by Al Martin
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China and Commodities Lead the Global Financial Meltdown
(8-25-15) As we have been consistently writing about the dark clouds gathering on the planet’s economic horizon, this latest downward trend is connected. Now China is the precipitating catalyst in the commodities as it has been all along since it has become the largest user of commodities on the planet, specifically copper, iron, nickel steel, and aluminum. China is the largest user of base metals on the planet, so with China’s economy deteriorating, this will be throwing a monkey wrench into the industrial metals, minerals and oil market – and it has. That monkey wrench phenomenon is spreading.
Global Commodity Meltdown: What Does It Mean?
(8-10-15) What we have seen in the last three months is a meltdown in commodity prices, such as we have not seen since the 1980-81 time-frame, when we were also coming off a speculative bubble.
Update on Global Hot Spots: Greece’s Debt & China’s Stock Market
(7-15-15) In Greece an alleged deal has been reached between Greece (the debtor) and the so-called Troika (the creditors) – the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) -- but it is far from a fait accompli. Greek Prime Minister Alexis Tsipras has to get the Greek parliament to vote on it – without amendments, and then it has to go through the German parliament then the problem is the rest of the 18 EU nation-states – essentially without any tangents. Meanwhile the Europeans keep saying they could have this done by the end of the week – but they’re dreaming. In terms of market impact however, markets have already responded based on the concept that everything that can go well with the deal has gone well. Thus from the markets’ perspective here on out, the only thing out there is the potential downside, meaning that some monkey wrench could get thrown into the situation over the next few days which would cause the deal to unravel.
Greece: Liquidity Problem or Insolvency Issue?
(7-6-15) Every central bank likes to push the line that Greece is suffering from liquidity driven insolvency and that somehow if you provide enough liquidity, you can prevent something that’s already insolvent from becoming even more insolvent.
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Will Greece Repudiate Its “Odious Debt"?
(6-19-15) In a ZeroHedge article called “Greek Debt Committee Just Declared All Debt To The Troika “Illegal, Illegitimate, And Odious,’” we read that “…two months ago Zoi Konstantopulou, speaker of the Greek parliament and a SYRIZA member, said she had established a new Truth Committee on Public Debt whose purposes was to "investigate how much of the debt is illegal with a view to writing it off."
Why the Currency-Rigging Bank Conspiracy Got Away
(5-25-15) Bloomberg reports – “Six of the world’s biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions. Citicorp, JPMorgan Chase & Co., Barclays Plc and Royal Bank of Scotland Plc agreed to plead guilty to felony charges of conspiring to manipulate the price of U.S. dollars and euros, according to settlements announced by the Justice Department in Washington Wednesday. The main banking unit of UBS Group AG agreed to plead guilty to a wire-fraud charge related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.” The Obama Regime of course is politically predisposed to want to get individual guilty pleas from the officers, principals and directors of these banks because their constituency wants to see people going to jail. The problem is that’s not going to happen. It’s going to be the same-old same-old corporate guilty pleas where they’ll soak them for big fines.
From the Liquidity Crunch to the Last Bag Holders
(5-11-15) A brewing story that you hear more and more about in financial media is this growing problem of illiquidity in the planet’s financial marketplaces. Even Fed Head Janet Yellen has mentioned it, as have most of the Fed governors. It is a symptom of overvaluation in the planet’s equity, bond and commodity markets. This overvaluation has been fueled by cheap money and also by the world’s central banks continuously “flooding the system” with money.
Flash Point in the Gulf of Aden
(4-24-15) The situation in the Gulf of Aden has deteriorated noticeably even as it goes beyond what the Saudi strikes against Yemen are all about. The Iranian navy has gotten very active and has substantially put all of its naval forces into the Gulf of Aden. Its forces consist primarily of the Russian-made Sunburn guided-missile destroyers which are just as advanced as the guided missiles the United States has built. Their intent is an attempt to deliver military hardware to the Houthi rebels in Yemen. Saudi Arabia is determined to prevent that from happening and has consequently concentrated all of its naval forces in about a four square mile area.
The New Asian Infrastructure Investment Bank (AIIB): What Does It Mean?
(4-7-15) First of all here’s a secret for successful trading in today’ market volatility…
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Central Banks Make Last Gasp Effort to Save Global Economy
(3-17-15) As mentioned in previous Al Martin Raw articles, every week now yet another central bank is joining the interest rate fray in the new race to the bottom.
The Greek Euro-Debt-Can Gets Kicked Down the Road… Again
(3-3-15) Last Friday the Greek government and the so-called Troika (European Commission, European Central Bank and International Monetary Fund) now called simply “the Commission” – because the Greeks don’t like the negative implications of the word “troika” --came to an 11th hour deal. The Germans caved in a little bit because they needed a deal to kick the can down the road for 6 months and they wanted to get this puppy off the front page. The Germans knew that the longer it stayed on the front page they wouldn’t be able to get any kind of a deal where they could kick the can down the road.
Shakedown Planet: Reparations for Everybody?
(2-12-14) It seems that everybody wants reparations -- compensation for crimes committed against them in the past. This bespeaks of the desperation of governments in a fiscally depleted planet.
European Dis-Union & the Conundrum of Greece
(2-3-15) In another case of strange bedfellows, it should be noted that financial alchemist George Soros has provided financial support for the newly elected “communist” Syriza Party in Greece, which was cobbled together from about 17 different left-wing political parties. However the funding wasn’t so much as for Syriza itself as for the newly elected Greek Prime Minister Alexis Tsipras. Also Soros has had a long-time acquaintance with Greece's new finance minister Yanis Varoufakis, who has a doctorate in economics as well as being a professor of economic theory in Greece.
Milquetoast Mario: Too Little, Too Late… Again
(1-25-15) On January 22, 2015, ECB (European Central Bank) Chief Mario Draghi announced a new QE (Quantitative Easing) program which means “monetary stimulus” -- purchasing a combination of government sovereign debt and high-grade corporate bonds. This is usually accompanied by a reduction in the central banks’ benchmark interest rate – which was not done because the ECB benchmark rate is already in the red. Thus it becomes a case of pushing on a string.
Economic Danger Signals 2015 (Part 2)
(1-16-15) To continue with our theme from last week, we would like to mention important changes that have taken place even during the last week that bespeak of more warning signals for 2015. One of those certainly is the continuing problem of credit quality deterioration of Planet Earth. We saw a milestone on Jan. 13 when there was a further S&P downgrade of Venezuela from Double Junk to Triple Junk wherein the Standard and Poor 500 median planetary credit quality, which is a number by the way that comprises the credit quality of all of the 221 countries on the planet, trade-weighted, or adjusted for the amount of trade they do, to come out with a smooth number. Thus you have a credit quality rating for the entire planet as it were. The value in having such a statistic is that it tells you about big secular moves in the planet’s economy.
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Danger Signals: Economic & Political Outlook (2015)
(1-8-15) In a recent interview, Bloomberg pundit Marc Faber says we’re in for a year of volatility in the markets and he’s not making any predictions. And that’s what everyone’s saying because it comes down to the same old battle and that is – can the United States be an island of prosperity in a growing tide of foreign red ink? Last year in 2014, the United States remained the only island of prosperity. The question then is – can the United States continue to be that island of prosperity in 2015?
Bloomberg Gets It Wrong… Again
(01-01-15) In a Bloomberg article by William Pesek called “China Steps In as World's New Bank,” we read – “Thanks to China, Christine Lagarde of the International Monetary Fund, Jim Yong Kim of the World Bank and Takehiko Nakao of the Asian Development Bank may no longer have much meaningful work to do. Beijing's move to bail out Russia, on top of its recent aid for Venezuela and Argentina, signals the death of the post-war Bretton Woods world. It also marks the beginning of the end for America's linchpin role in the global economy and Japan's influence in Asia.”
Putin, the Price of Oil & the End of Sanctions
(12-24-14) Russia’s President Vladimir Putin just had his annual address or press conference, which was four hours long, the equivalent of our State of the Union address. He didn’t express any desire to back-pedal on Ukraine and was really as belligerent as ever, trying to mask over the pain that the Russian economy is feeling because of sanctions and lower oil prices. However the situation in Russia is dire and you can see the Europeans are beginning to back down, even though the sanctions are popular with the Euro-Left. Last week we saw some olive branches. For example French President Hollande backed down on the two Russian warships, affirming that Russia is still going to get the warships that the French built for them. Simply put, as Hollande pointed out, France needs the money, since the French economy is declining.
The Contemporary Art Market Bubble
(12-17-14) In the wake of Art Basel Miami Beach, the contemporary art fair and the 19 or so other so-called “satellite” art fairs held in Miami during the first week of December, it’s becoming evident that the art market is beginning to get strained. It’s less liquid. You can see this by simply looking at the Sotheby's and Christie's auctions and other large houses that handle contemporary art and check their bid failure rate. It’s been steadily increasing since 2011 and even Sotheby's and Christie's have warned that there is a speculative bubble in contemporary art. This bubble is now getting holes punched into it because of what’s going on in Russia.
Oy Oy Oil Gevult: The New Oil Price War
(12-5-14) Led by Saudi Arabia, OPEC (Organization of Petroleum Exporting Countries) decided not to institute a oil production cut and that’s what hit the price of oil last week. Saudi Arabia has made it clear that they want prices lower in order to squeeze out so-called marginal producers, but what they’re effectively talking about is US fracking shale production. They want to keep OPEC relevant since it’s still about a third of global production, but Saudi Arabia is launching a price war because it is in the best position -- given its fiscal reserves in hard currency – to survive a price war.
Obama Regime Gets Sued. Is Impeachment Next?
(11-26-14) With his executive order on immigration, many Americans are wondering – has Obama crossed the Rubicon, so to speak, and transitioned the United States from a so-called Republic into a new American form of Caesarism?
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Paul Craig Roberts: There He Goes Again
(11-20-14) As Ronald Reagan famously said during his debate with Jimmy Carter, “there you go again.” The same could be said about Paul Craig Roberts, another discredited so-called Reagan-Bush era supply-sider which would also include David Stockman, Larry Kudlow and Arthur Laffer, inventor of the so-called Laffer Curve.
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Geopolitics of Ukraine: Rumors of War Roil the Markets
(11-11-14) Last Thursday the markets were roiled when Ukrainian President Petro Poroshenko held a press conference wherein he threatened to declare war against Russia and essentially announced that he’s “all in” as they say. By “all in,” he means that he has all of the Ukrainian military and all the reserves stationed against the Russian border and against the so-called Eastern line that the Russians themselves have drawn, behind which as Poroshenko correctly points out are Russian soldiers pretending to be Ukrainian insurgents that are occupying a third of Ukraine. Poroshenko sees his position differently now that he got a little support from the European Union. Part of that support -- although the Europeans never expected that it could be drawn on because it’s standard language – was a commitment to support Poroshenko militarily. The money he got from the European Union comes with certain conditions. One of those conditions is a standard term that the European Union makes when it starts passing money out again – that they’re willing to support Eastern European nation-states against Russian aggression. The problem for the Europeans is they never expect to stand behind this because of the way it’s written – that Russia has to be the aggressor.
The Geopolitics of Oil: Beware of the Shills
(11-3-14) In an article published on Zero Hedge entitled “The US Economy Runs Into A Problem If Oil Hits $75,” we read that “US shale oil is now the marginal swing barrel in the new world oil order, and as Goldman Sachs warns a decline in WTI to $75/bbl would start to significantly slow US shale growth (and thus employment, business cap ex, and the entire US economy).” This is the line that’s being peddled and Goldman Sachs is leading the charge. Why? Simply put it’s an effort to support oil prices.
Global Deflation Threatens the World: Look Out Below…
(10-29-14) It appears that global deflation is coming right on schedule as commodity prices including Coffee and Cocoa got hit as soon as this Brazilian president Dilma Roussef got re-elected. We knew right away that it would hit the ‘trops’ (tropical commodities) and they did since she was up against Social Democrat Aecio Neves, who represented business and industry. In her last four year term, Roussef had done well for the Brazilian economy in the first two years because she had done what south of the border socialist always do. She had weakened the currency, the Brazilian Real, in order to increase Brazilian exports. The only problem is that you can get away with doing that for only maybe two years at the most – and she knew that. After that it creates inflation. That’s why south of the border countries have this perennial problem with inflation. It exists because of their own management since they create it by cheapening their currencies on purpose by exerting pressure, for example on whatever the cross-rate is, in this case the Brazilian Real -- US Dollar cross-rate. It’s easy to cheapen your own currency. You just start to print a lot of it.
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How To Make Money on Market Volatility
(10-20-14) There has been record market volatility this past week, the total range of volatility being 747 points in the Dow. This has created tremendous trading opportunities and it was an easy week to trade, particularly for the shorts like myself. All you had to do is keep shorting the December Spoos every time they got back up into the 1880s or so.
Pre-Collapse Market Volatility: The Trader’s Best Friend
(10-13-14) The opportunity to accumulate wealth always comes in the preamble of economic collapse. This has always been true and it is important for those who understand economics and markets to capitalize on the volatility that is always the first signpost of economic collapse.
The Problem with Bill Gross
(10-2-14) Bill Gross managed PIMCO’s Long Term Total Return Fund which was their flagship fund, and as a manager of a bond fund, Gross had to change his portfolio all the time. The problem is that he’s been wrong consistently for the last 2 years and as a consequence the PIMCO Total Return Fund, which had a stellar track record and as a matter of fact the best cumulative 40 year track record for a firm which Gross founded in 1971. During the last 2 years, however his performance began to suffer as the fund went down to $222 billion from a peak of $293 billion last year. There is expected to be a great exodus from the fund, but those who wanted to exit have probably already done so. Since Gross unexpectedly left the company last week, PIMCO expected another $10 billion in outflows after the $60 billion or so that has already gone out the door in the last 2 years.
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Why Bond Bears Are Wrong -- And Will Be Wrong Again
(9-25-14) Definitions first. A bond bear is someone who believes that interest rates are going higher hence the value of bonds is going to decline.
The Geopolitics of Oil - Starring NATO, Russia, Ukraine & China
(9-9-14) The question remains -- will Ukraine be returned to the Russian/ Soviet Empire?
Saber rattling by Ukraine, NATO and Russia continues apace. However the Ukrainian situation is really unchanged even though NATO has played its card – this idea of developing a 4,000 man European so-called Rapid Deployment Force which Obama has already pledged a billion dollars to finance. Even though none of the other nations involved in this alleged NATO Rapid Deployment Force have agreed to pony up a dime for it. This would be a Rapid Deployment Battalion that would work outside the regular chain of command. It’s supposed to be a composite force which means having people with a wide variety of skills. Obviously it would involve some US troop commitment, but it’s meaningless because it takes two or three years to put them together and all the NATO countries disagree who’s going to finance it and where it’s going to be stationed. That could be an unsurmountable problem…
The Ukrainian Gambit: Fun & Games with Uncle Vlad
(9-1-14) Uncle Vlad Putin’s new strategy regarding the Ukrainian situation has become clear and you can see that reflected in the markets, in that the markets are no longer selling off, as they had been on every fresh move by Uncle Vlad. Why? Because he’s making his longer-term strategy clearer by his recent actions – the reinforcement of the Russian position in eastern Ukraine.
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Wealth Confiscation & Capital Controls: Not in My Back Yard
(8-24-14) After Cyprus and Spain, Portugal is now the next country that is considering capital controls – but it’s not that onerous. Capital controls simply means preventing the shipping of money out of the country. It doesn’t mean anything more than that.
How the Economic Collapse Will Be Different This Time – And Why
(8-15-14) Economic decline is occurring in Europe and Asia. For example, the economic statistics we’ve seen in the last month in the Eurozone economy point to this fact, even as more recently the German GDP has become a red number. French GDP is close to being a red number. Italian GDP is a red number now. So Europe is clearly sliding back into some sort of recession and the rate at which inflation is falling in Europe, which is down to .4% is a “threshold number,” since .5% or one half of one percent annual inflation rate has always been considered a threshold number. It’s a threshold number to a pending deflationary cycle.
Debunking Internet Mythology
(8-8-14) It’s time once again to refute internet nonsense, so here goes… So-called analyst Gregory Mannarino is mixing apples and oranges in his take on the Argentinian bond default and how it could trigger a global daisy chain of sovereign defaults. “This issue with Argentina is going to trigger a credit default swap event,” he says. “A credit default swap is an insurance policy that is purchased by another entity to insure the debt of another institution or, in this case, country. So, we just found out that the issue with Argentina is, in fact, going to trigger a credit default swap event. What that means is whatever debt is owed is the problem of another entity. And, if that entity can’t pay it back, it becomes the problem of another entity, and another entity, on and on. So, absolutely, boom, boom, boom, a cascade of events that will happen. This is not a maybe. We are going to watch this sweep the globe.”
What he’s trying to claim, since obviously he doesn’t know what he’s talking about, is that Argentina or any other sovereign bond default could then subsequently create a secondary default – in this case the 8% of bond-holders that did not sign on to the original default agreement – because they’re not required to do so. Now Singer the head of Elliott Management is attempting to extort the Argentinian government, using US courts which at the urging of the Obama Regime is extending their jurisdiction.
Ukraine: Cold War 2.0? Or World War 3.0?
(8-1-14) So who’s making mischief in Ukraine? Putin is the principal mischief maker because he’s under domestic political pressure not to stop support for Russian paramilitaries. Part of this is due to elections coming up next year in Russia. Putin is under pressure from Russian nationalists in Russia, which is his largest voting constituency, to continue funding Russian paramilitary operations in Ukraine.
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The De-Dollarization Hoax
(7-24-14) Even though the US dollar is the world’s reserve currency, there has been much talk recently regarding nation-states using other currencies and moving away from using the dollar in trade.
The BRICS New Development Bank: Another Third World Fantasy?
(7-16-14) ABC News reports – “Leaders of the BRICS emerging market nations meet to launch a development bank and emergency reserves fund, an ambitious challenge to Western-run multilaterals that have shaped global finances since the end of World War Two.
"Brazil, China, India, Russia and South Africa on Tuesday will sign off on the new institutions after two years of tough negotiations, a major step for the diverse group known more for its anti-Western rhetoric than coordinated action.”
The problem is that there are a lot of flies in the ointment in this deal, as they say. The commodity-producing all-beat-out third-world nation-states – which is what this is about – have consistently had a hard time - as they should – borrowing money from the IMF (International Monetary Fund) and the World Bank and obtaining trade credits from the Export-Import Bank. Why? Because they’re all beat out third-world nation-states which makes them less credit worthy even though they are commodity rich. These are countries which have in the past repeatedly defaulted on their debt.
The Price of Oil & The Return of the Petro-Dollar
(7-9-14) The 1970s-era plan by Henry Kissinger to recycle Middle East oil revenue, called petro-dollars, into purchases of weapons systems from the West may be a byproduct of the current ongoing disengagement by the Western powers. In this case disengagement means a return to the previous status quo which means that Saudi Arabia, Kuwait and the Arab Emirates would be increasing their purchase of US made weapons systems. The use of petro-dollars was to allow the larger powers not to get as involved as they subsequently had to get involved.
The Balkanization of Iraq and the Middle East
(7-1-14) What we are seeing in Iraq and the rest of the Middle East is the beginning of the Grand Disengagement Policy which is a return to the past and which is the only way that the Middle East can now be stabilized. Otherwise the rest of the world is going to have to have military forces there forever to hold together artificial constructs, i.e. the current nation-states. Even Time Magazine has proclaimed on its cover “The End of Iraq” with a big burned out hole where the country of Iraq used to be. They’re envisioning Kurdistan in the north, Sunni Iraq in the middle and Shia Iraq in the southeast as the three divisions. This benefits all the parties involved. This is why Kerry is talking to the Iranians because they’re going to have to get involved as well because of the Shia majority in Iraq especially around Basra where it’s very pro-Iranian. Iran is also interested in the stabilization as well. So Iraq is going to revert to what it was before the war.
Middle East Chaos: Why Now? Why Again?
