Monday, October 10, 2011

Today's Market Action Reflects The Latest Systemic Farce

Does anyone take the Merkel-Sarkozy dog and pony show seriously any more? Perception management is not a solution.  (see link below for quote source)
When I got onto my futures software yesterday and saw that the S&P 500 futures were up quite a bit I began to look for any credible news that might be the source of the ebullience.  Of course, the partial "bailout" of Dexia was not good news, especially with regard to paper currencies, and the bond market is rewarding Belgium for its action with higher sovereign bond yields today (that's a negative, in case you were wondering).

Then I saw that Merkel and Sarkozy, who were putting their heads together to solve the EU's problems over the weekend, had issued a statement that they would make sure that the EU Einsteins would eventually have a plan that would prevent the big banks from collapsing.  They would issue their plan for that plus saving Greece in three weeks.

Huh?  Seriously?  For whatever reason, the equity markets in Europe and the United States seem to be willing to suspend disbelief and put more blind faith into empty rhetoric.  Sounds like voters in the U.S. who still think Obama is doing good job. 

So I queried someone who's view and market knowledge/perspective I highly respect and who has plenty of his own skin in the game with this:  "Your thoughts here?  My inclination is that this is a low volume holiday short-cover ramp on basically no news and that we will sell-off either this afternoon or later this week.  That Merkel/Sarkozy statement is full of 'fluff.'"

His response was "my thoughts exactly," and sent me link to this brief commentary by Charles Hugh Smith, who I rarely read but with whom I often agree: 
The problems of the global economy are not based in perception, but in the reality of prices, balance sheets and income statements, vast concentrations of wealth and power, precarious systemic imbalances, ruthless exploitation, and command economies mismanaged by Central State/Bank policy and manipulation. Sarkozy and Markel's absurdist theatrics--"we have a secret plan right here in our pockets"--are not just incredible, they are uncredible
Here is the LINK  The same "gut" reaction I had when I saw the "Merkozy" statement last night and now I feel even more strongly about this conviction.

What this means is that I expect the markets to retrace today's theatrics once everyone in the U.S. has returned from their Columbus Day break.  I still believe there is a lot of disappointing and bad news ahead of us and the markets will soon reflect this by heading south again.  What I do believe is that the probability increases by the day that the next big downside "event" will be reflected in the markets by a massive rush into physical gold and silver.  This has been going on all along in India/Asia/Russia/Middle East anyway, while the short term-oriented U.S. funds dump all of their paper gold and silver (futures, GLD, SLV).

Hold on tight because once the downside volatility in the metals has "washed out," the upside will be breathtaking.


  1. Celente - We are Looking at a Total Global Financial Collapse

    Gerald Celente continues:

    “It’s like Bernie Madoff said, ‘The US is one big Ponzi scheme.’ From the king of Ponzi he knows what he’s talking about. All they can say in the mainstream media is that it’s a buying opportunity as they sucker people back into these markets. Did you ever here them say, ‘It’s a selling opportunity?’ Not one of them, they’re a bunch of whores.”

    Despite the current stock market rally, Celente says we still face difficult times ahead, “We are looking at a total global financial collapse and these collapses are not isolated to the financial community. All things are connected and the people that are suffering the most are going to be out there the most (protesting).

  2. Son of a gun...what will Bernanke have the kids substitute for school lunch?..."Air" sandwiches?

    Peanut Butter Prices Are Rising By 24 to 40 Percent

    You can now add peanut butter, a long-time recession staple food item, to the list of things that "the 99 percent" may no longer be able to afford. Thanks to droughts, the price of peanut butter has gone up from $450 a ton to $1,150 a ton in just one year and now peanut butter makers are about to pass on the increased costs to consumers.

  3. John Paulson should be advising Angela and Sarkozy.

  4. Just wanted to bring in another perspective. Would love to hear any ones thoghts. This guy is one sharp analyst.

  5. Metals and equities continue to be the same trading market for months now. When cometh the divergence I wonder?

  6. (Dave)

    Dunno for sure but we are getting closer to that time by the day...

  7. I'm really tired and annoyed that the manipulation is so blatant. No body or no thing that intentionally sides with the corrupt forces is immune from the hideous, long lasting effects, affecting the hearts and infecting the minds of those running the show and those being run by the show. It's a sad commentary on how the insatiable appetite of selfishness and greed devours the hosts Soul.

    I'm in the bleachers when it comes to forecasting the outcome of the Game, but on some level I've got a good sense of where precious metals should be right now and we're talking well over $50 and $2000, easy, fucking easy. These present prices are an embarrassment to anyone with a sense of integrity, who knows we should be storming "their" gates at this very minute instead of wasting our time playing a guessing game analyzing the crumbs that they drop, while doing what most of the masses are doing with their lives, i.e. being busy doing absolutely nothing. All the mumbo jumbo jargon spoken by the so called "knowers of the trends of the markets" is coming to an end! It's obsolete anyway; based on living in ignorance...DEAD. To even begin to line up on getting it close to right one has to have a masters degree in Market Analysis combined with a Psych Phd. to diagnose a veritable kaleidoscope of human psychopathic disorders, and, all the while, being established in the state of Pure Awareness, i.e. Enlightened.

    Fortunately though, we've crossed the line and there is definitely no turning back now. (Who would really want to go back to "that" anyway?)

    As precious metal volatility continues to become a daily occurrence, expect the same frazzling for the human nervous systems, intensifying exponentially. Gonna' see a lot of breakdowns out there. My prescription? Stay centered and grounded, brothers and sisters. This is no drill.

    Got to say, this is a great time to be alive cause finally everybody's going to experience what is truly Real. No place to hide. Rise and Shine!

    Oh my, it's past my bedtime, did I say something? I must be dreaming.

  8. The Democrats and Republicans are a Major Problem Moving Forward
    The Democratic and Republican parties have done nothing to the benefit of the American Public in the eyes of history and the future. These parties do not represent different things. In fact these organisations are profiteers in a system that concentrates wealth and power in the hands of a few elite. The Democrats and Republicans frame issues to be divisive to keep themselves in power. It is time for these conspiracies to be starved out of existence and then prosecuted under the law. Being intentionally divisive the solution set resides under “none of the above.” These organisations are brand happy and they want to take over any potential reform movement, they want to block progress, and they are designed to be solution-less. We cannot afford to have criminals in place of leaders. Its long past due that we no longer follow the tune of our own destruction. Meaningful change requires elimination of both these parties.