Despite all the warnings from some about the shady Dealers at the Casino tables of America’s stocks, mortgage, bonds and money markets – America was content to ignore the dangers and in pursuit of fast money, let the good times roll.
Except the roll now keeps coming up snake eyes and hundreds of BILLIONS of dollars have evaported into thin air. This week has nearly everyone talking about the economy and the global market collapse underway. Of course the obvious fallout for this coming disaster is going to be the blame game, and it has already begun. I had to laugh in amusement at the comments by Hillary Clinton in last night’s Democratic Debate when she said “If you’re a homeowner who has been at the bottom of this incredible scheme that was established, you’re left holding the bag and you don’t have the house..” when this was the same Democrat party that pushed for and encouraged the banks to make risky mortgage loans to ‘working poor’ and illegal Mexicans.
I guess there’s nothing so typical than for government to encourage a scheme, exacerbate a problem and when the misery begins to be felt, blame the ones they enabled and create ANOTHER government scheme to deal with the effects of the problem.
The trial lawyers are already flapping their wings in prep to take flight in order to feast on the roadkill of America’s economy in multi-billion dollar lawsuits.
I think the only thing we can bank on for sure, is that beyond the lawsuits from new preisthood, we can count on the inept government behemoth will step in at the behest of a screaming dependent populace and make a bad situation an unholy nightmare that takes everything down and leaves nothing but ashes. Like all tyrannical behemoths throwing a total fit, when things begin to unwind – the Elites in power would rather tear everything down leaving absolutely nothing for anyone if they cannot run the show their way.
I guess we may look back on this period of time and consider the final straw breaking the proverbial camel’s back
My freind John has some serious warnings to consider about this market, and these are wise considerations:
During the day someone-according to Frederick Lewis Allen it was thought to have been a bright messenter boy for the Exchange-had the happy idea of entering a bid for a block of stock at a dollar a share. In the absence of any other bid he got it.”
-The Great Crash 1929 by John Kenneth Galbraith
And so as I awaken this morning, do I have a buck to spare? Uh, no. But the quote from the book above indicates what exactly happens during a wide open market panic. There is a misnomer that the powers that be, aka the “Plungers”(PPT), can not stop the momentum of the events we are about to see. The futures are already turning as I type this with an almost 1% swing in the Dow, S&P, and NASDAQ futures yet they are all still down substantially. The “plungers” will spend the next 5 plus hours buying futures in a desperate attempt to stave off a panic or crash on their watch as the scream after the formation of the PPT as a result of the 1987 crash was “never again” or NIMBY. Alas, the problem is that they have no control over Asia to any great extent and the traditional banking powers in Europe in coordination with the PPT can only influence so much for so long. To give you some idea as to the volatility, in just my one hour of being awake this morning the FTSE 100 has swung from down 226 to up 30 plus to back down 40 plus as I type. Will we see the U.S. markets rally? Who knows. There are rumors abound about Federal Reserve rate cuts, banks in trouble, and efforts by the banksters to use the power of their hedge funds to stave off or protect certain sectors in an attempt to hold the line.
They shall inevitably fail.
We might be so lucky to see rallies during the day as in the 1929 and 1987 crashes, yet please, don’t be an idiot. This is not a market for amateurs or people who do not have money to lose. If you understand the concept of trading in a bear market and have day trading experience, have fun as this is your day. If you do not and have the antiquated belief that “buy and hold” is the play of the day, God help you. By the end of today you could easily see a sizable chunk of your portfolio shredded. The brokers are not your friends. Their phones will be mysteriously busy for hours today, the email you send unanswered for days and the protection of their butts first and foremost on their agenda. The smaller platforms which allow you to trade online will probably get smoked today and you might even see some orders executed well below the levels you anticipated or at losses to your account.
The only safety is to be a spectator as I will watch with popcorn and iced tea in hand. History has a funny way of just “happening” as the clock moves forward and the calender flips pages. Those of you too young to have enjoyed disco, polyester jump suits and the 1970’s have to understand that in equity, energy and of course the metals volatility was the mantra of the day. But with internet trading, individual speculation and government sponsored meddling the volatility we during the rest of this month could be a nightmare. There will be bankruptcies from what we witness today. There will be political repercussions. There will be loud, shrill calls for government takeovers to ease the pain. It means nothing. The word is on the street that the first layer of the banking system has issues and those issues will show themselves in due time. IF you would like to check the “rating” on your bank you can go to BankRate to check on the status of your bank and just see how it rates. Watch the local news, read the papers and listen to what is being said by the management. When the entire financial system reaches certain levels of instability, the small community banksters are the first to implode.
So what can we look forward to today? As the title of this op-ed says, “BOOM”, and nothing more. The word “panic” is being used over and over again on Bubblevision and Bloomberg. When the financial media speaks in these terms and tells people to avoid the markets at all cost you can bet your bottom dollar that there are a truckload of sell orders sitting on the desks of the brokerage houses. Mutual fund owners are going to unwind. Small investors who elected to follow the Cramers and Kudlows of the world are going to unload. Foreigners who have been losing everything in Asia and Europe the last two days are going to unload. So regardless of anything our buddy Benron or Hank Paulson who speaks at 8 a.m. this morning wish to say or do, it will have little effect as the markets do not trust our central bank. Faith has been lost and that is not to be restored with $100 billion in intervention nor a 75 point basis cut in the Fed Funds rate and discount rate. I think it is also safe to say at this point that the dollar will be sacrificed to keep the artificial price on equities in place. The Fed may not move today into this panic, but you can bet that the author of Helicopternomics will fire up the rotors and destroy the traditional economic models that a lot of traders wagered trillions on. Despite the efforts and news today, promises of stimuli, and breast beating of the politicians, none of this matters to a family where the husband and wife watched their jobs get exported overseas and the ability to meet the terms on their Option ARM loan which is resetting. Homes will continue to be lost. Banks will be forced to write down trillions. The implosion will be so total, so complete that when the average uninterested observer finally realizes what has happened we will be well into the next depression.
You will see denial. You will hear the President. You will witness pompous political asses marching in front of cameras all night long as the markets gyrate. Remember the safest soundest strategy and remember the warnings we have been giving about the J.I.T. inventory system, the Ponzi scheme known as our financial markets, and the games the government has been playing with our statistical reports which the world uses for raw data to trade. All of the lies and manipulation have to come home to roost and that egg is about to be laid. The famous headline is so appropriate for what we shall witness.
As today, no matter the efforts, the lies and the manipulations we shall see, the smart money is gone and only those who hope and prayed this day would not come(due to their own financial interests) and those who will get religion on the floor of the exchange shall be engaged today. I worry more about the little old lady conned by the major brokerages to invest in stocks and funds she had no business in. I worry more about the people who piled monies into 401K’s because their corporate financial benefit’s advisers are more concerned about inflating their company’s own stock rather than investing in safety for the future of the employees. And I really worry that the spin we will see all day long will give us all major cases of whiplash.
Have your neck braces ready folks.
The day, the first of many, we have warned of, begins today. Below 1200 on the S&P cash market is the darkness. If we break that today, I see little if any technical support until we reach the 1030-1070 range. That’s just a historical observation and if we hit my prediction from the December 28th program and do it in one day, you can dispose of a lot of other predictions I made.
What I worry about, is in our weakness – which one of our enemies will try and capitalize on it and do us even greater harm?
The world is in a period of momentous change and upheaval – which always happens when civilizations change hands.