(6-21-14) War and rumors of war continue apace. In preparation for Invasion of Iraq 2.0, the Obama Regime’s plans earlier in the week at least made sense. He sent an aircraft carrier task force and then planned to make some air strikes to slow up this new Sunni coalition and that would at least buy some time to pressure Iraqi Prime Minister Nouri al-Maliki -- or get him out altogether. But the Obama Regime loves this idea – as do all Democrats and social welfare-ists – of putting in a wimpy so-called “unity” government which never works out. The ISIS group who are marching toward Baghdad are Sunni Muslims that the CIA had supported in the 1980s when the US was supporting Saddam. The problem is that when you pull away that support, then artificially created states like Iraq begin to break down to the pieces that they were originally created from. That’s what’s happening in Iraq. Unlike the liberal Democrats, at least the Republicans have the right idea – the only way these artificially created states can be kept together is by dictators. So if you want influence, you have to support those dictators.
Did Mario Draghi Just Postpone the Global Financial Apocalypse?
(6-12-14) Mario Draghi has finally stopped dragging his feet and did what was necessary. He was the master of jawboning, but he got all the economic lift he could out of jawboning the markets, intimating that more QE was on the way in Europe. Essentially Mario Draghi, head of the European Central Bank, just re-established the Euro version of Quantitative Easing or QE. Why? To create “inflation” – the same thing all the central banks on the planet are trying to do.
Euro Nations Take Hard Right Turn After Elections
(6-3-14) So what’s the historical significance? The illusion of “democracy” and bogus elections are sprouting up all over the world. For instance, in Syria, this election becomes just an excuse for not getting involved in the Syrian situation. Other countries like Germany, UK and even the Obama Regime use a Syrian election and the fact that Assad is going to allow elections, despite the fact he’s the only one running and his party the Baath party is the only party in Syria, roundly applauding these elections. But Assad is smart since he’s holding these elections. He’s doing the same thing that Vlad Putin does, which is that every time the Russian regime comes under threat, they hold some sort of a bogus election to let everyone else off the hook, as it were, who wants to get involved in Russia’s business.
Keeping Hillary Clean for 2016
(5-27-14) Why do Republicans keep shooting themselves in the foot?
Hear Ye, Hear Ye: The Market Correction Has Begun…
(5-19-14) The markets are getting hammered after the S&P failed to establish a close above 1900 -- even as we had put out a shorting recommendation at 1896 on our sister site Insider Intelligence.
Ukraine on the Grand Chessboard
(5-5-14) Putin has called for an emergency UN Security Council meeting to discuss “the serious escalation of violence in Ukraine” and there’s been a lot of speculation on what his intent is – since obviously he’s not going to get anything he wants out of the UN in terms of asking for protection of Russian nationals in eastern Ukraine. And of course the UN is not going to put in some force for monitoring or protecting the Russians.
It isn’t really a PR move, but a prelude or an excuse since he knows that the UN is very slow to insert UN forces. It’s a go-ahead move, which gives him an excuse to insert Russian forces because he can say that he had to do it since the UN wouldn’t act. This is actually a smart move on his part. You go to the body that is the slowest to react, i.e. the United Nations. They can’t even keep so-called peace keeping forces in a country for twelve months. But it does provide a pretty good diplomatic and political cover for him to say – oh the UN won’t protect Russian nationals. So what would be his next move? To insert Russian forces into Ukraine – into eastern Ukraine – initially where he could get a foothold, which is what he wants.
Trading with Uncle Vlad
(4-29-14) There have been reports that the Russians have amassed four divisions of troops on the Ukrainian border. These are the same four divisions they’ve had there for the last six weeks. They’ve just been moving them back and forth. Last week what killed the end of the week “fear bid” was when there was an agreement for disengagement and, as we reported, Putin would back away from it in order to buy more time. And that’s what happened. They’re just playing the game, since they temporarily moved them back north. In the Russian army, a division is 10,000 combat troops, but a total division could be as many as 25,000, depending on how much staff support is included.
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Putin Snookers the West…Again, Or How to Make Money in a “Fear Bid” Driven Market
(4-20-14) The latest Geneva deal between the US, Russia, Ukraine and the European Union is a faux settlement of the Ukrainian issue. Russian Foreign Minister Sergei Lavrov finally gave in to American and European requests to meet his Ukrainian counterparts because Russia had refused to recognize them, but supposedly an accord was reached wherein Russia and Ukraine would act to de-escalate the situation. Russia will pull back the four divisions on the Ukrainian border and Ukrainians will pull back their troops from Eastern Ukraine, where they have been making a drive against pro-Russian militia which had occupied Ukrainian government buildings. The Ukrainians have already started doing so. Of course the reality is that they didn’t have any choice.
Keeping Up with Dennis Gartman and Other CNBC Shills
(4-11-14) In a recent CNBC interview, financial newsletter publisher Dennis Gartman, who edits the Gartman Letter, said he ‘got scared’ and moved his equity exposure to near zero from 100%. “Friday morning I came back from the gym, and I was very comfortable: I owned aluminum, I owned coal, I owned money-center banks. Then between 11 a.m. and 11:15 a.m. it was as if they flipped the switch. Everything changed: stocks changed, bonds changed, gold changed, currency changed — the whole world switched,” said Gartman.”
High Frequency Trading: Are the Markets Really Rigged?
(4-2-14) According to Michael Lewis, author of “Flash Boys,” the UK Guardian reports that “the US stock market is rigged in favor of high-speed electronic trading firms, which use their advantages to extract billions from investors.”
U.S. vs. Russia: Cold War 2.0
(3-25-14) Bloomberg reports “Putin Clears Crimea Annexation as Ukraine Signs EU Pact” – even though last week he said that Russia would not annex Crimea. What he’s doing is he’s testing the limits...
Why the Fear Bid Has Come into the Markets
(3-16-14) Markets got run up last Friday based on better than expected US unemployment data which supported the markets. However the run-up was marginal and light volume as run-ups have been since the first of the year. It’s been an 8.3 : 1 market, where we have seen declining volume on red days exceeding volume by 8.3. What it demonstrates is that the Unwashed are the lightest buyers of all because they don’t have the financial resources like large-scale buyers. The Unwashed are the principal buyers on rallies, but selling from institutions and real traders comes in on rallies and swamps the Unwashed buying.
Russia & Ukraine: Uncle Vlad Wins Again
(3-8-14) The Ukraine so-called “crisis” is another Big Media Distraction. Kremlin oligarch Vladimir Putin a/k/a Uncle Vlad has been doing the same play almost since the time he came into power. So what does he do? He rattles everybody’s cage… and then he gets bailed out. That’s what the rest of the world has taught him.
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Go Short, Young Man!
(2-27-14) In the olden days, the smart money advice was “Go West, Young Man” because of the perception that opportunity awaited those who ventured to the western region of the United States. Today in the crumbling global economic environment, the smart money advice would be “Go Short, Young Man.” Here’s why --
Civil Unrest Sweeps the Planet; Globe Spec Bubble II Keeps Expanding
(2-21-14) The Global Speculative Bubble II is still concentrating wealth and while civil unrest is created by rampant corruption in all governments, which flourishes when economic speculative bubbles occur because it’s simply an opportunity to be corrupt.
Financial Juggernaut? Or Not? Where’s the End of the Cliff?
(2-13-14) Since the House of Representatives voted to suspend the US debt limit until March 2015 – and passage by the Senate seems quite likely – this will be the first time since 2008 that a debt limit extension is actually going to happen.
Big Trouble in Big Bad China
(2-5-14) With the recent downturn in the market, what everybody wants to know – is this just a 5-10% correction or is this the beginning of something bigger?
The Downward Spiral in the Currencies of Emerging Markets
(1-29-14) It was reported on CNBC that the Argentine peso lost 84% of its value, Brazil’s real lost 35% and the Turkish lira lost 22% of its value against the US dollar. Some analysts are blaming Fed “tapering” -- but what does this really mean?
ObamaCare – A Socialist Welfare Pyramid Scheme (Part 2)
(1-22-14) The thing with ObamaCare regarding pre-existing conditions is to deflect public attention from the underlying fact of what Obama is trying to accomplish – to give the 47% of have-nots medical insurance and have the 53% pay for it. Why? Because the 47% are his constituency.
Obama Care: Just Another Pyramid Scheme To Destroy America? (Part 1)
(1-16-14) People have asked me – so have you signed up for Obama Care? And I tell them I haven’t even looked at it yet. The problem is that they keep changing the mandatory sign-up date. The reason they have these mandatory dates is to try to force the young people in, so they keep extending the dates, since only 10% even understand what it is.
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Economic Predictions for 2014
(1-7-14) So what is going to happen to the global economy? The answer to this question is divided into two camps. The financial media shills and the speakers of GovLie who keep trying to proffer this idea that not only the United States economy but also the Europe and Asia economies have reached what economists call “escape velocity.” They claim that GDP has improved so much thanks to massive “quantitative easing” i.e. endlessly injecting more monetary stimulus into the global Hopium Cloud and that stimulus may be gradually withdrawn because it is no longer necessary. Since “escape velocity” has been reached, the global economy can now rebound without the monetary stimulus crutch.
How Uncle Vlad Outsmarted Obama and the EU
(12-20-13) It’s been a big week for Uncle Vlad Putin. First, he pledged to lend $15 billion to Ukraine, which Bloomberg called a “junk-rated Ukraine vassal” thus outfoxing the EU’s bid to bring Ukraine into the EU and NATO orbit.
Ukraine: Stuck in the Middle with EU & Russia
(12-11-13) The political & economic crisis in Ukraine continues as demonstrators tore down a statue of Lenin in Ukraine’s capital Kiev protesting President Yanukovich’s policies of cozying up to Russia and rejecting closer ties to the European Union. So will Ukraine become the next Cyprus, another basket case that needs "bail-in' money to stay afloat?
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Trading the Bubblicious Market
(12-4-13) At our sister site InsiderIntelligence.com, we have been recommending for the last 30 days that traders remain short the Gold, Silver, and Sugar, as we have been, under the guise that Gold is coming down for a test of 1200 and the Silver is coming down for a test of $18. The reason why this is happening is because the Unwashed are pulling money out of all the commodity ETFs, Gold and Silver most notably, in order to pile into the S&Ps.
Are You Doing Your Part To Support the Market Bubble?
(11-28-13) Now the market commentary is changing not only from financial media shills. but also from the Fed governors. There is an increasing admission that the markets are bubblicious but we can’t let any air out because the global economy is now so fragile that everyone has to do their part to maintain the bubble.
Marc Faber Proclaims The End of Capitalism. But Not Yet….
(11-20-13) It starts off with comments by the Notorious Corporate Raider Carl Icahn who says “markets could easily have a big drop” because he thinks that equities are overbought and that could be subject to a hit. But he’s not the only one saying that.
The Pernicious Cycle of Global Deflation on the Horizon
(11-8-13) The European Central Bank (ECB) caught markets off-guard this week by cutting their benchmark rates a quarter of a point and also talking about accelerated LTRO (Long Term Reserve Operation) which is their equivalent of yet another huge quantitative easing move. So what do the central banks see that markets and governments don’t – that suddenly they’re getting so aggressive in pumping ever more monetary stimulus into the global Hopium cloud?
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ObamaCare: Forensic Analysis
(11-1-13) What’s eventually going to happen with ObamaCare is what always happens in a situation like this and this happens only when Democrats are in power. It gets sub-contracted out to the cheapest bidder and they’ll always go to a socialist welfare nation-state. That’s why they went to Canada to express solidarity. They fuck it up and sub it out to somebody in India who fucks it up even more, and then after having spent $500 million already, it will come back to the United States. Then they’ll hire competent nerds at five times the money they spent already, who will actually get the thing straightened out. When all is said and done of course, they would have spent a billion dollars.
To Q E(ternity) and Beyond
(10-24-13) In a recent CNBC interview Marc Faber, publisher of the Gloom Doom and Boom Report, says “Every government program that is introduced under urgency and temporary measures is always permanent. And in my view the Fed has boxed themselves in where there is no exit strategy. The question is at what point will they increase the asset purchases [from $85 billion per month] to 150, 200 billion a trillion dollars a month? That’s the question.”
Political Brinksmanship… Just Wait Until January
(10-17-13) In the post-war regime there were fundamental changes undertaken as to the manner of the structure of the planet’s economy. The planet effectively abandoned the pre-war model which was sustainable, i.e. savings-generated economic growth.
Koch Brothers Playing Global Chicken with the Debt Ceiling Debate
(10-8-13) It hasn’t even been verified if the Koch Brothers are selling everything short -- but could so-called “technical default” of US Treasury Bonds on October 17 be the end of USA, Inc.?
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Defunding Obama Care, Govt Shutdown, Et Al
(9-25-13) Financial media like CNBC and Bloomberg are promoting the “government shutdown” and defunding Obama Care as the next “crisis” du jour. CNBC even has a clock with flashing numbers counting down to the October 1 date when the government must pass a budget – or else.
What Happened in Syria
(9-18-13) Did Obama get snookered by Putin in the run-up to the US invasion of Syria? Certainly he tied his hands. He stole his thunder. He pulled the rug from under him. Whatever expression you want to use. After all it was Putin who was first to come up with this idea of Syria abandoning its chemical weapons – which of course is very self-serving because he knows the manner in which such surrender would occur under UN auspices.
So-Called “Tapering”: Will QE Have a Happy Ending?
(9-11-13) People have asked me what in the world is “tapering” of Quantitative Easing (QE) and how will it affect the economy? Fed Head Ben Bernanke told Congress that the Fed may “taper” or ease up the bond-buying program known as Quantitative Easing (QE) in the coming months which will cut bond purchases from $85 billion to $65 billion per month.
Realpolitik 303: Syria, Chemical Weapons & War
(8-28-13) So what is it about Syria, which is starting to look like Iraq 2.0?
What Is It With Egypt?
(8-21-13) Demonstrations by millions of Egyptians, riots in the streets and mass killings have rocked Egypt for months as the military, the Islamists and their secular opposition have turned the country into a state of chaos and turmoil. What will happen next?
From Genetically Modified Food to Population Reduction
(8-13-13) Now that US grown Genetically Modified commodities like GM Corn, Soy, Wheat and Cotton are so prevalent in the world’s markets, how does this relate to the fact that nation-states around the world are banning GM crops in Europe etc.? Will this precipitate a parallel market in non-GMO commodities?
The Global Shell Game of the Central Banks
(8-6-13) According to Bloomberg, private equity firms are getting ready to sell, sell and then sell some more – “Private-equity managers from Fortress Investment Group to Blackstone Group LP which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.” What does this mean?
The Obama Regime Shakes Down Wall Street
(7-31-13) According to Bloomberg, "JPMorgan Chase & Co. will pay $410 million to settle U.S. Federal Energy Regulatory Commission allegations that the bank manipulated power markets... JPMorgan Chase & Co. said July 26 it was considering the sale or spin off of its physical commodities business, including energy trading, three days after a congressional hearing examined whether banks are using their ownership of raw materials to manipulate markets."
So why are JP Morgan Chase & Co, Goldman Sachs Group and Morgan Stanley all getting out of the commodity business?
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Global Central Banks Go All In
(7-17-13) Now that Mark Carney, the former Bank of Canada governor and now the Bank of England governor who took over from former Bank of England governor Mervyn King, and who will be meeting with ECB chief Mario Draghi and the other Euro Central Bank governors in the coming weeks appears to me to be a precursor to a final round of monetary stimulus, “all in” as it were, by the global central banks in a desperate bid to stave off growing deflationary pressures which were not dealt with and were being generated from the collapse of the previous speculative bubble.
The Snowden Affair
(7-8-13) Last week Bolivian President Evo Morales’ plane was diverted to Austria because of a rumor that NSA whistleblower Edward Snowden was on board. Both France and Portugal denied Morales over flight privileges as his plane was flying from Moscow back to Bolivia.
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The Bullish Gold Conspiracy Takes a Tumble
(6-26-13) Gold continues to move south, and as we have been saying on our sister site Insider Intelligence.com – short the Gold. Here’s why…
How Washington Will Plan-B the NSA Whistleblower
(6-17-13) Will Edward Snowden, the hapless NSA geek whistleblower end up in a Hong Kong flophouse? Or will he end up working for the Chinese Ministry of State Security? Which would you choose?
Are You Leaving the United Stasi of America? Here’s Some Handy Tips for Wannabe Whistleblowers…
(6-11-13) Ed Snowden, the 29-year old whistleblower exposed the world to the NSA Global Surveillance Program during his tenure at Booz Allen Hamilton, which has provided contractor support for the NSA’s National Security State -- called the United Stasi of America by Pentagon Papers leaker Daniel Ellsburg. Now understanding his situation, Snowden said in an interview to the UK Guardian -- “I don’t expect to see home again.” (SEE Edward Snowden: the whistleblower behind the NSA surveillance revelations)
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Gold & Bonds on Disinflation Planet
(6-6-13) In an article called “Gold prices are heading towards $1,000. There are many reasons why the gold bubble is deflating, and why gold prices are likely to move much lower by 2015,” it appears that renowned economist Nouriel Roubini has changed his tune. (http://www.guardian.co.uk/business/economics-blog/2013/jun/03/gold-bubble-bursts-nouriel-roubini)
IMF, World Bank & ESF: Financial Fraud Rules
(5-28-13) In the latest financial scandal, International Monetary Fund (IMF) chief Christine LeGarde has been charged with fraud and embezzlement in her previous role as France’s finance minister under Nicolas Sarkozy. So why is there so much financial malfeasance connected to the IMF and the World Bank?
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What’s Going on with Gold? ETFs vs. Bullion (Part 3)
(5-21-13) People have asked me -- is the decline in Gold price tantamount to a correction?
Pimco Bond Twit Bill Gross Tweets Again
(5-15-13) There he goes again, as Ronald Reagan used to say. Bill Gross, head of Pacific Investment Management Co. (Pimco) keeps promising to retire, but still hasn’t. Instead he tweets…
Realpolitik 2013: Diddling with the Planet
(5-8-13) So has the Obama Regime really continued and even expanded Bush Cabal foreign and domestic policies? Some wags have even quipped that Obama has out-Bushed Bush himself with the acceleration of heavy-handed tactics aimed at foreign and domestic “enemies.”
May 2013: The Month of Desperation for the ECB and the FED
(5-1-13) Whatever the Federal Reserve and the European Central Bank (ECB) decide to do this week, there have been great expectations that they will act together and come up with another major shot of pabulum in the Hopium Cloud. There have been a lot of rumors in the markets during the last couple of days that the Fed and the ECB are going to step up to the plate instead of acting wimpy, which is what they’ve been doing since the start of the year because they realize that markets need another shot of pabulum to maintain the speculative bubble that the global central banks have created – the so-called Second Speculative Bubble. Nobody knows what the plan of action will be -- even though the Fed keep saying they have a lot of “tools” left in their toolbox – which of course they don’t -- since that’s a lie. It’s not that important what they do as is the degree to which they do it. If they step up in a bold way, for instance, if the Fed knocks out that quarter of a percent overnight rate that they’re paying in bank deposits – that’s why money keeps re-circulating back into the Fed instead of being lent out. If they get rid of that quarter point, which by the way gives banks a guaranteed profit, that’s going to force the banks to lend money. That would be a bold move…
What’s Going on with Gold? (Part 2): Pent-Up Demand Spurs Gold Buyers
(4-24-13) On April 22, 2013, Financial Times reported “Asian bargain hunters pile into gold” -- but there’s nothing new about this. So is there really a dearth of physical gold around the world? Not really. There has been a so-called pent-up demand for the physical metal for some time. Therefore a price drop in Gold was bound to bring up the physical demand.
What’s Going On with Gold? The D-Word Is Back!
(4-16-13) The catalyst for the drop in the price of Gold last Friday, which had actually been rumored in the market since last Thursday, was that the central bank of Cyprus was going to be forced to sell thirteen metric tons of Gold from its holdings in order to meet the capital requirements for the 10 billion Euro bailout. The Bank of Cyprus didn’t actually confirm that until early Friday morning our time. Thirteen metric tons isn’t really all that much Gold. So what happened?
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Bushonomics: The Sad Legacy of David Stockman
(4-8-13) Reagan’s budget director David Stockman has written a disingenuous New York Times op-ed piece called “State-Wrecked: The Corruption of Capitalism in America.” It should be remembered that Stockman never spoke out at the time as he was the original proponent of taking the United States off of GAAP (Generally Accepted Accounting Principles) and putting it on BFLAP (Bushonian Fantasy Land Accounting Principles) in order to effectively cover up fiscal corrosiveness of the budget deficits the Reagan and Bush Regimes were running.
