Wednesday, February 23, 2011

Morning Update/ Market Thread 2/23

Good Morning,

Equities are flat just prior to the open after being higher in after hours trading. The dollar is down, bonds are higher, oil is adding onto huge gains, gold is pushing higher above the $1,4000 mark, while food commodities are being slammed backwards.

Yesterday’s rout was obviously the large move called for by the prior small movement in the McClelland Oscillator. The McClellan moved to firmly negative territory yesterday, meaning that most stocks are just like that established in downtrends. As a reminder, don’t forget that the market is still under the auspices of a valid Hindenburg Omen.

Most short term up trends are clearly broken, however, the longer term ones are not yet. In the 9 month daily chart below you can see the rising wedge and that its lower boundary is right in the 1300 area:

Classic chart, historic divergences built upon historic money creation.

In yesterday’s daily thread we discussed the fact that the National Association of Realtors (NAR) is being outed for overstating home sales for the past decade – by as much as 15%. No surprise to us, this is exactly what I’ve been harping about in regards to the bad data and disinformation. It is a product of a serious conflict of interest. Organizations who have a vested interest in the outcome should NEVER be allowed to compile and report data on their own industry. Misinformation such as that causes misallocation of resources within an economy.

And I’ve been harping on the Mortgage Banker’s Association (MBA) for producing what I believe is completely bogus data – as in not even close to reality. They are not only conflicted, but they are a hypocritical narcissistic organization that continues to damage our economy with their business practices and false reporting of loan conditions within the mortgage industry. Their latest rendition is that, get this, in the past one week alone, mortgage applications supposedly rose by 5.1% with Refinancings rising by a completely unbelievable 17.8%! In just one week!

If you believe that, then I’ve got some swamp land in Florida to sell you, just ignore that oil sheen on the water next to those dead dolphins. Here’s Econoday biting on the MBA’s snake oil:
Borrowers are locking in lower interest rates, making for a burst in both refinancing and purchase applications. Refinancing applications jumped 17.8 percent in the February 18 week with purchase applications up 5.1 percent, pulling levels back up from two weeks of declines. The average 30-year mortgage rate, reflecting demand for Treasuries tied to Middle East unrest, fell 12 basis points in the week to an average 5.00 percent.

Riiiight. “Whatever” is what goes through my mind when I see reports like this – completely disconnected from reality. So much so that even ordinary people are finding it difficult to believe the constant flow of disinformation. And gee, what are we seeing as a response to the despots around the world?

And that same response is happening right here in the good ol’ U.S. of A. And it’s spreading as the impossible math of central banker debt pressures more states. I just read that Detroit, after closing 54 schools last year is now slating another 70 for closure – HALF of all their schools! And the result is that classroom size is going to double with each teacher working with 60 (!) children. I can tell you from my wife’s experience that even managing 30 kids is too much. Many children are coming to school not only unprepared to learn, but they are coming from families so under pressure that they act out in negative manners due to their surroundings. And, YES, I blame the central bankers for creating that environment. Never ending debt means never ending price inflation. Wages fail to keep up, and now both parents are required to work just to afford overinflated home values, overinflated auto values, overinflated everything. In other words, inflation pressures the family core – the more on the margin they are, they worse they are affected.

Let me share a story my wife brought home last night (she’s a principal in a Middle-School)…

Boy is brought to her office who is acting out in class and being disruptive to the other students, refusing to follow directions from the teacher. Minor stuff, not like gang activity, guns, and drugs she deals with on a daily basis (we’re talking south of Seattle here, not East LA). She sits the normally well behaved boy down and asks if there’s something outside of class that’s bothering him? Turns out that three of his siblings were just taken to child protective services, his father was arrested, and neither of his parents have a job.

That boy absolutely is not ready to learn – normally a good boy, he has become a management problem. This is repeated over and over and over. Some of the stories she brings home are outright scary. Sixty Detroit kids per class? Oh yeah, no child left behind there.

And thus the riots in the streets by frustrated teachers who mostly don’t draw the same connection I do between the breakdown of the family, to the breakdown of the REAL economy, and that lands right at the feet of the narcissistic central bankers who worry far more about global overpopulation than they worry about the kids, parents, and teachers of Detroit or Seattle, or anywhere other than the private schools they send their own kids to.

But at least I get a good laugh out of reading stuff like this:
Essex South Register of Deeds John O’Brien announced today that he will be seeking over $22 million dollars from the Mortgage Electronic Registration System, “MERS” which represents several major banking conglomerates. O’Brien bases the $22M number on the fact that the Salem registry has recorded over 148,663 MERS mortgages since 1998. After a careful review of a number of these mortgages O’Brien said it became very clear to him that MERS had assigned mortgages to other entities at least twice without paying a recording fee. Based on this information the taxpayers have been defrauded out of $22,299,450 in Southern Essex County alone. It is quite possible that in some cases they may have assigned the notes more than twice resulting in even greater loss of revenue. O’Brien called MERS “one of the greediest schemes ever perpetrated on the American people. They have compromised the integrity of the public land recordation system and in doing so, have wreaked havoc on our economy”.

ABSOLUTELY! MERS is a completely illegal entity whose business model is stealing from every county in the nation. MERS is toast, and the mess created by them is unbelievably huge. Yet another central banker scheme that is completely outside of the rule of law and now collapsing on their heads. Still, the collapse of MERS is evidently a good thing to the markets as it is just another central banker justification to print more money for their HFT computers to feed their ever expanding Ferrari collections.

But while I can laugh at MER’S demise, I weep when I read about GM receiving more than $14 billion (!) in tax cuts from the Federal Government because they are waiving taxes post bankruptcy just for them, allowing pre bankruptcy losses to carry over. Again, this is completely outside of the rule of law. Bankruptcy law is clear in this regard, and those prior losses are not allowed to be deducted past bankruptcy. And so, this is just another $14 billion bailout of GM who gets to report profits to pay their central banker owners while the kids of Detroit are squeezed 60 to a classroom. Get it? Get the teachers marching on the state Capitals?

If you don’t get it yet, you will. Let me explain…

The people of the world are currently at war against the central banks. Most don’t recognize this war yet, but those are the two sides, just take a look around the globe. On one side is the people, and on the other is those WHO control the production of their money.

This is nothing short of a war to determine whether the people of the earth advance humanity, or it becomes ruled by the evil forces of central bankers. I know that sounds like a bad movie plot, but sometimes reality is stranger than fiction. What I expect is that the bankers will create false flag terrorist acts and more false flag wars, all while letting you change their left/right puppets out at the ballot box – thus letting you feel some sense of false control. The only way to stop it is to cure the bad math – and trust me, taking away teachers right to collectively bargain won’t do it, not even close. So get ready, those “other events” I’ve been talking about for years are steaming ahead in fast forward motion.