Saturday, May 8, 2010

Fed Charts...

Above is the published value, as per the Fed, of Maiden Lane Holdings.

The holdings in this entity are the absolute crap, bottom of the barrel assets that they were forced to take when Bear Stearns failed. Well, does it remind you of anything?

Ok, the markets have swung from 666 to 1230 and these assets barely moved? Do you have a hint yet?

Ok, JPM and Goldman Sachs $115 trillion dollar derivatives books look just like this. Imaginary marks and all. Where did they get the idea for creative marking like this. You guessed it - the Fed.

There is no way in hell that assets of any kind project value the way that the chart above represents. The Fed is clearly lying, just as the other big banks are. The swings in realistic valuation are huge and would not simply be plus or minus a few percent here of there. Especially when you consider that 86% of Maiden Lane holdings is hospitality related debt. Meaning hotels.

Business is not so good for hotels and Red Roof Inn is just one example. Below is a graph of the hotels index as levitated with fed issued credits and manipulation.

Now look at the fed graph again...notice the similarity? I did not think so.

Friday, May 7, 2010

Wall Street...up to old/new tricks

This week was an abortion. Currency collapses, volatility, margin calls, liquidations and manipulations. It was not without serious implications. The manipulators won. But what did they win?

Well, that is an interesting question. First, take note that Morgan Stanley, JPM and Goldman Sachs and the Fed are at risk of a lot of dangerous litigation and regulation - both of which they do not want. I am quite sure that Goldman, for one, is tired of being painted as the villain - though they and the others are, but it could finally have been time for them to show Washington who really runs Washington. Ironically, if these financial institutions spending $100 million per week on lobbying is not enough why not use a bat.

On the very day that the senate was supposed to vote on the breakup of these very banks, including a few others, their computers and market making shenanigans, unlimited naked short selling capability, systematic front-running mechanisms, rebates and liquidity miraculously paused and the market crashed by 10% intraday.  Ironically, creating one even larger shenanigan, in my opinion - if you want to call playing with millions of peoples lives a shenanigan.

Note 5/9/2010: Mike Shedlock indicated today in his post Human Judgment Needed or Computers Bid $.01 that this was not a coordinated event but a symptom of inefficiencies in the system. I do not agree. I would like to point out is that the markets have been down 300+ points many times before with NYSE curbs starting to take effect without causing a cascading crash. Liquidity was pulled from the market in a different manner than any previous trigger and most definitely not without some coordinated responses or trigger events in the liquidity systems. For the record, liquidity trading systems are quite aware of the electronic exchanges and use them quite well in fact. Please refer to this post for more information: PG and the market...more lies from the press

Think about the result of breaking up these banks. The Fed's deceit would be readily visible - as the balance sheet issues of the large banks would prove their insolvency once their assets could no longer be commingled and their balance sheet could no longer be marked to fantasy. If that happend, there would be more scrutiny of the Fed's balancesheet aswell. Politicians paniced when Paulson and Bernake went to capital hill claiming the the end of the world was near...seems to me a good panic would be just the ticket again to trigger them to forget sound reasoning and instead worry about they're election contributions, near-term perceptions of their constituents or special interests. Score is Fed 9, us tax payers 1 and special interest politicians 8. So far, I would say the Fed has done a very effective job of fighting Ron Paul and his attempts to hold them or their buddies accountable.

As if to let the senate know that their vote could be a disaster - the entire financial computerized market liquidity system was shutdown and then rebooted to demonstrate just how powerful these powerful forces really are. 1987 was probably more easy to understand actually and though it was also contrived it was not the same kind of contrived and coordinated effort that was required to create Thursday's action. This event was just ridiculous, highly orchestrated and well coordinated. Just take a look at the program trading chart below. If ever there was a clear blackmail of the senate and the policy makers in Washington -this was it. And guess what? ...the vote failed. These arrogant manipulators got what they wanted. 

Market making is a ludicrous business, with access to hugely leveraged capital at nearly no cost, nearly free trading costs and settlements, rebates, exchanges, offsets and finally dueling and often coordinated computer programs. If you can hitch a ride on those coat tails fine, otherwise, quite frankly you are screwed. Even with this market as it stands, I would not be surprised to see these dueling and coordinated market liqudity trading algorithms used to engineer a move to new highs.

