Morning Charts 08/07/12 SPX /ES

OK, this is getting a bit out of hand, two shootings and now a refinery fire. The Sikh temple shooter was a former Army psyops specialist, am I about to go bit far with this? (of course I am) What's next, a war? I'm not sure how to react to this one as a shut down refinery may be the thing that could push the consumer and economy over the edge. Whoa, whoa, wait, the calls for QE3 would be louder than ever.

I may be on to something here - could this be a manufactured terrorist strike on ourselves? Are we the largest sponsor of terrorism on the planet? How about that, and guess what, they did not have to crash the markets to get the fear QE trade up and running. Brilliant! I can see the Manchurian Manbat right now teleprompting this as a good thing to get thousands hired (and then outsource the job to a Chinese outfit). Bottom line is this being an inside job really fits the bill right now given the position of, well, everything. You should actually expect a rash of incidents like these in the coming months as the crony capitalists are finally out of bullets facing he end game.

Open Weekend Post 06/16-17/12

You know the drill, share the love and the knowledge.

PIIGS on the barbie this weekend (July 4th holiday not far away). Sunday should be interesting and may clear things up for a few days (till the FOMC on the 20th).

I found this Keiser report vid worth a look.

Keiser Report: Con Games Go Global (E301)

Afternoon Delight 04/23/12 - SHTF Edition

As mentioned this morning, all the charts are finally adding up to an increasingly narrowing point where it appears some major event is about to happen. TA is there across many markets. The stars are aligned.

The Russian Market being closed today would make for a nice first domino. French elections, Greece elections, Dutch resignations, EU non easing, Fed non easing, AAPL miss, MENA, Israel, Iran, Egypt, Syria, China ... I could go on and on. We're one 'event' from a tidal wave of erupting the emotional powder keg that is global tension.

Weekly Indicator Chart - (Best viewed at the link) - I'm looking at the last three major tops and none of them turned on a dime. They all gave us at least one major corrective and rally to a higher high before the ultimate collapse. I'm not saying that has to happen here. I like the right shoulder being complete and the ultimate top being set for the three phase 'recovery' that was not really a recovery. Look closely at the chart below off the 667 lows and see what $27 trillion can do for a market (and banksters wallets) in an economy that is turning to dust. Green Dashed lines would be an optimal fall scenario for me.

Afternoon Delight 03/20/12 -You Need To Be Afraid, Really Afraid - The Government Is Taking Over Everything

As the market works on a top here, so many other things are working on their own crescendo. Of course none of this is any good. In fact it is all rather disturbing (quite disturbing actually). If you don't follow the news on the net or rely on the MSM solely for your news you may find some of this either off base or a stretch. Bottom line is what you are about to read below is all real.

It is time for you to take the big boy step and realize just how bad things are both politically and economically. As STB has stated many times recently, the market is NOT the important things here. Far from it as a matter of fact. The markets are a great distraction. They are the smoke screen hiding the painful truth that as an American your rights and freedoms are being taken from you right from under your nose.

In what should be the safest place on the planet for the Secretary of Defense, the unheard of (and never done before) happened, "US soldiers were asked to disarm during a speech by Leon Panetta, the American defence secretary, in a sign of grown concern over spates of seemingly random violence in Afghanistan." Soldiers asked to disarm during Leon Panetta speech in Afghanistan - Telegraph. Yes, we've now reached a point where not even our own military personnel (yes, the same ones we trust to defend the nation) are not trusted with weapons around their own command.

You see, guns are bad. They are not safe and they are about to be taken from us after Obummer gets reelected. An armed nation is not what this government wants.  US Attny General Eric Holder is doing everything he can to rid this nation of guns. If you are not familiar with Fast and Furious, read more about it here. You know, when our government shipped guns to Mexico so they would be used to kill our own law enforcement agents so the government could crack down on gun control. You need to listen to, "then-U.S. Attorney Eric Holder announcing a public campaign to "really brainwash people into thinking about guns in a vastly different way."" The Vetting - Holder 1995: We Must 'Brainwash' People on Guns

If you are a bit late to the game and missed the NDAA (You know the National Defense Authorization Act that says you have NO rights at all and that the government can come and lock you up indefinitely for no reason at all) you need to read NDAA Is Washington’s Totalitarian Response To Political Dissent And Economic Collapse Alex Jones' Infowars. Then came ACTA and Sopa and PIPA where the government launched its strike on attempting to control the internet.

Afternoon Delight 01/04/12 - Obummer

The market news was really slow and market action even slower today. I guess after all the Iowa hoopla last night the only good news (not for Obummer) I could find to report today was mostly political. Congrats to my man Ron Paul for hanging in there proving he's a real contender that needs to be taken seriously no matter how or where they counted the votes.

One thing that is for sure is that this will set up to be a really strange year regardless of the Mayan Calendar or not. The election in November will top the charts most of the year. A market crash or two will happen. Record deficit spending will keep us all distracted from the real problems of the day. A few countries will default on their debt. Heck, that will all be routine stuff, for the really interesting things take a look at No Mayan Apocalypse in 2012 … But There’s Alot of Other Interesting Stuff Happening from Washington's Blog (whom STB thanks for its recent inclusion in the blogroll).

Market News -

Quiet Before The Storm?

Sorry for not posting last night or this morning, servers were down and internet access was a no go.

The Greece hot potato is being tossed around still, the ISM numbers were fictionally good, employment was fictionally good and the market closed flat.

Mish's thoughts on the ISM report and some factors surrounding it that you will not read elsewhere are in ISM Service Sector Expands, Backlog of Orders and Employment Still Contracting; Public Sector Catchup Coming. The thing I like most about what Mish is bringing to the table these days is his focus on the state and city level budget shortfalls. These will hit home more than the "national" bullshit you read about on a daily basis. In this post is a link to a recent speech given by the new NJ Governor Christie. Please take a moment to watch this. This guy is ready to kick some butt and take names to get his states budget shortfalls worked out and he does not care who gets pissed. It is the best thing I have heard in a long time. Denninger takes on the ISM BS in We're Schizoid! (Non-Manufacturing ISM). Both are not that impressed and poke unique holes in the report.

You market timers may find this one interesting (I finally went short today BTW) Has Goldman Called The Market Top: GS Sells $3.1 Million Leveraged Index-Linked Notes Referenced To 1123.7 On The S&P. Zero Hedge as usual is above the line on their reporting and timing of reports. This one is quite interesting. Maybe we can take advantage of a tip from the gods on high (and hope like hell it is not a sucker play).

Since everyone else has posted it, I'll complete the circle - No Wonder the Economy Isn't Improving from Washington's Blog is a wonderful post on the idiocy demonstrated by our leaders and an expose of the bullshit that flows endlessly from Washington (sounds like something I would like!).

