Investor Sentiment Diverges From Corporate Over Future Outlook

“Sensing better times ahead, investors have pushed the Dow Jones Industrial Average up this year near its record high. But a different mood is pervading U.S. companies, where executives are less optimistic about the global economy and their own prospects, and many are lowering financial forecasts.

Fourth-quarter operating earnings topped diminished expectations, rising 7.3% at the 339 members of the Standard & Poor’s 500-stock index that have reported results, while revenue rose 5.9%, according to Thomson Reuters. But the companies warn that the current quarter will be more challenging, and analysts project first-quarter earnings at S&P companies will rise just 1.7%, Thomson Reuters says, or less than half what they were predicting at the beginning of the year.

Sixty-three S&P companies have lowered their forecasts for first-quarter earnings, according to FactSet Research, while 17 have raised them, the largest disparity since the firm began tracking the data in 2006.

Many executives see shrinking economies in Europe. Closer to home, they worry about hesitant U.S. customers, chilled by continued Washington gridlock.

In a sign of executive caution, a Wall Street Journal survey of 50 S&P companies found they plan to increase investment this year by 2%, signaling a dearth of big growth opportunities. Through the first nine months of 2012, S&P companies boosted investment 8%, following a 20% increase in 2011….”

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“There’s a growing meme that the market and the economy are about to have a date with destiny.

The thinking is this: Markets have surged all year like there’s not a care in the world. On the other hand, the economy has already been buffeted by one major headwind (the end of the payroll tax holiday) and it could be hit by another (the upcoming sequestration spending cuts. As such, we’re about to know whether the economy can really justify the market rally, or whether risky assets will have to come floating back down to earth….”

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“The Justice Department decision to sue Standard & Poor’s has investors asking why Moody’s Investors Service and Fitch Ratings weren’t targeted for awarding the same top grades to troubled mortgage bonds and other debt securities.

The Financial Crisis Inquiry Commission and a Senate panel laid the blame on S&P, Moody’s and Fitch for inflated ratings on mortgage-backed securities and collateralized debt obligations that helped cause the worst financial crisis since the Great Depression. Together, they provided 96 percent of all ratings for governments and companies in the $42 trillion debt market in 2011.

The U.S., in a lawsuit filed Feb. 4 in federal court in Los Angeles, is alleging that the unit of New York-based McGraw-Hill Cos. defrauded investors by failing to adjust its analytical models or taking necessary steps to accurately reflect the risks of the securities because it was afraid of losing business.

The federal case was assigned to U.S. District Judge David O. Carter in Santa Ana, California.

S&P lowered the U.S. government’s credit rating one step to AA+ from the top AAA rank on Aug. 5, 2011, after months of wrangling between President Barack Obama and Congressional Republicans over whether to raise the federal debt limit. Bond investors repudiated the downgrade and U.S. borrowing costs fell to record lows as Treasuries gained the most since 2008.

S&P has used this as a defense. Floyd Abrams, the Cahill Gordon & Reindel LLP lawyer representing the company, said in a Feb. 5 appearance on Bloomberg Television that investors required two ratings on CDOs before they would buy, yet only S&P has been accused of acting in bad faith.

Ed Sweeney, an S&P spokesman, declined to elaborate on Abrams’s comments.

For more, click here.

For a timeline of the allegations by the U.S., click here.

S&P Case To Turn on Question of Fraud, Not First Amendment….”

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“Treasury 10-year notes declined for the first time in four days as the U.S. government prepared to auction $72 billion in coupon-bearing securities this week.

Longer maturities led losses as economists said a report in two days will show retail sales rose in January amid an improving labor market. The government is scheduled to sell $32 billion of three-year notes tomorrow, $24 billion in 10-year debt the following day and $16 billion in 30-year bonds on Feb. 14. President Barack Obama intends to use his State of the Union address this week to focus on job creation, marking a renewed emphasis on the economic issues.

“We’re in a tight range and the auctions this week will be the focus for Treasuries,” said Barra Sheridan, a rates trader at Bank of Montreal in London. “The market can cheapen up into those sales and the 10-year should auction above 2 percent.”

The 10-year yield rose three basis points, or 0.03 percentage point, to 1.98 percent as of 7:34 a.m. in New York, according to Bloomberg Bond Trader prices. The 1.625 percent note due in November 2022 declined 7/32, or $2.19 per $1,000 face amount, to 96 7/8. The yield declined seven basis points last week.

