Sunday, March 29, 2015

THE GREATEST BULL

Only a fool couldn't have recognized "it". You bulls were right and I missed it. Obama crossed his legs in March of 2009 and gestured to the camera calmly recommending that "you" should buy stocks here they were a good investment. It was a bizarre moment in history where a sitting President after weeks of telling the American people over and over just how "bad" the economy was suddenly smiles and does a 180 on the "stock market" and says publicly BUY BUY BUY. Was there a partnership made between the government and the bankers? Maybe, or just maybe it was a coincidence that the recession was shortly declared "over" and the market has gone straight up now for over 6 years. 

Sure, its a ton of money missed on the long side of the "market". Do share buy backs and massive executive compensation as a result make me feel any better with the artificial P/Es? Does the languishing median wages for the past 10 years make the economy any more palatable to the masses? Probably not to most but to many it may be considered a success. Many pundits constantly (and correctly) point out that QE did not work because we are essentially in a 2% growth rate that probably is not keeping up with true inflation. To be fair to QE proponents WHAT do you think the real economy would be if they hadn't printed TRILLIONS to buy our debt and prop up their banks? 

So was that indeed the right choice? I'll wager you would not like to see what things would have looked like around the world if they had not printed more debt. So here we are. We're fixed and good times ahead.....right? They've kicked the can and pushed us out far enough that everything has fixed itself....right? We've controlled the media message. We've twisted our allies arms. Heck...we've twisted virtually every arm of every country in the world to keep this together. If they didn't go fully along, we broke their arms and/or bullied them into compliance. We've stretched our armies beyond belief and expanded the spy grid into everyone's bedroom to keep the glue together.....and so here we are.....we're in a recovery. The stock markets tell you so. 

Yet something just doesn't feel right. Now every country besides us seems to be in a race to debase their currency. Strong arm tactics are being exerted everywhere for capitol controls and negative interest rates. Never in my lifetime could I imagine a world this distorted with only MOAR distortion on the horizon as far as the eye can see. The Fed is talking tightening of course...they're backed into a corner, but even the massaged economic numbers are showing slowing. So how does that work out? 

Greenspan, Dalio, and many mainstream banking gurus are sounding an alarm, and they seem to feel its going to be a very hard time ahead for the "recovery". Maybe they know something. 

What happens when you've thrown trillions of dollars at your economy that you don't have? What does the world think when you've bullied and browbeat them for the last decade? Maybe they're growing weary of the wars and collusion of Central Banks. What happens when they say enough of the dollar supremacy and your ability to print endless amounts to enable you to bully some more? Maybe they develop an alternative to that hegemony. Surely not? Surely they wouldn't want to leave that subservient role. I mean seriously who doesn't want their daughters turning to prostitution after a medical education. Who doesn't like a few million casualties to protect the hegemony. Human nature, maybe its more predictable than you think. People are getting more and more disgusted. gl

Thursday, March 26, 2015

THE QUICKENING

Morning news cycle meet Middle East Destabilization plan. Low Oil meet Saudi troops in Yemen. Yemen populace meet Arab Spring. Up meet down. Good meet bad. Time for some air to come out of the tire. Algobots will remain in CONtrol, but that doesn't mean the trade doesn't change. There's a lot of money to make on the downside for the bankers here and never fear they'll eventually be on that trade. 

Will they "use" the fear trade to sucker in some more short money for a nice scalping or do they slaughter all the sucker money and the "buy the dipchit" crowd? Only the hand knows. Its a paper slaughter and there isn't any self-respecting smart money on the street that isn't just perplexed but scared shitless of this market. They can't make money in this type of algo driven trade. Its insane.

Watch the MSM for a clue on when they squeeze the shorts, but it should be volatile for the next few weeks. Look for gold to be taken up before the paper players crush it again. China's accumulating physical and will help the West paper pushers keep the price down until they cannot be provided physical any longer. Its a game and its beginning its final phase of quickening. One morning you'll wake up and the headlines will say "game over". gl









Sunday, March 22, 2015

TO DA MOON ALICE

You don't get it do you Alice? This is very serious. We gotta get this Greek guy Tspiras or whatever his name is to go along with our deal. We can't keep jugglin' this ponzi if these guys won't play ball. After all, we have control of the money. We can print and they can't so what in the hell do you think they're trying to pull. They gotta pay the vig Alice, its just the way things are. It really pisses me if they think they can walk away from the deal after everything we've done for them.

