Monday, August 24, 2015

The Saudi Situation

Freak Out and Carry On by Julieta Gutnisky

Going through my email inbox this morning was amusing. A wide variety of emails (even one, literally) screaming "Time to Panic!" had flooded in over the weekend. The time to "panic" was about a year ago at the latest (it takes time to emotionally work through these things).

To steal a line from a short post from way back in 2007, we advised you to "Panic Now, Avoid the Rush" back then (would've been good timing, by the way, just saying...) Panicking when things are in crisis is a bad evolutionary strategy. If you haven't long ago found a way to reach a reasonably Zen-like state of calm when facing the whipsaws of the equity and commodity markets, figure it out now.

Whether this is yet another head-fake before the final blow-off top (as Martin Armstrong would have you believe) or whether we are long overdue for a major and sustained sell-off in equities (as the bright minds at EWI are suggesting), at a minimum this is a good time to at least do some back of the envelope scenario planning on what a downturn in mood and markets could mean for you in areas other than your 401(k) or stock portfolio.

The socionomic indicators make me think, at least for the US, we are staring at a net-negative mood environment, possibly a severe one. Look at the success of the Trump candidacy (a two-fer for socionomic analysis - strong insurgent political candidate and strong traction on strengthening border controls and repatriating those who came here illegally during an era of more positive mood) or the ongoing anti-cop anger making headlines across the US. You could even tack on the recent terrorist attack attempt which was foiled in France and the ongoing issues Europe is facing with illegal immigration as well.

However, instead of talking market action or Western socionomic trends today, I want to revisit what I regard as the linch-pin of the Middle East - the Kingdom of Saudi Arabia.

Saudi Arabia

In January of this year, we had a post entitled The Clown Show, in which we tried to look at the unfolding situation in the Arabian peninsula with a different lens than was being reported at the time. The chart of the Tadawul All-Share TASI Index at the time was coming off low and showing the signs you get from net-negative mood eras, such as a major terrorist attack.

As 2015 carried on, the index recovered somewhat. As this timeline of Al-Qaeda and ISIS attacks in Saudi Arabia shows, attacks and incitement to violence continued. With the strong downdraft in Saudi share prices recently, it is my suggestion it is time to get concerned again about just how stable the Kingdom is:
SASEIDX on a 1 year chart from Bloomberg
China, Europe, and the US will be getting the headlines as the next market moves play out - whether we see one more plunge into delusion and credit-fueled insanity, or whether markets around the world head for the Great Reset and some sort of cleaning of the Augean stables of debt and corruption which have ruled for so long. While others solely focus on those markets, I beg you to keep Saudi Arabia in your thoughts and scenarios.

The Kingdom is basically the Islamic State Lite. Beheadings, oppression of women, a bleak interpretation of the Word of the Prophet - that is all funded and supported by Saudi Arabia, and has been for decades. The Kingdom has exported the exact ideology the Islamic State adheres to, all the while ruled over by an aristocracy whose behavior leaves it open to charges of, shall we say, hypocrisy. Combine that with a collapse in oil prices to fund the programs a booming population has come to expect and, well, you do the math.

Put the SASEIDX on your list of markets to track. I might even suggest that those of you who work with Elliott Waves do you own count and see where you find yourself.

If the KSA goes down into civil war, especially at a time when Syria and Iraq are in flames and Turkey is facing internal challenges, things could get quite exciting there - and that excitement could spill over into Egypt (and their lovely canal), Jordan, and potentially Iran.

Whether your concerns are over the price and availability of petroleum, prospects for future expansion of US oil production, the likelihood of a family member deploying yet again to the Sand Box, or the potential for conflict there to trigger a wider war, it will pay to be ahead of the curve on this one.

Friday, August 21, 2015

Global Stocks Slide

If you want to know why I've had a focus on nuclear weapons attack scenarios this year, it is because today's downdraft in the equity markets is part of a trend I expect to accelerate - a trend towards warfare, xenophobia, breakdown of markets, and eventually of countries.

Sorry to be that blunt.

Below is another pitch from Elliott Wave International. At a minimum, please take advantage of the free report. Being forewarned matters in this kind of environment. Good luck out there.

- - -



Markets are moving! Want to get onboard?

