America is stretched to breaking point: watch the markets

[VegasVic]

The Nation says "America is stretched to the breaking point: watch the markets" Well I have gladly taken their advice and have been watching (and participating in) the U.S. markets, and just to give another update, nearly all the market averages hit fresh new highs yet again today Don't those folks at the Nation ever get tired of getting it wrong???

[MexicanFarang]

1.squaring off against Russia over the Ukraine crisis.

5555. You got to be kidding, right? Next.

2. bombing ISIS in Syria and Iraq

This actually stimulates the economy for the Military Industrial complex. Next.

3. grappling with a threatened Ebola pandemic at home.

While I would agree that America is not prepared for a pandemic, neither is any other country on Earth. Next.

4. and trying to prevent its stock market bubbles from busting.

BINGO! The stock market is rigged by extremely rich people, who want to crash the market sometime in 2016 to influence the election.

[Asiantravel]

interesting video compares the relatively sanguine Black Friday of the 1980′s with today’s zombie-fest.

[lovetotravel]

Seems the economy is doing quite well:

http://money.cnn.com/2014/12/05/news/economy/america-job-recovery-six-charts/index.html?iid=HP_LN

http://money.cnn.com/2014/12/05/news/economy/jobs-hiring/index.html

Wages haven't gone up much, but not really down much either. And inflation has been very low for many years.

[Asiantravel]

As of the last day of 2014, total US debt soared by $98 billion in one day (driven again by Social Security debt surging on the last day of the month to a record $5.117 trillion), and closing off 2014 with a new all time high total of $18.141 trillion in Federal debt - an increase of $136 billion in the month of December and $790 billion for all of 2014.

http://www.treasurydirect.gov/NP/debt/current

[2fishin2]

interesting video compares the relatively sanguine Black Friday of the 1980′s with today’s zombie-fest.

What is the point of this? Makes 0.0 sense. The US economy is just fine right now.

[lovetotravel]

As of the last day of 2014, total US debt soared by $98 billion in one day (driven again by Social Security debt surging on the last day of the month to a record $5.117 trillion), and closing off 2014 with a new all time high total of $18.141 trillion in Federal debt - an increase of $136 billion in the month of December and $790 billion for all of 2014.

http://www.treasurydirect.gov/NP/debt/current

Increasing debt is a big issue. But as this article states, it's much more complex than just looking at a single number:

http://www.forbes.com/sites/mikepatton/2014/09/18/the-u-s-debt-why-it-will-continue-to-rise/

NOTE: As a disclaimer, I feel compelled to state that this subject is far deeper and much more complex than a single article or even a series could explain.

The article is worth a read. Well written.

Chart 4 is most interesting. The increase in debt is slowing and will do so for a number of years. As predicted, 2020 and later could be tough years due to entitlements.

Japan...well...that's another story.

[mania]

Something is amiss........Not that I ever consider debt/GDP to be any kind of gauge

Since once again it (GDP) includes the govt spending what they do not have but it is the taxpayers who will inherit the bill.

That aside this is interesting as it is not just oil plunging

If there is this so called great recovery going on why the fall in Industrial Commodities prices?

Or as this article states...

A robust manufacturing sector and robust consumer demand is simply not compatible with crashing industrial commodity prices.

Full article here

Oil Crash: Don’t Believe the Happy Clatter

Edited January 3, 2015 by mania

[Asiantravel]

Something is amiss........Not that I ever consider debt/GDP to be any kind of gauge

Since once again it (GDP) includes the govt spending what they do not have but it is the taxpayers who will inherit the bill.

That aside this is interesting as it is not just oil plunging

If there is this so called great recovery going on why the fall in Industrial Commodities prices?

Or as this article states...

A robust manufacturing sector and robust consumer demand is simply not compatible with crashing industrial commodity prices.

Full article here

Oil Crash: Don’t Believe the Happy Clatter

" You are no doubt thinking by now that the U.S. stock market is also supposed to be a reliable barometer of economic vitality – looking out on the horizon by about six months.

