Posts Tagged ‘Elliott Wave International’
Gargantuan and Growing: The U.S. Debt Figure You’ve Probably Never Heard Of
The widely reported $16.1 trillion federal debt is a drop in the bucket
By Elliott Wave International
Financial transparency is a must for U.S. publicly traded companies. But if the federal government had to abide by those same regulations, more Americans would know that the often-reported $16.1 trillion federal debt doesn’t come close to the truth about the nation’s liabilities.
In a Nov. 26 Wall Street Journal opinion piece, a former chairman of the Securities and Exchange Commission and a former chairman of the House Ways & Means Committee write:
The actual liabilities of the federal government — including Social Security, Medicare, and federal employees’ future retirement benefits — already exceed $86.8 trillion, or 550% of GDP.
The authors say that few people know about the $86.8 trillion figure because that figure is not in print on any federal government balance sheet.
Federal debt is staggering enough. Municipal liabilities also pose a danger to the nation’s financial health.
Illinois has an unfunded pension liability of at least $83 billion. It had 45 percent of what it needed to pay future retiree obligations as of 2010, the lowest among U.S. states.
Bloomberg, Aug. 29
The article also noted, “California, with an A-ranking, one level below Illinois, remains S&P’s lowest-rated state.”
Budget shortfalls in California and Illinois are just the tip of the municipal financial iceberg. Many other state governments are financially swamped.
How did municipal spending get so out of control? Well, a stupefying story out of Bell, Calif., provides a hint. On Nov. 26, CNN reports that the Bell police chief earned $457,000 a year, and “He is now asking for more money.” In 2010, the Bell city manager resigned after controversy over his $787,000 yearly salary.
States Are Broke and Approaching Insolvency
… States’ legislatures continue to blow money. For years, state governments have been spending every dime they could squeeze out of taxpayers plus all they could borrow. (The lone exception is Nebraska, which prohibits state indebtedness over $100k. Whatever Nebraska’s official position on any other issue, by this action alone it is the most enlightened state government in the union.) But now even states’ borrowing ability has run into a brick wall, because the basis of their ability to pay interest — namely, tax receipts — is evaporating. … The goose — the poor, overdriven taxpayer — is dying, and the production of golden eggs, which allowed state governments to binge for the past 40 years, is falling. The only reason that states did not either default on their loans or drastically cut their spending over the past year is that the federal government sucked a trillion dollars out of the loan market and handed it to countless undeserving entities, including state governments.
The Elliott Wave Theorist, November 2009
If there’s another leg of the economic downturn, expect a further dwindling of tax receipts.
Finally, consider the wobbly financial dominoes in Europe and what may happen in the U.S. after the first one falls.
 | 8 Chapters of Conquer the Crash — FREE Can the Fed Stop Deflation? Should you rely on the government to protect you? What should you do if you run a business? You can get answers to these and many more questions in Robert Prechter’s Conquer the Crash. And you can get 8 chapters of this landmark book – free. This 42-page report can help you prepare for your financial future. You’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt and so much more. Get Your FREE 8-Lesson “Conquer the Crash Collection” Now >> |
This article was syndicated by Elliott Wave International and was originally published under the headline Gargantuan and Growing: The U.S. Debt Figure You’ve Probably Never Heard Of. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Bernanke’s Bigger Bubble: QE-3 and the Coming Economic Crash
Why monetarist theory is flawed
By Elliott Wave International
Federal Reserve Chairman Ben Bernanke really means it this time.
He will rescue the economy.
Ben S. Bernanke for the first time pledged that the Federal Reserve will buy bonds until the economy gets closer to his goals … . The central bank yesterday announced its third round of large-scale asset purchases since 2008, with the difference that it didn’t set any limit on the ultimate amount it would buy or the duration of the program. … Bernanke is “going to fight and fight until he sees a real improvement in the economy,” said a co-head of global economics research at [a major bank].” He believes quantitative easing can help the economy, so he’ll just keep at it until there’s a real turn in the economy.”
Bloomberg, Sept. 14
But we’ve all heard the definition of insanity: doing the same thing over and over and expecting a different result.
Why should we think QE-3 will work when the previous two failed? (Don’t think they failed? Then ask yourself why we need a third one.)
