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We’re probably going to see so-called green shoots half a dozen times in forthcoming dead cat bounces before The Greater Depression II is over and done with. Here are a few important reasons why the stock markets have only begun to stink, er sink.

Technical patterns are among the worst we have seen since 1987.

Fundamentally, numerous things are very wrong. Foremost among them; broken consumers have no buying power, ability to get more credit, have any savings to speak of (although they are trying), are overloaded with debts, reside in homes with sinking values and are scared to death of losing employment if they haven’t already. All of us know of more than one friend or acquaintance without a job. Soon we’ll see one person with a job supporting four or more jobless adults in one house.

The USA GDP ratio to debt indicates we cannot come back to our glory days without a smasharoo crash in most markets to washout debt or in fact pay it off. Most cannot pay. Budgets are ruined.

In this earnings season, which some chortle is improving, good numbers are being posted by a handful of Big Boy companies with deep pockets who have been slashing jobs and expenses for the last how many years? Any company can make money briefly as they exist on old previously produced inventory and then fire half the organization. This can’t last long but it makes them look better for a few quarters.

Where is the stability in companies and the government? They are most all careening from one major disaster to another as the White House stays up nights trying to devise more new ways to tax and spend money from broken taxpayers. Corporations like the bigger banks are hoarding cash for many rainy days, not just a few. They are not investing in new people, training, inventory, or products as who will buy them? CEO’s are selling their shares into strength and preparing for early retirement on some island somewhere with a cash-paid for mega-yacht. Most would prefer to just disappear.

Before I left Michigan, yards, commercial lots, and other spots were littered with used boats, cars, trucks and junk that people were trying to auction, or sell-off just to pay bills. Does this sound like green shoots and growth?

We see a systemic collapse in shares except those related to “must have” products like oil, coal natural gas, water, and precious metals. Others would be food related and items you need to get through the day even if unemployed. Some of the best hedge fund returns last year were posted in big bear funds shorting banks, mortgage companies and the stock market. Betting on disaster was a huge winner. This year and through 2012 it gets even better for bear traders.

Luxury-type eating establishments watch business fade as patrons go down scale. This is why the McDonalds stores are improving and their $1 menu is so popular. Even big sports facilities are losing audience as more go to watch free sports in bars while drinking cheap beer to drown their sorrows. The larger sit-down food chains are shrinking and some are going bankrupt.

In the 1929 stock market crash the Dow slid -90% to the bottom. One of my top analyst friends shocked me by reporting there was potential for the stock markets to GO TO ZERO! AS IN WIPED OUT! Understand that with hot inflation or hyperinflation shares’ prices and the stock indexes could be much higher in unadjusted numbers. Yet, measured in inflation adjusted values they might be worth less than today’s market valuations. Watch this one fool the Sheeple when it arrives this fall or next year.

Years ago we made the forecast, I think in 2003, that one major trading platform would crash and burn and cease to exist. My guess is that if this true it could be the CBOE Chicago Board Options Exchange as they run and trade some pretty hot derivatives. What happens in a crash to this kind of trading?

Crude Oil Is The Big Momma Market Vulnerable To Wild Price Swings

We are always watching crude oil as it is the major commodity affecting many of the others. Further, oil is a signal leader for the whole commodity group including precious metals. Traders are driving oil higher in the face of over-supply and falling depression demand. Why is this? We think the beginnings of inflation have entered the picture and traders are long oil for potentially bad summer weather. Funds take big oil positions and are often long or short only. Our 4th quarter oil price forecast is $80. This is repeated by some of the largest traders. Keep in mind this forecast reflects normal inflation, demand, supply and no hurricanes or Middle East violence. That other stuff makes prices lots higher.

Here is a nasty, interesting idea: Would Israel, Iran, Russia and the USA manufacture a potential war incident to spike falling oil prices? I wonder? Some analysts are forecasting $20 oil due to the depression. This kind of maneuver would pop oil much higher. We believe anything is possible.