Saturday, January 22, 2011

Russell Leads..,

If wave 2 is complete, as it appears to be, then wave 3 has reasonable probabilty points in at these projections. I am currently short TF, ES, NQ, EMD, GOLD, SILVER, Oil among others and added EURO shorts at the end of the week...the systems have not covered with the exception of the Daily TF Swings.

The demise of the EURO continues...

...In case you are wondering why Nigel Farage despises the EU and Herman Van Rompuy, this video exemplifies it.

The major economic and governmental problems we have, center on constant wealth transfer that rewards the incompetent at the expense of the competent and the forced leverage syncronized between banking and government that are the tools that accomplish the job - otherwise known as Fractional Reserve Lending and the Debt Money system.

Whether a person as an individual, or a government as an entity, can legitimately fulfill their obligations is not relevant to people looking to become recipients of their defaulted assets - nor are the attempts to obfuscate the issues and delude the masses. Benanke did not once apologize for cheerleading the Real Estate market all the way down...clearly his agenda was more important than that.

Spain, Greece, Portugal, Italy, Iceland never had a place being considered for a homogenized unit and debt based constitution called the Euro. The presumption that they ever could be forced to maintain compliance and establish economic and constitutional equilibrium was and still is a pipe dream by people attempting to unify finance and governance. This video of Herman Van Rompuy is really a sad commentary on our times. (listen to the quotes at 1 minute and 45 seconds in the video)
"We are in a period of anxiety, uncertainty and lack of confidence. Yet these problems can be overcome by a joint effort in and between our countries. 2009 is the first year of global governance and the climate conference in Copenhagen is another step towards the global management of our planet. Our mission, our presidency is one of hope supported by acts and by deeds." - Herman Van Rompuy

After you hear this crap, it rather looks like the hope means "hope for the few" and the "anxiety, uncertainty and lack of confidence" of which they speak are the reasons that they have hope. The crisis that the world is in is not surprise. It has been engineered via regulated and legislated theft and fraud. When I worked at JPMorgan, it was clear that the financial engineering and leverage allowed and encouraged explicitly at the behest of the Fed was being used as a mechanism to scale up and grow our financial system and obfuscate its risks and frailties. This was accomplished via critical accomodative regulatory and legislative efforts and achievments. This leverage was explicitly encouraged, endorsed and allowed.

The result was that a few people have most of the wealth and the remaining people are struggling to cope with the results of their losses. Anxiety, uncertainty and lack of confidence are great tools if you are a banker - especially a pathological central banker who wants to pretend and is determined not to see a housing, debt or derivative bubble even when it's right in front of his eyes.

Germany - not an island in the rough...

Germany is certainly in better shape than Spain or Greece, however with banks like Deutschebank waiting to blow up and with more off-balance sheet and derivatives risk than a lot of notorious offenders in the US, things are not what they are hyped up to be. Interestingly the DAX has not made an effort to even broach the 8136 high (double top) that it established in 2000 and 2007. This is despite all the trumpeting of salacious and highly laundered numbers in addition to the sundry government interventions and simulations that are supposedly imparting an economic situation in Germany that is "THE BEST EVER"...really? Apparently, that is not believed by everyone...

China and India can not continue to remain bastions and consumers of Germany's and the world's wares when they are suffering their own huge market dislocations, credit bubbles, real-estate bubbles and the widest ever disparity between rich and poor. The seeds are sown all over the modern world for social unrest and tumult. No country can be an island with customers who are as at risk as this.

Friday, January 21, 2011

Fraud its not better...its worse than ever

As I indicated many times, real estate prices can not stabilize without access to healthy amounts of credit and therefore, will continue decline as long as available credit is inhibited. The essential basis for price increases in real estate of over the last 30 years is the abundance of policy and credit vehicles created by the government and fed. Ironically, the same reasons that education costs have increased as well.

Credit has continued to contract, unless ofcourse you are a primary dealer, fed shareholder or want to buy inflationary assets in the socialized markets. Below is a very interesting graph from Case Schiller and Barry L. Ritholtz's blog of what may be about to happen to the increased leverage that the banks have taken via legalized frauds that have been regulated into being and that allow banks to lower loan loss reserves - counting them as earnings, and also to reflect assets that are worth 5 cents on the dollar at close to par. Keep in mind that IF you believe the banks and take them at their word regrading their assets on their books and the health of their loan portfolio, they are still leveraged much higher than in 2007 in addition to being bigger. But we should not worry, the institutions are much too big to fail now, bonuses are right around the corner and Obama is waiting in the wings with open arms. So, lets just not bother to recognize that banks are nearly universally lying about and overstating asset values and data regarding loan performance/reserve requirements.

So, what happens when a credit fueled rally in real-estate prices is not implemented in the real estate markets? Another 50+% decline in prices, even in Coral Gables Florida and New York, New York and a actualised insolvency of the entire financial and banking system in the US and Europe.

Size and concentration of the banking and financial system...(courtesy:

Massive reward for failure...bonuses to fly with abandon

As long as the ECB is meeting expect the EURO to be levitated.

I smell some special interest trading desks and banks getting very nice bonuses and a lot of policiticans high-fiving and back slapping. I am rather interested to see how the markets and public treats them...I expect not too well will be the answer.

ECB Socialist Policies

Now watch the ECB governing Hungary. (the whole thing)

Thursday, January 20, 2011

Potential SP500 Pattern

RVS TF Daily System Short with Level 0 Reticulation (Updated)

The reticulaton engine built the trade that I presented a few days ago and that trade has now progressed to as below.

Wednesday, January 19, 2011

Sunday, January 16, 2011

RVS Strikes again...with level zero reticulation

Reticulation trading is a new trading management facility for the current RVS systems. To ensure that maximum margin of error is accounted for in the trades, the systems trigger a single position via as many as 300 sub trades via market and reflection triggered orders. The results is that the market does not know or see very large orders or have time to react to limit orders and sizes. Currently RVS is short large size TF, ES, EMD etc...this type of order management allows the systems to trigger effective risk-off, re-entry and market-related order sizing even in thin markets like EMD. Additionally, it creates beautiful equity curves that are easily reproducible in the real-world markets with very high win rates.

Below are examples of TF since inception with an average trade requirement of 251K and average 90K position risk for a 10 million dollar liquidity pool. Uncompounded results produce extremely small negative excursions (less than 1%) and produces roughly a 18% return annualized
Below is an example of ES since inception with an average trade requirement of 282K and average 59K position risk for a 10 million dollar liquidity pool. Uncompounded results produce extremely small negative excursions (less than .6%) and produce roughly an 8% return annualized.

An good overview of money and banking...

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