Sorry. You’re confusing the stock market barometer of yesteryear with today’s cacophony coming from high frequency traders, artificial intelligence algorithms, co-located computers, dark pools, and over $1 trillion in corporations buying back their own stock."

[thailiketoo]

" You are no doubt thinking by now that the U.S. stock market is also supposed to be a reliable barometer of economic vitality – looking out on the horizon by about six months.

Sorry. You’re confusing the stock market barometer of yesteryear with today’s cacophony coming from high frequency traders, artificial intelligence algorithms, co-located computers, dark pools, and over $1 trillion in corporations buying back their own stock."

Ya them algorithms are sure having a bunch of fun. Steak, strippers & sweet rides: Wall Street’s back

http://www.cnbc.com/id/102306197

[F430murci]

" You are no doubt thinking by now that the U.S. stock market is also supposed to be a reliable barometer of economic vitality looking out on the horizon by about six months.

Sorry. Youre confusing the stock market barometer of yesteryear with todays cacophony coming from high frequency traders, artificial intelligence algorithms, co-located computers, dark pools, and over $1 trillion in corporations buying back their own stock."

Ya them algorithms are sure having a bunch of fun. Steak, strippers & sweet rides: Wall Streets back

http://www.cnbc.com/id/102306197

Lol . . . Love how people can observe what daily life is like here from afar. My city of primary residence has an unemployment rate of less than 5%, housing and commercial construction is booming.

Said it before and will say it again . . . watch the feet of institutional investors with fiduciary duties and responsibility of investing billions of dollars or handling their countries assets. They will NOT be investing in Russia or China right now or their will be a very small allocation of assets tied to those markets. They will invest heavy in US funds, markets and treasuries.

US is set up to operate on debt. Debt is not necessarily a bad thing under our economic structure. We just need to stay out of wars as that depletes money. You can always tell the goofey nutters from the rational when they say stuff like US is engaging in another conflict to spur the economy. Lol, this separates the clueless reading whack websites from those living in reality.

[mania]

" You are no doubt thinking by now that the U.S. stock market is also supposed to be a reliable barometer of economic vitality looking out on the horizon by about six months.

Sorry. Youre confusing the stock market barometer of yesteryear with todays cacophony coming from high frequency traders, artificial intelligence algorithms, co-located computers, dark pools, and over $1 trillion in corporations buying back their own stock."

555 No I gave up that illusion many years ago but really had the nail driven home when I saw the banksters rewarded after near toppling

the world. Of course I knew where they would take their rewards....right back to the casino of course.

The markets are 101% propped now

I think of it as a game of musical chairs.

Of course Joe Blow See's it & thinks hey I too can make $$$

But he is so in over his head

The music will stop on cue & he will wonder why he does not have a chair yet all the banksters not

only had chairs but left the building last week.

Not to say it all went to 100% casino style during the QE/Bailouts etc...

I tend to think really it all happened when investing changed to day trading & the click of a mouse.

In previous times folks invested in companies based on stats/performance/ROE

These days it is ticks daily ....in & out...I often wonder how companies can even have any future planning

when everything changes daily.

Folks use to buy shares in a company they believed in take them home & put them in a safe for years.

Edited January 3, 2015 by mania

[mania]

We just need to stay out of wars as that depletes money.

Oh Lordy...dont look now

[Publicus]

it is time to analyze the OP who wrote his piece in mid-October and his focus on four points which he calls crises. Prez Obama addresses three of them which the prez calls threats, I call them policy issues which is to say how the US is dealing with the issues strategically and tactically. .

The first point by the OP is Russia. Noting Russia's circumstance, the OP goes directly OTT to quote Putin on nuclear weapons, "We hope that our partners will realise the futility of attempts to blackmail Russia and remember what consequences discord between major nuclear powers could bring for strategic stability." This is Putin demagoguery and is a reckless scaremongering that exceeds the blatant militarism of Russia in Ukraine, all of which the OP has no trouble with.

