Saturday, June 30, 2012

From, the word ‘no’ means ‘a negative used to express dissent, denial, or refusal, as in response to a question’. It seems to be such a simple word. But, the power of ‘no’ is lost on modern society. The ability to exercise the word ‘no’ is a profound exercise of freedom. If we can’t say ‘no’, then we have no freedom. Slaves cannot exercise the word ‘no’.
The month of June has ended and with it, a little more freedom has been conceded. We should all be ashamed because future generations will look back at ours as one of cowardice. We surrendered when we should have stood strong. We buckled when we should have bucked. We conceded when we should have been courageous. Let history record the truth.
The freedom to say ‘no’ is what gives balance to economies and free people alike. It is fairness and truth. When prices for a good or service rise to a point where that good or service is no longer affordable, consumers say ‘no’ to the higher prices by closing their wallets. They stop buying that product. The makers of the product then have to find a way to lower the price or go out of business. They must become more efficient. If they lower the prices and demand is still solid, eventually the lower prices make the product once again affordable. This is the way a free market works. This is capitalism. The scales of freedom are calibrated to the effective degree of expression of the word ‘no’.
In June, 2012, the US Supreme Court validated the supposed constitutionality of a government regime’s ability to require its subjects to buy health care insurance coverage. ‘No’ is no longer an acceptable response. In reality, the US will now institute a nationalized health care system that will be funded with a new tax that working subjects will pay. They cannot say ‘no’ regardless of price. Proponents of the idea insist that somehow someway this new health tax will lower costs of medical care and premiums for everyone will decline. I don’t know what these people are smoking but I would like to get some of it, you know, on a prescription basis, and let the rest of you pay for it. As many people back in the ’70’s used to say, ‘That must be some good s#%&’!
Beyond the argument over medical care, we should all be concerned with freedom. As I wrote when the so-called ‘Obama-care’ universal health care legislation was proposed, let’s be honest and call this a ‘tax’. A service will be provided, it will be administered by the government, and it will be regulated by the IRS. This is a tax. Period. And yes, the Supreme Court ruled it to be a tax as well. One would have to be a stupid cousin of Pelosi to even confuse this issue with real health care. T-A-X. It is a TAX!! And, we all know that when the government institutes a new tax, that tax rate only goes up. It never goes down. 
It seems to me that as we move into the month of July, we should reflect upon Independence Day very solemnly. Our founding fathers gave birth to our country in large part because they wanted to exercise the freedom to say ‘no’ to taxes extracted by the British government from the new colonies. It didn’t seem fair to our forefathers that the sweat and toll of those who produced something in this new part of the world should be forced to give up part of their earnings to a government that no longer offered any representation. And now we turn our backs on our forefathers as we roll back the hands of time. We are surrendering freedom to a government that grows more powerful and more intrusive by the day. This Independence Day should be a day of shame as we again, refuse to exercise the freedom of the word ‘no’.
When we lose the power of the word ‘no’, we lose the ability to control prices. Health care costs have been rising at a rate much higher than the gooberment’s concocted inflation numbers and will likely continue their rise. Why? Because the root of inflation is the same root that poisons freedom. The central bank has always been a destructive force on the value of a nation’s currency. The central bank gains power by taking ours. The central bank gains assets by taking ours. Andrew Jackson knew this and he told us so. He protected his, and future generations, in one of the greatest acts of patriotism ever witnessed by annulling the central bank’s charter in 1832. But we are weak and growing stupider by the generation.