Treasuries handed investors a 0.8 percent loss this year through Feb. 8, compared with a 0.5 percent decline for an index of government bonds around the world, according to Bank of America Merrill Lynch data. The benchmark 10-year yield climbed to 2.06 percent on Feb. 4, the highest level since April 12.

‘Cleaning Up’…”

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“Apple Inc.’s profit margins are falling back to levels not seen since sales took off after the 2007 debut of the iPhone, as competition and lack of breakthrough products pressure the company to lower prices.

Concern over falling margins helped prompt a 33 percent decline in Apple shares from a record high of $705.07 on Sept. 21, making it the worst-performing stock in the Standard & Poor’s 500 Index in the same period. Last week, Apple said the board and management are discussing the return of more money to shareholders, after a proposal by Greenlight Capital Inc.’s David Einhorn to pay out more of its $137.1 billion in cash and securities, possibly with higher-yielding preferred stock.

The latest quarter’s drop in gross margin to 39 percent from 45 percent a year earlier was caused by the introduction of the iPad mini, other products with higher costs and price cuts for existing products, Apple said. Unless Chief Executive OfficerTim Cook unveils a revolutionary new gadget with premium pricing, Apple shares will remain under pressure.

“It will be almost impossible for Apple to maintain the margins it’s had in the last few years,” David Yoffie, a professor at Harvard Business School, said in an interview. “They’ve been able to charge pretty much whatever they wanted for their products, but competition is increasing.”

A central challenge is slowing sales of the iPhone, Apple’s best-selling and most-profitable product that accounts for 56 percent of revenue. Samsung Electronics Co., HTC Corp. and other rivals are introducing cheaper and feature-laden smartphones and tablets based on Google Inc.’s Android software.

Steve Dowling, a spokesman at Apple, declined to comment.

Margin Pressures…”

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“Gold declined to the lowest price this month in New York on speculation that physical demand will slow during this week’s Lunar New Year in Asia.

China, 2011’s second-biggest gold buyer, after India, and most Asian markets are closed for this week’s holiday. Gold is down 1 percent this year after rallying for a 12th straight year in 2012 as nations from the U.S. to China pledged more steps to boost economic growth. Haruhiko Kuroda, one of the potential candidates to head the Bank of Japan, said today in an interview in Tokyo that additional monetary easing can be justified this year.

“The absence of the Chinese market this week means demand from other regions has a larger gap to plug, thus exposing prices to a fragile floor,” Suki Cooper, an analyst at Barclays Plc in New York, wrote today in a report. Still, “the broader macro environment remains supportive for prices given low interest rates and global balance sheet expansion.”

Gold futures for April delivery fell 0.5 percent to $1,659 an ounce by 7:47 a.m. on the Comex in New York. Prices reached $1,656.40, the lowest since Jan. 29. Gold for immediate delivery was 0.5 percent lower at $1,658.50 in London.

The London-based World Gold Council is due to release a quarterly report this week that will show nations’ annual bullion demand.

European Ministers…”

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“The dollar declined against the euro, snapping a three-day gain, ahead of a speech by a Federal Reserve official who may reiterate the case to maintain monetary stimulus.

The Dollar Index fell before Fed Reserve Vice Chairman Janet Yellen speaks in Washington today. The yen trimmed gains after Haruhiko Kuroda, a potential candidate to head the Bank of Japan, said additional monetary easing can be justified for 2013. The BOJ holds a policy meeting this week. The Australian dollar weakened after data showed home-loan approvals slid.

“Yellen is one of the doves in the Fed committee,” said Alvin Pontoh, Asia-Pacific strategist at TD Securities Inc. in Singapore. “If she says anything, it’s likely to be dovish and maybe because of that, we’re seeing a bit of euro strength against the dollar.”

The dollar weakened 0.1 percent to $1.3379 per euro at 7:29 a.m. in London, after gaining 1.6 percent in the past three sessions. The greenback slid 0.1 percent to 92.55 yen from the end of last week.

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trade partners, slid 0.1 percent to 80.172. The Japanese currency traded at 123.83 per euro, after climbing 2.6 percent in the past three sessions to 123.87.

The Federal Open Market Committee last month linked its policy to economic indicators for the first time, saying it will keep rates low as long as the unemployment rate is above 6.5 percent and the outlook for inflation is no more than 2.5 percent.

