Total US Debt Soars Over $17 Trillion......................via ZERO HEDGE

LINKS:

US debt increases to whopping $17 trillion
US debt surges $328 billion in single day, surpassing $17 trillion for ...
US debt hits 17 trillion dollars
Total US Debt Soars Over $17 Trillion
Treasury Stole $328 Billion From Federal Workers (In Part)

MUST READ ARTICLES ON "OF TWO MINDS" BLOG

Charles Hugh Smith has some fantastic posts on his blog:
http://www.oftwominds.com

The Big-Picture Economy, Part 3: Scarcity, Risk and Debt 
(September 25, 2013)

The Big-Picture Economy, Part 2: Surplus, Spending and Debt
(September 24, 2013)

The Big-Picture Economy, Part 1: Labor, Imports and the Dollar
(September 23, 2013)

 The Trouble with Asset Bubbles: If You Stop Pumping, They Pop 

(September 20, 2013)

US 10 YEAR BOND YIELD CHART -FROM CHART OF THE DAY

US TREASURY BOND YIELDS - Where are they headed if the FED begins to taper??

As the market waits for the US FED to reduce its purchase of US government bonds, it's worth noting the steady upward climb in US Treasury Bond yields.

Here is more from  Michael Snyder of The Economic Collapse blog, and he addresses the all important question;

What Is Going To Happen If Interest Rates Continue To Rise Rapidly?

LINK:

Guest Post: What Is Going To Happen If Interest Rates Continue To ...

GOLD : POST THE RECORD SLAM DUNK

Gold continued to sell off this week, and as the weak 'long' hands finally throw in the towel, gold sliced downwards through multiple support levels.

Where will it end? 

More on this below.

The Feds own balance sheet has expanded drastically over the last 6 years even as quarterly GDP growth rates hover at just under 2%

Bernanke has suggested that the Fed would gradually reduce its bond -buying, and cease it altogether by mid 2014. 

This has resulted in  a sell off in the US bond market. 

The US 10 Year Bond yield spiked upwards to just under 2.6% (from just under 1.6%)

Bernanke will have to keep an eye on the rising cost of borrowings, lest it derail the ongoing housing market recovery and destroy the ''wealth effect' he has tried so hard to create by boosting asset prices, i.e. US Equities and Housing.

With Federal Government debt at record highs, the last thing the FED needs is a rising cost of government borrowing.

The FED may have to keep its bond buying program going, just to keep the cost of borrowing low, and also to pacify the panicky bond market bulls who are currently weary that the long bull run in bonds is drawing to a close.

Coming to precious metals, The Bullish Bear continues to be a long term gold bull and views the current ''crash'' as  a cyclical correction (albeit a severe one) in  a secular gold bull run.

As Jim Sinclair once said " The price of gold is going much higher. The problems that give gold its reason to go higher are growing, not waning." 

After a one way bull run over the last decade, this correction will really stress test the weak hands that bought into gold over the last two years at prices of $1300-$1700.

As the momentum has shifted to the downside, pinpointing a bottom at this stage is impossible. 

However the drastic the sell off can result in a rebound from these oversold levels. 

Gold and Gold stocks are deeply oversold at the moment.

The Commitments of Traders Report (CoT) provides an important insight:-

Source:

In Gold We Trust 2013; Long Term Gold Price Target $2,230   June 27th, 2013

http://etfdailynews.com/2013/06/27/in-gold-we-trust-2013-long-term-gold-price-target-2230/

(An extremely detailed and well written report)

 The commitments of traders report (CoT)1currently shows – from a contrarian perspective – a clearly positive situation. It confirms that a great deal of speculation has been wrung out of the sector in the first half of this year. Many trend-following speculators in COMEX gold futures have apparently not only thrown in their bullish towels, but have embraced the downward momentum for gold by selling futures short. On the other hand, large commercial interests, the natural hedgers, considered by many as the “smart money” in gold futures, have very strongly reduced their net short positions. 

From October of 2012 to June, 2013, the commercial hedgers reduced their net hedges (net short futures positions) by 84%. They currently hold the smallest net short position since February, 2005. This means that the largest, most deep-pocketed and best informed traders have positioned themselves for higher gold prices.
Compared to October of last year, large and small speculators have decreased their net long positions by 91% and 99% respectively. 

