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
The Precious Metals Bears' Fear of Fridays - 23rd Nov 17
UK Economic Austerity, Bloodletting and Incompetence - 23rd Nov 17
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

Economic Coin Flips and WikiLeaks Catching Up With Market Truths

Stock-Markets / Financial Markets 2010 Aug 01, 2010 - 01:19 AM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleMany market analysts were left scratching their heads as the stock market ignored bad news the whole week from ECRI recession data to worse than expected U.S. GDP data by closing up on the week at 10,466 (10,425), with the Dow continuing its meandering trend towards a target of 10,700 which will more than likely be achieved this coming week. Last weeks newsletter (Stocks Bull Markets Generate Economic Growth) proved an opportune reminder to readers to remember asset prices drive economic growth which is contrary to the consensus view.


The graph below from the Inflation Mega-Trend Ebook (FREE DOWNLOAD) continues to illustrate my overall trend expectations for the year. We still have to get through the seasonally toughest period of the year for the stock market so at this point I can't envisage a breakout to new bull market highs this side of October.

DOW Stock Market Forecast 2010

The bottom line the stock market has so far not doing anything to negate the stealth stocks bull market scenario that continues to play out where many if not most investors remain too afraid to invest. Unfortunately the BlogosFear is full of so much bearish commentary right from the birth of the stocks bull market in March 2009 ( Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470 ), so it is highly likely that the bull market will remain in stealth mode all the way to new all time highs and probably beyond. My recommendation is always to do your own research into what the analyst you may be reading has said before at least during the past 12 months to gauge against what has actually transpired, and then you will know if someone is perma-clueless that espouse the virtues of some voodoo methodology when all they really have is something that has no more value than a coin toss, which applies to all technical tools and economic theories.

Gold - Bounced from a new early week low of $1155 to close at 1181, down by $8 on the week. Despite Fridays strong rally, Gold continues exhibit a trend that targets $1140, though now there is not much distance between $1155 and $1140.

Economic Coin Flips

Economic analysis is not a science or an art but the calling of a series of coin flips (as is stock market analysis), the actual determining item that flips into a final conclusion may be something inconsequential on its own, realising this will put analysts ahead of the curve. The Grand Media Star Wizards that propagate the press and academic institutions use formulae's and theories as smoke and mirrors to try and persuade you otherwise, but still at the end of the day come out with statements such as there is a 50/50 chance of a double dip recession, 50/50 chance of deflation, 50/50 of..... However without firm actionable conclusion such statements are pretty much worthless.

WikiLeaks Disintegrating Government Control of Information

First we had a U.S. Fed Board Member telling the masses to ignore bloggers on economic theory that was contrary to their own propaganda. Now we have had wikileaks releasing 91,000 pages of the actual facts on the War on Afghanistan. This is a continuing manifestation of the disintegration of the mechanisms of government to exert control over the thoughts of masses by means of security services and the mainstream press with much overlap between the two.

For decades if not centuries, the only real source of truth as to what is actually going on has been the markets, as the governments cannot hide the truth from the markets. If you want to know what is really going on with an economy, a war, then always look for the truth in market trends. Which is now being increasingly supplemented by the likes of the blogosphere and sites such as wikileaks.

Whilst wikileaks may not survive being targeted by U.S. security agencies, the internet being what the internet is, it will likely be replaced by a 100 similar sites.

Your analyst glad he does not have to sleep with one eye open.

Comments and Source: http://www.marketoracle.co.uk/Article21547.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Featured Analysis of the Week

Federal Government's Trillion Dollar Deficits Crowding Out Our Future Wealth - 31st July 10 - Gary_North
Has Economics Run Out of Ideas? - 30th July 10 - Andrew_Butter
Platinum and Gold Price Trend Relationship Analysis - 30th July 10 - Zeal_LLC

Deflation Report

The Fed Flashes the Nuclear Quantitative Easing Trump Card - 29th July 10 - Gary_Dorsch
Austrian Business Cycle Theory Vs Keynesians - 29th July 10 - J_M_Finegold_Catalan
Did BP Accidentally Tap Into the Rigel Gas Field? - 29th July 10 - Washingtons_Blog
The U.S. Econonomies Future
Bill Gross Ponders "Deep Demographic Doo-Doo" - 29th July 10 - Mike_Shedlock
Kindergarten Double Dip Recession Economics - 28th July 10 - Jim_Willie_CB
Government Economic Lies, The Grossly Problematic Gross Domestic Product - 28th July 10 - Richard C.B. Johnsson
Buy and Sell Gold On-line Securely
Economic Warnings From Niall Ferguson and Nassim Taleb - 28th July 10 - Gary_North
European Sovereign Debt Crisis, Running Through a Minefield Backwards - 27th July 10 - BAM
The Unlimited Power of Suppressing the Interest Rate - 27th July 10 - Thorsten_Polleit
Stock Market Crash Report - FREE
Should the Fed Pump Even More Money? - 27th July 10 - Frank_Shostak
Four Shocking Economic Bombshells Bernanke Did NOT Tell Congress About Last Week - 26th July 10 - Martin_D_Weiss
Stocks Stuck in Trading Range Despite Positive Corporate Earnings Reports - 26th July 10 - Jon D. Markman
Get Your Free 50-Page Download: The Ultimate Technical Analysis Handbook
The Illuson of Economic Recovery, Major Indicators Point Towards Further Collapse - 26th July 10 - Bob_Chapman
Money Supply Divergence TMS1 vs. TMS2 vs. M2, What does it Mean? - 26th July 10 - Mike_Shedlock
Stocks, Commodities and Financial Markets, The Shape of Things to Come - 25th July 10 - Steve_Betts
Buy and Sell Gold On-line Securely

