51 minutes ago
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 other...so 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.
Wednesday, January 26, 2011
ES Swing Still Short
ES Swing may add another entry if the market were to be able to get another push...that would be a huge size entry in terms of the number of contracts. You can see the trade reticulation entries and exits on this chart it currently has 55 contracts open.
Machinations
Nothing like a bad housing report to get the markets motivated.
As addition collateral, the EURO (which I am reasonably short) has hit major resistance around the 1.3730 area. All in all the currencies, transports and some index action portray a very dangerous situation. Moreover, the rubberband has been stretched by another factor - the overshoot of our inverse head and shoulders pattern targets on the daily charts. These targets were in the range of 1240 to 1255ish for the SP500. We have overshot by more than 50 points. This creates the prospect of an overshoot in the reverse direction when a correction occurs of roughly the same amount. So, we may be in for another flash crash type thing that everyone can blame on some fat fingered button pusher who types 1 billion instead of 1 million into a special and proprietary order entry system (especially designed for reporting by CNBS media spokes people) that has no security and/or validation that would validate and verify that kind of data.
“Though new home sales rose by more than forecasts in December, the increase was off a very low reading in November and was primarily due to a jump in sales in one region. To put the increase in the West into perspective, unadjusted nonannualized new home sales in the West rose to 7,000 from 4,000—once annualized and seasonally adjusted, these sales are reported to have risen to 110,000 in December from 64,000 in November. While it is encouraging that sales continue to move into better alignment with home supply, we characterize new home sales as still bouncing around at low levels (December’s reading compares to a peak of 1.4 million in July 2005) and we do not expect the housing sector to be either a significant driver nor a drag on economic growth in 2011.”
Tuesday, January 25, 2011
Dollar Update - Perfect Bounce
Nice bounce around the areas that we should see it - hopefully we can breakout over the falling wedge at some point soon...FYI covering Silver and Gold here for a bounce. Up nearly $100 for Gold and $4 for silver.
Sunday, January 23, 2011
If a company files bankruptcy...and Goldman/JPM off risk while supressing fundemental issues...
what happens? Can you say MUNI bond and Auction Rate. Well its back. Fraud on a massive scale perpetrated right in front of our eyes as if we were all too stupid to see it and most definitely not capable of stopping it and punishing the fraudsters.
In this case, a company files bankruptcy and the press conspires by avoiding to promote its formal insolvency. Obviously the press must have a reason that it would like everyone to believe that it was and has not been news worthy or relevant. Great, we can continue life as usual while everyone in the "know" does just the opposite and dumps risk. Well, wouldn't you know it, the companies that were cental to the headlines in 2007, 2008 and 2009 are insolvent and their Munibond insurance is no good - as it if ever were. While AMBAC was busy preparing its bankruptcy filing last year, Goldman Sachs was setting up its new "Ultrasafe Munibond Marketing Entity" with Incapital and JPM was trying to off risk to mom's and pops through Schwab and UBS. Lots names familiar to people who got hosed by Auction Rate securities...how come the same players are still in the same game after they blew everyone up?
Two months ago I met a guy in South Point Park in Miami Beach. He was an older guy trying to preserve money for his grand kids education - as he said. He asked me about Muni's, to which I replied that I felt "the Muni markets are rife with bad documentation, risk and fraud and at high risk for (structural) defaults. Not a great market in which to operate, especially if Goldman and JPM are pumping like mad" The funny thing was that he then asked me about this one particular munibond that I, ironically, had looked at for Hartford, Pennsylvania. Yes, you know the city that missed its bond payments and that the state had to lend 55 million to so that they could pay the interest on the notes. He was pumped this security by his broker who said it paid nearly 8% (of which he was very proud) and was fully insured. Clearly the broker gets paid a lot to sell crap and is therefore, highly incentivized to rip this guy off...He was rather shocked to find out that the reason Hartford was paying such exorbitant rates is because they are broke and can't actually make the payments. The issue of insurance seemed to bring him some comfort, as his advisor had clearly spent quite some time on that subject. But the insurance is worthless. What I saw in action was an example of the JPM and GoldmanTax's effort to further rip-off the public and transfer the wealth into their bonus packages.