For the same period the large speculators have increased their gross short positions seven-fold to record high bets the price of gold will fall further. Because they tend to trade with the current trend and momentum, generally more short-term oriented speculators reach their highest gross short positions at or near important long-term low turning points for the price of gold. Conversely, the commercials seek to hedge longer-term price risk. Commercial hedgers tend to reach their least net short positions at or near important gold price lows.

The commercial hedgers have not been net long gold since 2001 with gold then near $270, but following the 30-plus percent correction for gold since September, 2011, the industry hedgers and bullion banks are now the closest to becoming net long in 12 years. Indeed, on June 4, 2013 U.S. bullion-trading banks reported a 29,622-contract net long position for the first time since July of 2008 during the financial crisis with gold then USD $939. In our opinion this signals an attractive counter-cyclical entry point. The current positioning data in the futures market are what we would only expect in a mature downtrend and are a recipe for a pronounced rally.

For now, the Bullish Bear is cautiously monitoring the precious metals sell off.

Fresh buying can be avoided for now, until the dust settles.

Aggressive buyers could start accumulating on declines via staggered purchases. (start with allocating 5-10% of your total precious metals outlay on declines). While its too early to call a bottom, the substantial correction has provided a decent margin of safety.

I would recommend that investors 50-60% book profits on short positions in precious metals. 

A near term low may be in, and a short covering pull back could occur.

Watch this space!

MORE LINKS:

Physical Gold Market In Disconnect As Premiums Hit Record    June 26, 2013

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/26_Physical_Gold_Market_In_Disconnect_As_Premiums_Hit_Record.html

Citi: Are Gold And Silver Finding A Bottom?

Submitted by Tyler Durden on 06/27/2013 22:30 -0400

http://www.zerohedge.com/news/2013-06-27/citi-are-gold-and-silver-finding-bottom

The Golden (Sentiment) Rule: If It Isn’t Off The Chart Now, It Soon Will Be

Submitted by Tyler Durden on 06/28/2013 19:49 -0400

http://www.zerohedge.com/news/2013-06-28/golden-sentiment-rule-if-it-isn%E2%80%99t-chart-now-it-will-be-soon

Gold and Gold Stocks –Signs of Life – Pater Tenebrarum  June 28,2013

http://www.acting-man.com/?p=24390

”””””””””””””””

So what can we conclude? For one thing we can certainly conclude that there has already been an 'overshoot' in the gold stocks. As we have pointed out with respect to 'long term oversold' signals, once gold stocks become as oversold as they have recently been, the historical record suggests that a rally of between 55% to 550% can be expected to start from the eventual bottom.Moreover, we know for a fact that gold stocks most of the time tend to lead gold. This is very likely simply a result of the fact that the people who buy gold futures in many cases are also trading gold stocks. It would make sense for them to load up on gold stocks before they move into gold futures in size. Therefore, every serious divergence that appears could be a sign of an impending trend change. Whether this will be just a short term trend change, a medium term one or a long term one remains to be seen. Certainly the technical damage to date suggests that it will take some doing and a lot of  back and forth before the sector truly gets back on its feet.However, what we cannot firmly conclude yet is that the cyclical bear market is over. The evidence is just too flimsy to come to that kind of conclusion at this point. There are many alternative possibilities worth considering:  the gold stocks may simply be subject to some short covering. There may be some shenanigans going on related to end-of-quarter window dressing. It may simply be a pause, relieving oversold conditions before the long term downtrend resumes.It is therefore simply not possible to sound the 'all clear'. However, as we have emphasized previously, anyone buying at these levels with a very long term time horizon probably won't make a mistake. The major fundamental trends that have supported the gold bull market have not changed – although there have certainly been a number of medium term gold-bearish fluctuations in the support previously provided by negative real interest rates, credit spreads and forever rising US budget deficits. However, these fluctuations have in our opinion not truly altered the long term outlook. The painful measures that would be required for long term solutions of the problems besetting the global economy have not been taken and are unlikely to be taken in the foreseeable future. It seems far more likely that what government will resort to will be measures that are inherently gold-bullish.With regard to the recent 'signs of life', let us watch and see what develops. It certainly could be that we have just seen a major trend change, even though we have to reserve judgment on that for the moment. Nevertheless, the divergence we have just observed is no doubt quite noteworthy. It is precisely the type of divergence we would expect to see once the medium to long term trend does in fact change.””””””””