The OP is equally over the top concerning ISIS, which he says is but a matter of, "The US has once against demonstrated its appetite for the doctrine of unending war. The campaign against ISIS is merely an excuse to exert greater US influence in the region." He tries to introduce Iran, Russia, China as somehow being equal partners to the US in the Arab world, while ignoring the Arab countries that are central to the coalition to obliterate IS. The OP conveniently omits how any of the three might or do relate to the Israel-Palestinian issues.

Ebola comes next, as the OP uses his piece to audition as a Hollywood movie script writer, "The epidemic has been linked to dubious research and development of the virus by US researchers in West Africa. In this age of globalisation, outbreaks such as this one are difficult to contain and are thus a real threat to humanity." The OP thus tells us all we need to know about his alleged thought processes.

Then alas the OP turns to the markets, supposedly his main point. He says, "...there are fears that US stocks can't continue to rise forever," which is a convoluted way of trying to deny the upward trend line that shows up after naturally occurring corrections and surges. He then quotes the goldbug and fellow scribbler James Rickards, a champion of the Mad Max Austrian school of economics, who wishes says the NYSE will collapse by 70 to 80 percent, in yet more rhetoric

The OP says all of this is due to the US being the cause of global instability, "What is certain is that the US is engaging in several battles all at once, each posing huge risks to global stability."

The writer has it exactly bass ackwards.

The US and the EU as Nato are stopping the revanchist and irredentist Russia acting like the same-minded 1930s Wehrmacht in its equally blatant attempt to dominate Europe, this time for the Brics. The US and Arab coalition partners are stopping ISIS establishing its own caliphate over the Middle East and Israel to include bordering Iran. In August doomsayers were hollering there would be 1.4 million cases of Ebola in Africa but as of January 2nd the UN said there were 20,000.

US GDP 3rd quarter hit 5% and the markets are doing just fine thank you, unless one is looking at the gold markets the OP and Rickards still don't want to talk about.

United States GDP Growth Rate 1947-2015 | Data | Chart | Calendar

The Gross Domestic Product (GDP) in the United States expanded at a seasonally adjusted annual rate of 5.0 percent in the third quarter of 2014 over the previous quarter. GDP Growth Rate in the United States averaged 3.27 Percent from 1947 to 2014.

http://www.tradingeconomics.com/united-states/gdp-growth

Edited January 4, 2015 by Publicus

[lovetotravel]

Something is amiss........Not that I ever consider debt/GDP to be any kind of gauge

Since once again it (GDP) includes the govt spending what they do not have but it is the taxpayers who will inherit the bill.

That aside this is interesting as it is not just oil plunging

If there is this so called great recovery going on why the fall in Industrial Commodities prices?

Or as this article states...

A robust manufacturing sector and robust consumer demand is simply not compatible with crashing industrial commodity prices.

Full article here

Oil Crash: Don’t Believe the Happy Clatter

I'm no expert, but from what I've been reading, commodity prices have been falling due to the world economy slowing. Especially China. As we all know, you can't trust China's reported numbers. Many think their growth is way below what's reported.

[danmarnj]

With so much computer trading and traders making money on volatility, the guys on the inside are raking it in. Then along comes the gurus who see any market change and then look for an explanation for it in the latest news. Simple cause and effect analysis is fodder for news articles. If they had the answers they would be rich and enshrined in a mansion too busy sucking down cocktails to write such drivel.

Those traders are not investers. They are gamblers. An invester finds some good companies and rides out the storms. Then buys more and reinvests dividends when younger and hopefully has a nestegg that is built up gradually through the years

The stock market has been around quite a while, has suffered through many corrections and even depressions. But one thing is certain throughout its history.

THE STOCK MARKET HAS YET TO TOP OUT

[NeverSure]

Global commodity prices are down because there is less demand for them due to a global economic slowdown. This is good for the US because its economy is booming and manufacturing is cheaper due to lower prices.

Those who love to criticize the US should pay attention. (That is if they could afford to pay attention.) The US economy is running away in overdrive.

As to the OP, the US can say what Mark Twain said: "The news of my death has been greatly exaggerated."

