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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (13452)	12/14/2012 12:00:45 AM
From: John Pitera	Respond to of 33421

Hi Bridge Player, that chart is a definite Trump. The President is going on vacation on Dec 17th. The Senate is not putting anything on the table.... Our President is still out campaigning in Michigan..... on collective bargaining and Holliday dreams of Infrastructure deals. We get no deal in 2012 and we'll see if our lame duck pols work out something in early Jan. Peter Lee of UBS has called a top in his latest report and he has remained bullish all the way up to SPX top. He's a very accurate market observer and is head of Market Analysis at UBS. IMF’s LaGarde and the fiscal cliff By Rick Manning - 12/10/12 12:28 PM ET The International Monetary Fund has jumped into the so-called “fiscal cliff” crisis in the United States with Managing Director Christine LaGarde weighing in on the situation this past weekend, saying, “The best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means raising tax or creating new sources of revenue, and cutting spending as well.” Speaker Boehner should immediately take Ms. LaGarde up on her challenge by eliminating the $100 billion line of credit that the U.S. Treasury has given LaGarde’s IMF. Legislation that has 96 co-sponsors has already been drafted by Boehner’s incoming House Republican Conference Chairwoman Cathy McMorris Rodgers (Wash.). The only thing the legislation needs is House leadership backing to bring it to the floor. While eliminating the $100 billion in liabilities would not have a major, immediate impact on the budget, it would eliminate a massive liability that hangs over our national treasury. The prospect of having the IMF tap the U.S. Treasury to provide bailouts to countries that are negatively impacted by our nation’s massive national debt is almost Bernankian in its perversity. *LaGarde is correct in noting that the U.S. debt problem has become a problem.* She is also correct in noting that many of the European countries that teeter on the brink of economic disaster actually have better balance sheets than the United States. For instance, Spain has been in the news in recent months as it continues to struggle with its debt crisis. nYet Spanish government debt only represents 69.3 percent of that nation’s economy as measured by gross domestic product. The U.S. debt-to-GDP ratio is 103 percent and skyrocketing with another $1.1 trillion in deficits logged in fiscal 2012. It is this debt-to-GDP ratio that investors use to gauge the future ability of a nation to pay back its creditors, and the $800 billion increase in U.S. government expenditures since 2007 has caused our nation’s credit rating to be lowered, threatening the entire world’s economy. In fact, if the U.S. were not the largest economy in the world, and the dollar weren’t the world’s reserve currency, LaGarde and others would be demanding immediate and massive cuts that would make the fiscal cliff look like the water drop in Disneyland’s Pirates of the Caribbean next to Niagara Falls. Of course, while LaGarde recognizes the fiscal disaster if the U.S. doesn’t get its economic house in order, she has been strangely silent on having any willingness to do her part. It would seem the least she could do is urge Congress to rescind her automatic withdrawal account from the U.S. Treasury as a first step toward fiscal sanity. Instead she pontificates like some mountaintop seer, *when in reality her hands are covered in Uncle Sam’s red ink.*

To: Bridge Player who wrote (13452)	12/14/2012 5:25:36 AM
From: John Pitera	2 Recommendations Respond to of 33421

Bill Gross, co-chief investment officer at Pacific Investment Management Co., talks about the impact of the Federal Reserve's asset purchase program on the economy. “*What really happens, and this is critically important, is that the Treasury issues bonds and the Fed buys them and then it remits interest to the Treasury,” Gross, who runs the $285 billion Total Return Fund, said in an interview on Bloomberg Television with Betty Liu. “It means the Treasury is issuing debt for free. There are complications. Inflation is one of the complications.”s--* Art Cashin comments on cnbc that Interest rates have been going up the past few days and while right now the velocity of money is zero, it will not stay that way forever, they agreed that the monetary stimulus is light a coiled spring and if and when we see inflation kick in, The FED and other monetary authorities can not guide it to 2.5% and magically keep it there, it can easily overshoot , John Mauldin comments that the Labor participation rate is at 62% and change and as the economy improves more people come back into the work force and as the participation rate goes back to 65% or 68% it makes it that much harder to get the unemployment percentage down...... It's amazing how the FED can give us guarantees that rates will stay near zero going forward several years into 2015.... talk about Hubris that if you think you know with your crystal ball that you as the (FED) know what's happening with interest rates and the yield curve Alan Greenspan and Bernake are responsible for their role in exacerbating the boom bust cycles going back to the market crash of 1987... and then making the financial system more and more dsyfunctional. they appear to working to destroy capitalism....... and Rick Santelli made an excellent point that the USA is a Republic and not a democracy. And there is a difference. In a Republic each individual has rights and has the power of liberty. In a democracy if a large group decide to Kill all the people with Red hair...... there are not checks and balances in place The Bundesbank in Germany reduced 2013 growth downward significantly to 4/10 of 1 percent, this past week. Deutsche Bank is in trouble with the authorities Deutsche Bank AG (DBK)’s announcement yesterday that earnings will suffer this quarter added to a cacophony of negative news over the past two weeks that’s increasing pressure on the bank’s new leadership. Two days ago, police raided Deutsche Bank’s Frankfurt headquarters, arresting five employees, in a tax probe involving the sale of carbon-emission certificates in 2009 and 2010 that includes co-Chief Executive Officer Juergen Fitschen and Chief Financial Officer Stefan Krause, who signed tax returns. The Libor probe is escalation them and UBS is facing over a Billion dollars in fines for the LIBOR rigging. John