By Elliott Wave International

"When the alarm goes off and the dreamers awake, it will be pandemonium in the stock market." -- Bob Prechter, from the just-released Elliott Wave Theorist.

You would agree that markets around the world have served investors a lot of surprises lately:

  1. Crude oil just fell to $40 a barrel, a 6 1/2-year low.

  2. Gold -- after hitting lows not seen in five years and disappointing just about every gold bug on the planet -- just broke above $1150 an ounce.

  3. The U.S. dollar, doomed to failure by the mainstream consensus a few years ago due to the Fed's "inflationary" QE policies, is enjoying strength not seen in years.

  4. Chinese stocks, up almost 60% YTD into their July peak, suddenly crashed, sparking fears of global contagion.

And almost every step of the way, Elliott wave price patterns have guided us and our subscribers:

  1. Last November, a joint bulletin from our Elliott Wave Theorist and Elliott Wave Financial Forecast called the low in gold and silver to within two days. Last month, on July 24, we issued another bullish bulletin -- the exact day of the intraday lows in gold and silver after four years of decline.

  2. On June 6, 2012, we sent to subscribers a Special Report calling the low in 10-year T-bond yields after 31 years of decline. The top in T-bonds came right around the same time.

  3. Crude oil has followed its Elliott wave script since 1998, including the all-time high near $150 in 2008 and the more recent secondary peak -- one from which oil fell to $40 a barrel this week.

  4. Wave patterns warned us of the huge declines in commodities -- and the huge rally in the U.S. dollar, both against nearly universal disagreement.

Plus, says Bob Prechter in the new Elliott Wave Theorist,

"With rare foresight, our European and Asian analysts predicted the failure of both the Swiss franc peg and the Chinese yuan peg, dramatic events that caught economists completely off guard. You have to know a lot about markets to do these things."

Yet the credit doesn't go entirely to our analysts -- it goes to the Elliott wave method. For the past 80 years, waves have warned thousands of investors about risks -- and new opportunities! -- at countless market junctures.

Today's #1 story is the 358-point sell-off in the Dow. Both the DJIA and the S&P 500 are now in the red for 2015.

Even the white-hot NASDAQ ended the day with a 3% decline

Is this a "normal correction" -- or are the "bubble days" really over?

Prechter's new Elliott Wave Theorist -- which got published just yesterday (Aug. 19) -- says:

"When the alarm goes off and the dreamers awake, it will be pandemonium in the stock market."

We invite you to read this special free report "Pandemonium in the Stock Market" from Elliott Wave International. It features analysis and insight into the conditions leading up to the market turmoil we're seeing right now.




Free Report: Pandemonium in the Stock Market

In this just-released report, you'll see new excerpts from our two flagship monthly publications, The Elliott Wave Theorist and The Elliott Wave Financial Forecast. Get valuable insight into the volatility we saw in the markets this week. We think you'll come away better prepared than most investors.

Get the free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Global Stocks Slide. 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.


Thursday, August 13, 2015

Oil's Price Point

As regular readers know, the models we use here at Futurejacked headquarters have a strong Peak Oil (actually Peak Resources) component to it. We've also mentioned that a whipsaw in prices should be expected at the plateau as tertiary sources (i.e. tight oil) come online in response to high prices, which combined with economic pain of high prices and a new glut, then pushes prices down and crushes infrastructure. Expect this pattern to repeat a good bit over the next few decades.

EWI has a different take on "peak" anything, but their analyses in the commodity sector have been impressively accurate over the last few decades. For those of you allocating a portfolio that includes exposure to the oil price, give a listen to the following.



One prominent analyst says oil prices will drop much further

By Elliott Wave International

Editor's note: You'll find the text version of the story below the video.
Recall crude oil's dramatic 2008 price collapse. The high that year was in July at $147.50 a barrel. By December, the price had plummeted to $30.28.
This chart shows how Elliott Wave Theorist subscribers were warned ahead of time.
It was a few weeks before the top when the Theorist said, "Crude Oil: One of the greatest commodity tops of all time is due very soon."
Eventually oil did climb back above $100 a barrel. But it took two-plus years, and even then prices remained far below the July 2008 high.
Crude traded roughly sideways through June 2014. Then came another nosedive, and about nine months later crude was trading below $44 a barrel.
Once again, subscribers were warned weeks ahead of time. Here's what the May 2014 Theorist said:
"The multi-year outlook is for much lower prices."
After oil's relentless multi-month decline, the January 2015 Theorist said that "now that bearish conviction has crystallized, oil is likely to rally."
By May 5, oil's price climbed to just above $60 a barrel. Yet as our long-term analysis suggested, the bounce was relatively short-lived:
"US oil settles at a six-year low of $43.08 a barrel" (CNBC, Aug. 11).
Where are oil prices headed?
Well, one prominent financial observer has been consistent with his outlook for oil.
"Gary Shilling thinks the price of oil is going way lower. The economist and financial analyst wrote an op-ed for Bloomberg View discussing the various reasons why he thinks the price could get down to $10-20 per barrel" (Business Insider, Feb. 17).
Shilling is a deflationist. In an Aug. 3 tweet he reiterated his oil forecast: "Prices will drop even further."
As always, there are voices saying the glass is half full: The founder of a financial firm recently told CNBC that "Oil does not have much more of a downside left."
Time will tell which of these forecasts is correct.
Consider the bigger picture -- namely the downtrend in other commodities (like copper). Think about the economic weakness in Europe and now China. Consider the record levels of global debt. Reflect on the ineffective stimulus efforts of central banks around the world. And finally, consider this excerpt from the July Theorist:
People who are afraid that deflation will lead to economic contraction are correct. That's why the subtitle of Conquer the Crash includes both words: Deflationary Depression. But the trip to the finish line is a zigzag path. Results don't show up overnight. What's happening now is nothing compared to what's coming.
"Peak Oil" -- And Other Ways Crude Oil Fooled Almost Everyone

Remember "Peak Oil"? About ten years ago, it was a hugely popular theory "explaining" why oil prices would only go higher. They didn't. These excerpts from Robert Prechter's Elliott Wave Theorist highlight the flaws in the conventional approach to forecasting oil prices and show you a better method -- a method that has done a remarkable job forecasting the future path of oil prices.
Read Bob's free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline (Video, 3:38 min.) Oil's Slippery Slope: How Far Will Prices Fall?. 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.

Wednesday, August 5, 2015

Nuclear Strike of the Month (August 2015): Target Whiteman Air Force Base


Nuclear Attack on Whiteman AFB by three 1 MT warheads, two as groundbursts
Note on the Nuclear Strike of the Month Series: In this series I want to illustrate various ways attacks using nuclear weapons can play out.  I will be using Dr. Alex Wellerstein's online NUKEMAP tool to generate the estimates of the blast and follow-on effects and we'll be turning to concepts found in Nuclear Emergencies to help evaluate consequences.

My rationale is to show a wide range of nuclear attack scenarios short of all-out thermonuclear war. The idea is to give readers a feel for the destructive power of nuclear weapons, provide scenarios as thought experiments for your own planning, and to discuss what nuclear weapons can and (sometimes more importantly) what nuclear weapons can't do.

For a variety of reasons, it is my opinion we will see nuclear weapons used in warfare sometime between now and 2030. We might as well brush up on the basics.


Nuclear Strike of the Month: Whiteman Air Force Base

This month we will examine a nuclear strike on Whiteman Air Force Base. Whiteman is located in west-central Missouri and is home to the 509th Bomber Wing. The 509th flies the B-2 Stealth Bomber and is a critical asset in the United States' ability to project power across the globe.

This month we will drill down a little deeper than we have in previous iterations of the Nuclear Strike of the Month series. We'll use Google Maps to help you as a civilian get a feel for scenario planning a nuclear attack. This can help you form and then test whatever nuclear response plans you think are necessary.

The Scenario
Historians, many of them working by candlelight, would continue to puzzle over just how the Great Eurasian War started, much as their predecessors wondered over how World War I began and how that fair. Maybe it was as simple as the Tanner Hypothesis, or maybe it was the dark side of the herding impulse natural to large populations.

Either way, the three missiles that hit Whiteman Air Force Base as part of the group of exchanges that snowballed after the nuking of the Chinese fleet off of Taiwan and the leveling of the Port of Los Angeles, opened the new and deadliest phase of that war.

American B-2 bombers had wreaked havoc over North Korea, helping the ROK forces shatter the offensive which had turned Seoul into a battleground, and had lately turned their attention to targets on Hainan.

