The 3x Financial Bear ETF (NYSE:FAZ) has never looked so juicy, especially with the prepped up, fake financial rally created by sleazy, lying, and manipulative US government regulators as they issued numerous, erroneous headlines in order to hide the truth from the public’s eye.

Bank stocks will be the first to feel the burn as slowly, but surely, the real statistics begin to emerge from Waldo’s back pocket. Stocks likely to be affected by heavy put calls in the coming days: Citigroup (NYSE:C), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), American International (NYSE:AIG), Wells Fargo (NYSE:WFC), and Morgan Stanley (NYSE:MS). With interest rates at a standstill, cash is king and the financial institutions will only continue to suffer.

US banks are about to  take their first few steps upon a deep, red, bloody mess as bad economic reports from May saw just about every indicator and variable decrease, unlike the highly misleading projections that a recovery was nearby. Unemployment, housing, sales, consumer confidence, spending, income growth, credit, inventories, trade all tumbled as the market began to understand the misleading press releases launched in order to promote optimism.

The economic reports for May are rolling in, and so far they’re pretty ugly. In the first four months of 2010, it seemed pretty clear that a recovery was upon us, though it was shaping up to be a slow one. Last month, however, the economy seemed to take a step back. Was it a blip, or a sign of a double-dip to come?

Even though we don’t yet have full information to evaluate May, here’s what we do know:

Employment

Unemployment technically declined in May. But a deeper look at the numbers showed that was mostly due to temporary census hiring. The private sector only hired a measly 41,000 new workers. If you subtract all government jobs, then hiring was the worst we’d seen since January.

Housing

Mortgage applications for new purchases have indicated an incredible fall in home sales following the April expiration of the buyer credit. They’re down 42%. Foreclosures also continued to occur at a very high rate, so housing market inventory almost certainly increased in May.

Sales

As we learned Friday, retail sales fell by 1.2% in May — the first decline in eight months. Consumers felt less comfortable parting with their cash last month, or more accurately, swiping their credit cards. Borrowing had been driving better sales.

Consumer Confidence

At first, it looked like consumers were more confident in May. But then Gallup provided an update for the second half of the month. It wasn’t good. April’s increase in sentiment was erased.

Spending

Spending was up in May, but only for the wealthy. Most Americans declined to use more of their disposable income for additional purchases. While this might be fiscally responsible, it isn’t going to help economic growth.

Income Growth

One of the few bright spots in May was income growth. Hourly earnings grew by $0.07, according to BLS. That might not sound like a lot, but it’s the biggest gain we’ve seen this year.

The economic indicators we’ve seen so far for May have been largely negative. The only good one was income growth, but that’s a lagging indicator, as it probably even trails employment. Consumers were skittish and businesses don’t seem eager to adopt the view that a strong recovery is underway.

There are still a few statistics for May that we haven’t gotten. But even they don’t look particularly promising either:

Credit

Consumer credit only increased in April due to the spike in home sales. With those gone, we can expect a decline in May.

Inventories

These might increase in May, but probably because sales declined. Since there was little additional hiring, however, it’s not likely we’ll see a steep rise — production isn’t likely to ramp up.

Trade

The trade deficit grew in April, mostly because exports declined so much. With Europe’s trouble continuing in May, it’s hard to believe that exports could have grown much last month. In fact, they probably shrunk even more.

According to the Labour Department in Washington, payrolls in U.S. increased 431,000 in May, while the jobless rate fell to 9.7%. While at first glance this all looked fine and dandy, one needed to simply peer closer into the report to find the missing loopholes that revealed the ugly truth. “Payrolls rose by 431,000 last month after a 290,000 increase in April, figures from the Labor Department in Washington showed today. The gain was smaller than the 536,000 median forecast in a Bloomberg News survey and reflected a 411,000 jump in government hiring of temporary help for the 2010 census. Private payrolls rose a less-than-forecast 41,000. The unemployment rate fell to 9.7 percent as Americans dropped out of the labor force.”

Here is the ironic part, all of these jobs will vanish within one to two months time as it is simply temporary, and you can also add in that they are private sector jobs, not public, thus do not affect or benefit the economic recovery in the long run in any way shape or form. From a basic point of view, essentially, they do not add to the country’s GDP, GNP, exports, trade, public goods or any other way you want to look at it. Ironic that we, as tax payers, citizens and investors should have to subjected to reading fine-print on government materials from this point onward.