Here Comes Euro-Sodomy: When Does a ‘Haircut’ Become Outright ‘Confiscation’?
(4-2-13) In the Cyprus situation, “confiscation” is not really the right word to use since it assumes that there is something left to confiscate. The depositors’ money is gone. Why? Because the banks of Cyprus used it to buy worthless Greek bonds. This is just another example of the cascading Euro sodomy effect.
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Collapsonomics (Part 6): Where Will Global Collapse Begin? The Same Old Place...
(3-28-13) As has always been the case in the past, global economic collapse will once again be triggered through a European event. Why? Because Europe, fiscally speaking, has never really recovered from the Dark Ages.
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Collapsonomics (Part 5): Big Panic in Little Cyprus
(3-20-13) The government of Cyprus wants a bailout from the European Central Bank, which is primarily controlled by Germany, that will force depositors to give up 6.7% of accounts which are smaller than 100,000 Euros and 9.9% for accounts larger than 100,000 Euros. This confiscation is couched as “deposit insurance.” Since Cypriot banks have become a refuge for Russian KGB mob money, there has been some reluctance to take this route.
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Collapsonomics (Part 4): The Market Correction Cometh – How Soon? How Much?
(3-13-13) In a CNBC interview last week, market analyst Nouriel Roubini, dubbed “Dr. Doom” for his pessimistic outlook, said “I think the markets will be surprised by how much the U.S. will slow down even compared to last year and the second half of the year. The U.S. stock market could correct somehow.” Now everybody is just trying to make a guesstimate of how it plays out.
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Collapsonomics (Part 3): The Impact of Sequestration
(3-5-13) The sequester is simply the automatic across the board spending cuts that Congress agreed to abide by two years ago. It was supposed to be a scare tactic for Congress agreed upon prior to the 2012 bi-elections since both military and domestic spending would be cut 50-50. Sequestration was supposed to be a government “poison pill” (like a corporate “poison pill) for incoming members who came in after 2012. The only reason it passed was because of the votes it received by retiring members. They thought it was a way of forcing discipline on the next Congress. It was a poison pill in that it was meant to force some agreement between the Obama Regime and Congress on spending cuts, something that obviously hasn’t worked out.
Collapsonomics (Part 2): Why Gold & Silver Prices Are Falling
(2-25-13) The Gold Bugs have been told by the Gold and Silver Shills in financial media, who have a vested interest in rising bullion prices because they’re all involved in the selling of bullion in some fashion, that Gold is “going to the moon.” Nevertheless the price of Gold and Silver can decline during a deflationary cycle -- not only can, but in fact always declines in the initial stages of a deflationary cycle. It is not until later in that cycle that the price of Gold and Silver will begin to rise again, as currency depreciation begins to outweigh deflation, or in other words, a race to the bottom between currencies and the underlying rate of deflation. When currencies are sufficiently debased, that’s the time when Gold and Silver will begin to rise again within the context of a deflationary cycle.
Collapsonomics (Part 1): Bonds vs. Equities vs. Gold, (Part 2) Why Gold & Silver Prices Are Falling
(2-20-13) For the last year or so, we’ve see that the Stock Shills on CNBC and Bloomberg have also doubled as the Bond Bears. Why? Because if you are a Retail Stock Tout in financial media, you have a vested interest in pooh-poohing the Bonds at every opportunity. The line that they have tried to sell is that money is coming out of US Treasury Bond funds and Bond Fund ETFs and supposedly the Smart Joes are adroitly using that money to buy up stocks. The problem is that the statistics do not point that out. However it’s an easy sell since yields are so low in Bond funds or anything related to Bond funds, namely around 2%.
Why Venezuela Devalued Its Currency. Who’s Next?
(2-12-13) Last Friday President Hugo Chavez announced a major currency devaluation in Venezuela, raising the Bolivar to Dollar exchange rate from 2.15 to 4.30, while the black market rate has remained 6.25 per dollar. The Bolivar has been falling apart because Venezuela can not maintain the Dollar peg.What happened?
Dow Flirts with 14,000. What’s Next?
(2-7-13) It has been reported that “the Dow topped 14,000 for the first time since 2007, as investors applauded encouraging U.S. economic news.” This is the way it’s getting spun and that is the whole shill. The rally that has occurred is basically a four –year rally, which is nothing more than a cyclical rally within a secular bear market. This has been a so-called “professional affair,” meaning that it is a rally that has occurred without retail participation, i.e. Joe Six Pack buying.
The US Nanny State: Guns, Marijuana & the Future of America
(1-29-13) Senator Dianne Feinstein's so-called assault weapon bill appears to be going down to defeat because the gun issue is the same-old same-old story. The Democrats got to rattle the cage again on the gun ban which isn't going to happen. What you're going to get is another watered-down compromise on restriction of high capacity magazines and further restrictions on ammunition -- plus the establishment of a national database, which is going to come under the Obama health care scheme, which one would think would run up into constitutional issues, but apparently isn't because it's so widely suppported, so mentally incompetent people can't buy guns.
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Realpolitik 201: Gun Control, ObamaCare & Civil War
(1-22-13) Recently there has been some chatter about gun control and the possibility of a civil war because of new firearms restrictions – but it just ain’t so. Here’s why…
Watch Out for the Old Double Debt Time Bomb Whammy!
(1-15-13) The markets are increasingly divorced from reality. There was some indication of this in Fed Governor Bullard’s warning Friday that the Fed and other central banks are creating yet another new speculative bubble. How? By keeping their foot down on the monetary accelerator, as it were, to ensure that negative real interest rates remain for a protracted period of time. In fact one of the goals of the central banks and one of the goals of a grey skies economic policy is to maintain negative interest rates as long as possible. There are numerous benefits in so doing.
Hamstrung US Govt Lurching from Cliff to Cliff
(1-8-13) First it was the fiscal cliff, and then it was the dairy cliff and now it’s the debt ceiling cliff. The fiscal cliff issue was “resolved,” but only as a stop-gap temporary measure, wherein only half of the tax revenue targets and were met and none of the spending reductions targets were met. Also there has been a temporary nine-month kicking the can down the road of the so-called dairy cliff, wherein the House was able to pass an emergency temporary measure, once again effectively extending spending from last year’s agriculture bill to prevent milk and other dairy prices from doubling. Again this was a temporary measure. And that’s what we have become – a temporary government. Everything that is now done by the US government is done on a temporary or what is legally defined as a stop-gap measure bills. A stop gap measure is temporary as opposed to the passage of an appropriation for a bill. In fact the United States government has had no budget or new fiscal initiatives passed in Congress in the past six years.
The Dysfunctional Government Goes Over the Cliff
(12-31-12) Now that the “fiscal cliff” issue has been set aside, the so-called “dairy cliff” shows just how dysfunctional Washington has become – and more importantly how it got that way. The dairy cliff refers to an expiring 2008 farm bill which has certain subsidies without which the retail prices for milk, butter and cheese would all double in 30 days. Milk, for example, which sells for an average $3.53 per gallon could rise to $7 a gallon.
No Fiscal Cliff: The Peaches ‘N’ Cream Trucks Are Here -- And Oh! The Drama…
(12-18-12) Look at all the “good news” in the financial media. The equities are rallying. There’s still a “risk on” trade. It is simply absurd.
The Ever-Shrinking Republican Fraud Pie; Fiscal Cliffhanger (Part 2)
(12-12-12) The exodus of Republicans leaving a sinking ship began with the resignation of Republican Senator Jim DeMint, who of course was called the father of the Tea Party. Even he now understands that’s a losing proposition – and he has said so publicly. They lost big in the last election. It was a mistake to back them, but it also bespeaks of Republican desperation – because the Republicans know that the party is shrinking. However they’re not prepared to give up the ghost as it were and institute real reform and real changes in their fundamental philosophy. As such, Republicans are increasingly viewed – as public opinion polls clearly demonstrate – as the Party of the Past. Clearly that’s not a very good advertising slogan for the Republican Party. And nobody’s going to care what it is you’re saying and what the Republicans have always sold as this concept of “fiscal discipline”.
Planet Earth: Nothing But Grey Skies Would Be Best
(12-4-12) The Global Debt Time Bomb is now 5 minutes to midnight. We have been consistently writing on the necessity for governments to adopt a Global Grey Skies Policy, meaning that global GDP of 1.5% per annum can be maintained through the application of negative interest rates and endless liquidity. This should be done while they still have the ability to do so. To that end we are continuing to see a pickup in this global pernicious cycle of credit quality deterioration since we see that the pace of this deterioration at both the governmental and corporate level is increasing globally.
The Fiscal Cliffhanger: A Tax & Spending Showdown
(11-28-12) The so-called "fiscal cliff," very simply put, refers to the budget sequesters, in which automatic spending cuts and automatic tax increases are triggered on January 1, 2013 because of legislation passed by Congress as the Budget Control Act of 2011. Therefore certain legislation must be passed by January 1, 2013 to keep this from happening. This is when Bushonian tax cuts for the wealthy are due to expire. So what’s wrong with this picture? This would dramatically slow GDP and it would constitute a drag of at least 1.5% on the GDP - if it would take effect.
Blast from the Past: Iran-Contra Conspirator Dewey Clarridge (Slight Return)
(11-21-12) Old Republican scamscateers never die; they just fraud away. And so it goes…
Notorious Iran-Contra Scamscateer Dewey Clarridge is still alive. I thought he was dead years ago. “Clarridge was indicted in 1991 on seven counts of perjury and false statements,” Then on Christmas Eve 1992, George Bush Sr. pardoned Clarridge before his trial could finish. At the same time, Bush also pardoned five other Iran-Contra Scamscateers including former Defense Secretary Caspar Weinberger, former assistant secretary of state for Inter-American affairs Elliott Abrams, former National Security Advisor Robert McFarlane as well as former CIA employees Alan Fiers and Clair George, who all committed perjury before the Iran-Contra Congressional Investigating Committee.
Realpolitik in the District of Corruption: Scandals-R-Us in Washington, DC
(11-14-12) So many lies, so little time… And they still don’t have an LCB -- Lie Coordination Bureau. See Al Martin Raw Archives for more information.
In a burst of heavy-handed partisan rhetoric, former Republican New York Mayor Rudy Giuliani has compared the Benghazi incident in which a US ambassador was killed to Nixon’s Watergate scandal. In a Fox News interview, Giuliani said – “It could be worse than Watergate because it involves very, very sensitive, classified information about which people could be killed and that may be worse than Watergate in terms of, you know, the taking of human life.”
This comment then bespeaks of Republican desperation because the Republicans are very desperate right now. They got beat and they got beat bad. Also a lot of the Tea Party people got thrown out. The Republicans essentially no longer have a cohesive coalition – and they know it. They might even end up on the scrap pile of history like the discarded Whig Party.
Geo-Economics: After the 2012 Election (11-7-12) Since the Republicans are holding on to the House, the situation in Congress remains unchanged. However in terms of the ability to get something done and the ability to compromise, that can only be done by the President. It should be noted how much Clinton got done in his second term. All of the fiscal surpluses inured by the Clinton Regime came in his second term. They did something that was never done before in the history of the Republic. They were able to accrue five years of consecutive fiscal surpluses. How he was able to do it was because he was a lame duck president.
The Economics of Hurricane Sandy
(10-30-12) The markets will have been closed for two days because of Hurricane Sandy – Monday, October 29, as well as Tuesday, October 30, 2012, and reopening on Halloween. This is the first time that markets have been shut down for two consecutive sessions because of weather since 1888, when a New York blizzard caused a major disruption.
Creeping Global Deflation (Part 2): How the Conspiracy Really Works
(10-23-12) The Global Zombie Economy is upon us. As a trader, you always look at the fly in the ointment, as it were, and that is – what are the chances that the global central banks can successfully institute a Grey Skies Policy? So what is the problem that is frustrating their efforts to institute a necessary economic policy? It is the action of governments, who are not allowing the people, wearing their hats as consumers, to enjoy the falling prices of Blue Widgets (or any other product) that planetary deflation is causing. Why? Because, as Economics 101 tells us, the governments are filling the falling price gap with ever higher tax levies…
(10-17-12) Recession has arrived all over the world and deflation is becoming more apparent – despite the complete blackout of its existence in mainstream financial media.
(10-10-12) Bloomberg reports that “gasoline closing in on a record $5 a gallon prompted Governor Jerry Brown to direct California regulators to relax smog controls so oil refineries could increase supplies of cheaper fuel…
(10-3-12) “Bond bears” are essentially those who consistently pooh-pooh US bonds, particularly long-dated Treasuries – from the 10 to the 30 year “paper.” This is a self-serving shill. Everyone who has an interest in the financial industry – from the brokerage houses to the financial media – has. a vested interest in pooh-poohing the bonds. Why? Because there isn’t any money in bonds from a brokerage firm’s perspective.
Smart Money vs. Dumb Money
(9-25-12) Recent reports claim that billionaires like Warren Buffet, John Paulson and George Soros are dumping stocks, while retail investors are putting their money into equity ETFs, reversing the trend of outflows from common stock mutual funds. So what’s really going on?
QE Forever – What Does It Mean?
(9-18-12) Fed Chairman Ben Bernanke and the other central banks are going “all in,” as they say in poker, regarding “unlimited” injections of money into the global economy. This in itself should be worrisome.
Secrets of Casino Capitalism (The Wealth Transfer Mechanism for Dummies)
(9-11-12) So who will get bailed out next? Now that so-called Quantitative Easing, or QE 3, has been largely discredited as the latest bailout mechanism for useless banks, “asset purchases” is the new buzzword for kicking the can down the road, i.e. avoiding economic collapse.
All-American USDA Ethanol/ Corn Scam; GOP Old Losers: Gay Old Politburo?
(9-4-12) Bloomberg reports that “the worst U.S. Midwest drought since 1936 is hurting crops in the biggest agricultural exporter, driving corn and soybean prices to records.” Meanwhile agribusiness ethanol producers are fighting the meat and oil industries which have called for the suspension of the ethanol requirement. But what is really going on?
Realpolitik 2012: Romney, the Tea Party & the Bush Cabal
(8-29-12) So how is the Republican National Convention (RNC) going to turn out? The gold bugs will be disappointed, after they got all excited when Mitt Romney said that the Romney Regime would form a commission to study relinkage of the Gold and the Dollar. Of course that was part of the deal for Ron Paul support – but that isn’t going to go anywhere. Ron Paul wanted that as part of the Republican plank – the reinstitution of the 1971 Gold-Dollar peg that Nixon did away with. That’s something that Ron Paul has pushed for.
Food or Democracy? What’s Your Choice?
(8-21-12) People are puzzled -- Why are equity markets going up around the world? Simply put, equity markets are rallying on a combination of persistent intermittent rounds of short covering and fresh small lot buying by the Unwashed, who continue to swallow the prevailing global central bank Hopium story.
Working Class Republicans Don’t Know It’s Not Bacon
(8-14-12) When working class investors consistently lose a lot of money in the markets in an election year, invariably the issue gets politicized. And that is exactly what has happened. This can be seen in the last week in the change in the advertising of these non-principal electro-fly-by-night outfits (discount brokerages) on CNBC and Bloomberg. Now they are purposely not mentioning stop loss orders anymore, and they’ve stopped using examples of bogus technicals. This is being done because the SEC is exerting pressure on them about stop loss orders and the enormous amount of money that the Unwashed are losing. (For more information about stop-loss orders, see the AMR column of 8-7-12)
Knight Capital Group Blows Up: Who’s Next? -- The Secrets of Stop-Loss Orders
(8-8-12) Knight Capital Group cleared trades for discount brokers like TD Ameritrade and Scottrade, which means that they provided high-speed order execution systems for a number of the non-principal outfits. Essentially these are wholesale services. Or as Bloomberg reported – “Knight is the dominant firm in equity wholesaling, the business of executing orders off exchanges primarily for brokerages such as Scottrade Inc. and TD Ameritrade… Its main competitors are UBS AG, Citadel LLC and Citi Group…” (bloomberg.com)
Regime Changes in the Middle East: From Geo-Politics to Geo-Economics
(8-1-12) The recent change in regimes in the Middle East and Africa have less to do with politics than with economics, i.e., they are meant to keep the price of oil down. The original invasion of Libya, for example, was to ensure that the flow of Libyan oil would be restored as quickly as possible – and it was.
Who’s Responsible for the Global Financial Crisis?
(7-25-12) As Ronald Reagan used to say – there he goes again…
Now Paul Craig Roberts, former Reagan Assistant Secretary of the US Treasury, is blaming Robert Rubin, Clinton’s Treasury Secretary and former Goldman Sachs honcho, for the current financial crisis. In “The Meaning of Libor-Gate,” he writes, “As villainous as they might be, Barclays bank chief executive Bob Diamond, Jamie Dimon of JP Morgan, and Lloyd Blankfein of Goldman Sachs are not the main villains. The main villains are former Treasury Secretary and Goldman Sachs chairman Robert Rubin, who pushed Congress for the repeal of the Glass-Steagall Act, and the sponsors of the Gramm-Leach-Bliley bill, which repealed the Glass-Steagall Act. Glass-Steagall was put in place in 1933 in order to prevent the kind of financial excesses that produced the current ongoing financial crisis....
“The constraints on capitalism could now be thrown off, because markets were self-regulating as Federal Reserve chairman Alan Greenspan, among many, declared. It was financial deregulation -- the repeal of Glass-Steagall, the removal of limits on debt leverage, the absence of regulation of OTC derivatives, the removal of limits on speculative positions in future markets -- that caused the ongoing financial crisis.”
But is this really true?
Why the Financial Frauds Just Keep On Coming
(7-17-12) Last week was the Global LIBOR Fraud debacle. The week before, there was the JP Morgan $2 billion trading loss debacle which keeps rising every day. And now another low-level Ponzi scheme has been uncovered with the failed suicide attempt and subsequent arrest of Russell Wasendorf, Sr., who ran a nickel and dime firm in Iowa called Peregrine Financial Group (PFG Best) which now has a $200 million shortfall. Acting like a mini-Madoff, it was revealed that Wasendorf had been forging bank statements so it appeared that the firm was in good financial shape, while he was looting customers’ money for the last twenty years. It’s probably the same old story – Wasendorf got himself into some bad trades and then used customer funds to try to cover up the busted trades. It’s just another garden-variety Ponzi scheme. Then in a desperate attempt to hide his losses, he falsified and forged statements to his clients, and that’s the end of another nickel and dime outfit.
Banks Rigged the LIBOR Rate: So What Else Is New?
(7-10-12) Everything from house mortgages to automobile loans is set by the LIBOR interest rate. As quoted in Forbes, James J. Angel, associate professor of finance, Georgetown University. McDonough School of Business, explains “Libor stands for the London Interbank Offered Rate. It’s the rate at which banks are able to borrow money from each other. An agency called the British Bankers Association surveys a group of banks everyday asks the following: If you were to borrow money this morning at 11am London time what you would have to pay for it? The BBA then takes those submissions from the banks, lobs off the top 25% and bottom 25% and publishes the average of the remaining rates. Voila! That’s the daily Libor rate.”
Now it’s been revealed that LIBOR was artificially manipulated to be at a higher rate -- and because of this, so many trillions were lost by the Unwashed in their mortgages and automobile loans and refrigerator loans. If people understood what the scam cost them, they would be outraged. But fortunately - or not - nobody is telling them that. And nobody will…
Keeping the Unwashed “All In”
(7-3-12) There is still no Deutschland Uber Alles in the Euro Zone, as German chancellor Angela Merkel got some more vague commitments from her erstwhile Euro “partners.”
Shoot-Out at the Euro Corral (Will the Huns Stick to Their Guns?)
(6-27-12) Bloomberg reports the ominous warning of George Soros regarding the latest Euro summit. – “Billionaire investor George Soros called on Europe to start a fund to buy Italian and Spanish bonds, saying policy makers should create a European Fiscal Authority to purchase the debt in return for the countries implementing achievable budget cuts… “There is a disagreement on the fiscal side,” Soros said in an interview with Bloomberg Television. “Unless that is resolved in the next three days, then I am afraid the summit could turn out to be a fiasco. That could actually be fatal.” (Bloomberg.com)
When Will Global Collapse Occur?
