Get out of the stock market. This is a trap. Take a close look at the P/E ratio. The ‘real’ next leg down in the stock market will be a bloodbath.
- Gerald Celente: ‘Their is no recovery; It’s a coverup. We are already in the Greatest Depression.’
- CIT Bankruptcy Filing Expected in Days; $2.3 Billion Taxpayer Money to Be Wiped Out; Goldman Sachs Receives $285 Million In Termination Fees:
“With $71 billion in assets, CIT would have the fifth-largest bankruptcy filing in U.S. history.”
(Every investor is fully responsible for his/her own actions, actually for his/her entire life. Blaming others is a sign of weakness. It is giving your power away to others and leaves oneself in the position of a pathetic, powerless victim.)
By Bob Chapman
Insiders at corporations are selling with glee. Thirty times more sell orders than buy orders.
During September and October we still saw short covering. We also see that 73% of NYSE trading was of the black box variety, program trading. There are 16 firms front-running all market trades and the SEC refuses to do anything about it, so that Goldman Sachs and JP Morgan chase can further enrich themselves, illegally. The SEC calls it flash-trading not what it really is, stealing. And, yes, the SEC still refuses to stop naked shorting, which is also illegal – another trove of riches for the anointed insiders at Illuminati run brokerage firms. The remainder of the market strength comes from banks, brokerage firms and insurance companies who are leveraging funds received from the Treasury and the Fed, some $12.7 trillion. That is what this really is all about.
This is the first time ever that the S&P 500 has ever rallied 60% in six months. The Dow reached 10,000, when it should not have exceeded 8,500. That shows you the distortion and manipulation going on and points up the now blatant activities of the President’s “Working Group on Financial Markets,” which, of course, operates in secret. As a tribute to this phony rally we have lost 2.5 million jobs over its tenure, when two million are normally created. Are there no professionals out there that get it? They cannot all be that dumb, and they are not that dumb. They are engaging in a conspiracy of silence. They want to be thought well by their peers at the club. They do not want to be ostracized in the Wall Street click. We know we were there for 28 years, of course, always on the outside looking in, permanently known as goldie. If you want to see where the US stock market is eventually going take a look at Japan from 1992 to today. 70% losses and still unable to get out of its own way with an economy still in depression. Incidentally, if the US market copies Japan, which we believe it will, we could easily fall to 3,800 to 4,200 on the Dow and we’ll be very lucky if it holds there. Others whose opinion we respect are looking for 2,800. Wall Street is pricing into the market earnings not only for 2010 but 2011 as well, which is very dangerous in such an environment. We are still in the worst credit crisis since the 1930s.
Trailing P/E on operating earnings is 27 times. When the Dow was 14,168 in 2007, it was 18.8 times. Reported trailing earnings are 180 times, whereas in 10/07, it was 23.4 times. In 10/87, it was 20.3 times. That should give you something to think about if you are in the market. Normally P/E’s should be 14.5 times. Instead of chasing an overpriced goose you should be participating in the bull markets in gold, silver and commodities. That is where safety, preservation of capital and possible large gains are to be found, both short and long term. Why fiddle with an overextended bear market rally when you can gain in relative safety. Get rid of those bonds, stocks, CDs, cash value life insurance policies and annuities, which are really uninsured and in the stock market waiting to again fall 40% to 70% in value. The crisis is not over; it is still in the beginning.
The Fed and Wall Street tell us the recession is over and soon policy actions will continue to a gradual resumption of sustainable economic growth. They see no inflation ahead, only the 1.2% presently. Needless to say, they are well aware that real inflation is 6.11%.
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