Thursday, August 2, 2012

ITS STARTING TO GET UGLY

   This is only light reading and the musings of a bored trader. There is no market. At least there is no market in the sense of a typical "two sided trade". We are engaged in a stagnant battle to maintain an illusion. There is a concerted effort to maintain confidence in our economy by maintaining the level of the market in a "safe range". Obviously there are many reasons to prop the market. Your pensions are most likely tied to the market level as are many of our long term insurance vehicles. In other words if the ponzi breaks a lot of pain will go with it. So of course when I hear the call for a "fair market" I wonder if the same Larry Kudlows really understand the ramifications of what they wish for. Eventually the market is going to give you what you ask for but right now they are trying to "soften" the landing. Can they really soften the landing? .........no...... This is going to be a brutal event. I can still hope for an outcome that doesn't include extreme outcomes such as global wars etc......but all of these events come into play in the end of Grand Supercycle events.

http://nationalinterest.org/commentary/are-eurobonds-inevitable-7276?page=show

Watching and listening to the pundits on CNBS and Bloomberg is beginning to reach the level of absurdity. Their confusion and efforts at trying to give the public the answer they want to hear while trying to dissect every word or phrase in the Fedspeak statements borders on outright comedy. Unfortunately for all of us there is indeed a price to pay for our excesses and the time to pay is getting very close in my opinion. It is possible it could come VERY rapidly but I happen to think their plan is to slowly boil us ........just like the frog analogy.
Today Michael Pento told King World News we are now just weeks away from a European ‘bombshell.’ Pento predicted, “In my estimation, the ECB is about three or four weeks away from giving a banking license to the EFSF and the ESM. This will lead to unlimited purchases of European debt, and an unlimited dilution to their currency.”
Pento also warned, “I am telling my clients, I am gearing them towards the inevitable inflation,” because “you will see the most salient moves in precious metals, base metals, energy and agricultural stocks and commodities.”
I remember vividly Pento warning CNBS pumpers in early 2008 just how bad things were going to get in the market only to be shouted down by the interviewers and the other 2 or 3 guests pundits........well we all remember how 2008 turned out. Once again he is sounding the clarion call. Whether his timing is right or not, I at least think we are very close. This entire game is reaching the point of absurdity. Some type of reset that provides the markets some direction will have to be made soon. Bernanke is not stupid. He's buying time. He knows the score. He knows very well the ramifications of his next QE.........he will unleash the gates of hell on "price stability". Save the dollar and unleash full Depression or monetize.......and start the mother of all stagflation.......and pray you can control it ....those are his choices........you pick.


28 comments:

  1. I think is gets more ugly now. Anything can happen at any time but it has to get ugly first..Just saying... I hear the rotor chop of war.

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  2. http://www.reuters.com/article/2012/08/02/korea-economy-reserves-idUSL4E8J17JD20120802

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  3. http://www.garynorth.com/public/9871.cfm

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  4. Excellent Post and your right "Beware of what you wish for" for when the music stops there is going to be Hell to pay and not too many have a farking clue about whats about to hit them! Its now to the point no matter what you read, see or where you turn reality has become warped and truth is scarce. In order to maintain the charade fraud and corruption are commonplace and there is no where to turn for remedy because the entire system is in on the game..........

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  5. For the "What's good for the Plebe's ain't necessarily good for the "Gov-ment Slug Bitchez" (credit to Sheep's)" file....



    http://www.politico.com/news/stories/0812/79328.html


    Can you imagine...........

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  6. I read Martin Armstrong's 7/9/2012 article last night "Why Property Taxes will Soar,...".

    The good news is that likely someday, we will all be rich. He has a graph within the article that shows that the definition of rich has declined steadily since 1913. So, if you are not rich yet, perhaps the definition will fall to a point where now you are included. Then, you will feel better.

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  7. From Jesse yesterday - the Lewis Powell memo:

    "“The mess we’re in now did not begin on Wall Street. Long before the financial collapse, the dismantlement of government regulation was well under way. All the consequences are the result of a brilliantly executed coup. This is the story of the biggest heist in American history.”

