When Will the Federal Reserve Tighten? Never.

EST

– Rick Ackerman, former San Francisco PSE market maker

When the Federal Reserve will tighten: I worked some numbers over the weekend in order to refine my forecast for Fed policy. One prediction that has stood the test of time is that any real tightening by the central bank is as likely as a Martian invasion. Turns out that when you crunch the latest data available, a Martian invasion winds up being 1.835 times as likely as any Federal Reserve tightening now or in the future. The formula I used to handicap this bet is proprietary and somewhat esoteric, so I won’t go into it here. But the bottom line is this: Anyone who believes that deliberate tightening is even remotely possible, let alone likely, is delusional.

when-will-the-federal-reserve-tighten-san-francisco

Of course, many of the deluded are bound to argue that the Federal Reserve has already begun tightening via the “taper,” a gradual reduction in its sham purchases of Treasury paper and mortgage-backed securities that commenced with dubious earnest last winter. However, the tapeworm represents the sort of “tightening” that Fed-watchers, pundits, eggheads and the news media can wrap their delusional brains around, since it dovetails conveniently with the absurd myth that the Fed knows what it’s doing.  In fact, most of those who interpret economic news — crypto Marxist-cum-Nobelist Paul Krugman chief among them — couldn’t hold down a CETA job assembling doorstops. These are the same economic bozos, after all, who bought into Greenspan’s crackpot notion that inflated home prices constitute “wealth,” and that capital investment supposedly was expanding at a time when household savings growth in the U.S. was negative.

Managing Our Expectations

To put the tapeworm in proper perspective, it has amounted to the withdrawal so far of perhaps forty billion dollars’ worth of Treasury funny money per month from the financial Rube Goldberg machine’s fuel tank.  If this is what Federal Reserve tightening is all about, it is like putting a thousand-pound man on a diet by substituting aspartame for sugar in his coffee.  Meanwhile, as the Federal Reserve goes about its Goebbelsian business of managing our expectations, the banking system continues, via a quadrillion-dollar derivatives shell-game, to churn out uncollateralized digital money at a rate probably 50 times that of credit withdrawn from the system via the tapeworm.

The result is that for all the talk about the Fed gradually ending “quantitative easing,” the world is awash in a sea of egregiously underpriced loans. This holds true for the entire spectrum of borrowers — from the lowly, revolving-credit consumer to the home-equity lender to the multinational banking giant. Mortgage rates are hovering near historic lows, and car loans remain so cheap and plentiful that even someone in prison can buy an Escalade with no money down.  Zero-percent teaser rates continue to glut the mailboxes of anyone with a credit card. And for top-rated corporate issuers of debt, the Guvmint has made credit infinitely abundant and so cheap that even companies with mountainous cash surpluses continue to borrow because it costs them practically nothing to do so.

Global Markets Ebullient

With corporate-debt sales running at a record clip, Apple just raised $12 billion, Oracle $10 billion, and Cisco $8 billion, contributing to a reported $612 billion of corporate borrowing in the first half of 2014. The news media have reported this mania matter-of-factly while failing to recognize it as a symptom of malinvestment at a millennial peak. The fact that the tusnami of money creation cannot possibly recede without sweeping the global economy out to sea has been overlooked for one reason: U.S. stocks are trading in record territory. Although this has provided psychological support for an unprecedented wave of investor madness around the world, and for the spinmeisters’ story that the U.S. economic “recovery,” such as it is, is sustainable, it is entirely predictable that today’s giddy ebullience will turn into cold, hysterical fear overnight when the epic bear market that is by now long overdue takes its initial plunge.

Meanwhile, it is remarkable that the Federal Reserve has succeeded for so long at “managing expectations” on-the-cheap, holding a quadrillion-dollar deflationary juggernaut temporarily at bay with, most recently, a mere $50 billion worth of monthly, monetary sleight-of-hand and cryptic policy speeches.  Clearly, the dolts, eggheads and editorial hacks who interpret Federal Reserve policy, and who hang on Janet Yellen’s every word, still believe the Fed to be all-knowing and all-powerful. Heaven help us when the central bank’s transparently idiotic ruse lies fully exposed to market forces, as occurred briefly during the Great Financial Crash of 2007-08. As to any deliberate Federal Reserve tightening in the meantime, it is absolutely unthinkable, since subjecting the quadrillion dollar derivatives bubble to even 50 basis points of market-induced tightening would precipitate an unwind of wrong-way bets that in mere days will leave the global financial system in smoldering ruin.  By that time, the feather merchants who created it will have no place to hide, and the Paul Krugmans of the world no choice but to acknowledge the epic hoax that sustained it.

Comments on this entry are closed.

gary leibowitz July 13, 2014, 5:27 pm

The average revolving credit thru credit card debt has been lower in 2013 than in 2006. In fact thru the whole 5 year debacle debt has been flat. In 2006 the average debt per household was 7,971 while in 2013 it was 7,102. In 2006 the average debt per indebted household was 16,675 while in 2013 it was 15,224.

The peak was in 2008. The false assumption that people are getting into more debt these last 5 years is simply not true. There are some anomalies as to why the indebtedness household debt actually fell sharply in 2009 and 10. That had to do with bank write-offs of bad uncollectable loans. In 2011 it went back up due to banks issuing more cards. While there is nothing pretty about our tendency to borrow above our means there is clear evidence that individuals were not adding to that burden these last 5 years. I will state that the amount outstanding is a staggering figure, but one that has been in place for decades. Me, I refuse to see 2 months go by without paying off debt. I am not the typical borrower.

My point being that the governments massive increase in debt has allowed individuals to increase their savings slightly and not increase their debt load. No one considers the consequence of the Fed action as allowing individuals to hold the line on personal debt. I am afraid that we just might be setting ourselves up for another massive round of debt increases. For now though that is not the case.

&&&&&&

Enough! Your arrant stupidity and obtuseness have grown insufferable! I will allow no more posts from you on this topic, since the one above has ignored $1.4 trillion-and-growing student-loan debts, as well as the huge growth in loans needed to artificially sustain a boom in auto sales.
RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten or loosen? **Discussion for Federal Reserve tightening**

gary leibowitz July 13, 2014, 7:34 pm

Just look it up yourself instead of believing the biased slant. yes my one post seems to get to you while all the other outrageous kooks are allowed to post. Just as long as they stay on theme. Pathetic. Who exactly is the narcissist?

Student loans and delinquencies have surged as expected. They can’t get a job without higher education. Mortgages, autos, and credit cards have not hit the highs. In fact only autos is where it was pre-crash.

Unbelievable. Show the charts, and all the facts. Perhaps this is why you keep expecting a crash. You select the data you want and ignore the whole picture. The other fact you conveniently left out is the cost of college has surged in the same time frame. Gee, I guess if the exact same number of students enroll the costs and loans will surge also. Wow! What a revelation. To ignore these very important points is absurd. But hey, what do I know. I have only been consistently right. Lets play the 1,000 to 1 roulette wheel of crash protection.

Here you go again! Read my lips! Dare you to post this with a real debate on my data points. If it is wrong wouldn’t you want people to put me in my place? Not the one liners I have been getting for years. Real debate. Never mind. Stick to your old method. How has it worked?

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

gary leibowitz July 13, 2014, 7:53 pm

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/18/student-debt-is-terrible-in-charts/

http://finance.yahoo.com/news/should-u-s–companies-leave-the-country-to-save-on-taxes–124523234.html

Here is two such articles explaining the problem. Notice that delinquency rates on all but student loans have been coming down. Why congress allows such loans without a good credit is beyond me. Why they cover their eyes while colleges continue to surge in costs is another absurdity. Finally why parents allow their kids to go to expensive schools when state and city colleges are much cheaper is also a mystery.

Yup we do love to borrow, even in these times. Finally if the simple answer to our immediate future is that borrowing is too high than we should never see any increase in economic activity. Stay tuned. My guess is we go on full throttle with all debt vehicles before the end is here.