As the central bankers have pilfered the treasures of a nation, they have learned a few tricks over the years. In present day, as long as the Dow Jones Industrial Average rises, the subjects of the regime will not protest a bridle in their mouth nor a yoke around their neck nor a whip across their back. The Federal Reserve’s PPT virtually insures that any slip in the Dow will be met with a furious rally. And so it was on Thursday, June 28, 2012. Europe was desperately trying to avoid the inevitable bankruptcy of her sovereigns, JP Morgan admitted that the $2 billion in losses announced last month were really more like $9 billion and counting, Barclay’s was just fined $454 billion for LIBOR rigging, Q1 economic growth was not a strong as originally lied about, consumer spending was slowing, the Supreme Court had just given the US regime the okay to implement a massive new health care tax, and understandably, the Dow was down 170 points by 2:30 PM. No matter. A rally burst forth in the final 90-minutes of the day to leave the Dow down only 30 points. 
If we really want to live freely, we should be allowed to set prices for everything including stocks. When we all felt prices were too high, we should be able to exercise the power of ‘no’ by selling stocks. But we aren’t allowed to do that and prices are never allowed to be fairly adjusted. The central bank always stands ready to launch a rally. After all, they don’t have to use their own money. Certainly part of this rally was based on the news out of Europe that the European Union had solved all of their member debt problems with the waving of the central bank magic wand. They announced that all the banks that lost all of their money trading derivatives would now be recapitalized. The EU announced an ESF or an ESN or CON or a RUSE or an ESPN or something with an ‘E’ in it to produce trillions of euros for cash starved banks. Did it bother anyone that Europe has been grappling with debt problems for several years and has yet to do anything meaningfully helpful? Yet now, coincidentally as second quarter was ending and the Dow was fading, they put forth a magic solution of sorts. Just in time to save the euro, the EU, and the Dow! Well, in truth they only acted to save the big banks in Europe and also to spur on a rally in stocks. 
The month of June was positive for the Dow basically thanks to two trading days. The third day of the month gave the Dow a 2% gain due to rumors about Fed stimulus. As the Dow turned weak in the second half of the month, the PPT instigated a 150-point rise in the last 90 minutes of the next to last day of trading. Then the wondrous announcement from the EU supplied the Dow with a 270 point, 2.2% rise in the final trading day of the month/ quarter. This action was almost enough to erase all of the losses for the quarter. All stock gains are now tied to rumors of, or actual announcements of, central banker stimulus. Hurray for freedom to set prices ourselves!!
So I ask again. Why aren’t investors allowed to set prices for stocks? Why do central banks intervene so often? Are we so devoted to the Dow that we are willing to surrender all freedom so the central bankers can rig the indices higher only to make our new-fitted bridles and yokes more comfortable? Will it be worth it if we surrender all our freedoms in exchange for a new high on the Dow? Are we willing to put the word ‘no’ on the profane list? 
Yes. Uh, I mean, ‘yes master’. Of course, we are willing slaves. Just as long as the Dow goes higher we will accept anything from the regime. We won’t argue with higher prices for anything. For example, on the last day of June 2012, the euro-banks got their bailout promise, stocks enjoyed a serious rally, and consumers were rewarded with a 7.9% increase in the price of West Texas Crude. Hip-hip-hur..., what? 
For all the people as dumb as a Pelosi, here is the way it works. Elite banksters, suddenly insolvent from speculative derivative trading, get rewarded with bailout money siphoned from the treasures of taxpayers by central bankers which in turn inflates prices for stocks and everything else including oil so that the woefully ignorant subjects of the land lose the power of ‘no’ in setting prices and wind up paying 10% more for oil. Don’t cry - the Dow Jones Industrials went up too! 
What are we going to do about it anyway? We don’t control prices anymore since we relinquished control of the word ‘no’. Besides, the current regime has promised that health care costs will fall anyway. What are we worried about?
My friends, we have taken the first few steps down the slippery slope of Mount Enslavement.
So let’s fire up the barbecue, wave our flags, and celebrate Independence Day. The Federal Reserve and the European Central Bank have the Dow moving higher now. They certainly set the prices for bonds. Now they set the prices for stocks. Investors and citizens have surrendered the power of ‘no’. That little word is the ultimate expression of freedom. What are citizens in the US supposed to celebrate again on July 4? Independence? Independence from what?

Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. Advisory services offered through BMF Investments, Inc.

Friday, June 15, 2012

Stock Speculation Surfing

Tuesday, June 12, 2012.
The backdrop.
Family net worth down nearly 40% between 2007 and 2010.
Spanish bond yields rise to euro-era high with the 10-year rising to 6.8%.
Ratings service Fitch cuts 18 Spanish banks.
Fitch also expects Spain to be in a recession through 2013.
9:30 AM - Dow futures close up 70 points.
10:10 AM - Indices lose early gains. Dow up 10. Other indices now in red.
10:15AM - The Fed’s POMO stock price manipulation activities commence.
11:00AM - The Fed’s POMO stock price manipulation activities conclude. Dow up 100 points. All indices higher all over the world. 
11:08AM - Headline: ‘Surging Spanish Bond Yields Push Europe Lower’.
11:11AM - Headline: ‘Europe stocks climb, Stoxx 600 up 0.4% to 242.99’.
Other than the usual central banker upward index manipulation activity, what could spur on such an explosive 100-point, thirty-minute rally in the Dow? To define, my own definition of a Plunge Protection Team rally is a rise in the Dow at a rate of 200 points per hour. 100 points in thirty minutes certainly qualifies this mid-morning rally under suspicious circumstances presented by weak economics and a deteriorating situation in Europe. But the Fed gooses the Dow higher every morning starting at 10:30. Check the charts. Surely they solicit the assistance of their shills, Wall Street and the so-called ‘media’? Ah, there it is. 
11:37AM - Headline: ‘US stocks rise on hopes for stimulus.’
Hope. Merriam-Webster defines hope thusly. ‘To cherish a desire with anticipation’. The same dictionary defines stimulus thusly. ‘Something that rouses or incites to activity’. In other words, Wall Street desires a stock rally so they are anticipating central banker stimulus to incite that rally. Einstein defined insanity as doing the same thing over and over again and expecting different results. Since banker bailouts have been issued all over the world since 2007 on an almost monthly basis, has anything really improved? Bailout economies like the US and the EU are still broke and both continue to expand indebtedness. Europe is in a complete mess with large members and small members alike teetering on insolvency and default. The US has continued to amass trillions in indebtedness that it cannot repay. The average citizen in Greece, Spain, Ireland, Brazil, or the US is losing ground. Yet, Wall Street expects another Federal Reserve stimulus package to finally turn the economy. Is it really going to be different this time? Or, is this true insanity?
Don’t get me wrong. I completely agree that the Fed will furtively filch more assets from the profoundly ignorant citizens who entrust their protection to the profoundly incompetent, treasonous, and mendacious body known as congress. Little do the people understand that their representatives have aligned their allegiance with the banksters who are busy fashioning the yoke of indebted enslavement to control their subjects. So yes, there will be another stimulus plan that will no doubt be announced sometime early this summer. In the meantime, the rumor of such a plan will intoxicate Wall Street every Tuesday morning with rallies built on fantasy and insanity only to give way to the sober idea of reality on Thursday afternoon. So thanks to the central bankers, the idea of ‘investing’ in stock indices is akin to ‘investing’ in where the ball may land on a roulette wheel. Need we even discuss suitability?
What we have now is akin to yelling ‘Fire’ in a crowded movie theatre. That’s how stampedes are created. Only now, when a rally is needed, someone yells ‘Stimulus’ on Wall Street. Everything is legal now and the rally is the only thing that matters. Apparently the economy has become so desperate that any act is accepted as long as there is a rally. But don’t get too excited. 
The chart below shows the day of 6/12/12 in five-minute bars with the Dow in candlestick and the EWP in orange. Clearly we can see the powerful triple-digit rally in the Dow over a forty-five minute morning time period. What caused the rally? Certainly the Fed gooses the indices every morning at their prescribed 10:30AM manipulation hour. But also, the magic word of ‘stimulus’ was injected into the trading no doubt from the people that benefit most from a faux rally - Wall Street. Okay, so the indices are a complete fraud and con. But what is the orange line on the chart? This is why we can’t get too excited. The orange line is the EWP - the Spanish ETF. Hey, I told you it was a fraud and a con! Why on God’s green Earth would the Spanish ETF rise on a day they succumbed to a $100 billion in bankster bailout money with their economy contracting 8% and an unemployment rate of 25% and no hope of future prosperity? What am I saying? None of that matters. ‘STIMULUS IS COMING. STIMULUS IS COMING!!!!Combined with a little Fed intervention, poof, a triple digit rally starts. Beware of the con. Commit this chart to memory. Whatever happens over the coming weekend in Greece with their ‘elections’ almost doesn’t matter. If pro-bailout candidates are elected, then the banksters get a bailout. If anti-bailout candidates are elected, the banksters get a bailout. ‘STIMULUS IS COMING! STIMULUS IS COMING!’ Not that it will work to improve the economy. But that matters not. The ‘stimulus’ is really for the stock indexes and not the people of the land. If you want to cause a stampede out of a movie theatre, just yell, ‘Fire!’. If you want to cause a stock rally stampede, just yell, ‘Stimulus!’ Central banksters are charging up their bullhorns. 

