Monday, October 10, 2011

Morning Update/ Market Thread 10/10

Good Morning,

Banks are closed today for the Columbus Day holiday. Equity Markets are open and bond markets are closed except for futures trading, of course with no volume equities were pumped higher over the weekend. Of course higher markets come at the expense of a dramatically lower dollar, lower bonds, higher oil, higher gold & silver, and higher food prices.

Desperate people do desperate things, and man are they desperate in Europe. Bailouts, money printing, and bank nationalizations are flying all over the place. Belgium bank Dexia is being nationalized after passing Europe’s version of the “stress tests” which Dexia passed despite being leveraged nearly 30 to 1, the same as Lehman when they failed. In fact, Dexia’s debt portfolio is greater than the entire GDP of Belgium all by itself! Talk about impossible math. Now other banks in Europe are being nationalized as well – again making the people responsible for private mistakes, a complete and total breakdown of the rule of law. Dexia’s bond holders will supposedly receive 100% of their investment.

Meanwhile the people suffer, no real bailout for them, just more and more impossible math. No surprise then, that we see them finally take to the streets all over the world including the U.S.. None of what they are doing will have any helpful impact in more than just the short run, in fact their actions will only lead to bigger and nastier other events.

No economic data today and a pretty light economic calendar all week. Earnings, as trumped as they are, will begin pretty soon.

The market has gone basically straight up since receiving that VIX market buy signal early last week. Meanwhile “other events” in Syria begin to increase with more violence occurring there. Fukishima is a nightmare of historic proportions, just scroll down the headlines at the following link, and you’ll soon develop that nuclear nasty metallic taste on your palette: