The Stock Market Has Officially Entered Crazytown Territory

It is time to crank up the Looney Tunes theme song because Wall Street has officially entered crazytown territory.  Stocks just keep going higher and higher, and at this point what is happening in the stock market does not bear any resemblance to what is going on in the overall economy whatsoever.  So how long can this irrational state of affairs possibly continue?  Stocks seem to go up no matter what happens.  If there is good news, stocks go up.  If there is bad news, stocks go up.  If there is no news, stocks go up.  On Thursday, the day after Christmas, the Dow was up another 122 points to another new all-time record high.  In fact, the Dow has had an astonishing 50 record high closes this year.  This reminds me of the kind of euphoria that we witnessed during the peak of the housing bubble.  At the time, housing prices just kept going higher and higher and everyone rushed to buy before they were “priced out of the market”.  But we all know how that ended, and this stock market bubble is headed for a similar ending.

It is almost as if Wall Street has not learned any lessons from the last two major stock market crashes at all.  Just look at Twitter.  At the current price, Twitter is supposedly worth 40.7 BILLION dollars.  But Twitter is not profitable.  It is a seven-year-old company that has never made a single dollar of profit.

Not one single dollar.

In fact, Twitter actually lost 64.6 million dollars last quarter alone.  And Twitter is expected to continue losing money for all of 2015 as well.

But Twitter stock is up 82 percent over the last 30 days, and nobody can really give a rational reason for why this is happening.

Overall, the Dow is up more than 25 percent so far this year.  Unless something really weird happens over the next few days, it will be the best year for the Dow since 1996.

It has been a wonderful run for Wall Street.  Unfortunately, there are a whole host of signs that we have entered very dangerous territory.

The medianprice-to-earnings ratio on the S&P 500 has reached an all-time record high, and margin debt at the New York Stock Exchange has reached a level that we have never seen before.  In other words, stocks are massively overpriced and people have been borrowing huge amounts of money to buy stocks.  These are behaviors that we also saw just before the last two stock market bubbles burst.

And of course the most troubling sign is that even as the stock market soars to unprecedented heights, the state of the overall U.S. economy is actually getting worse…

-During the last full week before Christmas, U.S. store visits were 21 percent lower than a year earlier and retail sales were 3.1 percent lower than a year earlier.

-The number of mortgage applications just hit a new 13 year low.

-The yield on 10 year U.S. Treasuries just hit 3 percent.

For many more signs like this, please see my previous article entitled “37 Reasons Why ‘The Economic Recovery Of 2013′ Is A Giant Lie“.

And most Americans don’t realize this, but the U.S. financial system and the overall U.S. economy are now in much weaker condition than they were the last time we had a major financial crash back in 2008.  Employment is at a much lower level than it was back then and our banking system is much more vulnerable than it was back then.  Just before the last financial crash, the U.S. national debt was sitting at about 10 trillion dollars, but today it has risen to more than 17.2 trillion dollars.  The following excerpt from a recent article posted on thedailycrux.com contains even more facts and figures which show how our “balance sheet numbers” continue to get even worse…

Since the fourth quarter of 2009, the U.S. current account deficit has been more than $ 100 billion per quarter. As a result, foreigners now own $ 4.2 trillion more U.S. investment assets than we own abroad. That’s $ 1.7 trillion more than when Buffett first warned about this huge problem in 2003. Said another way, the problem is 68% bigger now.

And here’s a number no one else will tell you – not even Buffett. Foreigners now own $ 25 trillion in U.S. assets. And yet… we continue to consume far more than we produce, and we borrow massively to finance our deficits.

Since 2007, the total government debt in the U.S. (federal, state, and local) has doubled from around $ 10 trillion to $ 20 trillion.

Meanwhile, the size of Fannie and Freddie’s mortgage book declined slightly since 2007, falling from $ 4.9 trillion to $ 4.6 trillion. That’s some good news, right?

Nope. The excesses just moved to a new agency. The “other” federal mortgage bank, the Federal Housing Administration, now is originating 20% of all mortgages in the U.S., up from less than 5% in 2007.

Student debt, also spurred on by government guarantees, has also boomed, doubling since 2007 to more than $ 1 trillion. Altogether, total debt in our economy has grown from around $ 50 trillion to more than $ 60 trillion since 2007.

So don’t be fooled by this irrational stock market bubble.

Just because a bunch of half-crazed investors are going into massive amounts of debt in a desperate attempt to make a quick buck does not mean that the overall economy is in good shape.

In fact, much of the country is in such rough shape that “reverse shopping” has become a huge trend.  Even big corporations such as McDonald’s are urging their employees to return their Christmas gifts in order to bring in some much needed money…

In a stark reminder of how tough things still are for low-income families in America, McDonalds has advised workers to dig themselves “out of holiday debt” by cashing in their Christmas haul.

“You may want to consider returning some of your unopened purchases that may not seem as appealing as they did,” said a website set up for employees.

“Selling some of your unwanted possessions on eBay or Craigslist could bring in some quick cash.”

This irrational stock market bubble is not going to last for too much longer.  And a lot of top financial experts are now warning their clients to prepare for the worst.  For example, David John Marotta of Marotta Wealth Management recently told his clients that they should all have a that contains food, a gun and some ammunition…

A top financial advisor, worried that Obamacare, the NSA spying scandal and spiraling national debt is increasing the chances for a fiscal and social disaster, is recommending that Americans prepare a “bug-out bag” that includes food, a gun and ammo to help them stay alive.

