Charts / Cycles / Demographics

Charts / Cycles / Demographics - thread


Stocks could be much lower by the end of 2014.


This is not the message you are getting from Wall Street, but I have legitimate reasons for believing this.


Let's first look backwards at some key indices:


YearEnd : --SPX-- : --HSI- : HK2823 : 10yr%

2008 - : 0,903.25 : 14,387. : $8.36 : 2.244%

2009 - : 1,115.10 : 21,873. : 14.92 : 3.843%

2010 - : 1,257.64 : 23,035. : 12.74 : 3.305%

2011 - : 1,257.69 : 18,434. : 10.34 : 1.871%

2012 - : 1,426.19 : 22,657. : 11.14 : 1.756%

2013 - : 1,848.36 : 23,306. : $9.34 : 3.026%

============


Talking about a down year, after so many up years is a contrarian call. The prediction for year-end stock indices from mainstream forecasters is almost uniformly bullish What they seem to be forgetting is that after so many years of rises, the stock market has gotten ahead of the underlying fundamentals of the economy. There are many vulnerabilities that are not being fully recognized. And that would include:


+ Rising interest rates (Long term rates are already moving higher - see above)

+ A Credit crisis in China could trigger a collapse of China's property bubble

+ Those consumers in the US who have been spending cheerfully on their credit cards,

may be reaching the limits of their borrowing capacity.


My view, is that at any time in the market, there are almost an equal number of positive and neagtive factors. But sentiment will get most investors to focus on either the positive or the negative side. A shift from predominantly positive to predominantly negative can bring a sharp decline in stock market prices. And that may be what we will see in 2014.


/ Charts, Cycle, and Demographic indicators can help us to predict those shifts before they happen/

/ Charts, Cycle, and Demographic indicators /


DOW CHART comparing the DJIA Current Period, with DJIA 1928-29


chart : http://images.quickblogcast.com/0/9/0/0/4/249687-240090/uhoh.jpg

=== ===


Demographics expert, Harry Dent, is very Bearish in this recent C2C Podcast


"I am staking my reputation on this... We are going to see an even bigger crash" (than 2008)


(he does the first part of a "split show")


Coast To Coast Am - January 20 2014 - Coming Deflation/ Tall White ETs


= http://www.youtube.com/watch?v=VXGaOgrOBzc =


He expects stocks to peak before between now and May 2014


The Low could be as low as Dow- 5,500


ALL his cycles are down over the next Six years


"Being short could be one of the best things over the next 2-3 years.


But just being in Cash will be good enough for most people."


Old Chart -from Harry Dent, the upturn has lasted longer


chart : http://www.theaureport.com/images/Dent%20Megaphone%20chart.jpg


DOW - latest ... : Dow-since-1987


chart : http://imageshack.com/a/img827/8731/uu9.gif


Gold and Silver, he does not like.


Longer term, he thinks Gold could go to $700, even $500, or lower ($250?)


Silver could go to $5.50


("Don't sell your gold now. It could rise to $1400 or higher in a few months. Sell then.")


"China is the greatest bubble, we have ever seen in history"


"The last place I would want to is China."


The bursting of China's Real Estate bubble, will bring the global economy down, like US Real Estate did in 2008.


"When debts get written off, money gets destroyed.

There will be less money, chasing fewer goods.

Even with the money printing we have seen, there has been little or no inflation.

In a few years, you will have a chnace to buy assets at the lowest prices in history."


BITCOINS : "It looks like another bubble. The US Currency is not going to die here."

A chart on US consumer debt as a percentage of disposable personal income: http://research.stlouisfed.org/fred2/series/TDSP


Even allowing for the impact of all the write downs in 2010-2012, household finances are still in better shape as far as this metric is concerned than they have been for decades which helps explain the robust consumer spending numbers BUT (and it is a very big but):


- i believe that distribution is more skewed than than it has been for some time;

- low interest rates contribute to affordability which means that rising interest rates will cause the percentage to move higher, although with the biggest contributor being mortgages which are mostly at fixed long term rates, query how hard rising interest rates would impact);

- middle and lower income households in particular are facing rising costs for many large non-discretionary expenses (with health care being the elephant in the room)


"My view, is that at any time in the market, there are almost an equal number of positive and neagtive factors. But sentiment will get most investors to focus on either the positive or the negative side. A shift from predominantly positive to predominantly negative can bring a sharp decline in stock market prices."


Totally agree. Sentiment will play a big part in deciding how the markets will perform.


One interesting question is the extent to which we will continue to see a repeat of 2013's divergence between the US markets and the many of the emerging markets?