(6-19-12) When the band-aid box is empty…
How Working Class Republicans Get Snookered by the Wealthy Republican Class
(6-12-12) In a column called “Collapse at Hand,” Paul Craig Roberts, the former Assistant Secretary of the Treasury under President Ronald Reagan, writes “Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.”
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Julian Robertson Lawsuit Heads to Supreme Court
(6-6-12) Julian Robertson's war on the First Amendment continues as his lawsuit heads to the US Supreme Court.
Why the So-Called Volcker Rule Will Not Solve Anything
(5-15-12) The latest fiasco of JP Morgan Chase -- losing more than $2 Billion and counting -- shows once again the problems with the so-called Volcker Rule, which is supposed to ban deposit-taking banks from engaging in proprietary trading, which means trading on behalf of their own accounts.
Europe’s Leftward Tilt Threatens Global Economic Stability
(5-8-12) The markets are getting hammered, as they have already reacted to the election of the new socialist president Francois Hollande, who defeated French president Nicolas Sarkozy in France. Any time there is a shift to the left, as there has been both in both elections in France and in Greece, where anti-bailout parties won, it roils financial markets. Why? Because the left is considered traditionally unfriendly to financial markets. Thus the reaction in markets is that they’re selling – as well they should be. On Friday I got short on the close, as a lot of other people also did, in anticipation of a Sunday night sell-off. It wasn’t any surprise that Hollande was going to win. This notion that the CNBC shills tried to sell all day Friday was that the Hollande victory was “already in the market.” Of course it wasn’t, but that sounded good.
Joe Six Packs Leaving Equity Funds in Droves
(5-1-12) In an article called “Equity Fund Redemptions in April Are Largest in 17 Years,” Bloomberg reports “Global investors this month pulled the most money from stock funds in any April in at least 17 years amid escalating concerns that Europe’s economy is faltering.
“Equity funds had net redemptions of $18.6 billion through April 25, according to data from EPFR Global, a research firm based in Cambridge, Massachusetts. The April withdrawals were the largest since at least 1996, the first year for which comparable data is available.” (Bloomberg.com)
What does this mean? For four consecutive years there have been net redemptions from US common-stock mutual funds as US investors get out of stocks. Public opinion polls point to one conclusion: the Working Class now sees owning stocks as a losing proposition because they’ve taken such enormous losses.
Hopium Rules the Planet
(4-24-12) The Urban Dictionary definition of hopium – “In securities trading a trader is said to be under the influence of the fictional narcotic hopium when she/he finds themselves deeply in the negative on the wrong side of a trade. The trader will continue to hold the position in the hopes that the security will return to the value at which they acquired it. (e.g. staying long in a stock position when the price continues to plummet). Usage: ‘Cramer, you are totally smoking hopium, man, thinking that stock will go back up anytime soon. Just sell it and get out!’”
Currency Wars? Dollar-Yuan Economics Explained
(4-18-12) Bloomberg has reported – “The Yuan fell by the most in a week against the dollar as China’s central bank doubled the daily trading band, reflecting declines in emerging-market currencies. The People’s Bank of China now allows 1 percent moves from a daily fixing, after keeping the limit at 0.5 percent since May 2007. The Dollar Index, tracking the greenback against currencies of trading partners, climbed 0.2 percent, after a 0.8 percent jump on April 13, amid concern Europe’s debt crisis is worsening.” (Bloomberg.com)
The Rise of China & the Decline of America
(4-9-12) Working Class Republicans have been responsible for the rise of China and the decline of the United States is the theme of the recently aired CNBC series. They showed the quips of Chinese lame duck premier Wen Jiabao, who thanked Working Class Republicans for building up China --which they have effectively done.
Still Clueless in the Home of the Naïve? There Are Alternatives
(4-3-12) Last week I had a chance to see a Bill Moyers interview with so-called community organizer George Goehl, who has been touted as “a co-organizer of The 99% Spring, a national effort to train 100,000 Americans to teach the country about income inequality in homes, places of worship, campuses and the streets” who says “together we can take on the 1%.” Goehl is described as the “executive director of National People’s Action, a network of grassroots organizations using direct action to battle economic and racial injustice.” This seems to be a conglomeration of burned-out left-wing groups. Goehl himself seems to be calling for a kinder gentler nation where the banks should be kinder and gentler and they should stop raping everybody. So after listening to this guy, I thought he should have called his program the 99% Solution for the Planet of the Naïve.
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The Gold Manipulation Conspiracy: Only ‘Unwashed’ Bears Believe It
(3-27-12) You’ve probably heard all sorts of internet nonsense about the price of gold being artificially suppressed – but it’s just not true. The evidence for this assertion is that gold is a free-to-trade market and I trade it every day. For something to be artificially influenced, someone has to have the power to inhibit those markets and there’s only one entity that would have such power and that is the government – or a group of governments. In order to influence traded markets for commodities, you have to control enough of that commodity to be able to artificially inflate or suppress the value of it. Remember central banks of governments that hold gold on this planet have been net sellers for about 40 years.
It’s Not an Upscale Doomsday: From Bushville to Breakdown…
(3-21-12) There has evidently been a crackdown on Bushvilles, which are tent cities and the last residence of BOVOBs (Burned Out Victims of Bushonomics) -- typically Working Class Republicans, who have lost their jobs, their houses, etc. It appears that Florida is leading a number of states in passing legislation, which could be called anti-Bushville laws, making the theft of scrap copper and aluminum a Class A felony, punishable by 30 years imprisonment. People residing in Bushvilles are evidently purloining scrap copper and aluminum, so it’s beginning to become a problem, particularly for the municipal and county governments, since basically the infrastructure is being dismantled. They’re stealing plaques and road signs – anything with scrap value. Scrap dealers could then become co-conspirators in these crimes, and in fact laws are going to stiffen for scrap dealers, who knowingly buy purloined scrap from Bushville residents. A Florida legislator was asked – so how is the scrap dealer going to know? Well, when somebody walks in with a rusted-out shopping cart with an American flag on it from the nearest tent city, he ought to have a clue…
Greece Defaults. Who’s Next?
(3-13-12) It’s official. Greece has defaulted on its debt and there was barely a ripple in the markets worldwide. Why? Because Greece only defaulted on a small portion (about 10%) of the debt.
Preventing a so-called disorderly default for Greek sovereign debt wasn’t that difficult, since the ECB (European Central Bank) was so desperate to lend them the money that they came up with this cockamamie idea, which has never been done before – tendering what was going to be defaulted debt with a pre-determined haircut (a write-down of principal and interest) which will turn out to be about 74 cents on the Euro, so that holders of this debt could be issued new bonds at a 3-1/2% coupon for which neither the ECB or IMF (International Monetary Fund) will guarantee the payment.
Nevertheless the ECB and IMF essentially forced bondholders into this submission, or “tender” as it was called. They said that they couldn’t lend Greece any more money unless 95% of all Greek outstanding Treasury bonds were submitted and then reissued so that 95% of the bondholders would take the haircut. The primary holders of this stuff by the way are European banks and the ECB itself.
Then what happened is by the submission deadline Friday (March 9, 2012) somewhere between 80-85% of the bonds had been tendered so that the European Financial Regulatory Commission allowed a credit default swap (CDS) to be triggered on those that were not submitted. The real reason why it didn’t have any impact on the market is because people were fearing that the counter-parties would be forced to pay out a big number. In fact the number is only going to be between $2-4 billion and maybe even less than that because the ECB probably won’t take any payment.
This is simply creative book-keeping to the nth degree that nobody’s even ever heard of before. This was and will continue to be such desperation to prevent a disorderly default by Greece and to keep Greece in the Euro Zone. There’s not really any pretense here, but it shows the extreme lengths that the ECB and IMF are willing to go through in order to prevent a disorderly default of Greek debt.
How Wall Street Journal & Financial Media Distort Reality
(3-6-12) On February 29, 2012, The Wall Street Journal published “Huge Futures Trades Roil Markets,” -- “Treasury and gold investors were rocked out of their recent torpor on Wednesday as a series of large trades in the futures markets sent prices tumbling.”
Business As Usual: NSA Chief Hypes Cyber-Threat & Shills for More Money
(2-28-12) According to the Wall Street Journal, US Army General Keith Alexander, the director of the National Security Agency (NSA), has warned that in a year or two, the hacker group Anonymous could attack the American energy grid and shut off power for millions.
Circling the Drain: From Euro Default Preppers to Forced Population Reduction
(2-21-12) In a UK Telegraph story called “Germany drawing up plans for Greece to leave the euro,” we learn that “plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiraling out of control -- with or without a second bailout.” The article further quotes German finance minister Wolfgang Schaeuble who says “cuts required are so deep” that he “does not believe that any government would be able to implement them.” And therein lies the key to the German position. They keep coming up with new hoops that the Greeks have to jump through, in order to get the continuing tranches of the promised Euro bailout money , even though they know that at some point the Greeks are going to reach a point where they’re going to say “no mas, baby.” The riots in the streets deliver that message loud and clear.
Realpolitik 101: World War III? Not Yet. Economic Collapse? Still on Schedule...
(2-14-12) Syria and/or Iran will not be the catalyst for a Third World War.
The Washed vs. the Unwashed: Understanding the Difference
(2-7-12). We have often mentioned in previous articles the power structure that exists on the planet, wherein 82% of the people can be characterized as the Unwashed, while 18% are members of the so-called Washed. Of course, the 82% represent the Indians and the 18% represent the Chiefs. This is the way everything works and always has – and that’s the way it was meant to work.
The Republican Candidates: Has Beens & Wanna Be’s
(1-31-12) Jeb Bush and George Bush Sr. met with Obama in the White House last week. Jeb, of course, is supporting Romney since there’s a lot of bad blood between Gingrich and the Bushes. Especially after Bush Senior blamed his 1992 defeat on Newt Gingrich. This was when Gingrich got pushed out of Congress in disgrace and then starts bad-mouthing the Bushes. His beef was that he wasn’t taken care of the way he should have been. As a so-called “loyal Reagan supporter,” Gingrich was instrumental in pushing through a lot of Star Wars defense contracts in the mid 1980s -- the beneficiaries of which were the Bush Cabal. The problem was that Newt didn’t make a lot of money from it because he was never an insider.
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Dispelling Euro-Rumors & Disinformation about the Dollar
(1-24-12) There have been different published reports about the drop dead date for the Greek financial crisis to be resolved. Otherwise we are told that a Greek debt default is inevitable. By January 26, 2012, the Greeks must show that they made a certain amount of progress in their debt negotiations in order to qualify for continuing IMF (International Monetary Fund) participation with the ECB (European Central Bank) in the next tranche, as it were, of Greek aid coming from the ECB.
Joe Six Pack Bitch-Slapped Again: The Reality of the Global Economic Situation
(1-17-12) In a story called “Goldman Bids for Bad Bonds, Offer to N.Y. Fed For AIG's Debt Rattles Market,” the Wall Street Journal reported that “Goldman Sachs Group Inc. recently approached the Federal Reserve Bank of New York and offered to buy a multibillion-dollar bundle of risky mortgage bonds that the Fed acquired in the 2008 bailout of American International Group Inc (AIG).” What does this mean?
How to Fix the Global Debt Bomb Problem
(1-10-12) All of the global leaders are meeting this week, keeping their mouths shut, and letting central bankers do their thing, in order to come up with some kind of grand global package that will ensure that the global economic “debt bomb can,” as it were, can be successfully kicked down the road for 2012. That in fact is the new mandate.
Good News for WKRs & Bad News for WBRs: Economic Collapse Will Most Likely NOT Occur in 2012
(1-3-12) WKRs -- pronounced Wickers -- refers to Working Class Republicans. WBRs -- pronounced Webbers -- refers to Wealthy Bushonian Republicans, meaning members of the all powerful Bushonian Cabal.
The MF Global Debacle: Exposing the Loopholes
(Dec. 21, 2011) Former MF Global’s CEO Jon Corzine’s testimony before Congress was designed, so as to not inculpate himself criminally or civilly. Of course he was roundly criticized in financial media for what they called a carefully choreographed verbal dance. However he had to do it. He had no choice. As one of Obama’s prime fundraisers and campaign fund bundlers, it won’t be a surprise if the Department of Justice doesn’t go after him. After all they’ve got to prove that he used customers’ money to support his own positions that were wrong. And frankly it’s unlikely that this happened.
NDAA: This Is What American Gulags Look Like
(12-5-11) On December 1, by a vote of 93 to 7, the US Senate passed the National Defense Authorization Act (NDAA) for Fiscal Year 2012, which allows the military to operate domestically within the borders of the United States and to detain US citizens without trial. Indefinitely. This bill dramatically increases law enforcement authority of the US armed forces in the United States. So what does this mean?
Just Another Week on the Road to Globe-Collapse
(11-28-11) Globe-collapse is short for global economic collapse.
Equity, bond and commodity markets globally fell every day last week. And in fact equity markets globally have now fallen for 10 consecutive sessions, which is unusual. This would indicate that the pace of globe-collapse is now quickening.
Risk vs. Safety: A Return to Reality
(11-22-11) The essential flaw in the European Union has always been that they attempted to achieve an economic union before achieving a political union.
Short Selling for Fun & Profit on Hopeaine Planet
(11-15-11) This is now a Hopeaine Planet, as markets are awash in Hopeaine (rhymes with Cocaine).
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MF Global Blows Up: A Forensic Analysis of What Went Wrong
(11-8-11) How MF Global, headed by former New Jersey governor and former Goldman Sachs CEO Jon Corzine, got into trouble was that its bets about sovereign debt not being written down or discounted. Also MF Global was too “long” the risk, as they say in the trade and it didn’t have enough counter-party trades on the other side. Then as Euro peripheral state debt, like Greece and Italy, got shakier and shakier, the credit default swaps that MF Global had put on came to be increasingly more worthless.
The Euro Con Men Come Up with the Next New Plan
(11-1-11) Last week there was a dynamic relief rally in equity and commodity markets globally based entirely on this wishful thinking that the Euro-zone has at last got a workable plan that it can actually enact. This new plan is supposed to herd the 17 cats of the EU nation-states better than any previous plans. The enthusiasm didn’t last long even as we’ve seen dramatic rallies globally which have been supported by this fantasy concept in financial media that this time the Euros have a plan that’s workable and the peaches ‘n’ cream trucks are on the way. This rally has caused equity and commodity markets to react since the so-called “risk trade” is back on again.
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EU Tries Herding Cats… Again
(10-26-11) An article called “New Euro 'Empire' Plot by Brussels” in the UK Telegraph reports that “European Union chiefs are drawing up plans for a single ‘Treasury’ to oversee tax and spending across the 17 Euro zone nations.
“The proposal, put forward by Herman Van Rompuy, the European Council president, would be the clearest sign yet of a new ‘United States of Europe’ -- with Britain left on the sidelines.”
It should be known that this Rompuy is a nobody and the position that he holds is almost a ceremonial position. The European Council has absolutely no power.
Planet in Flames, As Cities Seethe with Discontent
(10-18-11) This is the latest winter of our discontent, as strikes and protests and demonstrations cover the globe.
Dealing with Rumor Control: Return of the Deutschmark? Debt Repudiation? Euro Collapse?
(10-11-11) You may have heard about the rumors that Germany is getting ready to print the Deutschmark in preparation for the breakup of the EU because of the never-ending sovereign debt debacle. But that’s nonsense.
Civil Unrest in America: What’s Next?
(10-4-11) Despite the Occupy Wall Street demonstrations and protests, the country will never be in a state of civil unrest -- unless Working Class Republicans ever wake up to the truth, namely what’s been done to them by Wealthy Bushonian Republicans.
Stock & Commodities Market Collapse Begins: How To Profit from Declining Markets
(9-27-11) The collapse, or correction, or whatever you want to call it, really started with comments by the Fed last Wednesday (Sep. 21) with the release of the Federal Open Market Committee (FOMC) so-called “minutes” of the meeting, which is an event that comes every six weeks. This week was important, in fact probably the most important ever, because the Fed announced that it was starting what they called Operation Twist. This had been widely expected by both the equity and bond markets, which had opposite reactions in both. Essentially the Fed gave the markets more than they were looking for.
Global Economic Collapse: The Continuing Saga
(9-20-11) Every week it seems there’s a new twist on the continuation of the same theme – the dark clouds on the horizon. So where are we on the Collapse-O-Clock as it were?
Coming Soon: Global Financial Politburo, Gold Standard Redux, Labor Camps And More…
(9-13-11) The G-7 summiteers in Europe all agree that a “Grey Skies” economic policy is now the only means of preventing economic collapse.
The End of the “Good Life” (Part 2)
(9-5-11) To continue with the end of the ‘good life’ -- Social Security is a giant Ponzi scheme that is now no longer sustainable.
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The End of the “Good Life” (Part 1)
(8-30-11) After the Second World War, society had to change, so governments made secret side agreements to the 1944 Bretton Woods conference, from 1946 to 1950, in order to change the economic model of the industrialized world. Before the war, it was a savings-generated economy, and that contributed to economic growth and consumption. After the war, this radical new concept of the so-called “good life” was promoted by government and media. This meant that you worked to a certain age and then retired, so you would receive a Social Security check from government as well as a pension check from your employer. Of course, this was a radical new concept because previous generations worked till they dropped. However it took hold, since all the governments of the industrialized nation-states promoted this concept.
Germany’s Final Solution to the Euro-Debt Crisis: Let Our People Pay!
(8-23-11) The whole planet continues to lurch from crisis to crisis, even as the Europeans are now coming up with some more realistic ideas to save the Euro Union. This could be seen from the Merkel-Sarkozy meeting last week, so now Merkel has to sell this idea to the German taxpayers -- the issuance of so-called Euro-Bonds, which would be a precursor of consolidating all European debt under one roof. These Euro-Bonds would then be unconditionally guaranteed by Germany and France.
How Money in the Markets Flows from the Joes to the Pros
(8-16-11) Volatility is the trader’s friend, and last week was a very easy trade to make, particularly in the S&Ps. Gold was also certainly easy to trade from the short side -- when the December Gold contract got above 1760.
People ask -- how can you tell if fear is driving the markets? You can tell when you see that equities are leading the band and all other contracts become the tail wagging the dog. In other words, they march to the tune of the equities. Last week was a good example of that. A fear-driven market was abating and you saw good examples of how markets trade and how equities tend to lead the charge. It makes the rest of the boards easy to trade.
Market Correction? Or Crash? What’s Going On?
(8-9-11) After the DOW dropped last week – and this week as well -- there is a recognition in markets that the global economy is shifting back into a lower gear, as it were.
Terrorizing the Unwashed: The Debt Ceiling Circus Act
(8-2-11) This entire Debt Ceiling Show with its mix of salaciousness and entertainment seems to have been designed for the Unwashed. It reminds me of an Old West hanging – except Uncle Sam is standing on the scaffold with the noose around his neck. Everyone is gathered around and there are hawkers and peddlers selling knickknacks -- made in China of course -- to the crowd. And there are children on people’s shoulders -- looking on and cheering. Actually it’s more like a lynching.
Meet the New Terrorists: Right-Wing Fundamentalist Christians
(7-28-11) The Norway Massacre has focused the spotlight on European issues which have not been discussed in the past. The New York Times labeled the 32-year old Anders Behring Breivik as a right-wing fundamentalist Christian terrorist, while the European news media are labeling him as radical, right-wing, conservative and capitalist. These are the dirty buzz words in Socialist Welfare Europe because Conservatism and Capitalism are the two evil C-words.
Avoiding US Default & Financial Collapse: Kicking the Can Down the Road…
(7-19-11) It’s still a race to the bottom – will the US or the Euro-Zone be the first to default on its debt?
US Debt Crisis & Euro Debt Crisis: A Race to Economic Collapse
(7-12-11) In the United States the Republicans continue to play games with the debt ceiling limit bill. Now you can tell that even the Republican opposition is beginning to weaken because they understand that they’re on the wrong side of the equation, meaning they are way out of step with what the majority of the American people want. Meanwhile Republican House Speaker John Boehner is sending signals that he isn’t really concerned about what 80% of the Republicans want because that’s not his constituency. They don’t make any bones about who their constituency is -- and it’s not the Working Class Right who will vote Republican regardless. Since they don’t understand economics, they are going to vote Republican based on political, social or religious issues.
