Monday, May 11, 2009

More P3 (Impending Crash) Evidence

Part 1 -

I told you China was full of it and could not be trusted. To all the Cramerites out there that are buying his waterfront property in Arizona, I told you so. Mish to the rescue again in Chinese Deflation Picks Up Steam; Recovery a Mirage . "Thus "stimulus" (here and in China) is guaranteed to fail, leaving still more overcapacity when it does." kind of says it all. China's got to create 20 million jobs a year - that ain't happening folks and as long as we're not buying they are screwed (shhh - don't let them in on that little secret). All this radical commodity frenzy is about is a bunch of hooey. OK, so for P3 China is out of the equation and their recovery (and future purchase of treasuries) is IMO less optimistic than ours.

UPDATE: More good news from China. In China’s Export Decline Worsens, Hampering Recovery you'll read about, "The collapse of world trade has cost millions of jobs in China and dragged growth to its weakest pace since at least 1999. Surging lending and a 4 trillion yuan ($586 billion) stimulus package are yet to establish solid foundations for an economic recovery, the central bank said last week." and more.

Update 2: I continue to pummell China

Part 2 -

I tried to get Meredith's vid off CNBS, but Blogger did not like the embed code and I'm not geek enough to fix it, so go visit Calculated Risk to check it out. I'm not going to elaborate other than if you listen to Meredith she lays out the ground work and timing that leads to P3 (the impending crash) perfectly. She ROCKS!

This video actually made me feel better. I love it when a plan comes together. I just hope we're all able to survive the impending doom.


  1. Hey Dr.Doom and Gloom

  2. Dr. D&G,

    That has a nice ring to it. Just checking in after a nice long hiatus.

  3. Dr. D&G. I like it!. Folks, just trying to convey what I think is important. We're getting screwed and what really pisses me off is that it will most likely effect my children more than me and the basterds that caused all of this are getting away scott free with millions of our money thinks to the spineless bastard elected officials we have. Is it "all that bad"? I hope not, but the way I add it up right now I don't see any other way of looking at it.

  4. What is your take on all the short covering that is going on lately? Are they not covering ahead of what they think is more upside to come over the next 6 months? I can't understand why they would be covering so aggressively if they didn't think the market was going higher short term or longer.

  5. My Take:

    I do think word is getting around that there is no fundamental basis for this rally to continue and that, more likely, buyers are done. I don't expect another push near term nor do I expect a shallow pullback and another leg up to form a better short entry spot for that so-called "catastrophic wave (C) down." Wave counters are often wrong, and they don't realize it till much later, expecting a "final move" that never comes, hoping to derive some glory for making the "call."

    The more obvious situation is that we are still in the larger down channel and a slide to the other side, breaking the 666 low is most likely. Momentum is neutral and the collapse of real earnings places the SUPER MAGNET beneath the market.

    As I pointed out on Social, Bear markets bottom when the PE and Div Yield are "close" and under 10. This has been the case time and time again. Right now the SP500 PE is 62 and the Div Yield is 2.9%. At a PE of 10 the market would be under 100. We are about to head in that direction and the government can't stop it because it is based on earnings, and earnings requires people to spend, and they aren't and will likely tighten up further as this market dives and more of their wealth evaporates.

    Retail investors need to be disgusted with stocks and all the bad/corrupt companies need to be disolved, and that means most of the banks and replacement of their enablers like Ben, Timmy, Larry, and O.


Keep it civil and respectful to others.