Tuesday, November 30, 2010

Morning Update/ Market Thread 11/30 – Up is Down and Everyone’s a TERRORIST!

Good Morning,

Equity futures are down sharply, erasing all of yesterday afternoon’s false straight up POMO induced short covering romp. Oil is down this morning after zooming on yesterday’s huge POMO infusion, yet gold continues to soar. The dollar continues to rocket as the euro gets slaughtered:

Bonds here are higher while spreads across Europe blow wider. Obviously this isn’t going to stop until all of Europe is bailed out… and how’s that going to happen? In the end countries are left with DEBT that cannot be repaid. Anyone who thinks that Ireland is EVER going to repay this “rescue” is simply insane – it can’t happen. Yet the central banks don’t care - they can create the money from nothing time and again – it’s not about money, it’s about CONTROL. But in their fervent and feverish desire to have control, the banks are losing control, the people of the world ARE going to toss them and their debt aside, there is no other outcome that’s mathematically possible.

I’m sure that just having that ‘T’ word on the headline will get me on 10 more watch lists… We have Congressmen branding WikiLeaks’ Assange a “terrorist” in addition to Hillary Clinton and the rest of the Administration brandishing HIM a criminal for exposing THEIR criminal acts (UN seeks answers from Washington). Next Assange says he has information regarding one of America’s big banks, and now we also have Actor Mark Ruffalo placed on terror watch list for supporting a documentary about gas drilling.

Current developments are disturbing to say the least - there is no doubt that the real terrorists reside at the central banks. Those terrorists and those who support them should think long and hard about their standing once the people rise up, and they will, it is only a matter of when.

Meanwhile the markets continue to be a complete and total joke – a façade. Netflix at $200 a share! Give me a break. Yesterday we just pumped $9 billion more into the markets via two POMOs, and one has to wonder when it becomes 3, then 4, then you might as well just run a constant hose straight into the market. Yesterday the “Fed” cited weakness in just 3 companies as justification for pumping an additional $600 billion into the world! LOL, well, I’m a little short, perhaps the “Fed” should consider another $trillion or ten?
Need for QE2 Seen in Pausing Electronics Manufacturing Services

Nov. 30 (Bloomberg) -- In the week before the Federal Reserve announced its $600 billion program to help spur the U.S. recovery, three makers of electronic equipment for companies such as Cisco Systems Inc. announced that demand for their products was weakening.

“Our customer forecasts are more uncertain,” Jure Sola, chief executive officer of San Jose, California-based Sanmina- SCI Corp., said on a Nov. 1 conference call. Some clients “have a lot of inventory in the pipeline” and “are worried about the economy.”

Policy makers led by Chairman Ben S. Bernanke cited the deceleration in business spending on equipment and software when they announced Nov. 3 that the Fed would purchase Treasuries in a second round of quantitative easing to prevent inflation from falling further and help bring down unemployment, which has remained above 9 percent since May 2009.

Sweet, sweet POMO… While the central banks suckle the sugar, our real economy rots in the decay. The world became saturated with debt, they lowered interest rates to nothing (except for real people), then they pumped money from nothing, and now governments and people are even more saturated because it’s all the SAME PEOPLE who are responsible for all of it. More debt doesn’t make the problem go away – DUH. So what comes next? That would be the “other” events. You know, ignoring the Constitution, ignoring the rule of law, currency wars, trade wars, real shooting wars, labeling everyone a terrorist – that type of stuff. And there’s plenty more to come… plenty.

Yesterday Simon Black wrote a very provoking piece that was posted on ZeroHedge:
Simon Black Advocates Leaving America As The "Most Effective" Way To Fight The Battle With "The Mob-Installed Government Beast"

Simon Black, better known as Sovereign Man, presents some disturbing thoughts which are sure to get the broader spirits elevated. Instead of continuing to fight what some see as a losing ideological battle with a government which no longer even remotely represents the broader population's interests, Black says simply to walk away: "When you think about it, what we call a 'country' is nothing more than a large concentration of people who share common values. Over time, those values adjust and evolve. Today, cultures in many countries value things like fake security, subordination, and ignorance over freedom, independence, and awareness. When it appears more and more each day that those common values diverge from your own, all that's left of a country are irrelevant, invisible lines on a map. I don't find these worth fighting for ...The government beast in your home country feeds on debt and taxes, and the best way to win is for bright, productive people to move away with their ideas, labor, and assets. This effectively starves the beast and accelerates its collapse. Then, when the smoke clears, you can move back and help rebuild a free society."

This is the “Who Moved My Cheese” type of thinking – best to move on early, which is usually true. However, in this case one must ask if there is a freedom seeking place remaining on the planet? To me such a place needs to be safe and free from the reach of the central bankers! But I don’t see such a place, the central bankers have literally polluted the world with their corruptive filth. It’s so dirty that China and Russia will no longer trade with one another in it:

China and Russia quit dollar

St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

Meanwhile back at home, your home is simply worth less, despite the very real erosion of your money – do not confuse the dollar index with REAL purchasing power, they are NOT the same (see gold rising today alongside a rising dollar weighted against other worthless monies):
Home prices appear to be a growing risk to the economic recovery. Case-Shiller's adjusted index fell for the third month in a row and fell very steeply, down 0.7 percent in September for the composite 10 index. At only plus 1.5 percent, the adjusted on-year rate extended its run of weakness. Unadjusted data, showing a 0.5 percent month-to-month decline and a plus 1.6 percent on-year rate, show similar results. Weakness is no longer concentrated in the West or Florida with declines sweeping across regions.

Oh yeah, oil shooting higher, home prices sinking like a stone – that’ll turn out good for Americans.

And now we have Obama’s “Debt Commission” about to vote on the flavor of AUSTERITY Americans must face!
Obama's debt commission report: 4 flash points

NEW YORK (CNNMoney.com) -- Get ready for some heated rhetoric about how to contain the unsustainable national debt.

The spark will be lit by President Obama's bipartisan debt commission, which is set on Wednesday to vote on a final set of recommendations. That report will be an amended version of a plan put out three weeks ago by the panel's co-chairmen, Erskine Bowles and Alan Simpson.

What you hear this week is just the start of a long national conversation. Next year, Obama and Congress will attempt to turn talk into policies.

But for now, here's a look at just four flash points likely to dominate the reaction to the commission's report: Social Security, defense spending, the mortgage interest deduction and the spending vs. taxes debate. [follow link to see their four points]

Sorry, but it is mathematically impossible to austerity our way out of debt. If you take down the debt, you take down the economy! Let me say that again… take down the debt and you take down the economy!

That is because ALL of our money is debt. And that’s why neither debt based stimulus OR austerity will work! The only thing that will work is to produce debt free money and to restructure/ retire the debt that’s already in existence. The real answer cannot be found with the PRIVATE central banks in control of the production of money!

And that makes all the current worldwide “rescues” and austerity talk a realm for the mathematically “challenged” (insane). Current mainstream media is nothing but a central banker marketing arm – REAL PEOPLE must tune them out and focus on REALITY, as hard as that is.

The VIX is jumping again this morning, it is pressing the upper Bollinger bands upwards. I continue to believe that the world’s markets are living on borrowed time and borrowed money, yet we are still moving sidways in the same range. The central bankers are smokin’ some pretty good stuff if they believe this game is going to continue to much longer. Don’t toke on their stuff, man, or next thing you know they will be dragging your neighbor off while telling you they are “terrorists!”