Treasuries conflict with equities...

Currently Treasuries are showing rather bullish patterns that contradict the asundry bullish observations out there…If the market wants to gain steam via intervention, its seems that that could be a long and torturous path…going potentially into the 1449 area on the S&P500, moreover, EVERYONE is watching the inverse head and shoulders pattern going on at these levels…however, as with everything with this tortured and totally corrupted market…things are never very rational…I will post a few charts today as it looks like things are getting interesting again…

I apologize for my absence in posting. I have not intended to quit blogging and thank you all for the feedback over the last weeks. I have been otherwise attended and very completely occupied. Additionally, I have found little reason to comment on the markets since last time since nothing has really changed…equities are still chopping around the same areas and the market is very dangerous indeed and getting more so every day.

Ben BURNanke’s bus has now disintegrated…time to cover some.

As the wall and bus collided at full speed, the plan for the wall to disintegrate while the bus, minus wheels and now masquerading as a missile, blasted through it without barely a scratch falls apart…the market has collapsed and damage has happened faster than most anyone would have expected. We reduced longer term shorts and dollar positions yesterday and today…waiting for an opportune reload, which will be beckoning soon for certain, as one Mr. Ben BURNBus-anke and the driver looks for a new vehicle to try the drive full speed into a wall again…What a crazy world…For me the anti-Fed intraday and reticulation 5 systems I recently released are trading and quite frankly do not care what type of vehicle or approach that Ben uses to implement his destrcutive panacea. The markets may very well trend down hard (and no matter what happens near-term they are destined for HARD DOWN sooner rather than later) from here still and I will be trading to reflect that, however, given the desperate need for the markets and central planners to come up with some good news…I would certainly not be surprised with a short period of retracement from near these levels.

The “Ineptocracy” is running the show…alive and well

As JPM’s massive money amplification schemes unwind and reveal its absolute insolvency…I am reminded that we operate in an “Ineptocracy.” A system where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

An 80 Trillion Dollar Perfect Lie at the biggest bucket shop in the world...

JP Morgan would like you to believe that their trading losses are 2 billion and could increase by another billion. I believe the losses will be 100% to 200% more than that by the time this is said and done. They would also like you to believe that releasing loan loss reserves via accounting maneuvers is equal to earnings. Not to mention that having the audacity to reduce loan loss reserves while credit quality is contracting and risk is increasing - its just simply ridiculous. The reality is that the quality of the whole financial sector’s earnings (not to mention most S&P500 companies) has declined appreciably over the last 10 years and precipitously at the TBTF institutions.

On these pages you have heard many times before that JPM (or any other large entity or market participant) can not manage or hedge its derivatives risk sustainably and effectively without mismarking and accounting shenanigans. Perfect hedges simply just don't exist and certainly if a perceived perfect hedge is found it s not without introducing other new and unforeseen risk and consequences. Hedges, however, are the excuse for increased leverage. To look at JPM’s Bruno Iksil CIO portfolio is particularly disturbing in that the capabilities and resources brought to bear there are representative of the capability of the entire bank's derivatives methodology. However, JPM and Jamie Dimon want us to believe that the decisions and risk management of positions were “egregious" and that there were “...many errors, sloppiness and bad judgment” involved. They really want the public to believe that somehow they have an isolated pocket of ineptitude and risk takers who are the only ones related to the issue. Jamie of course takes responsibility because they work for him…but he definitely does not want anyone to believe that JPM put their crack derivatives resources on this and still blew up. The only problem is that when you build a trillion dollar notional exposure there are no accidents. There is no isolation. There is no sloppiness and egregious counts towards the the chutzpah of the bank to try to make us believe their case. These types of positions require persistent and deliberate action usually over an extended period of time.

In the case of JPM, the reality is the JPM is a bucket shop that makes profits via accounting maneuvers, backroom deals and outright malfeasance and conflict of interest relating to client assets. Moreover, the institution is totally insolvent - as I have indicated many times before…the pursuit money amplification for profit generation and as the illusory element to shore up hopelessly unshored balance sheets has been chief on large banking cartel members like JPM and also the Fed’s agenda.

