Saturday, March 27, 2010

Damon Vrabel – Renaissance 2.0, Lesson 4, The Culture of Empire

In Damon’s words:
I just posted the next couple videos in the Renaissance 2.0 series. They are the first 2 parts of Lesson 4 on the Culture of Empire. I think this type of content is important to help people understand WHY we need to move beyond debt-based money at the federal level and fix the Federal Reserve monetary system without only relying on math and spreadsheet models.

The fact is, most people don't care about the numerical justifications. It's just not interesting to them because it only speaks to the left brain...it doesn't engage the right brain and our deeper emotions, which would help them understand why their left brain should care. The Culture of Empire does engage the deeper issues. People do care about their lives, their families' lives, their communities, and the natural world they live in. That's the purpose of Lesson 4. It should help all of us explain the "why it matters" issue to people who haven't already joined an effort to reform the monetary system.
To view the other videos in this series (and the very cool artwork of AZRainman), please visit Renaissance 2.0

Renaissance 2.0, Lesson 1 of 4, The Culture of Empire (7:56)



Renaissance 2.0, Lesson 2 of 4, The Culture of Empire (8:39)

Friday, March 26, 2010

Morning Update/ Market Thread 3/26

Good Morning,

Equity futures are up with a typical no volume overnight ramp job that followed yesterday afternoon’s daylight high volume sell-off. Below is a chart showing 30 minute DOW futures on the left and 5 minute S&P futures on the right:



The Dollar is down slightly, while the Euro is up. Bonds are down yet again, oil and gold are back up a little.

The final revision to 4th quarter GDP came in revised downward to an annualized rate of 5.6%. The consensus and prior report was 5.9%. Econoday’s report follows:
Highlights
Fourth quarter economic growth was up but not quite as much as previously believed. The good news is that we have moved well beyond the final quarter of last year and forward momentum is now probably a little better than seen in GDP. Real GDP growth for the fourth quarter was revised downward to an annualized 5.6 percent from the prior estimate of 5.9 percent. The consensus expectation was for no change from the previous estimate. Both final sales and inventory investment were revised down. Final sales grew a meager 1.7 percent, following a 1.9 percent rise in the third quarter.

The 0.3 percentage point cut in the GDP growth rate primarily reflected downward revisions to nonresidential fixed investment, to private inventory investment, and to personal consumption expenditures.

Year-on-year, real GDP held on to its return to positive territory, improving to up 0.1 percent from minus 2.6 percent in the third quarter.

Inflation is still barely noticeable as the GDP price index was revised down to a 0.5 percent gain, compared to the prior estimate of an annualized 0.4 percent. Analysts expected no net revision to the prior estimate of 0.4 percent.

Were today's report the initial estimate for the fourth quarter, it would be upsetting how weak final sales were. But more recent monthly data show a gradual improvement in consumer spending, business investment in equipment, and an uptrend in exports. Basically, there should be little reaction to today's GDP revision.



All I can really say is that I believe the entire GDP report and associated growth to be as false as the bank’s mark to fantasy accounting. This is an annualized number, measured in dollars and it contains all the false inflation data errors, plus it reports financial engineered and government engineered “productivity.” Wake me up when we stop lying to ourselves.

Citizen Sentiment is released at 9:55 Eastern.

Yesterday’s zoom to the moon followed by dive into the close is a typical intraday reversal that is often seen near major tops. These types of reversal signals, however, have been manipulated away during this past year’s rally, but one day one of them will be for real, it certainly could be this one as the market internals are now badly diverging and the oscillators have all issued sell warning. Breadth is deteriorating as seen in the Advance Decline line.

Most important is what’s occurring in the bond and currency markets. Bonds are selling off hard as supply is overwhelming and the Fed is talking like they are going to really, truly, cross their hearts, mean it when they say they are going to end their nonsense. Right… right up to the moment that the markets begin to roll over again and it turns the pressure back on.

The pressure, however, is already on. The middle and long end of the bond market is signaling that higher rates are coming. Below are 2 year charts of TLT (20 year bond fund) and the TNX (10 year Treasury), both have broken smaller H&S patterns that target higher rates than here, and the TNX has broken, although not yet convincingly, the very large 2 year (inverted) Head & Shoulders pattern neckline. This portends higher rates are coming and targets may well be achieved within the next 6 month to a year.