When AMBAC was busy getting its bankruptcy filing prepared. Wisconsin's Office of the Commissioner of Insurance, or OCI took over AMBAC contracts and obligations without making much more than a peep...in the name of preventing a MUNI bond collapse and frozen issuance market...by doing this it was hoping to help the incompetent by deceiving the market into complacency once again while bringing no new structural stability to the picture in any way. The hope was, lets just get the AMBAC name stabilised or out of the picture and keep the game on the normally scheduled programming. Yes, the charade...was endorsed by the OCI and this is an example of regulated fraud. The fraud is all still there, its still occurring every day and these guys attempted to make sure that this was the outcome. That was their specific goal...let a totally flawed, deceptive, highly inducement oriented product continue to function with NO impediments.
Ironically, we should all already know that by its nature, a market in which someone tries to get your money by locking it up, providing crappy collateral and fuzzy or deceptive documentation, would require them to make some sort of inducements and incentives. "Ok, lets make the gains tax-free in order to find marks to whom to pawn it." Sounds logical to me.
At the very same time as this ponzi scheme is being implemented, the regulator(s) had NO problem with all the major Dealers scaling up their marketing and hype surrounding these products specifically focused on "Mom" and "Pop". Yes, there is no issue there...just lets get this boat back on the water keep it looking like its floating and get people on it...
OCI and the regulators in general did a GREAT job regulating yet another legalized fraud and theft.
In this case, a company files bankruptcy and the press conspires by avoiding to promote its formal insolvency. Obviously the press must have a reason that it would like everyone to believe that it was and has not been news worthy or relevant. Great, we can continue life as usual while everyone in the "know" does just the opposite and dumps risk. Well, wouldn't you know it, the companies that were cental to the headlines in 2007, 2008 and 2009 are insolvent and their Munibond insurance is no good - as it if ever were. While AMBAC was busy preparing its bankruptcy filing last year, Goldman Sachs was setting up its new "Ultrasafe Munibond Marketing Entity" with Incapital and JPM was trying to off risk to mom's and pops through Schwab and UBS. Lots names familiar to people who got hosed by Auction Rate securities...how come the same players are still in the same game after they blew everyone up?
Two months ago I met a guy in South Point Park in Miami Beach. He was an older guy trying to preserve money for his grand kids education - as he said. He asked me about Muni's, to which I replied that I felt "the Muni markets are rife with bad documentation, risk and fraud and at high risk for (structural) defaults. Not a great market in which to operate, especially if Goldman and JPM are pumping like mad" The funny thing was that he then asked me about this one particular munibond that I, ironically, had looked at for Hartford, Pennsylvania. Yes, you know the city that missed its bond payments and that the state had to lend 55 million to so that they could pay the interest on the notes. He was pumped this security by his broker who said it paid nearly 8% (of which he was very proud) and was fully insured. Clearly the broker gets paid a lot to sell crap and is therefore, highly incentivized to rip this guy off...He was rather shocked to find out that the reason Hartford was paying such exorbitant rates is because they are broke and can't actually make the payments. The issue of insurance seemed to bring him some comfort, as his advisor had clearly spent quite some time on that subject. But the insurance is worthless. What I saw in action was an example of the JPM and GoldmanTax's effort to further rip-off the public and transfer the wealth into their bonus packages.
SEPTEMBER 8, 2010:
Goldman Sachs Group Inc. is about to start selling municipal bonds directly to mom and pop.The New York company plans to enter a partnership this week with Chicago securities firm Incapital LLC to sell bonds issued by U.S. states, cities and towns to individual investors, according to a person familiar with the situation.
