Saturday, November 27, 2010

Weekend Open Thread...

Friday, November 26, 2010

Morning Update/ Market Thread 11/26 – More Contagion…

Good Morning,

I hope everyone had a terrific Thanksgiving. Equity futures are down again this morning for our post holiday shortened trading session. The dollar is significantly higher, the euro lower, bonds are higher, while oil and gold are lower.

The Chinese hiked margin requirements on almost all commodity trading, this is pressuring the commodities as China attempts to cool the hot money inflation. Notice how our governments first work hard to stimulate, and then when that blows up in their face, as it always does, then they resort to having to micromanage every aspect of the markets… and then that will fail as it always does. Governments cannot manage markets – doing so eventually wrecks both the government and the markets.

There is no economic data today. Next week will be a busy data week that culminates in the November Employment Report on Friday.

The real news continues to revolve around debt saturation. European spreads are continuing to blow wide in one country after another. The “rescue” of Ireland has failed to lower rates on Irish debt and the average rate across the PIIGS is now at new all-time Euro zone highs:
Irish Relief Fleeting as ‘Day of Reckoning’ Nears: Euro Credit

Nov. 26 (Bloomberg) -- Borrowing costs for Europe’s most indebted nations are at record highs as Ireland’s capitulation in accepting a bailout of its banking industry stokes concern that other countries also will have to seek aid.

The average yield investors demand to hold 10-year debt from Greece, Ireland, Portugal, Spain and Italy reached 7.56 percent today, a euro-era record. The average premium investors demand to hold those securities instead of German bunds widened to 488 basis points, the highest level of 2010. The average cost of insuring against default by the five nations using credit- default swaps reached a record 517 basis points on Nov. 23.

“It’s no longer taboo to speak about a restructuring,” said Johannes Jooste, a portfolio strategist at Bank of America Corp.’s Merrill Lynch Global Wealth Management in London, which oversees about $1.4 trillion for clients. “The fact that bond yields continue to rise and put pressure on countries that have to fund from the market makes investors less and less confident, and it’s bringing forward the day of reckoning.”

The Nov. 22 relief rally after Irish Prime Minister Brian Cowen conceded that the nation needed financial support proved transient. Irish 10-year bond yields fell 4 basis points, before jumping 100 basis points as of 11 a.m. today, exceeding 9 percent for the first time since 1995. The euro’s respite was more fleeting; the bailout inspired a 0.8 percent gain for the currency before it slumped to a two-month low. It fell 0.9 percent to $1.3238 today.

Volatile Market
“When Ireland accepted help, the general feeling in the market was that this could restore some calm; that hasn’t been the case,” said Michiel de Bruin, who oversees about $35 billion as head of European government debt at F&C Netherlands in Amsterdam. “Authorities should be doing their utmost to calm the situation.”

Analysts at Morgan Stanley said in a Nov. 11 report that any move by Ireland to use the European Financial Stability Facility would boost the euro and be a “circuit breaker” for the European sovereign debt crisis. While Ireland has enough money to pay its debts until the middle of next year, it has requested a bailout from the European Union and International Monetary Fund amid concern the cost of rescuing its banks would overwhelm government finances.

Portuguese Finance Minister Fernando Teixeira dos Santos said in an interview published today that EU governments can’t impose a bailout on his country.

A majority of euro region officials and the European Central Bank are putting pressure on Portugal to accept aid that helps stop contagion spreading to Spain, the Financial Times Deutschland reported today. German government spokesman Steffen Seibert said the nation isn’t pushing Portugal to seek aid. An official at the office of Portuguese Prime Minister Jose Socrates also denied the report.

The “bailouts” haven’t restored calm because they make the situation worse. Only a fool believes that you can cure a debt problem with more debt. But trust me, the central bankers are no fools, they are rolling in the lap of luxury while they PURPOSELY create stress across the region in order to force these “bailouts” that are really all about establishing power and control. They do so by creating money from absolutely NOTHING and then indebting entire nations. It’s preposterous and I’m amazed that the people aren’t waking up to take action.