Now, they still are not yet convincingly below the neckline, so there is still time to come in and continue to manipulate the bond market again, but in the end the manipulations can only last so long, otherwise the government winds up being the only players in the market.

The TNX is currently just under 4%, that was a doubling of rates from 2%. The target on a break is 6%. While that may not sound like much, it is a tripling of the borrowing costs from a little over a year ago. And while it is closer to historic norms in terms of rates, what’s different is that the level of debt in the system has grown exponentially and there is a ton of supply still coming on. Most of it was financed short term and that presents a problem going forward. Also, if those targets are achieved, interest rates will break a 28 year downtrend line, portending the possibility of even higher rates. So, it’s crunch time again. They either try to stop it here again, or they let the markets do what they are going to do.

Keep an eye on the VIX here as well, it broke above the most recent downtrend line yesterday as seen on this 3 month chart:



Hey, it looks to me like the bond market (DEBT) has got them under a little pressure:

Billy Joel – Pressure:

Thursday, March 25, 2010

The Foundation of Economies

I’ve been talking a lot to people lately about the rule of law and how important it is to the foundation of our economy. It is THE critical element, without it, no functional economy. You can have massive human and natural resources, but without the rule of law, you will not have capital formation and you will not have an economy that works.

The basis of a functioning economy is a rule not of man, but of nature. It is natural because man can attempt to manipulate or bypass the process, but man will lose every time they stray outside of the rules. The same rules win out every time they are tested, just like gravity. The basis of economies are ruled by the same rules of mathematics and of physics, it is bound and limited in its construct by both. Create a system that is not harmonious with those bounds and well… welcome to exponential math and the limits of the physical world.

Sometimes when what you’re doing isn’t working, it’s best to get back to the basics. Allow me to start with a most fundamental concept, one that many people are aware of but may not be able to verbalize real well. I call it BE – DO – HAVE. The concept is simple. In order to have, you must first BE, then DO… THEN you can HAVE. Take, for example, the lotto winner. They skip right over BE and DO and proceed straight to HAVE. This is what people are attempting to do every time they gamble, every time they buy that ticket at the 7-11.

And what happens to those lucky enough to win, do they hold onto their wealth? Of course not, they failed to first BE and then DO. Thus they do not HAVE for very long.

My point? The same thing is true for nations. This is the root of socialism and WHY it is not harmonious with nature. Sharing the wealth destroys work ethics, it undermines BE and DO. It is an attempt to HAVE from the efforts of others. I was in the Soviet Union at the height of the cold war, I saw the lack of work ethic first hand. I saw how it impeded the progression of mankind – it was like stepping back in time 50 years or more. Innovation? Forget it. Security? No way. Freedom? Hardly.

Of course Plutocracy, rule by the rich, is hardly efficient at advancing humankind either. That doesn’t work because it too eventually destroys work ethic, serfs and slaves forced to give away all their productive efforts will eventually give up.

A Dictatorship, Mr. Chavez, is also an attempt to proceed directly to HAVE while skipping over BE and DO. This is why dictatorships do not last; they too are not harmonious with nature.

So let’s take a look at the basis of a healthy and functioning economic system, one that is built upon a solid foundation.

Pyramid of national wealth:



Note that the first bricks of the foundation are built upon the rule of law. They are not built upon money and they are not built upon human or natural resources. The rule of law comes FIRST, without it the others are meaningless.

If you attempt to head straight to wealth, you are skipping over BE and DO. This is the current method, it is top down, not bottom up. This is why money printing fails, it is not real wealth, and it is the “solution” being offered. It is destined to fail in exactly the same way that the gambler is destined to die broke.

Think that our nation can just go straight to creating jobs? Never happen, will never work without first starting at the foundation and building your way up to it. Think you know the answer to job creation? Build this project, build that project? If you think that you can just fire up job creation, you are mistaken.