That the base might be attacked was at least understood. What most civilians had not understood was that the strikes which took out Whiteman, raining down on the tips of Chinese missiles, would be conducted in a manner to ensure that base and its supporting infrastructure would not be a factor in the war from that moment on.

Three missiles detonated over Whiteman. DF-41s. One megaton each. These were single warhead versions, not the MIRV'd missiles which Pentagon analysts at the time assumed were being held in reserve for possible attacks on more densely populated regions of the US. Two of the strikes were groundbursts, fuzed to ensure as much damage as possible to any underground or hardened facilities, and one airburst, to maximize as much blast damage for surface targets.

The Attack
This is a multiple warhead attack on a military installation using warheads far in excess of the weapons modeled to date in our Nuclear Strike of the Month series, but which also include groundbursts.

As we discussed in Nuclear Emergencies, groundburst attacks generate intense amounts of fallout and result in a massively disrupted environment (not just blast effects, but fallout and contamination spread over a vast area, forcing populations to remain under cover for days or weeks and contaminating the environment for years or even decades - with major effects on agriculture and transportation).

Below is a close-up of strike effects on the immediate area of the base:
Three 1MT strikes on Whiteman AFB, showing immediate blast zone
The combined fireball would engulf well over 5 square kilometers, incinerating the Knob Knoster State Park and setting fires on the outskirts of Warrensburg and Sedalia (the two largest towns nearest the blast).

The immediate casualties are estimated to be on the order of 30,000, with over half of them deaths. The base itself would be rendered inoperable. As we are not privy to the details of the base, while there might be underground bunkers and support facilities which survive, access to them would be extremely limited.

Losing a key military base is a significant event, but it is the long term disruption caused by the radioactive fallout which made this strike far more deadly than would have been otherwise the case:
Blast and Fallout pattern for three 1 MT strikes on Whiteman AFB, two as groundbursts
And on a larger scale:

Blast and Fallout pattern for three 1 MT strikes on Whiteman AFB, two as groundbursts, with Kansas City, St. Louis, and Chicago as reference

Here is a description of what the fallout patterns mean, using the NUKEMAP model:

 
As the radioactive debris settled across Missouri, Iowa, and Illinois, the magnitude of the attack became clear.

The dose rate estimates shown here are the start point. Anyone caught out in the open in a radiation field of 100 R per hour and unable to get inside a well-shielded shelter (and out of any contaminated clothing - and pray you didn't inhale too much fallout) is going to be very sick or dead within days.

As we covered in Nuclear Emergencies, the radiation given off by fallout decays away in intensity according to the 7:10 Rule of Thumb. The takeaway is, the longer you can shelter in place and not ingest or inhale radioactive materials, the safer you'll be from contamination. More details can be found in this document from FEMA on the aftermath of nuclear attack.

The Aftermath
Using Google Maps, centered over Warrensburg, Missouri, and moving out, let's focus on the infrastructure affected by this attack.

An intense scar of radioactive contamination covers a wide swath of Interstate 70. The intensity of the fallout would render the highway unusable for the near term. The Annual Average Daily Traffic count for this area of I-70 is well over 20,000 vehicles. Alternate east-west routes, including Highways 50, 24, and 36, would also be closed for much of mid-Missouri. Missouri has the 7th largest highway system in the country and this would result in significant knock-on effects for commercial, military, and civilian road transportation, not to mention problems with refugee traffic, as every vehicle and probably every occupant of every vehicle exiting the blast and fallout zones would be contaminated.

Rail Freight Networks in Missouri
Rail transport would also be dramatically affected. Central Missouri is crossed by lines owned by BNSF, Union Pacific, Norfolk Southern, and Kansas City Southern. While the fallout pattern drifts the major contamination away from the critical yards in Kansas City, the tracks themselves, as well as any rail cars traveling on them as the fallout comes down, would be contaminated. This could result in the tracks becoming denied for use except for the most extreme of emergencies for some weeks after the attack. What's more, the UP line passes in parallel to Highway 50 just north of Whiteman. That line would be severed and the ability to repair it would be severely impaired by the radiation fields from the attack. It would likely have to be abandoned.

In addition, the fallout would rain down heavily over the Missouri River, with not-insignificant fallout making it to the Mississippi. Barge transport for bulk commodities could be heavily affected. Think coal transport for power plants, grain and corn from the interior for shipment to processors or for export out of New Orleans. Decontamination of barges would not be an easy task.