Oh wait, in Ireland they are:


I hope you took the time to watch that video, it is extremely important. Jim Corr is a man who understands what’s happening, the first citizen I’ve seen who eloquently, directly, and correctly identifies the ROOT of the problem and is organizing to defend themselves against attack. You are going to see more of this type of pushback, it is critical that the people of the world step up and do this. It will be coming to America, I only hope we will be as brave and as well spoken as Mr. Corr.

Attack is the correct word, the central banks are the ones pushing up the debt and the cost of that debt in order to push these bailouts. Politicians who don’t realize this are being duped. This is going to ripple from one country to the next, and sorry Mr. Zapatero, Spain is squarely in the crosshairs:
Spain Bets on Budget, Home Investors to Stem Contagion

Nov. 26 (Bloomberg) -- Spain is counting on budget cuts and domestic appetite for its bonds to build a firewall against contagion as Prime Minister Jose Luis Rodriguez Zapatero warned investors would lose money betting against the nation’s debt.

Spain, which has the euro region’s third-highest budget deficit, says it won’t adopt new measures to protect itself from Europe’s worsening debt crisis after cutting the central government’s budget gap by almost 50 percent and taming regional spending. Providing support is about half of Spanish debt is held at home, more than in Ireland or Portugal, offering a line of defense against changes in foreign investors’ moods.

“I should warn those investors who are short-selling Spain that they are going to be wrong and will go against their own interests,” Zapatero said in an interview with Barcelona-based broadcaster RAC1 today. He “absolutely” ruled out Spain would need a rescue.

You are being duped, Mr. Zapatero, your talk will only embolden the shorts (who are the same central banks who lent you the money in the first place, creating a completely unmanageable credit bubble in your country).

Those same banks in Spain are getting ready to dump massive amounts of foreclosure real estate into the market, this will spur the next major leg down in real estate prices, and that in turn will cause government revenue to plunge, making current debt all the more unserviceable.

And thus the ripple continues across Europe. There is simply no way that the math works in Europe and thus the Euro experiment is destined to fail, it already has.

And as smart as the central bankers are, their efforts to control the globe will ultimately fail. This is because there are NATURAL laws that prevent such an effort from being successful. You cannot repress intelligent people forever, they absolutely will rebel.

And thus we are going to witness HISTORIC events unfold at an ever quickening pace as the math of their debt is exponential and that exponential growth compresses those events in time. North Korea is threatening war again due to our military exercises planned for this weekend. These types of tensions and releases of anger are part-and-parcel the expression of underlying stress created by DEBT. It simply doesn’t have to be that way, and the people are going to change it – get ready as more historic events are coming.

Before I close today’s message, I want to talk about people’s misperceptions of this site. What it is not is a day trading site. It is my belief that those who day trade in this market will eventually get eaten alive by the central banker’s HFT machines, quote stuffing, and various inside games they play in order to ROB you of your money. My advice has been and remains DON’T DO IT.

I consider the writing on this site to be public service. Goal number one is to educate others so that we are aware of what’s happening and can thus work to fix the REAL PROBLEMS without being duped by the Central Bankers. I talk about the markets and do TA work, to highlight those problems and so that people can decide for themselves just how real the markets are or are not. Right now it is my considered opinion that the markets are NOT REAL, and thus I do not consider placing money for any time frame into those “markets” as an investment.

As I have repeatedly pointed out, there are three market aspects to consider before “investing:” 1. Fundamentals 2. Technicals 3. Psychological.

It is my ongoing opinion that fundamentally our economy is saturated with unserviceable debt. I therefore do not believe that investments are safe until RESTRUCTURING occurs that significantly lowers the amount of debt in the system. Therefore, betting long the markets is betting long that the bankers can push still more debt onto the backs of the people. Maybe they can for a while, but it will be short lived, and counter trend, again in my opinion. I personally do not bet counter the fundamentals or counter trend as I consider it foolish. I know there are people who think they are clever and can win by playing in these markets, and I think they are gambling and will be taught a lesson in the end. So, if you are here to pick up tips and tap my market knowledge, that is great, there will come a time again when that knowledge can be put to use in REAL markets again… but that time, unfortunately, is not now.