Large projects and infrastructure building, real wealth, cannot be stolen, it cannot be dictated. In order to create jobs, the rule of law must be in place, a system of exchange and way of providing capital must work, there must be human resources at the appropriate level, there must be natural resources available, and THEN you can HAVE jobs that build wealth.

THE RULE OF LAW:

The rule of law is necessary FIRST because without it capital will not be formed, it is not attracted, it will not concentrate. Would you give your money to Hugo Chavez as an “investment?” Would you lend your money to someone who is constantly changing the rules of the game? Would you put your money to work by giving it to a lazy person with no work ethic? Would you lend your money to someone who spends three times what they earn?

NO? Neither would I. Capital, you see, is free to come and go as it pleases, it is a part of nature and it cannot be contained, not in the long run.

Lawmakers skipping over and creating new procedures to pass healthcare? Is that the Rule of Law? Bailing out bankrupt companies, is that the Rule of Law? TARP, Quantitative Easing, Mark to Fantasy accounting, government buying of mortgage paper, are those the things that comprise the rule of law? Private individuals charging people interest to use their own money system, is that the Rule of Law?

These things are gouging huge holes in the foundation of our economy. They are causing capital to flee. This is a part of why so many do not have jobs, and why we are becoming less wealthy as a nation. It begins at the foundation. Who is responsible for maintaining the rule of law, the foundation? It is WE the People.

MONEY/ EXCHANGE SYSTEMS:

Money and exchange systems are necessary to provide working capital. Want to build a nuclear power plant? Where’s the capital coming from? Capital concentration is completely necessary to the advancement of human kind. A person and his capital can accomplish little things. Combine capital with several partners and you have the basis to accomplish something greater – the core of a simple partnership or business.

Want to send wooden sailing ships across the ocean without risking ALL your capital? Better have some limited liability, the foundation of corporations and the next level of capital formation that was necessary to advance humankind.

Want to accomplish something larger than is capable by a corporation? You will need capital that is directed and formed by government. That capital, however, will not last long if it is manufactured or not formed in accordance with the rule of law.



Let’s go back and visit the way in which capital is free. You may recall from the following diagram from my article Asset Classes and Capital Flow…



There are 5 principal asset classes:

1. Currencies – for capital to flow from one asset to another, it must first be exchanged for currency.

2. DEBT – Debt, because our money is backed by debt, it is as large an asset class as currency. Yes, debt, although likely a liability to you is an asset to someone else. An asset to someone, like say, the central bank who issues an instrument of debt when YOUR money is created.


3. Equities – Providing working capital for corporations is an essential process for capital formation. This is, in case you have forgotten, the reason that we have stock markets. No, they do not exist for the pleasure of market makers, quants, banks, or gamblers in derivatives.

4. Real Estate – Sections of the earth. Under our current rule of law, by the way, you don’t really own, you rent.

5. Commodities – Things of the earth.

It’s a fascinating study watching money pour from one asset class to another. The equity bubble in technology leading up to the year 2000… pop, into currency, into real estate… pop, into DEBT, pop… and now which asset class do you see capital flowing to?

New home construction lowest level on record. No, not there, keep looking. Meanwhile, with each cycle the DEBT piles higher, our money system adds on another three zeros. We are forgetting the basics, it’s time to head back to the fundamentals.

Is the Market Being Manipulated?

Yesterday I was tipped to read the following article from the Financial Armageddon website. I found the facts within the Phil Davis conversation (of Phil’s Stock World) to be quite fascinating. Here he discusses where the volume, what little of it still exists, is occurring. He also quantifies the effect of recent substitution bias in the DOW Industrials…


Is It...or Isn't It?

Larry Doyle, a long-time Wall Street veteran and publisher of the Sense on Cents blog, hosts a Sunday night show, "No Quarter Radio's Sense on Cents with Larry Doyle," on Blog Talk Radio. In this week's edition, which features an interview with Phil Davis of Phil's Stock World, Larry raises a question that a few of us, who are amazed at and unsettled by the willingness of investors to throw caution to the wind and repeat the mistakes of the past (see "Back Buying the Same Kind of Crap" for one example), have occasionally wondered about ourselves:

Is the stock market being manipulated?