David John Marotta, a Wall Street expert and financial advisor and Forbes contributor, said in a note to investors, “Firearms are the last item on the list, but they are on the list. There are some terrible people in this world. And you are safer when your trusted neighbors have firearms.”

His memo is part of a series addressing the potential for a “financial apocalypse.” His view, however, is that the problems plaguing the country won’t result in armageddon. “There is the possibility of a precipitous decline, although a long and drawn out malaise is much more likely,” said the Charlottesville, Va.-based president of Marotta Wealth Management.

So what do you think is coming in 2014?

Please feel free to share your thoughts by posting a comment below…

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The Economic Collapse

The Stock Market Has Officially Entered Crazytown Territory

Polish govt again silent over alleged CIA ‘black hole’ sites on its territory

Published time: September 24, 2013 13:18

A guard shuts the gate to the airport in Szymany in northeastern Poland in this file 2005 picture. Polish media said November 5, 2005 the airport was identified by Human Rights Watch as a potential site of alleged CIA prisons used to interrogate al Qaeda captives. Poland strongly denied it was hosting such facilities.(Reuters / Tomasz Marek)

Warsaw has, for a second time in 12 months, rejected a request from the European Court of Human Rights to hand over information involving the alleged existence of secret CIA prisons operating on its territory.

The Polish government said it could not comply with a new request filed by the European court over the detention of Saudi-born Abu Zubaydah, who was later transferred to Guantanamo Bay prison, Reuters reported Tuesday. The officials said their comments might compromise a Polish criminal investigation.

“The government takes the position that at the present stage of domestic proceedings, were they to address in detail all the questions submitted by the court, they could be seen as interfering with the competencies of the prosecution authority and the courts,” the agency reported the government as saying in its statement.

Although Poland has been applauded for being the only Eastern European country to begin its own investigation into claims of clandestine CIA prisons operating in the country, human rights activists have expressed their frustration with the lack of progress in the government’s five-year-old inquiry.

Human rights organizations say the secret prisons served for “extraordinary rendition” of suspects who were flown in from around the world without legislative oversight, and were often tortured.

Any proven participation of Polish officials in the alleged US intelligence program would be considered a crime under both Polish and international law.

In 2008, Prime Minister Donald Tusk, while falling short of admitting Poland’s participation in the CIA program, vowed that his country would never act outside the boundaries of democracy.

“This is a painful but very clear proof that no politician, even if hand-in-hand with the biggest superpower in the world, can do something that will never see the light of the day,” Tusk said. “We must act calmly, discreetly and in the spirit of responsibility for the state on this, but we can take no pride in the fact that such cases must be investigated in Poland.”

Five years later, Zbigniew Siemiatkowski, the chief of Poland’s intelligence services from 2002 to 2004, was formally charged in Poland with “depriving prisoners of their liberty” in US President George W. Bush’s so-called “War on Terror.”

Investigators believe a military base in Stare Kiejkuty, northeastern Poland, was the location of one of the CIA secret prisons between December 2002 and September 2003.

Some of the terrorist suspects allegedly transferred through Poland ended up in Guantanamo Bay, where the conditions are so deplorable that a 2005 Amnesty International report dubbed it the “Gulag of our times.”

In January 2013, Polish prosecutors awarded Abu Zubaydah, who was arrested in Pakistan in March 2002 and is now being held in Guantanamo, “victim status” in the investigation, following claims he was subjected to extraordinary rendition and secret detention in Poland.

Zubaydah, whose lawyer says he was detained and tortured for 4 1/2 years in secret CIA prisons in Thailand, Poland, Romania, Lithuania and Morocco, was one of 14 “high-value detainees” transferred to Guantánamo in September 2006.

Zubaydah, however, was eventually told by his US captors that they had made a mistake in suspecting him of being a leading member of Al-Qaeda. This was after he had been subjected 83 times to waterboarding, according to a 2005 US Justice Department legal memo.

Waterboarding, which has now been universally condemned as a form of torture, is a technique that leads victims to believe they are drowning.

“They told me, ‘Sorry, we discover that you are not No. 3, not a partner, not even a fighter,’” said Abu Zubaida, according to the transcript of a Combatant Status Review Tribunal.

Another victim of the interrogation technique was Khalid Sheikh Mohammed, the alleged mastermind of the Sept. 11, 2001, attacks on the United States, who was alleged to have been waterboarded 183 times while being held at Stare Kiejkuty.

More astonishing, however, is how much the president of Poland at the time, Alexander Kwasniewski, was apparently aware of the activities between Polish intelligence and the CIA.

In 2011, Gazeta Wyborcza reported that, based on a high-ranking source in Poland’s Democratic Left Alliance, Kwasniewski only found out about the CIA “black site” at Stare Kiejkuty, situated just over 100 kilometers from Warsaw, when Bush personally thanked him for Poland‘s assistance in the “War on Terror.”

When Kwasniewski subsequently learned that CIA-leased planes had been flying terrorist suspects in and out of Poland, he ordered the detention center to be shut down, the sources told the Polish daily.

The newspaper added, however, that Poland’s investigation is being actively pursued, that Zubaydah’s lawyer had access to many of the case files and that it would provide the European Court of Human Rights with extracts of the files that were not confidential.

The US has acknowledged that it had secret prisons around the world where it detained suspects in the “War on Terror.” Holding the detainees on foreign territory meant that the individuals were not entitled to legal protection guaranteed under US law.

Polish officials, meanwhile, still deny the country hosted any US “black sites,” though they say that in 2002 and 2003, CIA aircraft made illegal flights into an airfield in northern Poland, near the site of the alleged prison.

RT – News

Polish govt again silent over alleged CIA ‘black hole’ sites on its territory