Wednesday, March 23, 2011

Morning Update/ Market Thread 3/23 – Don Quiote Edition…

Good Morning,

Equity futures are lower this morning after bizarrely ramping overnight. The dollar is strengthening significantly, bonds are higher, oil is higher, gold is higher, silver is near a new record, rice is rocketing, while most other food commodities are flat.

The worthless, conflicted, unethical, and hypocritical Mortgage Banker’s Association says that Purchase Applications rose 2.7% in the prior week, and magically, so too did the refinance Index rise the same exact 2.7%. I can usually smell a con, and the figures coming from the MBA is just that:
Plus 2.7 percent is wild for March 18 mortgage applications data, a gain posted for the purchase index, the refinance index, and of course the composite index. The purchase index is still below levels at year end but is showing month-to-month strength that hints at improved home sales for March. The refinance index is tangibly higher reflecting favorable mortgage rates, averaging 4.80 percent in the week for 30-year fixed loans.

Excuse me while I hurl with laughter. Existing Home Sales just CRATERED in the recent report and Econday has the nads to spin MBA data like that? It’s become nothing but the theatre of the absurd. Yesterday the House Price Index also fell, and so too did the Richmond “Fed” Manufacturing Index.

New Home Sales are released at 10 Eastern this morning – results will be posted within the daily thread located in the comments at the bottom of this post.

Yesterday the market refused to break the down channel and the SPX was stopped once again by the 1300 mark, refusing even to test the 50 dma at 1303:

Look at how prices perfectly followed that upper channel trendline down. You think mom and pop are watching that line? No, only machines can follow lines perfectly like that – and our markets have been completely turned over to the machines, those machines are owned by you know WHO. I’ve watched the markets for decades and can tell you that the markets do not behave anything like they used to. Of course all this HFT activity draws it’s fuel from the funny money created by the “Fed” and from the FRAUD transpiring within the banks and within our own government.

Chris Whalen uncovered more fraud yesterday when he wrote about how Fannie and Freddie are purposely ignoring INSURED losses so that the monoline industry, which was absolutely busted to begin with, can avoid having to show just how busted they remain. Fraud has already been rampant in the mortgage insurance industry, and even after they failed, the fraud was allowed to be sweped under the rug by regulators when they allowed Ambac to create a shell company in a manner similar to the illegal shell game being played with the banks who create shell companies to hide their garbage loans.

Why would regulators allow Freddie and Fannie to not make claims that protect American’s assets, and not end the incestuous relationship between the monolines and the rating agencies? Because they know that if they do, then the whole ball of wax unwinds, that’s why. They know that the math is impossible and that the game is over – their failure to act early has led to their inability to act now.

For more on what Chris Whalen says about FRE and FNM, here’s a link: Fannie and Freddie Hiding Over $100 Billion of Losses?. Yes, I would guess WAY over. Every single day, day after day, all I see is one fraud after another.

It’s funny, but nature has a way of dealing with impossible math. Narcissists who create never ending growth don’t ever stop to ponder that, however. If they did, they would understand how unchecked growth causes man to test the boundaries of nature. Deep oil drilling – major catastrophe. Hundreds of millions of people crammed onto a tiny island on a major fault line – nuclear reactors shoddily built and covered up with fraud – major catastrophe. And so we see what are natural events, but we fail to acknowledge how our own actions and FALSE LAWS work against nature instead of with it.

What do I mean by “false law?” I mean that man can make any law they choose, but if we make laws that go against the natural order of the universe, then eventually said law will be smacked down. The law that is currently most at odds with the natural order of the universe is The “Federal Reserve” Act.

I know that it’s hard to see the connection for most narcissists, so if you need the connection explained to you, then you probably fall into the narcissist camp of misunderstanding the way the world really works.

Another example of an unnatural law is the way municipalities are sleazily getting in bed with the defense industry by allowing them to put their ticket by mail cameras up all over creation. The defense industry takes 40% of the cut, while the municipality gets 60%, but has to deal with the overhead of issuing so many ILLEGAL tickets. I say they are illegal because ticket by mail systems fail to identify the person driving the vehicle and issue tickets to the registered owner. When the ticket is received in the mail, the registered owner, who may not have been the one operating the car, is assumed to be guilty and must go expend his energy and effort to prove his innocence. This is completely against the natural order of the universe whereby people must assume innocence until proven guilty. There’s a reason for that… it’s called empathy. Remember, no commerce happens until empathy, then communication occur.

So, in placing these cameras against the public, municipalities are creating tension against the natural order of the universe. Living in towns rich with these cameras makes every outing tense. If given the choice of where I spend my money, I will avoid cities that have these every single time. While narcissistic politicians don’t get what I’m saying here, those who feel that tension may relate.