Other considerations would include any towns or cities which still get drinking water from the Missouri River and the destruction of the agricultural (both row crop and herd animal) potential of most of the state north of the Missouri River.

While the death toll would not be extreme for a war time attack, the knock on effects on transportation and food would be immense.

Thoughts and Plans
Some things to ponder for your scenario planning include:
  • How would first responders handle this kind of widespread disaster? Turn the northern and eastern part of the state into a quarantine zone? Check all the roads in and out of this area and consider how it would be policed or enforced.
  • How many hospitals are in this path of devastation? Columbia, Missouri, home to the University of Missouri and a number of hospitals is right on the fringe of the major fallout path. Along with Jefferson City, these are the main hospitals between St. Louis and Kansas City. What happens if the wind shifts a bit and the city, and its hospitals, are also covered with radioactive debris? Even at a low level this has major impacts on the operation of those facilities and their ability to handle injuries and refugees.
  • That idea to build a combination tornado and fallout shelter might look to be a good choice in this kind of event...
Use the NUKEMAP tool to play around with scenarios such as this. Think in terms of how you would react if the attack came while you were at home or at work. As I stated in the book, shelter is your best option in a situation with significant fallout. And far more important than any lead shielded jock straps would be filter masks. Even painter masks or basic surgical masks will keep the worst of the particles out of your lungs. Internal contamination is far more of a problem than external radiation doses in most cases.

Clown Show Disclaimer

Due to the subject matter of this post, it will be necessary to provide the following disclaimer. Blog posts like this tend to bring out comment trolls ready to gin up the Clown Show of name-calling, knee-jerk willful misinterpretation, and angry discourse generating much sound and fury, but which in the end, signifies nothing. Such comments will be deleted. 

I am not promoting nuclear war. I am not attempting to wish such an attack upon any population anywhere.  I am attempting to provide a plausible scenario which might lead to the use of nuclear weapons. My expectation is that you will use this scenario to war game whatever plans you may be putting into place to deal with this new era we find ourselves in and see if you are as ready as you hope.

Monday, July 20, 2015

The Iran Deal


I wanted to give the announcement of the nuclear arms control deal between Iran and the P5+1 a few days to circulate, watch the outrage machine kick into high gear, watch my facebook news feed get bombed by all manner of memes denouncing the deal, and give all the other by now tediously predictable opinion-massage techniques time work their way through the system.

Let's take a step through what the deal is - and is not - and see where that leaves us. A lot of the arguments against the deal can be found in this National Review article and many others like it. 

The Deal
Some of the claims about this deal somehow guaranteeing Iran will somehow be poised to immediately deploy nuclear weapons at the end of 8 years or 10 years look to be more talk than actual substance. The deal allows full and intrusive monitoring at the known nuclear sites, everything from mining to centrifuges. Centrifuges are limited and reduced dramatically in this deal.

The activities at Fordow, the place I would have most concern over, are dramatically reduced. Yes, the Iranians can continue centrifuge studies - but they can't use uranium in them. That is a big deal. Yes, the Iranian negotiators can go home and brag that they brought home the ability to work on centrifuge tech (under our watchful eye), but they don't mention, no uranium. They can only work with stable isotopes. Enriching stable isotopes is useful some niche manufacturing work and in the realm of medical isotope irradiations. There are a lot, and I mean a lot, of things you have to get very right in order to enrich uranium (the form you use for enrichment, uranium hexafluoride, is incredibly toxic and must be kept a high temperatures). Limiting uranium enrichment studies to the older centrifuges at Natanz is probably the best compromise that could have been reached short of war since, technically, it is not illegal to enrich uranium up to the 20% mark (that is, raise the level of U-235 from 0.7% to 19.9% - the U-235 isotope is the one that matters in this case).

The Iranians are required to downblend the material they had enriched up towards 20%, which again is a big deal in my mind as this limits a "breakout" or "sneakout" towards having fissile material in enough quantities to be of concern before we'd figure it out and bomb them.

I read the agreement to state that if Iran is found to violate key parts of the enrichment limitations then there is an automatic path back to the UN Security Council that re-imposes sanctions without a vote, which means Russia or China can't block future efforts to clamp them back down. It says something like "any participant" can raise issues with the oversight commission governing this agreement. The clock starts and within 30 days the UN Security Council can either do something (like impose sanctions) or if they do nothing, the sanctions are automatically re-imposed. That appears to me as a huge win. 