Amidst all of this turmoil, the deception doesn’t stop there. The current US National Debt stands at $13 trillion USD, and growing! Reuters reported that the US debt will rise to an astonishing record $19.6 trillion USD by 2015. For those number fanatics out there, check out the following Standard Debt Clock:

So we’ve established that the US is in debt, its growing, the economy is not getting any better, thus, what’s next? Well the jolly bright Harvard and Princeton graduates operating the “highly efficient” US government decided to sit down and form a Debt Commission. Watch this video which reveals just what a joke our hard earned tax money is paying for:

Yes, the US National Debt Commission itself found a way to go broke, currently operating on a mere $500,000 USD budget, thus allowing them no other options other than sending a nice warm letter to Mr. Obama for yet another bailout. Someone call Jay Leno, I think we have a new episode pitch to offer him.

Call Options on Daily Financial 3x Bears (NYSE:FAZ) Jump

FAZ options saw interesting call activity today. A total of 8,072 put and 48,476 call contracts were traded raising a low Put/Call volume alert. Today’s traded Put/Call ratio is 0.17. There were 6.01 calls traded for each put contract.

Put/Call ratio is often used to measure investor sentiment, the ratio serves as a predictor of investor behavior. A high Put/Call ratio suggests that the investor sentiment is bearish and that investors expect the underlying stock to decrease in value. In contrast, a low Put/Call ratio suggests that the investor sentiment is bullish and that the underlying stock is expected to increase in value. Unusual volume provides reliable clues that the stock is expected to make a move.

Shares of Direxion Daily Finan. Bear 3X Shs edged up $0.19 (+1.26%) to $15.30. The stock closed at $15.11 in the previous trading session and opened today at $14.72. The price of the stock ranged between a low of $14.56 and $15.39 respectively. The trading volume of 61,366,720 is below the 90 day average volume of 80,697,400 shares. FAZ is trading above the 50 day moving average. The stock’s 52 week low is $10.78 and 52 week high is $59.70.

Below is a list of 50 “Hard To Believe” statistics of the US economy:

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.

#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.

#48) If you went out and spent one dollar every single second, it would take you more than 31,000 years to spend a trillion dollars.

#47) In fact, if you spent one million dollars every single day since the birth of Christ, you still would not have spent one trillion dollars by now.

#46) Total U.S. government debt is now up to 90 percent of gross domestic product.

#45) Total credit market debt in the United States, including government, corporate and personal debt, has reached 360 percent of GDP.

#44) U.S. corporate income tax receipts were down 55% (to $138 billion) for the year ending September 30th, 2009.

#43) There are now 8 counties in the state of California that have unemployment rates of over 20 percent.

#42) In the area around Sacramento, California there is one closed business for every six that are still open.

#41) In February, there were 5.5 unemployed Americans for every job opening.

#40) According to a Pew Research Center study, approximately 37% of all Americans between the ages of 18 and 29 have either been unemployed or underemployed at some point during the recession.

#39) More than 40% of those employed in the United States are now working in low-wage service jobs.

#38) According to one new survey, 24% of American workers say that they have postponed their planned retirement age in the past year.

#37) Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008. Not only that, more Americans filed for bankruptcy in March 2010 than during any month since U.S. bankruptcy law was tightened in October 2005.

#36) Mortgage purchase applications in the United States are down nearly 40 percent from a month ago to their lowest level since April of 1997.

#35) RealtyTrac has announced that foreclosure filings in the U.S. established an all time record for the second consecutive year in 2009.

#34) According to RealtyTrac, foreclosure filings were reported on 367,056 properties in March 2010, an increase of nearly 19 percent from February, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.

#33) In Pinellas and Pasco counties, which include St. Petersburg, Florida and the suburbs to the north, there are 34,000 open foreclosure cases. Ten years ago, there were only about 4,000.

#32) In California’s Central Valley, 1 out of every 16 homes is in some phase of foreclosure.

#31) The Mortgage Bankers Association recently announced that more than 10 percent of all U.S. homeowners with a mortgage had missed at least one payment during the January to March time period. That was a record high and up from 9.1 percent a year ago.

#30) U.S. banks repossessed nearly 258,000 homes nationwide in the first quarter of 2010, a 35 percent jump from the first quarter of 2009.

#29) For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

#28) More than 24% of all homes with mortgages in the United States were underwater as of the end of 2009.

#27) U.S. commercial property values are down approximately 40 percent since 2007 and currently 18 percent of all office space in the United States is sitting vacant.

#26) Defaults on apartment building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter of 2010. That was almost twice the level of a year earlier.

#25) In 2009, U.S. banks posted their sharpest decline in private lending since 1942.

#24) New York state has delayed paying bills totalling $2.5 billion as a short-term way of staying solvent but officials are warning that its cash crunch could soon get even worse.

#23) To make up for a projected 2010 budget shortfall of $280 million, Detroit issued $250 million of 20-year municipal notes in March. The bond issuance followed on the heels of a warning from Detroit officials that if its financial state didn’t improve, it could be forced to declare bankruptcy.

