Monday, September 27, 2010

I Know, It Does Not Make Any Sense

What does or could make sense in this wacky world we call finance where the most common theme is to blow harder on the bubble when it is bursting in your face? That is sooooo 1930's dude. The last ditch efforts and corrupt ways are becoming more obvious every day and apparently they no longer are even trying to hide their actions. The complete lack of regulation is astounding, but when your the home team, you own the refs and are losing horribly in the 4th quarter the rules go the way of ethics, out the window.

The blatant rules breaking example today comes from our now weekly occurring HTF implosion of (pick your stock here ______) PGN. Covered by Zero Hedge in From $44 To $4 In Less A Second: Today's Flash Crash Brought To You Courtesy Of The Nasdaq And A Clueless And Corrupt SEC and by Denninger in Just Steal In The Open. As TD puts it, "And where the hell was the circuit breaker on this one? The market is and continues to be a miserable joke, especially courtesy of Nasdaq and the 160 trades in PGN that occurred at ridiculous, HFT-exaggerated prices." Denninger chimes in with, "There is no longer a fair and open market in which you can trade.  There is now a market full of pick-pockets who roam the exchanges with impunity and in fact legal sanction and permission from the exchanges and regulators, stealing as much money as they can, targeting random stocks on any given day."

For Some Additional Observations On HFT Stock Manipulation I suggest you read this as well from ZH. "Reuters ran an article "Traders Manipulating Cheap Stocks" in which it cites Jamil Nazarali, Knight's global head of electronic trading, who basically confirms what we have been saying for as long as we can remember, namely that: "Some traders are manipulating U.S. stocks that are worth less than $1 by taking both sides of trades in order to earn big rebates. It happens for hundreds of millions of shares per day." In other words, HFT algos that do nothing but churn and collect "maker-taker" liquidity rebates, are forcing fake prices in, yes, thousands of names."

Since Insider Selling To Buying Surpasses 1,400-1 you would think things really suck, but the markets continue to rally to the disbelief of many. Well you can thank the Fed and POMO for the levitation trick.Mutual Fund Monday Streak Broken By Absence Of POMO, As SPY Volume Plunges Below Abysmal 

Since the DB buyback announcement we've all known that things across the pond are not near as rosy as our MSM would lead you to believe. We all know that Greece is in deep and the rest of the PIIGS are on life support that no one can continue to afford (you know what they need are some of those new death czars that come with the Obama HC paln - yeah , let's apply that to the global financial system and see how many of them even make it to life support). Eurozone Recovery Slows; Contraction Evident Except Germany, France from Mish paints a nice picture of the rollover to imminent double dip. "How long Germany and France can keep Europe from slipping back into recession remains to be seen, but if contraction of economic activity in the rest of Europe continues, I would suggest another quarter or two at most."

Did someone mention big trouble with big china? Prepare for Currency/Trade Wars; How Might China Respond to US Tariffs?  "With US and China openly bickering, and with the US House of Representatives prepared to act, risk of a global trade war is increasing by the day. I do not think China's chicken move will help any. Every country wants its currency to weaken to stimulate exports. However, that's mathematically impossible except against gold, and rising gold prices will not do exporters any good." Denninger chimes in on China today with Watch The Birdie (Is That PANIC I Hear In China?)  Bottom line is tensions are growing and no one appears to want to come to the table with anything productive as each government tries to save face with it's populace continuing the strings of lies and misrepresentation that led to this mess in the first place.

Since we're discussing China and global financial warfare, let's look into this report form The Economic Collapse, please read 19 Facts About The Deindustrialization Of America That Will Blow Your Mind. This one will blow your mind. Some of my favorites:

#2 Dell Inc., one of America’s largest manufacturers of computers, has announced plans to dramatically expand its operations in China with an investment of over $100 billion over the next decade.

#8 According to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million. During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million.

#11 As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time less than 12 million Americans were employed in manufacturing was in 1941.

Massive deflation folks. It is coming. We have to be able to afford to manufacture again and until we lower wages to a point we can this jobless recovery will remain just that.

GL out there and thanks for the views and support.