I never argue the problem most point out here. I argue the conclusions. To rush the end game hasn’t worked. We had a respite for 5 years with fear and tight credit causing a time-out. Unfortunately with rising college costs in this dismal environment it is not shocking to see student loans surge. I just don’t see all the debt types as hitting a critical level yet. This is all a matter of interpretation. Why am I constantly ridiculed for being right? Your time will come. I just hope my future predictions are a step ahead of the market.

Give this post a very slim chance of staying up. I do love to be the underdog.

&&&&&&&

You’re not the underdog, Gary, you are — by acclamation — the village idiot. You blathered about how household borrowing was shrinking, and so I responded by noting a huge-and-growing category you evidently hadn’t thought about: college loans. For tens of millions of households, such loans represent the largest chunk of borrowing other than mortgage debt. You treat this $1.4 trillion-and-growing sum as somethng needing ‘interpretation’, and yet you wonder why we ridicule you? RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

dk July 13, 2014, 9:56 am

http://www.washingtontimes.com/news/2014/jul/12/new-cold-war-chinas-top-paper-warns-slippery-slope/

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

dk July 13, 2014, 8:27 am

Rick, another great read.
It is amazing that such a piece need be written.

These days, even the friggen Discovery Channel is airing complete fabrications (Megladon/Sharkweek, much?). Perhaps that marks the end of them, even as they attempt to justify it; not unlike other “credible” sources we know.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

VILE VLAD July 13, 2014, 8:08 am

I’ll be to the point, using you all’s points,
even commie gary’s, boring corrupt points;
in stating situation, that holds all our points.

“All the world’s a stage,
And all the men and women, merely players.
They have their exits, and their entrances;
And one man, in his time, plays many parts…”

or here’s another, you all know too well.

“it was the best of times, it was the worst of times…”
and a time much like ours, I’d say.

except for this.
I think we are at the end of times.

end game.
IMO, we are in an end game.

just look at the stats.

but hey.
enjoy every day, how it plays.

for I’ve always considered humans to be,
an alien experimento.

haha.

gary leibowitz July 12, 2014, 5:24 pm

That swoon from 98 to 91 is great compared to 2009, 10, 11 and 12 that had an average under 70. So please tell me what the big picture is. To use the bad winter months is kind of misleading. The facts are clear. Long term trend has remained the same where the middle class is losing out. The silly notion that the latest crash caused all this is absurd. In fact it has been creeping back up to the long trend norm. Absolutely nothing new. Go back decades and see the big picture. In fact the huge bull run pre-crash was exactly where we are today on most of the stats. We managed to spend beyond our means to sustain the lifestyle we were accustomed to. The last 5 years of contraction created a new impetus to revert back to our old ways. More savings, lower borrowing costs, a doubling of the 401Ks and other investment vehicles has made people less reluctant to take on more debt. Once the trend reverts all the way back to the pre-crash era we should see the big bull run falter badly. Today people are adding to debt with looser requirements. We are not near the level we were in before the crash.

If my statistics or data are wrong please correct it. If I am not reading the same reports that have been shown in this article please correct my mistakes.

On a long multi-decade trend we will hit a wall. The crash actually provided a respite from the horrendous pace. When we go in full throttle again the system will not be able to handle the huge debt structure. Until that time comes enjoy the show. BTW, I have stated this proposition for years yet no one believes it. I wonder why considering that my model, so far, has worked as projected. I guess this declaration makes me a narcissist. So be it.

As for the end is near proponents, I wouldn’t run to the nearest bunker just yet. I love those articles that purposely leave out long term trends. The peak for consumer spending pre-crash was over 100. In that time period their weren’t many articles declaring the death of the middle-class, even though there should have been. We have been in pretty bad shape right before the crash but was masked by over spending and easy credit. Now that we had a major contraction these facts become clear. That still doesn’t mean individuals wouldn’t revert back to those bad habits given the chance. I believe they will, and current trend indicates just that scenario.

Just one mans opinion.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

VILE VLAD July 13, 2014, 8:27 am

gary, you DEEPLY deserve, all you will get.
every bit of it. including your kin.
so say amen, socialist bro.

you are a joy to watch fall.
in pain.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Rick Ackerman July 13, 2014, 5:16 pm

Much of what you say is completely wrong, Gary, and it doesn’t seem to matter to you, since you evidently live to provoke gratuitous arguments using straw men. In this case, you’ve conveniently ignored the many ways in which this alleged recovery is so completely different from all others before it. Many trillions of dollars of stimulus have been squandered; and yet, not only has there been no recovery in wages and employment — other than, most recently, in the creation of some McJobs; we now find that the Walmart/Kohl’s/Target segment of the middle class, which never even slightly recovered, is slipping irretrievably back into the economic mire.

**Timetable for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Timetable for Federal Reserve tightening**

Redwilldanaher July 12, 2014, 2:45 am

Seems ElDerangedo needs to extend his shilling performances onto other sites and platforms. Each line of propaganda seems to not go as far as the last:

http://www.zerohedge.com/news/2014-07-11/gallup-slams-lid-hopes-us-economy

Kinda refutes every absurdity while backing Rick’s points, Mario’s, JJ’s and nearly everyone else’s save for Jill..
Sleeping sheople not feeling the love of fearless leader Obamao…

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Andy Gutterman July 11, 2014, 2:31 pm

Interest rates will go up when the market wants them to, and the FED will then raise rates. The market always leads the FED. Right now the market wants low rates, it has that. Rates will stay low until there is sufficient demand for money for rates to rise. Nobody knows when that will happen, but it could be along time before it does. Just look at the last time we went through this.

Andy

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Andy Gutterman July 10, 2014, 3:08 pm

Anyone want to guess on the outcome of this chart?

http://www.booktrakker.com/Economy/OhOnePercent.jpg

Andy

mava July 10, 2014, 4:49 pm

Does the author of this chart live on another planet?

“{…with}… low inflation…” ?? wtf?
at 2012 chart point?

Does this look like “low inflation” ?
http://static.safehaven.com/authors/saville/11688_a.png

How about this one?
http://1.bp.blogspot.com/-HsgmSDCJGSo/UTz6zq5_v9I/AAAAAAAAAOY/gKxnOWBoPMs/s1600/Total+Money+supply.jpg

Or is it high inflation for him only when “the bureau” says it is?

Andy Gutterman July 11, 2014, 2:36 pm

Monetary base and total money supply has very little to do with actual inflation. That’s why we have relatively low inflation at this time vs. what the gold bugs would have you believe.

If that money does not find its way into the economy then inflation stays subdued.

My expectation is outright deflation once the discretionary spending runs out for the majority of wage earners. The rich cannot support an economy on their own.

By the way, the chart I posted only shows that the .01% has seen their wealth and income soar at the expense of the bottom 90%. How long can that last? History gives you a clue if you are willing to learn from it.

Andy

&&&&&&&

For what it’s worth, Piketty’s new book on the maldistribution of wealth has been thoroughly debunked by Alan Reynolds. Personally, however, I agree with your point. RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

VILE VLAD July 13, 2014, 8:34 am

piketty’s data maybe askewed and biased,
but,
the reason it resonates, it’s because it’s true.

so, how many more months, does it take,
for madame defarge to rise, and come true?

you tell me. but rise she will, and wickedly true.

John Jay July 10, 2014, 6:26 am

Rick,

This Nation is so far down Tobacco Road on it’s way to Dogpatch that no matter who is elected POTUS in the next election, they are guaranteed to be worse than Obama.
Because they will rule over a crumbling Banana Republic, and they will have even less to work with than Obama did.
That’s been the trend since JFK was shot.
I see no hope that it can be turned around now.