Most Popular Financial Markets Analysis of the Week :

1. Four Shocking Economic Bombshells Bernanke Did NOT Tell Congress About Last Week

By: Martin_D_Weiss

In his testimony before Congress last week, Ben Bernanke lifted the Fed’s skirt and gave us a glimpse of the disasters now sweeping through the U.S. economy.

But there are four bombshells he did NOT talk about:

Read Article

2. Obama Preparing to Attack Iran

By: Webster G. Tarpley

Webster G. Tarpley writes: After about two and a half years during which the danger of war between the United States and Iran was at a relatively low level, this threat is now rapidly increasing. A pattern of political and diplomatic events, military deployments, and media chatter now indicates that Anglo-American ruling circles, acting through the troubled Obama administration, are currently gearing up for a campaign of bombing against Iran, combined with special forces incursions designed to stir up rebellions among the non-Persian nationalities of the Islamic Republic.

Read Article

3. Economic Warnings From Niall Ferguson and Nassim Taleb

By: Gary_North

Two widely respected economic commentators, Harvard's Niall Ferguson and Nassim "black swan" Taleb, have offered highly pessimistic assessments of what lies ahead for the American economy.

Read Article

The U.S. Econonomies Future

4. The Illuson of Economic Recovery, Major Indicators Point Towards Further Collapse

By: Bob_Chapman

The talk of recovery pervades insider thinking. The major media worldwide plays the same refrain. This is a desperate attempt to befuddle the public with misdirected propaganda to preserve confidence in a system that is in a state of collapse. As CNBC leads the charge, loss of faith in the system grows with each passing day. In spite of control of the major media by elitists, talk radio and the Internet hammers away incessantly with the truth influencing more and more 24/7 worldwide. As a result of the success of the alternative media a good many investors realize we have a systemic credit crisis that has turned into a debt crisis as well.

Read Article

5. Kindergarten Double Dip Recession Economics

By: Jim_Willie_CB

Double Dip used to pertain to ice cream cones, but now to dreaded return to economic recession. Green Shoots used to refer to gardening projects, then to deceptive economic viewpoints. My favorite is the second half recovery mantra, indicative of totally clueless. This year's promised recovery in the second half of the year will feature a return to recession instead, thus stripping mainstream economists of any remaining credibility. The endless links in the chain are impressive by the clueless cast of economists that disgrace the US landscape.

Read Article

6. Stocks, Commodities and Financial Markets, The Shape of Things to Come

By: Steve_Betts

"What a cruel thing is war: to separate and destroy families and friends, and mar the purest joys and happiness God has granted us in this world; to fill our hearts with hatred instead of love for our neighbors, and to devastate the fair face of this beautiful world" --- Robert E. Lee, letter to his wife, 1864

Read Article

7. The Fed Flashes the Nuclear Quantitative Easing Trump Card

By: Gary_Dorsch

Of ten people who hear the same story or speech, each one might understand it differently. Perhaps, only one of them will understand it correctly. On July 21st, Federal Reserve chief Ben Bernanke was speaking in riddles, as central bankers are apt to do, while delivering his testimony before Congress. Each word that’s uttered by the Fed chief is scrutinized by anxious speculators, who try to interpret the message correctly, before quickly placing bets in the marketplace.

Read Article

8. Stocks Bull Markets Generate Economic Growth

By: Nadeem_Walayat

The UK economy is booming! 1.1% growth for Q2 2010 annualises to 4.4%. The academic economists that populate the mainstream press were caught off guard again! with growth expectations ranging from 0.3% to 0.5%. As is usually the case the excuses button was pressed to try and mask the fact that they to all intents and purposes remain clueless on the direction of UK Economy with much press chatter focused on an non existant double dip recession.

Read Article

Subscription

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) 2005-2010 MarketOracle.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

Andrew
02 Aug 10, 20:49
This and That

Hi Nadeem,

I was reading your speel on how the stock-market drives GDP rather than the other way around - I agree with that and I've actually already made that point although not as explicitly as you did (I don't know if you saw my argument on how in USA particularly the bubble in house prices did too, although going forwards that's not necessarily how it will play).

