Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Stocks Are At The End Of The Line – Prepare Yourself Now! - 23rd Nov 17
Some Traders Hit. Some Traders Miss. Here's How to be Part of the 1st Group - 22nd Nov 17
Geopolitical Risk Highest “In Four Decades” – Global Gold Demand to Remain Robust - 22nd Nov 17
Relationship between Crude Oil Price and Oil Stocks - 22nd Nov 17
Harry Dent’s Gold Prediction Invalidated - 22nd Nov 17
Gold Sector is On a Long-term Buy Signal - 21st Nov 17
Saudi Arabia and Israeli Alliance Targets Iran - 21st Nov 17
What History Says for Gold Stocks in 2018-2019 - 21st Nov 17
US Bond Market Operation Twist by Another Name and Method? - 21st Nov 17
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” - 20th Nov 17
Trump’s Asia Strategy, Goals and Realities - 20th Nov 17
Crude Oil – General Market Link - 20th Nov 17
Bitcoin Price Blasts Through $8,000… In Zimbabwe Tops $13,500 As Mugabe Regime Crumbles - 20th Nov 17
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

Is the Debt Fuelled Economic Recovery Sustainable?

Stock-Markets / Financial Markets 2009 Oct 31, 2009 - 06:27 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleThe U.S. Economy bounced backed strongly in the third quarter, following Euro-zone second quarter recovery which is not so surprising given the amount of debt fuelled economic stimulus spending. Britain lags behind awaiting its bounce back in the fourth quarter due to the relative size of its financial sector.


Is the economic recovery sustainable ? Normalisation of the worlds economies from the economic free fall stage implies gradual withdrawal of unprecedented stimulus measures such as zero interest rates, deficit spending and quantitative easing, which means many negative measures will be adopted to fill the fiscal gaps, i.e. spending cuts and tax rises. This implies forward economic weakness for some countries more than others i.e. those that lack a manufacturing base which have basically funneled their stimulus into consumption of overseas manufactured products, which again puts Britain at the top of the list to suffer a double dip recession.

In the immediate future the UK government is going to continue to burn more money into the next general election which will set Britain up for deep second recession during 2011, as out of control perpetual money printing risks an eventual currency crash into hyperinflation so is NOT an option. A lot now hinges on whether the post 2010 election government has the will to put Britain onto a path of REAL economic recovery i.e. will we get a strong Thatcher-esk government or another dithering incompetent Brown-esk government.

Financial Markets

Stock Market volatility surged during the week with wild gyrations pushing stocks to the low for the week which brings the trend to a similar amount in points terms as the earlier down trend into the start of October. Meanwhile the U.S. Dollar clawed its way back above USD 76 keeping the USD bull market scenario alive, whilst Gold ended a little lower on the week, all three trends were inline with last weekends quick analysis. I will cover stocks, gold and the dollar in depth in Sunday's special newsletter as it is not possible to arrive at a quick take on especially stocks and gold. Ensure your subscribed to my free newsletter.

Some good news for Market Oracle readers, we are in the process of securing timely FREE access for our readers to Robert Prechter's premium financial markets forecasting services by mid next week, the details of which we will update by email so again ensure your subscribed to our free newsletter.

The plan is to include, Robert Prechter's Latest Elliott Wave Theorist issue, New Financial Forecasts Issue, and Three issues of his short-term updates. All for FREE without obligation to purchase.

Trading Lesson - Get in Synch with the Market

In our fast paced computer age of easily placed online stop and limit orders across a multitude of markets has meant that traders like never before have removed themselves from the price action where the focus is invariably on the latest indicator, tool or theory to analyse what will happen next rather than spending time actually watching and imprinting the price action in real time onto ones brain.

Not so long ago market charts had to be drawn by hand, this meant that one was forced to stay focused on the price action as it unraveled before one which generates greater FOCUS for one is more in tune or in synch with the market i.e aware of the changing character of the market which can warn of a significant imminent market moves, instead traders today are immersed in countless indicators that distract them from the market price into a state of confusion as if the phrases of convergence and divergence to the price carry's any real meaning, which is ever only clear in hindsight.

I suggest that if you really want to learn to trade then forget about using the computer generated charts, you need to draw these by hand, add trendlines and support resistance levels and nothing more, do this in real time so the most appropriate time frame would be the hourly chart. Yes this means you only trade one market at a time, but that is how it should be!

As you actually watch and interpret price action for your single market in real time, you will gain new insights into its character and changing behaviour and get in synch with the market, something you will not gain from any indicator, all of which distance one from the unfolding price action by introducing far too much complexity in its interpretation. Example of being in synch with the market.