I used to work at JPM and I can tell you from my view their capability with regard to managing their nearly 80 trillion derivative book is no better run than this disaster. This is why it was and is of utmost importance that the Jamie and Ben show misdirect so that no one could confuse this isolated incident with a larger pattern of risk and flawed and hollow methodology employed in their whole derivatives book to further balance sheet fraud rampant in the whole financial system,  executive compensation reward and ultimately to mask chronic insolvency.

If it were possible to move the marks to hide this particular blowup they would have done so. However, the outing of Bruno also made these trades and prices impossible to hide or cover up as they became the target of much smarter organizations than JPM. The really amazing thing is that this is just the tip of the iceberg with institutions levered 400 to 1 (Goldman Tax) and 80 trillion dollar derivatives books that are purported to be perfectly hedged (an impossible and implausible reality) we should be prepared that JPM’s problems will be growing dramatically as these perfect hedges are found not to be so perfect. Mind you, we don’t have to worry about the brilliant executives who built these positions they have all been paid and by the time the 80x losses from this debacle are being paid for by the bailout team at the fed and treasury these guys will be on their boat in the islands sipping pina colada’s.

As these huge money amplification schemes become unwound and are socialized all over the globe one can expect a very unfavorable outcome: persistent asset sales, further credit contraction and a gargantuan dollar shortage. So, don’t be surprised to see that the best trade of our era is long dollar and also don't be surprised by the social upheaval that comes along with this process. All these idiotic banks are short dollar via their massive and corrupt money amplification schemes.

Ben BURNanke defers to Jamie Dimon because he works for him and a few other cronyist interested parties. He will do so again and nothing substantial will come of his regulatory examination. In fact, men like Jamie Dimon, Lloyd Blankfein and Ben BURNanke should be criminally investigated for their, misrepresentations, theft and manipulation of US constituent’s assets.

For now, Ben BURNanke now has to go from worrying about stock prices to figuring out how to get "control-P" rerouted to the main branch of the Fed: JPM...

Ben and Mario and Brothers drive the BUS full speed into the wall...

Not such a pretty picture...

Patterns coming together...

Fireworks coming next week...

“Free" markets on drugs AGAIN...

Into the close…the DXY Dollar Index broke out of its falling wedge…which calls is in contrast to dubious wedges for inverse securities like Aussie dollar.

Tahir Square is back…this is what happens when you lie to the people

Just like the manipulations, systemic risks and agendas that planners have attempted to coverup - the reality is that things have not improved, in fact, the risks and negatives have gotten significantly bigger and much much worse. When people try to take advantage of an easy way out especially to the benefit of their cronies…things may get better for them and their friends but the get worse for everyone else and the problems get bigger. Our central planner have lied and the people will find out. Financial Crisis 3.0 here we come…perfectly timeed with Egypt 3.0 too. Ironically, the entire Arab spring is not a spring at all and, ironically, it is intimately tied to a very unhealthy global financial system.

Lunacy continues as patterns continue their progress...

As systemic risk lies underneath the surface everywhere only covered up by the lunacy and idiocy spreading out of credit pushers and price fixing central bankers…these distortions are exemplified in the absolute absurd reporting and earnings of the too big to fail banks…

The earnings are not making the markets happy and europe is a lurking disaster that has only been made worse by the complacency and policies of the ECB and the central banking cartel.

Lunacy and Idiocy combined with credit creates pure destruction...

