Financial Sense Blog

The word out of Washington is no new taxes! In what is being hailed as a huge compromise between the two parties, the Bush tax cuts have been extended for another two years. What is missed in the analysis is that taxes will be unchanged, and therefore little new economic activity is likely in the next year, as we’ll have to revisit the extension in two years.

The following is commentary that originally appeared at treasurechests.info for the benefit of subscribers on Tuesday, November 23rd, 2010.

You hear a lot about the states that are facing a financial wall. California, NY and Il are on top of the list. But that is a 2010 story. The 2011 story will shift toward the nations municipalities. There are 36,000 cities, towns, villages and boroughs across the land. They all are facing problems.

Overall look at the markets, macro-economic trends, and technical levels on the S&P 500. Conclusion: Bulls remain in charge.

Since the announcement last week that I will chair the congressional subcommittee that oversees the Federal Reserve, the media response has been overwhelming. The groundswell of opposition to Fed actions among ordinary citizens is reflected not only in the rhetoric coming out of Capitol Hill, but also in the tremendous interest shown by the financial press. The demand for transparency is growing, whether the political and financial establishment likes it or not.

The past week has been interesting to say the least. Gold is trying to find support while the SP500 grinds its way higher. Let’s jump into the charts and analysis to get better feel for what I feel is happening here.

Despite the fact that the S&P is up over 80% in the last 21 months, US financial firms are currently tripping over each other in their zeal to raise their S&P 500 and GDP targets for 2011. JPMorgan's chief US equities strategist, Thomas Lee, came out on December 3rd with a target of 1425 on the S&P for 2011, which would be a 15 percent gain.

The US is rapidly approaching a debt trap.

The structural changes that have taken place over the last 9 weeks remain intact and will likely resume after some of the 4 & 8 largest can add long and/or spread positions in order to minimize future losses. Judging by the way the way this has played out over the last eight or nine weeks, I would suspect this same trend to continue which goes along with higher silver prices.

Good morning. With stocks breaking out to new two-year highs on Friday and just about every major index now clearly in an uptrend, there is talk of the stars aligning for a new leg up in the bull market that began on March 10, 2009. And while the bears do still have some points to make, it is becoming obvious to anyone on the short side that the game just doesn't seem to be going their way right now and may not for some time to come.