Again, that’s my opinion, and note that I charge NOTHING to share that advice. If you wish to give your money away, then by all means sign up for people’s trading services – there you will find that there is NO ONE who will consistently return you money by trading over and over again in short time frames. Buyers beware.

And thus, if you want to be a successful INVESTOR, then you need to have realistic goals and a realistic understanding of the markets and of the people who provide services about the markets. NO ONE consistently gets every turn in the markets right – NO ONE. There are those who have made good calls in advance, and for the rest of their careers they will shout about those good calls while ignoring the bad ones. That’s the name of the game in investor services – buyer beware.

Don't forget that Monday's (ramp job) is coming 'round again...

Wednesday, November 24, 2010

Thanksgiving Day Open Thread...

Any Questions about Where the Euro is Headed?

Morning Update/ Market Thread 11/24 – Opt Out Day…

Good Morning,

Equity futures are higher this morning following another 90% down day yesterday that obviously fulfilled the large price movement called for by the small movement in the McClelland Oscillator which now stands at -145.85. The dollar is down only a very slight amount this morning after breaking up and out of its downtrend channel. Bonds are sharply lower, oil, and gold are higher.

The conflicted, still worthless, and hypocritical Mortgage Banker’s Association reported a rise in Mortgage Applications last week of 14.4%, as if that type of move in a week is possible – I highly doubt it, but for them this is a mild move as they attempt to paint reality as something it is not. The Refinancing part of their report fell by 1.0% which pushed the composite index to up 2.2%. I don’t know why I even bother with this report other than to keep an eye on what the criminals are disseminating – here’s Econoday:
In surprisingly good news for the housing sector, applications for home purchases surged 14.4 percent in the November 19 week. The report says the increase, which lifts purchase applications to their highest post-stimulus level, suggests consumers are feeling more confident with their own finances. Yet calendar effects surrounding the Thanksgiving holiday may be it magnifying the gain, one that will have to be confirmed in subsequent weeks. The refinance index isn't showing any lift, down 1.0 percent to hit its lowest level since June. Rates were mixed in the week with 30-year mortgages rising four basis points to 4.50 percent. Next data on the housing sector will be new home sales for October to be posted at 10:00 ET today.

“Calendar effects surrounding the Thanksgiving holiday?” What? Econoday is losing it as they are talking about last week, it is this current week that will have Thanksgiving week adjustments.

Durable Goods Orders fell sharply in October from last month’s report on September. If you remember, that was spiked higher by a surge in aircraft orders. Well, not this month. The prior report was +3.3%, this report was looking for -.1%, but the actual came in at -3.3%:
While the consumer sector looks good today from personal income and jobless claims, manufacturing has taken a step back. Durables orders in October fell 3.3, following a 5.0 spike the month before. The October figure came in notably below the median market forecast for a 0.1 percent decline. Weakness was broad based but led by transportation. Excluding transportation, durables declined 2.7 percent after rising 1.3 percent in September.

By major industries, transportation fell 5.2 percent in October after surging 16.5 percent the month before. The drop was mainly in defense aircraft but nondefense aircraft and also motor vehicles orders eased. Other industries generally declined but mostly after a moderate gain in September.

Orders for equipment investment are showing notable volatility. Nondefense capital goods orders excluding aircraft in October declined 4.5 percent after rising 1.9 percent the previous month. Shipments for this series slipped 1.5 percent, following a 1.0 percent gain in September.

Today's durables report is a disappointment but should be viewed in the context of being one of the most volatile monthly series for a major indicator produced by the government. Also, a weaker dollar points to likely improvement ahead for durables orders and manufacturing.