We gave em that Olympic dog and pony show. We let'em build all of those hotels on the Adriatic. We let'em have all of those great retail shop developments and their pensions and their schools and the big vacations and this is what we get for thanks. Well Alice, it just ain't gonna happen. I ain't gonna let it happen. These two snot nosed boys that we put in down there in Olive Oil land are our people. They wouldn't stiff a boss, they know better.

We can fix their debt problem. We've told them its easy. Alls they gots to do is sign on for some more debt to pay the vig on the old debt. What's so damn hard to understand? Its not rocket science Alice. The dumbasses in the States get it. The Germans get it. Hell, even the Japanese get it, so why can't the Greeks just relax and take it. After all, if they can't take a little pain now with our austerity then what do you think they'll be like when we Ukraine them and turn their beloved ancient rubble into dust. But I guess you just can't make everybody happy. Hey Frank, get Biden on the phone for me......I got another job coming up for his kid. Ask him how would he like to be on the board of an Olive Oil company.

How many of us understand just how far things have fallen in this country when the SON OF A SITTING VICE PRESIDENT IS APPOINTED TO A MAJOR ENERGY COMPANY IN A COUNTRY WE ARE IN A MAJOR CONFLICT OVER. Just how absurd has the farce become? gl









Thursday, March 19, 2015

YOU THINK ITS A LITTLE STRANGE.....

don't ya? Maybe you're just one of those individuals that likes to think for themselves, and you don't like those doomer sites like Zero Hedge etc. Yet you read them and then you look at the market and at the financial news and you think you're being lied to, but your just not quite sure why all of these doomers are lying to you while everyone else is getting rich. Makes perfect sense to me. The logic is impeccable. 

We're in a recovery. Things are healing.....slowly....but surely. That's why CNBS just spent the last several days fixated on the word patience. I wonder if she'll raise rates 25 bps? Some of you have been avid followers of the financial system for years and realize this type of attention to the word patience is just typical healthy market behavior. Not to mention the overhang of 280 Trillion in debt just in the U.S. alone. Then add on top of that, the attention that Greece is getting from the ECB as the Eurozone goes into negative interest rates in their healthy, steady recovery.

Maybe we should take note of the significance of the evolving currency wars in the healthy recovery. Multiple wars and hostilities across the globe help me sleep better as we recover economically. I wonder if she'll raise rates 25 bps?

I heard today that Uber is a breakthrough/disruptive technology as thousands of Uber drivers try to tread financial water. Watta recovery? In fact they had a massive demonstration for Uber organized in Jersey today and it was all over CNBS all morning. That's such a dramatic story. I love the recovery and I wonder if she'll raise rates 25 bps this year?

Its right out in front of you. Its a recovery. Don't argue. Don't think, just buy stocks. The Fed may even let you audit them if you're nice plebes. I wonder if she'll raise rates 25bps in this recovery












Sunday, March 15, 2015

FREE MARKET CAPITALISM AWAITS

If you thought investing in these markets was going to be easy then maybe you should talk to about 85% of the hedge fund managers that are underperforming the indices over the past 6 years. Maybe you thought you would play the QE game and buy precious metals to preserve your buying power...or worse you bought the miners of precious metals. What a crowded trade of like minded investors that was. Paint a target on us and start shooting fish in a barrel.

Why beat this dead horse? After all, the Fed has taught you how to invest now and hopefully all the sheep have learned.....just as they did in the most recent Fed induced slaughters of 00 and 08. Maybe you still think about fundamentals. Maybe you're really pissed off because you know they've killed the real underlying economy and its future with their distortions. Maybe you think there's no true price discovery and all the parasites on the Fed free money trail have just created the "Mother of all Malinvestments". Maybe you're just that dumb after all. I was.