And if the few Governors like Jan Brewer and Rick Perry who talk “I hate DC” all the time were serious about restoring the Republic they would be inviting all 50 Governors to a meeting to set the agenda for a Constitutional Convention.
Instead, when the Feds strike down State laws that try to restore some sanity, Perry and Brewer just roll over instead of coming right out and calling for a Constitutional Convention which I think would put the fear of God in the District of Criminals.
The States all act as if they are powerless, when they are not at all without legal recourse.
But they all want the DC Dollars, so they act outraged and play ball just the same.

Because that would be the only way to stop the insanity.
I believe enough States have voted for a Constitutional Convention now, but all I hear are crickets chirping.
Ron Paul and Jimmy Carter both know we no longer have a functioning Democracy, I would think they would come right out and say, “It’s Constitutional Convention time, right now, right away”.

If you make the Bill of Rights Sacrosanct along with whatever other Amendments are worth keeping, you will not have to worry about making matters worse with a Constitutional Convention.
But it’s all just a Pipe Dream and a Forlorn Hope.
Next stop, Dogpatch!

&&&&&&

Take heart, JJ. The nucleus of a Constitutional Convention exists in the honor roll of states that refused to take the Medicaid bait. The untenable demands of Obamacare alone may be enough to bring the governors around. And the immigration issue is only going to harden the battle lines between Washington and, for starters, a dozen states in the Southwest. RA

John Jay July 10, 2014, 3:45 pm

I hope you are right Rick, but I have not seen any potential populist leaders that are high minded patriots and not just out to enrich themselves and their families.

The Bush/Clinton Dynasty has been active for decades and seems to have a lock on power.
I think the ever growing SSDI/EBT/EIC/Student Loan/Section 8/ etc. programs are designed to stifle any real change.
With the Patriot Act/NSA/Police State as Plan B.
I guess we will just have to wait and see!

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

VILE VLAD July 13, 2014, 8:41 am

“The nucleus of a Constitutional Convention exists in the honor roll…”

damn. you actually believe, the ussa can still be saved?
amazing.
but hey. no problema. fight for what you believe in. until the end.
no matter how wicked. or proud.
haha.

but IMO, fohget abou’it.
haha.
I crack myself up.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

John Jay July 9, 2014, 3:31 pm

Mario,
Orange County now has 600,000 Asians living there.
And the Chinese are paying a whole lot more than 250k for properties here.
They have a big presence in Irvine and in the North County around the Brea Mall.
In LA County, San Marino was nicknamed Chan Marino
decades ago!
Very expensive little town, with strict zoning laws.
Demographics is destiny out here.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

mava July 9, 2014, 7:36 pm

I love that about Orange County!

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

mario July 10, 2014, 7:05 am

Sure JJ, the Orange County / LA Chinese community has been around for 30 years. El Monte up in LA is an isolated little China. They don’t integrate well for the most part. I lived in Newport Beach from ’96 to ’99. Now the next wave….Cheers.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Chuck July 10, 2014, 3:50 pm

didn’t think this ‘trend’ was going to last:
http://money.cnn.com/2014/07/10/news/china-corruption/index.html?iid=Lead

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

mario July 9, 2014, 8:16 am

A note of interest regarding U.S. real estate market, explaining where a lot of support is coming from. I’ve mentioned this here many times:

From China Economic Review, “Foreign purchases of US real estate increased 35% last year, with mainland Chinese forming the largest buyer contingent, The Wall Street Journal reported, citing a National Association of Realtors survey issued on Tuesday. Chinese customers purchased US$22 billion in housing for the 12-month period ending in March, or around 24% of foreign sales by dollar volume, up from 19% during the year-earlier period. Total international purchases stood at US$92.2 billion, up from US$68.2 billion the year before. Chinese buyers “want to diversify because the housing market over there is way too hot,” and because of political uncertainty, said William Yu, a UCLA economist.”

Divide by 92 billion by perhaps around $250,000 per property and we have around 380,000 property purchases by these foreign buyers….did I calculate that right?

Cheers, Mario

John Jay July 9, 2014, 5:36 am

Gary,

For the sake of your argument let’s assume that corporate earnings are all legitimate.
Even using that assumption, the problem is that money will never reach the average Joe and Jane.
Corporations are not investing in plant and equipment in America, are not hiring full time workers at good wages, and are not cutting prices at all.

Wheat futures have dropped from 730 back in May of this year to 545 today.
The price I pay for pasta at the grocery store has not dropped at all.
The corporations just put the savings in their pocket and never lower prices.

The same thing happens in every industry, worker productivity has been steadily rising for decades but workers wages have gone no where for decades.
All the wealth of this nation is just going to the “higher, tighter, and righter hands” that Poppy Bush spoke so glowingly of.
That is why, for the average Joe and Jane, there has been no recovery.
800,000 part time jobs with no benefits is not a recovery.
That is the point everyone is making.

CORRUPT VLAD July 9, 2014, 6:12 am

jj, you take gary too seriously. gary is just the buffoon of the site. the court commie jester.

meanwhile, talking about the purchasing store, are you aware, ancient wise jj, that
only 6 ussa companies, own about all, that’s sold, in ussa super-sized super-market stores?
I got the link somewhere, if you want to read it.
M-O-N-O-P-O-L-Y is alive and well, EVERYwhere. despite supposed ‘laws’, against it.

and that’s the SOLE reason, for your HIGH prices, at your store. MONOPOLY. yawn.
nothing else. so it’s not inflation. boring. because that’s an even bigger farce.
for it’s ‘wizard of oz’ time.
and, big time.

mava July 9, 2014, 9:24 am

Vlad, you’re wrong on inflation, but we already know that.

My point I am here to make is this:
Yes, it’s monopolies. You say: – “despite supposed ‘laws’, against it…”. Ha-ha.
Of course.

Because there can be no monopoly in absence of a government decree creating that monopoly. Monopolies are impossible in a free market, because they are uneconomical. They can only exist due to violence, and violence can only be sustained by the government.

USPS is a monopoly. No matter how uncompetitive, it need not to concern itself with the bottom line. We are forced to use it.

Wallmart is not a monopoly. It can grow as big as it wants, but the moment it stops giving us the best deal it is gone with the wind.

John Jay July 9, 2014, 3:48 pm

Vlad,

Ronald Reagan was the guy that decided to stop enforcing the Sherman Anti-Trust Act when he was President.

Reagan was the guy who talked small government while he watched Cap Weinberger help triple the national debt as his Defense Secretary.

Reagan was the guy who signed the first Amnesty for illegal aliens, and then pulled a Slick Willie and said “gee, that was a mistake” later on.

Reagan was the guy who fired Volcker and replaced him with “Easy Al’.

Reagan was the guy I watched being insulted when he was President by one of his rich backers for getting out of line.
Pathetic.

I’ll say it again……………
What happened to this country was corporate planned Policy, and nothing less then that.
And now they are in the process of mopping up what is left of the Middle Class.
It took them fifty years, but they got the job done, didn’t they?

&&&&&&

Yeah, but we’d all take the Gipper in a heartbeat over the president we’ve got. Speaking as a Jew, I’d take Himmler before Obama. RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

CORRUPT VLAD July 10, 2014, 2:54 am

jj, you are the poster I most respect on this site. so I take all you say, seriously.

however……. I see you don’t like 2-bit actor reagan. I get it. yet…. you answered nothing,
about what I previously wrote. since I wrote nothing, about 3rd rate actor reagan.