Granted, this round of quantitative easing appears open-ended. And it includes a pledge to purchase $40 billion a month in mortgage-backed securities. But high interest rates don’t explain the sluggish residential real estate market. Home purchases are slow for the same reason that many business owners haven’t expanded. A Sept. 12 CNNMoney article quotes a former Fed economist:
“Businesses are not hesitant to invest and hire because interest rates are too high – they’re hesitant because of the uncertainty surrounding their future prospects.”
When the August jobless rate fell to 8.1%, the widely reported reason was because so many people gave up looking for work. U.S. business startups are at record lows. Food stamp rolls recently skyrocketed. Several U.S. municipalities are declaring bankruptcy. Ratings service Moody’s just warned of a possible U.S. downgrade. And the national debt just surpassed $16 trillion.
Monetary policy will not fix what ails the economy. Robert Prechter explains:
Monetarist theory holds that each new dollar created can support many new dollars’ worth of IOUs throughout the banking system through re-depositing and re-lending, a process known as the “multiplier effect”…. Every aspect of this theory is flawed, from the assumption that credit is fundamentally good for the economy and should always expand to the bedrock theoretical assumption that human society is a machine where physics equations apply. Waves of social mood have no place in monetarist theory, but they can play havoc with the monetarists’ supposed machine when they reach extremes or undergo unforeseen (what other kind is there?) reversals.
The Elliott Wave Theorist, September 2011
Few people foresee a major economic reversal just ahead. The fact that Fed policy has become “QE Infinity” (it already has a nickname) tells us that something is badly wrong with the economy. And that something is a massive credit bubble
Monetary policy cannot make the global credit bubble simply vanish. Only a deflationary crash can do that. The chart below reveals why.
Look how fast the debt deflation unfolded in 1929-1932.
Learn what EWI expects regarding today’s much bigger credit bubble.
See more charts and read insightful commentary that will help you position yourself now for what’s to come next.
The herd keeps looking for intervention by government entities to aid their investing decisions. It’s time to break away from the herd and start investing independently. EWI is here to help …
 | Learn to Think Independently You’ll get some of the most groundbreaking and eye-opening reports ever published in Elliott Wave International’s 30-year history; you’ll also get new analysis, forecasts and commentary to help you think independently in today’s tumultuous market. |
This article was syndicated by Elliott Wave International and was originally published under the headline Bernanke’s Bigger Bubble: QE-3 and the Coming Economic Crash. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
10 Years Ago Today: Prechter’s Conquer the Crash Is Published. Read 8 Chapters Free Now
We’re sharing 8 Conquer the Crash chapters FREE to celebrate!
By Elliott Wave International
In June of 2002, the notorious dot.com bust was making way for a powerful housing boom, the European Union was growing, and American involvement in the Middle East promised a “quick and easy victory.”
Yet when EWI President Robert Prechter’s first edition of Conquer the Crash published ten years ago on this date, he wrote:
- “Home equity loans are brewing a terrible disaster.”
- “What screams bubble — giant historic bubble — in real estate is the system-wide extension of massive amount of credit.”
- “The Middle East should be a complete disaster.”
- “Look for nations and states to split and shrink.”
Today, 10 years later, the U.S. housing market still hasn’t overcome its worst downturn since the Great Depression; the eurozone is in crisis, and the expected quick victory in Iraq became a drawn-out mess.
Prechter’s analysis — based on the Elliott Wave Principle and socionomics, the study of how social mood motivates social actions — enabled him to foresee these changes in the economic, social, and political landscape.
What other eye-opening forecasts do the pages of the Conquer the Crash reveal? How about:
Banks: “Banks are not just lent to the hilt, they’re past it. In a fearful market, liquidity even on these so called ‘securities’ [corporate, municipal, and mortgage-backed bonds] will dry up.” (Remember the 2007-2009 “liquidity crisis”?)
Bonds: “The unprecedented mass of vulnerable bonds extant today is on the verge of a waterfall of downgrading.” (Remember the 2011 downgrade of the U.S. Treasury bonds?)
Credit: Credit expansion schemes — the primary role of the U.S. Federal Reserve Bank — “have always ended in a bust.” (Again, think back to the “credit crunch.”)
And — “Like the discomfort of drug addiction withdrawal, the discomfort of credit addiction withdrawal cannot be avoided.” (You could say that again.)
