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Stocks Galloped Higher in 1929, Too


As usual, the stock market was vexatiously out of step with reality last week, soaring on word that the ECB plans to do “whatever it takes” to preserve the euro and the political union that it binds. For U.S. investors, especially those who believe in hope and change (and, presumably, the Easter Bunny), there was also the invaluable news that the U.S. economy is once again verging on recession – a development which is widely believed to portend yet more Fed easing. Completing the delusional vision that good times are soon to return nonetheless, crude oil finished the week with a gain of about $4 per barrel.  Of course, no one actually believes that so strong a recovery impends as to squeeze current supplies of crude that are more than adequate. Even so, the news media, feigning ignorance of forces that have been pushing the global economy toward an abyss, and abetted by the stock market’s steroid-addled lunge, were only too happy to report events in a way that did not challenge officialdom’s cynically crafted, positive spin.  The Establishment’s most useful memes were dutifully trumpeted by The Wall Street Journal in two headlines that ran above the fold on Friday:  Weak Economy Heads Lower, said the topmost, in a heavy font; and, immediately below it, in italics, the implicitly good news:  Markets Jump as European Leaders Vow to Protect Euro; Flagging U.S. Recovery Could Spur Fed.

Such headlines have the seeming heft of history-in-the-making. Notice, however, that it is not facts that have borne this weight, but mere hope and speculation. To say the markets have responded positively to some banker’s speech is hardly an assurance that the ECB’s latest nostrums will work.  As for the Fed’s supposed ability to revive the economy with yet another monetary nudge, it is only on Wall Street where the cynicism such speculation evokes could produce an ostensibly positive outcome – i.e., last week’s 600-point surge in the Dow.  Despite such effusions, however, there is growing tension between the stock market’s ebullient leaps on the one hand and mounting perceptions on the other that the global economy is poised to collapse.  Under the circumstances, we imbibe headlines like the ones above with a growing sense of foreboding. The reassurances that our leaders seem increasingly desperate to promote are perforce muted by the echo of headlines from the past. Below are a few to ponder as we bear witness to the stock market’s inscrutable rise. All appeared on the front page of The New York Times during the summer of 1929.   While a few of them suggest that little has changed, others seem ominous in hindsight:

  • Leaders Assure President Senate Will Cut Tariff to Protect the Consumer
  • Stocks Set Record as Money Drops to 6%
  • London Suffers Record Heat; British Drought Most Serious
  • Britain Won’t  Join Neighbors in Tariff War with America
  • Red Army Reported Massing on Frontier of Manchuria
  • Three Banks Closed by State In Passaic; Quick Sale Forecast
  • Heat of 91 Kills 3; Squalls Sweep City
  • U.S. Steel Profit at Peace-Time Peak
  • Baby Auto for Two to Be Sold by Mail
  • Mercury Drops to 56 Degrees in Coldest Aug. 5 Here
  • Farms Ship Wheat in Record Volume
  • Capone Shifted to Another Prison Because Fellow Inmates Threatened Him
  • Stock Prices Break as Rise in Bank Rate Starts Selling Rush
  • Stocks Regain Half of Friday’s Losses
  • Bank of England to Get $250M [from Fed] if Necessary
  • China Says Soviet Is Trying to Start World-Wide Revolt
  • Stock Market Goes Up, Surprising Wall Street; Brokers’ Loans at Peak Had Indicated a Drop
  • Arabs Invade Palestine from Three Directions
  • Turks Threaten to Seize Synagogue in Tax Dispute
  • Heat at 94 Again; Wave Nation-Wide
  • Stock Prices Break on Dark Prophecy; Follows 19-Day Advance [September 6]
  • [Professor] Finds Nation Lacks Direction Because Teaching Is in Hands of Women
  • Senate Foes Attack Tariff Bill
  • Boy Held in Theft of $512,000 Bonds
  • Stock Leaders Sag in Liquidation [September 25]
  • Toppling Markets Rallied by Bankers [September 26]
  • Maniac Kills Man by Push on Elevated
  • Hoover Defeated on Flexible Tariff
  • $1,253,702,357 Rise in Taxable Realty on City’s Rolls
  • Year’s Worst Break Hits Stock Market [October 4]
  • Brisk Rally Checks Long Market Drop [October 6]
  • Radio Carries Cheer to Byrd in Antarctic
  • Hoover to Attend World Series Game Today
  • Stocks Driven Down as Wave of Selling Engulfs the Market [October 20]
  • Stocks Gain Sharply but Slip near Close [October 23]

And we all know the rest.  If there’s a lesson in this sequence of headlines, it is that we should batten the hatches if and when the stock market’s daily gyrations become front-page news in the The New York Times.  Of course, the worst conceivable outcome would be a market that fails to gyrate, instead collapsing in a flash crash so devastating as to crush all speculation about a recovery.


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  • V August 1, 2012, 8:31 pm

    since it appears no one here understood my satirical piece above on gary, about his fawning admiration for buffett, and trying to make him out as some saint (just because he has lived in same house for 50 yrs, and only had 1 wife according to his “facts”, and was donating most of his wealth away after death), here’s what I was attempting to point about gary, and buffett:

    from my view, gary’s general “facts”, in most of his posts, always distort the truth in some way, by solely looking at whatever he is addressing within a very narrow context; and primarily because he not only constantly ignores the bigger picture of the unpayable world debt of 1 quadrillion, but he does not even consider it, as important at all.

    Additionally, gary’s “facts”, are constantly partially laced with b.s. he makes up himself (to supplement whatever his argument is), such as saying that his “saintly” buffett had only been married once; when in FACT, he had been married twice, and had lived with ex-wife’s younger nurse, since 1977 (now 35 years together), and when he dumped his invalid wife out of the house, and just kept his new hottie.

    And gary does this all the time, citing distorted “facts” that he makes up, to complement his overall arguments.

    On top of this, I have also caught gary plagiarizing articles off of ‘yahoo finance’ page, in which he not only presents data cited in the article as his own research, but he actually even writes herein almost all in the article near verbatim, without quotations, trying to pass it off as his own words.

    Suffice to say, I stopped taking gary seriously long ago, so I mostly scan quickly through his dozens of long daily permabull posts, looking for something to laugh about, something particularly absurd to enjoy ridiculing, and show him for what he is, IMO, a total charlatan.

    And I have wondered by permabull gary even comes to this site to write over a dozen long posts per day, since this is a permabear site, in it’s core constituents.

    And all I can think of, is that he is retired, a stay at home guy with not much to do (since as he has stated repeatedly that he is not even investing now), and that he likes to play the devil’s advocate, be this site’s contrarian, and for some unknown reason of his own.

    I also wonder why redwilldanaher bothers to invest so much of energy to attempt to refute this narrow-spectrum, tight-blinders, stubborn permabull guy; a guy that, has already proven to me, repeatedly, to be quite the made-up bull sh–tter: so how can anybody take this guy seriously, except maybe as this bear site’s permabull court jester?

    so that was my main point about gary above.

    that he makes up “facts”, to suit his distorted, narrow arguments.

    my point on buffett had nothing to do with adultery, that was incidental, I only used it to satirize gary’s 1-wife “fact” (only proper way to treat the narrow-minded garys of the world).

    no, my point on buffett is that buffett is a shark, and a bigtime insider shark, and no saint at all, as gary tries to paint him (you can almost gary’s picture of a white picket fence, with the 50 yr old home behind it, and “good” warren and wife holding hands and laughing at front, like in a norman rockwell painting).

    My main point above re buffett, which no one addressed nor refuted either, is the FACT that buffett saved both goldman in 2008, and bofa in 2011, and both times, because the goobermint’s Fed could not do it directly themselves, without breaking the law in 2008, and without raising major banking concerns over the health of all big banks, in 2011.

    And buffett came to the rescue both times, not because he was a ‘nice’ guy (just the opposite, he is a shark), he did it because he is a bigtime insider, one of the top ones, and he lent these 2 banks billions of dollars in their default-crisis moment (and remember, these 2 banks are 2 of his own biggest competitors, since one of buffett’s main longtime darling large stockholdings, is wells fargo), he did it because being tight with the goobermint is more important than enriching wells fargo, or any other stockholding, since to always have pre-event insider information, is what’s critical: pre-event political info, financial info, etc. For that insider pre-knowledge is more valuable than anything.

    additionally, the world debt situation is so bad now, that if buffett had allowed bofa to go under in 2011, and that would have made it possible for wells fargo to acquire 100’s of bofa’s branches for pennies on the dollar, the ensuing financial chaos in that would have occured in 2011, would have been injurious to all his stockholdings including wells fargo itself, since the failure of bofa would probably have created panicked bank runs, on all the other big banks, then all financial hell would had broken loose, so bofa HAD to be saved from default, by somebody, so why not him, to give even more power, and more insider leverage, when the unavoidable world-debt collapse finally came.

