that the policy emphasis on easy money was one of the primary elements that created the illusory prosperity of the housing bubble and eventually led to crisis. The same is true of the various other crises that we have observed over the past decade. At present, I am convinced that the misguided policies that have been pursued in response to the recent downturn will again be reflected as significant new strains within a few years, if not sooner. While we will exercise as much latitude as possible to accept moderate investment exposures when the evidence is supportive, we have to be aware of the longer-term outcomes that are being set in motion by the present course of monetary and fiscal recklessness.
Perhaps more than any other economist, Ludwig von Mises got the theory of money and credit right, because he made distinctions between various forms of money and credit that are often conflated by other theorists. The amount of real physical investment in the economy is, and must be, precisely equal to the amount of output not allocated to consumption but instead to savings. Unlike many other economists, Von Mises not only recognized this identity, but carried it through to what it implied for monetary policy. Specifically, he observed that all real investment in the economy must be financed by real savings, while the creation of financial claims (which he called "circulation credit" or "fiduciary credit") in the absence of those savings tends to distort prices rather than output.
What follows are writings that I have selected from Von Mises work. The warnings that he gave prior to the Great Depression were particularly acute. Though Von Mises concerns unfortunately went mostly unheeded, they speak volumes about the origins of the recent crisis, and the risks that we are likely to face in the years ahead. As you read these, keep the recent housing crisis and the recent actions of the Federal Reserve in mind.
"Every serious discussion of the problem of credit expansion must start from the distinction between two classes of credit: commodity credit and circulation credit. Commodity credit is the transfer of savings from the hands of the original saver into those of the entrepreneurs who plan to use these funds in production. The original saver has saved money by not consuming what he could have consumed by spending it for consumption. He transfers purchasing power to the debtor and thus enables the latter to buy these nonconsumed commodities for use in further production. Thus, the amount of commodity credit is strictly limited by the amount of saving, i.e. abstention from consumption. Additional credit can only be granted to the extent that additional savings have been accumulated. The whole process does not affect the purchasing power of the monetary unit.
"Circulation credit is granted out of funds especially created for this purpose by the banks. It increases the amount of money substitutes, of things which are taken and spent by the public in the same way in which they deal with money proper. It increases the buying power of the debtors. The debtors enter the market of factors of production with an additional demand, which would not have existed except for the creation of such banknotes and deposits. It is the main tool of policies aiming at cheap or easy money."
"Every deviation from the prices, wage rates and interest rates which would prevail on the unhampered market must lead to disturbances of the economic equilibrium. This disturbance, brought about by attempts to depress the interest rate artificially, is precisely the cause of the crisis. The ultimate cause, therefore, of the phenomenon of wave after wave of economic ups and downs is ideological in character. The cycles will not disappear so long as people believe that the rate of interest may be reduced, not through the accumulation of capital [i.e. savings made available for productive investment], but by banking policy."
"The calculation of entrepreneurs is misguided by the issue of additional fiduciary media. The greater this quantity of fiduciary money, the more factors of production have been firmly committed in the form of investments which appeared profitable only because of the artificially reduced interest rate and which prove to be unprofitable [as soon as] the interest rate has again been raised. Great losses are sustained as a result of misdirected capital investments. Many new structures remain unfinished. Others, already completed, close down operations. Still others are carried on because, after writing off losses which represent a waste of capital, operation of the existing structure pays at least something.
"It may well be asked whether the damage inflicted by misguiding entrepreneurial activity by artificially lowering the loan rate would be greater if the crisis were permitted to run its course. Certainly many saved by the intervention would be sacrificed in the panic, but if such enterprises were permitted to fail, others would prosper. Still, the total loss brought about by the "boom" (which the crisis did not produce, but only made evident) is largely due to the fact that factors of production were expended for fixed investments which, in the light of economic conditions, were not the most urgent. If banks emerge from the crisis unscathed, or only slightly weakened, what remains to restrain them from embarking once more on an attempt to reduce artificially the interest rate on loans and expand circulation credit?
"The discrepancy between what the entrepreneurs do and what the unhampered market would have prescribed becomes evident in the crisis. The fact that each crisis, with its unpleasant consequences, is followed once more by a new "boom," which must eventually expend itself as another crisis, is due only to the circumstances that the ideology which dominates all influential groups - political economists, politicians, statesmen, the press and the business world - not only sanctions, but also demands, the expansion of circulation credit."
Ludwig von Mises, Monetary Stabilization and Cyclical Policy (1928)
Historical note - The Great Depression began the following year.
"If the market rate of interest is reduced by credit expansion, many projects which were previously deemed unprofitable get the appearance of profitability. The entrepreneur who embarks upon their execution must, however, very soon discover that his calculations were based on erroneous assumptions. However, as the banks do not stop expanding credit and providing business with 'easy money,' the entrepreneurs see no cause to worry. Everybody feels happy and is convinced that now finally mankind has overcome the gloomy state of scarcity and reached everlasting prosperity.
"In fact, all this amazing wealth is fragile, a castle built on the sands of illusion. The artificial prosperity cannot last because the lowering of the rate of interest, purely technical as it was and not corresponding to the real state of the market data, has misled entrepreneurial calculations. Deluded by false reckoning, businessmen have expanded their activities beyond the limits drawn by the state of society's wealth. In short, they have squandered scarce capital by malinvestment.
"The sooner one stops, the less grievous are the damages inflicted and the losses suffered. Public opinion is utterly wrong in its appraisal of the [business] cycle. The artificial boom is not prosperity, but the deceptive appearance of good business. Its illusions lead people astray and cause malinvestment and the consumption of unreal apparent gains which amount to virtual consumption of capital. The depression is the necessary process of readjusting the structure of business activities to the real state of the market data, i.e., the supply of capital goods and the valuations of the public. The depression is the first step on the return to normal conditions, the beginning of recovery and the foundation of real prosperity based on the solid production of goods and not on the sands of credit expansion.
"It is vain to object that the public favors the policy of cheap money. The masses are misled by the assertions of pseudo-experts that cheap money can make them prosperous at no expense whatever. They do not realize that investment can be expanded only to the extent that more capital is accumulated by savings. What counts in reality is not fairy tales, but people's conduct. If men are not prepared to save more by cutting down their current consumption, the means for a substantial expansion of investment are lacking. These means cannot be provided by printing banknotes or by loans on the bank books.
"If one does not terminate the expansionist policy in time by a return to balanced budgets, by abstaining from government borrowing, and by letting the market determine the height of interest rates, one chooses the German way of 1923."
Ludwig von Mises, The Trade Cycle and Credit Expansion: The Economic Consequences of Cheap Money (1946).
Historical note - Von Mises recognized that inflation is not simply a monetary issue but a fiscal one. While conditions in 1946 did not reflect the credit strains that presently keep monetary velocity in check, fiscal conditions were similar, with war-related deficits peaking at just over 10% of GDP. It is often forgotten that in the U.S., the CPI, which had averaged only about 2% inflation prior to 1946, shot to an inflation rate of over 20% by 1948. The S&P 500 plunged, and despite a dividend yield exceeding 4%, it would not durably exceed its 1946 peak until 1950.
The beauty of the financial crisis is that it highlights the theft and buggery perpetrated on the American people by a small group for decades. A perpetration that Obama and The Bernank want to extend at all costs.