    "HEIST: Who Stole the American Dream? is stunning audiences across the globe, as it exposes the real truth behind the worldwide economic collapse, tracing its origins to a 1971 secret memo entitled Attack on American Free Enterprise System. Written over 40 years ago by the future Supreme Court Justice Lewis Powell, at the behest of the US Chamber of Commerce, the 6-page memo, a free-market utopian treatise, called for a money fueled big business makeover of government through corporate control of the media, academia, the pulpit, arts and sciences and destruction of organized labor and consumer protection groups.

    Sound familiar? Today’s crisis and heart stopping headlines can be directly traced to Powell’s real “end game” which was business control of law and politics. Powell’s fingerprints are all over Citizens United, the fateful Supreme Court decision which gave corporations and the super rich unlimited ability to shape our elections with virtually unrestricted donations. HEIST’s step by step detail exposes the systemic implementation of Powell’s memo by BOTH U.S. political parties over the last forty years culminating in the deregulation of industry, outsourcing of jobs and regressive taxation. All of which led us to the global financial crisis of 2008 and the continued dismantling of the American middle class.

    Today, politics is the playground of the rich and powerful, with no thought given to the hopes and dreams of ordinary Americans..."

    http://jessescrossroadscafe.blogspot.com/2012/08/heist-who-stole-american-dream.html

    JD

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    1. very few peeps will bother to every read much less comprehend the full extent of this plan.......its easy implementation probably astounded even the architects of the plan........hehehehehe.......so simple and diabolical

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  8. http://www.zerohedge.com/news/russia-sends-three-warships-syria-carrying-hundreds-marines?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

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  9. Betcha this maneuver is not in the Farmer's Almanac.......... hehehehehe!

    http://www.dailymail.co.uk/news/article-2182958/Farmer-takes-revenge-drug-arrest-driving-tractor-seven-police-cars.html

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  10. Thanks Tom, I gotagood chuckle on that one. Heck I would contributeto his legal defense.

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  11. bull flag forming on cgr hourly

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  12. Nice find Kli, take a flyer on it...

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  13. Fascinating story/pictures about those police cars.

    I would not be suprised if more comes out of this incident then just punishment for the farmer. The concept that the farmer could crush all those cars, get away, and not have the police see or hear him is amazing. A neighbor needed to notify them of the damage? They could not hear because air conditioner was running? Shows too much vulnerability I think.

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  14. Doc,

    Maybe they should check their browser cache..... hehehehehehe

    All kidding a side that guys lucky not to be a statistic and at room temperature given the way Police conduct themselves now a day's !

    Guess Karma works in mysterious ways!

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  15. this is whats really going on.... the situation in Spain gets worse by the day. An article in Der Spiegel recently described the slow-motion bank run that is systematically ripping the Spanish banking system to shreds:

    Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank. In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.

    If those numbers sound really bad to you, that is because they are really bad.

    At this point, authorities in Spain are starting to panic. According to Graham Summers, Spain has imposed the following new capital restrictions during the last month alone:

    A minimum fine of €10,000 for taxpayers who do not report their foreign accounts.
    Secondary fines of €5,000 for each additional account. from seeking alpha

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  16. Down 50% on my KCG puts haha... wish I had seen the $1 puts as they would have been cheaper to buy with same reward. I still think the common shareholder is going to get screwed on this deal but could be wrong!

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  17. I hope they survive. So far, no client money involved. A lot of folks would loose a job. I would rather see "gov-ment slug bitchez" loose jobs.

    BTW the cops up in Canada may hve been sampling the farmers whacky weeds and dunkin donuts otherwise it would have been a blood bath. John Deere needs to make armored farm vehicles for this type of activity.

    Have a good week end and keep the tractor parked.