    Therefore, everyONE related to big banks and the govt. is a total lynig scammer, with buffett included, and he’s one of the biggest liars of all, because of high billionaire “sage” profile.

    By now, the unsustainable unpayable world debt, of both nations and large banks is so huge, that the liar-balls must be juggled daily and continually in the air and as long as possible, no matter what, with no crack of truth ever revealed by ANY insider; and to the point that even competitors, like the big banks, have to bite the bullet and band together, along with the govt., until the very end, when it all finally IMplodes together; and on the day least expected by the masses of sheeple “investors” and depositors.

    yet: those ‘in the know’, like the shark buffett, will know way ahead of the event, of the exact day that it will occur; and trust me, on that day, these 1% insiders be ready to screw the masses as deeply and permanently as they can. And I am sure also, they have all the NEW rules and regulations over americans, all setup already and waiting, for when this unavoidable event occurs.

    And I don’t blame them, because if I was one of them, I’d do the same.

    woody allen said it best, in annie hall:

    “Lyndon Johnson is a politician. You know the ethics those guys have? It’s a notch underneath child molester.”

    his girlfriend, in bed:
    “Then everybody’s in on the conspiracy… The FBI and the CIA and J. Edgar Hoover, the oil companies… the Pentagon, the men’s-room attendant at the White House?”

    “I would leave out the men’s-room attendant.”

    • redwilldanaher August 2, 2012, 12:07 am

      V, I have refrained for quite a while and will go back into hibernation as much as possible vis a vis Gary.

      Just as with Rick, sometimes Gary’s daily propaganda just pushes it a little too far and then I am compelled to respond. That takes the edge off and I go back to sadly chuckling at most of what he writes. Gary’s type is very dangerous IMO. Rick may publish an essay that I slapped together a few weeks back that alludes to the dangers that can eventually follow from Gary-style propaganda. Not the best essay I have ever written for sure but I’m in the middle of moving a family with 4 kids and it’s not easy!

    • V August 2, 2012, 3:45 am

      redwilldanaher, I had a younger biological brother once.
      and he would tell me, “that’s not easy!”, to what I said, all the time.

      and all I’d tell him, was this: everything in life is hard. so take hard, for granted.
      since nothing is easy, for that’s a modern b.s. myth. all survival is always hard, for all.

      then, if you actually get an ‘easy’ moment, enjoy it. because it probably won’t last long.

      he didn’t like what I told him. so he moved on.

  • gary leibowitz July 31, 2012, 8:21 pm

    I do read your posts. You want me to be angry and understand that governments are not the solution.

    The point of this is that every single time we have a crisis, guess what, more shenanigans get exposed, not less. More accountability is demanded, not less. That’s only natural. We pay attention only when it affects us personally. In so doing it corrects itself by to some extent until the next crisis, or until complacency comes back.

    Most government change happens during hardships. It tries to correct the specific problems that plagued it. Glass Steagall was a great example. The act of throwing it away happend very near the height of corruption and complacency. Here we go again. It’s a cyclical event, as is most of human nature.

    To suggest we were better off in the late 20’s and 30’s goes against everything I believe. We take stumbles but manage to get ourselves up and step forward. In almost every instance we are better off today than the last crisis. I suspect that will hold true for the next crisis after this. The proof is in our social status and health. We now afford and receive services and goods that only the privileged rich used to receive.

  • redwilldanaher July 31, 2012, 4:37 pm

    Finally Gary, I haven’t gotten it wrong. I’m railing against the rampant fraud and abuse that you cheer on…

    You are a perfect illustration as to why peaceful secession is the only plausible solution. I’d love to have the opportunity to leave you and your ilk behind in the commune.

    • gary leibowitz July 31, 2012, 5:24 pm

      The earnings numbers are facts. Yes this quarter they did nada. Known. No hidden numbers that skew the data becuase AAPL is the big winner. Even after all this the whole SP500 P/E is around 15. This in a quarter the the EU imploded, China stumbled, and domestic employment is low.

      I would say the street got it pretty right so far. No big adjustment down.

      As for my attitude on corruption, should I get angry that I can’t do anything about it (directly)? Should I start a campaign of hate and violence? Most peoples reaction is proportional to their own involvment. For every action there is an equal and opposite reaction. If the corruption directly affects me, losing a home for example, you can bet I would become more reactive.

      I prefer to take advantage of all situations when it comes to investing. I have been in the market since December and got out a couple of months ago, due to my triggers. I have yet to re-enter the market. In fact I believe their might be a good set up for another correction soon.

      I find it disingenuous that all this heated complaining about this fascist nation seems to take place after the markets refuse to cooperate with your notion that we should be knee deep in ashes by now. You aren’t really complaining about the wrongs of this world, only the fact that the powers that be managed to keep it from already happening. If my above statement comes to an erroneous conclusion, than I apologize.

      Govenments are a messy business. To dismiss them as having no value trivializes all the good and progress civilization has accomplished.

    • redwilldanaher July 31, 2012, 6:11 pm

      I’m done for a while Gary. You don’t even read my responses and drone on as if I’ve been blown up by being short for 3 years. I’ll let someone else waste their time with you for a while. Incorrigible.

  • redwilldanaher July 31, 2012, 3:59 pm

    “You want to get all upset that human nature acts the way it does. I prefer rules and regulations be enacted and enforced that limit these natural behaviors. The current situation is a result of lax laws and disbanding regulations.

    As for the idea that the worlds stock market is being manipulated, I say no more than was expected. In any crisis governments will do whatever they think necessary to maintain order. No matter WHO is in office.”

    1. I don’t have a lot of time today so I’ll have to hope that someone else can address your avoidance of the issues today.

    2. We’ve seen what rules and regulations are worth. The fact that you believe that new ones and new regulators will actually prevent anything is beyond laughable and more than likely there is a psychological descriptive term that I’m unfamiliar with that’s more appropriate here in terms of describing this particular madness.

    3. Sorry Gary, claiming that the markets aren’t rigged and then rigging them is having your cake and… Either we have so-called free markets or we do not. The government isn’t omnipotent and IMO you have no clue to what degree the markets are rigged.

    4. Finally, try to make the distinction between what people actually type and what you are arguing against. You constantly build straw men to represent people on this board and then argue with them. I remained sickened by your and others’ willingness to embrace the facade and the plans of your captors and then to attempt to justify it with faulty pragmatic logic.

    The stock market is the “dumbest” and most manipulated of all markets. Why was the stock market above 14k when it was obvious that the set of illusions that underpinned that fraud base run were no longer intact? Why did it get cut down so deeply from there? I thought it was always right?

    • gary leibowitz July 31, 2012, 4:15 pm

      Answers that you refuse to listen to:
      1 – rules like Glass-Steagall that were abolished to allow big banks to become very big.
      2 – enforce rule that is already on the books.
      3 – To say all regulations are meaningless is such a defeatist attitude. I can’t counter such an argument.

      You ignore one glaring fact. Corporations are making money. [Gary, pay close attention to one such corporation in particular, GM. Just as GM’s bailout is now unraveling, so will all the others. RA] You ingore that the market for 3 years now has gotten it right while you have gotten it wrong. You can’t dismiss earnings. Sorry. Not with me. Show me exactly how they are faked. Sales, earnings, profit margins (fake,fake,fake). Show me how people aren’t going out evey night for a good time. Show me the huge rise in the food industry is fake. SHOW ME. No generalities please.

      Finally to say we have bubbles and spectacular crashs doesn’t negate the markets stellar performances over a long period of time. I never said they were infallible.
      They make assumptions that turn out to be big mistakes like we all do. They usually do so when the earnings potential keeps rising, and ignore the possibility of a dramatic reversal.

    • redwilldanaher July 31, 2012, 4:21 pm

      S&P Earnings Growth Without Apple: 0%
      Joe Weisenthal|March 29, 2012|

      Analyzing the market sans-Apple is becoming a more and more popular sport on Wall Street.

      A new report from Barclays’ Barry Knap adds to the body of literature, looking at S&P earnings sans-Apple:

      As we head into 1Q12 earnings season, much like last quarter, AAPL is expected to have another sizable effect on index earnings and margins, masking otherwise less-than-stellar trends. Earnings growth is estimated at just 1.4% y/y, and about zero excluding AAPL. It seems likely that results will wind up somewhat better than expected, given a post-recession median positive surprise ratio of ~70%. However, even tacking on last quarter’s ex-AAPL earnings surprise of 230bp, this quarter is setting up for 2% y/y growth, which would make this the worst growth rate since the recovery began.