TPC has this from Rosy - ROSENBERG: THE MARKET LOOKS TOPPY. “In a secular bull market, a six-month trading range can be viewed as a pause that refreshes. But in a secular bear market, it more than likely reflects a classic topping formation, as was the case in the spring and summer of 2007 when the S&P 500 also flirted with the 1,500 mark for as long a period as it has hovered around the 1,100 threshold since last fall. Keep in mind that similar to 2007, we are starting to see some fraying around the edges in the latest set of economic data releases — jobless claims, housing starts and sales, core goods orders and shipments, construction, ISM and consumer confidence.” Put that with the GS report above and some of my fine analysis and I'd say you better be getting those horses saddled up.

In what I thought was the best new of the day, ZH has Philly Fed's Plosser Speaks: Too Big To Fail Must End, "I believe these three actions would go a long way toward improving financial stability. Enacting a credible bankruptcy process to solve the too-big-to-fail problem, clarifying the Fed's umbrella supervision and financial stability roles, and enhancing market discipline are steps we must take to lower the probability of a future crisis. We could simplify the entire financial regulatory legislative initiative by focusing on these three key elements. We do not need huge new bureaucracies, or a complete restructuring of our regulatory agencies." Damn, two tough and sensible speeches in the same week, what, did Washington run out of cool-aide? 

Last, but not least, I bring you a radio interview from Bob Chapman that I thought was interesting. I like the way this guy thinks (extreme like me). This may be a bit conspiracy laced for some of you, but maybe it is time to buy into some of those theories. "They are preparing for a large world wide meeting of the kind of the Smithsonian meeting in the seventies and they will decide from there which currency to devalue against which ...The whole Toyota issue is the American government behind the scenes telling the Japanese either you buy my treasuries or I destroy your best exporting part of the industry.... The UK may break up from the European Union, Warren Buffett should be in jail not in CNBC says Bob Chapman , 10 years ago everybody knew that Greece and Italy were in bad shape but everybody looked at the other side ..."

For the latest on the Greece saga, you can always turn to this link at the FT.com.

Have a  good evening.

Every Day Is One Step Closer To The End

Long, slow, painful (yet titillating at the same time if you are into that kind of thing) march to the end. The set up is right in front of your face. Banks hoarding cash and not lending. They know the breadth and depth of the problems. They are now enacting rules and legislation to guard against runs on the banks. Do you really think if things were getting better they would be enacting such policies?

Infowars.com did a nice piece on Citibank Controversy Puts Dubious FDIC Guarantee Back In The Spotlight that covers the issues facing the banks and FDIC limits. "Alarmingly, The Federal Deposit Insurance Corp. only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions. This was even admitted in a Yahoo.com article shortly after the collapse of Lehman Brothers in 2008. When Americans realize the fact that banks are “going to run out of money”, the article nonchalantly stated, a run on the banks will accelerate." Do not forget the FDIC is basically bankrupt (and the banks are refusing to come off of cash even to fund their obligations with them).

From the same post - ready for this? Want to be scared shitless? “The requirement is part of Regulation D of the Securities Act of 1933. It applies to all accounts classified as Negotiable Order of Withdrawal [NOW] accounts – basically interest-bearing checking and savings accounts held by individuals and non-profits. Banks are not required to hold reserves in place to cover NOW accounts, so the rule prevents a run on withdrawals for which there are no reserves,” states the report." (emphasis mine) Nice! I feel a lot better. Thanks Congress. Thanks a bunch! Uh, isn't that ass friggin backwards? Apparently not.

That is mostly right. A run on the banks from the citizens would be a big deal, but remember Dubai and that nasty thing called fractal lending that has caused this credit driven fuck up. They are not worried about you or me getting the funds. They are worried about Dubai demanding their $10 billion in deposits (fractal that). They are worried about sovereign runs on the banks. It will get ugly cause they don't have the money.

As always Mish does a nice job with the unemployment report. He has a unique way of bringing the worts ot of it almost every time. In Weekly Unemployment Claims Spike To 496,000; Will Reality Soon Set In? "At some point however, reality will eventually set in. Without jobs, all this happy talk about the impending recovery, and all of Bernanke's yapping about low rates, will not satisfy the market. It is going to take both jobs and an increase in consumer spending to lift the economy. From where I sit, neither is coming."

Your daily Greece update comes courtesy of Zero Hedge in Greece Deterioration Hits Nitrous: IMF, EU, ECB Find Greek Plan €4.8 Billion Short. You can only squeeze so much blood out of the turnip. This is it. This is what I see spreading globally. this is the main point of denial. Massive wage deflation and everyone is held captive to the banksters that we bailed out that caused this mess. What a friggin job that must be, huh?

Well the NYT has Banks Bet Greece Defaults on Debt They Helped Hide. Well? You don't think they KNEW this was coming did you? Nah, GS did not sell them (and numerous other countries) the systemic CDO's that caused their financial system to rot from the inside, all while knowing they would and having handsome bets on the other side. Friggin amazing stuff. Who needs regulations? ZH gave a nice graphic in Greek Treasuries Pancake As Bond Vigilantes Chant Death Chorus of their sexy looking bond spreads today.

Late yesterday Denninger put out Clap-Clap (Weil and The Mark-To-Market Scam) which covers the mark-to-myth scandal I do not cover enough (In plain terms the reason the banks are all actually insolvent). The Enron style accounting has led us to this, "We've done nothing other than making legal accounting lies. The impairment and thus the actual economic loss still exists, and while we may have pushed it off another year that actually makes it worse, because these non-accruing loans gather more and more hair on them the longer they sit around without being either foreclosed, put back, or otherwise disposed of. This part of The Bezzle is one of the worst examples in this entire sordid mess and if Congress won't grow a pair then FASB needs to - right now." I keep telling you we're really screwed. Like really deep shit. 

On the issue of lack of regulation Washington's blog has Economist With Financial Services Committee For Eleven Years, Assisting With Oversight of the Fed, Lends Support to Ron Paul's Questions "Today, Ron Paul accused the Federal Reserve of having a hand in nefarious plots such as Watergate and arming Saddam Hussein. House Financial Services Committee Chair Barney Frank said that the Committee should look into it." We really need to audit the Fed before it is to late. Heck, I'm not sure I want to even do it now. Scared of what we might find. Talk about Armageddon?

We're getting closer every day. Sure more QE may be coming but what good will it really do? Kick the can down the road another 6 month to a year and just dig an even deeper hole while stuffing the banksters balance sheets with more of your future tax dollars. Friggin GREAT! Sign me up! TWICE! I hope you all realize I am not blowing smoke here. Every night I bring you real world situations that should scare you to death. Massive deflation is coming to a street near you. Greece should be your model. I just hope like hell we come out of this a free nation.

This is AWESOME - Max at 7:00 - paints a really clear picture. the whole world will hate us when this is all over. 

GL and have a good evening!

News Time!

Gotta be a quickie tonight - I am coaching coach pitch baseball (this will be the last year I think) and have to get to practice.

Mish has Commercial Real Estate Apocalypse in 2011-2012, an incredibly detailed post that will have you feeling less better after you read it (or better if you are a perma bear like me).

As we watch the EU implode, Mish pulled this one Italy a Bigger Threat to EU than Greece; Italian Derivatives Draw Scrutiny; Mundell Wants Cap on Euro Gains; Academic Wonderland he notes the conundrum facing each nation these days, "It is impossible for everyone to get what they want: a weaker currency vs. everyone else hoping to stimulate exports."