What a joke! “One of the most volatile monthly series…” Didn’t used to be. Nice to see them admit that this data (and all data based upon measuring in dollars) is influenced by the direction of the dollar. When the dollar falls, it has the ILLUSION of increasing everything – growth in sales, growth in imports and exports, growth in GDP… but when that is from a falling dollar, it is not real. Well, guess what, the dollar is way UP for the month of November, not down, so these figures may not be coming in as good as thought over the next few months. Fourth Quarter GDP, how’s that going to look with a rising dollar? What would Q3 have been had the dollar not been plunging during that timeframe? Guess what, it can’t fall forever.

Meanwhile Personal Income and Expenditures are also bending reality. A 4.1% year over year increase in income? I highly doubt it:
The consumer is making a moderately strong comeback in October in both income and spending. Meanwhile, core inflation is subdued and still too low for Fed comfort. Personal income in October posted a healthy 0.5 percent gain, following no change in September. Income growth topped analysts' forecast for 0.4 percent increase. Importantly, the wages & salaries component jumped 0.6 percent, following a 0.1 percent improvement the month before.

Household spending also showed strength. Personal consumption expenditures rose 0.4 percent, following a 0.3 percent increase in September. For the latest month, strength was led by a 1.9 percent monthly spike in durables. Nondurables advanced 0.8 percent while services edged up 0.1 percent.

Year on year, personal income for October came in at up 4.1 percent, compared to 3.7 percent in September. PCEs growth slipped to 3.6 percent in October from 3.8 percent in September.
PCE inflation nudged up at the headline level but the core remained anemic. The PCE price index increased 0.2 percent in October, following a 0.1 percent uptick in September. The core rate was flat for the second month in row. On a year-ago basis, the headline number in October was 1.3 percent, down from 1.4 percent in September. Meanwhile the core was 0.9 percent, down from 1.2 percent the prior month.

Relative to typical recoveries, the rebound in income in income and spending is still sub-par but at least we are seeing some strengthening. Retailers and policy makers should be happy that the trend is up.

Again, all these figures are measured in dollars which were falling in value ahead of and during this timeframe. Furthermore I simply do not believe the supposed increases in income and there is likely tampering with that data by using a working population size that is shrinking – the same distortion used by the BLS to artificially lower the unemployment rate. Despite a growing population, they claim the size of the workforce is shrinking considerably.

And speaking of fudging the numbers – something that I am sick of having to report – the Weekly Jobless Claims came in at 407,000, a drop of 32,000 from last week’s reported 439k (revised higher of course). The problem with this drop? IT DIDN’T HAPPEN! When we look at the unadjusted numbers, they ROSE by 52,490! In the DOL’s own words, “The advance number of actual initial claims under state programs, unadjusted, totaled 462,027 in the week ending Nov. 20, an increase of 52,490 from the previous week.”

And here’s more on the unadjusted data, “The advance unadjusted insured unemployment rate was 3.1 percent during the week ending Nov. 13, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,839,033, an increase of 103,105 from the preceding week.” My, that’s a lot of increases for a week that reported a large decrease.

And there you have it. I can see the news headlines already, “BIG DROP in unemployment claims shows you should go out and spend, spend, spend like a drunken sailor in front of Christmas because never ending growth is what Christmas is all about!”

Last week’s data was similarly fudged with the unadjusted figures way higher while the adjusted and reported number was way lower. It’s all false, don’t shoot the messenger – here’s Econoday whose economic interests' obviously are tied to the economy remaining artificially propped up:
Seasonal factors tied to Thanksgiving may be at play yet the trend for jobless claims is clearly positive. Initial claims fell 34,000 in the November 20 week to a far lower-than-expected level of 407,000 (prior week revised slightly higher to 441,000). The four-week average is down 7,500 to 436,000 for a nearly 20,000 improvement in the month-ago comparison.

Continuing claims fell for the third week in a row and at 142,000 posted their biggest decline since July. The four-week average fell 51,000 to 4.309 million. The unemployment rate for insured workers fell one tenth to 3.3 percent for its lowest rate of the recovery.