What the Deal Does not Do
No, the deal does not allow the IAEA or the US to swoop in on any military base anywhere in Iran unannounced for inspections. That is quite true. This is a bargain to ease sanctions in return for more inspections and insight into the Iranian nuclear program, which means also more chances to catch covert work should there be any. This actually seems like a case where sanctions worked - we imposed hardship on them and they responded by policy changes.

What I think is being conflated by those who really oppose this plan is that it does little or nothing to ease geopolitical tensions in the region. That is true. This really is a nuclear non-proliferation treaty - not a regional peace treaty. This is much more akin to what Reagan accomplished with the USSR in the 1980's in terms of arms limitations and setting out methods for two states that don't trust each other. We got nuclear arms limitations out of the Rekjavik conference, but Reagan also continued to fund the mujahadin against the Soviets in Afghanistan (you know, back when Bagram Air Force base was the center of evil occupation, not a critical node supporting a military partnership). That's how I look at it, at least.

Now, I totally understand the hesitation over the sunset clauses, but it is not like we'll spend the next 8 or 10 years in a vacuum. We'll still be penetrating their programs with our spies, we'll be monitoring their efforts in nuclear and other programs, and we'll see how it evolves. I don't have a better answer other than to say this was a negotiation and you don't always get everything you want.

At the end of the day, the things most of the opponents wanted - full access any time, any place - was not going to happen. Iran was not a country defeated in a major war. This is still reasonably strong regional power and negotiations never give everyone everything they want. The Iranians actually had to give up quite a bit. Not everything, but then again, they didn't have to.

The other thing I find interesting is that Iran is viewed as having almost superpowers by many commentators. The IRGC apparently can magically miracle a nuclear bomb in place (and all the vast sub-systems and other challenges needed to deploy a useful weapon), undetected, without a testing program, and also magically have militarily relevant numbers of those weapons ready to use, also undetected. This is the same nuclear program which was penetrated by Stuxnet and where Iranian scientists continue to have a nasty habit of winding up dead.

Add to that the fact that Iran and their proxies are getting their butts handed to them in Iraq and Syria by the Islamic State, yet somehow I continue to read how they are magic demon warriors and will drive across the Middle East and take Mecca, Medina, and Jerusalem if we blink our eyes for just a second. This is the same country that couldn't beat Iraq back in the 1980's, even with Oliver North selling them spare parts.

Liking it vs. What is Best Strategically

There is another interesting thing lost in the immediate flare up of antipathy towards this deal. Roll the clock back to the early 1970's and ask yourself what a Korean War vet would have thought upon seeing Nixon grinning at a reception in China? The hate would have been strong. And justified. But that deal radically changed the balance of power against the USSR and gave the United States a tremendous number of options in dealing with the Soviets for the next nearly two decades.

Not to get all John Lennon on you, but imagine, if you will, just imagine having the option to flip Iran into, if not the US sphere of influence, then let's say out of the Chinese/Russian orbit. What happens when the Islamic State gears up for the big push into Saudi Arabia, the home of the hardcore version of Islam which drives IS and where a corrupt monarchy totters on top of a population boom and stares out at declining oil revenues? Wouldn't it be nice to have the option of cutting a few more deals with Iran? Hell, the brilliant neo-con architects of the Iraq invasion bascially gifted Iraq to the Iranians. We might as well have a few more options to get at all that lovely oil...

Don't mistake my lukewarm approval of the deal to mean I like it. But sometimes what is best strategically is not all that palatable personally.

Also, I realize it is heresy to think in terms of US needs and strategic position in this region where we are supposed to have only one position - the position told to us by our ally in nuclear-armed Tel Aviv, so I'll stop here.

Leftovers


There are still tons of issues in this region. Yes, there are legitimate worries over things like ballistic missile tech, Iranian support of Hizbullah and Iraqi Shi'ite militias (just to try and clear it up, we don't like Hizbullah, but we are okay with the Iranian-supported militias fighting the Islamic State - got it). No, the Iranian Revolutionary Guards Corps are not nice people. Noted.

