Wednesday, August 10, 2011

Dylan Ratigan - Loses his temper…why has America not lost theirs

The problem is credit money…it is the root of all the corruption and extends to all of the conflicts that we are so desperately in need of addressing…it begins with our education system and moves to the defense and banking system. These groups focus on integrating people into meaningless and bureaucratic positions rather than incentivizing them to do something valuable…just look at the tenured Mr. Paul Krugman for an example of arrogance and nincompoopsiness at its finest. What does he know other than how attempt to look smart while spinning ridiculous and dysfunctional fairy tales. The subject of money: what it is, how it works and who it serves is deliberately evaded and rewarded in our society, banking system and educational system.

Meanwhile in a land that needs no new bureaucrats, the highest subscribed educational programs are for finance and law…both specialities that generally provide negative contribution to our society as a whole, while allowing its membership to leverage loopholes and our cronyist infrastructure to reap rewards - all while not getting their hands dirty, mind you, by actually doing some valuable work. The reality is our education system is a HUGE part of our cronyist based credit money goverment system. The indoctrination of youth starts with their introduction to these fields via and acceptance of the credit money system via huge debts incurred to pay for said “education” and additionally the force feeding of other credit vehicles before they even have jobs. There is no better motivator for a young person to undermine their beliefs than to get them into a compromised position where they are in debt up to their eyeballs before they even have a career. This system then lures a large percentage of these newly minted accountants, economists and MBA’s, most of whom have no understanding of what money actually is, how it work and who it serves, into the corpoate and financial system to operate at large institutions and assigns them the task of designing and executing what amounts to be a fraudulent conveyance scheme. We train them to indirectly and directly payoff anyone who gets in the way and reward anyone who would help their scheme…and finally we reward them with lavish bonuses when they do this task well. This reinforces the social expectation that Accountants, Lawyers and Bankers are actually useful professions while dissuading people fromspending their efforts on objective that are of constructive social value. Then we ensure that these professions have copious amount of opportunity by building a tax and legal system so mired in confusion that these newly minted candidates can spend their full effort figuring out how to benefit at someone else's expense while transferring the wealth and resources back into the creation and issuance of new credit which supposedly represents real money…The results of that credit schema go to line the pockets of the most senior nincompoops and supports the political elites and cronyist bureaucrats.

The world would be a much better place if the most sought after majors were music, philosophy, agriculture, science, dentistry and carpentry…even ditch digging...pursuits that actually produces something of use…playing with numbers for economic, accounting and financial pursuits create no tangible output. What they do a very good job creating are intangible results which generally add complexity, inconvenience and outright theft to society’s every day functioning. We need to get back to basics. Out current situation is no exception, the crisis that our highly trained…I mean educated bureaucrats, lawyers, accountants, economists and MBAs have now built for us out of out 2007 debacle, is now much bigger and much more dangerous than its predecessor. Nice going Mr. BURNanke (chief accountant, economist, MBA), gHEiSTner and Obama - I hope that you are proud of your ability to do not a single thing that reduced the scale of the upcoming crisis but rather have chased to deliberately use your efforts only to further the agenda of credit money and the bureaucracy that embodies it.

Until this cycle of fake money is ended…we will continue to get just the results we should expect…fake ones. The mirror, mirror is on our wall...

Margin requirements lowered last month - more than DOUBLED today about that, margin requirements for futures are effectively doubled for the TF Russell 2000 futures $8,250 from $4,300. Maintenance margin is now $8,250 from $3,250. If you are in a long trade and down...the last thing you need is this margin requirement increase. In all of my systems, I plan on everything that can go wrong will...especially this kind of stuff.

On monday, there were a lot of accounts that were blown out in debt condition. That means that accounts that started the day with a positive balance actually closed the day with a negative balance. When ever FCM's get into debt account situations, as they did recently with Silver, the exchanges dramatically attempt to reduce FCM risk by raising margin requirements dramatically.

S&P 500, Nasdaq and Dow futures are next...look out...there is a lot more downside coming.

This market is not for trade margins are not available at Interactive Brokers...soon there will be no day trade margin at all on any of these markets.

Tuesday, August 9, 2011

Markets, People and the Fed

Well, that was interesting. The markets are off the lows by quite a lot of handles as intervention makes its rounds and means attempt to revert. However, we have a problem. By the close yesterday, as people were getting liquidated, many others were hanging on by a thread. Many managers careers depend on a bounce here of some proportions and many systematic trading algorithms that attempted to play this long need a rally well into the 1200's to show a remotely credible performance and avert the potential for disaster.

