XJO 2.16% 5,615.6 s&p/asx 200

usa is now in depression

  1. 95 Posts.
    I would love to defend my title of this post with proof, but just like my post over on BHP just then, I do not want to bore you all with an epic post. There is particularly too much data to post on this subject.

    Fortunately if you DYOR, you'll see that each piece of data out of USA has worsened to the latest "not seen since World War Two" ect in an exponential fashion. The next data you'll soon see out of USA is "not seen since 1929."

    You all know what I'm referring to: massive unemployment, foreclosures continuing to sky-rocket, massive business and now whole industry insolvency (think auto/manufacturing and financials to name the worst).

    Congress won't bail out auto's as they know they will be throwing their money into an open fire. USA auto industry must be allowed to go bankrupt and into a huge restructure to resolve their terrible business models.

    Anyway USA depression won't be the end of the world, just a new beginning which may be atleast several years away after we get through this excess irrational exuberance that caused this financial meltdown and resultant depression.

    As a trader I live and die by being ahead of the yield curve. I've been bearish and calling a USA recession since February, and had to wait until now to get it. I don't think I'm so early on the depression call though as many mainstream media and observers are already calling it.

    I'd appreciate it if someone could post S and P 500 and DOW PE ratios as they have seemingly vanished from everywhere I could formerly find them, probably because media does not want public to know USA is still horribly overvalued considering their predicament. Last I could see S and P 500 was sitting on about 10 times earnings and Dow was on about 100, yes 100 times earnings (a few weeks ago), so now you know why I think media is practically hiding PE ratios or won't publish them anymore because they are still so overvalued.

    Anyway for those that wonder why I post this on XJO thread, check the correlation coefficient on XJO and S and P 500/DOW (yes I've been studying stats/probability this semester) and you'll know why our fate is in USA's hands.

    My DOW target of 6000 within weeks (and a commensurate fall percentage fall on XJO) is stronger than ever now the last impediment has just been broken, which was technical traders needing a new low to be convinced of it going there. This has occurred and so you can almost pick a figure as to how low this will go by christmas.

    Longer term I believe DOW will find its penultimate low around 3000 sometime next year and will then go sideways for a long time while everything works itself out which must happen naturally over the next few years like a forest fire burning out. Government intervention has already been proven not to work, as free markets must be allowed to be what they are (free) if we are to continue to thrive sometime again in the future.

    You may see a small dead cat in USA tonight or soon but each bounce has been getting smaller over past several weeks with good reason. DOW has fallen 5 out of last 7 fridays with an increasing percentage fall in that time.

    Everyone is still way too bullish. Bottom is still so far away I can not see it without a hubble telescope

    Deep recession/depression whatever you want to call it is only just getting started in the States, and I can only hope our economy does not end up in the shape theirs is.

    As a quirky footnote, to illustrate just how bad things are over there, the number of people who can not afford to bury their dead has trippled in the past year. Whole areas of Cleveland and Detroit have been abandoned and vandalised ect (like ghost towns as depicted in armageddon-style hollywood movies) due to foreclosure (and many others), and this is only the tip of this iceberg as unemployment over there heads from:
    ______________________________________________
    Nonfarm payroll employment fell by 240,000 in October. Job losses over the last 3 months totaled 651,000. In October, the unemployment rate rose from 6.1 to 6.5 percent, and the number of unemployed persons increased to 10.1 million.
    ____________________________________________________
    http://www.bls.gov/cps/

    ...so 6.5 percent current USA unemployment (and rising clearly exponentially if you go back over previous data) to the projected rate of anywhere between 10 to 12 percent plus unemployment, that most pundits are now predicting.

    Finally as everyone knows: the lower the oil price, the worse the economy...so check the oil price right now if you're unsure of the state of the world economy. Or simply google "baltic dry index" for further proof.
 
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