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  18. http://www.zerohedge.com/news/sp-downgrades-15-italian-financial-institutions-says-country-faces-deeper-recession-previously-

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  19. better read up on this.....hehhehhehhehe....my suspicions about KCG are discussed

    http://barnhardt.biz/

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    1. KLI: Did you see their stock today? This whole episode is getting stranger by the minute.

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    2. don't like passing out drunk at Frat/Fed parties without lube

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    3. yes .......Ann is quite descriptive....hehehehe.........I'll bet the PTB enjoy her rants........hehhehe

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  20. http://seekingalpha.com/article/780031-harry-dent-s-formula-for-surviving-the-great-bust-ahead?source=feed

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  21. http://www.guardian.co.uk/environment/2012/aug/02/drought-worsens-midwest-corn-crop?newsfeed=true

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  22. http://www.bloomberg.com/news/2012-08-02/corn-s-60-surge-is-more-dangerous-than-euro-mess.html

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  23. borrowed comment from ZH DTCC 1999
    (worth reading) MDB- It was devastating for two futures traders I know losing most of their account with MF Global. They would take exception to your description of MF Global as one of America's most reputable financial institutions or being respectable. MF charged their clients fees to have a SEGROGATED account which was supposed to gain or lose based on the success of their own discretionary trades. MF then used the client's money (in a round about way) for their own trades. If a clearing firm does that and makes money their clients are none the wiser, but, MF blew their clients account without their consent or knowledge. Now what you describe as: appalling, tragic, unfair and unacceptable (to the point of it being the moral duty of all Americans to demand) is not that some people in MF go to jail and this practice end elsewhere; rather that they (and thousands of other such involved firms) all be bailed out by the Fed (call it Systemically Important Financial Institution (SIFI) or TBTF). It would be awful to have what happened to MF on a large scale but we both know this isn't a feasible solution long term. Amnesty for those involved / responsible; contingent on their cooperation/involvement for a global restructuring that eliminates the ROOT (core ability and incentive) that got us here, is a necessary pre curser for disseminating the key information and abilities. As finite as the situation seems it is an incredible opportunity for the evolution of mankind brought about (counter intuitively) by the situation being so ominous globally that the zero sum outlook is no longer more attractive for anyone. I suspect the unsympathetic tone in some ZH articles towards the people of some Euro member countries (whose people are in a similar pickle as Americans) are done strategically so that articles like this one (advocating their destruction) will seem acceptable - making Americans unknowing advocates for a similar fate. I'm not taking a jab at the ZH leadership/staff BTW - life can get complicated / no good deed goes unpunished / ect.

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  24. anther ZH commenter bank guy in Brussels

    Yes, the German judges have pretty much already laid out their line in earlier decisions ... only a blank cheque for the EU or other (i.e., Latin) nations is forbidden. But a specific amount voted by the German parliament ... € 3 trillion, for example, for a Sinking Redemption Fund, is okay.

    What is missing from the above thoughtful article, is what other ZeroHedge articles have emphasised these past several months - a focus on the vulnerability of German banks, insurance companies and pension funds when whirlwind-level crisis really hits Spain and Italy.

    In other words, the German financial elite realises that in the longer term, they must agree to print trillions along with Draghi and the Latins - even though the Germans are playing this role of 'we are cautious about buying bonds' in the shorter term, a necessary role for domestic political consumption, given that the German people don't understand their banks etc. are knee-deep in this.

    The money-printing and 'crisis moment' will help keep the euro low, and some of that deluge of printed cash will be used to try to soften the blow to people in Spain and Italy, to prevent them from taking the euro-exit route, and aborting the grand 'project' of the EU leadership.

    Their current political planning is brainstorming to try to fine-tune the loss of sovereignty in Spain and Italy, so that it seems 'necessary' and not the instrument of popular oppression.

    By the time the game is afoot on that level, later this autumn, the Americans could have started World War III in the Middle East ... what will happen by then is anyone's guess.

    But the German leaders will in the end, join Draghi in agreeing to buy bonds and print, in order to try and save both the German banks as well as the euro and EU projects.

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