      This is another interesting chart from Knapp: It looks at the number of stocks at any given period making an outsize contribution to the S&P 500 over a 3-month period.

      As you can see, right now, only one stock (Apple) has contributed more than 10% (or even 5%) to the rally over the last 3 months.

      Compare that to 1999 and 2000, a period characterized by several fast-growing mega-corporations, when several stocks were making big contributions.

      As for the above point about earnings, the situation is even worse if you just look at the tech sector, where earnings sans-Apple are actually shrinking.

    • redwilldanaher July 31, 2012, 4:31 pm


      Here’s Why Investors Are Punishing Companies That Beat Earnings Estimates

      July 25, 2012 3:26 PM EDT

      The short answer is: Many companies lie about their earnings results.

      A recent survey of 169 chief financial officers at publicly traded companies in the U.S. reveals that one in every five U.S. companies fudges the numbers to boost stock price. And for such firms, 10 percent of the earnings per share, or EPS, is typically managed.

      Earnings management is mainly driven by a host of factors but capital market motivations and career and compensation concerns dominate, according to findings detailed in a recent paper published by Ilia Dichev and …

    • redwilldanaher July 31, 2012, 4:35 pm


      Seems like your benevolent pals in government have caught onto the action too Gary.

      States Use Budget Gimmicks and Accounting Tricks to Evade Balanced Budget Requirements

      Peter Suderman|Jul. 18, 2012 3:50 pm

      Here’s the thing about state budgets right now: They’re in sorry shape. They can’t afford their Medicaid bills, which were on the rise even before the recession blew up the case load, nor their public employee obligations. And that’s just if you look on the headline numbers.

      As The New York Times notes, the state budget situation is actually worse than it looks. Although nearly all are required to balance their budgets each cycle, they’ve managed to avoid doing so by relying on budget gimmicks:

      While almost all states are required by law to balance their budgets each year, the report said that many have relied on gimmicks and nonrecurring revenues in recent years to mask the continuing imbalance between the revenues they take in and the expenses they face — and that lax accounting systems allow them to do so…

    • redwilldanaher July 31, 2012, 6:01 pm
    • redwilldanaher July 31, 2012, 6:06 pm


      For decades, Washington and Wall Street have been systematically rewriting the rules of the American economy to benefit the few at the expense of the many – putting in place policies that have steadily dismantled the foundation of America’s middle class.

  • gary leibowitz July 31, 2012, 3:38 pm

    Perhaps I wasn’t clear.
    1 – I believe all governments, political systems, institutions have some degree of corruption and manipulation for someones benifit. In a communist country or a socialist one. Thats the nature of human behavior.
    2 – I do not condon it, just accept it as a part of life.
    3 – Just because I accept (manipulation/corruption) this as a given doesn’t mean there shouldn’t be punishment when caught.

    You want to get all upset that human nature acts the way it does. I prefer rules and regulations be enacted and enforced that limit these natural behaviors. The current situation is a result of lax laws and disbanding regulations.

    As for the idea that the worlds stock market is being manipulated, I say no more than was expected. In any crisis governments will do whatever they think necessary to maintain order. No matter WHO is in office.

    Now, given these assumptions above I still believe that the stock market is driven by a free market who’s goal is to make profits. If government manipulation, say lowering rates to zero, markets will react by deciding if profits will do better or worse in that situation.

    Here is the important part. Any government manipulation can’t prevent or decieve the markets over any length of time without negative earnings consequences. As you stated many times here, debt and spending will eventually create problems for corporate earnings. In the case of inflation, corporations usually come out on the positive side.

    You have made the assumption that the markets are dumb and therefore don’t realize their mistakes. All I can say is that they have had a better track record than most. They were vindicated these last 3 plus years with stellar earnings. This despite, or in some instances, because of the dismal wage and employment growth. You want the market to acknowledge they were wrong and accept the fate you asigned to them.

    If you still want to get upset that the debt and spending hasn’t yet affected the markets, go ahead and rail. You seem angry that the markets aren’t playing fairly. You should instead base everything on potential profits and loss, when investing in the markets. thats how the street treats the stock market.

    • gary leibowitz July 31, 2012, 4:03 pm

      Why I think the technicals are calling for a correction instead of a major drop.

      Employment costs are extremely low. Wages have outpaced spending these past few months, home prices are actually rising, and PMI numbers are for the most part still rising, along with a steady service sector. Finally coprorate profits have not been adjusted down by a significant amount. EU is clearly backing away from strict austerity measures.

      In fact the above conditions could be interpreted as a spring board for another rally.

      Sorry folks but I don’t see the end of this earnings cycle.

  • Andrew Gutterman July 31, 2012, 3:13 pm

    During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.

    • Rick Ackerman July 31, 2012, 9:20 pm

      I’m not sure whether your post is tongue-and-cheek, Andrew, but the reality is that the system has been sustained by the infusion of trillions of credit dollars whose value is illusory. Under the circumstances, we have not been “safely carried” past the crisis, we have only postponed it and made it vastly larger.

    • Andrew Gutterman July 31, 2012, 11:13 pm


      That was Herbert Hoover in 1930 I was quoting. I have a book at home titled Oh Yeah? that is full of quotations by everyone up to its 1931 publication date. I thought I’d post them every now and then so people could see that there isn’t much that is new about this.


  • redwilldanaher July 31, 2012, 5:32 am

    Amazingly there is even more tonight Gary! Jill may like this one too!


    Seems as though the law may be important after all!

    Any chance that the psychopaths that have destroyed this country at an ever increasing rate may have overlooked this one? How about those that justify what the psychopaths have done?

  • redwilldanaher July 31, 2012, 5:17 am

    And yet even more proof that nearly everything is fully corrupt at this point and why renewal is more important than perpetuation:


    Regardless of the outcome, I don’t doubt it for a moment.

    • redwilldanaher July 31, 2012, 5:28 am


      Here’s more!

      See Gary, this is where you are really tripped up. I know that you support this manipulation because clearly our benevolent rulers are only doing what’s best for us, whether we know it and appreciate it or not, but here’s the rub, isn’t this kinda, sorta duplicitous? In other words, you are always calling for “better people” and “better regulations” to assure that the markets are looking out for the little guy. What seems to be lost on you is that the government/establishment are one and the same. Wall St. wants the regulations and the FEDS give it to them as requested. Why? Because it maintains the facade that things are legitimate when obviously they are not. Yes Gary, this legitimizes a thoroughly crooked game wrapped inside of a scam tucked inside of Great Con Job. Wall St. needs the regulations that they circumvent every time and then get a wrist slap of millions after pocketing hundreds of billions. This is the one unfailing pattern of the past 25 years.

      As has been asked thousands of times, who is to regulate the regulators Gary? Should we be using Porn Kingpins that can track IPs to “regulators workstations”?

      See the complete CON for what it is Gary. Choose to be a free man and not a collaborator.

      “I don’t go to sleep with no whore and I don’t wake up with no whore… That’s how I live with myself” – Martin Sheen to his spawn Charlie in Wall Street.

  • redwilldanaher July 31, 2012, 5:02 am

    Gary, do you realize what you are arguing for? Yes, I remember all of those events. I traded professionally through and around all of those events.

    I didn’t expect Armageddon 3 years ago, I expected Armageddon to be arrested 3 years ago. That’s what THEY do. That’s what my essays @ Rick’s have predicted more of. The predictions have played out as well.

    I’m simply disgusted by your cavalier treatment of the law and the truth. I think your propaganda is dangerous. I think you help to perpetuate the invisible gulag that most of us are housed in. I take issue with the fact that you and many others are willing collaborators. As I’ve stated many times, make your bullish predictions, ride the wave. I have no problem with that. My issue remains your adherence to propagandizing and further perpetuation of the big lies of which there are many.

    Call it for what it is, a farce. If you’re too clueless/lazy to realize to what degree this entire thing is staged and manipulated, then fine, but please don’t try to mislead people into believe the superficial level that THEY want us all to believe. That is tantamount to aiding and abetting the enemy.

    I doubt it will ever happen but my hope remains that the entire rotten edifice comes crashing down and that we that choose to finally have the opportunity to live in a much freer society that is much more real than the artificial matrix of lies and deception that you support on an hourly basis.

    It’s abundantly clear that you’ve never researched modern market manipulation and therefore you have no foundation on which to refute our assertions other than “I don’t believe it”. Sorry, that’s not good enough for me because I have seen much more compelling proof on the contra side.

  • redwilldanaher July 31, 2012, 12:19 am

    “All the silly acceptance of green martians invading America is what we have here. The Colorado incident was ripe for speculation that he wasn’t the gunman. Conspiray. Th 4th year of a market that has gone up on average 25 percent per year is also based on conspiracies and manipulation. It is only when it hits the devilish 666 on the SP500 that everyone here is vindicated that the markets are acting rationally.