Claims readings, due to the problem of making weekly adjustments in shortened weeks, start to get cloudy during the holidays. This puts the focus on the four-week averages which are offering a strong signal for rising payroll gains.

LOL, riiiiggght… As artificial as a made in China Wal-Mart Christmas tree. There are those holiday factors again. Once again this was during a week that contained no holiday, it was full length, although we must fluff up the reports in front of Black Friday. What a sad joke on the American public. Again, I will remind everyone that readings above 350k are job losing weeks – we have been losing jobs despite a growing population for a very extended time – sad, but manipulation of the data like this is not sad, it is sick.

Consumer Sentiment and New Home Sales are released at 10 Eastern this morning.

North Korea says they are on the brink of war. Does the market have a global conflict priced in? Oh, that’s right, war is a profit center for the oligarchs who manufacture our money and own the military industrial complex. Must keep growth going at any cost?

Yesterday’s equity and currency moves were quite bearish. Again the big news was what occurred with the dollar and with the Euro. The Euro is toast and the dollar is toast, it truly is a race to the bottom, the only question is who reaches the bottom first. Right now I would say that the Eurozone falls apart before we do – that is well in motion already.

The financials have been hit very hard. Below is a chart of BANK, yesterday in the daily thread I pointed out that it created an inverted hammer, today price is higher confirming that some type of trend change has occurred – I’m thinking minor, but we’ll see:

The “other” events worry me far more than market events. That’s because history shows repeatedly that those other events follow economic upheaval. Right now we’re seeing lies and manipulation. We’re seeing a public that is being conditioned and repressed. I don’t like being lied to and I don’t like the general sense I’m getting…

Tuesday, November 23, 2010

Morning Update/ Market Thread 11/23 – “Other” Events…

Good Morning,

Equity futures are down significantly overnight following North Korea’s attack on the South and the ensuing return fire. Bonds are higher, oil is significantly lower, and gold is also down. The dollar has broken upwards out of its down channel and the Euro has broken down from its channel in what appears to be the beginning of a wave 3 movement. A daily chart of the dollar is left, euro is right:

Yesterday there was a small movement on the McClelland Oscillator, thus we can expect today’s movement to be large.

The attack from North Korea killed two South Korean soldiers and wounded more. It was an attack on a civilian populated island. I won’t try to report the details, but what concerns me most here is that North Korea is really a puppet of China – therefore China’s reaction to this will be key to watch. In some respects I read this as China letting their dog bite one of our dogs. Was it a signal to knock it off in regards to what we’re doing in the currency wars?

I don’t know and I sincerely hope that this does not escalate, however, we have a completely empty suit for a President. He is weak, he has proven to the world already that he will let just about anyone with more than a nickel in their possession run him over. He let our own generals run him over in regards to doing the opposite of what he said he was going to do, which is to bring our troops home from overseas - and the most dangerous thing is when politicians run out of their own tools and turn things over to their generals. The right combination is a leader who is tough – one that you KNOW is going to take you out should you prod him, but who is cool enough to know how to step in and prevent situations from escalating. Our current administration worries me in this regard – I view him as a banker puppet, they are in charge of what transpires and that’s the most scary part of all because they are narcissists and do not care about escalation as it is a profit center to them.

Economic events, as I’ve repeatedly said, turn into “other” events where the money problems are not generally recognized as the cause, yet real shooting wars consistently follow economic turmoil. Shame on us for not taking action sooner against the central banks – if we want to prevent wars, we need to put the people back in charge of the production of their own money the world over. Here we have an insolvent banking system the world over, we have a bankrupt United States, a bankrupt European Union, and an economically sunk Japan. We have weakened ourselves in the name of “security.” We have sacrificed our freedom, and we have done this to ourselves.