http://bullmarketthinking.com/grandich-on-gold-fear-has-totally-gripped-people-to-explain-the-fundamentals-is-like-throwing-sand-in-the-ocean/

http://www.grandich.com/2013/06/gold-1225-bottom-in-sight/

FED ACTIONS AND THE FINANCIAL CRISIS - SUMMARY BY GAINS PAINS AND CAPITAL

Graham Summers of Gains, Pains and Capital in a recent write up on Feb 4, 2013, very aptly sums up the actions of the US Fed

""""""""""""""

Here's a recap of some of the larger Fed moves during the Crisis:

• Cutting interest rates from 5.25-0.25% (Sept '07-today).
• The Bear Stearns deal/ taking on $30 billion in junk mortgages (Mar '08).
• Opening various lending windows to investment banks (Mar '08).
• Hank Paulson spends $400 billion on Fannie/ Freddie (Sept '08).
• The Fed takes over insurance company AIG for $85 billion (Sept '08).
• The Fed doles out $25 billion for the automakers (Sept '08)
• The Fed kicks off the $700 billion TARP program (Oct '08)
• The Fed buys commercial paper from non-financial firms (Oct '08)
• The Fed offers $540 billion to backstop money market funds (Oct '08)
• The Fed agrees to back up to $280 billion of Citigroup's liabilities (Oct '08).
• $40 billion more to AIG (Nov '08)
• The Fed backstops $140 billion of Bank of America's liabilities (Jan '09)
• Obama's $787 Billion Stimulus (Jan '09)
• QE 1 buys $1.25 trillion in Treasuries and mortgage debt (March '09)
• QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug '10)
• QE 2 buys $600 billion in Treasuries (Nov '10)
• Operation Twist reshuffles $400 billion of the Fed's portfolio (Oct '11)
• QE 3 buys $40 billion of Mortgage Backed Securities monthly (Sept '12)
• QE 4 buys $45 billion worth of Treasuries monthly (Dec '12)

The Fed is not the only one. Collectively, the world's Central Banks have pumped over $10 trillion into the financial system since 2007. This money printing has resulted in a massive expansion of Central Bank balance sheets, spread inflation into the system, and done nothing to address the key solvency issues that lead up to the great crisis."""""""""

GOLD - INTRADAY VOLATILITY ----

As the FED threatened to end its policy of limitless QE, Gold sold off rapidly.

From levels of just under $1690, Gold went all the way down to under $1630.

I would like to advise readers to take another look at Clive Maund's chart from my post on 31.12.2012.

Corrections down to the $1500-$1550, will complete the ongoing consolidation in gold bullion and will provide good buying opportunities.

Brace yourselves for volatility, and don't take your eye off the big picture.

As US Federal debt levels continue to rise, even as unemployment numbers stay stubbornly high; the US Fed will face it's toughest test yet.

The last thing that US homeowners need is a rising mortgage rate, so I remain skeptical of Bernanke's comments last week!

RUCHIR SHARMA ON US ELECTION RESULTS AND THE US FISCAL CLIFF

Fantastic Article by Ruchir Sharma in the Economic Times Mumbai on Monday 12 November 2012.

Why Barack Obama won, what can be his legacy - Economic Times

EXCERPTS: (I highlighted some sentences in red colour for emphasis)

Ruchir Sharma on Why Obama won?

Even before the vote, prognosticators like Yale's Ray Fair who use just economic metrics to forecast election results pointed to a defeat for Obama, given persistently weak growth in per-capita income over his first four years. Fair was calling for Romney to win by a 51-to-48 margin. The polls showing that most voters saw the economy as the key issue only added to the mystery of how Obama beat the odds. The answer may be that, in their gut, voters understand that the US is not recovering from a normal recession, but from the worst crisis since the Depression, and, therefore, they chose to give Obama four more years, just as they did for Franklin Delano Roosevelt in 1936.

Historical evidence shows that the American economy has, in fact, not performed badly over the last four years, not when compared to its own previous track record in severe crises, or to other countries in similarly dire condition. The forecaster who expected an Obama defeat focused on how the debt problem is undermining US growth, which has fallen from a long-term rate of 3.4% in the decades before 2007 to just 2% this year, and is running slower than during the recovery phase of most post-war recessions. US economic output is now 10% below the trend line it was on before the crisis and still falling, which is the real reason for high unemployment. This case for the historically 'weak recovery' was the essence of the case against Obama's handling of the economy. 