Since I brought up Wonderland, just what has been happening behind the curtains over there? ZH has The Chairman Of Goldman Sachs Bank, And Former FRBNY President, Says Many European Countries Used Comparable Debt-Hiding Swap Transactions     

TPC has THE ONE CHART THAT SCARES RICHARD RUSSELL most of us are salivation over TBT and where it may go one day. They are scared, I'm looking forward to it. USB (30yr) is set to bust one sooner than later. 


Several blogs covered this one, but WB's conspiracy tint is the best I think -McCain: Paulson and Bernanke Promised that the $700 Billion Troubled Asset Relief Program Would Focus on the Housing Meltdown

Ritholtz has Policy Errors Dog Treasury Secretary "Ignore that misleading headline — the article itself is not so much about the anger over the bailouts, but instead details the policy decisions and political choices Geithner made as Treasury Secretary. The litany is not pretty." That it is not. I found this one quite humerus.

Enjoy! See you in the am.

IsThe Writing On The Wall?

The piece by Hoenig is either total manipulation BS being spewed but the powers that be to quell the Tea Party followers or there is one person at the Fed that has a brain. Actually they all have brains, it it morals they severely lack.

Mish has praised Knocking on the Central Bank’s Door by Thomas M. Hoenig, President, Federal Reserve Bank of Kansas City in his post "Three Paths Forward" - Kansas City Fed on Current U.S. Fiscal Imbalance, Hyperinflation, Printing. I guess having someone at least attempt to lay out some sort of exit strategy is nice. The only problem is he left the full frontal out of the equation.

Hoenig says, "I see just three ways forward in dealing with our current and prospective fiscal imbalances. While each involves considerable pain only the third will resolve the imbalances without eventually causing inflation to accelerate or precipitating a financial and economic crisis." 

Option 1 - Monetize. "One option for dealing with a fiscal imbalance is for the central bank to succumb to political pressure and monetize the debt. ... This process often appears benign at first, but if it goes on unchecked, the outcome is almost always higher levels of inflation and ultimately a loss of confidence in the value of the currency and the economy." News flash! We're there already. With the Primary Dealers now buying huge chunks of the auctions and promptly being refunded those funds by the Fed and the recent increase in the treasurt debt ceiling limit by $1.9 T, we're there. So seeeeerike one!

Option Two - Policy Stalemate. "The second path forward is a stalemate between the fiscal and monetary authorities. In such a stalemate, the fiscal imbalance grows while an independent central bank maintains its focus on long-run price stability. ... Eventually, this combination of large debt, and high cost of borrowing and capital weakens economic growth and undermines confidence in the economy’s long run potential. Slowly, but inevitably, if the fiscal debt goes unaddressed, the currency weakens, as does access to global financial markets. And the cycle worsens, leading ultimately to a financial and economic crisis." We're already there again. The key words are "undermines confidence" and weakens economy". What's that about China pulling out (China Pulls the Plug on U.S. Treasuries)? Who bought what last year? Large debt and high cost of borrowing will lead to that $1.9 T being spent in a few months and the drug addict will be back at the door looking for another fix. As DP used to say, "And the whiff." Steeeeerike two!. 

Option Three - Equitable Fiscal Discipline "Knowing inflation is not an acceptable alternative to strong fiscal management, a government faced with rising debt levels must provide a credible long-term plan to reestablish fiscal balance. The plan must be clear, have the force of law and its progress measurable so as to reassure markets and the public that the country has the will and ability to repay its debts in a stable currency." Steeeerike three! Flat footed watching a fastball down the middle! Plan? Anyone seen that plan laying around? You know the one with all those new job programs, ways to increase lending to small business and other measures to stimulate the economy while increasing regulations to ensure none of this ever happens again? Wait, not not that one, you mean the one to save the banks, funnel all of the TARP funds and increased taxes to the TBTFs? Oh, yeah, that one is right over here. They got a plan alright. One that puts us in the default line.

The Financial times picks up on Hoenig's speech in Lone voice warns of debt threat to Fed "The hawkish Kansas Fed president also warned against “dire” consequences of the central bank prolonging its holdings of mortgage-backed securities, which it purchased in an effort to prop up the US housing market. Mr Hoenig painted a picture of a slippery slope, where a less independent Federal Reserve was asked to find ways to support other ailing sectors, such as agriculture." LOL, don't forget about the Fed's balance sheet that is absolutely bloated with toxic debt and how their efforts to save the RE/CRE markets may have amounted to a big fat zero. 

For those of you looking for a good debate on whether to hyperinflate ot not, here you go. And I quote, "While Donovan is correct in principle, the opportunity cost, should debt levels become insurmountable, of a devaluation will likely be actively considered by all financial "experts" in the administration. Coupled with a prevalent expectation that this kind of action, especially in light of Donovan's analysis, and coupled with a short-maturity focused debt curve, means that the likelihood of just such a policy is becoming increasingly likely."

You can chew on this as well - The Minneapolis Fed President Kocherlakota Warns Massive Debt Load Can Only Be Paid By Tax Collections Or Debt Monetization - Our options are fading fast and none of then are very appetizing. Tough times are coming.

Have a good one.

It All Boiles Down To The Pigs

UPDATE: "This is yet another AIG in the making, with Goldman this time likely threatening to accelerate the collapse not merely of the US financial system, but of the global one, in order to attain virtually infinite negotiating leverage. Of course, the world will not allow a Greece-initiated domino, allowing Goldman to call everyone's bluff once again." from this ZH post.

And dig this, "Furthermore, we are now convinced that Goldman will join the government in facilitating the engineered market swoon with a bifurcated goal: while the Treasury will take advantage of a sell off to offload as many UST as it can in the rush for safety (which could backfire now that Gold is increasingly seen as a dollar alternative), Goldman (with or without Warren Buffett - it depends on what the actuarial tables say) will jettison its own stock price in order to go private in an increasingly hostile world."



After a brief discussion I had today with someone "in the know" (yes, I know those people), that person stated that last week we were "within hours of a global financial meltdown" and narrowly avoided a total disaster. We were "closer than ever before" and "the EU may be the first domino to fall". That sat as bad in my stomach as the cafeteria food I had eating with my kids at school today. I don't think it is any secret that we're in a world of hurt and it is only a matter of time before it all falls apart. We can't backstop the world can we?


On to the news -

Glad things are getting back to normal - Back To Normal: Insider Selling Outpaces Buying By 58 To 1 - "Notable dispositions included Bill Gates selling $85 million worth of MSFT, Roger Pensky dumping over $100 million, and Juniper Chairman Scott Kriens selling $12.5 million worth of JNPR stock." 

Did someone mention a bad number? BLS Seasonal Adjustments Gone Haywire; 11% Unemployment Coming by May? "However, unless the administration can pull a kangaroo out of a hat, those BLS seasonal distortions will fall on the hard rocks of reality, real jobs, by real people, as opposed to figments of imagination from some very imaginative people at the BLS." Trim Tabs takes 'em down.