Anticipating “shocks” to the global system is a remarkable and true, decade-long achievement of Prechter’s Conquer the Crash. And on the 10th anniversary of its publication, we’d like to offer you 42 pages of excerpted material to commemorate Prechter’s work.
| Take advantage of this FREE, 8-lesson report that can help you prepare your financial future. You’ll get valuable lessons on:
Get Your FREE 8-Lesson “Conquer the Crash Collection” Now >> |
This article was syndicated by Elliott Wave International and was originally published under the headline 10 Years Ago Today: Prechter’s Conquer the Crash Is Published. Read 8 Chapters Free Now. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
(VIDEO) Is Natural Gas the Next Big Thing?
By Elliott Wave International
Natural gas rallied 40% in the last two months. Is the cleaner alternative to crude oil braced for another big move to the upside?
EWI’s Senior Analyst Jeffrey Kennedy joins Yahoo! Finance Breakout host Jeff Macke to offer his take on what’s in store for the market that has plagued long-term investors since falling over 80% from its 2005 highs. Kennedy takes viewers through the technicals and offers his long- and short-term forecasts for the market.
Enjoy the interview that was originally recorded on June 19, 2012.
 | Get 6 Free Lessons to Help You Find Trading Opportunities in Any Market In this FREE report from Elliott Wave International, Senior Analyst Jeffrey Kennedy presents 6 different lessons that you can apply to your charts immediately. Learn how to spot and act on trading opportunities in the markets you follow. |
This article was syndicated by Elliott Wave International and was originally published under the headline (VIDEO) Is Natural Gas the Next Big Thing?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
European Debt Crisis: “Imagine the Worst and Double It”
Just how will the sovereign debt crisis end?
By Elliott Wave International
We’ve all heard the line: Let me give it to you straight.
And in speaking to his counterparts in Spain, an Irish economist did just that.
Ireland has this banking advice for Spain: imagine the worst and double it. [emphasis added]
Like Ireland, Spain sought a bank bailout after being felled by a real-estate crash. Now, just as the Irish did, the Spanish are awaiting the results of outside stress tests gauging the size of the hole in the banking system.
Bloomberg, June 14
Stress test or no, EWI’s Global Market Perspective has known that Spain’s banking system is frail. In May, the publication gave its subscribers this chart-supported insight:
A 17-year high in the percentage of non-performing Spanish loans is merely one illustration of the Continent’s illness. After falling to a four-decade low of less than 1% in 2007, delinquencies have spiked eightfold in the past five years. The percentage stands at its highest level since 1994.
Global Market Perspective, May 2012
By itself, a subsidiary of Spain’s largest bank, Banco Santander, absorbed Q1 bad loan losses of 475-million euros.
Italy is in the same sinking economic boat. The June Global Market Perspective showed how much the eurozone’s third largest economy is also drowning in bad debt.
The Italian and Spanish economies are in shambles as borrowing costs have skyrocketed for both countries.
But the recent spotlight has been on Greece. Now that the Greek election is over and voters appear ready to embrace austerity, should we be optimistic about the future of the euro zone?
You owe it to yourself and your investments to find out. Remember, even if you believe you’re not directly invested in Europe, there’s a very good chance that some of the companies in your portfolio are.
 | Get Ahead of What Is Still to Come in This FREE Report from Elliott Wave International The debt crisis in Europe continues to play out in the political, social and financial worlds. What will be next? With commentary and analysis from February 2010 through today, this timely report gives you an important perspective on the European debt crisis and what it could mean for your portfolio. Read Your Free Report Now: The European Debt Crisis and Your Investments >> |
This article was syndicated by Elliott Wave International and was originally published under the headline European Debt Crisis: “Imagine the Worst and Double It”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
S&P 500: Did the 13.74-Point Rally Finish the Move?
From an Elliott wave perspective, there was a good reason for the June 15 rally
By Elliott Wave International
There were few “fundamental” reasons to be bullish on U.S. stocks on Friday morning (June 15).
If anything, the news that the U.S. unemployment rose in 18 states in May sounded downright bearish. But stocks rallied anyway — for a seemingly unlikely reason, explained the pundits: Because all the bad news lately makes it likely that the Fed will step in again.