Voters seemed to choose, intuitively if not deliberately, the historical and global perspective of Harvard economists Kenneth Rogoff and Carmen Reinhardt, who argue that the relevant point of comparison is not the dozen or so recessions the US has seen since World War II, but the very different case of systemic financial crises. These are much more traumatic and rare, and by this standard, the US is recovering lost per-capita output faster than it did following previous systemic crises, from the meltdown of 1873 through the Depression of the 1930s, and also faster than most of the eurozone nations following the systemic crisis of 2008.

Ruchir Sharma on US FISCAL CLIFF - on US SPENDING CUTS - on US DEBT

He stresses the importance of debt reduction through spending cuts rather than tax increases.

The history of financial crises suggests that Washington has to get moving and address the debt burden now. In the developed world, the two most successful cases of recovery from a debt crisis were Sweden and Finland in the 1990s, and both began by cutting debt in households and corporations, while raising public debt to stimulate the economy. That is the path the US has followed - and followed more successfully than other rich countries since 2008 - with steep declines in US corporate and household debt. But this is the critical juncture. The Scandinavian cases show that, four years into the crisis or about where the US is today, the government needs to shift aggressively from stimulating the economy to putting in place a long-term plan to lower the public debt. 

It can't be just any plan. From certain quarters of Washington, one hears a steady refrain about how the only way to balance the budget is to cut spending and raise taxes. But research clearly shows that the recovery is likely to be much stronger if the debt is reduced through spending cuts rather than tax increases. 

Over the past quarter century, eight European countries have undergone periods of sharp government debt reduction, and those that reduced debt mainly or only through spending cuts, including Britain and Austria, saw their economies speed up during the belt-tightening process, and after some initial pain. In the Netherlands, Sweden and Finland, the governments actually lowered taxes while cutting spending, and saw the GDP growth rate accelerate, sometimes by a large margin. In the two best cases, Sweden saw its GDP growth rate roughly double, and Finland saw its GDP growth rate roughly triple, both to around 3%, which is very respectable for developed economies. In contrast, the countries of southern Europe - Italy, Greece and France - tried to put the budget in balance mainly through tax increases, and all of these economies saw GDP growth slow down. 

So, economies digging out of debt perform better following spend cuts. But why? An August 2012 paper from the National Bureau of Economic Research, The Output Effect of Fiscal Consolidations, offers an extensive comparison of how countries have performed after periods of budget deficit reduction, and it concludes that the difference in results is nothing short of 'remarkable'. Spending cuts are typically followed by mild recessions, or no recession at all, while tax increases have been followed by prolonged recessions. The authors, Alberto Alesina, Carlo Favero and Francesco Giavazzi, note that the gap in performance is so sharp, it can't be explained away by differences in monetary policy; rather, the key seems to be the impact on business confidence compared to consumer confidence. Businesses tend to react to tax increases by dialling back, and to react to government spending cuts by investing more, which is what the US economy could use right now, when many businesses are sitting on record levels of cash on their balance sheets. 

Regardless, the US economy looks likely to take some pain in the coming year, as Washington begins to deal with the debt problem. The market's worst fear is the 'fiscal cliff' that looms in January, when current law would impose a combination of tax hikes and spending cuts equal to 5% of GDP, which is likely to induce a recession if Congress doesn't act. However, a risk this clearly telegraphed typically gets resolved, even in Congress. The more likely risk is that Washington begins the process of debt reduction with a compromise package that could reduce growth by nearly 2% of GDP. That's a step in the right direction, long term, but could make for a rough 2013. 

Over the coming decade, the global economic race will be decided in good part by which nations are first to tackle the debt problem, and one often overlooked factor is that the wealthy can cope with large debts more easily than the poor. By that measure, the total US debt burden of 350% of GDP may pose less of a challenge to Washington than, for example, China's total debt burden of 180% of GDP poses to Beijing. 

The bigger picture for 2013 is that if Washington can produce a credible road map to lowering public debt, it could keep the US on track to be a Breakout Nation - as the strongest growth story in the developed world - this decade.

