Monday, March 14, 2011

Morning Update/ Market Thread 3/14 – OMG Edition…

Good Morning,

Equity futures are lower this morning, but not anywhere near in proportion to the declines in Asia, nor for what you would expect with the rolling disasters we are experiencing. The dollar is lower, the Yen is lower after being higher, bonds have moved higher, oil is down but bouncing, gold is up, rice is up, while most other food commodities are down.

Which disaster should we talk about first, the earthquake, the tsunami, our markets, or our economy?

Let’s start with the obvious stuff. To me the reaction in our futures markets is simply too muted to match reality. It is quite obvious to me that our markets are complete nonsense, taken over by computers fueled by money that’s simply made on other computers. None of it is real, the market I see more closely resembles a marketing tool in the hands of the “Fed.”

From my perspective, “investing” in THEIR markets at this juncture is as riskless as a stroll through the Fukushima Reactor #3 parking lot... you know, the one with the plutonium fuel.

The U.S. Navy has detected radiation up to 100 miles away, and they are repositioning their ships to avoid the fallout. Seventeen sailors who participated in rescue operations have tested positive for nuclear contamination - Tests detect radioactivity on 17 U.S. Navy crew members in Japan.

The effects of the earthquake and tsunami are huge, both in terms of life and money. But the effects of the damage done to the nuclear energy industry will be felt for decades to come. America has not built a nuclear power plant since after the Three Mile Island accident – the last reactor was completed in 1974. And yet, the United States still gets nearly 20% of its electricity from nuclear plants. What will be the future with these events? I see this as further pressuring organic based fuels, although the initial reaction has the oil markets lower. Again, the markets are not real, so I would not pass judgment on any short term move.

And as I predicted, these events are equating to even more money printing as the Japanese central bankers jumped right in to provide 15 Trillion Yen stimulus and have said that they will DOUBLE the amount of debt they are buying up (which equals more printing). The numbers in Japan are momentous and getting larger by the day.

Our own “FED” meets today in their regular FOMC meeting and will make their indebt you further announcement tomorrow. I think these events in Japan equal even more market manipulation and more money printing here and around the rest of the debt saturated globe. They can’t stop, and the numbers will only get bigger. These disasters then, are a triggering/ accelerating event.

And what I’m seeing of the natural world is that we are not living in an era that’s as calm as the recent past for the human experience. We have to not be afraid to connect the dots: large increase in solar activity, large increase in volcanic activity, bigger and stronger storms in a more energized atmosphere, strange and unexplained animal deaths/behaviors, large increase in earthquake activity with stronger earthquakes and more damaging results.

Take the Japanese reactors for example, they were designed 40 years ago and benchmarked the largest earthquakes in recorded history up to then – and then they added a safety margin and built them to 7.9 earthquake standards. Boom, a 9.0 (revised up from 8.9) comes along. And this follows on the heals of TWO devastating earthquakes in New Zealand, one in Haiti, one in Puru, and not too long ago one of the largest ever recorded, a 9.2 that struck Indonesia.

My point being that our science is failing miserably to explain a trend that is becoming very in your face. I now regard mainstream science in the very same way that I view mainstream media – they have been co-opted by the central banks and their money. There is good thinking going on in the fringes by people who refuse to participate in special interest science. We discuss these people inside of the daily threads, please join us there for more information.

Where these natural events are leading, I do not know, but I hope the trend that is becoming obvious changes real soon. But one thing is for certain… these natural disasters are pressuring earth’s resources and are adding fuel to the inflationary fire sparked by the central bankers.

True, one would rationally think that disasters on the scale Japan is currently facing could create a large and sudden decrease in economic activity – and you would be correct. But it is the central banker reaction to that which will create the inflation. The central bankers have only one tool left in their toolbox – since they have already lowered rates to zero, all they can do is print – and when that fails to work, they reach for the same old tool and print some more. Thus “growth” will occur despite the deflationary effects of a decrease in real economic activity and output – the “growth” being solely in the supply of dollars, yen, euros, and any other currency that a central banker can get their little hoofs on.

Speaking of the little pigs, the group Anonymous this morning released information that Bank of America was involved in scamming both the people who had mortgages with their bank, and those “investors” who purchased the mortgages in the form of derivates. In a nutshell, this was an insurance scheme where BOA teamed with an insurance company (Balboa - a wholly owned BAC subsidiary no less) and then would intentionally not pay the homeowner’s insurance. And when the insurance would lapse, BOA would then hire said insurance company and pay exorbitant fees while taking kick-backs and passing these exorbitant fees then off on the investors.

Blatantly and totally illegal – yep, no doubt about it. But you know what? As I read this I’m think, yeah, that’s obviously a crime, and it has huge implications, but it’s not anywhere near as bad as the dozen other crimes that we already know the banks are responsible for. In fact, compared to the size of the scandals ignored already to date, this is a yawner. Oh sure, two decades ago heads would have rolled and people would have been in jail, but in light of current events, I can see how the banks simply ignore this… maybe pay a fine and move on. But WHO is there to enforce the rule of law? No one, that’s WHO, because these banks are the ones who produce the money and are “too big to be taken down” solely because they have subverted the political and judicial branches of government.

Sorry, Anonymous, but you’re going to have to do better than that. Here’s a suggestion – think in terms of their HFT machines and exchanges, and you’ll be on a more effective path – but you didn’t hear that from me.

Once the math becomes impossible, as it most surely has, then shocks to the economy become accelerating events that make the math all the more impossible. Thus the economies of the world are a disaster of monumental proportions and we are witnessing a most bizarre and strange series of “other events” unfold. We are living in very historic times, I haven’t even mentioned yet the debt crisis growing in Europe, the continued violence against protestors in Bahrain and how the United State’s reaction to these freedom seekers varies with how entangled our own special interests are in each region. We are obviously bedmates to Saudi Arabia and Bahrain, the people and their freedoms be damned. Of course our policies are molded by and for the pleasure of those WHO produce and control the money.

No economic data today. Again, the FOMC meeting announcement comes tomorrow, there’s quite a lot of data on Thursday, and then no data Friday as it is quadruple witching day/ options expiration.

For those who worry about nuclear fallout reaching the United States, here is a link to a PRIVATE network of radiation monitors – all quiet so far: Radiation Network

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