You and I appear to be in agreement again and I'll always remember the calls that you made on the S&P, although our approaches are quite radically different.

I got a lot of stick on Seeking Alpha for suggesting that ECRI was driven by the S&P 500, one guy called me "a pompous ass", funny how rude jibes from people who won't even reveal their identity...hurt.

Anyway, just thought I'd send a note saying how refreshing it was to read your recent newsletter.

Best regards

Andrew


Nadeem_Walayat
02 Aug 10, 21:12
This and That

Hi Andrew

Read your last 3 articles, you specifically asked for my take which I don't usually give for obvious reasons, so here goes -

> U.S. Outbound Travel Expenditure Says No Double Dip Recession

I see all analysis as a series of flipping between positions until one settles on a certain outcome. Your travel passengers would be a case of flipping towards continuation of growth implying zero chance of a double dip. though it would take 20 or so contra exercises for me to arrive at a final conclusion and trend map.

> Has Economics Run Out of Ideas?

I don't follow any economic theory, as above, I flip between individual economic indicators and let them lead the way towards a final conclusion. I don't want to know about Keynes or mises or hayek, not because they were right or wrong, but because I don't want to discount the probable.

2: A housing bubble is not “production” either.

I agree with the wealth effect and that people have short memories, and are sentiment driven. I don't read krugmen or any of those in the press so don't know or want to know what they are stating, all I am interested in is ridiculing the Bank of England for its worthless inflation forecasts.

Hmm I think I disagree on bubbles pushing people away i.e. "suck out jobs", I see them more as attracting wealth and jobs like black holes that eventually go big bang.

I don't track U.S. house prices though did make a forecast a couple of years ago that needs updating now.

$100,000 tax breaks to home buyers will result in much higher inflation, but would result in an nominal rising trend but no boom until house prices start rising in real terms.

> Will U.S. House Prices Drive The 4.8% “Consensus” Nominal GDP Growth Forecast?

Again real trend is what sparks the sentiment driven booms, nominal trends don't they result in stagnation. I agree housing leads economic growth, housing real terms gains leads economic booms.

UK house price dynamics are significantly different to that of the US. Yes US housing is dirt cheap, I contemplate instead of buying a mini mansion in the UK to go an live in the US in a mega mansion for the same price.

At the end of the day the strongest conclusion I have is that of a multi-decade inflation mega-trend, which means rising prices both consumer and asset. I am also a bubble supporter as that is the best way to accumulate wealth by hopping from bubble to bubble before it goes pop!

Best.

P.S. I'm not a good reader am I ?

NW


Shelby Moore
02 Aug 10, 21:32
Final Bubble

Nadeem commented:

"I am also a bubble supporter as that is the best way to accumulate wealth by hopping from bubble to bubble before it goes pop!"

Agreed, buy fear, sell greed.

But how does one survive the reset of a currency in hyper-inflation, if one will be taxed at hyper-inflated nominal values?

http://www.marketoracle.co.uk/Article20327.html#comment93334

In that case, there is no asset that one can buy that won't also take the tax hit.

That is the methodology by which the banksters wipe out the middle class and the millionaires entirely:

http://www.silverbearcafe.com/private/01.10/thinklikeabanker.html

That currency wipeout cycle has repeated numerous times in history. The only way to avoid it has been to expatriate before the capital controls to stop it when it becomes obvious to all.

You had better get your plans in place now, if the banksters plan such a reset. I think they do.


Nadeem_Walayat
02 Aug 10, 21:46
Hyper inflation

I am not seeing signs for hyper inflation.

If or when signs of hyper inflation start to become more probable then I will have to adapt to such an outcome.

But at this point, I just don't see hyper inflation i.e. along the lines of 10% to 20% inflation per MONTH.

Yep banksters and governments defraud the middle classes by means of inflation. It is hard work maintaining ones overall purchasing power.


Shelby Moore
02 Aug 10, 22:12
Suddenly

The nature of hyper-inflation is that 99.9% do not see it until it is too late. Also hyper-inflation is caused by the stampede of the public once they realize the government is insolvent.

The western govts are all insolvent, and there is no level of austerity that can fix it without hyper-inflation.

Because any shift to austerity is going to plummet tax revenues and send debt servicing spiraling. More austerity will worsen the debt service as a % of GDP, until it exceeds 100%. The govt either allows sovereign default or it prints money in a runaway spiral.

The point is the runaway spiral is mathematically unavoidable now. It is a certainty.

We are only waiting for the market to realize this. The banks are very busy kicking people out of mortgages in USA, as they prepare to take the assets and leave the govt holding the mortgages.

Once the pin prick is heard round the world, there won't be any time to prepare.


Post Comment

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

Catching a Falling Financial Knife