    Markets thoughout history have overshot on both sides. It is afterall a guessing game based on earning trends and special events. To suggest “this time is different”, begs the question why use any historic patterns at all? If you can’t understand the markets because of the “new manipulation rules” than it is best to sit on cash. Rick suggests massive manipulation but he has found a technical system that works for him. How is that possible? Manipulation and technicals are clearly opposites.”

    [Even the manipulators are subject to the forces that make technical analysis work, RWD, and even manipulated markets create support and resistance zones whose effects on a stock are quite predictable. RA]

    So many gems in only 2 paragraphs!

    Here’s the deal Gary. I’ve provided you with some research over the course of time as I’ve encouraged you to do some of your own.

    It is a fact that TPTB coordinated a rescue of the American stock market. They announced that they would do it and they’ve done it. Overnight moves in the futures are responsible for the overwhelming majority of the points amassed in your amazing bull market run. Some research that I’ve read needed to go out to 11 standard deviations away from normal market conditions to explain what has taken place since your precious bottom. This time HAS BEEN different Gary. You are either too lazy, too well paid, or too cowardly to do the research and seek the truth. In any case you should be ashamed of yourself.

    Few here have been fighting the so-called bull market but rather lament the complete artificiality of it. This all seems impossible for you to grasp for some reason and the fact that you ignore facts and refuse to do research and simply keep your tired drumbeat going is what leads people to believe that you are a shill.

    BTW, the #1 tracked market timer in the world completely disagrees with you and believes that the markets are nearly 100 percent rigged at this point in time and over the past few years. In fact, he advises based on technicals the key off of the hyper manipulation. I suppose he is just a lucky conspiracy theorist????

    • gary leibowitz July 31, 2012, 2:16 am

      Yet earnings must be rigged also. World wide conspiracies where holograms of fake reality shows such things as: Young people around the world clamoring to buy very expensive elitist toys from AAPL. Young adults buying into a 700 sq foot co-op for over 500,ooo, combinbed with maiintenance fees over 700 per month. Restaurants and bars sprouting all over the place as if it’s a weed. Asia a burgeoning place for growth and free enterprise. China a huge untapped market that has 10 times the potential for growth we had.

      Earnings, people spending money on unnecessary things, entertainment industry that is at or near a peak in sales. Saying all this I am not a Pollyanna. I know there will be major problems ahead. I just don’t take the Cassandra warnings for the last 3 years as proof it is ending today.

      How can you have a rescue and control of markets without showing earnings as one big controlled market also? If you want to state that the bailouts, bond purchases, and bank shenanigans have kept the economy from collapsing, than I agree. Do you remember Long Term Capital? Same thing happened. Do you remember the last time Citi was bailed out prior to this mortgage debacle? Whats your point? Did you expect any less? Did you expect BUSH to allow all the insurance companies and brokerage firms, along with major banks to fend for themselves?

      I know whats been happening. I don’t even deny there are a lot of behind the scene manipulation to keep this economy going. I am not the economic watchman whose job it is to arrest the guilty. I deal in a world that has not changed in centuries. You act as if its unfair this time around since you expected armageddon over 3 years ago.

      The real question is how is the market going to react in the future? Not why.

      Facts: despite the mortgage debacle they have managed to keep rates low, the dollar stable, companies earnings recovering nicely, housing and jobs muddling along. Not great, but not bad either. Yes the real economy with real people working real jobs are once again feeling the brunt of this mess.

      I don’t base my bets on a wish list, and a sense of justifiable fair play. Markets are unemotional, like investors should also be. As an example: Short sellers were causing wild swings in the market years ago, so the solution was to place uptick rules on them. Unfair? Did it really change anything? We also have automatic stoppage of trade over a certain percentage drop. To me thats all part of the game. In the end the markets always find equalibrium.

      Everyone seems to be upset because I don’t see impending doom. If I see it happening 6 to 9 months from now that is still not accepted. Sorry I don’t flog myself with religious fervor and repent that the end is here.

      I just see the world in a more “logical” light. I could be wrong but I prefer to think that man hasn’t changed much over the last few centuries. The proof has already been shown to me in the form of the original debacle to begin with. These missteps will always happen and to think man himserlf can prevent it in the future is folly. In that light I do not see market manipulation having any real affect on the course it set out originally.

    • gary leibowitz July 31, 2012, 2:25 am

      On a technical basis there is major warning ahead. I have stated so. In that vein we are in agreement. I just don’t see this as the final drop. History usually waits for the markets to be very optimistic, i.e. overstep their expectations for future earnings in the form of above average P/E ratios. An expectation for a 5 percent move higher in next quarter should not be adjusted so drastically to account for a large drop in the markets of over 10 percent.

      For a short term play I will step in with puts if we hit my targets soon.

  • bc July 30, 2012, 11:24 pm

    We are all guessing between hyperinflation and debt deflation, that is all. My money is on debt deflation, just like what’s happening in southern Europe right now, and for the same reasons. Our ruling elites prefer it that way.

    • Rick Ackerman July 31, 2012, 9:09 pm

      I agree that Europe’s slow-motion train wreck has shifted the hyperinflation/deflation in favor of deflation. Although I have come to accept the argument that hyperinflation is likely or perhaps even inevitable at some point, it seems increasingly likely that it will occur with the swiftness of a thunderclap — think global “flash crash” — rather than as the result of yet more failed QE attempts.

  • Jill July 30, 2012, 8:02 pm

    It may seem impossible to people unfamiliar with his tribe, but Buffett’s tribe is concerned with other issues besides how much in taxes he will personally pay.

    Politics is a tribal activity, like religion, sports spectatorship etc. Your “team” or “one true church” can do no wrong. The opposing team is going to hell and can never be right. Corruption, evil, stupidity etc. are only noticed in the other team. Or, if they are noticed in your team, there is some logical explanation as to why appearances are deceiving. Tribalism is based on identification with a team or group, not on facts. So I don’t know why people are bothering to argue facts re: politics, as they are irrelevant. Tribalism is esssentially faith based, based on faith in one’s tribe.

    Re: the market, Vlad I think you meant to say 2011, not 2012, when you said “Market breadth for S&P500 was excellent (huge stock accumulation), over the last 4 months of 2012.” Otherwise, folks would have noticed your post. This is a predominantly a Bear board, after all.

  • redwilldanaher July 30, 2012, 8:00 pm

    Had to leave my own stand-alone comment today because it gets harder and harder to live silently when insanity has a lock down on the landscape.

    One thing I’d like to raise is the opportunity cost that Gary and his like-thinking cohorts seem to miss. It’s been noted countless times as to how important the destructive side of the cycle is to maintaining the integrity of the full cycle itself. My question to the would-be central planners (the seals, call them what you want) is, why do you completely discount the values of adversity and necessity? I understand why the criminal syndicate at large does but for the life of me I can’t understand how this can be missed by people other than the fact that they don’t want to see it.

    Please, someone explain this type of thinking to me…

    • Jill July 30, 2012, 8:54 pm

      Everyone misses facts that they prefer not to see. You are no different. Perhaps the extent of adversity and destruction would be too much to bear and would not make things better in the long run, as you imagine. People project out future scenarios based on “If this course is taken, according to my ideology, then this will happen, so things would then become far better/worse.” But no one knows for sure. We’e all guessing and perhaps all blind to the “truth” of what would really happen in such a case. Hard to predict the future.

    • redwilldanaher July 30, 2012, 11:16 pm

      Jill, you sound like you may be experiencing Stockholm Syndrome early onset. I have solution for people that feel as you wrote of. Leave us alone. You go your way into commie/socio/central planning paradise and leave us unenlightened alone as we depart from you and chart our own course knowing that at least we can play at more honest tables.

      In other words, for those of you that prefer to lick the boots of your captors, Lick away! For the rest of us, I have a strong suspicion that we’d rather die as much more free men.

    • Mark Uzick July 30, 2012, 11:52 pm

      Jill: “Everyone misses facts that they prefer not to see. You are no different.”

      Your argument amounts to, “Everyone is guilty of irrational bias until proven innocent; therefore all opinions are of equivalent validity.”

      My guess is that you also subscribe to the corollary of that principle – moral relativism – as well.

      Jill: “But no one knows for sure. We’e all guessing and perhaps all blind to the “truth” of what would really happen in such a case.”

      Some people actually want to know the consequences of actions, honestly seeking the evidence and principles to help them come up with a plausible guess – always ready to reexamine their beliefs. Others only see what supports their preconceptions.

      You see both types of thinking as equivalent; and because you belong to the second camp, you think you’re being overly generous and tolerant to say so.

