Want to make a lot of money...

Apparently, a lot of people want to make a lot of money without asking "what it is?" or "why?" or "what for?". They just have to have it, have to get it and regardless of any understanding of their process. This type of identification with "money", is a slow motion panic. It is a symptom of credit cheapening the value of money and thereby hastening the urgency to get it so one can get something with it before it becomes worthless. The proverbial mouse on the wheel. Central bankers really know how to play their victims and practice psychological warfare at an extemely high level.

"If we take man as he is...we make him worse. But if we take him as he should be, we make him capable of becoming what he can be" - Goethe

Below is a video of a lecture by Viktor Frankl on the "Search for Meaning..."

Nigel Farage - we need more people who have courage like his

Manifestations of social phenomona derived from the values espoused via our system of credit are not limited to Wall Street

As if the abuses within the credit and banking system are not enough...those attitudes, distortions and unproductive motivations are also evident in the fabric of society as a whole...for massive crimes like the finance debacles to occur, society in general has to be complicit - so, government, judicial and regulatory complicity are required and end up compromising our liberties and freedom...

This is a great piece that illustrates some of the issues of a very similar incarnation in another forum...the legal system.

Market Update - perfect retest

Covered some of the index, forex and commodity shorts but left a core positions remaining.

Market Update

I am now reshort the EURO and all the major indexes.

Market Stuff

Weekly systems have reentered shorts in the 1195 area for ES and 720 for TF based on reticulation re-entries. Market looks rather frail...and they tried as hard as possible to get GM to stay above the initial offering price on the first day of trading. Given how fickle our fearless leaders are, I would not be surprised with an exit stage left scenario.

SP500 Update

Ultimate targets for the SP500 are still between 1120 and 1150ish but there is a support level here for an intermediate bounce. Again I think most of the elliotwavers are intellectializing the markets and will miss the trade looking for waves that are not there...as happend with this current move down. The 5th wave never happend on the intraday charts and it is quite likely that the there will be another theoretical missed wave on the EW dailies. Bounce at trendline will likely produce a lower high and then proceed to emmulate the 10 year Treasury Bond indicated on this chart with the blue line. We have diverged significantly for the last 6 months. The equity market should start to look like that chart.

Janet Tavakoli...fraudclosure, Rubin, Munger, Buffett etc

Janet Tavakoli on Bank Foreclosure Fraud from David Fry on Vimeo.

Bubblicious "Bernanke Span Krudman" Baby...

Well here we go again, QE is announced and the yields that Ben and Paul say will go down go up...yet they will apparently swear under oath that rates actually are going down, have gone down, will go down and will stay down. Ben is living in a fantasy world. The results of the vote of no confidence in the QE ploy are readily available in the Junk, Muni, Corporate and Treasury markets. Interest rates will go up since credit risk is also increasing.

As I indicated in my post regarding the ending well line...Bernanke was willing to risk all and try to trigger a technical breakout that would create a sustained rally. What he forgot is that he needs shorts for that...there are precious few shorts left to be squeezed. Additionally, when you make it apparent to all corporations that you are going to increase their costs while lowering the demand from their customers due their customers increased costs and jobs attrition that are the result of said increases in corporate costs and cost cutting...most CEO's will stand back from taking risks and feed the beast by cutting more and spending less...In an environment where there are less jobs and fewer consumers, credit risk increases with the commensurate need for better compensation for bondholders brave enough or willing to take the risk. These are ultimately the dynamics that will prevail regardless of our blind, deaf and dumb leadership. But take heart - for atleast a few days to a few months, insolvent bank balance sheets like JPM's, BAC's, GS's etc will look better...and that is sure to create a gargantuan increase in confidence which will surely fix everything.

So there we have it. Default risk has doubled for Muni bonds, increased dramatically for Junk and corporates and will likely increase dramatically in the future.

Additionally, Mr. Bernanke has triggered a fearless rush into commodities regardless of fundamentals. We have parabola everywhere. Silver, Sugar, Wheat, Corn, Uranium...these patterns are very unhealthy and will require new cyclical lows to flush out the excesses in these markets. This type of activity is also not good for a stable market place or economic environment. What is interesting is that these activites fall so nicely into the "stable prices" mandate for the Fed. Bernanke must have left his reading glasses at home when reading that part - as he clearly has misinterpreted it.

The MUNI bond market pumped by Goldman Tax's new division as ultra safe investments are now on their way to the same insurance scam, financial fraud triggered default territory that nearly blew them up in 2008. This will not be pretty. All these markets have gained significant fuel due to Bernanke's bubble blowing and have additionally added the public to the bus. The public will now be raped because they will get the bill for the Fed's abusive manipulations and they will lose after having bought into the parabola psycheout.

All the Elliotwaver's are busy looking for a new high towards the end of the year...to which I say they will probably get another missed trade - just like they got on this one. What happened to that missing 5th wave anyway? Where did it go? I got the shorts via my weekly and daily systems...but the current patterns do not look like we will be getting another high into the end of the year...though I do think we will get some sort of a bounce off my "ending well" line on the weekly SP500. In case you are wondering, we needed to avoid the breakout over that trendline, for the best possible outcome IMO...Benanke killed that and now we are going to have to watch the worst case scenario play out over the next few years. Below are some of the reasons that this will take years to unwind...and the world will likely look quite different when that is completed.

The Nasdaq has confrimed its overthrow sell signal and targets much lower levels. This is a dangerous pattern. 1,840 to 1,860 are possible if the pattern proves accurate.

