Monday, May 10, 2010

The Markets are DEAD…

That’s right, it’s official - put a toe tag on them, they’re gone.

Which markets am I referring to? Why only the Equity market AND the bond markets – that’s all.

The equity markets? Forget about it, they died a long time ago. The convulsions of the past week are simply after death reflexes. Thursday’s rout occurred when the selling volume triggered a stop in high frequency traders’ machines – there were no bids left and the market simply disappeared in a flash. What does this tell you? That the only participants in the market were the high frequency machines – they have displaced real people almost entirely.

Regardless of what stopped the machines, bids where no longer present. Now take a look at the events in hindsight… Greece on the verge, threats of action against the banks – BANG – machines turn off, no bids. Over the following weekend ANOTHER TRILLION in bailouts largely benefiting the banks! Anyone see a pattern here? Is this not EXACTLY what happened before and has happened repeatedly throughout history when the banks blackmail the economy?

Then today we learn this about Goldman Sachs, one of the largest HFT players (Goldman Sachs Says It Expects More Lawsuits Over CDOs):
Goldman Sachs, which makes more money from trading than any other Wall Street firm, also disclosed that its traders generated $100 million or more on 35 days during the first quarter and lost money on no days. The firm set a record when it made $100 million or more on 46 days in the second quarter.

Not a single losing day in 3 months? How is that possible? There is only ONE WAY that’s possible, and that’s for you to control the market – period. There is no other way, they ARE THE MARKET! In other words, a “market” no longer exists, it is dead.

Let that sink in – and then reevaluate everything you thought you knew about the current “markets” and how you “invest.”

Why in the world did we allow the banks to take total control of our money and of our markets? More importantly, now that you know who’s who and what’s what, why would we not take them back?

My take? EVERYONE should immediately withdraw all funding from the equity markets, all of it. Oh wait, you already have! The current market is simply a shell, a façade, a money printing operation for the investment banks who obviously have corned the globe.

Now let’s talk about bonds. D-E-A-D – dead! This market is so dead that to call it a zombie would be the highest of compliments. Truth is that there is absolutely NO WAY POSSIBLE, not even close, that incomes can EVER repay the bond debt that is out there. There is far more debt than money, and if it could be repaid, there would be no money.

This is why our “Federal” reserve resorted to quantitative easing – if they could have sold more debt at their artificially low rate they would have. They couldn’t and so they resorted to PIECEMEAL DEFAULT. That’s right, the USofA has begun default and now the ECB is doing the same. Instead of letting Greece and the other PIIGS default on their debt and clear it out, they have chosen to let the debt remain and to simply piecemeal default for everyone. Everyone in the Eurozone, and AMERICANS are paying for it. Americans are paying for it through our contributions to the IMF (same central banks and bankers) and through illegal swap lines in which our “Fed” provides DOLLARS (your money) to foreign banks.

The bond market is a JOKE, it is dead. Bond debts can no more be paid than you can leap to a landing on the moon – the assets and the incomes are simply not there to support them. The only support is paper and electronic, that support will crumble in time as confidence further erodes.

That’s right, these “markets” are dead. Now if only we could give them a proper burial.