Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
Time for Crude Oil Price Drop below $50? - 21st Jan 17
AI and Robotics - We Are All Low-Skilled Workers Now - 21st Jan 17
The Trump RESET Starts on US Presidential Inauguration Day 2017 - What to Expect - 20th Jan 17
Will the CIA Assassinate Rogue President Donald Trump Like JFK? - 19th Jan 17
Bonds, Dollar, Stocks, Gold, Silver Major Markets at Turning Points - 19th Jan 17
Populism; the Danger? What About Debt? - 19th Jan 17
Gold Price 50-DMA Breakout - 19th Jan 17
Turkey, 'Axis of Gold' and End of US Dollar Hegemony - 19th Jan 17
The Most Important Market Chart on the Planet - 19th Jan 17
Trump Deficits Will Be Huge - 19th Jan 17
Stock Market Trading Patience Pays Off with CHK Using Momentum Reversals - 19th Jan 17
Gold - How to "Buy Low and Sell High" Like a Pro - 19th Jan 17
State of the Global Stock, Financial and Commodity Markets Report 2017 - 19th Jan 17
The Hunt for Russia's Next Enemy - 18th Jan 17
Returning Gold Bulls - 18th Jan 17
Biotech Breakthrough Could Create A $11.4 Trillion Opportunity - 18th Jan 17
Bitcoin and Gold - Outlook, Volatility and Safe Haven Diversification - 17th Jan 17
Stock Market Uptrend on Borrowed Time - 17th Jan 17
The One Stock to Retire On - 17th Jan 17
Trump anti-Communist Counter Revolution - 17th Jan 17
US Stock Market Update as the Trump Inauguration Approaches - 17th Jan 17
The American Crisis - Common Sense 2017 - 17th Jan 17
Obama Leaves, Hope Arrives, Will Stupid Stay? - 17th Jan 17
Damage Inflicted by Precious Metals Manipulation Is in the “Multi Billions” - Keith Neumeyer - 17th Jan 17
Gold Price Forecast 2017 Update - Video - 17th Jan 17
The Story of the U.S. Regime Change Plan in the Philippines - 16th Jan 17
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Stock Market Breaks Down, Financial Regulation Too Little Too Late

Stock-Markets / Financial Markets 2010 May 22, 2010 - 04:52 AM GMT

By: Anthony_Cherniawski

Stock-Markets

Best Financial Markets Analysis ArticleThe U.S. Senate, bringing Congress to the brink of passing the most comprehensive regulation of the financial industry since the Great Depression, approved a bill that imposes restrictions on proprietary trading by banks and creates a consumer protection agency designed to prevent lending abuses that triggered the housing collapse and the worst unemployment in almost three decades.


The legislation, approved by a 59-39 vote yesterday and requiring reconciliation with a bill passed by the House of Representatives in December, provides a mechanism for liquidating financial institutions, until recently considered too big to fail, a council of regulators monitoring threats to the economy and specific restraints on the trading of so-called derivatives, which spawned the toxic debts that seized up the credit markets in 2007 and 2008 and prompted the Federal Reserve to make trillions of dollars of loans to banks on the brink of insolvency.

This is the first time that our legislators are publicly admitting that our major banks are insolvent and on life support.

Some call this a “Faux Financial Reform” Bill.

In Washington’s Blog he points out that, “won't fix any of the core problems in the financial system, and won't prevent the next financial crisis.

The bill doesn't include the Volcker Rule (it wasn't even debated), doesn't break up or even substantially rein in the too big to fails, and doesn't force transparency in the derivatives market.

Is this bill only cosmetic, to make it appear that our legislators are doing something?

The S&P Index has broken down.

--A weeklong rout in stocks deepened, with U.S. benchmark indexes losing the most in more than a year.  A look at the S&P 500 Index shows a deeper low has just been made, which confirms the decline as bearish and indicated there is more to go.   You may wish to visit our YouTube Channel to get the latest technical information on our expectations for this decline.  In the Words of Richard Russell, “Get out of stocks now…”

Treasury bonds make new highs as investors flee to safety.

-- Treasury bonds are making new highs as investors seek to find a place of shelter in the financial storm.   This rally may not last, but appears likely continue as long as there is a perceived risk in the stock market.     The long bond is not a permanent resting place for investor cash, as the target for $USB may be near 130.00.  Once the target is reached, the uptrend may be over.

 Is gold is reversing course.

