Tuesday, September 27, 2011

Morning Update/ Market Thread 9/27 - Euro TARP LOL Edition…

Good Morning,

Equity futures are doing the end of month/ quarter zoom on rumors of yet another European scheme to shuffle/ leverage paper in such a way as to fool the people into believing that they are making something from something when in fact they are simply going to make something from nothing again to keep their Ponzi going for a few more months/ days/ hours (?). Sorry, but it’s a rob you joke of giant proportions. And that our markets are reacting they way the are… well, let’s just say “buyer beware.”

The dollar is down, bonds are down, oil is up after bouncing off the $80 neckline, gold is bouncing back, silver is roaring back, while food commodities continue to starve those in the world who live on the margins.

The problem in Europe is exactly the same as it is here in the U.S., which is exactly the same as it is in Japan, and in the U.K., and in all the big banks – the condition is one of debt saturation, that is there is not enough income to service the principal and interest associated with all the debt. That has a name, it is called insolvency, which is commonly referred to as bankrupt. This is why throwing “liquidity” at an insolvency condition only works for a short while and then fails – actually makes the insolvency condition worse because it creates more obligations when what is needed is less.

For those who don’t fully understand the root cause of this condition, it is monetary – it is a function of how our money is created and by whom. It is a way different equation if your money is EARNED into being versus loaned into being. It is a way different equation when truly sovereign money is created on behalf of the people – so that it bears no interest, no future obligation, no payment of interest to private individuals. And it matters greatly WHO creates it because those who do can use it to buy their way politically – a huge disaster for the world.

There is no reason whatsoever to give private individuals the money creation power – in fact there are a ton of reasons not to. There should be no U.S. bonds or Treasuries – period. There is no need. These markets are a scam created by and for private interests. They fly in the face of the natural rule of law, and thus they will fail regardless in due time.

The S&P Case-Shiller Home Price data through July was released this morning. While S&P claims it shows “strength,” the truth is that there is no strength to be found in the report whatsoever. While they claim that month to month the 20 city is flat, year over year both the 10 and 20 city are showing price declines in the 4% range. Remember that August was a cliff month economically, and that the selling season is now over. Still, I remind everyone that the huge anchor that is the Option-ARM wave of resets has now peaked and thus a heavy weight is being lifted from the housing market as we speak – but it will take time. Here’s Econospin:
Home price trends are holding steady based on S&P Case-Shiller data that, for July's adjusted composite-20 index, show a third straight unchanged reading. Half of the 20 cities tracked show declines with eight gaining and two unchanged. Weakness is concentrated in the West including a third straight decline for Phoenix, San Diego and LA and a sixth straight decline for Las Vegas. Gainers are led by Detroit, Chicago and Washington DC.

Summer is a seasonally strong period for housing demand as seen in the unadjusted data that show a 0.9 percent rise for the composite-20 index vs June's 1.2 percent gain. But the unadjusted year-on-year rate, at minus 4.1 percent, underscores the housing sector's weakness. The minus 4.1 percent reading, though, is an improvement from minus 4.4 and minus 4.5 percent in the prior two months.

Case-Shiller data, which are three-month moving averages based on repeat transactions, offer strongly reliable indications on home prices though they do lag other home-price information including those in the existing and new home sales reports. Yesterday's new home sales report showed unusually severe monthly price contraction during August.

And for those interested in seeing the figures and charts, here’s the entire Case-Shiller report:

Case-Shiller Sep 2011

Consumer Confidence is released at 10:00 Eastern. Not that record low confidence has impacted public actions, it hasn’t. Again, that’s because the narcissists are in charge – you will note that all the bailouts center around them (the banks), and not around clearing the debts of the “consumers” (formerly known as people or citizens). Demand cannot gain traction because the PEOPLE are either debt saturated themselves, or they have no job because businesses are debt saturated, or if they work for the debt saturated government then they are getting pay cuts or are also being laid off, or if they work for the debt saturated banks they are either losing their jobs or making millions robbing from those who still have two nickels to rub together – one or the other.

“Markets?” What a joke. Get ready to be robbed one way or the other. It's all just a matter of time...