I can not count the number of times I have been asked that question over the last 9 months. Rather than my offering personal opinions which market pundits may view as sour grapes or worse, I want to revisit a ten-minute segment of my interview last evening with Phil Davis.

The segment runs from 29:45 until 40:00 (audio player provided below). If you do nothing else today, please listen to this dialogue between Phil and myself. Neither of us goes into this conversation with agendas or preconceived notions in an attempt to score points. I will offer an edited version here. I think you will find the information, thoughts, and opinions offered to be enlightening.
PD: It’s getting more and more likely that there’s going to be an event that takes the market down and that’s because of the nature of the market rally. The rally has been a very thinly traded, low participation rally.

LD: I want to pursue that….the idea that there could be or will be some sort of an event. Obviously, all of the governmental support that has come into the market, all of the quantitative easing, the easy money, the 0-.25% Fed Funds rate…all sorts of other backstops. Now they’re trying to figure out how to ease some of those supports out of the market while China and India have increased their rates. Are we overextended? Have we created a little bit of an asset bubble?

PD: I think we have created a ‘helluva’ asset bubble…..Let’s be honest. We were delusional in 2007. Those valuations were completely wrong….the earnings were fake and I want to emphasize again fake because they were fake. They were not only not real earnings but what were reported as earnings turned out to be tremendous losses. The financials were putting out fake numbers…it was all fake…..How did we get the market back to where it is then? How is this even possible?

LD: How much are we overvalued?

PD: Don’t forget the Dow is fake also. They took out GM and Citibank from the Dow. Those are two zeros and they put in Travelers and Cisco…that’s 640 Dow points that were added because they swapped GM and Citi for Travelers and Cisco. Now is that real?

LD: I look at the most actively traded stocks. Almost everyday the most actively traded stock in the market is Citi…this isn’t real…

PD: Whether Citi is real or not, I think you touch on something more important, though. The most active stock is Citi. The next most active stocks are Bank America, Wells Fargo…

LD: Also AIG.

PD: Those trades are 80% of all trades in the market and the total market volume is less than half of what it was back then. In other words, you’ve got half the market participation of what it was and of that half, 80% of it is concentrated in less than half a dozen financial firms.

LD: What does this say about the future of Wall Street?

PD: It says that the people who are running the system are in total control of the marketplace. There is no retail participation….on a relative basis.

LD: They don’t believe it.

PD: ….it looks like a bunch of crooks….
So, is the market being manipulated? I would guess that depends on how one defines manipulation. That said, market volume and market depth tell us a lot. I thank Phil Davis for providing this ’sense on cents.’

No, the markets are not real and they are not performing the function for which they were intended. The entire run of the past year rests on the back of mark to fantasy and other accounting fraud, combined with the hot money created by robbing the American people. All this is run by a few of the biggest players and their computers.

Cheered on by the media and politicians, rules and ethics are routinely ignored in an attempt to smooth over the American marketing façade. Company annual reports are the slickest marketing brochures money can buy. Your broker adds on yet another layer of marketing brochures, and all this is championed by those who should know better. Not an adult in the room. Americans are caught in the middle, I certainly would not call it “investing.”

By the way, without the effects of substitution bias over the years, the DOW Industrials would be worth almost exactly zero - GE being the only survivor, having only survived with bailouts and accounting fraud.

Morning Update/ Market Thread 3/25

Good Morning,

Futures are moving upwards once more in more parabolic fashion, with the ramp beginning around midnight. The movement is particularly strong in the NDX, but weakest in the RUT. Below is a 30 minute chart of the DOW on the left and a 5 minute chart of the S&P futures on the right:



This move appears to be a fifth wave higher off the last touch of the uptrend line and comes off a bullish flag that appears to have been wave 4 of this move.

The dollar had an enormous move upwards yesterday on high volume and was a breakout. It is slightly lower this morning. Bonds had a massive move downwards yesterday (higher rates), moving back down to support. The TNX broke upwards out of a bullish triangle, signaling that higher rates are likely. This is a big deal for our debt saturated economy should it continue. Both oil and gold are higher this morning, the downward movement in gold yesterday produced a bearish target of $1,040 an ounce on the Point and Figure chart:



Yesterday new home sales fell another 2.2% to the lowest sales level in history! That’s right, at no point in my lifetime have the number of new home sales been lower than last month. Now that’s an economic recovery. It shows just how damaging the creation of bubbles can be and how long the aftermath can be.