Financial Armageddon -- If the Debt Ceiling Limit Bill Is Not Passed
(6-29-11) The temerity of the US debt ceiling situation exceeds anything else going on anywhere -- even the debt crisis in Europe. According to Secretary of Debt Geithner and Helicopter Ben Bernanke who remind us everyday, the Republicans are playing with fire by not agreeing to a pro forma extension of the debt ceiling by August 2. This is the only issue that really makes any difference. Why? Because if the debt ceiling limit is not extended, the United States will default on its obligations, the consequences of which could be a global economic collapse. Forget about Greece and the other PIIG peripheral Euro Zone nations…
Global Fire Sale: Everything Must Go!
(6-21-11) The global monopoly end game is on in earnest....
The Dreaded D-Word Is Back: How Likely is a US Treasury Bond Default?
(6-14-11) Last week it was revealed that Fitch’s and other credit rating agencies “would slash to ‘junk’ the ratings on all Treasury securities, seen worldwide as a risk-free investment, if the government misses debt payments by August 15,” reported Reuters.
“Moody's and Standard and Poor's have issued similar warnings. But Fitch was the first among the big-three rating agencies to say Treasury securities could be downgraded, even for a short period, to a non-investment grade.
“The agency said even a short-lived default, also called a technical default, would suggest a crisis of governance from a sovereign credit and rating perspective."
What does that mean?
Working Class Republicans: Loyal & Stupid – All the Way to the Tent…
(6-7-11) Dark clouds are on the economic horizon. There has been a continued deterioration in economic statistics globally. We saw last week, off the US economic calendar, sharp deterioration in the ISM manufacturing index along with continuing deterioration in construction spending and a disastrous Friday unemployment number. This follows a global trend, wherein we are now seeing in the last 30 days, sharp deteriorations in global manufacturing, industrial production & capacity utilization indices. Finally there has been some admission from global leaders that in fact the planet’s economy is now slowing down and that a new recession is in the offing. All of this is prompting the “summer swoon” in equity prices so we expect equity prices to move lower and for the S&Ps to test 1275 in the coming week’s trade. The result of this slowdown will determine, certainly by September, whether the Fed is prepared to go into a QE3 program. This would be one of the greatest bearish signs for not only US but global equity markets since the collapse of the bubble in 2007.
Summer Swoon Season, Pre-Collapse Signals and Why Economic Collapse Still On Schedule
(5-31-11) The Euro debt crisis is like a tornado spiraling down into an abyss.
The Collapse of the Euro Zone & the IMF Fiasco
(5-23-11) The European situation is in a state of continuing degeneration. With each passing week, the desperation in Europe increases as they try to hold together this Pan-Socialist Welfare bloc called the Euro Zone. This desperation has become laughable and even absurd, as they are even inventing a new language. Instead of “debt restructuring,” they are calling it “debt re-profiling.” This is terminology that doesn’t even exist in the real economic world. They just make it up.
Economic Collapse: What Will Be the Trigger?
(5-16-11) The economic collapse will most likely begin in Europe . Lest we forget, the Great Depression of the 1930s started with the collapse of a small bank in Austria in 1928. There was a domino effect in Europe which affected the United States after the Stock Market Crash in September 1929. And that just put the nail in the proverbial coffin.
Why Commodities Took A Tumble
(5-9-11) Last week’s precipitous drop in commodity futures, especially the oil and the silver, is the unwinding of the commodity bubble that the Fed created and fostered by putting its foot on the economic gas pedal so to speak.
Why the Middle East Problem Will Never Be Solved
(5-3-11) The senile old raghead Kaddafi has escaped the grave again. The US bombed the building where he and his wife were, while the son and the daughter in law and the grand-rugrats were in the adjoining room. They didn’t make it.
(4-26-11) The war on Libya is another in a series of same-old wars for the same-old reasons. However, neither the United States nor Europe want to get bogged down there with expensive commitment. And yet they clearly want Khaddafi out. They wouldn’t want McCain to go over there otherwise. John McCain has always worked both sides of the aisle and he’s always been friendly and had good relationships with Democratic Regimes. McCain has been used as a front-man before by both Republican and Democratic White Houses. McCain’s function in this case was to give moral support and openly send a signal but also covertly, which is the way McCain has acted in the past, because most of his entourage was DoD and CIA people. It is the United States which is making arrangements to arm and surreptitiously train the Libyan rebels. After all, it’s cheaper to arm the rebels and give them some training than it is to maintain a so-called no-fly zone and start up using a lot of cruise missiles at $2 million a shot and predators at $4-1/2 million a piece. Maintaining a so-called no fly zone is just cover for bombing the piss out of everything that has Khaddafi’s name on it.
Realpolitik 101: Wall Street Scamscateers Get a Free Pass
(4-19-11) In an article called “In Financial Crisis, No Prosecutions of Top Figures,” the New York Times asks – “It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?
Working Class Republicans: Here’s How Trickle-Up Economics Works
(4-12-11)Downward pressure on the Dollar helped lift Gold and Silver, as well as industrial metals like Copper last week, but the Dollar is still declining. Also the ECB raised interest rates a quarter percent -- even though it was widely speculated that they wouldn’t despite ECB Chief Jean Claude Trichet’s protestations to the contrary. They shouldn’t be raising rates now and everybody knows it, including Trichet himself. Given the deteriorating economic situation in Europe, now is not the time to be raising rates in order to combat perceived inflation. So why did they do it? Because Trichet had talked himself into a corner – as he has done in the past. In other words, it was so widely anticipated that the ECB would raise rates because of Trichet’s comments over the last month that they had no choice but to do so. If they had not raised rates, the Euro would have fallen precipitously -- instead of rallying…
The Return of the Sub-Prime Paper Monster: The Bait Is High-Yield
(4-5-11) So-called “high-yield” sub-prime bundled mortgage paper in various guises has been making a comeback, particularly in the last year and a half. This encompasses CDOs, CMOs, and the entire spectrum of bundled, chopped and channeled mortgage derivatives.
New Financial Order: Joe Six Packers Whacked Again
(3-30-11) Billionaire George Soros and many others, including European central bank chiefs, have been calling for a Bretton Woods III conference and a new global economic order, which would lead to an agreement on how the planet’s economy is going to be managed – in order to prevent economic collapse.
Japan Nuked Again Will Weaken the Yen
(3-21-11) There are obviously serious economic consequences stemming from the Japanese earthquake and atomic disaster. However there are a lot of Japan naysayers who are saying that Japan is finished and that it will take Japan decades to recover and the Japanese debt to GDP ratios which are going to exceed 200% are going to hobble Japan’s ability to rebuild – and in fact all of that is nonsense. Why? Because the rest of the G-7 nation-states have now agreed that coordinated intervention is necessary. This has not occurred in Japan since the Kobe earthquake in 2005. The idea behind this, of course, is to weaken the Yen, which had risen to an all-time high against the Dollar in Thursday’s trade. And we did see the Yen weaken significantly on Friday as global central banks intervened to sell Yen. Indeed you are going to see that continue…
(3-14-11) Bill Gross has reportedly sold all of Pimco’s Treasury Bond holdings, and it’s just more self-destructive behavior on his part. Just look what he’s done since 2008. Everything he’s done has been wrong. First he started buying mortgage-backed bonds in 2008 when everyone was selling them. After all he wrongly assumed that he would get bailed out by the Fed buying these toxic securities. However the Fed never said that directly. It was just an assumption. The Fed wasn’t just going to let everyone just buy bonds and then take them out at a 30% premium. That was never going to happen.
The New DWI (Double Whammy Inflation): Gas & Food Prices Rising. Why?
(3-8-11) There have been sharply higher prices for food and fuel because processors and manufacturers are now able to pass along price increases, which they were not able to do before.
NAR’s Shocking Lies on the Alleged Housing Market Recovery
(3-1-11) The National Association of Realtors has been caught lying, i.e. fudging the numbers of US home sales since 2007 – putting a happy face on a desperate and worsening real estate market in the United States.
The ‘Bernanke Put’ Is On and He Starts To Tell the Truth. Why?
(2-22-11) Fed Chairman Ben Bernanke has become more frank about the intentions of the Fed. This combined with the sudden departure of German central bank (Bundesbank) governor Axel Weber from the Euro-scene, who will not be the ECB’s next president, is sending a powerful message to the world. The French finance minister Christine Lagarde had also been saying in media interviews that Weber couldn’t be allowed to become the head of the European Central Bank. Why? Because Weber was one of the old Bundesbank “hawks,” who had expressed his opinions quite frequently in recent days. In essence Weber was saying that when he became the head of the ECB, he would contract Euro-money supply, raise interest rates and force Euro-governments to reduce deficits. And that’s something you simply can’t have, or as Ben Bernanke says – now is not the time for fiscal prudence.
(2-14-11) The civil unrest currently sweeping the planet is a symptom of looking for someone to blame for the ongoing global economic disintegration. In the desperation to blame somebody, people are blaming the existing political order. Ultimately they should be blaming themselves for believing the lies they’ve been told by the existing political order. In the last analysis, whose fault is it? It’s like blaming the messenger, but whose fault was it for believing what the messenger said in the first place? The whole concept of the cookie cutter society in the post-WWII world was served on a bed of lies that people wanted to hear…
The Big Shill: Stupidity Rules From Egypt to the USA
(2-7-11) Egyptians understand the need for a dictatorship. They understand this means getting rid of one 82-year old dictator named Hosni Mubarak who is supported by Washington and replacing him with their new favorite dictator General Omar Suleiman, whom Mubarak has ensconced as vice president and who seems to be the most popular guy around. Of course Suleiman was head of the Egyptian secret police. He instigated and controlled all of the governmental torture chambers in Egypt. He is the CIA’s man in Egypt, as both he and the CIA have admitted. However we’re talking about a country of 80 million people, which has no natural resources. This is a country that can no longer feed itself and must import even food and water. And it is a country where 45% of the population lives on less than $1 a day. Another 35% live on less than $2 a day. It should also be noted that Egypt is a country wherein the middle class that earns $10,000 a year constitutes only 2% of the population. The rest of the population -- the 18% on top -- have net worth in the millions. So how do you “fix” that?
Middle East Explodes; It’s Snowing Prozac in Davos
(1-31-11) The Middle East is in flames, not only Egypt but Tunisia, Lebanon, Yemen etc., and it bespeaks of the grand foreign policy errors that the United States has made. Since it is our fault. What we’re seeing is that unpopular pro-western governments, largely installed surreptitiously by the United States are falling like dominoes in the Middle East. The problem with these puppet regimes is that since they have been getting financial, political and military support from the United States, they are regimes run largely by corrupt Middle East versions of Wealthy Republican Scamscateers who have looted the treasuries of their countries for decades. And these are regimes which furthered American Wealthy Pro-Bush faction Republican interests, both as individual investors and corporately. These countries have made very little effort at improving the lot of their own people or spending any money on the infrastructure or the modernization of their own countries. And then came the installation of Bushonomics to create and maintain a wealthy elite in these countries, which were little more than defacto Middle East Republican Parties. And now these governments are falling…
Who’s Hu? And What’s What? US-China Relations Heat Up…
(1-24-11) The visit of Chinese President Hu to Washington last week underscored the increasingly symbiotic relationship of China and the United States. It should also be noted that the Chinese Government is very much like the governments of Japan and Korea, essentially a government of old men. So why did Obama do so much scraping and bowing before the Chinese president?
This was an important visit for the Chinese, since it was the first state visit of a Chinese leader to the United States since 1991. It was also important politically for the Obama Regime, so they could be seen expressing displeasure and pressing the Chinese on the Yuan revaluation issue, human rights and Chinese military proliferation in Southeast Asia, etc. – all of the problems the United States supposedly has with China.
In fact the real purpose of the visit was to give China political cover, in order to steer a lot of contracts to American business and industry. Everything else is political theater. Like the Obama Regime expressing continual concern and even outrage over the revaluation of the Yuan, the China in Tibet issue, the China pressuring Taiwan issue, etc. This also has allowed the Obama Regime to save face to make it appear that the United States is not what it really has become – a world power in decline.
The Euro Zone Continues to Unravel: When Will the End Come?
(1-17-11) Last week was a classic example of what this planet has become – lurching from crisis to crisis and perpetually on the abyss, as the whole show gradually spirals downhill. That’s where the planet is right now. So every time there is a Peripheral Euro State (PES) series of auctions – last week it was Portuguese, Spanish and Italian bond auction, all the markets on the planet effectively hold their breath. They all sell down before these auctions. The Euro currency gets hit before these auctions. In fact the whole planet is holding its breath. The trick of it is -- can the ECB (European Central Bank) engineer yet another seemingly successful round of auctions to keep these PES nation-states alive -- and also the Euro Zone alive?
Coming Soon: Night of the Long Knives for Commodity Futures
(1-10-11) There are so many Joe Six Packers who are now invested in the commodity ETFs and ETNs.
Continuous liquidation of common stock mutual funds have contributed to this phenomenon and the new concentration of ownership in stocks does not include Joe Six Pack anymore. Stocks have literally become passé, as commodities are being promoted to Joe as the Next Big Thing.
This concept is being pushed throughout financial media. But the bigger story here is what the G-20 is doing. Last weekend there have been many reports, especially from Chinese media, about the G-20 financial regulatory committee, which is preparing some sort of “Night of the Long Knives,” as it were.
Why? To coordinate some sort of action in the planet’s commodity markets, particularly in the commodity futures markets, the goal of which is to force commodity prices back down to reality. This would include, for the very first time, actual enforcement of existing regulations, especially the number of contracts any individual owner can have. This would shut the back door that has existed for years, which allows the investment houses to own huge amounts of future contracts through artificially created option derivatives, in order to get around the commodity regulatory acts that exist on the planet -- not only in this country but in all countries regarding the concentration of ownership.
(1-3-11) State and government pension systems could be the next major financial debacle which will also affect private and corporate pension plans. Planet wide the problem is the same. The biggest problem with both public and private pension systems is that they are loaded up with junk securities from the past. Just as Spain is a collapsing country, it should be noted that 70% of its state pension system is invested in junk securities. Therefore, as Bloomberg also reported, Spain is going to reduce its old age social security benefits, and they will reduce those benefits with each coming year. Now many year-end financial reviews have brought a new focus on this planet-wide and global problem, which is fueling economic collapse – how to deal with aging pensioners who actually believe they will get their pensions?
Chinese Raise Interest Rates -- A Bitch-Slap to the Global Economy
(12-27-10) An important economic event occurred over the weekend that will have repercussions throughout the global economy, namely that China has come out with a definitive statement on their economic policy and their plans for 2011. China has said that their fight against inflation will take priority over all other economic considerations – and that’s an important statement to make. China did raise interest rates, which is something that all markets feared, and they came out with new punitive measures to cool down their own real estate market. In other words, they have come up with a coordinated and more serious plan to reduce inflation in China. The effects of this will be to reduce Chinese economic growth, which is something that the shills are frightened of, because the whole planet is literally surviving on Chinese economic growth now. The problem they face like all the BRIC nation-states face in fighting inflation is that every time they raise interest rates, it draws in more foreign capital, more so-called “hot money” inflows. This drives up the value of their fixed assets which makes it even more difficult to combat inflation. So how do they discourage the inflow of foreign capital?
TV Shows: Preparing For Collapse
(12-21-10) The future can now be seen simply by watching television. For instance on the Dish Network, which supposedly has hundreds of channels, they have what I call Last Ditch Effort Get Rich Quick schemes for the Unwashed, those who still have a little bit of money left in their pocket. They have a sales pitch like – Recession-proof your profits. Make $1000 a day Trading Commodities. Make $500 a day on EBay. And on and on. The theme on all these channels is the same, so you know who they are targeting. Have you lost your job? Are you a victim of the collapse of the cookie-cutter society? Are you a Working Class Republican who never knew anything about anything? Don’t worry. You can still make $500 a day – and not know anything about anything. You don’t have to know anything about economics or markets. You don’t have to have ever run a business before. Actually you don’t have to know a thing – but you can still make $500 a day.
Necessary Evil: Bernanke’s TALF Program Prevented Economic Collapse
(12-15-10) Recent criticism of the TALF program in the media has prompted us to mount a defense on its behalf and explain how it played a part in preventing financial collapse. TALF was one of the numerous Fed guarantee and stabilization programs that came out after collapse of the 2008 bubble. Unlike TARP and HEMP, TALF was specifically designed to stabilize markets, by allowing large holders of junk mortgage paper and junk corporate paper to either continuously borrow money from the Fed or to put back these securities to the Fed at a fixed price. In other words, the Fed effectively bought back these securities, which were mark to market, but less the discount. The discount that the Fed was prepared to buy this junk back ranged from about 70-80 cents on the dollar, when much of this junk paper was worth less than 20 cents on the dollar.
In Germany We Trust: Adolf’s Revenge
(12-8-10) The whole planet’s economy now really depends on the steps that the German government takes over the coming months in respect to bailing out the European Union. Germany has blocked any increase in funding for the Grand Euro Bailout Fund, and it has blocked the issuance of so-called Euro-Bonds (E-Bonds). Why? Because the German taxpayers would wind up being responsible to consolidate all of this PIIG state debt into more highly-rated securities, similar to US Treasuries in an effort to cut the PIIG states borrowing costs. The Germans have said that they will be fiscally disciplined now as they always have been, and they will not relent -- but they have to relent. If the Germans do not relent from their position and do not agree to an expansion of the Euro bailout and more shuffling around and effectively more lying and more debt deterioration, there will be serious consequences. They have to agree to release the other European countries from the 3% Debt to GDP ratio mandate. If the Germans keep acting fiscally disciplined as they always have, Europe is going to collapse. And that is going to create a tidal wave…
Cliffhanger Economics, Bushonian Tax Cuts & the End Game
(11-22-10) Like a cliffhanger movie, the planet is wondering – what economic debacle is next?
Linking Currencies to Gold -- Not the Gold Standard
(11-15-10) (FREE SAMPLE COLUMN - SUBSCRIBE NOW) There is a growing initiative to re-link the dollar and other paper currencies to gold, and it’s gaining momentum. It certainly got a boost last week when World Bank chief Robert Zoellick came out publicly and supported the idea. This is a modified version of what existed after the United States went off the gold standard in 1933. Many do not understand that although the United States currency was no longer redeemable or backed in gold, it nevertheless remained linked to gold – until Nixon closed the so-called “gold window” in 1971.
The New Speculative Bubble in Equities and Commodities; Rising Food Prices? Blame Joe Six Pack Investors…
(11-8-10) As Helicopter Ben Bernanke says -- We CAN create speculative bubbles. Actually we must – or else.
Coming Soon? The “Buy the Rumor - Sell the Fact” Trade
(11-1-10) As all of the Fed governors have said in recent weeks, the upcoming Quantitative Easing II program to repurchase substantial quantities of US Treasury Bonds, reduce long term interest rates and pump money into the economy is an effort to create a new speculative bubble in equities, commodities and bonds.
G-20 Nations Desperately Seeking Inflation
(10-25-10) Party on G-20 Dudes. Scarf down those appetizers. Suck down those appletinis. At taxpayers’ expense, of course…
Commodity ETFs: Why Trickle-Up Economics Is Still Alive and Well; American Debt Clusterfuck (Part 2)
(10-18-10) It was another good week for wealthy Bushonian Republicans and a bad week for Joe Six Packers.
Late week we began to see that the commodity bubble created through Quantitative Easing - or QE II - buying, which is largely Joe Six Pack buying through commodity ETFs - ExchangeTraded Funds - began to bleed some more air, as commodity prices fell.
So who benefits from this action? Those who are the large short sellers in commodities, which are principally the Republican Trading Pools. Meanwhile Joe is the principal buyer of commodities through commodity ETFs. What does that mean?
Currency Wars: Racing to the Bottom in the End Game
(10-11-10) All countries are in a race to the bottom as currencies around the planet are dropping in what has been called the "currency wars." What does this mean? Central banks are attempting to cheapen the currencies of their own countries and get them cheaper than those currencies that they trade against. In other words, the Fed is trying to cheapen the Dollar relative to its principal "trading basket, which in this case refers to those countries that the United States does the most business with.
American Debt Cluster-Fuck: Who Owes What to Whom?
(10-4-10) The mortgage foreclosure fraud debacle has moved to another level. According to news reports, Bank of America has joined Ally, formerly known as GMAC, and JPMorgan in stopping foreclosures and evictions in 23 states because the documentation wasn't properly processed. In fact it was in most cases counterfeit and bogus. What are the implications?