Lunacy and idiocy from bankers, especially Central Bankers like Ben BURNanke and his buddies, have driven exceptional amounts of speculation and via credit instruments and leverage throughout the world. It was just last summer that insolvent banks who could not get a loan from a car salesman were writing as many derivative contracts as they could possibly write. This of course, left them short. Short the premium and short assets. The reality is that, however, for the immediate term last year these idiots showed cash generated as a result of these transaction as cash on their books without regard for the obligations they had taken on. Funnily enough, when this was combined with “The Ben and Mario” shell game the world was convinced that there was a new bull market. In fact, many smart and reasonable people now have entirely disregarded logic and turned hopelessly bullish. All that’s left for a massive rush to buy call options in Apple Computer. After given rumor and innuendos, it appears that that has already happened. However, to summarize, I have NEVER seen market activity as deformed and unhealthy as this years. That is saying a lot since the last years have been anything but healthy - going from one crash to another with intervening headless rallies…not to mention the consistently collapsing real estate markets.

So, where are we now? Well, at the precipice of a MAJOR breakout in the dollar index, collapse in Europe and an impending unwind of the AAPL juggernaut among many other iBuubles and much to the dismay of Byrini and the many imaginative bulls who are looking of any rational to hold till $1,000. The reality is VERY different…AAPL is only a symbol of the excess in this market and it will break. The Dollar, the EURO and various over inflated risk assets are all at very important points…if, as I expect, the dollar breaks out, the market still needs to catch up with the EURO decline…and that places the S&P500 index in a position of needing to drop to well below 1,000 if it happens…

The irony is that we have a bipolar market, driven by credit instrument excess, that can either only go up and then just the same can only go down. Brutal as it will likely be, I think we will not be seeing very nice looking bounces here and that the huge megaphone pattern on the Dow and S&P 500 over the last ten years will not take wave E to a new high the pattern implies. Even if that were to ultimately occur…the reality is that NOW this market is in for a nasty unwind of the credit distortions that have occurred over the last years. In my impression, Ben BURNanke should be prosecuted for his inept and disastrous manipulations…that aided and abetted this evolution if not were the main reason for their occurrence…

To put it succinctly, this market is entirely broken…and its going to get much more broken. I have taken it upon my self to release systems at this point which no longer rely on any sort of normal market dynamics and are engineered to target the Central Bank driven HFT programs and the credit distortions that have eliminated nearly any renaming semblance of “free” to the supposedly free markets. These systems are indeed Fed killers - taking advantage of all available volatility and eliminating slippage entirely -  I will discuss them in more depth in some future posts. In any case, these are VERY unusual times and I encourage everyone to be very aware just how unusual and take steps to prepare. I have gone to great length over the last months because I only see things getting more unhealthy and broken with the markets…It will certainly not be funny to see us go from a reverse crash and total euphoria directly into a persistent and powerful decline….but for this beast it is poetic and ironically highly likely.

Ready to run...

Breaking, Broken and BURNed…

Epic Delusion and Social Hysteria…everyone looking up…is this time really different?

Everyone has switched sides. Old bears and now looking for breakouts to the upside in securities they would never have dreamed of touching just a few months ago and bulls are new money or completely complacent. One place to watch is the currencies…

Dollar Update

Some Charts

Non-professionals buy as Institutions sell highs...

Yesterday - yet another - ramp was sold by professional participants and bought by amateurs. This is classic behavior and combined with overthrows (including on the dollar)…Additionally, the EURO hit major weekly resistance. I will update shortly with some charts - I have been rolling out new systems and do not have time to post more right now.

Hugh Hendry Hits...

Topping patterns all around us...

As Gold is debased and commodities founder in general…where is stability going to be found? US Treasuries and Cash - that’s where. This market is a pure disaster having driven the bus into the wall and now proceeding through the slow motion effects of a Hollywood dramatization as the Bus and Wall crumble…the old bus was never intended to drive at 100mph because we know the wheels come off at 55 - but the Ben and Mario brother’s theory is that is you drive the bus fast enough people won’t notice the missing wheels and momentum has a chance of holding the bus in tact in its confrontation with the wall…

Canada and many European charts are showing dramatic weakness. In fact, quite a lot of european indexes have already broken their rising wedges to the downside. I still am amazed that deleveraging of the most insolvent institutions in financial system in Europe and the Ben and Mario brothers were able to push the markets to heights which will only exacerbate the disaster that is coming. 

Markets significant at risk...