MONOPOLIES are alive and well, around the entire world. not just in the ussa.
and that’s what I wrote. so address that, professionally; since reagan, ain’t it.
I can tell you stories re reagan. example– he took a bullet, because he crapped on ‘insiders.’

but I won’t get into that. old story. for reagan is dead.
however, I’ll tell you this, so you understand.

the supposed killshot, by ‘crazy-gunman’ bullet,
that was meant for reagan, yet avoided, by a silly dive-before-him (forgot-his-name) dude,
CHANGED, forever,
reagan’s ‘heroic-actor’s call. so, thereafter, he just–‘played-ball.’
I have more info about this, but I won’t bore you all. suffice to say, that reagan,
though not-well-in-head, was probably, most honest president, since your beloved jfk.

hey, don’t get me wrong, I liked jfk too. I was a child, when I heard of his death.
and even all hispanic countries, were in shock, that the world, had been turned,
upside down, due to his death.
IMO, it was the begin, of human world’s end. jfk’s death.

end
of honest capitalism, exchange between peers, fighting to hold truth, of equalism.

but no more. haha. since it was always, just a fkknng bull illusion. haha.
for the sheep.
us all.

ok.
to address ‘corporate.’
‘corporate’ is just the short term result, of play.

but what is deeper, and more true, is—-
power. control. 100% control.

in other words—
‘1984.’

for sure.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

CORRUPT VLAD July 10, 2014, 3:23 am

for the first time ever, ackerman, I will say, I am proud of you.
for preferring himmler, over obama.

and I ain’t praising himmler.

and obama, is just a monkey clown.

but, it’s your concept, that gets it started.

and it’s fight back— re-venge.

towards, the– ‘uber als.’

damn. I love the french revolution.

best of all.

&&&&&&

I wasn’t praising Himmler either, if you catch my drift, but he’d be easier to rein in than Obama if he were in the White House. Also, relatively speaking, he’d probably be a better friend to Israel — and no proponent of a Himmlercare. RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

mario July 9, 2014, 8:11 am

Crystal clear JJ, its all being funneled upward…the greatest heist in history….

gary leibowitz July 9, 2014, 6:48 pm

Nothing to disagree with. I put the blame squarely on corporations. They have profited greatly by this debacle. I have reiterated this point many times before.

Where we differ. I don’t believe its a fraud or conspiracy perpetrated by this government as many believe.

As for earnings, clearly they have managed to control costs at peak productivity. On the backs of the workers. It’s a question of what will cause this dynamics to falter. Obviously consumers are spending enough to prop up earnings. The low rates have produced lower debt costs for all. The fact remains that discretionary money has increased.

A cut and paste: Disposable Personal Income in the United States increased to 12877.20 USD Billion in May of 2014 from 12821.60 USD Billion in April of 2014. Disposable Personal Income in the United States averaged 4485.37 USD Billion from 1959 until 2014, reaching an all time high of 12877.20 USD Billion in May of 2014 and a record low of 351.90 USD Billion in January of 1959. Disposable Personal Income in the United States is reported by the U.S. Bureau of Economic Analysis.

The purpose of corporations is to increase profitability. they have managed to do so in this environment at an almost perfect pace. I actually think the reason this economy has muddled along for so long is perversely because of this fact. Low rate environment with deflationary forces at work have allowed companies to reach peak productivity. not good for the average worker but good for sustaining the slow growth path to health. I personally do not think the ending will be a good one but can understand why wall street is doing so well.

Eventually without wage growth there will be a reckoning. My argument is that it is transparent. The data will show this. As long as individuals expand their spending thru increased disposable income, or increased credit the game will continue.

All seem to scratch their heads as to why the market has performed so well. I ignore moral indignation and focus on facts. I stated years ago that corporations were in a sweet spot for earnings due to low wage, low cost environment. if this balance changes so too will earnings.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

redwilldanaher July 10, 2014, 2:05 am

You’ve been a stooge for them…

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

CORRUPT VLAD July 9, 2014, 5:25 am

ackermansky, I know you’ll hate this, but I go back to one of my oldtime favorites artists,
and possibly, his best work, lyrically. (not romantically, but, lyrically). so here’s— billy joel.

“We Didn’t Start The Fire”

“Harry Truman, Doris Day, Red China, Johnnie Ray,
South Pacific, Walter Winchell, Joe DiMaggio…
Joe McCarthy, Richard Nixon, Studebaker, Television
North Korea, South Korea, Marilyn Monroe…

Rosenbergs, H-Bomb, Sugar Ray, Panmunjom,
Brando, The King And I, and The Catcher In The Rye…
Eisenhower, Vaccine, England’s got a new queen,
Marciano, Liberace, Santayana, goodbye…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it…

Joseph Stalin, Malenkov, Nasser and Prokofiev,
Rockefeller, Campanella, Communist Bloc…
Roy Cohn, Juan Peron, Toscanini, Dacron,
Dien Bien Phu Falls, Rock Around the Clock…
Einstein, James Dean, Brooklyn’s got a winning team,
Davy Crockett, Peter Pan, Elvis Presley, Disneyland.
Bardot, Budapest, Alabama, Khrushchev,
Princess Grace, Peyton Place, Trouble in the Suez…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it…

Little Rock, Pasternak, Mickey Mantle, Kerouac,
Sputnik, Chou En-Lai, Bridge On The River Kwai…
Lebanon, Charles de Gaulle, California baseball,
Starkweather, Homicide, Children of Thalidomide…

Buddy Holly, Ben-Hur, Space Monkey, Mafia,
Hula Hoops, Castro, Edsel is a no-go…
U-2, Syngman Rhee, payola and, Kennedy.
Chubby Checker, Psycho, Belgians in the Congo…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it…

Hemingway, Eichmann, Stranger in a Strange Land,
Dylan, Berlin, Bay of Pigs invasion…
Lawrence of Arabia, British Beatlemania,
Ole Miss, John Glenn, Liston beats Patterson…

Pope Paul, Malcolm X, British Politician Sex,
J.F.K. blown away, what else do I have to say…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it…

Birth control, Ho Chi Minh, Richard Nixon back again,
Moonshot, Woodstock, Watergate, punk rock…
Begin, Reagan, Palestine, Terror on the airline,
Ayatollah’s in Iran, Russians in Afghanistan…

Wheel of Fortune, Sally Ride, heavy metal, suicide.
Foreign debts, homeless Vets, AIDS, Crack, Bernie Goetz…
Hypodermics on the shores, China’s under martial law,
Rock and Roller Cola wars… I can’t take it, anymore.

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
But when we are gone…

It will still burn…
on and on and on and on…
And on and on… and on… and on…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No we didn’t light it
But we tried to fight it…

We didn’t start the fire
It was always burning
Since the world’s been turning
We didn’t start the fire
No, we didn’t light it
But we tried to fight it…

Iro Noiro July 8, 2014, 5:25 am

Looking at a weekly DJIA chart, starting from the low of Nov.12, 2012 to present day. That price action to me looks very impulsive. The fact that the DJIA is showing no signs of exhaustion only confirms to me its impulsiveness. I have also drawn a center line that goes through major support and resistance of which the pullbacks seen June 2013, October 2013 and February of this year could not break through which also confirms that there is considerable support for all this upward movement. I think there will be a pullback and then one more major rally blowout. This does not mean the Dow then crashes to 40 points, to the contrary, this just means that 14,000 is the new floor in which Dow 100,000 will be launched from. What do you guys think?

_Iro

“Even a thousand mile journey begins with the first step”

Iro Noiro July 8, 2014, 6:26 am

!CORRECTION!
Ignore everything in the above post. The DJIA is hugely overbought, yet shows no signs of exhaustion.
!CORRECTION!

CORRUPT VLAD July 9, 2014, 5:38 am

samurai warrior says—
‘it is better to admit to a mistaken untruth, than to cling to one.’

Redwilldanaher July 8, 2014, 1:05 am

Paul Craig Roberts: “The US Economy’s Phantom Jobs Gains Are A Fraud”

Submitted by Tyler Durden on 07/07/2014 – 16:30

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality. What you can take away from this is the opposite of what the presstitute media would have you believe. For the most part economists have turned a blind eye. Economists serve the globalists. It pays them well. The corruption in present-day America is total. No one serves truth and liberty. America has left us. We now have the tyranny of the Orwellian state that rules, not by the ballot box and Constitution, but by force and propaganda.