Deconstructing "Wall Street" The Sequel: A Real World Perspective by a Trader
(9-27-10) The movie begins as Wall Street Scamscateer Gordon Gekko played by Michael Douglas gets out of prison after 8 years. Years later he's shilling his book "Is Greed Good?" to an auditorium full of 20-somethings. He's like a combination of a Michael Milken - Lloyd Blankfein figure -- but he's got hair. He starts off his lecture by saying, "You're all pretty much fucked." There's silence -- and then he refers to his audience as the NINJA generation, i.e., No Income. No Job. No Assets. "You've got a lot to look forward to," he jokes -- getting blank stares in return. Is this just the ranting of an old guy disillusioned with life -- or is there actually some truth to his assessment?
Gold & Silver: How High & Why? -- A Lesson in Real World Economics 101
(9-20-10) Bloomberg reported that "Gold climbed to a record for the third time this week as investors stepped up demand for a haven from financial turmoil." (Sep. 17, 2010) So why has Gold become the safe haven of choice for investors who have become disenchanted with the stock market and the empty pronouncements by public officials, i.e., no Obama peaches 'n cream trucks on the horizon?
Are You Ready for a New Faux Boogeyman? Homegrown Terrorists in America
(9-13-10) A new report called "Assessing the Terrorist Threat" by former 9/11 Commissioners states that the old boogeyman known as Al Qaeda is not scaring Americans enough, so a new faux boogeyman, or so-called "homegrown terrorists" must be created. Also, with no new acts of foreign terrorism on US soil, the media looks around for something else to focus on, and they look at the increase in "homegrown terrorism" or some kind of reconstitution of patriot and militia groups. But none of that has happened -- yet.
The Slow Motion Collapse of the American Empire
(9-6-10) Every week it's just more of the same -- more statistics and more revelations of the continuing decline of the American Empire. There are 41 million Americans on food stamps, 57 million people without medical insurance, 7 million homeless, and now we hear that 31 million have lost their life insurance. The depletion of wealth in the nation that has occurred since the turn of the millennium is simply astounding. IRAs are now being described as "remnant" investments, since Americans can't use their houses as piggy banks anymore. Also there are 15 million unemployed and another 30 million "under-employed" -- people with college degrees working at burger joints or temporary jobs or at reduced hours. Now we are seeing a depletion of wealth in this country that has never been seem before. The more troublesome part of this, as Secretary of Debt Geithner has noted, is that this is wealth that isn't coming back. This is wealth that can not be generated again.
Lost in Translation: Deciphering Fed Speak at J-Hole
(8-30-10) The Kansas City Fed's annual symposium in Jackson Hole Wyoming -- now called J-Hole by media pundits -- has not given investors more confidence. There were the usual namby-pamby nebulous pronouncements by Fed Chairman "Helicopter Ben" Bernanke on Friday, August 27, but the question remains -- is the Fed preparing for deflation, inflation, or economic collapse? As the old joke goes, when the only tool you have left is a hammer, everything looks like a nail. Or rather it has to be a nail. In other words, the markets remain skeptical, if not downright pessimistic, about the so-called economic "recovery." So what did Bernanke say and what does it mean?
No Confidence: The Shift from 'Yield' to Capital Preservation
(8-23-10) The flight to safety continues. Meanwhile investors act as if there is no credibility in what the Fed, the SEC, the Obama Regime and the CNBC Council of Bullish Shills are saying. And now the markets are beginning to reflect this new reality. We saw some more bad numbers on Thursday, and the shills are desperately trying to twist and maneuver the facts -- but frankly it seems like they're starting to give up. For the first time you are beginning to see more balanced commentary coming out of financial media. There are more realistic assessments of the economic situation and you're seeing more bears on the CNBC and Bloomberg panels. They're not trying to be so desperate and spin the numbers anymore, and I think they're concerned that they know that they're not credible. In fact if they persist in this spin, they're going to lose all of their credibility.
Attack of the C-Words: Crash, Collapse & Conspiracy
(8-16-10) Watch out -- now even the Wall Street Journal is reporting the markets may be coming down. In an op-ed piece called "Is a Crash Coming?" (August 13, 2010) by Brett Arends, the fear is palpable. The problem is that Brett is using the wrong C-word. He should have asked "Is an Economic Collapse Coming?" -- but he doesn’t have the balls to say that. Now people are finally starting to use the word "crash," but nobody has the nerve to use the ultimate C-word, which is "collapse." So what's the difference between a "crash" and a "collapse"?
The Die Is Cast, As the G-7 Nation-States Throw in the Towel. Why?
(8-9-10) "Helicopter Ben" Bernanke and other Fed governors made some comments last week about what they plan to do with the "quantitative easing" program, and it sounds like they were just quoting what Bernard Baruch said in 1933.
The F-Word & the D-Word: The Fed Invokes 'Deflation'
(8-2-10) Federal Reserve governors are finally beginning to admit the truth about the economy. What happened? St. Louis Fed Governor James Bullard said that the economy could become “enmeshed in a Japanese-style deflationary outcome within the next several years.” Similar comments were echoed by Fed Governor Richard Fisher last Thursday. Of course, this column has been warning about the coming Japanization of the US and global economy, meaning slow or no growth economy, as well as deflation, for at least several months. Why? Because the consequences of reversing government-sponsored fiscal stimulus would create deflation. That is the inevitable consequence of what the Obama Regime did in order to avoid an economic depression.
Markets Still in LaLa Land: Bogus Stress Tests & Faux Rallies
(7-26-10) In economic news, there has been a continuation of the faux rally in the equity markets, as well as the stress test of the Euro Banks last Friday. The stress test, however, is all nonsense and the European currencies responded by turning lower upon its release, as did Gold and other commodities. At least the US stress tests were conducted before the US Treasury and the Fed flooded the banks with government money. The Euro stress tests, on the other hand, were conducted after the European Central Bank flooded Euro banks with money. The problem is that all the Europeans banks, which were Tier 1 banks that passed the test, said that they had capital ratios of 10% or more. That's deceptive because they don’t have to subtract from those capital ratios the amount of money the European Central Bank already lent them. The question then becomes -- is it a real stress test? A real stress test would ask -- can these banks survive as standalone financial institutions on their own? And the answer is -- No, none of them could survive on their own. This then was just another PR ploy by the ECB to bolster confidence in the European financial system with a bogus stress test.
How to Survive the Deleveraging
(7-19-10) Global governments of the major industrialized nation-states have decided what the future of the planet's going to like -- and they're all marching down the same path. Common agreement has been reached on what’s going to be a defacto Bretton Woods III. Why? Because governments can't come right out and tell people the truth about the dark clouds gathering on the horizon. Thus Bretton Woods III has been formulated, but it will be unwritten. In other words, governments have decided that a perennial "grey skies" policy is better than the alternative, which is economic collapse. "Grey skies" is the same thing as Japanizing the planet's economy. They have no other choice, and they know it. So what's next?
The Russian Solution, Spy Swap & Why DoJ Challenged the New Arizona Immigration Law
(7-11-10) Changes are afoot in the Russian government as they try to polish up their image from the post-Soviet era and build credibility for themselves. Russian President Medvedev's recent comments suggest that the Putin Crowd has diminished in Russia and that Russia is in a transition, having cleaned up a lot of the corruption that the Putin Crowd inherited and maintained. It is apparent from Medvedev's comments and Putin's silence that power is beginning to shift in Russia. Those who believe that Medvedev is just Putin's puppet are wrong because the Putin Crowd have been consistently losing power in the Russian Duma (the Russian Congress). Meanwhile Putin is effectively stepping on the toes of everybody who supported him in the past because he understands that if Russia is to become a senior member of the envisioned global power trimultive of the future, it has to clean up its act and become a real functional state, not simply a state whose elite is supported by a bunch of oligarchs and the Russian equivalent of Bushonian Scamscateers. They want to garner some respect and one way to do that is to get rid of that post-Soviet corrupt oligarchy, which was essentially a Russian faction of Bushonian Scamscateers. These fraudulent business transactions in Russia took place when there were enormous transfers from the former USSR into the hands of a few people. (Does that sound familiar-- just like the Era of Bushonomics in the United States?) These so-called oligarchs were former Communists, and since they didn’t know anything about economics, they turned for "help" to the Carlyle Group, Halliburton, Bechtel, and the American Enterprise Institute -- their counterparts who were the American equivalents of Russian Scamscateers . Or as Putin used to say about George Bush that we're "birds of a feather." What do you think he meant? Or as George Bush said that he looked into Putin's soul -- and saw only scamscateerism…
Working Class Republicans Deserve Higher Taxes (And Here They Come); Reverse Expatriation Update
(7-6-10) Japan is now proposing a separate G-20 meeting at the ministerial level to discuss a dramatic increase in taxation. As the Bank of Japan pointed out, the planet is down to brass tacks time. Central bank balance sheets can not be expanded further. Governments can not afford to further deficit-finance fiscal or monetary stimulative measures. Therefore there is only one way to raise money and that is to increase taxes.
The End of Capitalism: Entering the Era of Post-Bushonomics
(6-28-10) Bushonomics was the last nail in the coffin of Capitalism.
Russia and China Promote New Economic World Order (Led by Guess Who?)
There was a major global economic conference held in Russia last week, but it hasn't gotten a lot of press -- because, on this side of the "pond," it's not in anybody's interest. Also, interestingly enough, the United States didn’t send a representative to the so-called St. Petersburg International Economic Forum because they didn’t want to get involved in this effort by Russian President Medvedev, who wants to formulate a new economic world order. Thus Russia and China will now collaborate in formulating a new global economic order, since they are the only two superpowers that are in the position to do so. They have accrued fiscal surpluses, and China, of course, has no external foreign debt, even while its internal debt is negligible. Also Russia continues to use its accrued fiscal surpluses through commodity exports to pay down its debt, so Russia will be completely debt-free and have all of its national debt paid down by 2016. This is a new collaborative effort because Russia and China are concerned that the United States debt is simply going to sink the planet.
The Global Confidence Game: How Long Can Central Bankers Keep the Balls in the Air?
(6-7-10) The drop in the markets on Friday (June 4) has been called "The Great Obama-Biden Sell-Off," and it was one of the greatest shorting opportunities of this year, as the Dow Jones industrial average closed below 10,000 points at 9931.97. So what happened? Last Wednesday, the markets began to rally after both Obama and Biden said that Friday's unemployment numbers would be better than expected. Equities immediately rallied, which in turn created a buy-the-rumor sell-the-fact trade scenario Friday morning on the release of the monthly employment numbers, which then directly led to the sell-off. There was lots of anticipation that the Obama-Biden comments had built into the market and then the plug got pulled at 8:30 AM EST Friday morning. This is a good example of how the Unwashed should not be suckered by self-serving political comments that come out of the White House when the White House starts commenting on economic numbers before they're released. A lot of the Unwashed got suckered into the market and then lost their shirts on Friday.
The Double Dip Has Arrived; Governments' Conspiracy Against Credit Rating Agencies
(6-1-10) Last week Fitch's credit rating agency downgraded Spain one half of one notch, indicating that it's still behind the curve. The rating agencies are under pressure once again not to downgrade any European nation-states, even though they are now in an accelerated state of fiscal deterioration. Nevertheless the credit rating agencies are not lowering credit ratings quickly enough and deep enough to reflect the pace of credit quality deterioration now being experienced by the Euro Zone nation-states. This is being done for political reasons. The rating agencies neglected their responsibilities in the past and now they're neglecting them again -- but this time they're doing it in desperation in order to stay in business. Why? Because every government on this planet is conspiring to put them out of business.
Euro-Trash'd: The Collapse of Empire
(5-24-10) Many pundits had always predicted that the global economic collapse would begin in the Old World, and indeed Europe, making economic policy errors to combat a perceived debt crisis, was also the first to have its remaining natural resources diminished so as to become the first to create large amounts of credit and debt. Of course the Goldman Sachs engineered financial debacle and the subsequent raping of the Euro governments which invested in marginal credit default swap deals, etc. didn't hurt either. This is all part of a larger scheme. What's important now isn’t what has happened but how the Euro governments handle it from now on. So what can be expected?
End of the Euro? The Sovereign Debt Contagion Spreads…
(5-17-10) There were several events that roiled the markets last week. First, there was Euro distress. The second story that roiled the markets was the SEC expanding its investigation of investment banks, which we had warned about several weeks ago. We had written that the SEC would expand its investigation beyond Goldman Sachs. Also it seems that every weekend the EU comes out with some sort of new bailout package for Greece which always seems to be bigger than the last. And this is the pattern that we now see established in markets in recent weeks, wherein markets rally during the first part of the week -- and then decline in the second part of the week. Why? Because nobody believes them anymore. There is no trust and there is also a lack of confidence in these pronouncements, which have been coming out regularly for the last couple of weekends, regarding the Greek debt crisis.
Crashonomics: The Long Awaited "Correction" Is Here
(5-10-10) There was a 1000 point drop in the Dow Jones Industrial Average on Thursday, May 6, 2010 and then a further drop on Friday morning, deleting more than $1 trillion in wealth, before the market bounced back on Monday. Then there were unsubstantiated media stories about how computer technical errors or trader errors caused the crash, but that's been all discredited now as complete nonsense by the investment houses themselves and their allies in financial media, so that Joe Six Pack wouldn’t worry about it. But what actually happened?
Euro-Zone Bailout: The Bare Necessities of Avoiding Economic Collapse
(5-2-10) This past weekend there has been a Grand Euro Confab, wherein all of the Euro governing council of the European Monetary Union, are meeting not only about the Greek sovereign debt debacle in which Greece needs immediate relief, but to consider a plan that the Euro-Socialists started pushing last week -- a grand 600 Billion Euro bailout of all of the PIIG states. The meeting will include Greece, of course, but also Portugal and Spain whose economies have now deteriorated because of Euro foot-dragging that some larger and more draconian measures are necessary to keep the Euro confederation together because without it, everything will fall apart. Meanwhile New York University Economics Professor Nouriel Roubini has said publicly that "Greece is just the tip of the iceberg." He's right and everyone knows it. The proof of that statement came last week with the plethora of S&P, Fitch's and Moody downgrades of various Euro-zone countries. The implication is that the allegedly strong Euro Powers Germany and France are also in the center of the sinking ships of state that comprise all of the Euro Zone nation-states. This is particularly true about France and how Moody's is going to put France under special review. Thus all sovereign debt within the Euro-Zone nations is becoming suspect. So what does it all mean?
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The "Dark Market" Conspiracy: So-called Dark Markets Will Remain Dark, Opaque and Impenetrable
(4-26-10) The so-called Financial Regulation Reform bill is going to be passed, and it just depends on the tweaking that should occur over the next week or so, since both Republicans and Democrats are going to keep out what the investment banks considered to be some of the more onerous provisions regarding derivative regulation and the "illumination" of so-called "dark markets" -- which nobody wants. This bill dovetails into the reason why the Obama Regime has not changed the scheduled Bushonian tax cuts on unearned income and capital gains interest dividend income, which the Obama Regime inherited, so to speak. All the Democrats expected that these rates would increase because that's what Democrats do when they first come to power. But they haven’t. And there is a reason behind all of these machinations.
"Dark Markets" are so-called non-regulated, non-registered opaque markets that are maintained by brokerage dealers through the investment houses they are part of in order to effectively trade losses. In other words, they are trading financial instruments that have a negative net worth so they give them the appearance that they are actually worth something.
Clash of the Titans (Of Conspiracy): SEC vs. Goldman Sachs
(4-19-10) Goldman Sachs has been sued by the US Securities and Exchange Commission (SEC) for fraud, and it’s based on the conspiracy between banking titan Goldman Sachs and insurance titan AIG. The issue here is that Goldman Sachs effectively got AIG to write Credit Default Swaps (CDS) on so-called “synthetic” CDOs (Collateralized Debt Obligations) with low quality mortgages that Goldman Sachs hand-picked to put in the CDO pool (specifically handpicked for their worthlessness). Meanwhile AIG charged them a premium that actually reflected the underlying risk. Thus Goldman Sachs just transferred 95% of the risk to AIG. And that’s where this particular conspiracy began….
Dow 11000? Look Out Below; Plunge Protection Team Saves the Day – And the Markets
(4-12-10) The CNBC Council of Bald Headed Shills continues to shill Dow 11000, but Dow 11000 is just another number. They say that if we get above 11000 then it will be 12000 next stop – more nonsense to keep Joe Six Packers divorced from reality. A close above 11000 would signify that “synthetic” recovery is “working.” Is anybody buying this? Somebody must be buying because the market keeps rising. Everybody will be feeling better and then it’ll be ready for a drop or the long-dreaded so-called “correction.”
Deflation Soon? The Great Bullish Conspiracy vs. Rising Global Inventories of “Everything”
(4-5-10) It seems that nobody has wanted to talk about the rising global inventories of everything. This includes housing stock (commercial, residential and industrial), oil, metals, grains, and soft commodities, as well as the enormous accumulation of repossessed and seized goods. Now finally we have begun to hear this even on financial media like Bloomberg. What does this mean?
Capitalism vs. Social Welfarism; The USA vs. Europe
(3-29-10) Financial news flows were dominated last week by the Greek debt situation while ECB Chief Jean-Claude Trichet is showing signs of emerging as the man of common sense and the person who has a handle on the bigger picture and what to do about it. Meanwhile politicos like Andrea Merkel of Germany and Nicholas Sarkozy of France are being perceived as obstacles in resolving this situation. The entire Euro zone situation can be summed up by looking at the politics. Germany and France are the obstacle to a workable solution. Now they’re finally moving to this idea to allow the IMF (International Monetary Fund) take the lead in bailing out Greece and potentially other PIIG nation-states. And don’t worry they say -- the EU will come in behind the IMF to provide any secondary financing that is beyond the IMF’s ability.
Global Equity Markets: Are They Ready to Crack? (Of Gold, Dollars and Coffee Floods)
(3-22-10) The global equity markets have been in a fantasy world for some time now, and it’s entirely possible that global equity markets are going to crack hard over the next 30 days. There are numerous indicators, but the markets are as technically overbought in some cases as they have been in a hundred years. Last Friday, for example, the renowned market technician Robert Prechter, known for the Elliott Wave theory, pointed out that the Dow dividend yield was the third lowest in a hundred years. Numerous other technical measures of relative strength and other monetary indicators signal that global equity markets are reaching a level of overvaluation not seen since the crack of 2000. So what will happen next?
Who’s Planning for a Pre-packaged Global Bankruptcy?
(3-15-10) Standard & Poor’s came out with a very extensive report on the current state of the global economy as well as future projections and forecasts – and it’s absolutely dire stuff. The IMF has also been coming out on a much more regular basis issuing reports about the economic situation on the planet, but S&P has put it all in a nutshell as the saying goes. Moreover S&P is free from political influence which global bodies like the IMF or BIS must endure.
The S&P report stated that all global currencies are now depreciating against fixed assets. From a trader’s perspective that doesn’t really mean a lot because traders are more interested in how currencies react to each other. S&P however is pointing to a bigger picture, which is that global currencies have entered a new cycle of devaluation against fixed assets which is now irreversible. What does this mean? They don’t use these words but the conclusion is obvious, i.e., that the planet’s economy is unwinding and that global GDP is deteriorating. This means that the purchasing power of this domestic product is declining because it is measured in various baskets of global currencies all of which are deflating against fixed assets. Or in other words, it means that the planet is “falling apart” economically speaking.
The “Silly Season” Returns; Bullish Shill Conspiracy Lifts Equity Markets… Again
(3-8-10) Global equity prices have been rising as global economic numbers continue to deteriorate. This phenomenon shows the power of Bullish Shillism exerted by financial media which has gained so much strength that it can actually manipulate market psychology. The traders come in, knowing that Joe Six Pack who listens to CNBC and Bloomberg is buying the market. This then leads to overvaluation in marketplaces, which can last a very long time. What does this mean?
Is the Euro Trash? Is NATO Dead? Is This the End of the American Empire?
(3-1-10) So many questions. Not many answers. Will the California Bubble pop? Will the PIIGS get fed? And will the China Bubble explode? Consult General Primakov’s upcoming book “Gulag Planet…”
“Greecey” Credit Default Swaps: How the EEU/ Euro Fraud-Conspiracy Was Engineered (Shades of BushFraud)
(2-22-10) According to Bloomberg, “Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.” So what was the role of credit default swaps in this scheme?