(Just as a side note, how many times did the Fed “step in” in 2007-2009 while the DJIA was dropping from over 14,000 to below 6,500? But hey, that’s ancient history, and besides — “it’s different this time,” right?)
From an Elliott wave perspective, there was another reason for the June 15 rally: the S&P 500 had some unfinished technical business on the upside. Here’s what the editor Tom Prindaville wrote on Friday morning in EWI’s U.S. Intraday Stocks Specialty Service (try it free now, during June 14-21 FreeWeek):
S&P 500 (Intraday)
Posted On: Jun 15 2012 9:30AM ET / Jun 15 2012 1:30PM GMT
Last Price: 1331.33Trade pushed beyond the 1319.74 level yesterday…[which] is significant because it implies that, minimally, the S&P wants to take a closer, more deliberate look at 1338, and the overall proportionally of the recent Elliott wave action backs that up. For today, persistence atop 1319.74 is needed to see the very near-term trend up with a minimum upside target of 1338.32.
The S&P 500 closed trading on June 15 at 1342.84, exceeding the bullish price target U.S. Intraday Stocks Specialty Service gave on Friday morning by 4 points.
 | Find out where the S&P, NASDAQ and DJIA are likely headed next — FREE Now thru 12 noon on June 21 Try our U.S. Intraday Stocks Specialty Service forecasts of the S&P 500, DJIA and NASDAQ free for a week. No strings attached, no credit card required. |
This article was syndicated by Elliott Wave International and was originally published under the headline S&P 500: Did the 13.74-Point Rally Finish the Move?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
S&P 500: Elliott Wave Forecasts, Simplified
Plus, your FREE opportunity to test-drive our intraday S&P forecasts for 1 full week — starting now
By Elliott Wave International
Here’s what Elliott wave analysis is all about: You study charts to find non-overlapping 5-wave moves (trend-defining) from overlapping 3-wave ones (corrective, countertrend).
With that in mind, please take a look at this chart of the S&P 500, which our U.S. Intraday Stocks Specialty Service (FreeWeek is on now) posted for subscribers at 9:37 AM today (June 14):
Immediately, you can see that the S&P 500 has been moving sideways in a choppy, overlapping manner. That’s the definition of a correction — i.e., that is NOT the trend. The trend, as the U.S. Intraday Stocks Specialty Service editor Tom Prindaville said in the morning market overview, was higher — at least in the short-term:
…sideways-to-up over the very near term will be expected. Simply put, overall higher near-term remains the intraday call — to complete a corrective second wave.
And here’s a chart of the S&P 500 at the close of the market that the Service posted at 3:34 PM on the same day:
To make this bullish forecast, the Service editor Tom Prindaville was simply following the Elliott wave model of market progression. The model called for a completion of the developing wave 2 — in this case, “higher near-term.”
Market corrections — the sideways, choppy moves you see in both charts above — are notoriously hard to forecast. And not every Elliott wave forecast works out. But you do get a real, practical roadmap of the expected market action.
| WANT TO TRY ELLIOTT WAVE FORECASTS — FREE? You can — now thru 12 noon on June 21 Try our U.S. Intraday Stocks Specialty Service forecasts of the S&P 500, DJIA and NASDAQ free for a week. No strings attached, no credit card required. |
This article was syndicated by Elliott Wave International and was originally published under the headline S&P 500: Elliott Wave Forecasts, Simplified. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
S&P 500: Why Didn’t It Crash Further Last Week?
Bad U.S. jobs number, bad news from Europe… So why did stocks rally?
By Elliott Wave International
Think back to Friday, June 1. The DJIA closed down almost 300 points that day, and pundits blamed it on a bad U.S. employment report and even worse news from Europe.
The expectations for the next week were so bearish that CNBC held their Opening Bell segment on Sunday night (June 3) instead of Monday morning. (Robert Prechter was invited to speak; hope you got to see that interview.)
But the crash never showed up. “Fundamentally,” nothing had changed — but stocks not only “refused” to fall further, they rose. Odd, right?
Not really — if you look at it from an Elliott wave perspective. This is an excellent example of how the news doesn’t shape price trends — the market’s collective psychology does. What’s more, market mood will shift before the news, as in this case. Yet those shifts are not random — they unfold in Elliott wave patterns.
