Wall Street Whispers Turn To Shouts – “Get Out Now”

by Ulsterman on March 19, 2014 with 6 Comments in News

Disclaimer:  I’m no financial expert, but I know some who claim to be, and the whispers that came my way on occasion, have just recently turned to shouts, directing me to get out of any speculative investing and brace for a very tough few years, or decades, ahead. So with that said, here’s the generalized details of what I was told regarding an increasingly bleak economic outlook that frankly, has me very concerned for my own financial well being, and even more so for the future well being of my children.  Likely some of you are already feeling the much the same…

“The ice is cracking under our feet.” 
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First, there is the ongoing unemployment number – a figure that is daunting in its implications for just how bad things really are:
4.5 million FEWER jobs today than five years after the recession.  That means a huge and unprecedented shift of millions onto government assistance, disability, etc.  Millions more takers, and millions fewer to pay for it.  That is economic disaster 101.  The U.S. has spent TRILLIONS of money it does not have, from Obamacare, to stimulus, to cuts in Social Security and Medicare funding (that was Barack Obama’s idea by the way) while increasing Social Security and Medicare  benefits.  As some of your already know, unemployment hasn’t actually gone down, but rather those even attempting to find work has dissipated.  This country has not faced as low a labor participation rate in over thirty five years.  As government grows much bigger, the numbers of workers who must then pay for that growth, has decreased dramatically.  It is unsustainable, and the breaking point has arrived.

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“IPO dumping”.  If you don’t know what that is, I was right there with you.  Apparently it’s when the corporate and Wall Street investors literally dump IPO’s into the feeding trough in an attempt to cut their losses.  IPO’s aren’t making money – they’re losing money.  That is, I’m told, a classic Bear Market crash scenario.  It could be months, perhaps a year, but this ongoing cycle is never wrong.  The Big Money boys and girls know how to read the signs, and those signs are now pointing them to the exits and shouting “get out now”.    A strong and profitable IPO market means an economy that is growing, producing, creating – all things this American economy has not done for several years.  That makes for a very ominous and troubling future ahead.

Disparity between market profits and Main Street reality.  Over the last five years, the gap between Wall Street and Main Street has never been greater.  Normally, Wall Street is a predictor of Main Street’s future.  That rule has now been broken under the false good times/easy money policies of the Federal Reserve, which has propped up Wall Street profits at the expense of real economic prosperity of a nation.  Perhaps the FED thought things would eventually catch up.  Perhaps they were simply buying time.  Whatever the reason, the trillions of dollars that transferred from the FED, to the banks, to the government, back to the FED, while allowing companies to slash jobs and live off of low interest capitol, and thus increase stock prices, the disparity can no longer be ignored.  It is an increasingly volatile monster pushing its way through the door, to consume all who are now trapped inside of the economic death room that is our economy.  Ma and Pa America aren’t just suffering – they are dying.

Wall Street knows this.  At least, the most powerful among them do, and their collective positions have been to take money off the table, in preparation for waiting out what is going to be one hell of a messy storm.
So take cover reader.  And if you’re in – get out.  Get out now.    -UM