#22) The National League of Cities says that municipal governments will probably come up between $56 billion and $83 billion short between now and 2012.

#21) Half a dozen cash-poor U.S. states have announced that they are delaying their tax refund checks.

#20) Two university professors recently calculated that the combined unfunded pension liability for all 50 U.S. states is 3.2 trillion dollars.

#19) According to EconomicPolicyJournal.com, 32 U.S. states have already run out of funds to make unemployment benefit payments and so the federal government has been supplying these states with funds so that they can make their payments to the unemployed.

#18) This most recession has erased 8 million private sector jobs in the United States.

#17) Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of 2010.

#16) U.S. government-provided benefits (including Social Security, unemployment insurance, food stamps and other programs) rose to a record high during the first three months of 2010.

#15) 39.68 million Americans are now on food stamps, which represents a new all-time record. But things look like they are going to get even worse. The U.S. Department of Agriculture is forecasting that enrollment in the food stamp program will exceed 43 million Americans in 2011.

#14) Phoenix, Arizona features an astounding annual car theft rate of 57,000 vehicles and has become the new “Car Theft Capital of the World”.

#13) U.S. law enforcement authorities claim that there are now over 1 million members of criminal gangs inside the country. These 1 million gang members are responsible for up to 80% of the crimes committed in the United States each year.

#12) The U.S. health care system was already facing a shortage of approximately 150,000 doctors in the next decade or so, but thanks to the health care “reform” bill passed by Congress, that number could swell by several hundred thousand more.

#11) According to an analysis by the Congressional Joint Committee on Taxation the health care “reform” bill will generate $409.2 billion in additional taxes on the American people by 2019.

#10) The Dow Jones Industrial Average just experienced the worst May it has seen since 1940.

#9) In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

#8) Approximately 40% of all retail spending currently comes from the 20% of American households that have the highest incomes.

#7) According to economists Thomas Piketty and Emmanuel Saez, two-thirds of income increases in the U.S. between 2002 and 2007 went to the wealthiest 1% of all Americans.

#6) The bottom 40 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

#5) If you only make the minimum payment each and every time, a $6,000 credit card bill can end up costing you over $30,000 (depending on the interest rate).

#4) According to a new report based on U.S. Census Bureau data, only 26 percent of American teens between the ages of 16 and 19 had jobs in late 2009 which represents a record low since statistics began to be kept back in 1948.

#3) According to a National Foundation for Credit Counseling survey, only 58% of those in “Generation Y” pay their monthly bills on time.

#2) During the first quarter of 2010, the total number of loans that are at least three months past due in the United States increased for the 16th consecutive quarter.

#1) According to the Tax Foundation’s Microsimulation Model, to erase the 2010 U.S. budget deficit, the U.S. Congress would have to multiply each tax rate by 2.4. Thus, the 10 percent rate …

So  the US is sitting in a pile of trash, will Europe bail them out? No, they can’t afford it!

1. Why is Europe in another financial crisis?

Europe’s debt crisis is a continuation of the global financial crisis and also the result of how Europe attempted to solve the global financial crisis that brought an end to a decade of prosperity and unrestricted debt. European attempts at defending itself against a deep recession, has now created a new crisis of unsustainable and un-serviceable sovereign debt.

Much of this can be attributed to stimulus packages passed by European governments in order to halt the effects of the economic crisis, especially in preventing massive layoffs. Europe’s heavyweights spent massively on stimulation packages. However such attempts at defending themselves against a deep recession, has now created a sovereign debt crisis. Sovereign debt is the money governments borrow and promise top pay back over a number of years. This gives a government access to large funds instantly, which it repays in instalments over a number of years. As a government guarantee’s the debt, this type of debt is considered the most secure. This is why US treasury bonds are thought to be the most secure investment globally as the US government itself underwrites them.

2. Greece appears to be receiving the bulk of the media coverage, where does it fit into the debt crisis?

Greece joined the Euro zone when it was launched in 1999. By becoming member of the Euro zone Greece’s credit rating was considered the same as Europe’s heavy weights such as France and Germany as they were all now part of the same union. This gave Greece access to finance that it would otherwise not be privileged to and as a result a boom in the Greek economy took place, from 2000 – 2007 Greece was the fasted growing economy in the Euro zone as capital flooded the country.  Successive Greek governments went on spending spree’s, creating in turn many public sector jobs, new pension plans and many other social benefits. The spending addiction included high-profile projects such as the 2004 Athens Olympics, which went well over budget.

In keeping with monetary union guidelines, Greece deliberately misreported the country’s official economic statistics. Greece paid Goldman Sachs hundreds of millions of dollars in fees from 2001 for arranging transactions that hid the actual level of borrowing. This enabled Greece to live beyond its means, while hiding its deficit from the EU. Greece’s revision of its deficit figures in May 2010 confirmed its economic statistics had been outright lies. Holders of Greek debt questioned if Greece Would ever be able to pay off the €215 billion in government debt it really owed.

