14% OF US CITIZENS CAN'T BE WRONG

THE NUMBERS JUST KEEP GETTING BIGGER
Any thoughts of an abatement of the increase of food stamps recipients were squashed today as I pulled up the latest government statistics on those productive citizens of the US that receive assistance in the form of food stamps.
As you might recall last month, the increase in people taking stamps had its lowest gain in more than 25 months, so foolishly I thought that there would be a chance that the number of folks on the government dole might have a chance of actually decreasing this month. 

WISHFUL THINKING WON'T MAKE THE SITUATION BETTER
Once again, my assumption was completely wrong as we find that this month's increase equaled the 1 year average growth rate.  44.6 million families received benefits at an annualized cost of $6 Billion.  The average family receives about $284 a month in free food. 

So, let me see here.  We have a stagnant economy where food, energy, and all costs are increasing.  We have a poor job environment where there are no prospects for wage increases, a terrible housing market, and a US dollar that is frankly in the toilet.  On top of all that, the Fed's transfusion of QE II is now ending.  That's that bad news of course, the good news is that awesome companies like Linked In have gone public and have captured the hard earned money of investors on the hopes that there will be other suckers that come and pay higher prices for a company with little revenues, but a whole lot of potential (snicker).

WHAT DO THEY KNOW THAT THE OTHER FOLKS DON'T?
Perhaps it is just me, but I thought the goal was to turn the economy around, not add more and more folks to the government assistance list.  We know that the Fed has been doing, but what is our CONgress or administration doing to make our nation's small businesses get back on track?  Do any of them have a plan?  Perhaps these are the wrong questions.  Maybe I should be wondering what it is that 1 in 7 Amerikans know that I don't.  These guys may know the tricks that I don't when it comes to receiving $284 a month in these tough economic times.  My guess is that these guys will continue to convince others that the water is just fine and that others should join them.

GOATMUG

BIG TROUBLE IN BIG CHINA? (REAL ESTATE MADNESS)

Chinese speculators put the "If you build it they will come" theory to test as this story highlights the absolute bubble that China has created in real estate.  One must ask if the emerging markets are truly decoupled (as we've seen they are not) and what impact a crash in real estate prices will have on the US economy.

Enjoy.

Visit msnbc.com for breaking news, world news, and news about the economy

GOATMUG

JOE 6 PACK LEARNS FROM BERNANKE AND GOES TO THE POKEY

JUST DOING WHAT OUR LEADERS DO -
While scanning the news I was struck by the irony of this story from the San Francisco CBS affiliate.
Samuel Kioski was arrested recently for an inventive application of Ben Bernanke's magical printing tricks.

http://sanfrancisco.cbslocal.com/2011/05/26/technician-faces-charges-of-cleaning-out-bay-area-atms/

REPLACING WORTHLESS DOLLARS WITH WORTHLESS PAPER
Allegedly, Mr. Kioski was an ATM technician who replaced almost $200,000 of real money for fake copies of dollar bills.  In his "rampage" Samuel opened up a total of 7 machines, grabbed the real cash, and dropped in bad forgeries into the cash dispensers.  The police stated that the fake money was not even a good attempt as he simply made the bills on a copy machine. 

The repairman was able to sneak away since last July with his haul, but was found two weeks ago in Arizona. 

YOU NEED TO BE A BANKER TO GET AWAY WITH THIS
See, Mr. Kioski didn't quite understand that you must have a PHD from Yale or Harvard and also deal in billions rather than hundreds of thousands to get away with this sort of trick.  Our central bankers have pulled off the exact same scheme, but instead of going to jail, they are lauded as heros.  Think back to the scary days of the economic collapse.  When the full impact of the Lehman implosion was being felt, we watched as Goldman Sachs, Bank of America, JP Morgan, and others swapped their toxic assets with us for clean, crisp, and freshly printed digital dollars.  We taxpayers (our leadership and the Fed) were more than happy to trade worthless paper (MBS) for our currency in the name of avoiding disaster. 

