How is the market (world) doing?

I have been looking at the stock market recently. I’m no real expert on stock markets, but since I know that they are highly overvalued at the moment it is fun to watch those graphs go up and down. Sooner or later a crash or at least a long downturn will emerge and while nibbling on some popcorn those graphs are almost like a video game.

Yesterday, 17th Aug 2009, Shares worldwide fell which some investors and economists worried feared that the recent stock market rally has come to an end. London's benchmark share index, the FTSE 100, dipped 68.96 points or 1.5pc to 4,645.01. European and Asian exchanges recorded similar drops. The Dow Jones Industrial Average was down 1.8pc at 9158.09. But despite this drop I do not really believe that it’s over already, stock markets will continue to go up and down for a while yet - as long as nothing very unusual happens. So you buffoons can probably still buy and sell stocks for a couple of months more since all those billions of stimulus money that mainly have weaselled its way into financial institutes, and artificially low interest rates will, together with an crazy over-optimism, keep things going for a while. Just like during the Great Depression (soon to be called: “the miniscule one”) we will see ups and downs. Looking at the Dow for instance it experienced no less than six Bear Market gains during the Great Depression - gains ranging from 12 percent to as much as 72 percent - all while the economy was in collapse and unemployment soared.

Speaking of unemployment I read an interesting piece in today’s paper. Looking at UK in 2009/10, the Treasury is expecting to take in £140.5 billion in gross income tax receipts, but social security benefits are projected to be £164.7 billion. I find this hilarious and even funnier it becomes when I one can read that the total amount of people on benefits will be over 6 million for the first time, ever. UK unemployment increased by 220,000 to 2,435,000 in the three months to June, taking the jobless rate to 7.8%. However, this figure is not really telling us about the 300 000+ jobs the government have “created” and the additional numbers being “hidden”. And looking at housing the Telegraph quoting Numis Securities that is saying: “Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.” Isn’t painting a nice picture? Ad to this the enormous total debt around 340% of GDP and an overvalued stock market and I hope you see what I see.

In the US things are even worse. There is no stopping the Obamination, even if it seems like he is taking one step back regarding public hell-care. The inflator policy is the worst in recorded history, official unemployment is near 10% (real number around 20%) and entire towns are closing down having unemployment numbers around 40%. Public services in Chicago have decided to shut down for a day in an attempt to deal with a $300m budget deficit. In California, which has a budget deficit of some $24.3bn and has declared fiscal emergency, state offices have been ordered to close for three days each month. Michigan has said it will not pay its state employees on six days up to the end of September, to save nearly $22m. If you never read Ayn Rands Atlas Shrugged, it might be time to do so, almost frightening likenesses. But the worst looming disaster of all is the USD that is so overvalued at the moment its frightening. Japan, China, Saudi Arabia, Brazil are still buying US treasuries, but during last couple of auctions it has not gone so well and the Fed are buying up treasuries like crazies further moneterizing a potential hyperinflation. The commercial real-estate market is about to collapse and people are hording guns and ammunition like there is no tomorrow. No wonder people are buying lots of alcohol (only retail commodity selling in huge numbers)and snorting cocaine with the few dollar bills they have left.

All in all, looking at graphs the current recession is “the worst since the Great Depression” but it’s still better than the Great Depression, so far. This leads many cornflake economists to conclude that this isn’t so bad and when some financial institutes (evil as they are) announces that the recession is over people tend to believe that crap. But read what I have just told you and take a look around. Does it seem like the recession is over? I see no end to this mess, none whatsoever. Temporarly gains will not change that. Not only will figures continue to drop, more stimuli will be thrown into the fire which will further inflate markets and further deteriorate the world economies.

Already when I started to really analyze what was going on a couple of years ago I thought this could be Great Depression bad, since then things has gotten a lot worse. Now I’m actually starting to believe my own persona on this blog. Just think about it; what is usually the consequence when people have lost everything, have nothing left to lose and everything around is hysterical and horrid? They will, most likely, turn towards those funny little men with hysterical answers, just as before. And in a world in deep deep depression, war is very likely. And what do we have today that they did not have the last time around during the 30’s and 40’s? That’s right, weapons of mass destruction...

Don’t kid yourself people. As I have said before and will urge you to do again; you better start stock-piling goods that will become useful i.e. cans, dried up food packages, candles, gasoline and weapons. Even if I’m wrong and you think I’m a complete idiot, those things are still good to have at home, and if I’m right it might very well be the thing that keeps you alive.