Industrial Production…”

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“Brent traded near a nine-month high in London amid concern that tension with Iran may lead to disruption of Middle Eastern exports. Brent’s premium to U.S. crude narrowed for the first time in nine days.

The European benchmark was little changed after rising for a fourth week, the longest run of gains since July. Iran won’t cede to pressure to halt its nuclear work, President Mahmoud Ahmadinejad said yesterday at a rally in Tehran to mark the 34th anniversary of the Islamic Revolution. Egyptian President Mohamed Mursi’s secular opponents geared up for marches today. Bank of America Corp. said there is a “growing risk” the North Sea grade will rally to $130 a barrel.

“The recent move higher for Brent came amid a combination of geopolitical jitters over potential supply disruptions if violence escalates in the Middle East,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.

Brent for March settlement was at $118.31 a barrel, down 59 cents, on the ICE Futures Europe exchange at 11:05 a.m. London time. The number of futures exchanged was 34 percent below the 100-day average. The contract increased $1.66 to $118.90 on Feb. 8, the highest since May 1. The European benchmark grade was at a premium of $22.80 to the U.S. benchmark, WTI. It closed at $23.18 on Feb. 8, the widest since Nov. 26.

The Brent-WTI spread has widened since Enterprise Product Partners LP said Jan. 31 that capacity will be limited until late 2013 on its Seaway pipeline to the Gulf Coast from Cushing, Oklahoma, the delivery point for the New York contract.

China Imports…”

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“Germany is losing a yearlong borrowing-cost advantage over the U.S. as healing in the 17- nation euro area lures investors to greater returns in Italian and Spanish bonds.

German securities had their worst January since at least 1986 and options traders hold almost three times more bets on further declines than a rally, according to data compiled by Bloomberg. That contrasts with Treasuries, where wagers through derivatives are about even. JPMorgan Chase & Co. says Germany’s 10-year yields will exceed U.S. rates for the first time since February 2012 by the end of the third quarter.

Demand for the euro area’s benchmark assets is waning after European Central Bank President Mario Draghi dispelled concern the bloc may break up and as banks pay back emergency loans two years earlier than required. With confidence recovering from last year’s debt crisis, German two-year note yields climbed to a 10-month high in January from below zero, while relative borrowing costs tumbled in Italy and Spain, the region’s third- and fourth-largest economies.

“Bunds could come under pressure as we expect to see more diversification into higher-yielding peripheral bonds,” said Oliver Eichmann, a money manager at DWS Investment GmbH in Frankfurt, Germany’s biggest mutual fund, which oversees $379 billion. “We prefer Treasuries in the near term.”

Draghi allayed investors’ concern the euro region would collapse after he pledged in July to do “whatever it takes” to hold the currency bloc together. The Stoxx Europe 600 Index of equities has rallied 12 percent since then and a composite gauge of euro-area services and manufacturing output improved to 48.6 in January, the highest level since March.

Crisis Remedies…”

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“Euro-area economic data due this week will probably show the damage inflicted by the region’s sovereign debt crisis with the worst quarterly decline in output for almost four years.

Gross domestic product shrank 0.4 percent in the fourth quarter, according to the median of 45estimates gathered by Bloomberg News. That would be the biggest decline since the first quarter of 2009, when GDP fell 2.8 percent in the wake of the collapse of Lehman Brothers Holdings Inc. The data is due to be published on Feb. 14.

While measures to stem the region’s debt turmoil have helped curb sovereign bond yields from Spain to Greece, at least seven countries of the 17-nation bloc are in recession, leaving 18.7 million people out of work. The European Central Bank President Mario Draghi said last week that “economic weakness” will prevail in early 2013 even as the economy shows confidence stabilizing “at low levels.”

The fourth quarter “is probably the trough of the cycle, Draghi is hopeful that it will be,” said Marchel Alexandrovich, an economist at Jefferies International Ltd. in London. “We should see some improvement in economy in the first half of this year. The question is, whether it’s strong enough” given the risks that lie ahead, he said….”

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“European finance chiefs will seek to win back crisis-management momentum to navigate through emerging political pitfalls after markets signaled last week that the three-year crisis is far from over.

Ministers from the 17-member euro area meet in Brussels today to discuss aid to Cyprus and Greece as a tightening election contest in Italy and a political scandal in Spain disrupt market calm. Group of 20 finance chiefs and central bankers will gather in Moscow Feb. 15-16.