This deal does not address these issues. This was structured as a nuclear arms control deal, not a regional peace deal. On that limited score, it is actually a net win for the West, in my opinion. Yes, war is an option, I guess. The last one worked out so well, some folks might be ready to send another generation off to fight for their opinions on the matter.


Parting Shot

Oh, and one other thing. There is a great quote from Speaker of the House John Boehner talking to this deal that I must share:
“It blows my mind that the administration would agree to lift the arms and missile bans and sanctions on a general who supplied militants with weapons to kill Americans,” Mr. Boehner said.
He said this without irony. How many 9/11 bombers were Iranian? How many were Saudi?

Just checking.

Thursday, July 16, 2015

8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble

I wanted to share another set of analyses from EWI. Personally, I am not sure whether we are poised for a blow-off like the mid-1920's in the U.S. or about to jump off into the Abyss, but I have found the charts and analyses from Prechter's folks very valuable over the years. I hope you will as well.

- - -



By Elliott Wave International

This article was adapted from Robert Prechter's June 2015 Elliott Wave Theorist. For more charts and detailed commentary, analysis and forecasts from Prechter's latest issues, click here for the extended subscriber version of this report -- it's free.

It is amazing to read assertions from the Fed and others that the stock market is nowhere near being in a bubble. Several aspects of the financial environment are actually so extreme as to be unprecedented. Some indicate a bubble, and others a bubble in trouble.

Below are eight indicators we are watching closely, among others.

1) Record debt in U.S. dollars

Total dollar-denominated debt peaked at $52.7 trillion in early 2009. At the end of Q1 2015, it stands at $59 trillion, an unprecedented amount.

2) Margin Debt at All-Time Highs

Never have more trading-account owners owed so much money, and never have they had such a low level of available funds from which further to draw.

3) Stocks Are Overvalued (based on dividend yields)

The Dow's annual dividend payout has been less than 3% for 235 out of the past 246 months. Prior to the bull market that started in 1982, the longest duration under 3% was just one month, at the top in 1929.

4) Fund Managers Are Maxed Out

The percentage of cash in mutual funds has been below 4% for all but one of the past 70 months (a period of nearly six years). Prior to this time, the longest such duration was only nine months, a streak that ended in October 2007.

5) Stocks are at a Triple Extreme

Previous triple manias occurred in 1901/1906/1909 and 1965/1968/1972, and both led to severe bear markets. This one is even bigger and has lasted longer.

6) Stocks Rose on Low Volume for Six Straight Years

Such a thing has never occurred before -- one year, maybe, but not six.

7) Unprecedented Divergence Among Major Indexes

On May 20, we published an interim issue of The Elliott Wave Theorist to tell subscribers:

Today something amazing happened: The Dow Transports closed at a 6-month low on the same day that the S&P 500 made an all-time intraday high. I doubt this has ever happened before.

The Dow Theory non-confirmation between the Dow Industrials and Transports is now [more than] six months old. This big a divergence, for this long a time, is very bearish.

8) Advisor Bearishness at 38-Year Low (optimism near record high)

The 30-week moving average of the percentage of bears among stock market advisors is at a 38-year low. (Investors Intelligence data is inverted to show optimism.)

This article was adapted from Robert Prechter's June 2015 Elliott Wave Theorist. For more charts and detailed commentary, analysis and forecasts from Prechter's latest issues, click here for the extended subscriber version of this report -- it's free.


Sunday, July 5, 2015

Too Late to Prepare Now...

In light of the "No" vote in Greece this weekend, here is a video from EWI which I think might interest you. One thing to think about - what's the use of all this information if you don't take action early?

Enjoy.
-------

An Elliott wave perspective on the Greek crisis

By Elliott Wave International

Today, I got on the phone with Brian Whitmer, editor of our monthly European Financial Forecast.
Brian has been preparing his subscribers for the Greek crisis for a while. Listen to his latest thoughts.


Europe is in the world spotlight this month, with Greece's future hanging in the balance. But Greece is just one part of the problem. Enjoy an excerpt from Brian Whitmer from the June European Financial Forecast to see just how precarious Europe's financial situation has become.
Read Global Insight: Europe's Debt-Dependent Economy now >>


This article was syndicated by Elliott Wave International and was originally published under the headline (Interview, 5:13 min.) Greek Debt Crisis: "Too late to prepare 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.