And things like this may be shirked off as trivial in the scheme of things, but they are not. Our very survival as a species depends upon us getting that order of law correct. The good news is that compared to the dark ages we have progressed. The bad news is that we are currently taking a giant step backwards. If we wish to come out of this impossible math situation progressing mankind, then we must strive to create a human order and rule of law that is compliant with nature. The place to start is by revoking the “Federal Reserve” Act.

Unfortunately, I don’t expect that enough people will understand what I’m saying to get the critical mass required. And thus the impossible math will continue to express itself in negative ways and nature will continue to spank us until we get it right.

And talk about getting it wrong… the information we’re learning about the nuke disaster in Japan is amazing on many fronts.

The way in which these reactors were built and fueled is flawed to say the least – outright criminal is more like it. Here again the rule of law was subverted by special interest money where Tokyo Electric was allowed to do things that never should have been done.

And the Japanese government is absolutely failing still to keep them in check in the same exact manner that the United States failed to keep BP and the other energy companies in check. Radiation is being allowed to escape in a way that could absolutely destroy much of Japan for decades… it doesn’t have to be like that. What’s happening is that the corporation is being allowed to attempt to salvage their lost assets and to avoid the expense of properly containing the radiation by encasing those reactors in a way that keeps the radiation on site. This is because the corporation’s self-interest is NOT aligned with humanity’s self-interest. In my opinion, the very first step in a big man made disaster like this is to REMOVE the firm that runs the activity, and replace them with outside experts who can make decisions based on what’s best for humanity and not what’s best for the corporation. Corporations are NOT people, when will we ever learn?!

But money is a corruptive power that is sometimes more powerful than human life itself. It’s a shame, really, because money and corporations should be a tool of mankind, not a tool of a few to take advantage of mankind. And that’s why the Federal Reserve Act works so fervently against nature.

And nature is taking it on the chin in Japan. The nuclear plants have once again been evacuated as radioactive smoke continues to pour out of the plants to the highest radiation levels seen so far. From my perspective there is no hope of salvaging the ruins and containment, not salvage, should be the number one priority – obviously it is not.

Contamination of food in Japan is getting worse. And now radiation is twice acceptable levels in the water supply of Tokyo proper! THINK about that! This is one of the world’s largest cities… would you live there under these circumstances? I sure as heck would not. And you are being lied to about the dangers being posed… if you can handle the truth, then I suggest you read this: What They're Covering Up at Fukushima.

Don’t bother reading that if you prefer to play ostrich. Just remember that you have been warned about the danger, and that the particles in discussion can absolutely make it to our shores and already are.

And with just a few minutes of research, I taught myself about how the Russians initially contained Chernobyl, but are now in progress of building a more permanent sarcophagus. This is no small feat, it is akin to building a pyramid of Giza on top of a lethal smoking nuclear plant. And man, is it expensive – we’re talking about a sarcophagus that is 303 feet high and more than 880 feet wide! The new sarcophagus will cost Billions of dollars to build. Is there any wonder why Tokyo Electric doesn’t want to go there? Their site may need four or more of these structures! We need to get over this bull that “it’s not worse than Three-mile Island,” or “It’s approaching Chernobyl levels of danger.” Bunk! It’s by far and away the worst nuclear accident in the history of mankind, now let’s get on with the job of limiting the disaster further – and I don’t mean pouring seawater on what are obviously completely destroyed facilities! (New Safe Confinement)

Meanwhile, speaking of the Giza Pyramids, Egypt attempted to open their stock markets… and they promptly crashed, so they shut them down again. Oh well, nice try. And yet further evidence that when the criminals are removed, that what they are leaving behind is nothing but fluff for the REAL people. This same exact scenario is coming to America and to global markets – again, if you don’t see the fluff for what it is, then you are very likely a part of feeding into that fluff, addicted to it. Being addicted to the paper fluff is far worse than being an alcoholic or a drug addict – heck, at least some of them can admit they have a problem. But once you build your life around the paper, your home, your cars, your toys, and even your family then are dependent upon you keeping that paper inflated, regardless of whether or not it conforms to the laws of nature. And then you are stuck and it becomes even harder to extricate yourself than it is ridding yourself of most bodily addictions.

And for those still fretting over what the markets will or won’t do – Bill Gross says that as the world economy slows to look for QE3 to come, higher inflation, and thus eventually interest rates will have to rise. Oh yeah, it’s coming… but it won’t be a straight line getting there, there are many “other events” still in progress – the drum beat of REAL change is steadily increasing, it is marching to the beat of the impossible math. Can you hear it, or am I simply Tilting at Windmills?