Friday, June 4, 2010

Stock Market Review - 6/4/2010

Which Comes First - Moral Bankruptcy or Just Bankruptcy?

It is now almost 11:30 AM on Friday morning and the Dow is down over 200 points to 10,040. The culprit of the day's sell-off has been the announced payroll numbers that were 'disappointing' to market players. Our government claimed that the US economy added over 400,000 new jobs but almost all of them were created by the temporary census worker additions. As always, when the number of workers disappoints, the government lowers unemployment to 9.7%. Again, that was mostly due to over 300,000 workers dropping out of the system. Is this really enough to take the Dow below 10,000? Can't the government manufacture some kind of good news to offset the stock market drop? How about throwing the banks another trillion in bailouts? You know it's coming. Come on, Ben - save the bank from their derivative bankruptcy. Do it. Do it now!!! Simulate. Manipulate. Bailout. Lie. Isn't this the mantra of a central bank?

Hold on. It seems that the nation of Hungary is warning now that they are in serious debt trouble. They want a 'clean slate'. Yeah, I bet they do. However, they won't get one because their debt, like Greece's, has banker derivatives tied to their debt. If they get a clean slate, the bankers lose their pretend capital of derivatives. A clean slate will therefore not be granted. Grinding poverty will be imposed by their banker masters and perpetuated by the sheople of Hungary refusing to accept reality. That reality is that the world is both morally bankrupt and fiscally bankrupt. Which comes first?

I believe that moral bankruptcy precedes fiscal bankruptcy. The sheople of a nation have to first turn their trust in God over to a government of some kind. The government has to lure this trust by promising everything that God promised and more. The government has to convince the Sheople that responsibility for everything rests with the government. The Sheople no longer have to worry about being productive or efficient in their economic decision processes nor do they have to worry about their behavior. The government will serve as an 'equalizer' to make sure they 'spread the wealth around a little bit'. The government will supply retirement funds, health care, food vouchers, shelter, and stipends rewarding non-production. They will also provide education with the government's version of the truth. The government will decide what the media conveys to the profoundly ignorant public. The media will engage in a love orgy with the government who now sees them as their best friend. This is the opposite of a trust in God who promises none of the above. This is moral bankruptcy.

When President Jefferson told us that central banks were more of a threat to our liberties than standing armies, boy - feel free to be a genius, Mr. Jefferson. In our lust for the material good life, we have been more than willing to ignore the financial reality of living beyond our means. We have been deceived by inflated asset prices, conned by the media, and led astray by lenders. Rather than dispensing a capitalistic punishment for egregious indebtedness, we have turned to central bankers and allowed them to usurp our morality from our maker to our new enslavers. Humans never learn from past mistakes. They just find new ways to cover them up. Now we are faced with fiscal bankruptcy.

The simple truth is developed nations of the world have developed on a mountain of debt. The mountain is now crumbling as everyone tried to ascend the peak. The Sheople cannot accept reality. The very governments that induce the moral bankruptcy have also served as a conduit to shuttle the enslavement of the Sheople via fiscal bankruptcy. Nothing can save us now. The indomitable will of Andrew Jackson has been diluted by porous borders, a failed education system, and a greedy, glutenous population whose lust for material goods is only exceeded by its ignorance of the price of indebtedness required to purchase all those goods. Is it any wonder that the reflection of economic productivity, the stock market, is now failing in response to moral and fiscal bankruptcy? Where are you, Ben? It is now 12 noon and the Dow is still down over 200 points. Where is our trillion? Uh, I mean, where is the banks' trillion?

At the heart of everything now is the very currency on which all assets are valued. Clearly since the beginning of the great bear market of 2001, the central banks have been intent on inflating their way out of the mess they created. With both an expansion of credit, an expansion of money supply, an expansion of governmental control, and a hellish tool named 'derivatives', the central banks have acquired a power over the world of which it will not relinquish. The one weapon they have is the currency they issue. Our Congress abdicated responsibility entrusted to them by the framers of our Constitution with regards to controlling our currency with the creation of the Federal Reserve Bank in 1913. And now, the central bank controls currency production and credit issuance. With the Fed Funds rate now at zero for eternity, the Fed can produce credit to its shill banks at zero cost and proceed to run the greatest scam in history. Since the cost of money is free, derivatives can be created and used risk free. This is especially so now that we know the true intent of the central bank is to restore any capital lost by the shill banks in the dealing of derivatives. They use derivatives as the lever to hopelessly indebt the nations who are governed by the hopelessly stupid politicians who are elected by the hopelessly ignorant Sheople based on promises of moral bankruptcy. The dealers in derivatives in the US amount to the banks at the top. They are Goldman Sachs, JP Morgan, Citigroup, Morgan Stanley, and Bank of America. They made over $28 billion last year trading derivatives. Are any of us better off?

Okay, it is 12:15 PM and the Dow has just dropped below 10,000. Okay, Santa, I want a new bicycle, a candy bar, a new baseball mit, and maybe a pony. Yeah, that would be great. Oh yeah, if you could jimmy the stock market higher, that would be great too! Yeah, I know you're already on that one so I'll leave you alone. Why do they call you, 'Ben'? Don't forget - milk and cookies will be beside my portfolio on Monday morning! Yes, my friends, our world has now gotten this absurdly ridiculous.

Okay, so now it is 3 PM and the Dow is down 327 points to 9928. Normally, the PPT led by Chairman Bernanke are in a mad dash to get down to the NYSE to save the markets but they haven't been spotted yet. Has anybody seen him? Is he okay? Maybe he got his tie jammed in the printing press and he is stuck right now? Don't worry. He'll be along. I'm sure his phone is ringing off the hook. Could any of the big five banks suffer a day of trading losses? Nah, that can't happen. They make all the rules. But still - where is Bernanke? I'm switching all my screens to an intraday minute-by-minute live update so I can see the exact moment of Santa's arrival.

Well, it's now 3:30 PM and the Dow is still down over 300 points. Didn't Santa get my wish list? Where is he? I'm really getting impatient now. Let's see. A typical PPT rally is about 200 points per hour. We could still cut the loss in half in the last half hour. I know you can do it, Santa!

It's 4:00 PM and the markets are closing. Santa didn't come. The milk is getting warm. The Dow can barely hold onto 9,900. Well, you know what that means? Here comes a trillion! Where will it come from. Maybe it is China's turn to inject a trillion into the banking system. Maybe it is Australia's? Maybe it is Peru's? Come on. In a morally bankrupt world, somebody is going to have to give the banks some more money. We have a stock market to save. After all, the market is falling because even the Sheople are starting to realize that we can't fend of the impending fiscal bankruptcy.

Let me leave you with this. Since we are dealing with moral bankruptcy, does it strike anyone else, besides me, as odd that the Japanese PM resigned after he agreed to keep the US marines on the island of Okinawa? He came to office pledging the opposite. But suddenly, a supposed North Korean sub sank a South Korean sub heightening tensions enough to force Japanese capitulation. Maybe the North Koreans really didn't fire the torpedo in question. 50,000 marines can't leave Okinawa. Where would they go? Back home? By the time they get here, the census will be over and we won't need them. Unless of course, you believe the fantasy of economic recovery.

Below is the Dow. How about that? The 'fat finger mistake' decline of May 6 really wasn't a 'mistake' after all. Beware, though. We all know that Santa does not allow for the Dow to rest below 10,000. Put the milk and cookies back out on Sunday night. Moral bankruptcy isn't cured over night!

1-month Dow
Chart courtesy

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