The arrangement will make billions of dollars of municipal bonds underwritten by Goldman available for sale by at least 85,000 brokers in Incapital's distribution network of broker-dealer firms.
The move allows Goldman to branch out into a lucrative area of the fixed-income markets, a haven for retail investors scared off by volatility in the stock market and riskier corporate credit markets. While some municipalities are facing budget crises, it is rare for municipal bonds to default. Such securities yield more than certificates of deposit or other ultra-safe investments and are tax-free in most cases, making them a staple in retiree savings accounts. read moreGoldman strikes deal to sell new-issue munis
October 1, 2010My question is:
Goldman Sachs Taps Retail With Munis
By Patrick McGee
The company recently announced that it is teaming up with the Chicago securities distributor Incapital LLC in an exclusive agreement to sell new-issue munis. Incapital maintains a retail distribution network of more than 600 broker-dealers and 400 fee-based advisors.
"We're really acting as Goldman's syndicate desk to the retail-dealer community during the traditional retail offer period," John Radtke, the president of Incapital, says. "It gives Goldman access to a customer base that they historically have never reached."
Goldman has been the lead underwriter on $16.3 billion of munis this calendar year, according to Thomson Reuters. It is best known in the municipal bond world for its institutional distribution, particularly for large issues-the 95 deals it has senior managed this year is the smallest number of deals among the top-10 firms.
Historically, virtually none of Goldman's underwriting has been distributed to the conventional retail base, aside from high-net-worth individuals who can purchase new municipal products through its private wealth division.
"We're helping to create something that's almost unprecedented in the municipal business," Radtke says. "And that's giving retail access to investments that they would never actually see."
Jeff Scruggs, co-head of Goldman's public-sector and infrastructure group, described the agreement as an expansion of a multiyear relationship with Incapital.
The firms have worked together for the past three years marketing Goldman's certificates of deposit, plain-vanilla corporate debt and some structured fixed-income products. The addition of municipal products deepens their ties while also offering municipal issuers the chance to market bonds to a wider investment base. "We felt that with the addition of the Incapital relationship, it really rounds out our overall marketing and distribution ability," Scruggs says.
Retail demand for tax-exempt products has been growing, as investors become more concerned with wealth preservation and protecting their portfolios from a potential increase in income tax rates. Federal Reserve data indicates that household holdings of muni debt increased to about 36% of the market in the first quarter of this year from less than 33% in the first quarter of 2008.
During that period, total outstanding muni debt grew 4.6%, to $2.83 trillion, from $2.71 trillion while household holdings surged 8.9% from $937.7 billion, to $1.020 trillion.
Earlier this summer, fixed-income analysts at JPMorgan Chase & Co. called the increase in retail demand a shift in the tectonic plates of the market that hasn't been seen since tax laws were changed in 1986.
The Goldman-Incapital agreement was six months in the making, according to Radtke, who expects it to be fully implemented this month. Incapital will distribute the new-issue bonds initially to a selected group of 175 broker-dealer firms that represent about 85,000 brokers, with assets totaling more than $4 trillion, Radtke says. However, he declined to name which firms were selected.
Incapital, founded in 2001, isn't very well known in muni land. But in the broader fixed-income world it offers underwriting and distribution for corporate debt, U.S. agency bonds, CDs, structured notes and mortgage-backed securities.
"The last item or table-leg was municipals," Radtke says of Incapital's expansion into fixed income. He notes that more than half of its broker-dealer clients are involved with municipal products.
"The muni world might not know Incapital, but munis aren't new to us, based on the personnel we have employed," Radtke says. He adds that the growing trading team alone has more than 50 years of experience.
Incapital hopes the agreement could raise its profile in the muni world, as it may begin looking to make a splash as a co-underwriter at some point in the future, Radtke says. This distribution deal doesn't preclude that, he says.