“We don’t know yet how we’re going to get out of the crisis,”Wolfgang Franz, the chairman of Chancellor Angela Merkel’s council of economic advisers, told Welt am Sonntag. “If the crisis is a marathon, we’ve got two-thirds of the course behind us. But the last third is always the hardest.”

European Union leaders who last week reached a seven-year budget agreement that for the first time cuts spending will look ahead to Italy’s Feb. 24-25 elections as polls show the vote might fail to deliver a governing majority. European stocks last week posted a second weekly drop as investor concern about policy roadblocks in Italy and Spain revived.

Yields on Italian 10-year bonds climbed to a year-to-date high of more than 4.5 percent as former Premier Silvio Berlusconinarrowed the lead of front-runner Pier Luigi Bersani. The euro’s climb was broken last week, falling 2 percent against the U.S. dollar to $1.3365, after European Central Bank President Mario Draghi voiced concern that euro strength could hamper the recovery. The currency was at $1.3373 at 9:45 a.m. in Frankfurt.

‘Price Stability’…”

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“The Group of Seven nations are considering releasing a statement on exchange rates this week to calm concern the world is on the brink of a currency war, three officials from G-7 countries said.

Finance officials from the world’s major industrial economies have drafted a text now being reviewed by senior policy makers, one official said on condition of anonymity. The current wording, which still may be changed, contains a commitment to market-set exchange rates and an agreement that governments don’t use fiscal or monetary policy to drive currencies, the official said.

Japanese Prime Minister Shinzo Abe’s push for more aggressive monetary policy has raised concern abroad that his government is directly seeking to weaken the yen, something it denies. In the talks, Japan has questioned the statement’s contents because it doesn’t want to be singled out for criticism, another official from a G-7 nation said, also on the basis they not be named.

The G-7 is looking to release the statement before a Feb. 15-16 meeting in Moscow of finance ministers and central bankers from the Group of 20, which includes the G-7 and emerging markets such as Brazil, China and India. Any pledge not to target currencies when setting policy would mark a strengthening in stance from when the G-7’s finance chiefs last commented on currencies as a group in September 2011.

The Wall Street Journal reported yesterday that the G-7 was debating a statement.

Japan Contacts…”

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“Pope Benedict XVI, saying he no longer has the strength to lead the world’s 1 billion Catholics, will resign from the papacy at the end of the month, the first such abdication in almost 600 years.

“After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry,” he said today in an address to senior church officials in Rome.

Pope Benedict, the 265th leader of the Roman Catholic Church, said his resignation would take effect at 8 p.m. on Feb. 28. He will step down two months before his 86th birthday after serving for almost eight years as pontiff after succeeding John Paul II.

The resignation of Benedict may reopen rifts within the Church as pressure builds to name a pope from the developing world where Catholicism is growing and offsetting declines in Europe and the U.S. The new pope will be chosen through a conclave, a special gathering of cardinals who are sequestered in the Sistine Chapel at the Vatican until they can agree on a successor.

Pope Benedict will have no role in choosing his successor, Vatican spokesman Father Federico Lombardi said at a press conference in Rome. The pope will initially retire to his summer residence in Castel Gandolfo before transferring to live in a convent, Lombardi said.

Monti Shaken…”

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According to Saint Malachy, the next Pope will be the last….

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

 

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“Price volatility is an unavoidable aspect of investing in common stocks. During periods when emotions are dominating reason, price volatility can become more pronounced than is normal during calmer times. The insidious part of this fact is that the more volatile stock prices are, the more fear and stress they generate, which only feeds even greater volatility. Of course, the same can be said when greed raises its ugly head. The purpose of this article is to provide some logic and reason that can be applied to stock price volatility that simultaneously weakens its potential damage.

However, in order to accomplish my objective, it is imperative that the reader be willing to consider what I believe is the undeniable reality that stocks are often mispriced by Mr. Market. This concept flies directly in the face of the so-called “Efficient Market Hypothesis (EMH)” accepted by proponents and followers of Modern Portfolio Theory. According to the Efficient Market Hypothesis, stocks are always accurately priced because existing share prices always incorporate and reflect all relevant information. Therefore, stocks are always trading at their fair value. I consider this notion preposterous, and in the context of this article, I intend to offer evidence that clearly disproves it.