RAY DALIO to CNBC

GOLD & EURUSD - INTRADAY - 7th SEPTEMBER 2012

Well, promises from the ECB, a below expectations jobs number in the USA, hopes of QE3 from the FED....... and we see a breakout in Gold and a EURO/USD rally!

These really are crazy days. Hopes....promises....and stop gap fixes. A mega global equity rally today and now a rally in precious metals and the Euro.

WATCH THIS SPACE!

$16,000,000,000,000 !!!!

Well depending on where you read it, US Debt has now already crossed / is about to cross the $16 trillion mark!
(Yes, that's a large number of ZEROS!)

What is worrying is the rate at which it has risen this past year and the prudent market watcher can only worry about the cost of servicing this massive debt in the future once interest rates rise!!

Meanwhile, markets were trending upwards ahead of  the Federal Reserve's annual  symposium at Jackson Hole. However, it now appears that we may not hear anything new and markets are heading into the annual meet in a rather lacklustre manner.
So no QE3 for now I guess??

$16,OOO,OOO,OOO,OOOBAMA! | ZeroHedge

"""""November 16, 2011 was a historic date: that's when the US officially surpassed $15 trillion in debt for the first time since World War 2. We celebrated it by cheering $15,OOO,OOO,OOO,OOOBAMA. Today, August 28, 2012, is when we can unofficially celebrate again, because 286 days after the last major milestone was surpassed with disturbing ease, total US debt following today's $35 billion auction of 2 Year bonds is, well, in a word: $16,OOO,OOO,OOO,OOOBAMA! 
The result: $16.05 trillion, which is what the debt to the penny will officially show next week.

          ..................................................
          ....................

Of course this will be the total following the balance of this week's auctions. In the meantime, the US is now officially between that ceiling and a $16 trillion floor.
But wait. You aint's seen nothing yet. At this rate of growth, total US debt will surpass:

• $17 trillion on June 10, 2013;

• $18 trillion on March 23, 2014;

• $19 trillion on January 3, 2015; and

• $20 trillion on October 16, 2015

And on, and on, and on..."""""

MORE LINKS :

Some clear thinking on the debt

""""August 29, 2012Rome, Italy
If you haven’t heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world. 
It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days.

This portends two key points: 

1. Anyone who thinks that inflation doesn’t exist is a complete idiot; 2. To say that the trend is unsustainable is a massive understatement.    """""""

US IOU — $16 Trillion

Rodney Davis: US needs debt repayment plan

US debt to pass $16 trillion - NYPOST.com

US Debt Officially Passes $16 TRILLION | SilverDoctors.com

GLOBAL BANKING - NO RECOVERY YET.

The ever articulate David Rosenberg has continuously maintained that the Great Recession of 2008, was no garden variety recession.

 According to him a combination of deleveraging, demographics and deflation  - the result of a post credit bubble collapse has meant that despite record stimulus packages and accounting rule changes and Central Bank Balance Sheet expansion; we are still a long way from an end to the crisis.

The Charts below clearly demonstrate how the stock prices of large multinational banks have fared during the post bubble bust scenario. 


As worries of the debt crisis in Europe continue unabated and market watchers are eagerly hoping for a QE3 to boost global equities; it's quite clear from the stock prices below that the crisis is far from over.

Canadian Banks dominate World's 10 Strongest Banks

Canadians Dominate World's 10 Strongest Banks

This is a Bloomberg link that makes for an interesting read.

For readers in Asia, we tend to be more familiar with the 'Too Big To Fail' American and European Banks. These include the likes of JP Morgan, Deutsche Bank, Bank of America etc.

However, prudent risk management, conservative lending policies and a strict regulatory policy have enabled Canadian Banks to grow even as Banks elsewhere struggled post 2008.



"CIBC (CM) was No. 3 in Bloomberg Markets’ second annual ranking of the world’s strongest banks, followed by three of its Canadian rivals: Toronto-Dominion Bank (TD) (No. 4), National Bank of Canada (NA) (No. 5) and Royal Bank of Canada (No. 6), the country’s largest lender. Bank of Nova Scotia ranked 18th, and Bank of Montreal was 22nd. "


The Canadian Dollar (CAD) too has been a currency that has outperformed over the last decade.
A stable Banking System and global investors searching for higher yielding currencies have contributed to the outperformance in the CAD.