Very simply put, a credit default swap is an insurance policy. The premiums are assigned by what the marketplace perceives as the risk of guaranteeing payment on a certain financial instrument.
Bloomberg further reports that Goldman Sachs “raised $1 Billion in off-balance sheet funding” using credit default swaps. According to the Wall Street Journal (Feb 22, 2010), “Goldman Sachs did 12 swaps for Greece from 1998 to 2001, according to people familiar with the matter.” (You gotta love the Journal‘s anonymous faceless sources.)
In other words, Goldman Sachs created a complex series of default swaps on behalf of the Greek treasury, or more specifically the Department of Finance in Greece, which effectively turned “liabilities” into “assets” (a cornerstone of Bushonomics and BushFraud). That was the net effect -- making it appear that liabilities, which were discounted assets, were not worth, let’s say, 30 cents on the dollar, but were worth 50 cents on the dollar. This financial fraud is now roiling the Euro-zone. So what will happen next?
Bailing Out the PIIGS; G-7 Bankers Look for Plan B -- Before Global Economic Collapse
(2-15-10) But at least these PIIGS won’t be bacon – at least not right away. There have been new statements recently by the G-7 central bankers, especially the ECB (European Central Bank), regarding a larger “bailout.” They’re not even using the word “bailout” they’re calling it debt refinancing for the PIIGS that should extend “globally.” It’s obvious that a larger master plan is in the works, meaning that the state debt of the so-called PIIGS (Portugal, Ireland, Iceland, Greece and Spain) can be foisted on the taxpayer-citizens of the entire planet. That’s what ECB Chairman Trichet means when he says “globally,” and that’s the concept he’s trying to push which has certainly gained momentum. The Bank of England and the Bank of Japan are on board, but the Fed hasn’t said much lately on this topic. The premise is what ECB Vice Chairman Axel Weber said at Davos -- global economic collapse is now inevitable and this will be merely another “bandaid” solution or “sticking plaster” as the Brits like to say. For obvious reasons, this pronouncement got scant attention, since nobody in the media wants to see that published.
Understanding Global Economic Collapse; Getting Used to the D-Words: Default, Deflation & Depression
(2-8-10) What does “global economic collapse” really mean? In other words, what is the planet going to like in an economically collapsed environment? This is something that most people do not understand and here’s why it’s important to be prepared.
World Economic Forum in Davos: World Bankers Agree on New Ways to Rape & Pillage the World
(2-1-10) New pronouncements are coming out of Davos and these are not the usual cheerleading and Bullish Shillism regarding the future of global markets, which is what Davos has been all about in the past. The World Economic Forum is composed of bankers, corporate chieftains and politicians, and it meets once a year in January in Davos. They all go there at the expense of shareholders and taxpayers in their private jets and limos and typically have filet mignon and lobster lunches. Usually not much is said and nothing is really accomplished, except to come out with a glowing statement about the planet’s economic prospects in the future. We are seeing that this year’s meeting was substantially different. The tone was much more somber, and there were many more so-called secret meetings at Davos regarding global financial regulations.
Global Governments Begin to Unravel, as Planet’s Economy Teeters on the Brink
(1-25-10) Last week we saw that global governments led by Washington are in a state of complete turmoil. There is now a general recognition that any so-called early “exit strategy” from fiscal stimulus is impossible and that more fiscal stimulus will be necessary for an indeterminate amount of time. Washington and London are seeing that the effort to gradually unwind speculative bubbles, provide the liquidity, and create jobs is failing. In fact, the planet’s economy is continuing to deteriorate. This is creating dynamic political stress within governments. The problem is that everybody in government wants to politicize the situation and play the blame game by pointing fingers so their party stays in power. This is particularly noticeable in Washington where we saw the Obama Regime last week attack investment banking houses with a vigor not before seen.
Dazed & Confused in the Heartland: A Tale of Two Generations in Post-Cookie Cutter Society America
(1-18-10) Is Vulture Capitalism the Future of America?
The world has been turned upside-down for millions of Americans and the story of Bob (not his real name), one of our 30-something subscribers and his 60-something parents illustrates this point quite well. Bob was one of the success stories I had when I was doing this market trading service. The story of Bob and his parents is a prime example of how America has changed. The America that people above the age of 50 or 55 knew is really gone now. What they believed in is all gone. What Bob, who’s now 33, and his parents have gone through in the last 10 years is a story that I think will resonate with millions because it tells you how the country has changed and the planet has changed as well.
The Crumbling of Cookie-Cutter America & The Speculative Real Estate Bubble in China: What’s Next?
(1-11-10) The fact that the Bank of International Settlements (BIS) recently stated that consumption will never be restored to 2006 levels bespeaks of the end of the Cookie Cutter Society in America. In the post WWII Cookie Cutter Society model, governments encouraged marriage and the production of rug-rats so as to endure the next generation of debt-financed consumption. Since a married couple with rug rats will ultimately consume more than two single people together, they will ensure that the next generation will go into debt in order to finance consumption to maintain economic growth. That is all beginning to break down and the BIS is saying that without the maintenance of the post-war Cookie Cutter Society (the post-war economic model of, not savings-generated, but consumption-generated economic growth), can not be maintained. So what is the agenda of the BIS in publicizing this information?
Global Foreclosure? BIS Reports Global Currency Devaluation Is Done Deal
(1-4-10) A newly released report by the Bank of International Settlement (BIS), which is the bank for the world’s central bankers, states that the unraveling of the global economy is now beyond the point of no return. There was little mention of it in the media because nobody really had a vested interest in talking about it. This report was the most comprehensive study of the global economy and its likely outcome between now and the end of the new decade. The BIS noted that in an effort to provide a global synthetic economic recovery, the G-20 nation-states have expanded their total governmental debt by 30% in 2009. What does this mean?
2010: Geopolitical, Economic & Military Forecast for Planet Earth; Where the Smartest Money on the Planet Is Investing
(12-21-09) You may have heard about “Smart Money.” What about the “Smartest Money”? When you take a look at that in conjunction with what markets are telling us now, you can draw a picture of what 2010 on Planet Earth will look like…
The Problem of Sovereign Debt & the Credit Rating Agency Scam
(12-14-09) The deteriorated credit ratings of sovereign debt, especially as we see it in Dubai, Greece and Ukraine, etc., has rankled global equity markets. This has also driven money into the US Dollar and is primarily responsible for the recent rally we’ve seen in the Dollar.
Sovereign debt is the debt of foreign nations, Second and Third World governments, denominated in a currency other than its own, to wit US Dollars, Yen, Pounds or Euros. This sovereign debt has been sold and is payable in a currency other than that of the issuing country. Usually the largest amount of sovereign debt outstanding is denominated in US Dollars and Japanese Yen. So what does the credit rating downgrade of the government debt of Greece and Dubai debt really mean?
Dubai Debt Debacle Roils Market: Force Majeure. Or Another Bailout?
(11-30-09) The marketplace knew this Dubai problem was coming when the Dubai government said it would seek to renegotiate the loans of Nakheel, the defacto real estate development arm of the Dubai government, which would be unable to continue to service its debt. The Dubai government is behind this and it owns the project. Also it is guaranteeing the loans. Prior to that, the Dubai government said that it would try to renegotiate about $40billion worth of loans regarding this Dubai World project which the Dubai government is responsible for. That did not initially roil markets because people knew there was a problem, that Dubai had overbuilt and that they were about to go through problems that other countries have had with high-end residential real estate. The implication was that Dubai would simply have to bite the bullet and renegotiate loans. It hardly caused a ripple. But what did cause a ripple came Wednesday night last week when the Dubai government asked for a 6 months extension in servicing the debt. No country has ever been able to get away with it without being declared to be in default. In other words, this is a defacto force majeure on the debt. What does this mean?
The Obama Regime’s Financial Regulatory Changes Threaten Speculative Bubbles
(11-23-09) Last week Secretary of Debt Tim Geithner appeared before the House financial regulatory reform subcommittee, and not surprisingly, he was attacked by all the right-wing Republicans, since they love to attack him and Obama saying – it’s your recovery and it’s your problem and it’s all your fault. Then we saw that even the moderate Republicans came to his defense and clearly said that this was George Bush’s mess. The right-wing Republicans then got red in the face, when their fellow Republicans pointed that out. But what was interesting and telling about his congressional testimony was the detail he provided on the Obama Regime’s ongoing financial regulatory reform initiative, particularly as it relates to limiting leveraged trading by the investment banks and brokerage houses. Geithner was unusually detailed, and he said that the CFTC under new management has now been given much more authority than before to regulate commodity markets so that the CFTC would move to re-impose daily trading limits in all trading contracts. This is the way it was years ago. Daily trading limits and contracts were first imposed in order to provide some stability in markets and to prevent calamities from occurring. The rules, however, for daily trading limits and maximum contract sizes that any one firm could hold were done away with under the Reagan-Bush Regime. It was necessary to do away with these rules since their intent was to build a gigantic speculative bubble, which, of course, is what the Reagan-Bush Regime did. Now what?
Overnight Trading: How to Make Your Money Make Money
(11-16-09) Real Trading isn’t trading using charts, fancy graphics and colored lights. Those infomercials advertising trading services are mostly financed by the brokerage industry, and they are responsible for consistently diminishing the so-called “burn rate,” which is the average number of days that a $10,000 trading account will last. Now it’s about down to 5 days – thanks mostly to the trading chart and colored light services. In other words, don’t be seduced by the infomercials. Please try to understand that the $5000 commodity trading seminars that teach you how to trade off charts and graphs are a complete waste of time. They aren’t even using real technicals. They’re using faux technicals which don’t even correspond to any reality. Why? Because they’re easier to understand…
Big Changes in Global Economic Policy: Oil Scam 101 & Other Speculative Bubbles
(11-9-09) It’s been another week in the decline of America, the Once Great Nation and former leader of the so-called Free World. And this bespeaks of the problem with newly created speculative bubbles – the same phenomenon in oil which we saw in 2005 and 2006. Oil is so overvalued now in terms of its supply’ demand fundamentals that global storage of crude product is at an all-time high and the number of ships that are off-shore which are being used as storage facilities has also grown to a record high. According to recent reports, there are 758 Class-1 tanker ships which are being used around this planet as de facto storage for crude petroleum. And where are the ships being kept?
The Evolution of Bushonian Fraud
(11-2-09) The most recent consolidation of wealth was dynamically advanced under the Bush-Cheney Regime, which depleted all of the fiscal surpluses it inherited from the fiscally prudent Clinton-Gore Regime and then accrued enormous fiscal deficits. Thus an enormous speculative bubble was created through a cheap and easy money policy that was kept too long, on purpose, and which then collapsed, leading to enormous wealth generation for those who were effectively short assets after the collapse. You could call this the "wealth multiplier effect" of collapse.
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From US Bank Failures to Civil Unrest: How Soon? How Bad?
(10-26-09) According to Bloomberg, the FDIC said 416 banks with combined assets of $299.8 billion were on its list of “problem” lenders at mid year. Meanwhile 106 banks have been closed by regulators this year to date. This compares with 179 banks which were shut down during the Savings and Loan Fiasco of 1992. Last week FDIC Chairman Sheila Bair told a Senate subcommittee on financial institutions -- “The most prominent area of risk for rising credit losses at FDIC-insured institutions during the next several quarters is in Commercial Real Estate lending.” What does it mean?
The Legacy of Bushonomics: The Creation of a Permanent & Growing Underclass
(10-19-09) FDIC Director Sheila Baird is becoming one of the most plain-spoken members of the Obama Regime. She’s been saying that the Obama Regime’s programs to initiate financial regulatory reform, in order to prevent the formation of another speculative bubble and another disastrous collapse, is frankly in trouble. The Regime is now backing away from doing what is necessary in the realm of fiscal regulatory reform. Why? Because the Republicans are dead-set against it, and the Obama Regime has come to understand that if it doesn’t give in to Republican demands, there will be a case of Government-By-Gridlock again.
Fed Governors Invoke the Dreaded D-Word (Deflation)
(10-12-09) There has been an unusual amount of Fed Speak last week, as many of the Fed Governors have been stumping in various venues. This is usually done only when the Fed is trying to send a signal. Then it becomes important to pay attention to what the Fed is saying. The signal they were sending was twofold. For the first time they used the D-Word -- Deflation. They said that deflation is now the problem. It is no longer inflation, but deflation will become more of a problem in 2010 -- as prices continue to deflate. The second message they’re trying to send is that although they’re prepared with an exit strategy to withdraw liquidity, they will not do so at this time – and indeed can not do so because the economy is in a “synthetic” recovery. By using the word “synthetic” in this context, they’re attempting to engineer economic growth on the back of deficit-financed government spending, aware of the fact that consumption is going to fall even as it is now falling – and will continue to fall in the future. This can be seen in declining retail sales numbers and the dramatic increase in the personal savings rate over the last 2 quarters. What does this really mean?
New Global Economic Forecast: “Grey Skies” Forever
(10-05-09) Governments globally are increasingly adopting “grey skies” economic policies – in recognition of coming deflation. In other words, governments are becoming more and more “Japanized”. This means that all G-20 nation-states are moving in the same direction as Japan has done. This will be a permanent substitution for “retail consumption” by government spending. A recent example of this is the Government of Ireland’s decision to effectively bail out and refinance (and ultimately own) all private real estate in Ireland. This would require the Irish government to issue 90 Billions Euros (equivalent to about USD 130 Billion) which happens to be 2 years of Ireland’s GDP. This is an enormous gamble. They are trying to take Social Welfare-ism to its ultimate conclusion – in order to save an economy which is the furthest-out, so to speak, in the Socialist Welfare economic model. This is because of Ireland’s state payments and state guarantees, i.e. a state-controlled economy. They are attempting to prevent a collapse of the Irish economy by effectively playing the end-game of Social Welfare-ism, making government now the largest owner of assets in the economy.
G-20 Pittsburgh: The Obama Regime Leads the World… Against Financial Regulation
(9-28-09) These G-20 meetings are usually considered nothing but a “photo opp,” but this time the G-20 leaders wanted to use it as a platform to prove that they are doing something to attack the global economic crisis. So they came up with a plan to coordinate financial regulatory reform. Now it was actually Obama who was the one that had to argue against caps on bankers’ salaries. Britain, Germany and France all wanted strict limits on bankers’ pay – but of course it goes beyond bankers. It’s the entire so-called financial community who want no pay caps imposed on themselves. Obama knew that this would create a problem with Republicans, and that the Republicans would use that as an issue. The Obama Regime was prepared to relent some in that they’ve toned down the rhetoric on this idea of Banker, Broker and Trader (BBT) pay caps. It’s a contentious issue with the Republicans, who keep using it as a distraction.
Smart Republican Money Gets Short -- Again
(9-21-09) The bleeding of air in the new speculative bubbles should begin this week.
Gold Rises. Dollar Falls. Why? (How To Make Money Whether Gold Moves Up or Down)
(9-14-09) Gold continues marching up the “technical ladder,” as traders say, so the Gold Shill is still alive. And now we are beginning to see the steady decline of the Dollar. This is what has been supporting Gold and Silver, but what Joe Six Packers need to understand is that a declining Dollar does not support all commodities. What does that mean?
Anatomy of a New Gold and Silver Sucker Rally
(9-07-09) Be careful of recent rallies in gold and silver. They are unsustainable... What does that mean?
In Bernanke We Trust: Global Leaders Still Addicted to Cheap Money & Speculative Bubbles as “Economic Policy”
(8-24-09) As the old saying goes, global leaders are trying to have their cake and eat it too. What does this mean? There were two good examples last week. One was the Bernanke speech on Friday, where he was commenting on the Kansas City sponsored Annual Jackson Hole Fed Symposium. Once again he tried to tell us how wonderful things are and that recovery is at hand – but the recovery will be slow and there are so many pitfalls yet to come. He intimated that the Fed was concerned about domestic equity markets and global commodity markets being overheated. Yet on the other hand, he said that there is no policy change on interest rates and that we will keep money cheap and liquid, which is fueling the very same speculative bubbles that I, Ben Bernanke, am concerned about.
Then there was the China’s premier Wen Jen Bao, who did the same thing Wednesday in a major economic address, when he said that the Chinese government is concerned about the speculative bubbles, which have been created in the Chinese equity market and global commodity prices – using almost the same words as Bernanke. But then he said we’re concerned, it’s overbought and there’s going to be a crash of the markets. We are going to take urgent measures to curtail speculation in Chinese marketplaces. Then he finishes up saying – however we will still continue to provide Trillions of Yuan in economic stimulus and we will keep money cheap and liquid that is fueling those very same speculative bubbles that I am telling you I’m concerned about.
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Obama’s Tax Bomb: Coming Soon to Your Neighborhood
(8-17-09) Obamanomics is an economic recovery plan that, simply put, will raise consumer prices. Meanwhile AP is reporting that “consumer prices have fallen more in the past year than in any 12 month period in nearly six decades.” And therein lies the irony -- how the Obama Regime is able to hide increased consumer prices. Even Joe Six Pack knows this isn’t true. Anyone who goes to a gas pump or a grocery store or purchases tobacco and liquor or any hardware items knows what’s happening to prices. This is very disingenuous, since they’re comparing prices to a year ago -- and not to 2 or 3 months ago. It should be remembered that in the first quarter of 2009, gas prices fell to less than $1.50 a gallon. Now, according to Lundberg this week, the median price at the pump is $2.63 a gallon. So what does Joe Six Pack get out of this?
Anatomy of a Bear Market Rally; How the Grand Market Conspiracy Works; Expatriation Update
(8-10-09) Joe Six Pack investors have been baffled at last week’s market action. Friday’s unemployment report got an awful lot of play, particularly in mainstream media, since it was better than expected. Nobody is saying, however, how deceptive that is. What is going on in the markets is increasingly becoming more “populist” so to speak because so much of this market action is bleeding into the mainstream.
On Friday (August 7, 2009), for instance, the release of the monthly unemployment report for July showed that the unemployment rate declined from 9.6% to 9.4%. Expectations for job losses were at 350,000, and they came in at 247,000. This then caused a continuation of the rally in what is already an overbought market -- despite widespread expectations that the market was going to come down, particularly since the market had begun to soften midweek. So who’s doing all the buying?
America’s Health Care Crisis: Looking for Solutions in Moscow; Response to Detroit City Boosters
(7-27-09) The health care policies of the Obama Regime have been the big issue of the week. It’s time for the United States to recognize, as increasingly other G-8 Nations (First World Countries) are recognizing that state-funded health care can not be maintained and it’s time to look at the issue practically. It’s time for the United States to adopt the Russian Solution to the health care crisis.
Obamanomics Means Speculative Bubbles-R-Us -- Just Like Bushonomics
(7-20-09) The Obama Regime is playing a dangerous game, relying on the creation of new speculative bubbles to prevent further economic deterioration. Even the Bullish Shills you hear every day in financial media are asking why the Fed won’t reduce liquidity or soak up the enormous amount of money it’s plugged into the system, which, by the way, is no longer doing any good. There are economists who say it’s time to soak that liquidity up because it’s inherently dangerous to have so much money sloshing around the planet’s system at a time when retail demand for that money continues to fall. Even China is exerting more pressure against the Obama Regime because it understands the danger of allowing too much liquidity as an economic policy, i.e. maintaining trillions of dollars of unused capital in the planet’s economic system. So what is the Obama Regme trying to do?
American Labor Camps? Thank You, General Primakov!
(7-13-09) In this economic environment, work camps in America may ultimately be “necessary.” What’s the one area where the Obama Regime has not fulfilled its campaign promises? Reversing US PATRIOT Act powers and dismantling the CILF (Civilian Inmate Labor Facility) program. Indeed they’re spending more money on CILFs because they understand the need for it, and they understand the need for the President to have PATRIOT Act powers in an economic environment wherein civil unrest is growing and will be growing even more...
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Detroit: The Post-Apocalyptic Future of American Cities?