Stock Prices are Often Pathological Liars

In his famous work, the Picture of Dorian Gray, Oscar Wilde perhaps said it best when he said “nowadays people know the price of everything and the value of nothing.” Unfortunately, this famous quote may be more appropriately descriptive of stock market investing, than in any other aspect of life.  To make my case, all I have to do is direct people to look at most every stock chart, on any financial site or blog, and they will discover a picture solely graphing the company’s stock price movement over whatever time frame is being graphed.

For example, let’s look at a 10-year price only graph on Dun & Bradstreet Corp. (DNB), courtesy of Google Finance. From this picture, it would be very easy to assume that Dun & Bradstreet was a good stock for the first five years on this graph, and a bad stock for the last five years.  If you’re talking strictly about the stock’s price, then these assumptions would be rational and correct.  For the first five years the price generally trended up, and for the last five years it has generally trended down. Therefore, from this graph we know a lot about the “price” of Dun & Bradstreet the stock, but very little about the intrinsic “value” of Dun & Bradstreet, the business behind the stock. Consequently, I would argue that there is very little wisdom offered by this price graph.

In contrast, if we look at Dun & Bradstreet through the lens of FAST Graphs™, the fundamentals analyzer software tool, over approximately the same time frame, our perspective on Dun & Bradstreet the business and the stock is radically altered.  Here, in addition to price only, we have added some essential fundamental information on Dun & Bradstreet.  The orange line on the graph plots earnings-per-share at a fair value P/E multiple of 15.  The slope of the line, however, is 12%, which is the operating earnings growth rate that the company achieved since 2003. The light blue shaded area represents dividends paid out of the dark green shaded area (earnings).

There are several important facts that we can immediately ascertain and learn about Dun & Bradstreet the business once we have the perspective of price correlated to essential fundamentals (earnings).  First of all, we discover that Dun & Bradstreet’s stock was generally being overvalued by Mr. Market for the better part of the years 2003 to 2008. The black monthly closing stock price line was above the orange earnings justified valuation line. Next, we see that the great recession caused the stock price to revert to the mean, thereby, bringing price down into being more in alignment with the orange earnings justified valuation line (intrinsic value).

Furthermore, by focusing only on the orange earnings line, we discover that operating earnings growth was very strong up through 2008, before modestly falling during the recessionary years 2009 and 2010. Then, we discover that earnings rebounded strongly in 2011 and 2012, and are estimated to grow at double-digit rates in 2013.  Consequently, we also now discover that based on its recent strong earnings recovery that Dun & Bradstreet appears to be moderately undervalued….”

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“The Department of Homeland Security’s civil rights watchdog has concluded that travelers along the nation’s borders may have their electronics seized and the contents of those devices examined for any reason whatsoever — all in the name of national security.

The DHS, which secures the nation’s border, in 2009 announced that it would conduct a “Civil Liberties Impact Assessment” of its suspicionless search-and-seizure policy pertaining to electronic devices “within 120 days.” More than three years later, the DHS office of Civil Rights and Civil Liberties published a two-page executive summary of its findings.

“We also conclude that imposing a requirement that officers have reasonable suspicion in order to conduct a border search of an electronic device would be operationally harmful without concomitant civil rights/civil liberties benefits,” the executive summary said.

The memo highlights the friction between today’s reality that electronic devices have become virtual extensions of ourselves housing everything from e-mail to instant-message chats to photos and our papers and effects — juxtaposed against the government’s stated quest for national security.

The President George W. Bush administration first announced the suspicionless, electronics search rules in 2008. The President Barack Obama administration followed up with virtually the same rules a year later. Between 2008 and 2010, 6,500 persons had their electronic devices searched along the U.S. border, according to DHS data.

According to legal precedent, the Fourth Amendment — the right to be free from unreasonable searches and seizures — does not apply along the border. By the way, the government contends the Fourth-Amendment-Free Zone stretches 100 miles inland from the nation’s actual border.

Civil rights groups like the American Civil Liberties Union suggest that “reasonable suspicion” should be the rule, at a minimum, despite that being a lower standard than required by the Fourth Amendment.

“There should be a reasonable, articulate reason why the search of our electronic devices could lead to evidence of a crime,” Catherine Crump, an ACLU staff attorney, said in a telephone interview. “That’s a low threshold.”

The DHS watchdog’s conclusion isn’t surprising, as the DHS is taking that position in litigation in which the ACLU is challenging the suspicionless, electronic-device searches and seizures along the nation’s borders. But that conclusion nevertheless is alarming considering it came from the DHS civil rights watchdog, which maintains its mission is “promoting respect for civil rights and civil liberties.”