The weekly jobless claims did, however, come in slightly less than expected, but still at very depressed levels. Here’s Econoday:
Highlights
Initial jobless claims fell to a lower-than-expected 442,000 in the March 20 week, which outside of a single week in the up-and-down month of February, is the lowest total of the recovery. Expectations were centered at 450,000. The four-week average, at 453,750, is at a cycle low.

Continuing claims are also at a cycle low, at 4.648 million with the four-week average at 4.689 million. The unemployment rate for insured workers is unchanged at a cycle low of 3.6 percent. Claims for emergency unemployment compensation and extended benefits also fell. Today's data include annual revisions.



According to the D.O.L.’s raw data, “States reported 5,558,430 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending March 6, a decrease of 329,618 from the prior week. There were 2,094,811 claimants in the comparable week in 2009.” That decrease is about the same size as the increase the month prior. There are nearly 3.5 million more people on the Emergency rolls this year than last.

Ben Bernanke testifies at 10 Eastern. Tomorrow we get Citizen Sentiment and the final revision to 4th quarter GDP.

The Republicans were evidently able to force another vote on the healthcare bill over a technicality. Not sure that will change anything, but the more I learn about it, the sicker and more perverse it seems, the more damaging to the economy it appears. I’ll just call it an “accelerating event.”

The market is reaching historic extremes in the upwards direction while our housing market is hitting historic extremes in the downward direction. And 100% of DOW stocks are above their 30 day moving average, even after yesterday’s move lower. It’s quite a roller coaster ride, “you would sure hate to miss out on a rise like that,” says the man about to fall victim to Minsky’s 6th bubble stage. But, hey, hot money running away from the debt bubble has to go somewhere, no? Just remember as you see the cost of healthcare zoom, taxes zoom, food and energy zoom, that Zimbabwe had the best performing stock market in the world for about a year. All the while the real economy was collapsing. The foundations of our economy are being chiseled away, we are looking more like Zimbabwe everyday.

Will America go through what was experienced in Zimbabwe, Weimer Germany, Argentina? It’s hard to say where events will lead. This time most of the entire world is going through these Debt driven events together. When the economic inequalities are at their highest, it seems to me, that the risk of “other events” climb higher. Things are heating up around the globe at the same time that sovereign debt is growing exponentially. There is one thing of which I have no doubt. The rules of the game of money are about to change.

Styx – Crystal Ball:

Wednesday, March 24, 2010

Morning Update/ Market Thread 3/24

Good Morning,

Equity futures, unbelievably, are lower this morning. For awhile there it was looking like they only go up as they have for 15 of the past 18 sessions. Below is a 30 minute chart of the DOW futures on the left and a 5 minute chart of S&P futures on the right:



Below is a daily chart of the Dollar. It has broken out to new highs, climbing very sharply this morning:



The Euro is continuing to break down. Below is a daily chart of the Euro, clearly now in its 5th wave down:



Don’t look at the long bond unless you want to see money fleeing DEBT, as it is getting nailed this morning headed straight down in a race back to support and its very large Head & Shoulders neckline. Should that neckline break, we will be looking at much higher interest rates and our debt saturated economy will be forced to attempt to carry that weight. That won’t be a fun thing to do with the entire world living on rolled-over short term debt.

Again, all this movement this morning is DEBT driven. Add the festering debt problems in Portugal to the list:
March 24 (Bloomberg) -- Portugal’s credit grade was cut by Fitch Ratings, underscoring growing concern that Europe’s weakest economies will struggle to meet their debt commitments as finances deteriorate.

The rating was lowered one step to AA- with a “negative” outlook, Fitch said in a statement today. The euro extended its decline, weakening 1.1 percent to $1.3355 as of 10:32 a.m. in London. Portuguese bonds fell, with the yield on the 10-year note rising 5 basis points to 4.33 percent. Portugal’s PSI-20 Index of stocks dropped 2 percent.

