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From the monthly archives:
November 2011
Hard as stocks and bullion got hit yesterday, there are outstanding targets well below these levels. Please note that there is bad news in today’s HUI forecast, since it implies a possible 15% fall from current levels.
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After opening on a small gap down Sunday night, the futures have flatlined for nearly six hours. This tedious dirge has left an 1194.50 downside target given here on Friday undisturbed, although I’d suggest using it to bottom-fish only if entry is via camouflage. (Check Friday’s post in the archive for further details.) A bigger-picture target lies at 1152.25, the midpoint support of the pattern shown. Click here if you’d like to learn how to do these trading tricks yourself.
Early Monday morning, index futures were off surprisingly little considering that the weekend just past seemed like a great time to get one’s own house in order in anticipation of Europe’s impending collapse.
[We used to think Nobelist Paul Krugman was the Looniest Economist in America, but Rutgers professor James Livingston recently emerged as a solid contender with an absolutely dumbfounding op-ed piece in the New York Times that said, essentially, that America’s wealth has come mainly from Government spending and consumption, not from savings and investment. In the essay below, we give our friend Edward Furst, a member of Young Americans for Liberty, a rebuttal opportunity. RA]
We all know that the New York Times isn’t exactly a bastion of free-market thinking. But a recent op-ed by Rutgers Professor James Livingston, a guy who makes Paul Krugman look like Milton Friedman, went beyond the pale of economic sanity. His basic contention is that economic growth comes, not from private investment, but from “consumer debt and government spending.” Livingston points to the increase in per capita GDP over the last century despite the relative atrophy of private investment as a percentage of GDP, the growth in government spending, and the general increase in consumer debt. Here we encounter the age-old conundrum of historians unschooled in economic thought (Dr. Livingston has a bachelor’s degree in British and American literature, a masters degree in Russian history, and a doctorate in American History). » Read the full article
Supercommittee Failure Just a Petty Distraction
by Rick Ackerman on November 22, 2011 3:35 am GMT · 24 comments
We view yesterday’s stock-market plunge as unrelated to the failure of the not-so-Supercommittee to compromise on a paltry $1.2 trillion in budget cuts over ten years. No one expected a deal in the first place, and even if there had been one, its effect on the economy, let alone on the deficit, would have been negligible. Who would ever have believed even a decade ago that a “mere” trillion dollars in Federal outlays would hardly be worth arguing about? Still, the way stocks fell, one might have inferred investors actually cared about the outcome. The nightly news pretended it mattered, perhaps because there were no titillating alternatives to serve up on a slow-news day. Wall Street did its patriotic bit as well, feigning concern by sending the Dow Industrials 250 points lower. In fact, there was bound to be a little knee-jerk selling by institutional traders fearful that their competitors would be selling “on the news.” In our view, markets are driven higher, lower, and sometimes nowhere by mysterious cyclical forces that we will never quite understand. Moreover, it is the cyclically driven price swings that color our perceptions of the news, not the other way around. » Read the full article