The PIMCO Muni Fund 2 was stable for many years then broke out of its range and has now setup a bear flag which it has broken out of to the downside - perfectly timed with Mr. Bernanke's announcement that rates would be going lower. Apparently not!

Below is the PIMCO Califorania Municiple Bond Fund...clearly this is much weaker of a bounce and a much more bearish chart overall.

Picture perfect parabola...Silver is shown below. Popular wisdom apparently has it that Silver will go to new highs because there is a shortage, there is currency risk and there is a squeeze on the large commercial banks attempting to manipulate the Silver market...people tend to forget those were the reasons that the rally started...and will not likely be the reasons for its continuation.
 

The sugar parabola has started to break down. A true blow off top will require an appropriate bottom...lets start preparing to say hello to sugar below 10 bucks. 

A parabola before and after. This is what it looks like, except this was just one was relegated to just a relatively small group of energy markets. The recent parabola that hasve just happened have been much more pronounced and damaging. We are still recovering from the earthquake of the Energy complex parabola and Bernanke just had to make new ones for us...wonderful...we appreciate it Mr Bernanke.

The Schwab High Yield Bond fund was marketed as "...as safe as money markets and Treasuries" just like the primary dealers would like you to believe the Muni's and other paper are supposed to be now. We are now 2 years later and there is yet to be a meaningful bounce in this particular hyper safe, ultra conservative investment marketed by Schwab (among many others)...including the Auction Rate Securities that turned out to be a total fraud. The problem with MUNI's is that they are likley to reach a point where there simply is no bid. Selling in that enviorment could collapse the entire market so there will be intervention into our socialized markets.  There will likely be all sorts new limitations, rules and fake marking. Ultimately, I think it will be difficult to get money out of these securities at some point in the future.

Quantitative Easing...defined

I saw this one and thought it was great...co-opted it on my blog...this is a must watch.

SP500 Weekly Update

Nasdaq100 Confirmation and Dollar Update

Dollar Index break out over resistance cycle - tren move likely initated to the upside

Nasdaq 100 Confirming Ominous pattern?

While all the elliot wave counters are looking for the ellusive missing wave up...the NASDAQ provides a powerful confirmation...this market needs to get back over that channel barrier pronto for it to maintain some upward momentum.

The biggest load of BS I have read in a long time...

Mr Bernanke has presided over a wild west style price stability effort. Prices are anything but stable and they are more unstable BECAUSE of this idiot who has the nerve to write an op-ed attempting to manipulate the truth and his reputation - yet again...

The guy in this video was reappointed...I fail to understand how that is possible, supported and reconciled. He's out of touch to put it on the best case. How can an out of tough academic get the most powerful job in the country?


What the Fed did and why: supporting the recovery and sustaining price stability

By: Ben Bernanke
Two years have passed since the worst financial crisis since the 1930s dealt a body blow to the world economy. Working with policymakers at home and abroad, the Federal Reserve responded with strong and creative measures to help stabilize the financial system and the economy. Among the Fed's responses was a dramatic easing of monetary policy - reducing short-term interest rates nearly to zero. The Fed also purchased more than a trillion dollars' worth of Treasury securities and U.S.-backed mortgage-related securities, which helped reduce longer-term interest rates, such as those for mortgages and corporate bonds. These steps helped end the economic free fall and set the stage for a resumption of economic growth in mid-2009.

Notwithstanding the progress that has been made, when the Fed's monetary policymaking committee - the Federal Open Market Committee (FOMC) - met this week to review the economic situation, we could hardly be satisfied. The Federal Reserve's objectives - its dual mandate, set by Congress - are to promote a high level of employment and low, stable inflation. Unfortunately, the job market remains quite weak; the national unemployment rate is nearly 10 percent, a large number of people can find only part-time work, and a substantial fraction of the unemployed have been out of work six months or longer. The heavy costs of unemployment include intense strains on family finances, more foreclosures and the loss of job skills.

Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run. Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling. In the most extreme case, very low inflation can morph into deflation (falling prices and wages), which can contribute to long periods of economic stagnation.

Even absent such risks, low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating. The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to buy an additional $600 billion of longer-term Treasury securities by mid-2011 and will continue to reinvest repayments of principal on its holdings of securities, as it has been doing since August.

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

While they have been used successfully in the United States and elsewhere, purchases of longer-term securities are a less familiar monetary policy tool than cutting short-term interest rates. That is one reason the FOMC has been cautious, balancing the costs and benefits before acting. We will review the purchase program regularly to ensure it is working as intended and to assess whether adjustments are needed as economic conditions change.

Although asset purchases are relatively unfamiliar as a tool of monetary policy, some concerns about this approach are overstated. Critics have, for example, worried that it will lead to excessive increases in the money supply and ultimately to significant increases in inflation.

Our earlier use of this policy approach had little effect on the amount of currency in circulation or on other broad measures of the money supply, such as bank deposits. Nor did it result in higher inflation. We have made all necessary preparations, and we are confident that we have the tools to unwind these policies at the appropriate time. The Fed is committed to both parts of its dual mandate and will take all measures necessary to keep inflation low and stable.

The Federal Reserve cannot solve all the economy's problems on its own. That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators and the private sector. But the Federal Reserve has a particular obligation to help promote increased employment and sustain price stability. Steps taken this week should help us fulfill that obligation.

The writer is chairman of the Federal Reserve Board of Governors.

Jim Rogers hosted at Von Mises Institute