But history does have a way of repeating just as it did again this cycle, and guess how the last two cycles ended? Surely they won't turn this market over to the "Free Market".......you know.......their sharks.....the ones waiting out there for the fresh meat they're about to be served. After all, Joe Kernen keeps saying he'd like to have free market capitalism again. I think you'll get it Joe. I suspect you'll be the first to cry for the Fed to save you again. I'll bet you squeal like a girl Joe. gl



Wednesday, March 11, 2015

IS THERE SOMETHING OUT THERE?

We're in a recovery though. At least that's what you believe, right? You know deep down inside you're right and the rest of us non-believers are wrong. The market's up and the meme that through their "monetary policy" that "this can go on indefinitely" is being proven to be valid. In other words the incredibly stupid, ignorant, morons, buying shares of Amazon, Netflix, Faceplant, etc and ripping these malinvestments into the stratosphere proves that the real morons are those that believe leverage and sound monetary policy are just insane doom-mongers. Right? Come on. Deep down inside you know you've been right. The Fed really does have your back and your well diversified portfolio of stocks proves it. 

For one thing, we all know that in any bull market there's major froth in the market before the bull is over. I listened to experts today on CNBS reporting this very important warning sign that is always given before a major bear market. In fact, I remember vividly in 2000 the daily froth as IPO after IPO and stock after stock reached crazy valuations with either NO P/Es or forward P/Es of 700 or more and people just kept buying. The smart money was selling into the froth to the suckers. It was soooo obvious, yet it went on for several months before the plummet to hell. 

I don't want to go too far back reminiscing or I might start doubting these great advice givers, but I stepped back to the year 1987 and suddenly had to pause and then I realized.......there was almost no froth and there was almost NO ONE saying to sell because of valuations or "froth".....yet it crashed over 30% in just three days. Most of that was in the second day of course. Hmmmmm 

As I listened to the agreement of the panel on CNBS of the "icing on the cake" for the "end" of all bull markets (that we just don't see yet) according to them, it occurred to me to go back to an even more recent bear market. Some of you might be young enough to remember that one. You know. That one in 2007-2009. Surely you bulls remember. You know it was the one that the Fed now says almost DESTROYED our financial system and that by a miraculous number of amazing interventions (printing trillions and trillions) we averted the stone age. Surely you remember that period of time. I do. I remember that super parabolic spike on the SnP......wait.......no.... I don't. There was no "icing on the bull cake". There really wasn't any obvious 2000 Naz parabolic move of icing. In fact just like today they pointed to the "fair valuations" on stocks and their P/Es. It sure wasn't an IPO bonanza like 2000 was. In fact all during 2007 Bernanke said there was no Housing bubble and that Housing NEVER had a drop in price in this nation in a single year. Then he repeated that several times in 2007 and that we were not facing a "slowdown" in the economy much less a "recession". hmmmmmmmm no icing there either before the market began tanking in late 2007. Hell, I remember those dip buyers on CNBS all through 2007 and 2008. I don't remember any in early 2009 when you could have been accumulating cheap stocks.

Oh, I know just more perma bear nonsense and you're right. Buy the dip. There's plenty of warning when the bull's over. Hey! Here's another sign we aren't even close to the end of this bull. The 25th country in 20115 (South Korea) just slashed interest rates tonight. So yeah... "we're a long way from the crisis".  I mean how can it get better.... Negative interest rates in many European countries signal "all clear". Hey....here's a dumb question. How does this work? Help me out. If everyone is "debasing" their currency because we're in a "global" recovery and lowering interest rates and printing money to buy their debt.......and our dollar is going PARABOLIC and we are now touting its all good and we are "going" to raise interest rates with our dollar going PARABOLIC, which is supposedly destroying commodity prices and our export sector, then WHAT is going to stop us from taking the dollar even further PARABOLIC? What stops this trap the Fed has created? I am confused but something tells me the word patient being removed might spell even more trouble for this meme. You bulls enjoy your meme. I'm certain that Lord Rothschild and Sir Allen Greenspan are just fear mongering with their recent warnings of a potential collapse coming. Probably just trying to sucker in some more bears.  I'm sure there's a simple solution. gl 





Sunday, March 8, 2015

PRICE DISCOVERY

What happens to a market that no longer is a "free market"? What does that really mean to participants, in fact to the real world that's not in the market? Let's keep it simple. Markets that function as free markets have buyers and sellers that operate in an environment that determines a fair price for goods and services based on their demand/value. In other word, if I decide I want to buy a nice Picasso, I'll go to an auction and bid against a number of other people for that painting. That same painting may have sold 1 million in 1980, but may cost me 50 million today to get it. That's price discovery. 