“This is a civil liberties watchdog office. If it is doing its job property, it is supposed to objectively evaluate. It has the power to recommend safeguards to safeguard Americans’ rights,” Crump said. “The office has not done that and the public has the right to know why.”…”

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“……According to numbers issued by the Department of Labor, weekly unemployment reports have dropped to a five year low, and the overall employment rate is holding at 7.9%.  This would seem to be a vast improvement over the dreadful bloodletting in the system only a few years ago.  Has the private Federal Reserve and the Obama Administration really done it?  Have they turned back the tide on the greatest fiscal crisis the U.S. has seen since the Depression?

No.  They haven’t.

They have only changed how the data is disseminated to the public. In order to understand how the employment statistics con is being engineered, it is important to understand the difference between “Adjusted” and “Unadjusted” numbers.

Labor Department data is “seasonally adjusted”, using a series of statistical assumptions including something called “Trend Cycle Analysis”.  Trend Cycle Analysis is, basically, a sham, but a sham put together in a very complex and confusing manner.  If you ask a mainstream economist what it is, you’ll likely get a three hour long dissertation filled with financial babble and very little concrete explanation.  So let me break it down as simply as I can…

Imagine that you are going to estimate how much profit you plan to make in a particular month, but you don’t just consider your current pay rate and pop it into a calculator; you also throw in the possibility of a few pay raises, an inheritance from a grandma who might kick the bucket, and, your exaggerated expectations of the entire year’s profit on top of that.  You may also take into account future bad weather, a mugging, a nuclear war….whatever.  All hypothetical situations not based in reality.  Basically, you decide that a particular trend in your income is inevitable, then, mold your statistical analysis around that assumption.

When your real profit numbers come in (the unadjusted numbers) and they do not meet your expectations, you simply change them according to what you believe SHOULD have happened.  If you insist that your profits are going to go up for the year, and they go down for a couple months instead, you change the variables you use to calculate the statistical average so that the results match your expectations, assuming that it will all balance out in the end.

Now, this sounds utterly insane for the common person out there trying to make a living.  If you ran your household this way, without accepting the cold hard unadjusted numbers in front of you, you’d find yourself broke and on the street in no time.  Unfortunately this is EXACTLY how our government handles most financial data; by coming to a final conclusion before hand, and then forcing the numbers to fit that conclusion.

This is why in February of 2013, “adjusted” first week unemployment rate was reported at 366,000 – a 5000 person drop from the week before.  A seeming improvement in the trend.  But, unadjusted numbers came in at 386,176 – a 16,000 person spike from the week before.  When one examines real unemployment numbers, he finds that the divergence between the adjusted and unadjusted statistics is growing larger with each passing quarter.  That is to say, the contradiction is becoming so blatant between the hard numbers and the Labor Department’s fantasy numbers that one must question whether or not the government is lying to us outright about the state of the economy (hint – they are lying).

These same methods are used by the government to calculate progress in the housing market, disposable income, etc.

The claim of “recovery” in the jobs market simply doesn’t jive with other indicators, like 2012 Christmas retail, which had the worst showing since the crash in 2008 (and these are still mainstream numbers!):

http://www.foxnews.com/us/2012/12/26/us-holiday-retail-sales-growth-weak…

Average household savings continue to scrape the bottom of the barrel, indicating that the public is not spending or withholding cash.  They are simply broke:

And the overall GDP of the U.S. contracted in the fourth quarter of 2012 for the first time in three years (again, according to official numbers, meaning the reality is much worse):

http://money.cnn.com/2013/01/30/news/economy/gdp-report/index.html

The downturn in consumption and industry also seems to be supported by the Baltic Dry Index, a measure of global shipping and rates.  The BDI has fallen to near historic lows THREE TIMES in the past year, which to my knowledge, has never happened before.  In the past, the BDI has been a strong prophetic indicator of future market volatility.  Usually, around a year after a severe decline in the index, a dangerous economic event takes place.  The BDI made its first sharp drop to all time lows at the end of January 2012, exactly a year ago. …….”

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What happened to the ways of Zarathustra?

A philosophy from a times past where life was to be as simple as right,wrong, good and evil. Where truth and good was to be sought out and life was to follow accordingly.

[youtube://http://www.youtube.com/watch?v=vvmuDH8cgG0 450 300]

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