No one really knows what motivated this nut job to go on a rampage. Maybe his parents threw all their money into a 500 k$ house 2 years ago and now can't sell it for 300 k$. And they probably understand that without gubmint subsidies it is probably only worth 125 k$. But thanks to the gubmint the guy across the street bought the same house with nothing down and just walked away months ago months ago without any loss.

You really never know what motivates unstable people.


"She has got to be the dumbest public figure in America.
She just keeps digging a bigger "hole" for herself to climb out of. Unreal."

I'd never heard the term "blood libel" before. Agree that her intention was not a religious one. But it does raise the question: Who writes for her?



"Palin is colorful and passionate and very popular among lots of folks. I have no problem with her using the phrase "blood libel." I think most people understand exactly what she's trying to say... many people agree with her sentiment... and I for one wouldn't be surprised if she has, pretty much single-handedly, changed the lexicon. Which is fun." - Georgy

I get the whole anti-elite and anti-intellectualism that Palin presents to the populace. But you don't get it.
The phrase "blood libel" has absolutely NOTHING to do with American politics. It's a disproporionate analogy, at best.

The fact that she used it in the context in which she did is a disgrace.

She's mad.
She's angry and offended by what has transpired. Her behavior has nothing to do with the victims, with Congresswoman Gifford, etc. Instead, she feels that SHE is the one being persecuted, in her own twisted way.

Talk about being petty, narcisstic, and ignorant . . . ALL at the same time.