Hell, we can’t even be honest with ourselves! Quarter 3 GDP was revised UPWARDS (LOL X 14 trillion) from 2.0% growth to 2.5% growth on an annualized basis. What a sham, GDP is probably 40% overstated or more, most of it the result of financial engineering. But let’s not talk about it, let’s just kick the can down the road some more and let those “other” events fester. Here’s Econoday’s unconscious reporting:
The recovery is not quite as sluggish as previously believed. Third quarter GDP growth was revised up to 2.5 percent annualized growth from the advance estimate of 2.0 percent. The revision came in higher than analysts' expectation for 2.4 percent. The upward revision was primarily due higher estimates for personal consumption, producers' durable equipment & software, exports, and federal government spending. Partial offsets were seen in a lower estimate for residential investment, nonresidential structures, inventories, and a higher figure for imports.

Importantly, demand numbers were revised up. Final sales of domestic product were boosted to 1.2 percent from the initial estimate of 0.6 percent. Final sales to domestic purchasers were bumped up to 2.9 percent from the original figure of 2.5 percent for the third quarter. Importantly, PCEs growth is a stronger 2.8 percent, compared to the advance estimate of 2.6 percent.

Year-on-year, real GDP in the second quarter is up 3.2 percent, compared 3.0 percent in the second quarter.

On the inflation front, the GDP price index was unchanged from the initial estimate of 2.3 percent. The consensus forecast was for 2.3 percent.

The bottom line is that the recovery has regained some momentum with the consumer sector taking on a little more of the growth burden. Final sales to domestic purchasers are moderately strong and overall sales of domestic product should pick up if the weaker dollar boosts exports-a decent probability. But growth is still sluggish relative to what is needed for improvement in the labor market.

On the news, equities were little changed. Futures remained notably negative due to saber rattling on the Korean peninsula.

The only thing that grew in the 3rd quarter was the amount of money pumped into the system, that is it, the rest is pure bullshit.

Corporate Profits for Q3 came in showing a growth of 28.2% on a year over year basis, this is down significantly from Q2’s 38.7% yoy growth. While up significantly yoy, the pace of growth fell by nearly a third – and keep in mind that a year prior to Q2 of 2010, earnings were close to zero! Thus they could rise very little and the percentage rise looks impressive. Are these corporate earnings real? HELL NO! They are completely FALSE! A large percentage of these profits come from the financial sector who is marking their assets to their own models. This is accounting FRAUD, that is stacked upon various other frauds. And it’s not just in the financials, the FRAUD is rampant, the “profits” are false. Simply return to mark to market accounting and those “profits” would vanish. They are going to regardless, even if it takes a major war to do it.

Existing Home Sales are released at 10 Eastern.

The markets are still within the range of a wave 4. As long as prices stay above the SPX 1129 level, then the odds favor that there will be a 5th wave higher. McHugh’s read is that there would be one more leg lower to finish wave 4. But the notion of a 5th wave higher is hard to imagine with all the events in Europe and now in the Koreas. Should 1129 break, then we will know that a larger correction is in play – there’s still a lot of support between here and there, but we know that the entire run up in stocks has been false – easy come, easy go.

And so, that dollar move is very significant. Within that down channel there is only 3 waves – that means that it was the down move that was corrective and that the primary direction of the dollar in the intermediate timeframe is HIGHER (the dollar is already dead mathematically, that is the long term). That is the OPPOSITE of what the masses believe in the short run, and that makes this channel break significant.

The mass media is reporting that the “Economy is Picking up Steam” due to the false GDP report. The only thing that’s picking up steam are the tremendous piles of manure created by the printing press – now a computer. The people know this. They know that printing money will not get them jobs. China is fully aware that with each POMO infusion the value of their U.S. debt is diminished – they are being robbed by the gangsters who run America. Those gangsters are indiscriminate, they will rob everyone, they do not care as long as their fortunes or their safety are not threatened.

Tomorrow is “Opt Out” day for the TSA – I support that movement wholeheartedly.

Freedom and Security… They are directly connected, and yet the relationship between the two is widely misunderstood. You CANNOT have FREEDOM while pursuing security. You WILL GAIN TRUE SECURITY when you pursue FREEDOM.