So what happens to price discovery when you have the bellweather of fiat.... Treasuries that are purchased with paper Fed dollars? Plenty of things start to go wrong. People with Fed bux in their CDs and other interest bearing accounts begin to recognize they're dying. They are spending their nest eggs to live on at the age of 74 with no hope of recovering that lost principle. As the cost of essentials (health care, food, rent) rise, they find themselves falling into poverty from what they thought was a safe, conservative retirement plan. They were going to live simply on a 5% interest on the money they had saved over years of hard work. They were taught by the lessons of past stock markets the safest play was interest bearing savings accounts. They weren't going to live an a luxury condo on the gulf coast with $40 dollar bottles of wine every night with their filet. Instead 74 y/o women are now in 3 inch heals serving drinks at 12 dollars/hr at 10pm on Allegiant Airline flights to the gulf coast... there is your reality of a recovery.

That dollar is being valued against all the other WESTERN currencies as they devalue their currencies at an even greater rate. Price discovery is being found in many essentials, but one thing is very certain, the one real competing currency/money which is gold, will not be allowed to appreciate against the dollar. It will be suppressed with every tool available to the paper ponzi scheme while allowing the East to pour the physical gold into their coffers. Does anyone really believe that China couldn't change the price of gold overnight? Of course they could, but they are the Chinese and they think years in advance. They know they will need gold and a lot of it to back there move into the world currency arena and they are all too willing to accept their role in the gold manipulation. So until the actual physical accumulation is complete, the price will remain suppressed. Your belief that "price discovery" is important to any market will remain in abeyance until reality strikes. Enjoy the game and enjoy those flights to Tampa Sarah......its a recovery and its "all good". gl











Wednesday, March 4, 2015

THE LAST PUMP

you da man Charlie
Who would have believed it? I didn't that's for sure. Many of us felt that after barely escaping a "global catastrophe" in 08-09 that an epic bull market would be the last thing the powers to be could orchestrate unless of course they were willing to completely eliminate free markets and price discovery completely, which is what they actually decided to do. 

Having endured three major bear market one would have thought the clock had finally run out on the Ponzi kings, but instead a very simple decision was made in 2009 and that was One More Ride to Glory. 

I remember like it was yesterday in the run up to the "1987 Crash". I still remember vividly the announcement of IBM's stock buyback a few months before the 87 crash. I remember the newly formed CNN business news explaining how bullish this was for the company. In those days on its face the explanation seemed plausible and why would a "business show" lie? There was a steady stream of analyst paraded on the new network showing how bullish the market was in 87 all the way up to the week the market crashed. There were virtually no bears to be found. There was one analyst named Elaine Garzarelli that purportedly called the crash shortly before and gained notoriety as one of the "only" analyst to nail it and rode that pony for years and years and forming her own hedge fund as a result.

2000 was a bubble that seemed even more obvious and the bubble media was in full pump mode for the year preceding that crash with CNBC leading the pump. Analyst after analyst proclaimed how different it was this time as multiples reached unheard of levels as the "internet" was welcomed into the lexicon. IPO after IPO was trotted out with instant billionaires everywhere. The problem was most of the instant wealth was "locked up" after the IPO or just "stayed at the party" too long and when they took the market down every leg was heralded as a "new buying opportunity" and the suckers on the side line stepped in and were slaughtered by the next selling wave. Many of the top flyers were down 90% or more or just delisted and left for dead. I still remember friends of mine leveraging up on stocks like JDSU after it was down 50% and then losing everything as it went down over 90% in just a few months.