JPMorgan Chase, another top muni underwriter known for its institutional distribution, also beefed up its retail base recently by tapping into the retail network of Charles Schwab Corp. and extending a 2008 agreement with UBS Wealth Management for an additional two years to 2013. Citigroup accesses retail clients through its own network of nearly 20,000 brokers.
Conversely, the broker-dealer Fidelity Investments benefited from the market dislocation of recent years and ramped up its negotiated underwriting of municipal bonds.
The Goldman-Incapital agreement focuses on traditional tax-exempt products rated investment grade. Build America Bonds, with their long maturities and taxable status, have been more popular among institutional buyers rather than retail buyers. But, if market dynamics shift and individual investors become more interested in BABs, this new venture could "absolutely" be a critical avenue in that space as well, Scruggs notes.
Goldman has led 18 BAB deals this year totaling $7.3 billion, ranking it the third-largest underwriter for the stimulus bonds.
- Where are the indictments?
- Who is paying the press to supress information that is negative.
- Where are the regulators?
- Didn't AMBAC's CEO vouch to congress that their insurances were all in great shape?
- Where are the rating agencies? and why are they downgrading the markets after the bankruptcy and not before?
When AMBAC was busy getting its bankruptcy filing prepared. Wisconsin's Office of the Commissioner of Insurance, or OCI took over AMBAC contracts and obligations without making much more than a peep...in the name of preventing a MUNI bond collapse and frozen issuance market...by doing this it was hoping to help the incompetent by deceiving the market into complacency once again while bringing no new structural stability to the picture in any way. The hope was, lets just get the AMBAC name stabilised or out of the picture and keep the game on the normally scheduled programming. Yes, the charade...was endorsed by the OCI and this is an example of regulated fraud. The fraud is all still there, its still occurring every day and these guys attempted to make sure that this was the outcome. That was their specific goal...let a totally flawed, deceptive, highly inducement oriented product continue to function with NO impediments.
Ironically, we should all already know that by its nature, a market in which someone tries to get your money by locking it up, providing crappy collateral and fuzzy or deceptive documentation, would require them to make some sort of inducements and incentives. "Ok, lets make the gains tax-free in order to find marks to whom to pawn it." Sounds logical to me.
At the very same time as this ponzi scheme is being implemented, the regulator(s) had NO problem with all the major Dealers scaling up their marketing and hype surrounding these products specifically focused on "Mom" and "Pop". Yes, there is no issue there...just lets get this boat back on the water keep it looking like its floating and get people on it...
OCI and the regulators in general did a GREAT job regulating yet another legalized fraud and theft.
Then and now...the not so Federal Reserve was also not so different
Friday, Sept 25, 1931: With the Dow off 191 points from the initial bounce out of the crash, the Fed was up to the same old tricks getting everything wrong and making everything worse...the market would fall well over 50% into 1932 and then reach a sustainable bottom...However, if you review the fed bag of tricks and manipulations in the 20's and 30's they are tame compared to today. The results were horrific. Bernanke, the eloquent amature and deceptive "Me, no I am not printing money. Its coming from reserves." pathologic, will attempt to make Time's man of the year again in 2011 by stealing from all its readers while telling them he is bearing gifts. The antics of the Fed for the day are shown below:
The Fed. Reserve reported gold continued to be "earmarked" for the account of foreign central banks (in effect exporting it from the US); $64M was earmarked up to 3PM on Thursday, bringing the total in the past week to $185M. Foreign and local bill selling reached an "extraordinarily large" total of about $100M on Thursday; bill dealers "advanced their rates sharply in a spell of nervousness;" open market rates rose 1/4% on all maturities but the Fed Reserve maintained its buying rates for bills, and left its rediscount rate at 1 1/2%; this was seen as "a virtual invitation to banks and dealers" to sell bills to it. It's believed the Fed. would welcome a large increase in bill holdings and discounts, in pursuance of its policy of "making money rates extremely easy and increasing the volume of both Fed. Reserve and general bank credit outstanding." - Friday, Sept 25, 1931:
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