CR GREATEST HITS©
Several factors will greatly influence the stock market during 2010. (NEWS proof) First of all the talk in the news about recovery will continue, but it keeps getting pushed out further and further. It’s like recovery is not happening fast enough and the news media just keeps saying, “It’s happening now, “or” it will show up stronger next quarter, in the next 6 months, or next year.”
(NEWS proof) The real news is that recovery is not happening at all. Yes, the stock market has been going through a rally propped up by the government’s gifts in the form of bailouts to Wall Street and larger corporations. This keeps the machine running so Wall Street can continue making money collecting fees and large businesses that are “too big to fail” can postpone defaults and bankruptcies.
(NEWS proof)So, the first thing that will affect the stock market is the continued worsening of the economy. The economy in general, is not in recovery, only small sections of it that benefit from government intervention. This lack of recovery in the economy and the market will be blamed on the consumer. Consumerism will continue to slow and eventually grind to a halt. Then the government will need to find another person besides consumers to blame. The next thing affecting the slowdown in the stock market will be increasing negative sentiment about the stock market in general, the government, and the financial institutions. This continuing lack of faith will cause many to pull out of the market and cash in their accounts. With less people investing the market will slowdown. The third item directly affecting the stock market will be the fallout and repercussions from the Dubai default. Once the scope of the default by Dubai World is realized it will be too late. Losses of hundreds of billions of dollars, perhaps more than a trillion will be started by this default – the largest the world’s ever seen. Banks and financial institutions around the world will feel like they have been hit by a financial tsunami, crippling their abilities to function properly in a global marketplace. This will affect the stock markets of many countries around the world.
(NEWS proof) The fourth item that will continue to affect the market is continued unemployment. This so-called jobless recovery just cannot happen. There will be no recovery until people are working again and saving and spending again. People will be broke or living at a level 75 – 80 percent lower than they lived during the height of all the bubbles. The unemployment situation will become so bad that the government will stop reporting numbers when the unemployment rate goes over 25%, you see, 25% is a number that would start scaring people. In fact, so many people will get out of the stock market that the government may need to step in and prop it up by giving billions of dollars to their friends on Wall Street to buy stocks, thus holding the market up artificially. There will be so much short selling pressure that the government may ban short selling altogether or limit it to certain institutions or certain friends on Wall Street. Many may see their investments of the past become virtually worthless over the next few years as they retire and hope to live on them. Investing will be something your parents and grandparents did and retired on. You will not be able to invest; only trade short-term as long-term investments or retirement plans cannot be relied on and may not be there when you need them. Many retiree’s pension plans that were invested in the market will become worthless. As far as a prediction for the market for 2010 we will only give you what we predict for the S&P 500. It is now just above 1,100. We see it falling to 900 and then bouncing. The bounce will be short- lived and the index will then fall to between 650 – 700. At that point it will bounce again and fall back down to settle around 513. This unraveling of the market comes at a time when many will start to realize that the American dream, that is, the dream that was based on a never ending increase in material wealth is unraveling. The new American dream will be not the pursuit of wealth and material things, but finding a new pursuit of happiness in things more spiritual and meaningful.
QUESTION: Explain the overall essence of your message today?
ANSWER: Today? Some people living in these times have never known anything different than the increase of material wealth. All their lives they have been conditioned and programmed to always do better and achieve more. This ‘more’ became a disease that will now turn on its host and begin to eat away from the inside. The obsession with money, wealth, and things has come to an end and over the next 3 years starting in 2010, people will start to see how futile it was to think this way. The stock market is a mirror of people’s greed. This greed comes to an end when people no longer have money to invest.
QUESTION: Why do people need to know this information right now?
ANSWER: Many will not see the reason why their future came to halt and that their “retirement years” was a phrase used to get them to invest all the money they could into a future promise. Investing in the stock market will go the way of ‘buy and hold’ that is a theory your parents and grandparents held onto. While it worked for them, this old paradigm is now gone forever.
