The U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government. During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone pay off old debt that matured. The Treasury also drew down its cash balance by $45.057 billion during the period, starting with $126,568,000,000 in cash and ending with $81,511,000,000.
The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.
This mode of financing the federal government resembles what the Securities and Exchange Commission calls a Ponzi scheme.
Posted by thoughtpwr - 11-28-14 16:14 - 1 comments
I had been on vacation for the last two weeks, but I have kept fully invested. I actually expanded my call positions for the holiday trades over the last week.
We have a couple of buy related events that will change the market over the short term.
1) First, we have the first Monday of the Month SPX Buy signal starting obviously on Monday at Open + 1.07 2) Secondly, we had an outside day down today and that is bullish with a SPX Buy at Open + 2.14 3) BIB I have claimed is the market leader here and it still has a target of 138. It finished wave 4 of its current run from April 2014 last week and is about half way through wave 5. It is primarily what has kept me in this market. Today, it reached a new high and fell back to the old top before regaining support. The action calls for it to rally to a new high over the next couple of days and hold that area (>130) before completing its structure. I contend that if it does this, the risk in the market over the next several weeks is low. 4) By keeping with buy signal stocks, I have managed to keep the rally dollars flowing as I have taken profits at target levels. I have also diversified into the down trodden like CBS and FL for good profits, but today's commodity hits hurt the entire performance for the week. 5) Schaeffer also identified some stocks that do well over the Thxgvg time period (+6%), which appear to be ready to fullfill that promise early next week (AAPL, JWN, SCSS, CRUS, etc.) By buying at their lows over the last couple of days, they are positioned to return a good profit with a positive week next week.
Look for Monday to be an inside day up which will be very positive for the next five days. With seasonality being strong for the first three days of next week. Obviously, we are close to a sell signal as well at 2060, which we only finished 7 pts above, but the odds favor seasonality here and so the risk should be taken. I have predetermined what put purchase I will take to hedge myself, if that becomes necessary, but based upon the wave structure of BIB, I don't think the likelihood of exercising the hedge is high until after Dec 26.
Another issue is the Fibonacci days of this rally. About two weeks ago, I correlated the stages of this rally as being projected out to at least 21 days, before things would fall apart. However, on the 14th day, last Friday, of this final 13 days of the 21 day rally we had the gap up on news of the Chinese rate cut. By Dow that is suppose to increase the duration of this rally to an additional 21 days to make the extension to 42 day, which takes us to Dec 22. The Bradley date of 12/26 also stands tall in this time frame, so I contend that the odds favor a holiday rally in secondary stocks over this time period.