Charade you are…

COMMENTS: 79READS: 12,762

EVIL VLAD July 8, 2014, 1:29 am

red, read ‘shadowstats.’

http://www.shadowstats.com/alternate_data/unemployment-charts

according to 64yr old john williams, its creator,
the current unemployed ussa adult %, is at 23% unemployment.

not fake 6%. real 23%.

I kid you not.

and near matching my spain’s unemployment rate, interestingly.

so, the world’s is ALREADY, in death throes, of exuberant ‘consumers.’

and this is occurring, while ‘things,’ are still ‘good,’ according to world ‘news.’

just imagine ‘when the world turns.’ to something called: r-e-a-l-i-t-y.

prepare. it’s coming. probably in 2014. and in a blast. probably in just 1 week.

Redwilldanaher July 8, 2014, 2:05 am

In his analysis of the June Labor Data from the Bureau of Labor Statistics, John Williams (www.ShadowStats.com) wrote that the 288,000 June jobs and 6.1% unemployment rate are “far removed from common experience and underlying reality.” Payrolls were overstated by “massive, hidden shifts in seasonal adjustments,” and the Birth-Death model added the usual phantom jobs.
Williams reports that “the seasonal factors are changed each and every month as part of the concurrent seasonal-adjustment process, which is tantamount to a fraud,” as the changes in the seasonal factors can inflate the jobs number.

EVIL VLAD July 8, 2014, 2:32 am

weird. I wrote you the above 2 hours before you posted this, about shadowstats.
however, because of my usual ackerman vile filter, you did not know I had written it,
before you did. no problema. however, it’s strange, we almost wrote the same thing.
must mean the end of times, IMO.

redwilldanaher July 8, 2014, 10:12 pm

Ha ha ^^,

I used ^ to avoid the _ _ filter.

Yes, agree. Been reading JW’s stuff for many years. Sent links along of his 5 years ago to El Garo et al. Ignored like anything else that reveals a sliver of truth…

gary leibowitz July 9, 2014, 12:15 am

You got it right RED. 5 years ago it is and you still see fake earnings. It must be the Chinese that are buying our services and goods. No, perhaps the Mexicans have breached the borders, bought all the goods they can stuff in their pockets, and ran home with them.

Still looking for reasons why the fake economy has fake jobs, spending, and earnings. My you are persistent. if you can explain the secret diabolical plot laid out these 5 years to force all the public corporations to “play ball” I would l-o-v-e to hear it. Don’t you get it? If earnings are growing you have absolutely nothing. I mean less than nothing. The numbers are clearly, in every category, better than last year and the year before, etc… How can the fake data, that’s better than any other time in the past 5 years be bad? Compare apples to apples and what do you get? Perhaps double digit quarterly gains. That’s the whisper on the street.

Please, I beg of you to comment. Bring it on!

&&&&&&

You go first, Gary. Explain why a married couple with two white-collar incomes must go into hock up to their ears to put their kid(s) through college, and why they have an average $2600 in liquid assets to put toward their retirement, which they’ve pushed back indefinitely. And while you’re at it, explain why two-income households are needed at all just to scrape by, since most
families managed just fine on a single income in the 1950s and 60s.

WhicH part of THE RECOVERY IS A FRAUD don’t you get? RA

RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

gary leibowitz July 9, 2014, 3:21 am

Rick, explain to me why you think this phenomenon is recent? I go back to the 70’s and see the trend develop all the way to today. Not the crash, not the Obama administration, and not the mortgage debacle. So please tell me what I am missing? I have complained about the shift in policy from the 80’s on. I have seen the trend decades before the recent crash. So please tell me why you think my views are any different today? I totally agree about the trend, but not the cause. I see ownership of this country at a massive percentage given to the very few. I see the disparity between rich and poor, corporate verses citizens trend further wider. Not a recent trend. I believe social programs have actually slowed down this trend. I believe without them we would have been in a deep depression decades ago. I also happen to think that the end result will be pretty darn bad. Not sure how bad or if the social programs will make a difference in the end.

The recovery is transparent. Are you the only one to discover the debt load? Have we in the past had government debt debacles? I never argued that the world governments are throwing money at the problem. I never argued they gave a free pass to the corporations and institutions that control the flow of money. It’s impossible to argue that transparent point. I only suggest its not done out of malice. I believe we go thru the same mistakes because of human frailties. We have always gravitated to greed and power when given the opportunity. that is human nature. Laws and governments should protect us from such calamities, but it rarely does. Check your history and tell me this is not a cyclical event. Pick at decade and geographic area and most likely you will see such an occurrence.

Finally please show me how earnings are faked? If a system is set up in a certain way its up to the investor to figure out the winners and losers. This has absolutely nothing to do with moral indignation. It is futile to discuss this and expect easy fast answers. We have been in deep shit before and suspect we will again. My complaints happened way before the crash. You can take that equation out in my mind because this is a long deteriorating problem.

&&&&&&&

The recovery is a fraud, Gary, and you’d have to be an imbecile to fail to see this.
RA

CORRUPT VLAD July 9, 2014, 5:45 am

one-track gary, here’s your asked-for comment.

“breached the borders, bought”
nice line.
but, IMO,
“broached the borders, bought”
would have been even better.

nohing else you wrote, is of any worth whatsoever.
as usual.
remember what I said. suicide, is an option,.

mario July 9, 2014, 8:10 am

Gary, you’re consistent but so narrow-minded about it. Like Rick is pointing out, yea, corporate earnings look fine, etc. But man, wages are FLAT for ten plus years, that’s ONE stat indicating the state of affairs in the U.S. The lower/middle class are in a sorry, declining state, you keep ignoring this and its plain to see.

My explanation for good numbers remains exactly the same for 2 plus years. We have to look closer at the split in the country, the societal schism is real.

The lower 150-200 million people in the U.S. are in the worst economic state they have ever been in in their lifetimes. As said “They don’t have a pot to piss in.” The upper 100 million on the other hand are doing very well, strong household incomes, they are spending plenty of money, probably ten times more than the have-nots, and that’s why the overall spending numbers are ok.

Gary I consider you support how well the “market” numbers are doing but you marginalize how lousy the “society” is doing. I’m not being an a88hole trying to point this out to you.

Cheers, Mario

mava July 9, 2014, 9:15 am

Gary,

Here:
http://www.youtube.com/watch?v=6BnNbLOf3dE&feature=player_detailpage#t=983

is the pertinent part (@ 16:24).

This beautiful lady is Nomi Prins (check her resume on Wikipedia). Basically, she explains in that segment why it is not crashed yet.

Like most of us here, like Vlad, like myself, she used to give out a timing. Like all of us, I learned a lesson:

Governments can remain unreasonable longer than they can remain solvent.

or:

Governments are built to remain self-destructive way past the point that they have realized that their end is near. (which is why and how they fall, including Rome).

mava July 9, 2014, 9:35 am

While it is true, that the recovery is a fraud, I just like to respond to this:

“…And while you’re at it, explain why two-income households are needed at all just to scrape by, since most families managed just fine on a single income in the 1950s and 60s.R.A.”

Because instead of assets, they now buy mostly liabilities. iPhones iPods iPads, cruises, quads, jetskies, pot, dinner outs, cable tv, every gadget known to man, car upgrades, green stuff, endless upgrades to everything, every new model of everything they already own, etc. They consume like there is no tomorrow. I know few such couples. They can’t even park in their two car garages.

All that while having the “studies” degrees. I mean not that they should not have fun, but I think they forgot how to live prudently.

This can be a partial explanation.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

gary leibowitz July 9, 2014, 6:18 pm

The recovery is as much a fraud as the last 50 years of pandering to the wealthy and corporations. The whole world has responded the exact same way, yet you think its a fraud? Every single country is doing the exact same thing yet you see this administration as somehow different? Its called trying to save the current system. Name me one country that has decided to go a different route?

