"The Spring of 1931 was a Corker."

peaceandlove · 05-11-2009, 07:12 PM

Enjoy the rally while it lasts - but expect to take a sucker punch

By Ambrose Evans-Pritchard
Last Updated: 6:43AM BST 11 May 2009

Our delicious spring rally is nearing the limits. The 40pc rise on global bourses since March assumes that central banks have conjured away the debt overhang by slashing rates to zero and printing money. Nothing of the sort has occurred. Two thirds of the world economy will be in deflation by July.

Bear market rallies can be explosive. Japan had four violent spikes during its Lost Decade (33pc, 55pc, 44pc, and 79pc). Wall Street had seven during the Great Depression, lasting 40 days on average. The spring of 1931 was a corker.

Article continues: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5301123/bEnjoy-the-rally-while-it-lasts---but-expect-to-take-a-sucker-punchb.html

Don't Panic! Big Brother will be in your fridge soon!

Insightful commentary by Mike at FEVER I AM with links to current pertinent articles including the above.

Video (9:02) with Links to articles: http://www.youtube.com/watch?v=tskeO...e=channel_page

The Economic Tsunami Is Curling Over

Karl Denninger Blog Monday, May 11. 2009

I have only one question for those who speak of "green shoots":

What are you smoking?

Let's start with a really ugly report from The Nelson A. Rockefeller Institute of Government:

The trend in state and local tax collections has been clearly downward from 2005 growth that was unusually high, and 2006 growth rates that were more in line with historical averages. Figure 1 shows the four-quarter moving average of year-over-year growth in state tax collections and local tax collections, after adjusting for inflation. Year-over-year change in state taxes, adjusted for inflation, has averaged negative 1.1 percent over the last four quarters, down from the 1.4 percent average growth of a year ago and 3.4 percent of two years ago.

There are a number of graphs in that paper, one of which shows that right around January (the latest for which they have complete data) there is an uptick in Goods consumption. This is part of where the Kudlow "green shoot" brigade is getting their information from.

However, if you look at the graph, you will see that every year there is a similar tick upward in consumption, although the exact date of it does vary by a month or two.

Why?

It's called Christmas!

Commentary continues (includes graphs): http://market-ticker.denninger.net/a...ling-Over.html

Humble Janitor · 05-12-2009, 06:30 AM

Yeah, we can continue to live in fear of the ****** economy or we can rise above and STOP WORRYING ABOUT IT!

The more fear we put into it, the more fear we will certainly get out of it!

There is more to life than money, stocks and power!

05-11-2009, 07:12 PM	#1
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	"The Spring of 1931 was a Corker." Enjoy the rally while it lasts - but expect to take a sucker punch By Ambrose Evans-Pritchard Last Updated: 6:43AM BST 11 May 2009 Our delicious spring rally is nearing the limits. The 40pc rise on global bourses since March assumes that central banks have conjured away the debt overhang by slashing rates to zero and printing money. Nothing of the sort has occurred. Two thirds of the world economy will be in deflation by July. Bear market rallies can be explosive. Japan had four violent spikes during its Lost Decade (33pc, 55pc, 44pc, and 79pc). Wall Street had seven during the Great Depression, lasting 40 days on average. The spring of 1931 was a corker. Article continues: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5301123/bEnjoy-the-rally-while-it-lasts---but-expect-to-take-a-sucker-punchb.html Don't Panic! Big Brother will be in your fridge soon! Insightful commentary by Mike at FEVER I AM with links to current pertinent articles including the above. Video (9:02) with Links to articles: http://www.youtube.com/watch?v=tskeO...e=channel_page The Economic Tsunami Is Curling Over Karl Denninger Blog Monday, May 11. 2009 I have only one question for those who speak of "green shoots": What are you smoking? Let's start with a really ugly report from The Nelson A. Rockefeller Institute of Government: The trend in state and local tax collections has been clearly downward from 2005 growth that was unusually high, and 2006 growth rates that were more in line with historical averages. Figure 1 shows the four-quarter moving average of year-over-year growth in state tax collections and local tax collections, after adjusting for inflation. Year-over-year change in state taxes, adjusted for inflation, has averaged negative 1.1 percent over the last four quarters, down from the 1.4 percent average growth of a year ago and 3.4 percent of two years ago. There are a number of graphs in that paper, one of which shows that right around January (the latest for which they have complete data) there is an uptick in Goods consumption. This is part of where the Kudlow "green shoot" brigade is getting their information from. However, if you look at the graph, you will see that every year there is a similar tick upward in consumption, although the exact date of it does vary by a month or two. Why? It's called Christmas! Commentary continues (includes graphs): http://market-ticker.denninger.net/a...ling-Over.html Last edited by peaceandlove; 05-12-2009 at 05:46 AM.

05-12-2009, 06:30 AM	#2
Humble Janitor Avalon Senior Member Join Date: Sep 2008 Posts: 3,201	Re: "The Spring of 1931 was a Corker." Yeah, we can continue to live in fear of the ****** economy or we can rise above and STOP WORRYING ABOUT IT! The more fear we put into it, the more fear we will certainly get out of it! There is more to life than money, stocks and power!