    • Jill July 31, 2012, 2:06 am

      Mark, none of that is true of me or my point of view. But you belong to a different tribe, so you think every idea associated with the political tribe you think I belong to (which is also not correct, BTW) is evil and that every idea or action associated with your own tribe is good.

      Gosh, I wonder why trying to discuss politics is 100% a waste of time. If someone disagrees with you, they have to be stupid, irrational, and evil and corrupt in every way.

    • Mark Uzick July 31, 2012, 3:28 am

      Jill: Mark, none of that is true of me or my point of view.

      Maybe that’s so – if you are not responsible for your words. If you think I misunderstood you, then explain in what way that I did so – otherwise accept that I got a glimpse of the real Jill behind the camouflage.

      But you belong to a different tribe, so you think every idea associated with the political tribe you think I belong to (which is also not correct, BTW) is evil and that every idea or action associated with your own tribe is good.

      I doubt there’s much difference, from my perspective, between the political tribe you belong to and the one that you think that I think you belong to.

      If your statement was true, then I wouldn’t always be arguing with most people here.

      “Gosh, I wonder why trying to discuss politics is 100% a waste of time. If someone disagrees with you, they have to be stupid, irrational, and evil and corrupt in every way.”

      I can only guess at what you believe other than your intellectual relativism. That you’re hiding your opinions is clear – that your beliefs are not open to question and that you fear opening them to scrutiny can be surmised, both by your fear of stating them and your belief that all perspectives are dogmatic and, hence, equivalent (A clear example of projection.).

    • Mark Uzick July 31, 2012, 3:52 am

      Jill: “Mark, none of that is true of me or my point of view.”

      Maybe that’s so – if you are not responsible for your words. If you think I misunderstood you, then explain in what way that I did so – otherwise accept that I got a glimpse of the real Jill behind the camouflage.

      Jill: “But you belong to a different tribe, so you think every idea associated with the political tribe you think I belong to (which is also not correct, BTW) is evil and that every idea or action associated with your own tribe is good.”

      I doubt there’s much difference, from my perspective, between the political tribe you belong to and the one that you think that I think you belong to.

      If your statement were true, then I wouldn’t always be arguing with most people here. Please don’t project your ridgid tribalism on me.

      “Gosh, I wonder why trying to discuss politics is 100% a waste of time. If someone disagrees with you, they have to be stupid, irrational, and evil and corrupt in every way.”

      I can only guess at what you believe other than your intellectual relativism. That you’re hiding your opinions is clear – that your beliefs are not open to question and that you fear opening them to scrutiny can be surmised, both by your fear of stating them and your belief that all perspectives are dogmatic and, hence, equivalent (A clear example of projection.).

    • mario cavolo July 31, 2012, 5:22 am

      It is a core point RWD, perhaps that the way the modern world system works has become so twisted and perverted that now the leadership will do everything possible to avoid it, thinking it will turn out much worse, cause too much suffering, social chaos, etc…Philosophy vs. Reality? In doing so, do their interfering actions disrupt or “shift” the cycle, rather than destroy it? The issue I see is that in today’s world, many traditional correlations don’t have the value and meaning they used to. There are correlations and ratios that are so extremely skewed, that no one can truly relate to them. For example, here’s a simple paired dataset based on UN, IMF, GS (and others) predictions:

      U.S. – pop.: 300,000,000
      Est. pop. increase in 30 years? 100,000,000 – Number of current shopping malls: around 75,000

      China – middle class (only) pop: 200,000,000
      Est. pop increase in 30 years? 6-800,000,000 Number of current shopping malls: 2500

      Nuts. The disparity is so wide its hard to comprehend its meaning. For example, how much difference will the planned 15,000 more shopping malls across China’s middle class increase U.S. exports to China? I say alot, but hard to pin down the number.

      Anyway back to the original point, seems to me, there’s a big focus in today’s world on “avoiding suffering” at all costs, even if those reasons are self-serving politicians who are just kowtowing to money and votes, which we know they are.

      Cheers, Mario

    • redwilldanaher July 31, 2012, 3:47 pm

      “It is a core point RWD, perhaps that the way the modern world system works has become so twisted and perverted that now the leadership will do everything possible to avoid it, thinking it will turn out much worse, cause too much suffering, social chaos, etc…Philosophy vs. Reality? In doing so, do their interfering actions disrupt or “shift” the cycle, rather than destroy it? The issue I see is that in today’s world, many traditional correlations don’t have the value and meaning they used to. There are correlations and ratios that are so extremely skewed, that no one can truly relate to them.” –

      Thanks for commenting Mario. I’ve made the same points that you’ve highlighted here and also, it’s an easy sell for many reasons. American society has been “wussified” and there is now a pavlovian call and response to “do something” just to mention a few. So yes, the you have to take the bad with the good concept is nearly entirely lost and remarkably most Americans are still completely fooled by the old loss of purchasing power trick vs. actually addressing the ludicrous deficits of many kinds. You know it is stealth, I know it is stealth but most people just gripe about it and do the old “when I was a kid this used to cost…” and then return to normally scheduled programming. Above, I was referring to people who should know better, and I should have made that more clear. It’s pretty simple, the typical person is going to be much more resourceful when they’re lost in the wilderness than when they’re lazily sunbathing on a pleasure yacht.

  • V July 30, 2012, 7:41 pm

    I posted this over the weekend, apparently no one saw it, except paid by hour gary l.

    It’s technically relevant and important, in order to interpret only true source, of current equity market advance: short-coverers.

    Looking at a study of the 500 S&P stocks’ “market breath” (up-day vol./down-day vol.) over last 12 months.

    Bottomline: Market breath for S&P500 was excellent (huge stock accumulation), over the last 4 months of 2012 (especially at each sharply down-day bottom, and there were several, over those 4 months).

    That alone should have forewarned there was a big multi-month rally ahead, since it was a primo set-up for the insiders to create, for months, a slew of 1-day short-covering “world is saved, we are in recovery” surprise news rallies.

    However, situation since Jan. 2012 is totally different, breathwise. Because breath has been getting worse every month, less and less accumulation going on, almost all distribution, and sold to the last few remaining short-covering permabears.

    So, “market breath” putridly stinks now. And that is not indicative of any new multi-month bullmarket, anywhere soon.

    It’s just the opposite. All there is right now are a LOT of waiting stock-sellers, and selling as much as sustainable into every (manipulated, by those ‘in the pre-know’) short-covering rallies (and usually setup overnight, like last Thursday).

    Because, so you get an idea of current “market breath”, last Thursday huge morning gap rally (out of nowhere, a real “surprise” to markets), and due only to Draghi’s words “I will not allow the Euro to fail, believe me, it is my mandate” (paraphrasing), only achieved less than .5 market breath (only 1 up-stock, per every 2 down-stocks).

    And that is an incredibly terrible market breath, .5, especially on a huge upmove “world is saved, for sure this time” huge news day.

    There is near zero stock-accumulation going on right now, and getting closer to zero each day.

    And this has been going now, for all 2012, so it’s a TREND and not a fluke, for it’s gotten worse every month.

    And all that’s left now, are insider manipulators simply draining the very last of the dregs of the funds of shorters, through these 1-day wonder “central banker news” hoaxes, like last Thursday’s.

    Eventually, even the most permabear shorters will stop shorting altogether (from getting burned so many times), and then there will be no one left to feed this huge, insider-created “stock-distributing” overpriced-monster, with all stockholders, just waiting to sell, to the next sucker on top of the overpriced-pyramid.

    Then, the largest ponzi scheme of all time, will be over very quickly.

    So, I continue to think there is a major trend-turnaround day coming very soon, and probably in the shape of an overnight “flash crash”; and due to the manipulating insiders going short themselves, since there is no more money to be milked from the repeatedly suckered, permabear shorters.

    So it’s near finally the time, that insiders will go after the money of the evenmore suckered stock-buyers; thus leaving them holding the bag once again, like in July/August 2011.

    S&P 1100 area is dead rush ahead, I think.
    And this week could be the start of that big trend-turnaround, in a strong case of “sell the (central bankers b.s.) news”.

    However, myself, I still like Greece, officially dropping out of the Eu this summer (and defaulting 100% on their debt), as “THE event”, that causes the overnight “flash crash”.

    • redwilldanaher July 30, 2012, 7:55 pm

      I read it. Thanks for the contribution. This is the kind of breadth stuff that I look at as well. In my book, having learned something over the past 20 years, this info serves to “set the stage”. This type of info tells me that it is risky to be complacently long looking out beyond short and swing style trading. IMO we have to wait for the catalyst and more importantly the catalyst must be seen by the market. The catalyst can remain there for some time ignored. It is only when the action that you allude to begins to take place that a serious decline will set in. Then again, as Rick often notes, in the modern world of nearly full artificiality, there may be a sudden “pull the plug” event followed by a reveal of the catalyst after the fact.