[MrWorldwide]

Just a general question - how are the terms 'world economy' and 'Chinese economy' in any way not co-dependent ? I dont know about Europe or South America, but I cant think of a single country in the Asia-Pacific which wouldnt be impacted by unfavorable numbers out of China, and that includes the US.

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_China

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_Russia

I'm not an economist and I accept that a few Wikipedia pages doesnt make much of a case, but if the Chinese need to fudge their data to keep the gears moving, I'm all for it. The whole enchilada - and I believe that's the technical term for it - is a confidence game : I believe I'll have access to funding so I hire more people / rent a factory / whatever. You believe you'll still be getting paid in 2015 so you buy a car, and so it goes. As the GFC proved, when that confidence evaporates you might as well start growing your own potatoes.

[MrWorldwide]

Global commodity prices are down because there is less demand for them due to a global economic slowdown. This is good for the US because its economy is booming and manufacturing is cheaper due to lower prices.

Those who love to criticize the US should pay attention. (That is if they could afford to pay attention.) The US economy is running away in overdrive.

As to the OP, the US can say what Mark Twain said: "The news of my death has been greatly exaggerated."

Hopefully its different to the overdrive that gave us Wall St bankers, Bernie Madoff and Enron, not to mention GWB and Dick Cheney.

[lovetotravel]

Global commodity prices are down because there is less demand for them due to a global economic slowdown. This is good for the US because its economy is booming and manufacturing is cheaper due to lower prices.

Those who love to criticize the US should pay attention. (That is if they could afford to pay attention.) The US economy is running away in overdrive.

As to the OP, the US can say what Mark Twain said: "The news of my death has been greatly exaggerated."

I've been tempted to go back to the beginning pages of this thread:

http://www.thaivisa.com/forum/topic/238057-financial-crisis/

And see how many members predicted the demise of the US. There were many! And obviously, they weren't correct.

Nobody knows where the markets will go. World events could happen that will change everything. But if things proceed like they are now, the markets will do just fine this year.

[NeverSure]

With so much computer trading and traders making money on volatility, the guys on the inside are raking it in. Then along comes the gurus who see any market change and then look for an explanation for it in the latest news. Simple cause and effect analysis is fodder for news articles. If they had the answers they would be rich and enshrined in a mansion too busy sucking down cocktails to write such drivel.

Those traders are not investers. They are gamblers. An invester finds some good companies and rides out the storms. Then buys more and reinvests dividends when younger and hopefully has a nestegg that is built up gradually through the years

The stock market has been around quite a while, has suffered through many corrections and even depressions. But one thing is certain throughout its history.

THE STOCK MARKET HAS YET TO TOP OUT

Absolutely right. I feel sorry for these young day traders who put so much on the line regularly.

Imagine if, when I was younger, I bought $1,000 each the first time I encountered them, of Walmart, McDonald's, Microsoft and KFC. Imagine if later I had done the same with Google, Amazon, and Ebay. What if I did that and was still holding them despite market swings?

I'd be so rich I wouldn't speak to the rest of you lowlifes, LOL.

[NeverSure]

Global commodity prices are down because there is less demand for them due to a global economic slowdown. This is good for the US because its economy is booming and manufacturing is cheaper due to lower prices.

Those who love to criticize the US should pay attention. (That is if they could afford to pay attention.) The US economy is running away in overdrive.

As to the OP, the US can say what Mark Twain said: "The news of my death has been greatly exaggerated."

Hopefully its different to the overdrive that gave us Wall St bankers, Bernie Madoff and Enron, not to mention GWB and Dick Cheney.

In order to make a comment like that you must not be reading the news paying attention.

[NeverSure]

Just a general question - how are the terms 'world economy' and 'Chinese economy' in any way not co-dependent ? I dont know about Europe or South America, but I cant think of a single country in the Asia-Pacific which wouldnt be impacted by unfavorable numbers out of China, and that includes the US.

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_China

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_Russia

I'm not an economist and I accept that a few Wikipedia pages doesnt make much of a case, but if the Chinese need to fudge their data to keep the gears moving, I'm all for it. The whole enchilada - and I believe that's the technical term for it - is a confidence game : I believe I'll have access to funding so I hire more people / rent a factory / whatever. You believe you'll still be getting paid in 2015 so you buy a car, and so it goes. As the GFC proved, when that confidence evaporates you might as well start growing your own potatoes.

The whole enchilada isn't a confidence game. Only part of it relies on consumer and business confidence. Most Western countries are very transparent in their numbers including their banking numbers. Look how bad news in the US went around the world in detail. All of it.

China operates in secret and the means of production belongs largely to the communist government. In the West the means of production belongs to the people - the investors, stockholders and private business owners.

The income of the average American is multiples of that of the average Chinese. All it would take for America to shut China down is for it to put a 25% tariff on imports coming into the US. It is already getting too expensive to ship raw materials to China, have them manufactured with "cheap" labor, and then ship the products back. Some of that manufacturing is already coming back to the US. NOW add 25% to the cost of imports and China would revert to the 10th century as US manufacturing picked up the slack.

Edited January 4, 2015 by NeverSure

[Publicus]

Global commodity prices are down because there is less demand for them due to a global economic slowdown. This is good for the US because its economy is booming and manufacturing is cheaper due to lower prices.

Those who love to criticize the US should pay attention. (That is if they could afford to pay attention.) The US economy is running away in overdrive.

As to the OP, the US can say what Mark Twain said: "The news of my death has been greatly exaggerated."

Hopefully its different to the overdrive that gave us Wall St bankers, Bernie Madoff and Enron, not to mention GWB and Dick Cheney.

Exaggeration indeed, and no perspective or good judgement besides.

There was the payola scandal way back when and the quiz show scandals...well before that Wall Street laid an egg....Jay Gould cornered the gold market then himself got cornered.

From the post-bellum Credit Mobilier scandal to Halliburton the US has dealt with scandals and has done it effectively, Dodd-Frank being a most recent instance. Charles Ponzi was a criminal but he much more significantly remains a lasting lesson which some certain others have been unfortunate enough to miss as one can plainly see in the above post.

Charles Ponzi and those Vladimir Putin eyes.

Let's remember scandal is not limited to the USA. There was the Swissair swindle, the Deutsche Bank spying scandal and swindle, the Canadian mining scheme, Siemens Olympic bribes, the Volkswagen prostitute service....the Soviet Union was a huge swindle and someone has already mentioned present ongoings in the PRChina.

And let's not forget the former LOS.

Edited January 4, 2015 by Publicus

[Publicus]

Just a general question - how are the terms 'world economy' and 'Chinese economy' in any way not co-dependent ? I dont know about Europe or South America, but I cant think of a single country in the Asia-Pacific which wouldnt be impacted by unfavorable numbers out of China, and that includes the US.

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_China

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_Russia

I'm not an economist and I accept that a few Wikipedia pages doesnt make much of a case, but if the Chinese need to fudge their data to keep the gears moving, I'm all for it. The whole enchilada - and I believe that's the technical term for it - is a confidence game : I believe I'll have access to funding so I hire more people / rent a factory / whatever. You believe you'll still be getting paid in 2015 so you buy a car, and so it goes. As the GFC proved, when that confidence evaporates you might as well start growing your own potatoes.

Well I am not an economist either so let's go ahead and talk enchiladas.

The OP and certain posters talk about US markets collapsing which is completely wrongheaded and is nothing more than an attempt to distract.

Distract from what?

Distract from the complete collapse of the markets across Russia.

To distract from the fact capital is fleeing the PRChina....that since 2012 foreign capital has been streaming out of China, as well as $1 Trillion in domestic capital accumulated by Chinese themselves as they escape the inevitable crash.

In other words, everyone knows to get out of Russia and in China both foreigners and Chinese themselves are bailing out asap and en masse.

China has potatoes too in small amounts in every market, so whether in China or Russia you're gonna get your potatoes mashed. Russia has in fact had its potatoes baked and China's order is already in the oven.

US markets ebb and flow and while sometimes the tide can get temperamental, US markets have a deep and enviable history because they are consistent, reliable, productive.