More rioting in the streets anyone? The world is awash in debt because the central banking system has used debt as a tool for power and control. Countries simply do not have to live under control of bankers. Debt is the most inappropriate way to control an economy as it puts exponential math to work for the banks and against the people who rightfully own their own money system.

Yesterday’s Existing Home Sales report was not sterling. It came in at 5.02 million, a very depressed level and even lower than last month’s disastrous reading. And yet stocks continue to move in a parabolic fashion. Are we witnessing money running away from debt? That very well could be a large part of what we’re witnessing. Anyone who calls this action in the market a good thing is simply insane. A 60% plunge followed by a 73% year long ramp and we’re still 3,300 points below where we were in ’07. No, not a good thing, this is the type of volatility that destroys wealth for the vast majority and benefits only a few.

The equity markets are not a sign of health, instead they are a symptom indicating there’s a huge problem. That problem is manifesting itself all over the globe and it is rifling our markets. The problem lies in the central banker’s control of our money.

The markets? Yes, they broke above another area of resistance yesterday and triggered a small inverted head & shoulder’s pattern that has a target now up at about SPX 1,185. The chart below is a 10 minute view of the SPX:



Boy, are they ever over extended – historically so.

The wild and completely worthless MBA Purchase Applications Index rose by 2.7% in the past week, yet another obscured piece of data designed to be a marketing tool and should not be considered for any economic consideration, yet is sold to you that way.

New Home Sales are released at 10 Eastern this morning.

Durable Goods orders did continue to rise with year over year growth rates now in the double digits compared to the year ago stand still numbers. While there is improvement, our economy is not that far off that bottom with still nearly 30% of our manufacturing capacity sitting idle and a great number of workers idle too. Here’s Econoday’s report of the numbers:
Highlights
Although the headline durables number did not rise as much as expected, a sharp upward revision to January put the level for February about as expected. Overall new orders for durable goods in February gained 0.5 percent, following a revised 3.9 percent surge in January. February fell short of analysts' projections for a 1.0 percent increase but January's number was much higher than the prior estimate of 2.6 percent. Excluding the transportation, new durables orders rebounded 0.9 percent, following a 0.6 percent decline in January. The combination of the upward revision to January's headline number to a modest shortfall in the February percentage left traders content that today's report was essentially in line with expectations.

The latest advance in new durables orders reflected components mixed in direction after such a huge gain in January. New orders were led by machinery, up 4.7 percent, with fabricated metals and primary metals also rising-by 1.9 percent and 1.5 percent, respectively. On the downside were electrical equipment, down 3.3 percent; transportation, down 0.7 percent; and computers & electronic equipment, down 0.6 percent.

Nondefense capital goods orders excluding aircraft made a partial rebound, rising 1.1 percent after dropping 3.9 percent in January. Shipments for this category-a key ingredient in equipment investment in GDP-rose 0.8 percent in February, following a 1.9 percent dip the month before. Both shipments and orders have been volatile but remain on healthy uptrends. For both, January was notably strong.

Year-on-year, overall new orders for durable goods were healthy and little changed at up 10.9 percent in February, compared to up 11.1 percent the prior month. Excluding transportation, new durables orders slipped to 7.9 percent from 8.5 percent in January.

On the news, trading remained more focused on concern about Greek debt woes as equity futures were little changed but Treasury yields edged up. But the bottom line is that manufacturing is still the greatest source of strength for the recovery and today's durables report supported that view.

What I see is an attempt at another cycle off the bottom. Each cycle now is pulled down by the burden of debt.

Interest rates fell from 1980 to 2008, nearly 30 years of constantly declining rates. Then we hit zero. Then we resorted to buying down interest rates to keep them from rising. Now, as we attempt to reestablish growth on the back of exponential debt backed money, I believe our monetary system is taking its last breath, a final inhale. The next downturn will require even more effort than that last. Confidence will not continue and you are already seeing that confidence shattered across the world.

Events are going to force changes to the system, its coming. Not the change espoused by bankers or their puppets on the Senate Banking Committee. No, the change that’s coming is going to rock the world. It’s an opportunity for the people to take a step forward if they have the guts. It’s also an opportunity for very ugly forces to rise. The path that’s taken is up to us. Which path do you choose? To choose the path of negative historic events, continue to do nothing. To choose the path of advancing mankind, rise up and take back your money system and the power that follows with it.