Monday, November 22, 2010

Morning Update/ Market Thread 11/22 – Contagion…

Good Morning,

Do we have a FAILURE to stem the contagion? That is the question this morning following Irelands’ “bailout.” Spreads on Irish bonds are UP this morning, not down. Spreads on Portuguese debt is blowing wide this morning, rising more than 40 basis points as the next victim of “rescue” is attacked. You know that Spain and Italy are right behind.

Below is this morning's reaction in the dollar (left), and euro (right). Not the results they want from a huge bailout:

At what point does the union simply collapse? How many billions in rescue funds can be generated before they finally admit that the entire region is broke and that the Euro has failed? IT HAS FAILED. The terms of the Union have already been broken, and I fail to see how it can survive in its present state as the crush of debt to come gets bigger and bigger very fast. Spain and Italy are many times larger than Greece and Ireland, the end of pretend is near.

And this so called Irish bailout is not even close to being a done deal itself – only broad strokes and agreement to leave their corporate tax rate alone, but no details regarding amounts or timing have been reached other than the government will have to inject an immediate $6 billion into their banks! Why immediate if their banks are all okay? Oh yeah, and Ireland “asked” for it… I must have read that a hundred times, what bull. Part of this deal is that supposedly the Irish banks will be restructured to be made smaller, with some parts sold off overseas… what they didn’t say is if the “bad bank” idea being floated over the weekend is a part of that restructuring. If so, that is nothing but the shell game whereby they dump bad investments into a shell corporation to be bankrupted later leaving that group of investors high and dry. They should be high and dry, but so too should the banks, their good assets should be sold to make good on their bad – that’s the rule of law, the shell game is ILLEGAL yet governments are doing it anyway (including ours).

And there is more and more resistance to this from factions within Ireland (appropriately so). And not just within Ireland, there are people inside of Germany threatening to sue over what has become the “Bailout Union (BU).” All of these bailouts are outside of the EU charter and are not supposed to be happening. In effect all of Europe is being placed on the hook to bailout European banks (boy, do we know what that feels like). But in Europe the countries are supposed to be sovereign, and being in perpetual and insurmountable debt is certainly not living free, it is living as a slave to the banks who are their masters.

But the people of the world continue to let the bankers control them. It starts out so subtly that we don’t even realize its happening. For example, just last week I received a statement in the mail from USAA who insures my property… in it was a notice that USAA is using personal credit information to set insurance rates! They show a full page table describing why certain negative credit events correlate to higher insurance risks, and thus higher premiums.

Now think about this for awhile… it may seem somewhat appropriate on the surface, especially to good actors like me who have low rates, but I have two big issues with this: One is that it works against the poor to keep them poor; and two, which is far more important, is that it conditions the population to CONFORM to the BANK’S RULES. This credit reporting system now affects every aspect of our lives, where we live, where we can work, and how much we pay for other things besides just DEBT. CONFORM OR ELSE. But in this case CONFORMING means you better not cross your corporate BOSS, and you better not disagree with anyone who can affect your credit rating or you will pay and pay and pay. Thus you have very LIMITED RECOURSE, but the corporations have nearly instant and unlimited recourse. RESISTANCE IS FUTILE.

Because resistance is futile, I would argue that resistance is MANDATORY.

Here’s Pat Rabbitte demonstrating the first steps of what I mean… where are the politicians in this country who have spines?

Sorry to break the news to you, but the people of the world are at WAR. The war is the people versus the central banks. Unfortunately we don’t yet collectively recognize the real enemy, but that recognition is developing. Also unfortunate is that the banks feed the corporations and in turn the politicians - as a result you get self-explanatory charts like this one that Jesse provided this weekend:

Markets? What a joke. With politicians on that side of the equation, is there any wonder that there are no adults to police the markets? Insider trading, dark pools, HFT machines, bailouts, POMOS, oh my. None of it is real, none of it serves the purpose for which they were created. FRAUD is rampant, it is no place for your money, not until the rule of law is enforced and is restored. That likely won’t happen until we change WHO controls the production of our money. Under the current system the private central banks produce and control all the money and they ARE THE “FED” – the same banks own and control the media and the military industrial complex. They own the exchanges, and thus they can see your bids and your stops before they are even executed. They have built high speed networks to arbitrage in milliseconds any move you make. They are the markets and they are profiting simply by stealing from you, and through the use of accounting and control FRAUD.