Compare the TARP swap with the trade Mr. Kioski made and you'll find little difference between his moves and those of the Fed, Treasury, and the bankers; little difference besides that it was a small amount and not sanctioned by the thieves at the NY Fed. 

WHO IS THE BIGGER CRIMINAL?

RULES TO STEAL BY -

So the takeaway from this story is that if you are going to pull a fast one and take money from folks, you must follow these rules to get away with your booty.

1)    Take money from taxpayers, not banks

2)    Rip folks off for billions or trillions, not thousands

3)    Wear suits and talk about the end of the financial system, everyone will hand over the money immediately

4)    Go to Davos, not somewhere like Arizona

5)    Take your wife with you, then she won't file a missing persons report

GOATMUG



THE LONG VIEW - AMAZING VIDEO YOU MUST WATCH (FT)

Please watch this video from the Financial Times, it is a strong piece that I highly recommend.

From http://www.ft.com/
"Felix Zulauf, former head of asset management at UBS, warns that storm clouds are gathering over the markets. He discusses with John Authers, head of Lex, his grim outlook: that Europe faces a double dip, China is slowing, bonds "look awful" and an overheating commodities sector will be hurt badly. He was interviewed at the CFA Institute Annual Conference in Edinburgh."

Unfortunately, I cannot embed the item, so click here and it will open a new window that will allow you to watch this video.

http://video.ft.com/v/950633944001/Long-View-Storm-clouds-over-markets

Overall, Felix is suggesting that the next few months will be rocky due to tightening in the emerging world and poor growth in the developed world.  Europe is dangerous he says.  I cannot stress enough how good of a use of time this 10:30 seconds is.  There is clear, focused, and is unambiguous. 

EUROPE
Germany is at risk because it exports much of its product base to the PIIGS, which is a high source of risk. 


CHINA
A dramatic slowdown in Chinese construction is ahead.

Chinese leadership will continue to tighten to attack inflation. 

Emerging currencies may rise a bit, but their outperformance is over and we will see a significant correction and a resurgence in the USD.  This will begin in the fall of this year.

QEIII or SOMETHING ELSE?
Yes, we'll see some type of stimulus from world governments

COMMODITIES
Base metals and commodities sectors will suffer a huge setback, especially with that slow down in China and emerging countries.

IF YOU HAD TO OWN STOCKS, WHERE WOULD IT BE? - (Only Defensive Areas)
Utilities, Consumer Staples, and Food & Beverages

TREASURIES
5 years out, bonds look awful!

WHAT WILL TIP US OFF THAT BOND YIELDS ARE GOING HIGHER?
We have seen the lows.  It could take another 2 or 3 years before bonds really take off.  The use of stimulus will be the key to really accelerate this.  As soon as the authorities see that asset prices are failing there will be a global coordinated effort to reflate.

Be Careful!

GOATMUG

TRADING DELIGHT - MOS

I have been trading MOS quite a bit lately and have been making money on the long and short side of things.  I simply wanted to put up a post with a chart that I have been using that has been a great tool in determining when to buy and sell and when to switch sides.

Currently I am short as of yesterday afternoon when I saw MOS hit $69.  I felt like that would be strong resistance on the upside, so it was natural to enter a short there.  I see that MOS is in a downward channel.  The $67.15 level has been one where it has had support, (although it did break through earlier last week), and that $66.75 area is also support. 

15 MIN CHART (MOS)

TRADING THOUGHTS
I will probably play this quite tight today, by selling 1/2 a position when we near $67.15.  Right now, my stops are around $68.35 to keep me winning.  If MOS would drop through the $67.15 area, it could very well trade down to the bottom of the channel which is somewhere around $65.00 on the weekly chart.

WEEKLY 3 YR MOS

Be very careful and nimble.  You must use stops, although MOS is under pressure, all commodity plays are potential huge upward reversals if the US dollar continues to drop.

GOATMUG