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Len OppenheimIowa newsEconomics 24 Feb 2011
21stbooks
Paradigms: Why They are Important by Len Oppenheim

“Everything we call real is made of things that cannot be regarded as real.”  Niels Bohr
 
Musings #1341. Attached is a link to one of those cutsie cartoons that have become so popular. This one pokes some holes in the arguments of the Climate Change proponents. I think it makes some good points. However, as a good friend pointed out to me, many of the “deniers” have a financial interest in promoting the continuing use of fossil fuels. I continue to be totally agnostic. I have no idea whether climate change is a function of naturally occurring cyclical factors or if it is a result of man’s behavior. I am skeptical of both sides and their arguments and their motives.
 
I just read some (new to me) data about the shifting of the north and south magnetic poles.  I would advise those interested in climate to Google this topic and read up on it. This could be quite alarming and might, in fact, result in a coming ice age!
• • •
I am opposed to entitlements, whether they be for the rich, the poor, or anyone else in between. Let’s get rid of government subsidies for rich farmers and let’s get rid of programs that encourage non-married women to have more children to obtain larger welfare checks. I also think it is about time we put the white collar criminals in jail.  The following link goes to an article with which I am in almost total agreement and I urge readers to use the link. Many from Wall Street deserve to be in jail! Let’s free the drug offenders and fill up the jails with those who cause massive problems for us all.
 
I love my country but....  I am totally outraged by a system that incarcerates Martha Stewart and allows men like Rubin, Prince, Blankenfein, Franklin Raines, and Barney Frank to walk away with millions (or in Frank’s case remain a Gadhafi like petty tyrant) as if they were not guilty of acts or omissions which directly led to the fleecing of America.....
 
Please take the time to read the article from the link below:
 http://www.zerohedge.com/article/matt-taibbis-latest-why-isnt-wall-street-jail
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Sooner or later things are going to get really bad in this country. I hope I am wrong but I fear I am correct. If or when that occurs Ben Bernanke will be reviled and blamed (justly so) for his misguided policies which are aimed at saving the banks at the expense of the citizens. Isn’t he smart enough to realize that a problem caused by overleverage and too much debt cannot be solved by adding leverage and debt?
• • •
I have used the above quote from Bohr on numerous occasions. It is one of my all-time favorite quotes. It is short and to the point. Most importantly it calls into question so many of the paradigms upon which so many Western Scientific Materialists base their view of reality and create their opinions about society.
 
The world, the universe, our bodies, our consciousness, our souls, etc. are all much more complex than our limited minds can perceive and understand.
 
One of the best books I have ever read is The Biology of Belief by Bruce Lipton, Ph.D.  If you want to read my review of it on our website from the bookstore which we have closed go to www.21stbooks.com and you can find it.
 
Lipton, using the traditional scientific method, develops an amazing story of how outdated the Western paradigm of allopathic medicine and our mechanistic views of evolution truly are. I found this book fascinating and groundbreaking.
 
A friend sent me a link to a presentation by Lipton on the internet. It is 34 minutes long so you are forewarned. However I think it is extremely important and well-done and I highly recommend investing the time.  The link is below. If you take the time to read it I think you may find it to be very useful and enlightening. Feedback is welcome!
https://sixminutes.infusionsoft.com/link/2cb30709060/1a9b860
• • •
I got a call from a very close friend today asking me if the bull market was over. I confessed that his guess was as good as mine.
 
At the end of 2010 I rated the prospects for 2011 as bearish. After a couple of weeks of watching the action in January I pulled back on my bearish outlook and became less sure of how the stock market would perform in 2011. For most of this year my advice was that it was very dangerous to be bullish and equally dangerous to be bearish.
 
In the last two notes I wrote, February 13th and 14th, I made it very clear that I thought the odds were 8:1 that the next move of consequence in the stock market--a move of 5 to 12% would be down, not up. The market went sideways to slightly higher after that but has not been down hard for two days in a row, on stronger volume.
 
When I analyze markets I try to compile fundamental and technical data and then try to recognize the patterns as they develop and use that as a forecast for the future.
 
I am not sure whether it has to do with QE2, High Frequency Trading, or other factors about which I am not knowledgeable, but for me the patterns have defied my ability to recognize them.
 
Today, based on most Elliot Wave Counts, and given the excessively optimistic sentiment figures, coupled with the extended nature of leading stocks and hugely overvalued nature of our equity markets, it is very reasonable to conclude that the bull run is over and the secular bear market has resumed and that in the coming year or two we are likely to take out the March 2009 lows.
 
However, given the Lowry’s data measuring supply and demand, and looking at the advance decline statistics and other momentum measures it is equally likely that after this correction runs its course we will rally beyond the most recent highs and then set the stage for an important bear market.
 
Both scenarios make perfect sense to me. Therefore I remain agnostic.
 
As a general rule I think very important bottoms are usually seen when stocks and/or the market as a whole fails to sell off on bad news. In a like fashion, important tops are often seen when stocks and/or the market fail to go up and/or sell off on good news.
 
Because this decline started based on “bad news” it calls into question, at least to me, whether or not we have seen an important top or The Top.
 
We had some panic lows Wednesday night/Thursday morning. Now we should get a rally. The quality of that rally and the distance it covers are likely to give important clues as to how significant a top we have seen. If the retracement of the decline stops at a fibonacci retracement level that would indicate that the top is likely to be significant. I will watch momentum, new highs/new lows, etc., and try to get a more firm opinion.
 
The bottom line for me is that this is a market for sophisticated traders only. Investors are best served on the sidelines.
• • •
While gold and silver continue to rally and appear to be headed higher in the next week or so, for the most part the action in the mining stocks is pathetically weak. This leads me to lean towards selling the precious metals and mining stocks on further rallies.
 
The problem with selling is that then one has to buy them back. My best guess is that if the mining stocks rally another 3 to 5 percent, then they are likely to top out. I intend to keep my physical gold and silver and ride out all the declines, aware that it may prove to be very costly and painful, if, as I suspect, gold may decline to between $1000 and $1100. On the other hand, maybe the secular forces are so strong that gold will not have that large correction. I just don’t know!
• • •
Bonds have been enjoying a good rally. I am a long term bear and have no opinion or insights into the short to intermediate term direction.
• • •
The action in the dollar has been extremely disappointing to this dollar bull. The flight to quality has not been to the dollar. Although, in the end, I expect gold and silver to be the last men standing and that all fiat currencies will be decimated, I still believe that over the next year or two we shall see the dollar rally very significantly, especially against the Yen and Euro. So far that has not happened, but for numerous technical and fundamental reasons I believe we shall see that scenario play out over time.
• • •
The events in Wisconsin are quite interesting. It was JFK who allowed government workers to unionize.  This is not a God-given right or Constitutional mandate. As an analystical friend pointed out to a group of us at a cocktail party, the problem with allowing government workers to unionize is that they have nobody to negotiate against who really cares about the general population of the long term ramifications of the contracts. In other words, our elected officials, pure politicians, have no vested interest in fiscal responsibility. So it goes!!


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