"This could become very interesting, and not in a good way, either." - Bank Securitization Woes Only Beginning

Mike Farrell's "less than optimistic" outlook must see video - THE TUG-OF-WAR BETWEEN PRUDENCE AND IMPRUDENCE

Washington has What Do Rising Sovereign Credit Default Swaps Mean? "Other commentators fear that the PIIGS' crisis has as much potential as a financial "contagion" as the subprime meltdown and the failure of Lehman." Plus a post from David Rosenberg is in here. I think the PIIGS are the key catalyst.

That is enough for tonight. Headed to draft my coach pitch baseball team (6-8 yrs). Wish me luck!

Take care.(Sorry bout the formatting - its a Google thang)

Good News?

After an exciting start to the day that had everyone hopping, the day would up quite uneventful from 11:00 to the close as SPX and other indexes sat on support and would not budge. For the bears the good news was the dip was not bought up with any fury (yet). for the bulls, there was no good news other than a strong support level. Does anyone recall that the unemployment report was this am? (LOL- what an afterthought that has become).

Other than GS's blow out, the big news to me was the O's speech basically attacking the banksters. As Denninger puts it - To President Obama: FOLLOW THROUGH NOW! The O has been a man of many unfulfilled promises and I'm quite surprised the market did not laugh off his (what should be idle) threat. I have no reason to trust the man. For once, I fully agree with the O. We saved their asses and they should be eternally grateful. It will be interesting to see1) how aggressively they push back and 2) who is actually running the show up there. Will they hold us hostage again? What leverage (financial blackmail) will they use to sway congress from even getting to a vote on this. This begs the question; was it all just rhetoric for the masses? If anything I will consider it a nice gesture and possibly the first brick laid in the foundation of an actual recovery. Naked cap also has“President Obama: It’s Not Just the Words!” Krugman is on this page as well. Washington's Blog - I'll Believe It When I See It (In the Fine Print) (this is getting rather humerous now - boy our president must have a ton of credibility!)

Another positive development is the delaying of Helicopter Ben;s confirmation. This is quite possibly the second brick in the foundation of recovery (of course a full audit of the Fed would be nice and abolishing the Fed would complete a whole wing of our ficticious recover hose we are attempting to build here). I think this is a must read from Zero Hedge. Scandal: Albert Edwards Alleges Central Banks Were Complicit In Robbing The Middle Classes As I am speculating the rhetoric and finger pointing for the blame is going to get very heated in this election year and the blame game hot potatoe will a fun one to keep track of. 


With Brown winning Massachusetts, this has been the best news week since like 2007. I'll report the good stuff to. I'll actually shout it from the roof if and when it happens. That may be three bricks in the foundation! (we got a long way to go.)


Back to reality.....


We got a lot of problems. One that gets little focus is the pension issue. In Escalating Pension Crisis Will Bankrupt San Diego Mish brings to life an enormous issue. You see underfunded pension obligations was a big issue before the crash and is now even worse after the crash and CDS debacles. If you thought unemployment was bad, wait till you get a bunch of retirees that can't afford shit cause corporations and governments neglected their fiduciary duties to get the pension pot right (uh - they had TWO bubble scenarios to get this done). "The core issue is unsustainable pension benefits. The system is broke. Toying around with little cuts here and there will not help. And as bad as things look now, they will look even worse after another stock market plunge. Unions in general are attempting to hold the status quo as the day of reckoning rapidly approaches. The realization phase for unions will be brutal." Now there is another crime, the unions misleading their members that all is well. It ain't and how sad it is that the members don;t get it yet after two years of this crap.


Calculated Risk is one of the few blogs that actually took the time to mention the (un)employment report this am. Weekly Initial Unemployment Claims Increase - Zero Hedge hit home the most important fact (as always) in Initial Claims Misses Estimate By 42K, Emergency Compensation Explodes By 652K Over Last Week "The combination of initial, continuing claims and EUC for the most recent period is a record 10,701,794 Seasonally Adjusted  or a whopping 12,021,880 Non-Seasonally Adjusted. The double dip is here, and unfortunately for Obama, he is all out of stimulus bullets." The way the administration is attacking this problem you have to ask, does employment really matter?


The most shocking story I read was last night  - Democrats To Seek Stunning $1.9 Trillion Increase In Debt Ceiling To $14.3 Trillion  That would be the icing on the cake now wouldn't it!


And for you market timers Deutsche Bank On China: "First Rate Hike Coming In The Second Half Of March"  I've been pointing to March for some time as the end of P2 (nope, I have somehow not called a top yet). I'm not a hopium addict. I just think they have another trick or two up their sleeves (remember they do control everything). All the signs are there and even price now. Maybe reality will slap me in the face and I will wake up. When China raises rates (I suspected they would first) we either must follow or get out of the way. When rates go up the market will implode.


In case you did not already know this - Ron Paul: After ‘CIA coup,’ agency ‘runs military’


Have a good one and GL!


"Based on the lower low, the futures and the daily indicators I have to vote for further weakness. 1118 to 1115 would be a good spot to look for." - who said dat this am? SPX low 1115.08.

Whutz In The Newz? (And A Bright Idea)

OK - INTC beats handily as markets set new highs. Intel posts sharply higher profit, tops views from Marketwatch. Looks like the earnings bar may be set low enough to allow the Fed and PPT to take a break for a week or two, let their fat fingered interns take a much needed break to heal the blisters on their thumbs and finally let some much needed irrational investors enter the market. Just wait till the banks knock the cover off of the ball as I expect a zero interest arbitrage, cash rich, non lending, equity pumped institutions should do.

The games our government plays to show a recovery when there is not one just don't seem to stop. Mish has Measuring the effect of stimulus: If you don't like the results, change the yardstick - "It would have been a lot easier on Obama if he simply made up numbers of jobs created without disclosing the methodology. Someone might have believed him. This Mickey Mouse manipulation in plain sight of inquiring minds just makes the administration look foolish." We are playing kick the can down the road and pull demand forward (with a sprinkling of Monopoly money and some BLS manipulation), you can't win at either game. You'll have to pay the band eventually. Sadly the band is not the Blues Brothers and we can't just fork over a case of PBR. Caught between a rock and a hard place they are, praying on their knees that if the good Lord will just let this bubble reflate one more time and make all of this bad mess go away they swear they will never let it happen again.

This one may seem a little off base but indulge me. naked capitalism has - Monsanto GM Corn Linked to Organ Damage in Animals. I am a pretty big believer that GM foods will be the "next big thing" once all this mess is over in about 10 years. You see, they are fucking with mother nature and might just put the royal fucking on our food supply. First, screwing with the genetic code of stuff and feeding it to us is not a good thing. You should check to see if what you are eating is GMO or not. Second, MON is one of the companies that I will be buying at the next low, because it is quite possible they will own a patent and get royalties on every food source grown on the planet. I'm not kidding. If you grow soybeans and the farmer next to you grows MON soybeans and they cross pollinate then the soybeans you plant  next year from the seeds have MON genetic code in them, you lose. You just stole their product and will pay royalties. Uh, yes, this is a real and not fictional problem. They own the code. Hell, they tried to corner and get the genetic code patent on pigs not to long ago - if they had won and you owned a pig - any pig anywhere - you were SOL. Their patent, thatnks for taking care of their pig. Not kidding again. Some great youtube vids on this stuff. MON is a bad, bad, bad company IMO.