(7-6-09) Here’s a glimpse of a Turn Key Approach to Urban Wasteland Management ™. Last week I had a chance to talk to a friend who just got back from Detroit and boy did he get an eyeful of America’s Future. After listening to him describe Detroit , it’s obvious that it has all fallen apart. First of all, there’s very little civil authority or regular civil government remaining and in operation. Almost everything has been turned over to these so-called Private Management Companies. And this is how it’s being done. They block out areas, in which 80% or more of the houses have been foreclosed on, which happens to be almost the entire city and county. They have selectively begun to bulldoze the properties which have been foreclosed on. The rest have been boarded up. Then they have turned over management of these 100 block area to private companies which have become defacto governments. They have the literal authority of “governments” and they’re paid a flat fee from the city, county or state to “manage,” as they say, a square block of this urban wasteland.
The Obama Regime: Floundering As a Policy of State
(6-29-09) You may have noticed that Secretary of Debt Timothy Geithner is being kept out of sight, as is Economic Non-Advisor Larry Summers, because they have both stuck their foot in their mouths so many times that they don’t want to keep putting them out up front. I think what they’re doing is that they’re protecting the “home team,” like Geithner and Summers who are part of Obama’s inner circle. They are being protected against themselves by keeping them away from the media. Now Fed Chairman Bernanke is increasingly being stuck out front on purpose because they view him as an outsider and they don’t know how much political support they want to put behind him for another term.
The New “Double-Dip” Economy -- It Ain’t Gonna Be An Ice Cream Sundae; Joe Six Pack America: Sheared Again
(6-22-09) Are you prepared for the coming “double-dip” economy? It is becoming increasingly clear that what I call the Endlessly Bullish Shills have lost the battle of promoting the Lie of a “V-Shaped Recovery,” and that in fact, even a “U-Shaped Recovery” is not likely either. What is much more likely is a so-called “W-Bottom.” In other words, we have reached the “peak” of the first so-called recovery and we are in the apex of the bottom of the W. What does that mean?
Real World Economics: The Global Bailout Bubble - Is the Planet Drowning in Liquidity?
(6-15-09) Yes, the planet is drowning in money. That’s literally what’s happening. Governments are printing money as fast as they can. Corporations are issuing new equities and bonds. These events have had the odd effect of simultaneously creating both deflation and inflationary pressures. What does it all mean?
The Market Confidence Game; Time for Sec. of Debt Tim “Let’s Print Some More Money” Geithner & Fed Chairman Ben “Bail Em All Out” Bernanke to Go
(6-8-09) Market gyrations have been ruling the day, and more importantly, even though the equities closed with very little change, after a pretty wild ride, the equities moved up after a sharply better than expected unemployment report. They were looking for job losses of 525,000 and came up with a loss of 345,000. However the unemployment number is one of those statistics that is very much a double-edged sword because Joe SixPack, who looks at the evening news doesn’t know what the sub-components of the report are, from a hole in the wall. Nor would he understand. He’s just told what the unemployment rate is, which is almost meaningless. The sub-components (how many payroll jobs were gained or lost, the month-over-month hourly wage figures, the average hourly work week, is what’s really important. The unemployment number itself really isn’t. But back to the gyrations… What the market didn’t like was the big jump in the unemployment rate, wherein the rate jumped from 8.9% to 9.4%, which was much higher than what they were looking for.
The Coming Debacle in Commercial Real Estate
(6-1-09) Speculative bubbles continue to balloon, as housing data shows home prices continue to collapse. So the economic absurdities continue unabated. We are now completely immersed in the Obama FantasyLand Economy where everything is supposed to be “wonderful.” It’s like Wall Street Journal’s Andrew Ross Sorkin just said – Look at what equity prices are doing. There aren’t any problems. GDP isn’t falling. Everything’s just great. Meanwhile, last Thursday night (May 28), the Fed actually came out with a statement which in essence said – we do not understand what is happening. That certainly inspired confidence. Cue up the laugh track…
The Obama Regime Creates a Financial Frankenstein with Trillions of Borrowed Money
(5-25-09) Readers have asked why we don’t write about “political” topics, as we have done in the past. Unfortunately there is nothing “political” anymore. That has all taken a back seat now, even in the general media. Nobody cares about anything “political” anymore. Now it’s all “economic.” Why? Because the governments understand that the planet’s economy continues to teeter as it were on the brink. Every week they are faced with a new problem. Certainly the news of the week last week was the credit rating agencies and the attack they made on the U.K. Gilts (government bonds) and the second warning they made about U.S. Treasuries on Friday (May 22) that roiled the planet’s bond and currency markets.
Understanding Economics 101 (Part 2) -- The Market Correction: Coming Soon? Or Has It Arrived?
(5-18-09) In recent news, New York Attorney General Andrew Cuomo has had some success in dealing with the Carlyle Group kickback scheme. In fact he is one of the few regulators in the United States who has had success in getting settlements out of people. He got $20 million out of them which is really just nickels and dimes in the greater scheme of things.
Banks “Pass” Phony Stress Test & Enter New Fantasyland Economics (Son of BFLAP)
(5-11-09) The Geithner “bailout,” including the bogus so-called “Stress Test” for banks, as well as the so-called Public-Private Investment Program (PPIP) which allows financial institutions to trade their “trash” for cash, has thus far been a dismal failure. Essentially the Obama Regime is using US taxpayers as the new dumping ground for every worthless asset imaginable. You may have heard about the Fed’s new equation for economic recovery -- Absurd Divided by Bogus Equals Cockamamie...
Lying with Statistics: The Reflation Trade Hoax & Avoiding the D-Word -- Deflation
(5-4-09) We are now witnessing history in the making. Domestic equity prices have generated a 4th sell signal in as many weeks last Friday - May 1, 2009, with the completion of the so-called Dow Theory Indicator. The first part of the Indicator which many people are familiar with is the Dow Industrials divided by the Dow Transports. This already generated a sell signal 4 weeks ago, but we now have the other half of that index, namely the Dow Industrials divided by the Dow Utility Index, also flashing a sell signal. Historically this has always been a danger sign, when the Dow Utility Index rises proportionately more than does the Industrials or Transports. This has happened only 4 times in the 113 year history of the Dow Jones indices. What does this mean?
The Conspiracy Against Joe SixPack; The Fed’s Bogus Stress Test Scam
(4-27-09) The Obama Regime is lying. The banks lie, and people don’t understand why. What is the motivation? The motivation is that the Obama Regime is scared shitless of telling the truth because if the people knew just how close the United States, and by extension the rest of the planet, is to utter economic collapse, their fear would become a self-fulfilling prophecy. Now they’re effectively sacrificing Joe SixPack. How? Because the Obama Regime’s lies, complicit with the lies of financial media’s Great Market Shill Machine brought in a record number of Joe SixPack 300 Share Buyers. This has taken place within the last 3 months, from February to April 2009. They’ve brought in Joe SixPack buying, and this has been done in concert with the complicity of the investment banks which are not selling stock. There’s the key. Joe alone can’t hold up the equity market. He can only do so -- if selling is withheld. So what exactly is the conspiracy?
Understanding Economics 101: Tricks of the Trade & Understanding P/E Ratios
(April 20, 2009) Over the years, I’ve had many questions from people who don’t understand economics. People hear the terms “fiscal stimulus” or “monetary stimulus” but they don’t have a clue. Or they hear “Price/Earnings (P/E) Ratio,” which is how do you value markets, and they don’t know what this means. Or they hear the term “economic fundamentals” and it doesn’t mean anything to them. The ignorance is enormous. People don’t even understand what “supply” and “demand” means and how that affects price expectation. One of the most common questions I have been asked – why do all markets seem to be in a continuous state of overvaluation? And then there’s the story of the Market Fundamentalist vs. the Market Shill, and it is the ongoing battle… This is very relevant now because the equity markets are dangerously overbought – and even the Shills admit that now, saying that the market needs some sort of a pullback. Even the Shills know that the further you stretch the rubber band, the harder it snaps back…
Dumb Money: Failing to Learn the Lessons of History
(4-13-09) The dumb money pouring into the equity markets should take a look at history, specifically what happened after 1933, to see how equity and real estate prices declined, What caused those declines is the same problem we’re having now. The similarities are such that they are simply amazing. There’s credit quality downgrade, increasing corporate and governmental defaults and increased write-downs. That’s exactly what took markets lower in the second half of 1933 and into 1934.
Now we see the new asset bubble being created in the markets by a confederation of the Obama Regime and a constant Bullish Shillism by the media with conveniently timed press releases. They have asked banks to pre-release their first quarter earnings if they are better than expected, such as Wells Fargo did on Thursday. This then prompted another rally in a significantly overbought market.
Reflation? No Bottom in Sight…
(4-6-09) The Global Financial Crisis and the G-20 Meeting in London have highlighted the ongoing battle between the Reflationists, who believe that government fiscal stimulus will reinflate (or reflate) the world economy Versus the Supply/Demand Fundamentalists, who think that commodity and equity prices are still overvalued.
Reuters has reported that “G20 leaders have endorsed a strategy that will transfer loan losses from banks and creditors to taxpayers (via government debt guarantees) and savers (via money creation and inflation). In their summit communique, they committed themselves to a strategy of reflation and moderate inflation in the medium term. While this is plausible and consistent, it has profound implications for asset allocation. It favors borrowers and owners of equities, commodities and other real assets, at the expense of savers and those holding cash balances and government debt. “(See G20 agrees inflation is solution to crisis)
The reflation trade is a bet that a rebound in the global economy will reflate the value of all assets, and drive up interest rates, as well as commodity prices. So what’s wrong with this “theory”?
Expatriation Update: What’s Hot & What’s Not
(3-30-09) It’s time once again for an expatriation destination update. So here’s the latest…
The Obama Regime Prepares for Civil Unrest; 1930-1940: Is It a Portent of 2009-2019?
(3-23-09) Economic history in the United States today parallels 1930-1940. Therefore if you want to see what 2009 to 2019 will look like, just look at what happened from 1930-1940. Gold confiscation. Gun confiscation. Property confiscation…
Unveiled: The Great Bullish Market Conspiracy; CNBC Market Shills Jim Cramer & Larry Kudlow -- One Down, One To Go
(3-16-09) Is this the end of CNBC, the Financial Entertainment Network, and its domination of what’s been called the “financial porn” market on TV?
CNBC is another part of the government-media conspiracy, which manipulates the markets through fear, greed and ignorance. Last week the Daily Show’s Jon Stewart castigated and in fact eviscerated CNBC Market Shill Jim Cramer for his disingenuous if not criminal so-called “investment advice.” Earlier that day Cramer appeared on the Martha Stewart Show, where she had him pounding dough, quipping that he was practicing on Jon Stewart’s head. After playing that clip, Jon Stewart said that Cramer doesn’t work dough; Cramer loses it for other people. Now CNBC has gone so over the top that their slogan for the show is “In Cramer We Trust” replacing God with a TV huckster named Jim Cramer. So what exactly is the Great Bullish Conspiracy with all of its interlocking components that work in tandem every single day?
Global Power Shift: What’s America’s New Role?
(3-9-09) The consequences of Bushonomics I and II and the enormous build-up of debt at all levels of American society, which caused debt-financed consumption to maintain artificially high Gross Domestic Product (GDP) far exceeding what has been America’s traditional 2-1/2% annual growth r has accelerated what was an ongoing change in power structures on the planet by causing the US economy to be “Japanized.”
Wall Street vs. Herbert (Hoover) Obama
(3-2-09) The war between Wall Street and the Obama Regime was played out last Friday as traders pounded the bank stocks lower after the release of more details of the so-called Geithner Bank Rescue Plan. What’s interesting is they’re not calling it Obama’s Plan. Now they’re lining up the potential sacrificial lambs, so now it’s called the Geithner Plan. The Obama Regime is smart enough to know that everything they’ve proposed so far has not worked -- and will not work. Therefore, the first thing you do, if you’re in the business of politics, is you set up a scapegoat. And between Gethner and Bernanke, guess who’s getting set up? Who could it be that will end up as “the fall guy”?
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What Hath Bushonomics Wrought? The Financial Exhaustion of the United States (And Planet Earth)
(2-23-09) There is a financial exhaustion of the United States and indeed of Planet Earth that has occurred during the first decade of the 21st century because of Bushonomics, a “school” of economic thought, which was adopted not only in the United States but globally. In short, Bushonomics is negative debt-financed consumption. So what hath Bushonomics wrought around the world?
Obama’s Bogus Housing Rescue Plan: A Darker Shade of Pink
(2-16-09) Last Thursday was the unveiling of the Obama Housing Rescue Plan. This was supposed to have been released with great fanfare, but they learned from last week’s release of the Banking Rescue Program when the markets got hit due to the lack of specificity not to expect anything. The New Housing Rescue Plan, however, also contains few specifics. So we have seen further confirmation of what we’ve been saying before -- every rally that has been created through the announcement of another Obama Financial Rescue Cum Bailout Program is nothing more than a fresh short-selling opportunity. It’s apparent that the plans that they have are unworkable and they are coming up against the same “brick wall” the Bush Regime came up against. The “brick wall” is that you can’t untie bundled mortgages that have been resold 64 times. So even though the market lifted substantially, the so-called New Housing Rescue Program does not apply to any existing mortgages. So what good is it?
Obamanomics: Post-Bushonian Bi-Partisan Fantasyland Economics
(2-9-09) What we have seen in market reactions is that Obama has everyone pumped up into believing that he can fix everything and mitigate the effects of the current recession. Obama is now being billed by the Democrats as some sort of a miracle worker, even though he’s promising things he can’t deliver, namely mortgage relief that is unworkable and tax relief that isn’t going to happen. He keeps saying that we’re going to be able to create 4 million new jobs. That’s nonsense because he’s fighting a recession in which there are already 500,000 layoffs a month. The recession is sapping the value of the fiscal stimulus, even though this is being promoted to the unwashed, so that the unwashed have piled into the markets. The tone of the news broadcasts is that Obama is the savior -- that the markets can sustain levels of overvaluation for years to come, that there will be no more foreclosures, that he will create 4 million new jobs, and that he can prevent the current recession from deepening. The way this is being billed to the public is false, but the unwashed are lapping it up. They’re buying equities willy-nilly, and they’re buying real estate again under the premise that if they can’t make the payments, Obama will…
False Hope: Obama’s ‘Bad Bank’ Rescue Plan, A Trillion Dollar Boondoggle for Taxpayers
(2-2-09) The new plan that has been floated by Obama’s so-called ‘Economic Recovery Team,’ led by former Under-Secretary of the Treasury Larry Summers and former NY Fed governor Timothy Geithner is what’s now known as a “Good Bank/ Bad Bank” rescue plan. This may be likened to a Good Cop/ Bad Cop scenario, in which everyone seems to be talking out of both sides of their mouth. They’re talking about having the US Treasury purchase so-called “toxic assets” from the nation’s commercial and investment banks. “Toxic assets” is another name for busted-out mortgage paper, not only sub=prime mortgage paper, but defaulted mortgage paper like CDOs, CMOs and other securities that are now worth, let’s say, less than 30 cents on the dollar.
Obamanomics, Economic Reality, and the Price of Gold
(1-26-09) The so-called “Obama Shill” turns more desperate, as the world falls apart. So what’s the difference between the Bush Regime and the Obama Regime? Not much. Last week we saw more affirmation of what the incoming Obama-Biden Regime is attempting to accomplish by maintaining a shill to keep markets overbought for as long as possible -- before economic reality sets in. What he’s doing is no different than what the Bush Cheney Regime did with oil, namely, they did everything they could from a policy standpoint to maintain high oil prices for as long as possible fro the purpose of wealth consolidation within the Bushonian constituency. Now Obama is trying to maintain overvalued equity markets for as long as possible to prevent the IRAs and 401Ks of the working class from looking any worse by instituting mortgage reform in an effort to reduce foreclosures, none of which is workable, by the way.
Japanization Rules: Global Economic Collapse Postponed… For Now
(1-19-09) Consensus builds in Washington. Japanization of the world’s economy is the only way to prevent global economic collapse and preserve the new “modified” capitalism. For the first time, officials of the incoming Obama-Biden Regime, as well as senior members of Congress in both parties are using the word Japanization in financial media. Now you see people in Washington using the term, including former under-secretary of the Treasury Larry Summers, who will be the new chairman of the Presidential Council of Economic Advisors. Summers is widely respected in both parties, and he’s the new go-to guy, as they say in Washington, for the new Obama-Biden economic policy. Why is there a new consensus now? Because it’s either that -- or we allow global economic collapse to occur.
Is Obama Keeping Market Bubble Alive?
(1-12-09) It’s becoming clear that Obama is playing the shill game. Please note some of the speeches he made last week, where he provided very few specifics about his financial stimulus program. Nevertheless he urged the equity markets to move higher despite ever increasing bearish fundamentals. It’s obvious that he wants to extend the honeymoon with the markets as long as he can. All he’s managing to do, however, is rob Peter to pay Paul. Why? Because Obama has now been keeping the markets artificially inflated by joining the shills of the financial media that we are not to worry about the depths of this recession and that we are not to be concerned about multi-million job losses nor are we to be concerned about a 25% decline in S&P earnings. Obama is implying this and in so doing, when the honeymoon is over 30 to 60 days from now, he is ensuring a greater decline in equity prices than would otherwise have occurred because he is part of the “Shill Program,” shall we say, that is keeping equity prices artificially inflated. So who is responsible?
Welcome to the World of Deflation; Will Japanization of the Planet’s Economy Prevent Global Economic Collapse?
(1-5-09) The impact of Japanization is that it retards the ability of the middle class to create wealth. Traditionally this is how the middle class created wealth. They have done this by buying a home which has increased smartly in value over time and investing in stocks that have always risen in value over time. But what if you take that away…
The World Turned Upside Down! (2008 Year-End Recap and 2009 Outlook)
(12-29-08) 2008 was the year that helped Americans get rid of their much-cherished, rose-colored glasses, which had so long blinded them to the “Great Lie” that everything worked the way they thought it did. Very simply put, 2008 was the year of the Global Unwinding of Speculative Bubbles caused by Bushonomics. In 2008, Bushonomics became not just a domestic, but a global event. It was also the year when the speculative bubbles that Bushonomics created simply burst, laying bare the motives of Bushonomics itself.
A Sordid and Tawdry Affair: Central Banks Attempt Bailouts – Again & Again & Again…
(12-22-08) The efforts of global central banks to keep their economies together – what a sordid and tawdry affair it has become. They’re like a bunch of little rats running around in the back room, trying to keep the whole thing together with little bits of string and baling wire. That’s what they have to do – to prevent global economic collapse. You can see these little rats with the faces of Bernanke, Trichet and King. And they’re all running around with little pieces of string in their teeth and their paws are trying to pull all sorts of stuff to hold the planet’s economy together.
Don’t Be Overhyping “Hope”: An Open Letter To President Obama…
(12-15-08) Dear President Obama, Please tone down market expectations of your economic stimulus program. You’ll be glad you did. Here’s why…
Beware - Major Disconnect Between Economic Reality & Stock Prices
(12-8-08) The most important issue today is the continuing dangerous move higher in equities (stock prices). Recently the number one question on CNBC and Bloomberg from Joe Six Pack 100 Share Investors has been – How the hell have equities been able to move higher after such inordinately bearish news flows?
The End of US Sovereignty: How the Fed Is Playing Chicken with Future Creditors of the United States
(12-01-08) This is the story of how changes in the TARP Bailout Program will negatively affect millions of working class investors. TARP was the name of the original Treasury-Federal Reserve bailout/rescue package, and now that it’s been changed, we’re way beyond Plan B. You could say that now we’re up to TARP #14. TARP has been changed and changed and changed again. Now we’re to the point that it is far removed from what the government’s original intent really was. Now there's even more danger on the horizon, and here's what we have to look forward to...
Vol. 3, No. 6
Iran/Contra and the
Collapse of the USSR:
by Al Martin
(For Subscribers Only)
Vol. 3, No. 5
Day of Reckoning:
Protocols for Economic
Collapse in America
by Al Martin
(For Subscribers Only)
Vol. 3, No. 4
$100 per Barrel Oil:
When? How? Why? (Part 1)
by Al Martin
(For Subscribers Only)
Vol. 3, No. 2-3
High Level Global Scams:
The Big Picture
by Al Martin
[Inside the Credit Lyonnais-Executive Life Fraud]
(For Subscribers Only)
ARTICLES ABOUT AL MARTIN
Al Martin: The Man Who Knows Too Much
Doublecrossed: Black Ops, Beltway Bandits & the US Shadow Government
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