The prospect of a debt default by a European Union nation made headlines and this is why Greece continues to be in the media.

3. Is Greece just an anomaly in the EU?

Debt problems are a characteristic of Capitalist economies and in Europe Greece is not the most indebted. PIGS is the acronym the financial markets coined to describe the troubled and heavily-indebted countries of Europe: Portugal, Ireland, Greece and Spain. Some analysts use PIIGS to include Italy – Europe’s longstanding biggest debtor. Many of the nations that have recently joined the EU have also gone down the path of Greece and taken on lots of debt to fund their economies. Greece is the latest sick man of Europe. It is now officially on the long list of European states that are considered the sick men of Europe. Total gross debt as the graph shows is debt owed by nations that is both short term and long term debt. Europe’s heavyweights all have debt which outstrips their national output.

4. Why has it taken the EU so long to develop a plan on how to tackle the crisis, considering the potential ramifications?

The Greek debt crisis has festered for months with no concrete decision coming forth from EU member states. A bailout package for Greece has been agreed in principal, however this package has many questions marks over it, in terms of it materialising. This is because Germany exacerbated the response. The European Union as a model of unification engenders such a fractured response.

As most of Europe is still recovering from the credit crunch, many have just come out of recession and are witnessing very fragile recoveries. Unemployment is still high and many governments are finding themselves having to slash government’s budgets when tax revenues are falling. A number of European governments have gone to great lengths to impose austerity measures on their domestic populations and hence are in no position to be bailing out a foreign nation. For these reason each of the constituents of the Euro zone looked after their own interests and pushed for Europe’s backbone – Germany, to come to Europe’s rescue. German public opinion was strongly opposed to the use of German funds to bailout Greece, especially after it failed to adhere to the rules of Monetary Union. Germany believes Greece should be taught a lesson on monetary and fiscal discipline.

The Maastricht treaty specifically states that EU funds cannot be used to bailout member states, this is why constituent member states have to use their domestic budgets for any bailout. Germany refused to foot the bill completely and this has only delayed the EU response. In the end a unified Europe only complicated the response.

5. Does this signal the end of the European Union?

Over a period of nearly 60 years the European Union has become an integrated whole through unifying its markets, through a single currency and now through the Lisbon treaty which will streamline decision making and empower Europe to emerge as a continental entity. The European Union has today expanded well beyond its original founder states. Consensus on how far enlargement should go and how deep integration should be continues to plague the union. Member states are reluctant to relinquish their sovereignty to bureaucrats in Brussels or leave key decision making to the two nations that dominate the EU – Germany and France. A union of smaller states into a larger political union is a weak method of amalgamation. It lacks the characteristics found in full unification where a people become one nation. A union as a method of binding peoples and nations is always prone to political differences as it continues to recognise the sovereignty of constituent nations, this leaves it open to fracture and this is the EU’s fundamental problem – it has now institutionalised the national interests of its constituents, this will always delay and complicate the EU’s surge forward.

The debt crisis has severely dented the credibility of the Euro as it was only as strong as its weakest link. It is far fetched to suggest the EU is coming to an end; this is because politically France created the EU in order to strengthen itself and it will not allow the EU to collapse as a political project. Whilst Germany the economic backbone of the EU would protect the EU as it’s Europe’s markets that Germany benefits from.

Italy has a record public debt of 1.813 trillion euros, an increase of 0.8 percent in a month, the Bank of Italy warned on Monday, three weeks after the centre-right government acted to cut overspending.

In March, the figure stood at 1.797 trillion euros (2.2 trillion dollars), the central bank said when issuing data for April, without indicating the percentage of gross domestic product that the latest figure represents.

Last year public debt reached 115.8 percent of GDP, and it is forecast to rise to 118.4 percent this year.

The conclusion: The only place the USD is going to be in is the dollar store. You can also expect the “World’s Leading” banks to follow suit, soon residing on the front shelves, all at discount prices for traders indulge in.

Disclosure: Long FAZ

TheMarketFinancial is not paid, compensated or in any way incentivized to report news and developments about publicly traded companies, unless otherwise stated.

A young and savvy, yet experienced and accomplished investments mogul since ‘01; Michael has amassed a fortune as a private self investor. Recently starting his own successful blog and turning it in to a corporation — MIV Investments Inc., a company offering advice to thousands of people worldwide and attracting contracts from various reputable sources. His articles and publications have been linked to Forbes, CNN Money, Reuters, Bloomberg, and many other top worldwide mainstream media sources.

Michael Vlaicu

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