1. Markets acted close to our scenario- we had a week 5-6 correction in between ( we are at the final day of 6). Now we can expect the final blow up over the next 2 weeks but one sector is already capitulating the bull trend that are the highly praised financials (by the con artists selling the bull campaign).
Still we can expect the SPX to be manipulated up towards 1370-80 before a steep drop will occur – another weakness sign of the markets despite we are around the highs is that the AIG placement has been halfed and GM secondary delayed to autumn. That does not make any sense as in a real bull market you just could place any stock and it would be absorbed smoothly no questions asked.
We are producing weekly bearish divergences and have reached the setup TDM 9 count month which is in 95% of all cases an indication for at least a serious consolidation to say the least but since this is a 9/13 combination it rather hints to a trend change considering the cycle analysis of Bill McLaren. On top QE2 comes to an end in a little more than a month and QE3 will be activated once the crash starts but that will be rather counterproductive as real inflation is already on its way to hyperinflation but QE3 would be the catalyst for the disaster to happen.
Still preparing for it as the guys who hired Obama propaganda team will need to keep their zombie banks alive and the upcoming elections will need a timing to bring in better economic data one could think. Well at the end is does not really matter under a McCain president we would have seen pretty much the same results since they belong all to the same structure of influence or manipulation. Therefor once they decided who should become the next president they will go for the necessary steps. It is always easier to go with the team which already settled in but if they assume the public opinion has a strong opposition they go for plan B. with George Bush’s second election the pulled all strings to make it happen although it was at the edge – VP Gore became rich thereafter not a real coincidence or display of talents.
Submitted by Tyler Durden on 05/12/2011 20:47 -0400
A little under a year ago Moody’s Mark Zandi and Princeton economist and former Fed vice chairman Alan Blinder penned a paper titled “How we Ended the Great Recession” which did nothing but extoll the virtues of spending trillions in both fiscal and monetary stimuli and preventing U3 from hitting 16% (of course how one proves a counterfactual is irrelevant: just remember – if the Fed disclosed its top secret bailout plans the world would end. Same thing here – accept it – after all the guy is a professor at Princeton). In a nutshell Blinder is nothing but Paul Krugman on steroids: a man who believes that there is nothing worse in this world than establishing fiscal (and monetary) discipline now. Well, in an interview with Tom Keene earlier, Blinder fired the first shot across the QE3 bow, telling his Bloomberg host that the US needs “somewhat more” fiscal stimulus once again in order to boost employment(hold on: didn’t we end the Great Recession, and certainly the normal one in the summer of 2009 according to the NBER?). How this would be accomplished in the current climate is not explained. Instead what Blinder says makes one wonder just who is on the tenure committee at Princeton – when asked how we bring the deficit in without austerity, the Princetonian responds: “Unfortunately I think it is very subtle for most political processes especially for the political process in the US. What we should be doing is somewhat more fiscal expansion but at the same time legislating into law fiscal consolidation for the future. Starting 2 years from now, 3 years from now, 18 months from now. But not now.” Of course never now: why bite the bullet nowwhen it can be kicked to some other administration in the indefinite future? Especially when tenure money and/or Wall Street bribes are at stake…