  • Chuck July 30, 2012, 7:22 pm

    ever wonder why someone ‘rich’ like Buffet, would ‘want’ to pay more in taxes….or rich like Nancy Pelosi?

    doesn’t really make sense to me…. they must be a different kind of rich huh….not actually in the ‘one percent’ class?

    • V July 30, 2012, 7:56 pm

      Buffett is a bigtime insider. He has proven it repeatedly, for he saved goldman with billions in 2008 (when the Fed couldn’t, because goldman was an investment bank), and he also saved bofa with billions in 2011; and the result of that, yet remains to be seen.

      However, Buffett usually wins, on were he places his big money. He won big on goldman (billions), and now he’s totally out of them. And as to bofa, he always gets preferred shares; so, when bofa finally bankrupts (as they surely will), they pay only preferred shares (small % stockholders), but common shares (suckers) will get 0% slammed dead; because insider Buffett almost always wins, and big.

      Yet, octogerian Buffett is not far from the grave, or off to profound senility, at least. And I will party hardy, when either occur. One less scumbag.

    • gary leibowitz July 30, 2012, 8:06 pm

      Buffett. Leaving 99 percent of his money to charity.
      Lived in same home for over 20 yuears. Children didn’t know his true net worth. Still lives very modestly.

      Perhaps he feels the tax code is slightly slanted? Perhaps he truly believes in fairness?
      His lifestyle ceetainly indicates he is in touch with the common man.

      Have you ever read his bio?

      Bashing him just proves my point. I guess in your mind anyone associated with busniss is corrupt.

      Please show me his evil ways? Yeah he is the CEO of one of the largest companies. Yeah he has a fiduciary responsibility to his shareholders. Yeah he is an old man that knows nothing of the internet generation and has acknowledged it.

    • V July 30, 2012, 8:28 pm

      Gary, I worry about you. there is something wrong. are you a communist?

      So Buffett is leaving (after death) 99% to charity. May be yes, maybe no.
      Because just because you innocently read it in a book, doesnt make it true.

      But let’s say it’s true, good ol’ insider warren will do so.
      Hey, my most respected American, T. Jefferson,
      freed all his slaves, after death.

      You are so either so naive, or such a liar, gary, it’s incredible, but—funny.
      yet you must also have a lot of free time, to constantly write nonsense here.
      so mazel tov, bull-nonsense dude. so keep your daily crap coming.

      Buffett—perhaps he believes in fairies? and magic? But fairness? roflao.


      The kinder, gentler V is a welcome addition to the room, but you’re pushing the envelope a bit here. RA

    • gary leibowitz July 30, 2012, 8:57 pm

      “In June 2006, Buffett made an announcement that he would be giving his entire fortune away to charity, committing 85 percent of it to the Bill and Melinda Gates Foundation. This donation became the largest act of charitable giving in United States history.”

      “Warren Buffett lives a modest lifestyle despite his net worth of around $44 billion. He purchased a five-bedroom house in Omaha in 1958 for $31,500 and has lived there ever since. Buffett doesn’t spend his money on electronics and reportedly doesn’t carry a cell phone or have a computer at his desk.”

      Hello, anyone home?

      Sorry I must amend my statement about him living in his home for 20 years. My math was a bit off. I believe it is over 50 years. Same wife till she died. Fancy that!

      I find it ironic that when we now have the ability to verify almost any fact at an instant people still go out of their way to remain ignorant.

      The evils of being rich. Going crazy. Clearly this affliction hit Buffett. How else can you explain his actions.

      Next you are going to tell me Mother Teresa had some nefarious deals with Commies.

      Back to your world of meanness with everyone and everything drawn to the “dark side”.

      I really can’t believe I am actually having to defend Buffetts long, very exposed, career.

      Un-be-liev-able !

    • gary leibowitz July 30, 2012, 9:39 pm


      Ending my posts to you. Have a good one.

    • V July 30, 2012, 9:48 pm

      here, fool gary, even wikipedia knows more than you, about your love-daddy warren:

      “Buffett married Susan Thompson in 1952. The couple began living separately in 1977, although they remained married until her death in July 2004. ”

      “In 2006, Warren married his longtime companion, Astrid Menks. She had lived with him since his wife’s departure to San Francisco in 1977.”

      hope I didn’t burst your bubble about your “saintly” billionaire love-daddy warren… roflao.

    • mario cavolo July 31, 2012, 5:05 am

      V, now you can truly completely without any hesitation go to F&^%%$ng HELL! You’re the worst scumbag that has EVER attempted to grace this forum. Burn in hell you piece of S^%t…YOU DON’T EXIST.

      Cheers, Mario

    • Sam July 31, 2012, 11:12 am

      That was a cheap one Vlad.

      Now I’m not defending Buffett – just playing devils advocate, but infidelity is no true indicator of a bad person. I know people who are good, free-spirited individuals and as a result they sleep around a bit (even within a marriage) but they are fundamentally good people. They will not back the arms trade, they will not invest in unethical, exploitative organisations.

      I can say for sure Buffett is a bad guy who is anti-competitive and kleptocratic. He says he’ll donate his wealth to charity but we have to wait until he dies – what’s that?! True indicators of a total arsehole. If he intended any good he would do this while he was still alive! Such corruption is indicative of a caesar or other deluded megalomaniacs. Taking little or no responsibility for one’s own actions until you’re dead is a clinically-proven psychological trait of a narcissistic sociopath.

      Had you have written something like this as a rebuttal, you would not have had to resort to taking a cheap hit at Buffett’s extra-marital affairs and flying insults to Gary.

    • V July 31, 2012, 10:18 pm

      mario, mario, mario. even when you send someone you detest to hell, you have to say cheers at the end. quite a syndrome. I’m the worst scumbag, to burn in f—nking hell, blah blah etc, yet, at the end: cheers.

      mario, mario, I read 3 different articles that china govt. stats are even worse b.s. than usa govt. stats. some say that the recently reported 7.5 % yearly growth is way overblown, that it really is around 5%. what do you think about that, kid?

      and if you see tanks coming down your street, don’t give them your flowers while you say cheers, they probably won’t like it. roflao.

      there is so much status quo obvious thinking on this site (specially two usual suspects, gary and mario); yet, believe it or not, it’s one of the most interesting thinking sites around, with lots of weird esoteric sh–tt, and not just on markets and money.

      wonder if chuck norris that started this blownout of proportion controversial buffett thread, with just an innocuous passing comment on buffett, is also roflao.

      personally, I think redwilldanaher and gary leibowitz should start a debating sitcom, just sitting on chairs in an empty stage, and foaming at the mouth, verbally clawing each other. either that, or they should date, quite a bipolar romance. roflao.

    • V July 31, 2012, 10:26 pm

      sam, I’m all for extramarital affairs, and banging other guy’s wives.
      so I am not criticizing buffett for humping nursey, while wife was ill.
      because all guys have their strong needs, and specially rich guys.

  • Robert July 30, 2012, 6:18 pm

    Fakery, fakery, everywhere….

    All this talk in the press this morning about Draghi and his comments regarding “saving” the Euro…? Really?

    Ummmm.. last I checked, the euro is trading +30% when compared to where it originally began trading vis-a-vis the dollar… I hardly consider that “tanking”.

    Fact is, they are not trying to “save” anything… They are trying to prevent the euro from printing a one-for-one ratio … that’s it.

    They are not panicking to prevent a collapse, they are panicking to preserve the ignorance of reality.

    None of the Central Planners are trying to preserve ANYTHING except the arbitrary ratios that pass for “price” in the current faux “global market” arena…

    Wake me when the market really begins enforcing its true price discovery mechanism… that’s when things will start getting fun.

    ” No political party in power would be so stupid as to allow people to suffer, even if it means recovering at a faster pace.”

    Gary- that statement is the one piece of real genius I think I’ve ever read from you… I agree completely.

    Now, using the knowledge you so eloquently summarized above, please explain to me (and everyone else) how to thrive in an arena where the underlying mantra is simply that “No one will suffer, unless everyone suffers equally”…?

    You see, when everyone becomes a victim of common suffrage, misery does not magically convert to joy…. get it?

    Embrace suffrage and shared misery if you must, but leave those of us who prefer joy alone to walk our own paths, please.

    • gary leibowitz July 30, 2012, 6:37 pm

      Well so far, if you are the top tier in income or wealth, you are doing just fine.

      Your definition of suffering equally is disingenuous.
      In fact there were people that did very well in the last depression. They of course had the means or foresight to profit during those times. Imagine snatching up real estate at rock bottom prices. The poor money strapped middle-class couldn’t do so even if they were aware of its potential profits.

      Suffer equally? I think not. Unless you consider having to give up some polo matches a hardship.

