Saturday, July 24, 2010

7/23/2010 - The World is 'Asinine'

'Asinine' means 'utterly stupid'. Investing money these days requires a mental reconciliation that the entire world is simply asinine. This past week is a case in point.

A week ago Friday, the Dow sold off some 265 points leaving the index precariously close to 10,000. Investors were worried about economic slowdown, poor earnings, and the upcoming results of the Euro-bank 'stress test'. As we know, the PPT is always present to defend Dow 10,000 and so they did. Monday of this week, the indexes rallied a bit. On Tuesday, they opened way down and the Dow touched 10,007. At that point, it was like air raid sirens went off and the PPT sprang to action as the Dow proceeded to rally 250 points. All the same worries were present. But more importantly, there were several outbursts of heavy volume buying letting in investors know that the PPT was present, accounted for, and hard at work. The rally stayed alive until on Wednesday afternoon, Ben Bernanke testified before Congress that the economy was 'unusually uncertain'. That comment dropped the Dow 150 points in an hour leaving investors feeling a bit queasy. If the man with the golden printing press was 'uncertain', how could any of the rest of us discern reality? Of course, this is the same person who has spent the last 4 years injecting, stimulating, intervening, taking over, manipulating, printing, swapping, repurchasing, bailing out, and generally treating the economy like it was a wad of Play-doh in the hands of a chimp. Gee, how did things get so screwed up that now no one can figure out where we're going?

But, his minions were ready the next morning as the indices shrugged off the asinine thoughts of yesterday and the rally continued. 15% or so of the entire trading volume of Thursday hit the indices in the first 15 minutes of trading on Thursday blasting the Dow upward. It was 200 points higher before the bubblicious CNBC crowd could get their pom-poms in the air. What were we worried about, again? Oh yeah - economic slow down, housing in the gutter, earnings, and that darn European bank stress test. Well, it is asinine to think that the PPT would abandon the indices now! The rally held as Bernanke pledged in his second day of testimony that the Fed would stand ready to stimulate further should the economy falter. After all, their sole function is to drive markets higher so no one notices their real motives of enslaving the world in debt. Did I mention that the world was asinine, anyway?

So Friday, we got the results of the 'stress test'. Only 7 of 91 banks failed the test. Boom! Big rally ensued. What was the worry all about? A few weeks ago, an ECB member said publicly that an EU bank default was "asinine". Since the ECB injected a trillion euros into the EU banking system a month ago, I take the man at his word. What was the purpose of a 'stress test'? What 'stress' could there be to any bank in danger of default? The ECB has a printing press just like us and they are willing to ink it up. There is no stress. There are only bailouts and injections. The whole process was asinine. There won't be any failures. There won't be any defaults. The asinine public simply has no idea that they are slowly being captured by the central banks who seek to dictate every aspect of their lives. The bank's weapon is greed fueled by the ignorance of debt's enslaving powers. Austerity will be imposed on the asinine. But for the banks - there is nothing like free money.

Forget the news. Forget earnings. Forget the economy. All that matters is the central bank and the illusion of the stock casino. And right now, they have set all the slot machines to pay off. Take a look at the chart of the week's DIA action. You'd have to be asinine not to like that chart! This rally might not even have any speed bumps!

DIA - Past 5 days intraday with 10-minute bars
Chart courtesy

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