Here’s the ironic part… despite creating money (as debt) and owning all of the above, they are INSOLVENT. And that simply goes to show you how crooked the mobsters are – and that anyone in America should respect or bow to a puppet like the “Fed” is beyond me. Don’t fight the “Fed” - my ass. That very statement gives them power that does not belong to them.

As far as economic reports this holiday shortened week, the main event is tomorrow with the 2nd report of 3rd quarter GDP. The first whack claimed (falsely) that the economy is growing at a 2% pace, and now the consensus is looking for that to be revised higher to 2.4%! Existing Home Sales is also reported tomorrow.

Today the Chicago “Fed” released its National Activity Index. In negative territory for the 5th month in a row and the three month moving average getting more negative, here’s Econoday:
In October, the Chicago Fed national activity index improved to a reading of minus 0.28 from minus 0.52 in September. Three of the four broad categories of indicators that make up the index made small positive contributions, while the consumption and housing category continued to make a large negative contribution.

The index's three-month moving average, CFNAI-MA3, decreased to minus 0.46 in October from minus 0.33 in September, reaching its lowest level since November 2009. October's CFNAI-MA3 suggests that growth in national economic activity was below its historical trend for the fifth consecutive month. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year. Production-related indicators made a contribution of plus 0.08 to the index in October, up from minus 0.12 in September. Manufacturing industrial production increased 0.5 percent in October, up from a 0.1 percent gain in the previous month; and manufacturing capacity utilization increased to 72.7 percent in October from 72.3 percent in September

Just remember that anything released from the “Fed” is suspect at best, so negatively reporting on themselves should be viewed that reality is much worse. NEVER give someone the power to report on their own performance – yet another doorway to fraud that was opened by the Federal Reserve Act.

So what does the stock market do from here? I don’t know for certain as we are in a transition point. If the contagion continues, then the markets are toast here and now. Many people this weekend were expecting a bounce, and many, many people are looking for a larger 5th wave higher. Will it develop? It doesn’t have to! But it could.

And thus we are still in the same area, still failing to break above the 61.8% retrace mark and still failing to break over 1200 on the S&P. We’ll track support and resistance levels and look for a trend to develop. The EW experts believe we’re in a wave 4, it certainly is acting like it, but again, it could be that hindsight will prove that count incorrect, that’s why we’re watching key levels like 1129 which is still a ways down there.

Eric Clapton - Stormy Monday:

Sunday, November 21, 2010

Martin Armstrong – The Rising Frustration with the Debt Crisis…

Martin Armstrong – Show Me the Money…

Martin has published several papers recently that are pretty coherent and I think offer some very good points and thinking about the way our economy and money system work, and don’t work. Again, his strong point is his read on history and his ability to put it into an economic context.

In this piece he correctly states that a gold standard is bunk and he offers some good insights on the movement of currencies and what to expect (generally the opposite of what the majority thinks will happen). If you look at his model, it does have a major turn date that occurs before the mid-point of next year – the last turn did occur close to the March ’09 low point in stocks, but it could also mark a major turning point in the dollar.

At any rate, this is an interesting read, it will make you more aware by reading it, but I would caution anyone about taking his predictions too seriously. Remember, predicting the future is pretty much a fool’s errand unless there is mathematical certainty involved – and in this case there most certainly is, the debt is completely mathematically impossible to ever repay and thus you know that events are coming. When predicting market events, the easiest thing to predict (which is not easy) is direction, the next hardest to predict is the depth, and the hardest to predict is timing. Thus you should always take people’s read of the future with a many grains of salt.