Styx – Suite Madame Blue (America):

Tuesday, March 23, 2010

Morning Update/ Market Thread 3/23

Good Morning,

Equity futures are close to flat or are slightly up this morning. Below is a 5 minute chart of the DOW futures on the left and S&P futures on the right:



The dollar is higher but has yet to break upwards from its recent range, the Euro is under more pressure again, and bonds continue to trade tepidly just above that very large H&S neckline and support area. Both oil and gold are lower overnight, but oil was down big yesterday before the open and came roaring back to a very positive close. Trading in a huge $3 range, it is quite obvious to me that market has become wrought with speculation. Markets that have too much hot money and are under the control of just a few entities will eventually have very difficult and volatile times – tick tock.

Existing home sales are released today at 10 Eastern.

Yesterday’s Monday ramp job was brought to you by the same speculative fervor still riding high on the back of accounting fraud and government sponsored hot money, your future obligation. Welcome to higher taxes to service it all, another half trillion in taxes was levied on you with the insurance industry bailout bill yesterday, it also takes money from both Medicare and Social Security in addition to the forecasted $1 trillion shortfall in the next 10 years. And you know how good those forecasts are in an exponential math environment – not.

Senator Dodd’s bill for financial reform passed committee yesterday. There are actually some good things in there, but there are some foolish things as well. Putting the “Consumer Protection Agency” under the FED is not at all like putting the fox in charge of the henhouse, it’s more like just go out collect up all the chickens, grind them up and feed them to the foxes at a gourmet style sit-down dinner. The devil for the other provisions are, of course, in the details. My overall cynical take is that the rules will be written by the bankers to favor the bankers while putting on a show for everyone else. Nothing works to help Americans until we address who creates the money – that the is the core issue. Nothing in his proposal makes the math of debt backed money any better. By the way, anyone who doesn’t think our money is backed by debt doesn’t understand how our system works.

The markets are still living in Wonderland. Historic high trailing valuations, parabolic style move, historic volume divergences, overbought readings on all the oscillators on all timeframes… broken record. Buy before you’re priced out forever, lol. Hey, I’d go on, but in a speculative fervor none of the traditional measurements seem to matter, that is a great clue that “investment” is not what the market is currently all about.

The SPX 1,168 area is overhead, a break above that level is bullish and break beneath 1,150ish is bearish. Just a spectator until the trendlines begin to break.



Pink Floyd, Comfortably Numb:

Monday, March 22, 2010

Damon Vrabel – Renaissance 2.0

Damon is proving to be a dedicated warrior trumpeting the sovereign money song. His message is in tune and it is loud and clear. Damon is producing a series of videos explaining the money, power, and control structure of the United States. As new videos are added, I will post them here and at SwarmUSA.com under the Freedom’s Vision and Media Tabs, “Renaissance 2.0.”

I think you’ll find that Damon has a unique way of putting our world into perspective. You might even find it ‘mind-blowing,’ but you’ll have a hard time making a case against what he presents. That’s because it’s all true. No conspiracies needed, just facts about the way our money and markets really work.

What Damon is really describing is WHO controls the money power. This is the same exact thing that Bill Still is describing, just expressed in a much different way.

I, for one, am really looking forward to more…

Here’s Damon’s introduction:
I've recently started an online video series, Renaissance 2.0, in the hopes of engaging a group dialogue to discuss where we want to head in the future as I believe we're facing the end of our monetary system, or a serious reset, which some of you probably detected in my articles. Will we move into Dark Ages 2.0 or Renaissance 2.0? No doubt many people would want their voice to be heard regarding this question. That's my hope with this series.

This effort may lead to something called the Council on Spiritual, Psychological, and Economic Renewal (CSPER), but I have not decided whether to formally pursue that or not. For now I'm moving forward with the videos.