Most of you still remember 07 and how Bernanke was constantly trotted out to tell us how there was no housing bubble and no slowdown was seen on the horizon. I still remember my friends relaying these facts to me as I made myself unpopular on the dinner circuit, but I just kept adding to my shorts of SKF and SRS as the 2008 collapse approached. I had Hedgee contacts in late March on a conference call with the biggest of the big boyz that were reassured while in Aspen that "someone" was backing them with liquidity and "hang in there" right after Bear Stearns had collapsed. I still remember telling them Lehman, and Merrill Lynch were next. They thought I was nuts. I continued to short the market while CNBC pumpers literally shouted down the naysayers in 2008 like Jim Rogers, Michael Pento and others. It was hard to calculate the wealth extraction they contributed to but after 2000, I knew the media had a different job than guarding the "public". 

Miners have been a disaster and may turnout to be the joke trade of a lifetime with this market. Physical gold and silver may be a bust too. I could be 100% wrong and we may have a slow steady economic recovery with sustainable growth and return to free markets and the rule of law because its different this time...right?.............yeah.. sure...  ;-)









Sunday, March 1, 2015

CAN WE HIT ESCAPE SPEED?

We just spent Trillions trying to jump start the collapse of 2008. We just printed at least 18 Trillion more in debt to stuff the balance sheets of the biggest banks. We've pumped Trillions more into the rest of the Western Central Banks and the World's velocity of money is still zero. Oh, I know we've proclaimed victory and now we're going to raise interest rates sometime this year. Maybe we will. I doubt it, but it can happen. In fact as part of the meme of recovery it may have to happen, but there will still be a problem. None of this is going to effect the insolvency of a debt binge of epic proportions that the World has engaged in over the past 30 years. 

No one can repair the staggering problem of developed countries obligations to their aging populations. Do you really believe with a declining birth rate these Western debt obligations to pension funds of baby boomers will be met?  Better yet do you believe in this country with 93 million Americans of working age that have given up looking for work really constitutes a recovery? Wait a minute. Let me guess. You live in Silicon Valley or New York City or Seattle and you don't see any of these problems in your backyard. Congratulations then, see no evil, hear no evil. Your problems are solved so go to another blog that spanks you on your ass and makes you call them daddy because you deserve it.

Pretending there's a recovery and actually having a recovery are conflicts that will have a resolution that sadly will effect all of us. It feels good now, but like all good feelings that are based on lies this too shall pass. Those are real people in those pictures and they aren't living in penthouses but they depend on a rule of law and truth for their future. They depend on a real economy to have a sustainable future and they are at the whim of the biggest ponzi in history. They will be the victims of malinvestment as the debt supercycle closes its doors on this dark chapter on human nature. Good people are going to feel the brunt of these Central Bank actions and none of us will escape without being touched. GL;







Tuesday, February 24, 2015

SOMETHING'S WRONG

You're in a time warp. You think that surely one day you will be  dealing with reality. You think you're going to wake up one day and we'll be back in a true price discovery market that is not completely controlled by algobots........WRONG! You're a member of the machine world now and there is no escape. Its no longer an economic world guided by Nature's gravity. 

Timmy Geithner warned in early 2009 that a decision was made to reinflate the debt bubble through the derivative markets. I listened to his interview live on Sirius and thought it was somehow just a bad joke or at least would never be implemented by rational people. I also realized the next years would be very painful for hundreds of millions of citizens as the flawed system was reset with its natural/unnatural eventual destiny with economic gravity but I was wrong. Instead they decided to slowly kill the real economy through a long and tortured course of keeping the Malinvestments of the previous 25 years alive through an elaborate marriage of propaganda and printed money. They indeed embarked on a long journey into the rabbit hole.

Many participants are convinced this unholy alliance of Wall Street and the Fed can keep going indefinitely. A part of me wishes they could, but they won't. I don't know when it fails but it will, just as it did in 2000 and 2008. Put your bets on the come line for the Ponzi if you believe this time it will be different. Somehow I suspect history will repeat and one day you may find that reality is suddenly back and no one could have seen it coming. Meanwhile the machines own you. gl