THE RECESSION ON MAIN STREET CONTINUES from The Pragmatic capitalist hits a home run. "Unfortunately, the frustrations are likely to grow on Main Street for Wall Street isn’t a place that lives in the same reality as the rest of us.  Wall Street is a world based on expectations and as long as investors remain depressed and corporations continue to outperform these low estimates the likelihood is for a continued rise in stock prices.  Unfortunately, a recovery that doesn’t involve Main Street is destined to fail sooner or later." I could not have said it better myself. Mish also has Small Business Trends Suggest No Recovery On Horizon. You see, this manufactured rally is taking the SPX to the top and everyone else is getting the shaft. For this reason I will begin to track the $WLSH to see if the trickle up failure theory works from here. The market should start to rot at the bottom first. so $WLSH and then $RUT should begin to lag and not recover to the highs set by the big boys. Let's test that theory, shall we (that may have been a moment of sheer enlightenment).

Washington's Blog has If Government Won't Break Up the Giant Banks, Let's Do It Ourselves friggin brilliant! I aspire to be the news hound and avid reader that WB is. His here, here, and here links just blow me away. We all know that we are going to eventually have to take the bull by the horns if we want any control over our destiny, otherwise we become further entrenched in the bought and paid for, corrupt, manipulated, over lobbied, special interest driven, socialist state we have become. Give this one a read, take a few action items away with you and figure out your plan for doing your part to get our nation back. 

Zero Hedge has Amherst Securities Estimates Nearly Half A Trillion Cumulative Losses At Fannie And Freddie which is not really all that surprising is it. The lender of last resort that has played hoover sucking up every overvalued RE asset on the planet has a small $500B problem and its growing. "If Laurie is correct, not only will numerous additional episodes of housing-focused Quantitative Easing be needed, but such a deterioration, once it is acknowledged by the auditors who obviously have no interest in indicating how bad the situation is, would have significant political repercussions which would reverberate from the FHA all the way to the White House. Another implication is that the shadow inventory is likely to continue remaining unsold so as not to blow the bottom out of the supply side in the market, likely confirming that banks will continue to pretend the vast majority of real estate assets on their balance sheets are unimpaired when in actuality they deserve a haircut of 20%,30% or more." Marked to market is the great ghost haunting the government and they will do whatever it takes to keep it in the closet for as long as possible. 

From The Big Picture - How bankers think - 

Have a great evening.

Up In Smoke?

Somehow I never saw this one coming. Hit me like a truck smack in the face.California Grows A Brain? from The Market Ticker is a breath of fresh air (well, laced with THC that is). Bravo Karl! "Specifically, hemp makes an excellent biofuel feedstock, it is suitable for very high-quality paper production at lower cost than made from trees and the fiber is useful for a whole host of industrial and consumer end product uses, yet it is virtually impossible, given the insane "public policy" view toward the plant, for any of this to be exploited." You see, Karl gets it. It IS a viable plant that can assist society. Thomas Jefferson devoted 40 acres to growing this industrious plant. I assume some lobby that wanted to corner the paper market and a few other industries and were behind the illegalization of this plant. I now also assume Monsanto will be a leading seed developer and will have a patent on every form of DNA to the plant making it illegal to grow without them getting a cut of the action in about 10 years.

Up in smoke will go this bubble as well. Housing Bubbles, Global Household Leverage, Why Fed's Reflation Efforts Will Fail Mish delivers "Not only did the Fed enable the credit bubble, it blew the policy response. All it takes to prove that is another stock market plunge and credit crunch. Both are coming, we just don't know when."
  
Calculated Risk has Option ARM Recast Update - Thought you may have put this one on the back burner so let's shine some light back on the subject. Uh, bad. Really bad. They can not raise rates or the housing market collapses. It is that simple. Uh, it may collapse anyway when the next round of arms rolls thru anyway, so WTF right?

If you do not know who William Black is, you should. thanks to naked Capitalism for digging this one up. William Black” “Anti-Regulators: The Federal Reserve’s War Against Effective Regulation” William has been around the block a time or two and I'd say any analysis he does on regulatory failure is far better than you will get anywhere else.  

US Will Hit 94% Debt to GDP Ratio Next Year, Surpassing the Level Where Debt Starts Reducing Economic Growth so what's above 100%?

Economist: Bubble Warning The Big Picture dug this one up. I point it out because 7 out of 10 sights I have visited so far have something related to a "top" article on them. Either everyone is starting to figure this game out or a lot of people are wrong. Can't make that call till after the fact. Earnings season is upon us and the numbers will tell the story. Will the beat the number, but miss on revenue story again be enough to satisfy the market? Well, that is a mute point, cause GS is the market and they will direct it wherever they want it to go with your money via the Fed. 

Do you remember the recent problems with Greece? Guess what - Greece condemned for falsifying data  when it rains it pours and since Greece is a tiny little gnat on the global scale I expect them to the lion's share of the punishment (only to distract us from the troubles here at home).  Pay attention to the right hand. That's it look over here. No, no, no; don't look at the left hand. Look at the right hand. Gooood.

There you have it. Another wonderful day in the neighborhood. Can anyone point out what is missing from this post? No, not a rant or 4 letter words. Should be obvious. 

Have a great evening.

Newsworthy Items

I'm really not sure about the economic horizon. Just kidding.

The audacity of government officials that continuously spew lie after lie telling us all is well, the recession is over, nothing to see here, move along is getting under my skin again. The honeymoon is almost over. I have not forgotten all of the fraud, misleading statements, the lies, the sheer criminal actions. I have not been lulled to sleep and have not partaken of the kool-aide or hopium distributed by the pushers in Washington and on Wall Street. I hope you have not either. All is not better. Sooner or later the top is gonna blow and the magnitude of the devastation will be historic. I have a self imposed "no rant" policy in place thru the holiday season, but you can be reassured that one is building in me like a mini Mount Vesuvius.

As my regular readers know I have speculated all along that it would take and "external event" to rip the market from the manipulators. Dubai was a close call. If the rumors of the withdrawal of funds from CITI were true, that would have totally devastated the whole financial system. You and I both know that if Dubai were to w/d all their funds from CITI they would not have them and then the trickle down effect would have been disastrous (think It's a Wonderful Life but there is no backstop). That said, what happens to Greece here Greece Enters Twilight Zone As It Announces 90% Banker Bonus Tax Plans, Expectations For Sub 3% Deficit By 2013 or Mexico Mexico Downgrade By S&P From BBB+ To BBB Means Everyone Get On The Bailout Train? Troubles in Austria? No More Failures Ever As Moral Hazard Goes Global: Austria's Hypo Alpe Adria Nationalized. The global ship is taking on water (actually the first two decks are full, they just won't admit that to you). It will not be long before a country defaults and tears down the financial house of cards. They are doing their best to hide the truth from you and me, but in reality we know, so why the charade? The global Ponzi scheme/musical chairs will end.


