The "Hindenberg Omen" is a New York Stock Exchange technical indicator attempting to predict a negative stock correction of 5% or more. I have no skin in the game for whether it predicts or not, but the following perspective on our economy and financials should give you pause to consider that as the markets try for green 21 out of 21 Tuesdays whether it is folly, or a tool.
One of my favorite blogs, http://theeconomiccollapseblog.com, recently published a piece on 18 signs of economic problems. While the piece is well worth reading and is global in scope I will cover a few that should garner more of your attention.
The US is a global trader so it should spark your attention that the Manufacturing ISM report showed a 6% decline in exports, the EU being our largest export partner at $2.1 Trillion.
#1 The eurozone is now in the midst of its longest recession ever. Economic activity in the eurozone has declined for six quarters in a row.The Economic model of the EU is failing and should one country, say Cyprus or Greece, leave there will be more that notice the door is open. The Eurozone is a failure and Libertarian EU Parliment member Nigel Farage puts it best here:http://www.youtube.com/watch?v=V72mZCDwmY0
I admit a man-crush.
Japan is imploding and one can only begin explaining the problems in terms most can grasp but I came across one recently showing the consequences of their money printing as Apple has hiked prices 16%.
#13 The financial system in Japan is beginning to spin wildly out of control. The Japanese stock market has now declined about 15 percent from the peak, and many believe that the yen will continue to get weaker and that interest rates in Japan will start to rise significantly.It should also be noted South Korea, a direct competitor with Japan, is miffed over their blatant currency devaluation.
You are becoming poorer every day the Federal Reserve prints. The number of people on welfare, continues to grow as do the number of violent death and suicides which are all tragically predictable consequences of the train-wreck ahead.
#15 Real wages continue to decline in the United States. Even though we are being told that the U.S. is experiencing an "economy recovery", real weekly earnings have declined from $297.79 in 2010 to $295.49 in 2011 to $294.83 in 2012. (The preceding calculation is based on 1982-1984 dollars).Call someone who lost their job recently and tell them you love them and everything will be alright. It will go a long way.
You are most likely not considered smart money, that is if you have any investments. Current savings levels in the US are at 2.5% which is essential nothing when you consider consumer debt grew again last month. There are many bloggers who point to people using their credit card for groceries and other necessities just to make ends meet.
#17 As I wrote about the other day, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years. That means that lots of "smart money" has been getting out of the market and lots of "dumb money" has been pouring in.Finally, yes, we have seen amazing new highs in the stock markets. A primary cause is borrowing money to invest called "margin". The phenomenon of all-time high margin and stock highs was last seen in 2007 as we began the bear market leading to Lehman's failure and the financial crash of 08.
#18 Margin debt on the New York Stock Exchange has set a new all-time high. The following is from a recent Market Oracle article... Margin debt—that’s the amount of money borrowed to purchase stocks—on the New York Stock Exchange (NYSE) reached its all-time high in April. Margin debt on the NYSE registered at $384.3 billion as the key stock indices hit new record-highs. (Source: New York Stock Exchange web site, last accessed May 29, 2013.) The highest margin debt ever reached prior to this was in July of 2007, when it stood just above $381.0 billion. At that time, just like today, the key stock indices were near their peaks and “buy now before it’s too late” was the prominent theme of the day
So I ask on this Tuesday, will it be 21 out of 21 Tuesdays in a row markets end green or are we headed for a new Tuesday meme. Perhaps one that sports a cardboard sign and a tin can for a new group of Americans.
Next Meeting is Tuesday June 11th at 7 PM. It we get 22 of 22 up Tuesdays I'm buying the first round. Meetings are at Uncle Mike's in Hudson. Info at YouTube.com/LibertyValleyWI
Peace everyone.
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