      We live in strange times where most people consider their economic status much higher than it actually is. They also have an unusally high expectation for “making it” into the upper tier. That could explain the lack of concern about taxing the wealthy since they see themselves there eventually. Maybe we can attribute that to Hollywood as well.

  • gary leibowitz July 30, 2012, 5:32 pm

    Perhaps you mean the stance on loosening bank regulations TODAY? This against the former CEO of CITI’s advise? In fact he suggests breaking them up. Hmmm. Strange aint it.

    How about concerned citizens begging that the unfair tax breaks to the very wealthy be reversed? This coming from some of the wealthiest individuals out there. I guess you can say the have something to gain by this?

    And the list goes on and on and on…

    Do you really want to talk hypocrisies? Me, I leave political posturing as another favor or pandering to a specific group. I never said one group or party had a monopoly in this. In fact I insisted the number on problem and fix to this whole mess is to make all political figures accountable by placing their life under a microscope with no outside monies at all for any pledge or campaign.

    A true notion of sacrifice for our nation. Not a free ride of lifetime perks and wealth. In that instance political parties divide on issues will narrow.

  • fallingman July 30, 2012, 4:43 pm

    By the way Gary, did you see this? Left it on Friday’s string later in the day, along with some comments.


    It appears he was for auditing the Fed before he was against it. A “shining example,” to be sure. Note the indignant tone toward those who would oppose such a measure.

    • redwilldanaher July 30, 2012, 4:57 pm

      As you know fm, Gary only sees things that are convenient for Gary. And the Hardly A. Weid link you left is irrelevant since it has no bearing on current PEs.

      Nor is this type of news:


    • gary leibowitz July 30, 2012, 5:04 pm

      Reid in 1995? When we had a Democrat in the White House? Now that is indeed strange.

      As for Hypocrisies no one is mentioning the Republican Presidential Candidate? Obamacare? Multi-millions in an IRA? Overseas accounts? Tax rate of 18 percent? Hidden tax returns that is sure to show a lower rate than 18 percent. If anyone understands the “PULSE” of the nations problems and how to fix it, he’s your man!

      Selective notion of hypocrisies.

    • redwilldanaher July 30, 2012, 5:18 pm

      Gary, let us know when you’ve finally managed to find your way through the faux left/right maze. We’ll find someone on this site, possibly Jill, to bring you up to speed as to what year it really is and how things really are…

      Take the pill Gary…

    • fallingman July 30, 2012, 8:37 pm

      Gary, when might it penetrate your skull that I loathe the Republican Party and Mitt Romney? I have mentioned this at least 3 times before to you. Allow the notion to penetrate.

      As a good friend of mine once said, “The Democrats are the enemy. The Republicans are traitors.” Generally speaking, the Democrats are actually less hypocritical, because they tell you you’re gonna get poked in the nether regions. The Republicans are gonna do it too, but they’ll tell you it isn’t gonna hurt a bit and they’ll still respect you in the morning…and you’re takin’ it for the good of the USSA.

      Trying to determine who is less hypocritical is like trying to discover the most honest man in a room full of thieves. It’s a pointless exercise.

      Romney supports the Fed, is opposed to an audit, supported the bailouts, etc. etc. He’s a Wall Street insider stooge who pretends to be a “conservative” in order to be elected.

      The man is a fascist’s fascist. Okay, you happy?

      The point is that government attracts sociopaths such as Bush, Obama, McCain, Gore, Dick Ball & Cheney, Romney, and Reid. They’re the same guy sporting different puppet masks.

      Please don’t constantly try to misdirect. Just because Reid is a hypocrite doesn’t mean Romney isn’t a world-class hypocrite too. The man is a complete fraud. Now, back to Reid.

      I take it you found the Reid clip interesting. There he is, the hero of the anti-transparency movement, the protector of the Fed, speaking so eloquently about the need to audit the secretive Fed.

      So which Harry Reid is right? Actually, I know the answer to that. Maybe a more compelling question is which one cost more to buy?

      Ah yes, good government….so hard to come by. But that whole “life under a microscope” thing should work…about the time pigs take wing.

    • fallingman July 30, 2012, 8:47 pm


      You mean there’s an economic slowdown in the works? Gosh, who knew? I say the Fed should print some fresh peachbacks and solve the problem pronto. (Sorry, but I prefer sarcasm to apoplexy.)

      Oh, and by the way, for those who discount such indicators, that’s DALLAS, where conditions had been pretty good, not Cleveland or Philly.

      Thanks for this. Hadn’t seen it.

  • gary leibowitz July 30, 2012, 3:25 pm

    The current market might be akin to 1933, but not 1929.
    The idea that we are worse off than 1929 is not as clear as it is made out. There was no FDIC insurance. I believe that single event is what caused consumers to panic. In 1929 we were the manufacturing capital of the world.

    So while I agree that a concerted world effort is in affect to try and prevent another depression, I still don’t think the end is upon us. The P/E ratios are tame, with realistic future expectations. There is no euphoria, no shock if this economy doesn’t pick up fast enough.

    Finally as we have had sub-par GDP growth for a long time, earnings have recovered nicely. The stock market is all about earnings. They couldn’t care less about the low wage and employment figures as long as it doesn’t impact the bottom line. So far these very lean industries have managed to produce nice returns for their shareholders over these last 3 plus years.

    Eventually companies will run out of ways to produce earnings without real consumer expansion. Don’t know when that is, or if the consumer will start a new round of spending. Given the fact the the biggest cost is homes, the new low rates certainly can only have a positive going forward.


    Over the years, I’ve listed reasons here many times why we are in far, far worse shape than we were in 1929. Here are just a few:

    1. The dollar was sound, backed by gold, and coins were silver, not pot metal
    2. Public and private debt were relatively minuscule
    3. More than 30% of the America’s working population farmed, literally living off the land
    4. Most of the remaining 70% actually produced things
    5. There was no trade deficit
    6. We didn’t work five months of the year just to pay our taxes
    7. There were relatively few regulatory intrusions on the economy and our lives
    8. The schools actually taught
    9. Big Government was just a glimmer in Roosevelt’s eye
    10. Everyone spoke English or was learning to speak it
    11. Women stayed home with the children
    12. Health care was affordable
    13. The economy was not arcane and fragile, as it is today
    14. Public employment was tiny
    15. Families hung together
    16. Food was wholesome and unprocessed
    17. Movies were not ultraviolent, hip-hop had not superseded music, and artists had talent
    18. Good furniture made out of real wood was affordable
    19. Algo trading had not been invented, nor derivatives
    20. People bought stocks as an investment…
    21. …and they saved
    22. People knew how to fix things

    • fallingman July 30, 2012, 3:47 pm

      Eventually, huh?

      Top line growth is 1% this quarter. Does that tell ya anything?

      Start the timer.

    • gary leibowitz July 30, 2012, 3:51 pm

      On a short term basis, perhaps 2 months, I do see some problems. The high end of the range is about to be hit, around 1400 on the SPX. It should not however be a watershed event. I had expected a low coming into August, instead it looks like a high.

      Is this the start of the end? Maybe, but it should not produce any flash crash since we already have low expectations going forward. A grinding drop is more likely.

      I was hoping for a low to be put in here. I will let the market tell me where we are in terms of this 3 year bull run. If our dollar weakens significantly from here tht alone will be a good catalyst for the market.

    • gary leibowitz July 30, 2012, 5:13 pm

      I guess things were hyped up by Hollywood concerning the soup kitchens, lost decades, no medicare, medicaid, social security, child welfare, etc…

      Do you really think things were better then?

      My father was a child during that time and the stories he tells me make me believe that no matter how bad things get this time around, we would be better off.


      1. We still have soup kitchens — geared to serving vast numbers of homeless
      2. Medicare and Medicaid have destroyed health care, not improved it
      3. Without government intrusion, fewer decades would have been “lost”
      4. Social Security is a brazen fraud — one that is growing each and every day

    • gary leibowitz July 30, 2012, 5:41 pm

      I can’t win. You are right. Things were much better off without the stupid costly “safety nets” we supposedly have.

      The darn “New Deal” mentality actually created more hardships, not less. I suppose things would have turned around faster had we allowed the weak to die.
      I don’t treat human beings as a business.

      Here is a news flash for you. No political party in power would be so stupid as to allow people to suffer, even if it means recovering at a faster pace.


      Ahh, my son. You’ve finally come home! RA

    • V July 30, 2012, 8:10 pm

      don’t pass this up, since good ol’ bud gary l. is always good for deep hardy laughs.
      and here are 2 of his beauts today:

      gary l. writes:
      “The current market might be akin to 1933, but not 1929.”