DJIA in candlestick, EWP in orange - 5-minute bars 6/12/12 
Chart courtesy
Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. Advisory services offered through BMF Investments, Inc.

Monday, June 11, 2012

Was It Something I Said?

Okay, it’s really simple now. Believing is reality. All we have to do is believe and fantasy turns to reality. The week that just ended is the new era in a microcosm. The problems in Europe are growing. Last week, Spain vehemently denied needing any financial assistance. Come Monday morning, they awoke to find their pockets turned inside-out with nothing but dust falling out. Yes, as those of us with a functioning brain cell knew long ago, Spain does indeed need financial aid. The only question is how much?
China lowered interest rate for the first time in several years. No one does that unless the economy is fading. Several major companies amplified this sentiment noting that Europe’s drag was affecting business in a negative manner. US economic data has not been very positive given that the US regime lies about everything to make the regime look more effective. Investors have taken all this in and elected to sell stocks. May was a particularly weak month. But now the calendar has moved us to the month of June.
It seems likely that the Fed would like to mend portfolios so a stock rally would be in order. Would they elect to goose the indices for the entire month or would they prefer to spank the indices higher in the last week of the month for some extra excitement? Either way, the rally is just a con instigated by the Fed.
By now, though, investors know the game. The economy is in the tank. Stocks are over-priced and a index correction is at hand. The Fed’s current manipulation plan known as Operation Twist is ending at the end of June and when Fed manipulation goes away, so too do the indices. Naturally, no one wants to be the last one to leave the party so the indices have been sold off. And now, we all know the con. We simply have to wait for the next stock manipulation program to be rolled out by the Fed. This is not rocket science. And, this is no longer a ‘market’. This week revealed the truth.
That is, as the stock indices were poised to eclipse ‘correction’ territory and possibly push ‘bear’ levels, an anticipation story broke that the Fed would be forthcoming with ‘stock manipulation 4’! Somebody said something about an imminent announcement and like stupid in full Congress the indexes took off! Was it fundamentals? Had a cure been devised for Europe’s ills? Was China’s rate reduction the elixir for a better world economy? Nah. It was something that was said. ‘More stimulus is on the way’. How pathetic is this?
Spanish banks are awaiting a bailout that is expected to come this weekend. But the point of all this stuff is exemplified by the chart below. We are in a period in which reality no longer matters. Fantasy is in charge now and a kind word or two from a central banker determines the beginning as well as the duration of any stock rally. Everyone knows big banks get bailed out. But now everyone is beginning to realize that this is not an economic solution. This is furtive filching at its worst and does nothing to stimulate an economy. Stock values are supposed to reflect economic potential. Today, however, they only reflect what has been said and what is anticipated to be said. This is the most pathetic period in the history of stock indices. So, Mr. Bernanke. The Dow is all yours. Get a megaphone. Don a short skirt. Wave some pompoms. When will the US bankers get another bailout?
The chart shows the past week of trading in the Dow. The ‘stimulus’ rumor was released and up went the indices. As the rumor effect faded, so too did the rally. Reality or fantasy. Belief or disbelief. This is the reason to invest or not to invest.

DJIA - Last 5 days, 6/4/12 - 6/8/12, 15-minute bars
Chart courtesy
Disclaimer: The views discussed in this article are solely the opinion of the writer and have been presented for educational purposes. They are not meant to serve as individual investment advice and should not be taken as such. This is not a solicitation to buy or sell anything. Readers should consult their registered financial representative to determine the suitability of any investment strategies undertaken or implemented. BMF Investments, Inc. assumes no liability nor credit for any actions taken based on this article. Advisory services offered through BMF Investments, Inc.