The market is fickle, especially one based on using credit for investing as its foundation. It is so amazing to me that BURNanke and his band of merry credit pushers continue to attempt this exact thing over and over again despite its nearly 100% failure rate. Today, short covering in front of the Fed is making it look like the inevitable bounce can happen and save the credit junkies, over committed investors and the asundry algo systems out there that use trade exceptions and generalized buy the dip concepts to build idealized historical equity curves. The managers who based their assumptions on a credit levitated market and the "buy the dipper" traders and systems that believe "you close your eyes and just BTFD"...are about to be tested...over the next day or two.

There are just too many of market participant that need to sell. If the market ends up taking its leg down to the 1020's it will wash out all that remaining credit in the system that sits in these weak hands. In my opinion this is a high likelihood regardless of the Fed possibly announcing another buying binge. That Fed announcement may well happen, but as we see the buying binge has extremely negative side effects - it has destroyed way more capital than it has created. I am more likely to believe that such an announcement or even hint of it, will likely ultimately endup both tanking the markets and the dollar - reinforcing the recent positive correlation of the classes. In any case, we will see. It has been time to take some profits this morning in Silver and Oil shorts and wait for the high probability trades to come out of the great deleveraging continues.

The many victims of the leveraged credit money system are appearing everywhere - in the markets of course and in Syria, Libya, London, Iraq, Greece, Italy, Ireland and Portugal aswell...though we have China and South America waiting in the wings...not to mention a highly leveraged England, France and Germany to contend with. The latter have based their expectations and capital investments on ultra rosy projections of future potential, that like all exponential curves and projections, tend to turnout vastly differently than expected...except by a few, I guess. Merkel, Sarkosy and Cameron are all dazed and confused and they are likely to get tossed out of the ring. America is on a campaign to become a private bank like Pictet and will stop at nothing to further its planned agenda to charge for deposits made to it and custodied by it. How ironic that the plan that the campaign most likely included a debt downgrade as a part of the masquerade.

The Fed is not the answer, the Fed is the problem.

Monday, August 8, 2011

An example of the ineptitude of the media...

Apparently, Mark DeCampbre went to school with Bernanke, Geithner and Obama...all of whom seem to be highly misinformed (to be optimistic) as to how the financial system operates.

As I indicated in prior posts, the short in energy is a big one and has not disappointed thus far...we may get a small technical bounce sometime soon, but there is MUCH lower to go here. So far, the Oil contract has been performing well - if you are short. Silver and Gold will have their commensurate collapses too rather more quickly than the guys at ZeroHedge seem to think. I am not short gold (though it is increasingly becoming a risk reward trade my systems are attracted to) - I am focusing on Silver and Energy...and the trades in the currencies which are still setting up.

As I indicated the S&P Downgrade was meaningless for the US. In fact, the downgrade works for the US in that everything else that is a higher risk than Treasuries becomes and even higher risk than it previously was - which will be a persistent driver of negative yield and performance of Treasuries as a whole. As I write this, the 30 Treasury sits at its all time highs...coincidence? No...its the way the credit money system works.

This guy Mark DeCampbre pontificates about all sorts of stuff that he has nothing but anecdotal evidence for and gets it all wrong...I think this is similar to the concept that the S&P actually downgraded the US without tacit involvement of the highest levels of our government. If you recall the recent negotiations between the large rating agencies and the ECB regarding the defaults in Europe, you will notice the the ratings agencies worked very closely in all day meetings to redefine their models and adjust the structures and capital reserve accounting for ECB bailout initiatives so that they would not trigger a default. The reality, is that the agencies do not want to lose their biggest clients - so they do what those clients want. S&P is not all of the sudden an altruist that has the sudden urge to be honest. This downgrade is part of an agenda to produce negative yield characteristics for US Treasuries and in my opinion was highly coordinated not to mention cronyist.

In any case, I saw another article by another overly educated nincompoop if you enjoy reading such things. I don't by the way, however, while on the plane and in transit in airports for 20 hours...I found myself paying attention in a sort of stunned silence. This professor has NO IDEA what he is talking about. I do believe that "panic", in this case, is a better course of action than complacency or extrapolating meaningless data forward...there is signficant potential for a quick collapse in the S&P to 1120ish and 1040 or so (especially if 1,120 does not hold. If Russell 2000 does not hold 635...then we have likely 50 more points lower to go) before a bounce and all hell breaking loose.

Here is the link to that rediculous article:

Mr. Malkiel, professor emeritus of economics at Princeton University, is the author of "A Random Walk Down Wall Street" (10th edition, W.W. Norton, 2011).

If ever there is a complete chalatan this guy is is clear and it is obvious that Random Walk theory has no place in investing. Markets are anything but fact they are highly predicable and cyclical and base little of their behavior on fundemantals or ramdomness.
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