You call it fraud. I call it a natural response to a crisis.
They have been very transparent in their fraud. What have they hidden from public scrutiny? Was it fraud in the 1930’s? 1890’s? Just because you have decided it is wrong and that it will lead to a worse crisis in the future doesn’t negate their intentions. Do you believe they want to see this whole thing blow up in their faces?

“Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain.” Was their intent to take advantage of the crisis to secure unfair advantage? They could do no different. In fact all countries that were affected from this debacle went the same route. Is that not true? Perhaps their choices were extremely limited given the capitalist structure they already had in place.

I just don’t understand the animosity and assumptions that everything governments do is towards our destruction. They always start with good intentions and as good times rolls along citizen apathy develops and so does political greed and corruption. This has been proven to be the case. that is why we always go thru cyclical swings. Is these economic and social cycles not clearly defined over the centuries? Is it just coincidence? The worse offenses seem to happen as one generation dies out and the past is forgotten.

&&&&&&&

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

mava July 9, 2014, 7:34 pm

“Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain.” Was their intent to take advantage of the crisis to secure unfair advantage?

No Gary, they could never even guess that the bank managers will get themselves those bonuses. I mean, how could they have known that?

It is a fraud, by your own definition:
They do deliberately trying to save a fiat system which was deliberately designed in order to unfairly and unjustly obtain monetary seignorage gain, without actually minting the coin.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

redwilldanaher July 10, 2014, 2:33 am

Here’s a little snippet for you El Dumba$$:

Yet for critics of IBM like BW, “Roadmap 2015” is precisely what is killing IBM. According to BW, IBM’s soaring earnings per share and its share price are built on a foundation of declining revenues, capability-crippling offshoring, fading technical competence, sagging staff morale, debt-financed share buybacks, non-standard accounting practices, tax-reduction gadgets, a debt-equity ratio of around 174 percent, a broken business model and a flawed forward strategy.

SOUNDS LIKE A RECIPE FOR LONG TERM SUCCESS EH?

Here is more for you to ignore:

Just think about the scene. You have the IBM C-Suite which is hugely compensated for jacking up the share price. And you have the managers of the big investors who are also hugely compensated if they get reliable information as to exactly how the share-price is going to be jacked up. Should it be any surprise that this self-interested cabal ends up jacking up the share price? The question remains: was this good for IBM—and society—or not?

http://www.forbes.com/sites/stevedenning/2014/05/30/why-ibm-is-in-decline/

That’s a mere glimpse of the inner workings of the game stooge! It’s a game. All companies are now playing the game, comprende stooge? Only a fool would believe that the government and corporations are remotely telling the truth about anything.

Do a little research on your own. It’s very easy to see how “one time charges” are the norm and are present quarter after quarter and so on…

I see that ^^, Mava, Rick and JJ paddled your a$$ a little and you trotted out your typical tripe in response.

Do you ever find yourself boring yourself?

While you’re at it, aside from explaining how things are amazingwonderfulextraordinarybeautiful, yet somehow Rick’s hypo/proto couple is circling the bowl during these greatest of great times, please show us a map as to where exactly “off balance sheet” is located.

While you’re at it please explain why we should trust a government that’s committed the atrocities that is has throughout history, lied about nearly everything it wasn’t able to cover up, and in the aftermath of the biggest swindle of all time 2008-9, wasn’t able to prosecute and “clawback” virtually anything despite having the support of a seething electorate. Explain why Wall St. is running roughshod now more than ever and how the the corporations have been able to get away with all of their misdeeds, when in fact you believe that “regulation” is the answer.

Explain to us how you can possibly claim to be sane and continue to place trust in a government that’s obviously either entirely corrupt or entirely incompetent and likely both.

I normally wouldn’t waste this much time since all of us have wasted too much time even having responded to you just once. At this juncture I felt motivated to do so just so I can remind you that all of your correction calls have been premature.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

gary leibowitz July 10, 2014, 3:51 am

Mario, your argument falls flat on its face with every single post I make. I never justified the decay of the middle class. I am a realist. I see a trend that has no single face to demonize. All countries and all political systems have the same problems to a degree. What system has been proven to work? Name me one? I see the dark days of the 30’s move into the golden era of the 50’s. Was their a face you can vilify and one to glorify?

You want indignation from me? Just because I see the repetitious trends thru history doesn’t mean I support or accept it. has this country done horrific things in the past? If you lived in that past would you want retribution and dismantling of the system? if we followed your solutions we would never have advanced where we are today. To declare this the worse of all times is egocentric to the extreme.

As a realist I can justify making money off the current system even though I expect the ending to be a disaster. I refuse to personalize the drama. I have supported and endorsed candidates that think like me. I have lived a life that tries very hard to do no intentional harm to others. Can I do more? Yes I suppose I can. Its up to each individual to take the path they feel comfortable with. I have no desire to fight windmills. My energy is best spent on enjoying my life and sharing in my good fortune.

In the end though it all comes down to citizens making the right choice when electing representatives. Your anger has to be focused on them. Apathy and ignorance is no excuse. Unfortunately we seem to make the same mistake on a generational basis. Is your anger at the presumed mistake of the masses? if so its futile to continue. you can’t change their minds. you can only wait for events to change it for them. But if it makes you happy to develop these complex theories and place the demon on a face or two, go ahead. I certainly can’
t stop you.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

gary leibowitz July 10, 2014, 5:53 pm

Mario, you seem to ignore discretionary income levels, consumer confidence and comfort levels, along with business confidence. Are these all misleading reports? You are basically saying the street has it all wrong for the past 5 years, yet they have managed to see earnings go exactly in the right direction. Earning with only cost cutting? For 5 years? Earnings on such shenanigans as buybacks, outsourcing, etc… Well perhaps that’s true to some degree. the bottom line is this economy or wall street could not survive these past 5 years if it wasn’t for the buying power of the middle class.

Once again its like pulling teeth with this group to even acknowledge that earnings were real. Now I have to defend the thousands of reports that show the middle class has not folded. Your argument about the trend of the middle class and how they are being squeezed out is correct. Your timing is way off. It wasn’t as a result of the debacle. It just becomes more glaring in tougher times like this.

I can agree that the excess spending world wide to defend the system should run into major problems down the road. I just don’t see it in this current cycle. The EU will be tested on how well it supports the banking system. I suspect they know that its an all in situation. That is why I have maintained all along that after this mega bull run there will be a major bear drop. I have argued that it will take a lot more time than anyone here wants to admit. Well 5 years have gone by yet I still get ridiculed. Explain that one?

The insistence that QE would never end has also been dropped as if it was never stated. Why is every argument that hasn’t conform to your views dismissed? If not dismissed than twisted to diminish its value.

You all talk about human suffering and at the same time want all the social programs abolished. You expect me to agree to this premise? I thought I was the socialist here yet you complain I minimalize their suffering? Are you kidding me? Twisted logic to keep your original focus. I can and have changed my views on the economy based on mistakes in my long standing assumptions. I was a perma-bear way before the crash. I reluctantly accepted the market action until I discarded emotional baggage and focused on what makes Wall Street tick.

You call these last 5 years a fraud. Semantics. I can just as easily declare Wall Street a fraud from the day it got going. Please show me how Wall Street is any different then it was 100 years ago? Rick can tell his own stories when he was involved. I am sure there were tons of illegal and insider trading. I am sure that money was always made with the insiders taking advantage of their position. Is anyone an historian reading this? To dismiss the efforts and rule changes needed to keep the world economies going is not a fraud. It’s called survival. Was it transparent or not? Will it work or not? These are questions that you should be asking. To the first the answer is yes, to the second its an open debate with my vote saying no.

BTW, after QE is stopped, there is a good chance the Fed actually starts raising rates within the next 12 months. I see credit expansion and looser lending practice coming back. Will it be enough to offset the debt payments? Time will tell.

Redwilldanaher July 11, 2014, 1:32 am

Did the street have it right in November 2007? How about February of 2000?

Give the a$$clownery a rest for a while…

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

gary leibowitz July 12, 2014, 5:38 pm

Red, once again you amaze me in your ignorance. The best barometer of economic activity, not necessarily stock prices, is the bond market. Even with the Fed intervention these past 6 years the slow growth, muddle along pace is consistent with the low bond rates. Call it manipulated or controlled but no one can state that it doesn’t reflect the current economic activity. Stalled wage growth has kept rates low. If the genie is let out of the bottle, watch this sucker rise fast.

As for the stock market I would say they have been pretty darn good. Statistically speaking very impressive. There is always shocks to the system like defaults and world events that can never be factored in before hand. there is always a boom/bust cycle where the street over reaches on future expectations at peak earnings, and under reacts from emotional shock. Rick was a part of that system. I would love to hear his point of view concerning the accuracy of the stock market since its inception.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Gary leibowitz July 13, 2014, 1:32 am

Rick now that you finally accept earnings wages are not a result of government mismanagement. I thought your free market determines that. If you want to blame corporations for not passing on their profits I am fine with that. What gov program caused low wages?

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Jason S July 7, 2014, 7:15 pm

Mario, I am interested in getting your take on the following article about the Chinese political system and how it is being impacted by the Western-driven wealth disparity:

http://www.salientpartners.com/epsilontheory/

mario Cavolo July 8, 2014, 2:17 pm

Previous post Jason, in response to Andy…..Cheers, Mario

Jason S July 9, 2014, 1:59 am

Thank you. I feel better about taking time to read Hunt’s musings.

CORRUPT VLAD July 9, 2014, 5:55 am

mickey, I answered near all questions you asked me in prior blog, that ackerman let thru.
and, if you read and acknowledge, I have something for you that you’ll treasure.
cause you are missing so much, worldwise, you cannot even imagine.
haha.

mario July 9, 2014, 3:57 pm

Hi V, read and acknowledged. Lay it on me baby, anxious to read it!

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

CORRUPT VLAD July 10, 2014, 4:21 am

mario,
3 options, for an education, to make money, in asia.
all from elliotwave, and mostly from, an old friend of ackerman’s— chris carolan.
I got no more money, not for steak, just frijoles.
but I’ll share with you, what you’ve not been told.
so here are just 2 weblinks, as I am now drunk.
http://www.elliottwave.com/freeupdates/archives/2014/07/01/Should-You-Get-Used-to-China-s–New-
Normal–of-Falling-Stocks.aspx#axzz36iGhxMWf
http://www.elliottwave.com/single-issues/aff/Asian-Pacific_Short_Term_Update.aspx?code=OCOMI

“the first key to writing, is not to think, but to write. just write.”
someone said that.
therefore, your own truth,
could be spoke, just like that.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

mario Cavolo July 12, 2014, 8:22 am

V, that Elliot archives link goes to an error page… Recheck it thx…Mario

VILE VLAD July 13, 2014, 8:19 am

mickey, I will tell you something, that will scare you further, beyond you rosy glasses.
I can easily access both links I gave you, from south america. what does that mean?
that your asian gov you love so much, is BLOCKING your access, to elliotwave links.
and not surprising. many totalitarian govs, like yours, block access, to net sites.
so, tighten your panties, for your life will be a bumpy ride, asian-loving liberace… ha.

mario July 14, 2014, 10:03 pm

V, no rose-colored glasses on this nose, and I couldn’t agree with you more that Chinese govt are control freaks in their own special way. They all do (govts)
I have a VPN. I get a whacky “Server Error on / Application page with a bunch of whacky code, weird. My main elliotwave account page opens ok. Just weird…Cheers, Mario

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

Jason S July 7, 2014, 6:25 pm

Also, I highly recommend reading Ben Hunt’s recent letter, “When Does the Story Break?” It outlines common knowledge games and how it applies to and can impact markets.

http://www.salientpartners.com/epsilontheory/notes/When%20Does%20The%20Story%20Break.html

Jason S July 7, 2014, 6:20 pm

Here is a very, very simplified way to look at it:

US GDP $17 trillion
US Federal Debt $17 trillion

For every 1% growth in interest that needs to be paid on that debt, GDP must shrink by 1%. This is based on the basic C+G+I+NX=Y. Now, that doesn’t mean immediately, but the more we borrow today to avoid that outcome, the greater that deflation of GDP in the future because of interest. Add to that the impact on the quadrillion dollar shadow banking system Rick warns about and you have an 8000 lb gorilla in the room that everyone is pretending isn’t there.

Vlad’s sight of the future is right, it is just the timing that is questionable.

EVIL VLAD July 8, 2014, 1:55 am

jason,
I no longer have any timing for this freedom-ending, life-ending, unavoidable world fiasco.

I used to. but I was wrong.
however, without doubt, the extension of the termination, of current utter lie,
only guarantees, one thing: and that’s for every extra day, this fraud does not implode,
adds even swifter days, of the depth, the despair, and suddenness, in which it will occur.

I can cite many reasons for this. current solely leveraged CREDIT-based bloatedness,
way beyond ALL prior records, leaving ’87, 2007, even ’29, behind in the dust.
I mean, just look at junk bonds, that no one would even touch, before milken.
and now, junk bond purchases, just in ussa, are approx at TRIPLE 2007 rates.
and that’s just 1 example. but there are many more. margin debt at alltime high, for another.

so yes, I concur with ackerman, fed ain’t gonna do nothing to interest, zero rates.
because, prechter proved near 2 decades ago, via centurial chart, that the ussa fed
FOLLOWS free market, and in particular, ussa bond purchases. so fed rates follow bonds.
not other way around.
ackerman likes ‘carnival barker’ analogy.
I prefer ‘the wizard of oz.’
and that’s why, IMO, that oz film,
was so successful, subliminally, in late 1930’s.

gary leibowitz July 7, 2014, 4:40 pm

Interesting to note that China has surpassed the United States in issuance of debt this year. But as Rick stated it is unlikely that rates rise anytime soon. With the lure of such low rates the 50 year buildup of credit replacing cash continues. The question is when does the music stop? What will be the catalyst for this all to end?

In the meantime profits are likely to continue to go higher. Wall Street seems only focused on quarter to quarter projections.

EVIL VLAD July 8, 2014, 4:55 am

ussa hasd ONLY 17 trillion fiats in national debt? that’s utter complete BULL.
ussa has MORE than 1 HUNDRED TRILLION, in collaterized debt, via ‘guarantees.’
and best recorder of this, I’ve read, is ex-amerikani, fellow patagonian, doug casey.
casey is living the good life, for years, with agreement with goverment. while you ALL,
including ackerman, are fighting, the OLD fight. since you’re ALL, living in the past.
but the PAST is GONE. the current ussa ain’t worth jack doo-doo. and it’s obvious, to many.
except to you all. you are still talking, about old myths. while you are, walking corpses.
ackerman, kill this blog, I tell you again. and get yourself asap, to open range australia.
asap. before doors are shut forever, in your lifetime. with no escape, from ussa prisonland.
$$$$$$$$$$
hey, recent gallup worldwide poll on ‘freedom’ says–ussa, hits 33rd, in terms of ‘freedom’–
“At No. 33, the United States is sandwiched between Bahrain and Cameroon.”
http://finance.yahoo.com/news/americans-are-down-on-america-190304928.html
meanwhile, there’s huge australia, where you can get range lost, in 1 of top 5 ‘free’ states.
dudes, I keep telling you, get out of dodge. as the entire ussa, is dodge. get out, asap.
’cause the big poop is going to hit the ussa, asap, like a blinding flash, of a huge meteor–
‘lucifer’s hammer’ style.
and change everything all of a sudden, and you’ll forever wonder–if you live to tell tale–
of how you could have self-denied, the ever massively building fraud, shaping your life.

mava July 8, 2014, 4:35 pm

Vlad,

Australia is stupid. They don’t like guns. I know, whatever, bla-bla-bla! It doesn’t matter!

