Friday, February 11, 2011

Morning Update/ Market Thread 2/11

Good Morning,

Equity futures are lower this morning following yesterday’s very non-generic looking activity (Transports) that produced another very small movement in the McClellan Oscillator – thus expect a very large directional move today or tomorrow. The dollar is higher, bonds are higher, oil is lower, gold is down slightly, and food commodities are close to even after corn set another new high yesterday.

In the currency world, it is the Yen that has begun to move, breaking upwards on the chart below denotes a weakening of the Yen and has recently correlated to weak equities:

Mubarak’s tease yesterday was typical despot deception, his speech filled with meaningless words meant to confuse while he holds out hope the people won’t storm the Presidential Palace. Unfortunately, it looks like that’s what it’s going to take to get the U.S. backed despots (including the V.P.) out of Egypt. Of course if Americans were smart, we’d be storming the “Fed” building and throwing out the central bankers who are the puppet masters using debt as their strings.

But while Americans sit on their asses and view Egypt as a spectator sport – you know, something that happens way over there – the central bankers who have anointed themselves to be the world’s bankers (with no vote by any people on the planet) are making plans to control the world’s money supply!

Sound like a conspiracy? It is, and the American public had better wake up. Keep in mind as you read the following that the largest power behind the IMF is the American bankers:
IMF calls for dollar alternative

NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.

SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs.

While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.

Dominique Strauss-Kahn, managing director of the IMF, acknowledged there are some "technical hurdles" involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.

"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.

The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.

In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.

Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.

The dollar alternatives
Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.

Do you get to vote on that? How important to the future of the United States and the world is that?

Here’s the outcome the way I see it: It would give the global banking cartel even more power to issue more debt around the world. Thus they would gain power and control, which is exactly what those narcissists seek. Thus it would diminish the people’s power, freedom, and control of natural resources. It would cause global inflation and it would starve those furthest from the creation of that inflation – those who spend the greatest percentage of their income on food. It would flood the world with their hot money and create completely artificial markets around the globe with them in control. VERY DANGEROUS, it is the opposite of true democracy.

That said, the concept of a global currency is not the problem! The problem is WHO is in control of its production!! If such a currency was under the control of the people for the benefit of the people, with proper checks and balances to keep the quantity of money under control, then I would fully support it.

WHO is the problem, and don’t be fooled by the IMF and World Bank smoke screen. These are the same exact people who are behind the Fed – private bankers who seek profits for themselves at your expense. And they are the ones who finance the military industrial complex and who prop up despot regimes around the world as they manipulate people and resources at their behest.

No one voted for the IMF or World Bank – they are self anointed bankers to the world. The “Fed” feeds them your money, they then leverage that money, creating more paper to indebt other nations. And then they require other countries to repay these paper loans with gold. That is how the IMF became the world’s third largest holder of gold. And the “Fed,” who no one voted for, uses this nation’s gold in “swaps” with other bankers around the globe! Who authorized that? Who gave the private bankers in the private corporation called the “Fed” permission to use OUR nation’s gold?

When Americans are going hungry, then maybe we’ll get off our lazy spectator asses and do something real besides falling for the false choices offered up by “Republicans” and “Democrats.” Until then it’s just a spectator sport, watching others do our bidding around the globe.

Oh yay, little Timmy Geithner presents a plan to Congress that has three choices on how to unwind the GSE’s (and replace it with a new one, lol):
Obama Administration Calls for Winding Down Fannie, Freddie
With the decline of private investment in home loans since the credit crisis, the two companies, along with the Federal Housing Administration, have come to own or insure almost 97 percent of mortgage bonds.

The options suggest differing degrees of government involvement in the system. The most dramatic would involve a “privatized” system of housing finance, with a government role to help “narrowly targeted” low-income and veteran buyers.

A middle ground would replace Fannie and Freddie with a system that helps low-income and veteran buyers in normal times and also provides an expanded guarantee that the government could ramp up in a crisis. The paper suggests using high-priced guarantee fees or restricted amounts of public insurance to achieve this goal.

A third option has the biggest government role and would hew closest to the current system. It would impose more regulation and give the government a role in “catastrophic reinsurance behind significant private capital,” so as to provide a backstop in times of crisis.

Winding down FNM and FRE is the right thing to do. Replacing them with more government guarantees is the wrong thing to do.

You see the game here, don’t you? When your last entity implodes, you simply shove the losses on the taxpayers and then start all over again with a different shell entity with a different name. It’s called the shell game, it is illegal, yet it has become the banker deception du jour.

And a big part of Timmy’s plan is to give private junk insurers like MGIC more power to insure loans; “We will encourage Fannie Mae and Freddie Mac to pursue additional credit-loss protection from private insurers.” Gee, that’s nice, and MGIC has jumped nearly 7% in before hours trading. This is the exact same model that failed, these companies went completely bankrupt, and now we get to do it all over again with the exact same companies who never should have been allowed to remain in the first place. A business is not a business if it’s not allowed to eat its losses and to fail.

Reports have come out as I’ve been typing that Mubarak has left Egypt. I hope so, but I also hope that the people are smart enough to get his crony regime out as well. The markets may react positively to this, but the truth is that the people will continue to starve at a faster pace the higher the markets go, and the faster the world's bankers pump hot money into the commodities necessary to sustain life.