-- Gold reversed course this week and has broken its uptrend.  The precious metal reached an all-time high of $1,249.70 an ounce in New York, last week.  In last week’s Digest I had indicated that the relative strength index for gold futures neared 70, a signal that prices might be ready to decline.  That observation was more accurate than I realized at the time.

Nikkei may be approaching crash levels.

-- Japanese stocks fell, dragging key indexes to their biggest weekly drops in more than a year, as rising U.S. unemployment and a deepening split in Europe spurred concern the global economic recovery will stall.  The Nikkei 225 Stock Average fell 2.5 percent to 9,784.54 in Tokyo, its lowest close this year. The Nikkei is now fallen below its prior low close in February.  The next possible support level is 9000.

China stocks are down over 20%.

-- The Shanghai Composite Index rose 7.74, or 0.3 percent, to 2,563.68 at 1:20 p.m. local time, reversing a 2.9 percent decline.  Today’s gains, however, are not enough to change the trend.  It is more likely that the Shanghai Index may continue its slide.  Although investors may be nibbling at the lows, it is not certain that the bottom is in.

The dollar is holding up very well.

-- Tim Geithner keeps talking up a strong dollar, but that is only part of his job description.  The fact is, many economists are starting to worry that the dollar is too strong, and exports may suffer.  This doesn’t take into account the declining Euro, for example, which may ultimately put European manufacturers in the drivers seat.

In the meantime, the dollar is still considered the “safe currency” in troubled times.

One in Ten Mortgage Borrowers Will Lose Their Home To The Bank.

New Observations is forecasting that a minimum of one in ten homes with a mortgage today will be lost to foreclosure in the next two years and that this loss represents a staggering five-million-unit addition to inventory-for-sale.  A record high 4.63% of mortgages were in foreclosure at the end of March The Mortgage Bankers Association reported Wednesday. Much worse, a mammoth 9.54% of mortgages are 90-days or more past due.

Deepwater Horeizon is a cause for concern.

The Energy Information Agency weekly report observes, “On April 20, 2010, an explosion and fire occurred on the offshore drilling rig Deepwater Horizon, which had been drilling an exploratory well in approximately 5,000 feet of water in the Gulf of Mexico, 52 miles southeast of Venice, Louisiana. The platform subsequently sank with 11 crewmembers presumed dead, and an uncompleted well leaking oil into the Gulf of Mexico. While both public attention and current activities are now appropriately focused on efforts to contain the leak and to mitigate the resulting environmental damage, readers of this publication might also be wondering about potential effects on energy markets.”

Natural Gas prices may have peaked.

--. At most market locations, prices reached their high for the report week on Tuesday, when the Henry Hub price jumped to $4.42 per MMBtu before falling 14 cents the next day. Despite price increases, weather was generally mild across the country. Mean temperatures were in the 50s, 60s, and 70s in the majority of the lower 48 States, with some areas of colder weather in the 40s in Wyoming and Colorado.

Albert Edwards: Europe Is On The Edge Of A Deflationary Precipice That Will, Paradoxically, Usher In 20-30% Inflation

From Soc Gen's Albert Edwards: The US and eurozone now stand on the edge of a deflationary precipice.

Amid all the recent euro-related turbulence, the markets have not focused enough attention on the rapidly vanishing core CPI inflation rates in the US and eurozone. With both moving below 1%, we are now only one cyclical mishap from joining Japan in outright deflation. Given our view that this cyclical recovery will end surprisingly early, slipping into the deflationary mire will trigger further, more extreme rounds of Central Bank monetisation, inevitably drivingus towards our ultimate destination – 1970’s style 20-30% inflation will surely return.

Exposing the Fed’s Racket.

(ZeroHedge) A reader provides us with the following letter he received from Senator Mikulski in response to dissatisfaction expressed about Bernanke's reconfirmation. The response from the Senator demonstrates precisely the type of intellectual racket that the Fed is exposing gullible and incompetent senators to, in forcing them to pass law after law that is only in the Fed's, and thus Wall Street's interests, as the alternative would always be a "market nose dive."

Traders alert:  The Practical Investor is currently offering the daily Inner Circle Newsletter to new subscribers.  Contact us at tpi@thepracticalinvestor.com for a free sample newsletter and subscription information.

Our Investment Advisor Registration is on the Web

We are in the process of updating our website at www.thepracticalinvestor.com to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .

Anthony M. Cherniawski, President and CIO http://www.thepracticalinvestor.com

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

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

Catching a Falling Financial Knife