Ironically, the frailties of the system were laid bare for all to see if only they were willing to look. However, many people may have seen the  end of day closing prices as a minor drop in their portfolio values and heard the press flaunting their ever popular fat finger type theories (I wonder how many favors they curried for that effort) and thus trivialized the implications of the greatest Wall Street blackmail of since Paulson and Bernake assaulted capitol hill.

So, where do we go from here...certainly, the markets can not be trusted, the government can not be trusted the regulators can not be trusted, the banks can not be trusted....that's a lot of trust that is lost. Maybe greed can over power it, but in my opinion if the markets can rally, it will be because big PPT member banks like JP Morgan's computers trading with Goldman Sach's (or other PPT member's) computers and not because there is any real buying, confidence or trust.

We need to support real change not Obama type change. We need a stable currency and a free market. To get there we will need to audit the fed, dismantle this confidence game and its ponzi scheme banking system. And finally we need to remove people who would prefer the totally manipulated and non-free market markets that have been the hallmark of the current system. Ron Paul, Rand Paul, Peter Schiff and even Alan Grayson are a few people who are going the right direction. 

We need to get involved.

TF Daily Income buys today...

I would like to point out that many systems are looking for shorts setups while there are still a few remaining that are looking for longs ones. This is a mixed message and therefore, reduced allocations are appropriate and on the table.

Audit the Fed

SSO and SPY Systems

I received requests to show what the SSO and SPY systems have done over the last days. So, I posted these charts. Please be aware that, if you are BPT member, you may have seen some other SSO system trades that Matt may have posted. 

I have given Matt the actual RVS model and he plays with it to build some of the incarnations that you may have seens. Matt does an excellent job with that and has been an extremely positive influence in applying this technology to new instruments and charts. For these reasons, though these are the systems that I have been watching over the last weeks and that use the most updated RVS models, they may not reflect versions that Matt configured. 

Also, keep in mind that it was a challenging week for any system this week...and these charts only reflect the SPY and SSO systems I watch. For example, the ES and UWM Income systems stopped out and the TLT system also stopped out...

SPY and BGU Arb - BGU trading at a premium to cash

This indicates a bid under the market.

Thursday, May 6, 2010

BGU releverage/deleverage analysis

BGU was sold at a discount to the cash SPY this morning and afternoon...and closed at a premium to the SPY. Very interesting action to say the least.

PG and the market...more lies from the press

For those who heard the stories on the street or media relating to a fat finger blowing up the market with the PG trade, you should be aware that the fat finger on the PG coincided with a failed low on the indexes. This was something that was not properly reported. Below is a 10 second chart that shows the performance of PG versus the market. It is clear from this that the market had already hit its lows while PG was still near 60. I have added times and lines so this is clearly visible.

Clearly the market collapsed and margin calls caused the selling in PG. From where? Margin calls from the market collapse overall and the never ending Euro breakdown - IMO.

More balderdash from the press...more bills for the rest of us.

By the way note the inverse head and shoulders on the Russell 2000 (TF futures) - target 698 if it plays out.

ES Daily Income System Stops out on market disconnection

ES Daily Income System will likely add again on the close today...

Wednesday, May 5, 2010

ES Daily Income System Triggers Long yesterday

and will likely add on the close...shown by the yellow arrow.

Tuesday, May 4, 2010

Releverage Deleverage Spread analysis back at par

Big move happened...indeed SPY was expensive and BGU discounted...

Monday, May 3, 2010

Releverage Deleverage Spread analysis

Above is the spread for the BGU vs SPY rendered rich/cheap (Red/Green) based on the delverage/releverage analysis. We have been drifting up and SPY is now expensive versus BGU...this usually happens when the market is preparing for a big move.

Hank Paulson hired Edward Liddy to run AIG

Liddy was the audit committee chair at Goldman Sachs for the CDO's that AIG insured...wonder why he got the job as CEO of a bankrupt AIG?

TF 30 minute monster trade

With a little stress thrown in for good measure...up over $35,000 from Friday's low on that trade for a very nice profit.
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