Well, the big report this morning was the 3.8% GDP report. What can I say? I was expecting the number to not represent reality and, sadly, I was not disappointed. Yes I am a complete cynic and very skeptical of all government reports that have any type of seasonal or inflation adjustments. The game, when played over long time periods, compiles distortions on top of distortions until nothing makes sense anymore.
People in America are confused. Why does it seem like the economy and markets are crashing down yet the statistics that come out of the government aren’t all that bad? Well, it’s because they are not real – they are lies that were slowly introduced over time. The people putting out the reports may not even realize the distortions themselves, but the people who introduced “hedonistic adjustments” and decided to begin excluding energy and food in the inflation data (which affects all the other calculations) most certainly did realize what they were doing.
This needs to be UNDONE, and it needs to start NOW in order to bring back believability and to restore faith in our government. I call on President Obama to create 100% transparency in government statistics and to make a complete overhaul of the way government economic statistics are reported. I think he should immediately appoint John Williams (of Shadowstats.com) to oversee this revamp!
But hey, let’s not stop there! Let’s reform our false accounting standards too, shall we? Heck, even our own former Chief of the GAO, the head accountant for the government – David Walker, refused to sign any of our own government budget reports. That’s how little faith he had in his own government’s office. Leadership by example, remember?
We dictate that companies use GAAP accounting yet refuse to acknowledge our own accounts payable and use CASH accounting. We rob Peter to pay Paul by shuffling money from one account to another. We hide literally hundreds of billions worth of military spending in other budgets while we spend more money in total on our military than the rest of the world combined.
And we allow the pigmen who run our financial institutions to use mark-to-fantasy accounting that would make the boys at Enron blush out of humility. Then we give them taxpayer bailouts!
It’s frustrating and just maddening as hell to see the greatest nation in the world turned into a banana republic by a bunch of liars and thieves. Sorry for the extremely negative rant, but it needs to be said. The sooner we remove these cancers the more meat that will be left on the dying patient.
As far as the morning update? Well, let’s just say that people are beginning to figure it out – painfully so. The markets tried to ramp and were rejected. I was late getting this out because I had to buy some more puts!
The short term oscillators are oversold, the 60 minute slow still has room, but the 30 is deep, deep oversold and can, of course, stay that way for awhile, but be careful.
Here’s my 10 minute chart of the SPX. See that burnt red line at the bottom? That’s the line that represents the bottom of the pennant. Break that and, well, I hope everyone’s ready. It’s not that far away and that pennant is worth 599 points.
The next support level here is the 61.8 at 832.