      Thanks for your deadpan humor, it’s superlative.
      For I rolled on the floor laughing for 5 minutes, on that one.
      you should do standup comedy, and I mean it seriously, you are talented.

      and here is his other rip-roaring comment, for this guy is a comic genius:

      “The idea that we are worse off than 1929 is not as clear as it is made out. There was no FDIC insurance.”

      And I still laugh while I post this, that’s how good it is, I pissed laughing when I read it.

      FDIC “insurance”? Gary l., are you even aware what FDIC actually legally covers?
      Gary, I assure you, in a mass banking collapse event, FDIC will “insure” anything at all.

      FDIC is a hoax. It is only designed to cover small isolated banking default events.
      read up on it, if you don’t believe me. FDIC will not save jacksh’t, when bigbanks close.

    • BDTR July 31, 2012, 1:12 pm

      …’ hip-hop had not superseded music, and artists had talent’. (Betraying some serious age on that one, Rick;)

      There are as many superficial similarities as differences comparing the world then to now, but there are a few fundamental elements in play that both eras share both culturally and economically.

      Four of the most pertinent are increasingly precipitous imbalances in division of wealth between the power elite and the working poor, absurd relative levels of leveraged market speculation, capitalist cronyism control of Congress, and abysmal ignorance induced complacency of systemic frailty.

      One ominous recent stat: 6 Walmart heirs control as much nominal wealth as 42% of the US population. Extreme imbalances are always unsustainable in both physics and social order. The violence in reaction to finding equilibrium is always proportionate in degree.

  • martin schnell July 30, 2012, 2:57 pm

    Everyone needs to remember that the metrics used to value the market at the moment are an illusion.

    When the US is running a deficit of $1 trillion or so, that is doing a whole lot to provide companies with the margins that bloat their profit stories. Cut the deficit in half and you will see company profits plummet as marginal demand gets pulled. The same can be said for Europe or China (excessively loose lending policies).

    As a reminder all new homes sold (say 350,000 X $250,000 = $87 billion) plus all new cars sold (say 14,000,000 X $20,000 = $280 billion) plus everything sold at WalMart in the US (roughly $300 billion) only gets you just past half way to the US deficit.

    To look at the market and properly value stocks (for the longer term) one has to adjust to more realistic E’s in the P/E. Traditional valuation models will give garbage answers in today’s upside down world.

  • PhotoRadarScam July 30, 2012, 8:33 am

    Why wouldn’t stocks climb while liquidity remains plentiful? An analysis of past market crashes shows that a liquidity crunch is almost always required to cause a crash. And just like commodities will increase with a devaluing dollar, so will stocks… Stocks tend to do very well when the printing presses are running wild.

    • Rick Ackerman July 30, 2012, 9:01 am

      Ahh, yes, plentiful liquidity! Now there’s something we can all count on, knowing as we do that it will absolutely be there when we need it. You be sure to tell us when the crunch is about to hit, okay?

  • bc July 30, 2012, 6:07 am

    In 1929 total private sector debt reached 2.5 times GDP. By 1945 this was down to 0.5 times GDP. I would love to learn the details of how this came about. In particular I’d love to know how much of this bad debt was eaten by the FIRE sector. I say this because we are at 3.5 times GDP now and this too will either be eaten by the FIRE sector or we will become a fascist slave state like Spain did back then. Are our elites as ruthless as Spain’s were? We shall see beginning right about now. IMO.

  • John Jay July 30, 2012, 5:44 am

    Back in 1929 I believe international trade was a much smaller percentage of the US economy than it is now.
    Debt of all sorts was smaller too. For a very good blow blow by account of the Great Depression, here is link to a very good web site:http://www.futurecasts.com/Depression_descent-end-%2730.html

    One factor we have now that was not a problem back in 1929….. pension funds and insurance company annuities facing a tidal wave of payouts as boomers throw in the towel and take all they can get to pay bills.
    I read a Japanese pension fund will have to start selling some Japanese government bonds to meet payouts.
    Steadily increasing selling pressure might temp the big players to front run a market break before the tipping point.

    If the market ever crashes again, that just means Uncle Sam will cover the GS/JPM/ML puts at 100 cents on the dollar when the next Bear Stearns/Lehman counter party bankruptcy occurs.
    And you and I will face MFG/PFG style confiscation in spades.
    No one in Congress or the White House or the DOJ can be depended upon to anything but aid and abet the final ripoff. TARP proved 100 to 1 opposition to their plans means nothing to them.

  • mario cavolo July 30, 2012, 5:19 am

    Hi Rick,

    It is easy to agree and understand that there are frightening sovereign debt problems and that there is no better place than right here to find a massive amount of intelligent information about that reality, from yourself and from many of your contributors. In fact, I can’t say enough about how much I’ve learned participating, its been my real world “MBA” 🙂

    With that said, let’s get to it. This is NOT a repeat of 1929. While there is a firestorm brewing, the economy is is now global, doing things that are unprecedented, much of which portends well for the future of economic growth. 50% of S&P earnings are global and current S&P 500 P/E ratios are not historically high. When we have a stock market bubble taking earnings closer to 20 or if earnings do start a genuine 30% downward decline, we can start respecting the red flags, now the red flags are on standby. A very large chunk of the globe is on the long term upswing. China is nowhere near close to a bubble, the place is just getting warmed up, expansion will go on for decades…similar developments in Latin America and India. I read one of Harry Dent’s recent articles, he hits the mark on a variety of longer term cycles, for example, the aging boomers will be spending less, divesting some assets to maintain their lifestyle, etc. However, his comments show he is quite clueless about the rise of Asia led by China and its impact. Back to that song, I am NOT saying this can “save” the Western world. But, in comparison to 1929, it is an example of many, many factors across the globe which make the current situation hard to compare to the circumstance around the 1929 period. When stocks went up after 1929, what were the P/E’s, what were real world earnings, etc.? Where was any other expansion coming from? None…that is not the case now, so in the end, let’s see how much of a difference such factors may make to help keep things afloat…Just making observations, I truly don’t know…

    Cheers, Mario

    • Andrew Gutterman July 30, 2012, 2:56 pm


      Page 23 at http://www.hsdent.com/swiw.pdf

      Harry sees China spending peaking in ~2015, so we get stimulas from China until then but after….

      The real question is how well can China do if we tank? How dependent on exports to the US and others is China’s economy?


    • mario July 30, 2012, 3:51 pm

      Hi Andy, yep, well said…. Meanwhile I have a pretty broad and rigorous data set indicating continuing . strong rise of China’s domestic economy for the next couple of decades, so let’s hope that will .help…

      Cheers, Mario

    • allen July 31, 2012, 2:57 am

      Looks like China is allready a bubble thats popped.Here’s a guy with some sense that probably knows a few insider and his take on China.Of course I’ve never liked wearing rose colored glasses myself..


    • mario cavolo July 31, 2012, 4:33 am

      Nonsensen Allen, China is nowhere near a bubble…its a bunch of media-based rhetorical crap…

      Cheers, Mario

    • allen July 31, 2012, 2:50 pm

      Your a pipe dreamer Mario and that’s all I got say about that.

    • mario cavolo July 31, 2012, 5:20 pm

      er um ok…search my name in the search box for all previous articles featured here at Ricks over the past 2 years to educate yourself on a subject of which you know nothing about except which you read, while I live and do business here with my finger constantly on the pulse of reality at every meaningful level…feel free to wallow in your ignorance if you like…

    • mario August 1, 2012, 7:05 am

      Allen, I’m completely confused. I just finished watching that entire Marc Faber interview. Do you not realize that he didn’t say ANYTHING worth watching or listening, not one single idea, not one single thought was anything alarming, anything new. So how exactly did you form an educated opinion about China after watching it?

      He said “will we have some deflation soon or from future inflated levels, I don’t know”, China markets, are “not doing well”, are “flat”, Asia and the world is in a slump”, “some sectors are going up, others are going down”, “but will markets plunge with low interest rates, the U.S. market is not too high or too low now, but it is higher relative to other markets (paraphrase)

      Good grief…what a waste of 15 minutes of my time to listen to a puppet repeat nothing of value.

      Now pay attention. China’s govt has TRILLIONS. China’s private sector citizens have TRILLIONS. They have trillions in cash AND they have TRILLIONS in mortgage free home equity at reasonable prices. There are 2000 malls in China for for a rising middle class of 200,000,000 DEBT FREE middle class citizens, 90% of whom own their mortgage free, and expecting that middle class size to expand to 600,000,000 million in the current baby boom generation. While in America, there are now 75,000 malls being fed by a society burdened with personal debt and a declining middle class of 100,000,000

      This retail commercial property data point alone should get a “thanks, Mario, wow, unbelievable, now I get it”….I’m tired of this idiotic argument.

      Cheers, Mario

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