What she had to say had nothing to do with the Country, with the American people.



PS. She could have transcended the moment. Instead, she chose to go into attack mode with a whole lot of narcissism and a heavy does of "Me, me, Me."

That's simply not what real leaders do.

Blood Libel???

I guess it would be too much to ask for someone that took 6 years and 4 different colleges to finally receive her BS degree to even understand what the phrase ACTUALLY means. She didn't study politics in college, and she surely didn't study history.

Sherman "double long" McCoy

SO, if Australia is headed for collapse, that must mean the fuel that drives their economy - iron ore exports - is going to collapse, which means China no longer needs iron ore, because they are collapsing, which by definition will cause America to collapse.

So basically, you're looking for DJIA 400 again, right?

Tom Kline

A year ago there was total denial the real estate market was in any bother. Now the recognition is beginning to dawn on the smarter folks that something terribly serious is happening to the property market, but as normal their blind faith is that they will have the oft spoken about 'soft landing'. Ha! No way hose! The bigger the boom, the bigger the bust. The property boom that began here in the late 90s started slowly and snowballed into the biggest property bubble the planet has ever experienced. This crash that's now underway will be absolutely the same. My advice to real estate speculators is panic, NOW! As this year pans out you'll finally recognize property in Australia is dead for generations. This crash is going to be a big one!

Thomas' Blog: Oz Real Estate Myths - Busted!

Hank Wernicki

7:56 am

60m stand-alone bottom fractal at 3:00 am this morning for the ES

11/17/10 is the base, today is the copy

based on the fractal evidence a big rally today

scanning for a setup


Michael - give it a rest. You don't like conservatives and Sarah Palin causes you emotional distress. We got it. Just say: "I don't like conservatives and Sarah Palin causes me emotional distress!" and skip the ridiculous emotive-logic. She can't win for losing.

I may or may not agree with her positions, but she seems like a nice person to me. [ For perspective, Obama also seems like a good guy and I wish him and his family the best. ] I just don't get what drives the rabid attacks on her. And, they are rabid. It's not her -- it's those doing the attacking who are of curious interest.

Account Deleted

US Dollar and EURUSD Charts


"Michael - give it a rest. You don't like conservatives and Sarah Palin causes you emotional distress. We got it." - rc

RC, I don't see her as a "conservative".
I see her as a self-promoter.

Emotional distress?
Not even close. It's somewhere between being totally embarrassing and downright comical. But the fact that she almost made it into the White House should cause anyone to pause, and evaluate . . . especially John McCain.

Mamma Boom Boom

>But the fact that she almost made it into the White House should cause anyone to pause, and evaluate . . .<

Finally, you smoked me out, I wasn't going to say anything, now I have to.

Sarah Palin has as much, or more, common sense as anyone in D.C. Common sense is the operative phrase when describing the qualities desirable in a leader. I would feel very comfortable with her as President and Romney as Vice President. The fact that she is not 'cosmopolitan' is a plus. We have 537 nit-wits in D.C. who think they are very special, these are the nit-wits that have ruined our country. The decisions that these sophisticated, pompous, fools make every day are deplorable.

Michael, you also are deplorable, deplorable for siding with them.

The American people were so sick of these deplorable people that they stuck their necks out and voted for an in experienced, Marxist. Of course they got what they deserved. But it just shows what extremes they will go to to get away from the criminals. I can't imagine what future candidates will look like.



You are spot on!

I get into silly spats with libs who simply cannot get up early enough in the morning to take swipe at Sarah. The minute the Tuscon thing happened, they and Sherrif Dupnick were all over it. They are stuck on Sarah, and stuck on middle America red state (and those, like me, who share same sentiments but are enslaved in blue state prisons) people who feel and ARE voiceless and disenfranchised.

And, not only are they sophisticated and pompous, but they are thieving bastards. They pretend to care for the little guy, bah.



Exactly. Mainstream media will attack Palin because she does not share their views. However, you would think they should be out in force talking about the corruption out there. How about Turbo Tax Tim with his glaring omission in reporting income? How about Charlie Rangel with his unethical behavior? How about Barney Frank with Fannie and Freddie? How about Maxine Waters asking help to bail out her husband's underwater investments?

You would think that the attacking THIEVES should be bipartisan, but it is not. Instead, people have to attack somebody's character because they disagree with their views.

Sarah Palin may not be perfect. She has flaws. We all do. However, those flaws (the difference in opinion) is OK compared with the real flaws out there. DISHONESTY. Being above the law, etc.