So most Americans disapprove of everything that is going on and polls say we would like things done differently (take HC for example), but they refuse to listen to us and go along their merry socialist path of righteousness. What is this country becoming? Cities Shut Off Streetlamps to Save Money; Indianapolis Threatens $2500 Fines for Challenging Traffic Tickets is a good example of what coming down the pike. Cities are strapped for cash and it will become painfully more obvious over the next year. Never mind that Paterson: 'New York Has Run Out Of Cash' or the 20% unemployed are running out of cash as well (wonder what types of actions that will bring?)

This one will being a smile to your face (and get you to questioning why we have not wiped out the poppy fields in Afghanistan). Do Summers, Geithner and Bernanke Have to Share Credit for Saving the Banks with Drug Kingpins? It is an interesting though and if proven true the conspiracy nuts will be, well, right again. 

And last but not least THE 5 REASONS GOLD IS IN A BUBBLE AND AT RISK OF SIGNIFICANT CORRECTION  Who am I to argue with Roubini? OK, I'll take the bait since I challenged myself. I think it corrects with the initial plunge of the market as people do not understand what they have and they rush for the exits and trade for profit. Then the smart ones (me) come in and buy it up and make it their only holding. Sounds good on paper at least. 

Take care and have a great holiday season.

Whutz In The Newz?

OK, wake up. WAKE UP! WAAAAAAKKEEEEE UP! I'm not sure if the markets ever actually opened today or if there was some sort of new holiday our fearless leader enacted that I was not aware of. Maybe something to celebrate the stellar employment numbers or possibly the fantastic retail sales coming tomorrow? You know, we really have so many financial blessings to be thankful for. I'm really thankful they have morgaged our country's future to save the TBTF's! Without them, where would we be? It's a damn good thing the rescission is over and we are not in a depression! Phew, I feel better now.

Shooting for another sentence from Zero Hedge - Here it goes - Focusing On (And Profiting From) The Upcoming Chinese Financial Crisis  we are  Sorry, The Upper Class Will Not Pull The US Economy Out Of The Depression but it looks like Retail Sales To Disappoint, Risk At Risk Again. Not as good as the last one, but you get the drift. The best read there is David Rosenberg's 2010 Outlook "The Recession Is Really A Depression" 

Keying from Rosie's Depression post, I'll move along with One in Four Children on Food Stamps, One in Eight Overall; Weekly Unemployment Claims Tick Up  from Mish which also covers the employment numbers nicely. Sounds like more statistics the government does not want you to know. I somehow missed the O covering this topic in his last speech. Well, at least we know he is expanding his voter base! Zero Hedge has this lovely visual on the employment situation (since we're covering things you are not supposed to see - Emergency Jobless Insurance Claims Surge By Most Ever In Prior Week

naked capitalism has Effort to Reform Finance Instead Turning into a Coup by Bankster. You see, they are taking control of your TV set. Do not touch the dials. Do not attempt to adjust the antenna. You have no control (actually no one has control but the big dog GS). So they are now writing their own runes. BRILLIANT!


And to continue that disgusting thought Washington's Blog has Financial Reform Is Being Gutted ... And Congress Might Not Even Realize It "From what I’m hearing, it is possible Frank doesn’t even know that this language, once in the bill as an amendment but removed, has snuck back into his reform legislation. Things are moving very quickly on the hill right now, and this is scheduled to be wrapped up by tomorrow. However this new language runs counter to the reforms Frank has promised to deliver to the American people. Either this language needs to be clarified before the bill is complete, or removed entirely." As often as I am having to call them to complain, I have just decided to keep my reps on the speed dial.

I'm depressed - Ha! Get it - Depressed. Not really, but we all should be cause that is not a light at then end of the tunnel headed our way.

GL and happy holidays!




   

Is There Any Good News?

Trick question, it depends on if you are a bull or a bear. If you want to hear something good go back to watching CNBS or turn on CNN where you'll get some sort of sanitized feed that will keep you in the dark forever. If you want to hear me gloat in the impending doom of our democracy or hear me bash on a politician du jour, please read on.

I was going to try to string these few Zerohedge posts into a clever scentance, but could not pull it off. You 'll get the gist of what I was going to try to get across as Most Recent Insider Selling to Buying Ratio: 82:1 as Consumer Credit Contracts For 9th Straight Month, Non-Revolving Credit Increases, but since Cash is King  there is no need to worry about Fried Calamari? for dinner. Wait a minute - I did make a sentence out of it. Caution, that may become some sort of new game for Shanky to play with himself. I think Marla may appreciate that (the sentence - not the playing thingy).

Mish has a good one from the most corrupt city in the USA. We all know Chcago is a really screwed up place that has produced a litany of characters that leave much to be desired (most recently our president). So what do they do to balance their budget? Chicago Cannibalization: Mayor Daley's Budget Eats 75% of a 75 Year rainy Day fund in One Year You just have to read this one to believe it. Creative financing at it's finest. And some wonder why I am such a perma bear? Cities, states, federal governments are using every available crutch right now without regard to the future consequences to solve a variety of funding issues. You talk about a recipe for disaster. The dig drop, deflation, depression is coming folks. It is just a matter of time.

Since we're dissing local governments (like shooting fish in a barrel these days) why don't we try But Wait, How About The States? from Dennninger. "Things are probably worse than most people believe," state Sen. Mike Doherty told me the other day. "It’s questionable if we’ll even be able to meet payroll in a few weeks." Oh kay, so payroll may be a problem as well as some possible bond default issues (nothing to worry about- really ;-)). Don't say they did not tell you so and don't say I did not tell you so. It is only a matter of time and the ammunition used in reflation project 2009 is empty.

naked capitalism has a must read in Newsweek: Goldman Supplied 9 Pages of Proposed Changes to Derivatives Legislation. This one is a classic, "Newsweek’s “Why is Barney Frank So Effing Mad?” is supposedly about the Congressman from Fidelity but is really about how the banksters are succeeding in neutering financial reform. One Congressional staffer has told me that everyone involved recognizes the measures don’t go far enough, but feel they can’t do much more (Congress can step out only so far ahead of the Executive, and this one clearly is in no mood to take a more aggressive stand)."  You'll laugh and cry your way thru a great article that is filled with suspence (just how much of the recent legislation did GS actually write) and humor regarding the neuterization of everything in Washington. This one might actually make you scream.

The Pragmatic capitalist brings you 10 REASONS THE EQUITY RALLY IS OVER from Rosie. BUT, BUT, BUT - TPC has this to say, "In other words, we remain in a “beat and raise” world.  That is unchanged for now and will ultimately be the reason why David’s 10 reasons are wrong and why the unwavering bear will be wrong again about this market top…." I'll have to go comment on this one later on TPC's site. They do great work and maybe I need some clarification to his statement. I can actually go for a little more manipulated upside, but his "improvement in corporate margins" reasoning has me a bit miffed.

