Thursday, February 18, 2010

DEATH THROWS

Impressive article that gives the reader a nice point of view and provides a similar view of the road ahead. If you don't view yourself as a macro economics person then take the time to begin your education. This article is an extensive analysis of the current state of affairs and how they affect us as investors, traders, and human-beings.....

No Macro Economic Report is provided this month in the Hat Trick Letter for paid subscribers, since the entire global financial system is stuck in crisis mode. Details for the crisis situation can be found in the Crisis Coverage Report in the February Hat Trick Letter. The system is not so much hurtling over a cliff, like my previous metaphor of a locomotive train long past crossing the cliff's edge. The system is more like busy creating numerous huge airpockets of insolvency, so many that eventually the entire nation suffers an historically unprecedented descent into a MASSIVE SINKHOLE of its own making. It will then find itself squarely in the Third World. The main questions are A) whether the foreign creditors pull the rug out, or B) whether the US Supreme Court renders a great decision regarding requisite disclosure of the US Federal Reserve to unmask its corrupt core, or C) whether the deteriorated state indeed permits the descent into a sinkhole constructed by Economic Mother Nature.



NON-EXISTENT EXIT STRATEGY

Heat rises from the debate of a USFed Exit Strategy from 0% interest rates to mask a broken banking system, and from massive money growth to enable monetized ustreasury bond purchases. Once more is seen the return of the 'Second Half Myth' as talk has begun of the USFed hiking interest rates in the second half of 2010. Far enough away to forget, close enough to be imminent, always forgiven when wrong, with new wrong revisions given. Chairman Bernanke is stuck in a policy corner. He must be aware. There is a great difference between being a bad economist and a stupid humanoid. A formal interest rate hike would torpedo the already weak vulnerable housing market, when mortgage rates have been creeping upward. A reduction in the USFed balance sheet would drain the system of funds, when lending is sparse, unresolved loan losses litter the balance sheets, and banks still hold massive toxic bonds and actual home inventory. The entire banking system depends heavily upon a cornucopeia of liquidity facilities, without which the system would have ground to a halt many months ago. Soon money market funds will augment the demand for USTreasurys for bubble maintenance, as redemptions become difficult to receive for trapped investors. Worse, a rate hike would pop the USTreasury Bond bubble the USFed has manufactured and add greatly to absurdly cheap borrowing costs on the USGovt debt. The good Chairman, Secretary of Inflation, would never agree that in September 2008 the US financial sector died. What he accomplished since then is vast pumping of blood through a dead corpse, with plenty of lateral drains directed to Wall Street firms. To expect an Exit Strategy to succeed is to demand a dead man to walk without the gigantic crutches and vast intravenous lines attached.

http://news.goldseek.com/GoldenJackass/1266508800.php

24 comments:

  1. Great read. Agree completely. I am beginning to wonder if there will be any place to hide from this mess. Maybe the international space station.

    Jeff

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  2. Another gold miner I think you should add to your list is CGC, Capital Gold Corp. They are a profitable small cap gold producer (heap leach pad mining) in Mexico (just announced a stock acquisition of another gold/silver producer in Mexico). Uplisted to AMEX in past month and trade around $3.50/share (also trades on Toronto exchange). I expect them to earn $.30/share in 2010 (yearend is 7/31/10) so at a forward PE of 15, the price should be at least $4.50/share. By my calculations, the fair value based on their proven and probable reserves is slightly over $5/share.

    Enjoy reading people's insights on this blog.

    pprazen

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  3. This post is to convey the obvious and to avoid the noise..If you understand that they MUST continue to attempt to reflate....then you can stay in the game....they have NO choice....the ponzi is popped

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  4. Fed hikes discount rate after the close...wonder how the banks will trade now? Strange timing...after we close. TXB

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  5. Treasury + GS = "Greek Style" to market participants

    Now I wonder who all was let in on the 25 basis point hike after lunch today. Pulling the rug out just as the rally was going towards the upper daily Bollinger Band. Puts the lower weekly bollinger band on the S&P (1035) back in play and caps gold move up for the time being. Also explains the huge self off in the 10 year.

    My guess TXB is besides lining insiders pockets on the trades, someone really wants to repeat the last March springboard and buy another year for the Ponzi and contain gold as an alternative currency for a little longer.

    Curious to see if they let the housing market get further crushed, gives an excuse for banks not to have to loan large amounts going forward for the depreciating asset class.

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  6. Looks like the fed just raised it's discount rate, thoughts?

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  7. how does a rate hike buy another year for the Ponzi? I get the implications for the the fiat currency Ponzi but your reference to Mach '09 seems to refer to the equity market Ponzi ...

