Saturday, January 29, 2011

Coming soon to a country near you...

Bernanke has blood on his hands...

In November I posted this post and this chart. Bubblicious "Bernanke Span Krudman" Baby... I indicated that if indeed Bernanke had the gall to pursue a policy of price and market manipulation in commodity and inflationary assets that the potential outcome would likely be of the worst possible in nature rather than something hopefully less extreme.

To tell you the truth, I did not think that it would even have been possible for a sane person to impart that initiative onto the markets in the manner and to the extreme that Mr Bernanke has. Bernanke has single handedly destroyed trust and faith in the markets, compromised trust and faith in fundamental life for the public and spread his virus to the whole global system for the sake of a few banking buddies.

Bernanke is responsible for the riots and social revolution in the middle east. Granted there is a lot of pent up emotion over there, but what pent up emotions need are sparks. Bernanke provided much more than Sparks by trying to pump balance sheets of banks at the expense of people. But we can see that what happens here does not just stay here. The perception of there being a reason to hoard and accumulate inflationary assets has been much stronger and misplaced than I thought it ever could be. That action and perception has been directly influenced by Bernanke and Co. That activity has distorted the perception of supply, demand and price dynamics.

Bernanke and the Fed's only business is manipulating numbers. That is all they do. Which is why they have directly manipulated economic indexes that are used in calculating GDP...GDP came in at 3.2%. The target was 3.5% - so we missed. The fact that the number are magically seasonally, secondarily and arbitrarily adjusted means that we can not rely on the official numbers. Additionally, if we were to calculate inflation correctly as well as other metrics and the number would have come in closer to 1.2%. This game is a farce. Now if that was it - that would be enough...however we had a horrible GDP number, significant earnings report issues yet...the markets defy them as they continue to celebrate the Bernake put. Bernanke knows that a market that goes up on bad news is perceived as much more bullish than any the powers that be jump on that to squeeze shorts and embolden leveraged buyers. "If the market can't go down on that news, then this time its different - trade on maximum leverage." or so goes the average investor. However, trust in the market is not created by this kind of aberration and yesterday TRUST was breached and ironically had NOTHING to do with Egypt in my opinon. What I saw as I was shorting the market this am was total confusion. Shorts were totally confused. "Why are we making new highs? Who is buy this crap?" Longs were confused: "Why are we making new highs? Why am I on 10x margin? Who is buying? Where is Bernanke? The answer came swiftly. I expect that the margin level will finally begin to decline from the highest  in years at $276.6 billion. But, Bernanke has succeeded in lulling people into a ridiculous complacency...he has increased the risk for EVERY sector of the financial system. And now the results of this trust and risk issues are spreading throughout the world...he has blood on his hands in addition to mush for brains.

Watch the video below. When central planners insist on stealing from the public this is the result and it will be coming soon to a location much closer to me and you that we may have every thought possible.

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