So, where do you stand? Washington's Blog has 79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job. "Trust will not be restored until Bernanke and Geithner are replaced with people whose loyalty is to the American public and small businesses, rather than the Wall Street giants, and whose track record demonstrates that they will put the American people and entire economy as a whole - rather than the big boys - first."  I could not have said it better and the sooner we get these self serving bastards out of their posts the better off we will be. Oh, did you read where Kashkari is going to work? Now the Kashkari Puff Piece Makes Perfect Sense

The Big Picture has a nice post on Who Wins When the US Dollar Falls? that you should read.

That is enough for now. Yet another day without any good news (unless you want to count TPC's statement that I am ignoring). Market is very toppy now and teetering, but that is usually when the PPT/reinflation team is at their best. I am very suspicious of them letting the dollar breathe a little and then using it's powers to assist in halting any major down turns that may be imminent (note the market fell today 15min before the dollar reacted)

GL out there and happy holidays.

News Time!

Since unemployment numbers appear to be steady (which is a great thing!), the market salutes the 169k newly canned (jit for Xmas) Americans by piercing to new highs! Nothing like spiking that 401(k) to make them feel better about their current situation. Have you figured out the liquidity driven, carry trade supported HFT dominated market yet? Nah, I did not think so. I have not either. I do know one thing, look for a few sharts coming soon to signal the top is near.

Let me put the pieces together for you!

Zero Hedge - October Credit-Card Delinquencies Rise Again, Approach Record Highs Says Fitch - "As Zero Hedge pointed out, and as Meredith Whitney has voiced her concernes about, the biggest threat to the economy going into 2010 may be that not only are banks dropping reducing overall credit availability, but that ongoing credit contraction to the tune of almost $2 trillion over the next several years will mean existing credit limits are tapped out as existing ones become increasingly maxed out." No consumer = No GDP The government can't perpetually support 70% of GDP (esp in non job producing efforts). The HNW (high net worth) can not spend enough to make up for the loss os the little guy. The balance is gone and the consumer is dead and getting worse. The banks are hoarding cash for some sort of impending rainy day disaster that is in the plans. It is painfully obvious.

Mish - 24 States Borrow Money To Pay Unemployment Benefits  - Was there an unemployment report today? Do they really even matter anymore? "The key take-away from this series are the millions of workers whose hours will rise before companies start hiring more workers. Unemployment will be structurally high for a decade." Uh huh, he said structurally high for a DECADE. I agree. Uh, Mish, how about the wage deflation that comes with the increased hours? Hell, where is all the money coming from? (I believe you know and feel the answer - and will feel it even worse in the future). "I sense a huge tax increase coming. Add that tax increase to concerns over cap-and-trade, rising taxes on the wealthy (many are small business owners), concerns over health care costs, etc, and small businesses have lots of reasons not to hire."  We are soooooo screwed. 23 friggin states? Half of the US of A? Our saviors have done nothing but plug the hole in the employment damn with some expensive chewing gum, and if you remember those cartoons when they tried the same remedy, it always failed miserably. NOTHING has been done (or really can be done) to stem the tide of Americans hitting the streets right now. Wait till the new year and those businesses that have been hanging on just to get thru one more Xmas start shuttering their doors. More empty retail space coming! 

Washington's Blog - Robert Reich Confirms Permanent Destruction of Jobs in America - Since we are dealing with some serious unemployment issues, why not highlight them and give them the moment in the sun they deserve (no one else is covering the topic). "Under the pressure of this awful recession, many companies have found ways to cut their payrolls for good. They've discovered that new software and computer technologies have made workers in Asia and Latin America just about as productive as Americans, and that the Internet allows far more work to be efficiently outsourced abroad."  Sounds reasonable to me. More with less for less pay! BRILLIANT! Folks, we have some serious problems. If there is not enough work for say a 4% unemployment number (real not fake), we're really screwed.


naked capitalism -AmTrust Financial bankruptcy a bad sign for regional banks - (via Edward Harrison of Credit Writedowns) "AmTrust Financial, a privately held regional bank holding company based in Cleveland, has just filed for bankruptcy. With $11 billion in assets, AmTrust Bank is fairly large. The circumstances surrounding its failure are unusual in that the Bank Holding Company (BHC) has filed for bankruptcy but the banking subsidiary is still operating. The picture this event reveals is one of continued distress in the banking industry, especially for regionals." This is a good one. "What does that tell you? I see it as a sign of many more busts to come. You might recall that I mentioned a growing dichotomy between the fortunes of big banks and small banks about two weeks ago. Too big to fail banks have been bailed out. Regional banks not so much. Therefore, regional banks have turned off the spigot and are holding on for dear life. This is what is behind the drop in lending."  Was I just covering above something about unemployment and lack of credit and banks hoarding money for some reason? Yup, I thought so. (more on AmTrust HERE from Calculated Risk)

The Pragmatic Capitalist -THE BANK PROFIT MIRAGE  -"The following is a guest contribution from Annaly Capital Management.  They eloquently show how bank earnings are still in dire capital positions and that their profits are nothing more than a mirage.  There are many hurdles ahead for the banks:"

SUMMARY - Mmmmkayyy, so banks are hoarding cash, not lending and the profits they make are a mirage leading to more impending bankruptcies while unemployment continues to rise while states have to borrow money to pay unemployment claims while we will not be able to create enough jobs to solve the current employment black hole while the the consumer credit card default rates near record levels while the government is looking to tax you for every fart over the legal limit. Got it? Good! So do you now understand the physics underlying the bull market 2009 and all the upgrades that are based on increased earnings assumptions?

Kind of scary that little 'ol me can put the pieces together and the greatest economists on the planet totally disagree with my fact driven assumptions. Guess if I was on the Fed's payroll I would not be able to figure it out either.

Have a great night and enjoy the season.

Could It Get Any Worse?

Does anyone out there get the feeling that the load on our proverbial Mule is getting a bit heavy and that our Ass is about to give out on us? It seems that the global financial system has finally reached DEFCON 9 and everyone is finally on red alert. A little hick-up in Dubai and the scramble that follows is like the roaches in the kitchen scattering when the lights come on. Anyone out there get the feeling that we are hours/days away from a real country biting the dust? How about something like AIG finally proving to be to big to save? The global financial time bomb is ticking and there will not be some super agent to come shut down the countdown at 007. We're close.

Since I am bored with the markets sideways action, and I'm not anticipating anything out of the ordinary I'll stick with the news tonight.

Zero Hedge - NY Fed Announces More Reverse Repos Coming, Spooks Stocks  - "In the coming weeks, as an extension of this work, the Federal Reserve Bank of New York plans to conduct a series of small-scale, real-value transactions with primary dealers. Like the earlier rounds of testing, this work is a matter of prudent advance planning by the Federal Reserve. It does not represent any change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future." OK, so let's read between the lines, nothing to see here, move along. As ZH addresses, the previous failure and the sheer mention of "value" is quite humorous. Like they think we have no clue and the potential results of this experiment mean nothing and should not be of any significance to anything. LOL, now that's funny. Benny Boy, care to tell us why you are doing these then? 