The first 3 chapters are online but they don't look into the future yet. They revisit History, Economics 101, and Civics 101 to correct the myths about the system within which we live today--a monolithic financial empire. My goal with these first 3 is to establish the common baseline from which we can dialogue about the future. Continuing to swing between the establishment right and left, which both take us down the same path, has failed for generations and will continue to fail because both sides are media creations controlled by higher powers, explained in these videos.

At the same time, a couple other efforts are hoping to fix 2 massive problems:

1. Debt-based money from the Fed and Wall St. We need a system that serves the people. This one does not. Nathan Martin is leading an effort to accomplish this at SwarmUSA.com. Even if you're not particularly interested in this issue, you can still signup at the swarm and then forward the emails we pump out to target key politicians, media personalities, and others who can help us solve this problem. It takes just 30 seconds to forward the periodic emails.

2. Political parties controlled by corporations/banks. America only exists if people run politics from the bottom-up, but 80% of the county offices are empty!! Why are we surprised at who runs the parties? So Phil Glass has launched the National Precinct Alliance to start getting local people in these offices. As long as they remain vacant, the mega Dem/Repub machine will control things from DC. If you're interested in helping rebuild local power or becoming a county precinct officer, check NPA out at National Precinct Alliance.

Warmly,
Damon


SECTION ONE - INTRODUCTION:

Renaissance 2.0: Lesson 1 - Revisiting American History - Financial Empire (9:43)



Renaissance 2.0: Lesson 2 - Revisiting Economics 101 – Debt (8:16)



Renaissance 2.0: Lesson 3 - Revisiting Civics 101 – Ownership (8:01)

Morning Update/ Market Thread 3/22

Good Morning,

Equity futures are lower this morning, below is a 60 minute view of the DOW on the left and a 5 minute view of the S&P on the right showing the overnight action:



The dollar is higher, mainly at the expense of the Euro which is taking another leg down, bonds are flat, and both oil and gold are sharply lower. Watch the commodities, they look like they are correcting here.

There is no economic data released today. Tomorrow will be Existing Home Sales, later in the week come New Home Sales, Durable Goods, Jobless Claims, and on Friday will come 4th quarter GDP.

Of course the Healthcare Bill/ Insurance Industry Bail Out act passed the House last night and is now headed to Obama for his signature. This will be the first Federal law in history that mandates you buy something from a private company. It adds at least $1 Trillion onto our deficits over the next ten years, it draws funding away from Medicare, away from Social Security, and people on Tricare are going to have to switch. This bill was written and sponsored by the insurance industry. Once again your government and special interests have become the pushers of debt. Even Dennis Kucinich who has railed against such insanity was bought off. Very few adults are left, they have almost all been co-opted.

Within the context of a debt backed dollar system, this is yet another accelerating event placing us deeper into insolvency. It adds the burden of more taxes onto an economy that is already debt and tax saturated. The markets will get this eventually, and I note the lack of a Monday morning ramp job so far today. So far.

Meanwhile, the impossible math of debt backed money continues to express itself in Europe and with Greece. That’s because the money has to come from somewhere. Are the European banks going to provide loans? How do loans solve a debt problem anyway? Who do they come from, the IMF? Regardless of who issues any loans, the people of Greece, and the world, are facing a future of debt servitude should they agree to any such loans. Again, finding solutions within the box that work for anyone besides a central banker is simply impossible.

The markets are very much rhyming with the top that occurred in late ’07. The 1,150 SPX area is support, if prices get below there then you’ll know a correction of some magnitude is underway. Oil is down nearly 2.5% on the open, gold is beneath $1,100 an ounce, and it’s not uncommon for the commodities to lead the start of a correction.

Below is a 3 month view of the SPX daily, you can see that there’s quite a bit of support near the 1,150 area, and thus I would not be surprised by a bounce off that area (run up occuring as I post this). Last Friday’s down stroke came on much higher volume and the internals are again showing great stress.



The number of new 52 week highs reached that historic 601 figure and collapsed. That is typical of major tops, but it’s also typical that they take a long time to form as the dip buying mentality is certainly firmly entrenched after a year of nonstop run-up’s based upon accounting fraud and government debt.

The Government Can:

Sunday, March 21, 2010

Uncle Jay Explains the News...

It's time once again, boys & girls, for Uncle Jay to explain the news...