STUDENT LOAN DEBT

Here’s what we do know about student loan debt: it’s roughly $1 trillion in size, greater than either auto or credit-card debt and second only to mortgage debt in the U.S.

Source: http://www.cnbc.com/id/47171658

Here are a few more links:

http://online.wsj.com/article/SB10001424052702303978104577364120264435092.html

http://www.reuters.com/article/2012/04/26/us-usa-colleges-debt-idUSBRE83O1JL20120426

http://www.bankruptcylawnetwork.com/is-student-loan-debt-the-next-debt-crisis-well-duh/

http://www.bloomberg.com/news/2012-04-26/how-college-students-can-work-off-their-1-trillion-debt.html

Well it's not getting a lot of coverage in the International Business Media (thanks to the Eurozone Debt Crisis perhaps), but  even CNBC has set up a page for it now.

http://www.cnbc.com/id/40682477/

Watch this space. A weak US job market  ( especially unemployed/underemployed graduates) will only add to the woes of US Student Loan Debt - Lenders!

GOLD - LONG TERM CHART

Thomas Friedman - on a Theory of Everything (sort of)

A precise article by Thomas Friedman about the current state of unemployment, credit and strained government finances.

A Theory of Everything (Sort Of) - NYTimes.com

You +1'd this publicly. Undo

You +1'd this publicly. Undo

MARKET UPDATE: THESE ARE CRAZY DAYS

Just a quick post today before I put up some detailed analysis soon.

There's so much happening in markets these days - Debt Ceiling, US AAA downgrade, Equity Market crashes, a really manic VIX (Volatility S&P500 ^VIX), UK Riots and all the ongoing discussion of the ''fragile'' global economic recovery!!

Below is a snapshot of todays wildly gyrating markets! For the ''goldbugs'' out there, Gold has been riding high, driven upwards by all the uncertainty & it is overbought in the near term!

The FED has signalled that it wishes to keep rates at record lows well into 2013!----the recovery must be more fragile than they first thought.

Overall, I would refrain from any risk taking at the moment and would look to hedge gold positions. In the medium term, I expect gold to continue to be volatile in a price range of $1550 to $1780(New all time high as of today).

Will come back with some market specific ideas soon.

THE ONGOING RECOVERY - NOT!

As the US Government is negotiating to raise the US Debt Ceiling, Central Bank Governors around the world are struggling to keep the fragile economic recovery intact while tackling inflation concerns at the same time.

Below are some magazine covers, that you would not expect to see at this stage of a economic recovery!

US ADJUSTED MONETARY BASE - Chart from St Louis FED

Clearly there's more stimulus to come, as the never ending recovery from those dark days in 2008 continues. The FED really has a tough job on its hands.
..
Talks of a possible QE3 could add more fuel to rising commodity prices, while a cancellation of a proposed plan for QE3, will not go down well in these jittery markets!

Below are two Charts of the Adjusted US Monetary Base. (5year + Long Term)
2011 has seen the graph spike sharply updards, a trend that is clearly not sustainale !












Meanwhile the Precious Metals sector has had quite a rally over the past week, with Gold prices topping $1600, and Silver just about getting over the $40 level. Perhaps, the Gold market is pricing in a possible QE3 further down the line.
I continue to be cautiously optimistic on the precious metals sector over the next month and a half; i.e. until the end of August 2011. These summer months have traditionally been seasonally weak for the PM sector.

DJIA - THE RALLY GOES ON

As the rally in the US equity market continues, even the most ardent ''bear'' is probably just about ready to throw in the towel.

Can this rally be explained in light of deteriorating fundamental news such as rising unemployment and government debt levels ?

Perhaps now is the time for the prudent investor to re-assess his risk reward matrix.
Does waiting for a possible upside from current levels justify the risk at this stage?
Some analysts are saying that the current rally since 2009 has started to form a bearish ascending wedge formation on the charts, and that it's time to book profits.

The Bullish Bear Blog's view:

• The risk reward ratio is clearly not in favour of the long only investor.



• After a monster rally from the lows back in March 2009, potential downside risk clearly outweighs any possible upside.



• The mega rally has exhausted a large percentage of short positions in the market. This in turn means that the market has much less support on the downside if a correction ensues.



• Meanwhile the market continues to ignore serious issues like the Club med debt crisis, unemployment issues in the US & steadily rising government debt levels in the developed world.