    Not sure how today's rate action will be positive for pushing stocks higher. Quite to the contrary, it seems they're sacrificing the equity market to push up demand for treasuries.

    -wolf

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  8. Nice red movement on the futures. This is just AWESOME. Rather than have this algo infested false action (like today, and I passed on trading because of it), we hopefully get a large gap play tomorrow. I usually do not play options on OPEX, but this is too good to pass up. It should be a wild one tomorrow. - Analyze.

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  9. Need a bigger gap than now though. The end of day ramp appears to just be a cushion to have the futures setting at max pain for tomorrow anyway. Go figure. - Analyze.

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  10. Denninger has a comment re discount rate and opex. "Timed for maximum pain".

    http://market-ticker.denninger.net/archives/1978-Fed-Changes-Terms-In-Front-of-OpEx-Again.html

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  11. I thought that looked pretty strange to see SPY start to go into an acceleration channel at the close given where max pain was. Anyone who does not believe this game is completely rigged is wrong. Actually a casino is far less house-friendly than this ponzi. Good Denninger article. - Analyze.

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  12. Where is max-pain? -wolf

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  13. SPY 110. That's why all the prop algos have been preventing downside the last two days at this level. - Analyze.

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  14. cant speak for tomorrow but should see red for close ...this may be the signal for the turn off the channel top for the ride to 1120.....only they know but it has to occur as red says...for the final ride to glory

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  15. They had everything set so that any selloff that would start before 1084 was topped was targeted at 1045 for a double bottom to still guarantee the consolidation channel topping at 1150 (or less). Seeing that, I mentioned last week I preferred a shorting opportunity above 1084 primarily because it was so rigged to prevent the lower target we had. With this much time passed since then, and so much ponzi investment to the upside, we shall see what tricks they have. Tomorrow, only a 1092 breach gives any significant downside not already baked into the futures. I would not be a nonchallant short tomorrow, there will be a reversal somewhere, with 1087, 1084, 1080 all prime candidates. They may rollover and forget about max pain, but... they love to dish out pain. I would love to see the lower target, but like everyone in this fixed game, I have become paranoid of the short side - which has been their objective from the start to instill this feeling in all traders anyway. - Analyze.

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  16. Analyze,

    Now you understand what I have been saying all along, there is ONLY one POWER that counts, whether it's politics, economy, OR stock market and it's called FED. FED controls EVERYTHING. The rest is just smoke & mirror. Today's announcement was just a message from TRUE power about what they can do anytime they wish, and that message was for every one else in the world as well.

    joe

    joe

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  17. kli,

    I am sure you still remember the 1987 crash, FED orchestrated that one beautifully, I knew it was coming that yr, did not know exactly when and just like you that day I took a beating, lessons learned after that one. Kress and his masterful cycle analysis saved my ass in 2000 before the crash.

    joe

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  18. You have been right from the very start Joe, no doubt about it. Last year I was believing in the market being contrived, I was seeing the algos manipulating things all the time, but was not seeing just how systemic the problem (Fed) really was. Now we shall see what reactions this triggers in other markets. With "reactions" meaning "what they are told to do to react" lol. - Analyze.

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  19. Believe in the "True Power" or you will be destroyed.....the ponzi is over but before it is completely destroyed and rebuilt.....the next 18 to 24 months will be a time of incredible manipulation....even the power will succumb to the "ultimate power" and that is natures law. Not even the true power will stop it. But if you don't believe they will take any stragglers in this market and destroy them.....I still hurt from 87

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  20. I will elaborate....the "ponzi" will never be destroyed only the ponzi market.....the "true power" will come out of this as strong as ever....but they will have to reboot......wash rinse repeat.....you got the message today

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  21. kli,

    Today's message by FED really meant, " WHO IS YOUR DADDY", heheee!

    joe

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  22. Looks like the Fed unloaded a bunch SPY right before the announcement or someone caught wind of it (GS) and sold a bunch. Where is the SEC when you have this obvious insider trading. OH YEAH I forgot they all used to work for GS can't send your buddies to jail.
    http://market-ticker.denninger.net/archives/2010/02/18.html

    Great commentary on what happened above
    Jeff

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  23. This is a wonderful website!! 参考になります。
    ありがとう! Thank you!!
    I'd be pleased if you exchange reciprocal link with me.
    お互いがんばりましょう。
    http://easy-happy-invest.blogspot.com/

    この記事の中でリンクしています。
    Easy investment:Bollinger bands, Technical Analysis (2010/02/19)
    http://easy-happy-invest.blogspot.com/2010/02/bollinger-bands-technical-analysis.html
    良かったらみてください。

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  24. Yes, Kli ... please exchange reciprocal links with him ... technical analysis should be much easier in Chinese - wolf

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