Archive for July, 2010

The Volatile Fear Gauge

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles. Ignore the economists and analysts telling us a double dip isn’t likely… They missed the last one. So why would you believe them now? Tell me, do you need any more proof that the economy is in trouble? More importantly, do know how to profit from the ensuing volatility, as all goes down the toilet, using a no-options options trade? Advertisement British Columbia’s Parliament is Cracking Down on Coal and Oil…. It may be the biggest abuse of government power since before the American Revolution. But you can turn this conspiracy into quick 171% gains… with just a few clicks of your mouse. Here’s how . Why are investors so worried? “What has been gratifying is the fact that the economy now is starting to stabilize and grow again,” Obama just told “The View.” But it’s just not true. Bernanke told us three weeks ago “We’re in a continued recovery… that just ‘won’t feel terrific’.” But that’s not true, either. And from the look of the Fed’s Beige Book, he’s beginning to understand as much: Participants generally anticipated that, in light of the severity of the economic downturn, it would take some time for the economy to converge fully to its longer-run path as characterized by sustainable rates of output growth, unemployment, and inflation consistent with participants’ interpretation of the Federal Reserve’s dual objectives; most expected the convergence process to take no more than five to six years. … Meaning they finally understand there’s no easy path to recovery… That we can’t continue to kick the can down the road and ignore growing and unsustainable debt levels… That a recovery is at least five years away. There’s even growing fear that scheduled 2011 tax increases could result in an 8.6% drop in the S&P 500, according to Barclays. And there are still indications of another dip Just what’s gutting the housing market, sending consumer confidence down the toilet and killing whatever recovery chances we had? Simple: The “recovery” was nothing more than a figment of the Fed’s imagination — a mirage of massive bailouts, stimulus programs, and dollar printing. Sure, we saw GDP growth… Big deal. The core problems that took us into the last recession are still there. They never went away. Close to 20% (real number) of America is unemployed; consumer confidence is fading. Even Bernanke has to see a crippled housing market, stuck in a depression… And an indicator with a 40-year history of calling recessions just said we’re falling into recession. Yep, the trusted Economic Cycle Research Institute weekly leading indicators fell as low as -10.5.  Every time this indicator has …

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