Washington's Blog - Climate: We Can All Agree On Two Things (Via a read in ZH) - "Everyone should read the leaked emails and rationally think through what they mean. But whatever one believes about climategate (the leaked emails showing that "tricks" were used to "hide the decline" in the climate data and the destruction of the original source data), we should all be able to agree that: (1) We should end the wars in Afghanistan and Iraq; and (2) We should not let the financial giants who caused the financial crisis to profit off of cap and trade schemes." There are several key news issues I have not touched on for one reason or another (mainly cause they so freaked me out and pissed me off I was not sure how to react). The leaked climate change emails should cause the conspiracy denialists to scurry into their cupboards and rethink every truth they have ever known (but they won't). This is as serious as it gets. With the Copenhagen meetings next week we all need to pay really close attention to what transpires. This may be the biggest event that lays the groundwork for the UN to govern our future and not our Constitution. I'm not kidding. This is huge.

The Market Ticker - They Aren't Really This Stupid, Are They?  Karl does a great job with this post. More laughable words from the Treasury its self. Again, conspiracy pundits stand up and take note, "Here is the real stunner. A senior person at Treasury said to a small group of us that it is now official Treasury policy to extend and pretend on real estate loans. In other words, the policy statement from last week says, if you can make an analysis that says even if the current value is less than the loan, if you can do a spreadsheet that shows if you extend for 3-5 years, and if the economy gets better, and if the loan can be amortized down to where the loan is no longer more than the value, then the lender does not have to take an impairment -write down. Loans are to be modified by rate reductions, deferral of reserves, deferral of amortization or what ever." This one is a must read so you will better understand the levels of false accounting and price manipulation all in the name of "better" balance sheets at any cost. And you wonder why the market keeps going up? Sadly, even with these tricks IMO the market still fails. How sad is that?



Mish -New Record Low Yield On Two Year Treasuries; Is This The Start Of A Dollar Rally?  - This is some real news relating to marker prices you need to note. "Given the US markets were closed yesterday, I have the same question floating in my mind as a day ago, wondering if this is another one day wonder rally in the dollar (and another one day wonder selloff in equities) or if this is the start of a long awaited correction in both the dollar and equities." I have been looking for this dislocation and have mentioned these actions several times in various posts over the past weeks.Keep an eye on this development.

Zero Hedge - Is Gold The New DXY Levered Intraday Speculative Bet?- Related to the above post from Mish, ZH wonders if the dollar has a new bitch?

The Pragmatic Capitalist - 5 REASONS TO EXPECT A NEAR-TERM SELL-OFF - "Strategists at Credit Suisse are currently expecting a near-term equity sell-off, but are not yet concerned about the downturn evolving into a larger bear market decline.  Why have they turned a bit more cautious?  A series of psychological, fundamental and technical events:" It is worth a look, but nothing new to the savvy technicians out there. For those of you wondering what these "super analysts" are worth and why we listen, your guess is as good as mine.

Times are getting testy. As my regular readers know, I do not expect anything bad to happen between now and Xmas. IMO they will not do anything to disrupt the non credit card wielding consumers at this time. After Xmas is over, all bets are off. On the other hand, if some EU country should decide to go bump in the middle of the night (as monsters do), chaos should ensue and there is nothing the PPT will be able to do to control the market (except shut it down as it almost did with Rule 48 last week). The boogey man is real and he's lurking (and I'm not talking about some horrifying disco king from the late 70's). It will happen overnight while you are sleeping (for Xmas sake I should have called him the Grinch). We may all wake up one morning to a closed market and then a sweet 1,000 pt plunge (remember I'm calling for at least two market closures on this next trip down.

GL out there and happy holidays.

Think We Are Looking For Some More Change?

Having assisted in the campaign for a local state senate seat recently , I am more than moved to hear about the ouster of some governors that have been in power. I am doing my part cause I want the right people representing me and you should too. We won but have to go to a run off cause of a lack of voters.

OK, do you think a lack of voters pissed me off? Well hell yeah it did. How? How in these times when getting the right people elected into office can you not make it to the polls to vote? This is more important than ever and people just don't give a shit. Folks, if you don't care and don't get involved NOTHING IS GOING TO CHANGE! I am on the side of the road with a campaign and vote today sign screaming my heart out to get people to vote (LOL - yes, me yelling at cars - maybe that was not the best idea), can you imagine that?

I want change (the right kind of change not to be confused with the change we already got). I am willing to work for change. I am tired of this shit. I want regulation. I want people punished. I want someone with a brain and ethics representing me. You should too, so get off your butt and do something about it. Make a phone call, donate, talk it up, get people to the polls, get a bumper sticker, just DO SOMETHING!

Replacing Democrats with Republicans is good only if the people replacing them are worth a shit. I have decided that party lines means little these days. Sure, you need balance but more importantly you need good, honest, hard working souls that have a ounce of common sense and actually care more about their constituents than their special interests and pocket books. If you do not do something about it and do not get involved nothing will change. Please, please get involved.

From Washington's Blog there is Will the Democrats Lose in 2010 (or 2012) Because They Won't Pass Real Financial Reforms? (this was covered by ZH and Naked Cap). "People are sick and tired of both parties' catering to the big boys. Indeed, given last night's election results and the Dems' utter failure to institute any real financial reform, trend forecaster Gerald Calente's prediction that a third party candidate will win the 2012 presidential election is sounding a little less crazy." repeat after me - RON PAUL - RON PAUL - RON PAUL!

Political Winds Shifting? from Denninger has, "It won't be an easy sell, but if they fail to make it, or worse, win on the back Obama's refusal to deal with the banksters and then continue the "anything goes in ripping off America" policies that both Bush and Obama have countenanced and in fact explicitly endorsed, we will suffer a political and economic collapse unlike anything previously seen in the world - a catastrophe worse than Germany in the 1930s."

Mish has a great piece on What is Money and How Does One Measure It? If you need an econ 101 refresher, please read it. With all the action in the dollar and its interaction with everything, I believe each of us could use a quick skim of this post as a refresher.

Prag Cap has ROUBINI ON THE DOLLAR CARRY TRADE & THE COMING CRASH. It is a must listen in my opinion.

The Big Picture and some others have covered the WSJ post on the economists "getting it wrong" in The Hubris of Economics Ritholtz gives his two cents. "This is not to say there are not good, even great economists (some are even friends of mine!) who foresaw the coming crisis and warned about it. Many are aghast at the rigor mortis in the academic establishment; some are horrified at how poorly the profession has done. Forget forecasting the future, too many economists cannot accurately describe what happened yesterday." Washington's blog covered this issues in Wall Street Journal Admits Economists Were Wrong, But Fails to Discuss their INCENTIVE for Being Wrong.

If I can remember I am going to start adding a daily story from Drew Curtis' www.Fark.com a site that covers some of the more bizarre stories of the day. Today's link is Iranians Rally on Anniversary of American Embassy Takeover. Apparently the government organized a protest against the Americans and all that showed up protested the Iranian government. LOL now that's funny.

GL out there.