Even though most mainstream forecasters are Bullish on stocks in 2014 - and especially the ones attached to big Wall Street firms, there are many Bearish forecasters out there.


Such as: Gerald Celente ....


Here's a comment from Egon von Greyerz:


“But we knew that there would be a blowoff in the stock market based on the trillions of dollars the US is printing. Some of the areas that are extremely dangerous are Japan, China, the US, Europe, emerging markets, the financial system, including bail-ins and derivatives, the political situation in many countries, stock markets in Europe, the US dollar and most other currencies, and the biggest bubble -- the bond market (laughter ensues).


Eric, any of these could be sufficient to trigger a major crisis in the world. And it’s virtually guaranteed that one or many of these risk factors will explode.

==

> http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/20_Frightening_Reality_Of_Whats_Happening_Around_The_World.html

TI,

The Average figures can be misleading, I think.


But there is no doubt that many individual households have reduced their debts - at least when looked at as a percentage of GDP. But a do believe that just as we see more Americans relying on food stamps, there are a rising number of household "living on the edge." At the moment is is based on anecdotal stories (and falling retail store sales), so I do not have an authoritative source to show you... yet! (I do hope this is the type of chart or source we can collect here.)


As many people held back from buying new homes, overall household debts dropped. And so did two other forms of debt (Corporate and Financial.) But Govt debts have soared, and that is where the US problems reside now:


chart: http://www.economicshelp.org/wp-content/uploads/blog-uploads/2013/01/us-debt-composition.png


I think we may see problems from China and/or Japan as a major trigger for the 2014 Crash.

Even Big Money shares similar concerns about China, Japan, and US politics


Blackrock's Larry Fink, Rare Interview


= https://www.youtube.com/watch?v=3POrfYwgBkM =


A possible "bias towards higher rates"


+ Deficit likely to be $600 Billion, down from $1 Trillion

+ The Fed might buy it all

Agree that the average can be misleading (this is what I was referring to with the skewing - upper income households looking relatively better than lower income households).


The bigger issue with the consumer debt analysis is to break down between mortgage, credit card and personal loan and student debt. Mortgage is much bigger than the rest combined and with all the new/used home buying in the last few years, it would be interesting to see how each component has trended over time.

Apart from New Homes, for every buyer, there's a individual seller.


If a buyer purchases a home in foreclosure, and finances 65%, then total mortgage denbt will decline from that transaction, because the new buyer has less debt than the foreclosed seller.


I expect we have seen many transactions like that in recent years

Big Drops in US stocks : about 3% down in just two days on RISING volume !


Is the peak in place?


I shall be looking into that possibility

Dr. Paul Craig Roberts: If the Currency Collapses


& You Try to Flee Into Gold,There Won't Be Any



= http://www.youtube.com/watch?v=_ojASipDzVY =

Published on Jan 8, 2014



"There's no recovery."



Amongst the Employed Americans:

40% earn less than $20,000 a year.

53% earn less than $30,000 a year.

The poverty line is $24,000.



"There's no consumer income... They cannot add any consumer credit... Few qualify"

"Consumer income is not growing, except within the top 1%."

"How does the economy grow?... Yet the stock market is at an all time high."


"How long can they fool people?"


"Maybe as long as the press will tell their story" (lie for them)

My Favorite Chart - high in place?


http://imageshack.com/a/img560/3493/efu.gif

Charles Nenner Predicts the coming dollar implosion 2014 - 2015


The Coming US Dollar Implosion 2014-2015 and Gold will Rise Explode


Charles Nenner Predictions;Buy Farmland We are in Bottom of Cycle The Coming US Dollar Implosion 2014-2015 and Gold will Rise Explode .


Charles Nenner Real Estate Prediction Supercycle not Over Yet The Coming US Dollar Implosion 2014-2015 and Gold will Rise Explode


= http://www.youtube.com/watch?feature=player_embedded&v=d7ZXR47WYOk =


This is more recent, but not terribly precise - was it July-Aug, 2013?


= VIDEO =


He likes to talk about the long term data, and the formulas he uses, but makes few precise predictions


"Gold is headed to $2,500, but might first go to $800."


He said he liked Monsanto (MON) and Mosiac (MOS) - because of his views on agricultural prices


THIS interview with David Gurwitz (Dec.2013?) was much better


= http://www.youtube.com/watch?v=GSliV_eneE8 =


"We have a Top in US stocks at SPX-1820, the second week in January" (good call !)


"Gold could go lower to $1146, but in the long term will go to new highs?"