Source: http://www.marketoracle.co.uk/Article14675.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Featured Analysis of the Week

Most Popular Financial Markets Analysis of the Week :

1. The War on the U.S. Dollar

By: Martin_D_Weiss

Last week, I showed you the most shocking numbers I’ve seen in my lifetime:

Up until the day Lehman Brothers collapsed in September of last year, it took the Fed 5,012 days — 13 years and 8 months — to double the cash currency and reserves in the coffers of U.S. banks.

Read Article

2. The Global Debt Crisis is Destroying the Economic Structure

By: Bob_Chapman

Last week Federal Reserve credit declined $12.9 billion, up 21% yoy. Fed foreign holdings of Treasury/Agency debt rose $4.1 billion to a record $2.865 trillion. Custody holdings for foreign central banks expanded at a 17.5% rate ytd, and yoy 15.2%.

M-2 narrow money supply fell $23.3 billion to $8.341 trillion, that is 5.9% yoy.

Read Article

3. Financial Markets Waiting to Change Direction?

By: Nadeem_Walayat

Britain's Great Depression caught the mainstream commentators and academic economists off guard (again), as the UK economy failed to grow by 0.2% in the third quarter as widely expected but rather contracted by another 0.4%. However the trend remains inline with my analysis and forecast of February 2009 that called for a low in the third quarter of 2009 followed by a small increase in GDP for the fourth quarter of 2009.

Read Article

4. The Elements of Deflation and Surviving Today's Economic Depression

By: John_Mauldin

What's a Fed to do? We get talk about tightening and taking away the easy credit, but we got the fourth largest monetization on record last week. This week we examine the elements of deflation, look at some banking statistics that are not optimistic, and then I write a reply to my great friend Bill Bonner about why it's the best of times to be young. I think you will get a few thought-provoking ideas here and there.

Read Article

INO TV - Watch From Your Computer for FREE

INO TV - Watch From Your Computer for FREE

Here are the newest authors: Jack Schwager, John Murphy, Jake Bernstein, and Ron Ianieri. All experts, all well recognized, and highly trafficked by our current members. http://tv.ino.com/

 

5. Financial Crisis Hidden History, The Warning Frontline Video

By: Michael Kirk

In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

Read Article

6. Civilisation Sweeping Towards Destruction, Economics Needs Moral Courage

By: LewRockwell

It must be really painful to be an economist of the mainstream today, or, at least, it should smart to some extent. In a financial and economic calamity of the current scale, people naturally want to know who issued the warnings about the real estate bubble and its likely aftermath.

Read Article

7. Financial Markets Wedge Patterns Everywhere Means All Stocks May Sink

By: Garry_Abeshouse

This is a follow on to my October 13th 2009 posting , British Pound A Major Disaster Just Waiting to Happen? and my market update on October 19th, and deals with the markets as they stood as of last trade Friday October 23rd.

Read Article

Subscription

You're receiving this Email because you've registered with our website.

How to Subscribe

Click here to register and get our FREE Newsletter

About: The Market Oracle Newsletter


The Market Oracle is a FREE Financial Markets Forecasting & Analysis Newsletter and online publication.
(c) 2005-2009MarketOracle.co.uk (Market Oracle Ltd) - The Market Oracle asserts copyright on all articles authored by our editorial team. Any and all information provided within this newsletter is for general information purposes only and Market Oracle do not warrant the accuracy, timeliness or suitability of any information provided in this newsletter. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We recommend that independent professional advice is obtained before you make any investment or trading decisions. ( Market Oracle Ltd , Registered in England and Wales, Company no 6387055. Registered office: 226 Darnall Road, Sheffield S9 5AN , UK )


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

John Bingham
01 Nov 09, 10:14
Question for Nadeem Walayat

Nadeem your thoughts on the markets have been very interesting, not to mention prescient, over the past few months.

I do however struggle to reconcile your multi year bull market thesis with the apparent end of the super credit cycle which drove the jobless recoveries in 91 and 03. There is a strong argument that growth our of debt is seriously impaired for now which begs the question where does the bull come from. Is it simply an expression of inflation?


Nadeem_Walayat
01 Nov 09, 11:14
Stealth bull market

HI

I am working on an update, will send out in a few hours.

I focus on the technicals, the fundemntals are only clear in hindsight.

Remember March when we were told stocks could not rally because of corporate earnings forecasts and that the low would come in early 2010. What happened ?

NW


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife