Tuesday, January 27, 2015

And Now Comes the Crash

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Writing this morning as Dow futures are down around 275-300 points, market participants are reacting negatively to any number of factors, not the least of which was the truly ugly print of December durable goods orders, which came in at -3.4% against expectations of +0.3%.

Also revised lower were November's durable figures, from an already disappointing -0.7% to a dismal -2.1%.

The stock market crash, yes, the one that's been delayed since 2009 thanks to QE from the Fed, then Japan, and now, supposedly, from the European Union (EU), is upon us. The bull market that began when mark-t-market became mark-to-fantasy in March of 2009 has overstayed its welcome, and those who have not already jumped ship on tech stocks, income stocks, growth stocks (there's a real laugher for you; most companies' earnings for 2014 were lower than 2013 and 2015 will be lower still), or blue chip stocks, are about to get creamed, rapidly, starting today, but, when the Dow Industrials close below 17,068.87 (the close on December 16, 2014), for certain.

One only has to look at a recent chart of the Dow Jones Industrial Average and have a cursory understanding of Dow Theory to realize that the primary trend is about to change. Now, if it doesn't - if the Dow doesn't close below 17,068.87 and subsequently makes new highs, or, if it does close below that level and then makes new highs - then the market is being purposefully and blatantly manipulated. Besides the fact that most, if not all, markets have been manipulated since the crash of 2008, and probably well before that, a massive nosedive in stocks should come as little surprise to anybody, save those who hold out hope against hope that the Federal Reserve and the federal government, in all their wisdom, will save markets no matter what, which, in fact, is the core of manipulation itself.

Bull markets do not last forever. Lying and misguiding the public does not work forever. The public, that nebulous, unintelligible mass of humanity that follows blindly like sheep led to shearing or slaughter, will understand little of this, if any of it, but, we've collectively been led down a garden path to economic slavery and destruction by lying lawyers, bankers, CEOs, media and politicians, whose only concerns are their own, and against sound public policy.

Globally, economies are in a shambles. A raging currency war is merely pretext for a coming deep depression. While the United States may be the "cleanest shirt in a dirty laundry basket" it is no doubt still dirty, and a cleansing is overdue.

For too long, the American public has listened to the media, bankers and politicians who promised what they could not deliver: economic prosperity for everybody. It's a pipe dream, a facade, a fallacy, a Fugazy. The reckoning is upon us, just in time for the Super Bowl.

Just wait for the number: 17,068.87. When the Dow closes below that, it's game over, and no jawboning by Federal Reserve governors, or politicians, or media mouthpieces, can change that. A long, painful bear market will take the Dow and other averages to places nobody can imagine. At first, it will be called a correction (unless it absolutely crashes - like down 1000 points - today), but, make no doubt, it will be a bear market, followed by a recession, and then a depression (which, many will claim we are already in, since 2008).

Trust your own judgement, but, if you have not prepared for the worst of times, you are certain to live through them. Your portfolio allocations should look something like this: 20% Precious Metals; 60% cash; 20% survival/tradable/salable goods.

Best wishes to all.

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