Wednesday, August 10, 2011

Morning Update/ Market Thread 8/10 – Macroeconomic Debt Saturation Morass Edition…

Good Morning,

Stocks are lower following yesterday’s fine display of market manipulation – twice. The dollar is higher, bonds are higher, oil is lower, gold is higher still, silver is holding steady, and food commodities are generally higher.

The Great and Mighty Oz behind the curtain spoke… and well, he laid an egg. Oh boy, rates will stay low until mid 2013 at least! Paarrrtttaaayyyy! My inane brokerage commentary said that eased investor fears about the future, LOL, and that it had a calming affect upon the market, LOL some more. Yeah, that and a few billion well placed fluff dollars to keep the bottom from falling out and get the shorts to cover.

As if the Fed is in control of rates without an even more massive QE program… without that, no way. Note the mantra of the market is now very easy – when progressively bigger QE takes place, market goes up. When QE ends, market goes down. Gee, “investment” just got easy. Well, except for the rip your face off 600 point artificial swings that is.

So, if you still have money in these markets – then I think you are plain old fashioned nuts. Anyone who hasn’t learned their lesson by now should be broke, and hopefully their DNA won’t filter to future generations. Not to mention that providing trading fees to these clowns can be considered downright un-American. No, sorry central banks, hiding behind false “Federal” monikers and the American flag don’t make your actions any less traitorous – in fact more.

How’s that for market advice?

What should you be doing? You should get REAL. Support real economic activity that you know is not backed by central banking and their financial engineering. It is possible to find. To illustrate my point, in my new yacht joint ownership program I could approach the Wall Street crowd and offer to let them securitize the debt of my customers – you know how it would work… 10% down, $2 a month payments for the rest of your life, and a boat that is immediately “under water.” They would then “engineer” a lovely financial product, S&P would slap a Triple-A moniker on it, and it would wind up in your “conservative” retirement account!

Instead, I am directly matching investors to customers – in a truly conservative manner. Thus the boat is never under water, and there are NO banks involved in the financing or construction of the boats whatsoever. This produces real jobs, right here in America. Does that sound familiar? Kind of old-fashioned and quaint? Well, that’s how business needs to be done, at least if you want a clean conscious.

My take is that the macroeconomic debt saturation condition will continue to produce an out-of-control marketplace to go along with many “other events” until that debt saturated condition is cleared. The math is IMPOSSIBLE, and thus it will take WAY more than just some new “debt commission.” I don’t care what figure they come up with or how they plan to “save” money – it will NOT WORK. For REAL economic health to return, it will require clearing the debt, clearing the FRAUD, and clearing out those WHO falsely were allowed to create money from nothing and use it to capture the three branches of government. We’re talking serious stuff here, it won’t happen without major league “other events” occurring – and yet it will happen.

The youth burning London? Slapping old men upside the head? Get used to it – the disenfranchised youth of London are no different than the disenfranchised youth of Egypt. The difference between their condition and those shiny multi-million Pound buildings their burning is night and day. If you don’t believe the economy and the sucking of wealth from society aren’t behind that, well, you probably still have your money in the “markets,” and thus you are a very slow learner.

Fraud? Try today’s MBA’s Purchase Applications Report. Let’s see, Purchase Applications down .9% - believable… Refinance Activity up 30.4% (!!!!) in just one week! Completely unbelievable – as in FRAUD. Yet who is there to call these Bozos out? Not Econopaytoplay:
The drop underway in long rates tripped a giant 30.4 percent surge in refinancing applications during the August 5 week. Applications are now at their highest level of the year while rates are at their lowest with 30-year mortgages averaging 4.37 percent, down eight basis points from the prior week. But low rates unfortunately aren't raising much demand for home purchases as the purchase index, down 0.9 percent in the week, remains depressed.

What bullshit. Fraud plain and simple, and that’s the extent of your “economic data” for today.