QUESTION: What is the engine that keeps driving this propaganda?
ANSWER: The news media needs to not only have something to talk about for the future, but they have an advertising base to maintain. If what they talked about never happened the advertisers would fall off one-by-one. By keeping the announcement of the coming recovery in the forefront, even though it never happens when they say it will, they maintain not only advertisers but an audience.
QUESTION: What will it take to change this?
ANSWER: They cannot admit that the recovery is not happening, they can only postpone it. This is pressure from the controlled news media and also government pressure.
QUESTION: At what point will this continued worsening of the economy finally affect the stock market?
ANSWER: The first wave is when the individual investors all liquidate their accounts in order to live. Next, there will be no recovery driven by the housing market as more and more foreclosures occur. In fact, the banks may be so far backed-up in foreclosure paperwork that they will do anything to not get more inventory to resell. This is far from a recovery lead by construction in the housing industry. Home builders stocks will fall as low as the bank stocks did and will be worthless. No recovery means no stock market growth. Only getting Americans and people around the world working again will produce a recovery. Only people with an income are consumers and savers and investors. The market will start to fall in Q-1 2010. This will first be seen in the small cap stock indexes, like the Russell and then the S&P will take a big slide down to around 900.
QUESTION: You said that consumerism would eventually slow and then grind to a halt, comment on this?
ANSWER: Over the next 3 years there will be no great recovery. When you have an economy where over 70% of the GDP relies on consumers spending their dollars at the stores you will not have a rebound in the economy. People without jobs are spending less, people who retire and their pension plans have defaulted will be spending less. In fact, government and state welfare programs will eventually run out of money to support all the people without an income. So, this is consumerism grinding to a halt and the ghost malls will appear.
QUESTION: Will increasing negative public sentiment about the stock market and the government be what brings the stock market down?
ANSWER: (NEWS proof) Yes, people will lose faith in financial institutions that keep getting money from the government and none of it gets into the hands of individuals or small and medium size businesses. While large corporations who are big government contributors get bailout after bailout and banks continue to get propped up after waves of defaults hit them like Dubai you will see increasing negative sentiment directed at the government for causing this. President Obama will certainly be a one-term President.
QUESTION: What about the stock markets outside of the U.S.?
ANSWER: There are economies growing at 2 – 5 times that of the U.S. and this growth will be reflected in their own localized stock markets. What will be universal however is the risk that large financial institutions, regardless of where they are located, took to accept the payback promise of developers who drove global run-away building like what happened in Dubai. The entire world was growth crazy and greedy and will be given a sharp dose of reality when derivatives come home to roost. This has already started yet the devastating impact of Dubai only lasted one day in the news. This was on purpose so as not to cause a panic.
QUESTION: When will the majority of the people pull out of the stock market enticing the government to prop it up?
ANSWER: Individuals will need to live on the money they had in their stock accounts and will no longer be able to risk any of it. Investors will close their professional retail accounts as they will no longer be able to afford the high fees that money managers charge on accounts that keep dropping in value. The stock market will be something like the old days when only the wealthiest people can afford to participate. You will see the number of accounts drop severely starting in 2010 by the 2nd and 3rd quarters.
QUESTION: At what point will the government prop up the stock market along with limiting or stopping the short selling?
ANSWER: These are 2 different questions. The government is already propping up the stock market artificially through bailouts and TARP. Once the only way you can make money in the stock market is by shorting the market, then the government will first establish new rules controlling shorting, then maybe eliminating it. This could happen during the last half of 2010 and into 2011.
QUESTION: At the point where the government either limits or stops short selling, what will be an individual investor’s best play?
ANSWER: The ability to spot and then trade bear-trap stocks.
QUESTION: How does an individual apply this information to their life at this time?
ANSWER: First a person has to realize what’s happening and that they cannot wait to apply this information. Waiting is not the right strategy. Get prepared now.