It does, to me. If the fascists don’t allow guns, that means they are looking to put me in the oven. Plain and simple. Only people should have guns. Not the jackboots.

So, this means, that Australia is an outpost of fascism. No different than Nazi Germany in 1930-ies.

And so is NZ. They had an actual Communist party in power for years, “the Labor”, they call it. Please, I wasn’t born yesterday, Labor means Communism.

There are places, that should remain unspoken for, but it’s not Australia, it is, btw, one of the “Five Eyes” – big nanny surveillance states.

CORRUPT VLAD July 9, 2014, 4:54 am

confucius says—
‘it is better to lose yourself, in forsaken land,
that in land, of fraud. for fraud is worse, of all.’

VILE VLAD July 13, 2014, 9:42 am

mav, there are many weapons, in the outbush, beyond guns. nearly as good.
btw, I’ve even seen many ussa models, of home-made ‘guns’. bolt-shooting, etc.

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime soon? **Discussion for Federal Reserve tightening**

Mark July 7, 2014, 11:58 am

All true. But you meaningfully left out the student loan debt bubble. This will crash faster than grandma’s soufflé because students will collectively realize they have no skin in the game, unlike all but the most underwater homeowners of the previous crash.

&&&&&

Couldn’t cover it all, Mark. But yes, the (wink-wink) student loan bubble, $1.4 trillion in size and still growing like topsy, will eventually come home to roost. The good news is that a corrupt, greedy and dysfunctional college system — one that by and large no longer provides students with skills relevant to today’s job market — will get crushed. This means that colleges and universities will no longer able to extort parents and put them deeply in hock just so that their kids can major in Transgender/Gay/Lesbian/Bisexual studies or go to law school. RA

**Discussion for Federal Reserve tightening** When will the Federal Reserve tighten? No sign of the Federal Reserve tightening any time soon. A Martian invasion seems more likely than the Federal Reserve tightening. Even the hint of the Federal Reserve tightening could spell catastrophe. Should the Federal Reserve tighten? Do you think the Federal Reserve will tighten anytime? **Discussion for Federal Reserve tightening**

Jason S July 7, 2014, 5:58 pm

And to throw some salt on that wound, they have rigged the student loan system to entice people to join public work rather than go into productive private enterprise with their “any unpaid student loan balance will be forgiven after ten years” BS. So you get to pay a max of 10% of your disposable income in repayment annually and that may pay off half the debt and then the rest goes away, “poof”.

Their mouths are writing checks that the population cant cash. Too bad the environmental nutjobs are so fixated on cow methane vs. politician flatulence; maybe Greenpeace would scare them straight.

Oregon July 7, 2014, 8:29 pm

I heard a piece on the radio a month ago – for the first time (since these stats have been kept), for home buyers in their 30’s, there is a higher percentage without a college education than with a college education.

I think one thing we can all agree on… the world has never seen this level of debt burden, saddled on the population from such a young age, and when it crashes, it will be one for the annals.

R.A., A superbly written piece. In the realm of wordsmithery, you are hella skookum.

mary July 7, 2014, 8:55 am

Oh, Rick, pleeeeeease. You know very well Comrade Krugman would never do that.

mava July 7, 2014, 8:08 am

“…the gruesome fact that aggregate credit must expand relentlessly to keep the [game] going…”
Thanks, BC!

I agree with RA, as often is the case, on most of what he said, but as irony would have it, I disagree (as usual) on one detail (deflation), which is the one detail that VLAD would actually agree with RA on. Go figure. I guess we’ll just have to wait and see.

“Global Markets Ebullient”. Thanks, Rick. What a reprieve. That’s what I like about this site. Charged for the coming week now.

EVIL VLAD July 8, 2014, 2:11 am

mav, I agree with your hyper-inflationary theme.
however, not until, most humans (90%), have been wiped out, via deflation,
and turned into life serfs. not just ussa. everywhere.
and anybody that holds his fiat wealth, in any bank.
for I see destruction of banks. and of course, along with those that, ‘trust’ them.
haha. it’s the plan all along. near all banks, go bankrupt. (except ubers’ few banks).
so depositors get creamed, along with bank bond holders. ubers’ big exit plan.
there is much stuff on the net, about ubers wanting to exterminate, 90% of humans.
makes sense. planet has too many humans now, IMO. haha. makes sense,
in a minimalist kind of way. hey, you can look at a few different times in history.
try the ‘dark ages’, for example. not just the plagues, everywhere, but the ideology.
all those ‘witches’ burned, for centuries, and their properties, then repossessed.
I’ll stop here. you all need to get your sheep sleep. haha.

Bc July 7, 2014, 7:09 am

The new wrinkle is where the ECB steps in to take on the debt expansion load to give our Fed a breather while our Fed claims to have begun tightening. Expect more of this tag team easing to hide the gruesome fact that aggregate credit must expand relentlessly to keep the Ponzi going. The real end game will be revealed when confiscation of savings begins in ernest. Already started in Spain. Coming to an economy near you soon.

John Jay July 7, 2014, 6:30 am

Rick,
I totally agree that the Fed can never again raise rates.
Bernanke came right out and said exactly that recently.

However, as far as Fed policy being incompetence……….

The banks learned their lesson well during the S+L crisis back in the 1980s.
They were lending long and got caught up in rising rates needed to lure money from savers back before the QE/Belgium bid/Deficits don’t matter new reality.
And back then, lots of bankers went to jail for the crimes they perpetrated.

So, they hired the Federal Government, had Bush/Clinton kill Glass-Steagall, fired Volcker, and put Easy Al on the job.
One brief stumble for Al with his “irrational exuberance”
comment, and after that, the sky was the limit!

Anyway, the Fed Chairman is just a Carnival Barker.
He doesn’t own the Carnival, he doesn’t run the Carnival, he is just in charge of the “Presentation” that keeps the “Rubes” confused and controlled.

When you see Janet talking to Congress or holding a press conference, just think “Carnival Barker”.
She is not calling the shots anymore than Greenspan or Bernanke were back when they had that job.
Volcker was probably the last guy to really dictate Fed policy.
Consider him the “JFK” of Fed Chairmen!
After Volcker, it was all over for honest, frugal, savers.
Just like JFK’s Administration marked the end of our Representative Democracy.
All the pieces fit.

mary July 7, 2014, 8:57 am

Interesting penultimate sentence, since Kennedy came to power through voter fraud.

John Jay July 7, 2014, 1:37 pm

Mary,

You are right about the JFK voter fraud.
However, I think he was trying to end the Cold War, especially after the Bay of Pigs,
After that close call, he no longer trusted the MIC, especially the CIA.
And I don’t think he shared the deep seated hatred for America and Americans that every POTUS since has increasingly displayed.
Obama is just the latest and most hate filled version.
Reagan and Carter just smiled a lot, they were both part of the sequence.

From my perspective, America now resembles an Old West Boom Town after all the gold and silver have been stripped from the mountains.
Now there is no wealth left, and nothing for the workers to do.
And all the residents are too poor to move away,
And the Mining Moguls keep bringing in train loads of new residents to add insult to injury.

If and when the Welfare State fails here, my analogy will come true with a vengeance.

EVIL VLAD July 8, 2014, 2:22 am

jj,
jfk was ok, however, the ‘bay of pigs’ fiasco, created MANY enemies for him, internally.
I read a small book decades ago, named ‘none dare call it treason’, and the
treason reference, is to jfk. from cuban freedom fighters, and even the cia.
because jfk betrayed his promise, to both. because his promised (no-show) jets, left the
‘bay of pigs’ cuban freedom fighters (cia trained, by his approval), stranded on the beach.
jfk screwed those freedom men, fighting for their home, taken by a castro commie pig.
so jfk, ain’t no saint. he betrayed plenty, he gave his word to. so jfk had plenty of enemies.
and j. edgar, was the worst. whom probably orchestrated, his dramatic demise.



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