Note. I do not agree with everything Sarah Palin stands for. I also do not agree with everything BHO stands for. However, that is OK.


?, I have been folowing this back and forth on the shooter with some bemusement. Starts with Michael shilling for the Demo's - a real CENTRIST would never be a propagandist for the Left. Blew his cover. Or was it JT?

A lot of you are trying to defend Palin, which is a distraction from the real point: the left always tries to tie any random violence to the right. They have been doing this since 1963 when Kennedy was shot in Dallas, a hotbed of conservatism at the time - distracting the voters from the FACT that Oswald was a Marxist who had lived in Russia and adored Castro. They do this all the time and only once have ever succeeded - the OK City bombing where the bad guys were right wing militia. That emboldened them to always knee-jerk with op-eds that the climate of anger led to the shooting or bombing or whatever. This time they are trying to distract the voters from the FACT that the shooter was a whacko leftist, to the extent he had any coherent political views, who stalked the target before Palin bursrt on the scene. She and the rhetoric had nothing to do with the shooting. Nada. Zippo. Nichevo. As Michael is wont to shout, these are the FACTS.

The real culprit is the sheriff, who aparently is also of the left, who was derelict in his duties, which would have at least put the whacko on a gun no-buy list. He should be fired.

As to Palin, she spouted off and fell into the same trap. In contrast, Obama gave a fine speech, which said little (as most of his better speeches do) but expressed lofty sentiments that fit this occasion.

As to the MSM, they once again proved to be of no use, just PR shills for the left. Pathetic.


Well, I don't have much good to say about Obama, so I won't.


SENSEX: Trendline Watch

Since my last update on the SENSEX, price has rebounded and stayed range-bound. In the process, a significant trendline (blue) from 2009 lows has been broken. There may be minor trendline support at current levels as indicated on the chart, failing which 18000 area should offer solid support. While the SENSEX is still in its teens, it's twin brother the KOSPI is making better progress towards adulthood.


S&P500: Approaching Multi-Year Congestion

While the trend is still up, here's a multi-year chart showing significant resistance ahead for the SPX.

"Wave 1 = Wave 5" is a common relationship. Counting the 5 waves from the July lows, this gives us a target around 1295. Also note that price is approaching the upper trendline. We already talked about the very overbought oscillators and extreme bullish sentiment.

Trying to trade a top or bottom can be a deadly exercise. The more prudent approach would be to wait for a significant trendline break, before taking action with a suitable stop. All the best!

Wave Rust


"the shooter was a whacko leftist"

in a 6 word phrase, you managed to squeeze in a triple redundancy.

maybe you could use it as a metaphor for MSM, which would make it a quadruple.

btw, i agree with your eval of Oblahblah's Seinfeld-esque speech.

wave rust


the stu commented on the amazingly low level of puts relative to calls in US equities --- interstingly, notwithstanding a savage decline in Indian equities, here too, the calls outnumber puts by quite a margin in the January series ::::: either this is the dot-com type of rise where the market will ignore all indicators and just keep on going making a fool of all the bears for a long long time or we must be near a fast and furious decline

Wave Rust

wave, thanks for sharing this. a cheap route ot clean water would have a huge impact in the third world, especially after disaster where the poor water system is overwhelmed and fails.

Account Deleted

INTEL Corp Technical analysis


Stratfor had an interesting writeup on the shooting. The US Capital Police Force is responble for congressional security both inside & outside DC. The US Marshalls are responsible for security for judges and they had protected Justice Roll in the past because of threats. UCPF protocol is to contact local police to coordinate security for congressional event. They apparently weren't notified of this event, but they do have a responsibility to assess threats & plan for them, which they didn't in this case. Had they been talking to the US Marshalls and had some advance scheduling from the officials (who clearly had security threats that warranted extra caution) there would have been more protection. Hindsight may be 20/20 & we don't know what we don't know, but a decade after 9/11 should we still be lamenting the fact that we can't talk outside silos & connect some dots?

Hank Wernicki


Got a Buy on Oats, 395.40 Stop Target 399 +

March Contract

Hank Wernicki

Long the Aussie Dollar from last week

Mamma Boom Boom

>Trying to trade a top or bottom can be a deadly exercise. The more prudent approach would be to wait for a significant trendline break, before taking action with a suitable stop.<

That certainly is the case today. Low volume is making life miserable.

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