Tuesday, November 2, 2010

Morning Update/ Market Thread 11/2

Good Morning,

Equity futures are gapping higher yet again this Election Day morning – oh happy times, the markets must be signaling all is well!? NOT. The dollar is sinking like a stone yet bonds are rising, and meantime oil is breaking out higher and will be running like a big dog if it gets above $84 a barrel. Gold is level.

Yesterday’s action was quite the display… up then down, then straight up to finish almost perfectly level. This is the eighth daily candle to finish within a 5 point range. All eight look like topping candles. This is completely unprecedented. This bizarre display, I believe, is a function of computer trading that lacks enough real human players:



Note that while that has been going on, that the VIX has been slowly rising. In fact the VIX pinned the upper Bollinger band yesterday before retreating. This is a bearish divergence from the market price:



Remember all the 90%+ up and down days? The big flash crash and the daily mini crashes? Having invested in the market for more than two decades I can say that what I see is nothing but criminal enterprise. I feel slimy just knowing that I own bonds and money markets in my retirement plans that support these criminals (wife’s plan where I have no choice).

So, let’s say that I know the robber barons are in fact going to run the DOW up to 60,000 tomorrow, do I participate in their enterprise is the question I find myself asking from a moral perspective?

Am I a fool not to? Or would I be contributing to the ongoing fraud if I do? That’s quite the question to ponder as you head out to the polls to vote. While I am hearing pushback type talk emanating from CORPORATE BACKED advertising, I know that nothing structural is going to change due to the election.

Is there not anyplace where you can put your money to work for you and where you can feel safe, confident, and know that you’re advancing humanity and not just contributing to a few narcissists? If that investment exists, please let me know – I haven’t seen it.

And if such an investment does exist, it must earn dollars faster than the dollar is being destroyed. Gee, that means it would have to earn more than 8% in just the past three months, and it would have to earn nearly a full percent just overnight!

Is gold that investment? Does “investing” in gold promote humanity and build a future worth having for future generations? I’m going to go right back to what I said yesterday, and that is that the change that needs to happen will not happen with the ballot box – not unless you are presented with the choice of voting for someone who will place an adult in charge – someone who will enforce the rule of law and start throwing the perps into prison where they belong. Not going to happen anytime soon that I can see, and thus I know that the criminal enterprise will continue.

The FOMC meets today and will announce their Quantitative Easing plan tomorrow at 2:15 Eastern Time. Zero interest rates PLUS “they” (the “Fed” who is the private banks) are going to “print” money to buy up debt that can never possibly be repaid. This amounts to accounting fraud. It is an attempt to get something for nothing. It is an attempt to FOOL the other holders of our debts into believing that the “Fed” can really keep interest rates at zero while spending trillions they do not posses.

Again I ask, “What’s the exit strategy?”

The population is saturated with more debt than can ever be repaid. The Fed is buying up bonds and via their surrogates is propping up equities. The question is how long can the charade go on? How quickly do the numbers grow? Where does it stop? How does it stop?

So, to go back to my original question – why support the enterprise?

As much as I can, I am not. Yet we must all make the determination for ourselves how deep we’re willing to support a system that is not sustainable. Do you work within the system where your livelihood depends upon it? Are your investment choices fueling their enterprises? No doubt that it is very difficult to avoid it, the tentacles of the vampire squid are far reaching.

The outcome of Quantitative Easing will indeed be a disaster, of course. While they may be able to keep the façade up a little longer, if they do then commodities like oil and food will also go to the moon. With wages falling, increased costs for energy and food act as a tax on the consumer. There is no free lunch, all debts get repaid with interest in one way or the other – that would be the other.

And just look at how the corporate empire is doing:
NEW YORK (CNNMoney.com) -- BP returned to profitability in the third quarter, rebounding from the severe loss caused by the Gulf of Mexico oil spill, the company said Tuesday.

London-based BP said it earned $1.8 billion in the three months ended Sept. 30. While that was down from a $5 billion profit in the same 2009 quarter, it was a turnaround from the $17 billion loss incurred in the second quarter of this year -- when the explosion on the Deepwater Horizon rig led to the environmental disaster in the Gulf.

So, here we have a British company who created the worst environmental oil disaster ever in the United States earning $1.8 BILLION during the same quarter in which the disaster was still ongoing. Have all the people and businesses affected by that spill been made whole? This just simply pisses me off to no end. That we don’t have the leadership, the manliness to stand up to corporations is sickening. No, we have judges who say it’s okay for them to speak freely with their money. Superhuman rights. You can bet that if YOU caused such a disaster that you would be behind bars, not reporting billions in income.

Example after example of the breakdown of the rule of law. And no, just because a banker passes a law doesn’t mean that said law conforms to the natural rule of law. And that’s where the people step in. That’s where you have to decide if you’ve had enough. Are you going to support the criminal enterprise. Is Mark-to-Fantasy accounting okay with you? Is it okay with you that the banks subvert the state’s laws to create their derivatives? Is it okay with you that the politicians aren’t prosecuting the crimes that the bankers are perpetrating?

No, it’s not okay because we all pay.