UPDATE released 05 jun 10

stock market at crossroads

ever since my earlier update that stock market is going nowhere mainly because of aging and a number of other factors. i have forgotten to include another key factor especially regarding the us market. usually when govt runs deficits, the economy should be much stronger when businesses are not contracting, why is it not then. the key factor lies in how you spend your deficits - weapons building and war [we shall name it wbw]. wbw will not recylce anything back to the economy. rusty weapons have to be destroyed and replaced with no final consumers indeed.

deficits created by wbw will not benefit the economy as can be illustrated by history. wbw actually destroyed ussr - if you still remember what that is. ussr engaged in war with afghanistan in 80 thus the olympics boycott, it fought on for ten years and was left with no foreign reserves to back its govt, thus the dismantling by itself of a once great communist empire.

remember the 90s when stock markets roared. the berlin wall fell in 90 and the peace dividends started kicking in. then you saw a roaring market when the us govt exercised discipline in spending.

euro

it will distinctly go lower as gobalization is impacting all of europe's more socialistic governments. welfare goes up, spending goes up, deficits go up. without major restructuring of labor and govt spending, it will only go lower until us starts their own program to devalue their currency through lower rates thus expanding money supplies.

oil

will oil go higher? it is hard to tell right now. in the medium term - a few years time, it is a definite yes, however, it might not in 2005 - why?

when crude oil reserves in the us are going much higher than the past few months, prices of it is also going higher [close to its peak] which does not seem right. also other commodities and gold are not close to their peaks. is there a manipulation of prices so some funds or govts can unload in the futures market their long positions or building up short positions with favorable prices.

remember the cao singapore incident, cao built up a large short position only being squeezed to liquidation [crude oil prices went thru the roof in oct] with margin calls and reported usd550m losses in trading [in nov]. this is an incident that major market players were aware of short positions kept by an amateur player suffering heavy losses so they collude to squeeze the last drop of blood from this player.

if crude oil forms a double top, it might go back to mid 30s during 2005.