That’s how our U.S. Intraday Stocks Specialty Service (FreeWeek starts June 14) knew of the week’s rally ahead of time. Take a look at this S&P 500 chart the Service posted pre-open, at 9:11 AM, on June 5 — a day before the huge rally on June 6.
US Stocks Overview (Intraday)
Posted On: Jun 5 2012 9:11AM ET / Jun 5 2012 1:11PM GMTMarket Overview: Good morning. … the initial pressure should be on the downside for the indices. The Elliott wave interpretation remains that price action is in a 4th wave [rally] of a larger 5th [wave]. The immediate bullish alternate is that [the June 4] low completed the final 5 within a 5-wave decline.
As you can see, before the open on Tuesday, June 5, there were 2 two viable short-term Elliott wave counts for the S&P. The preferred forecast called for a rally in wave 4. The alternate (or less likely) forecast suggested that the 5-wave decline had already ended, and rally was due. Both agreed on one thing: a rally was next.
Want to try Elliott wave analysis in your trading? You can — here’s how:
During FreeWeek, you get full, unrestricted — and 100% free — access to one of Elliott Wave International’s premier services for traders: U.S. Intraday Stocks Specialty Service.
Learn more about the June 14-21 FreeWeek and sign up now — IT REALLY IS FREE >>
This article was syndicated by Elliott Wave International and was originally published under the headline S&P 500: Why Didn’t It Crash Further Last Week?. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
The Smell of Fear: Detecting the Dow’s Scent
Stocks typically fall faster than they rise
By Elliott Wave International
Rising stock prices vs. investor fear: When one is present, the other is usually absent.
Yet the two were actually in each other’s company around the time of the most recent high in the Dow Industrials (May 1):
This week the Dow carried to a new recovery high without generating a corresponding new low in the VIX. This suggests a sudden hesitancy compared with the all-out, risk-on stance registered by the VIX’s behavior in March. The NASDAQ’s non-confirmation against the Dow’s new high also suggests a sudden reticence to ramp up portfolio risk. Last year, EWFF used a similar hiccup in the VIX to help identify the May 2011 high. With the Dow at or near the end of its rally, the odds favor a similar outcome now.
Elliott Wave Financial Forecast, May 3, 2012
Here’s the accompanying chart from that issue (wave labels removed):
When the markets were still going up at the beginning of 2012, were you warned that they would soon go down?
Read the full May issue of the Elliott Wave Financial Forecast FREE for a limited time (a $29 value)
No one should invest a dime in U.S. or European markets until they read this 10-page report at least 3 times. Get up to speed and ahead of the markets now. Read the May 2012 Elliott Wave Financial Forecast from Elliott Wave International and get the complete big-picture forecast for U.S. and Europe — financially, economically and socially.
Download your free 10-page report now >>
This article was syndicated by Elliott Wave International and was originally published under the headline The Smell of Fear: Detecting the Dow’s Scent. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Listen: EWI’s Chief Analyst Hochberg Explains Recent Action in Stocks, U.S. Dollar and More
Listen to Hochberg explain the problems with using lagging economic indicators like earnings
By Elliott Wave International
EWI Chief Market Analyst Steven Hochberg talks with MarketWrap radio on May 10, 2012, about recent market action and where we are in the long-term trend, among many other topics.
Listen to Hochberg explain why using lagging economic indicators like earnings as a forecasting tool is like driving down the highway while looking in the rear-view mirror.
Enjoy this free audio clip — and then take advantage of a limited-time offer to learn even more about EWI’s big-picture forecast for U.S. and Europe (see offer details below).
| When the markets were still going up at the beginning of 2012, were you warned that they would soon go down? Elliott Wave International has just made its May 2012 Elliott Wave Financial Forecast available FREE for a limited time. No one should invest a dime in U.S. or European markets until they read this 10-page report at least 3 times. With a $29 value, this single issue of the May 2012 Elliott Wave Financial Forecast will give you the complete big-picture forecast for U.S. and Europe — financially, economically and socially. Get up to speed and ahead of the markets today. Download your free 10-page report now >> |
This article was syndicated by Elliott Wave International and was originally published under the headline Listen: EWI’s Chief Analyst Hochberg Explains Recent Action in Stocks, U.S. Dollar and More. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
