READ the comments. There is some very savvy/smart folks out in cyber land,,,,,,,,
This is just 1 and I agree whole heartily....
by DavidPierre
on Thu, 08/18/2011 - 22:11
#1575667
theatre of the absurd !
Lets cut right to the chase. Investors have had their shorts in a knot for 2 weeks and much of the angst is related to weak economic data that is coming out almost daily. Well in that regard nothing has changed, since we have been highlighting horrible data throughout the year and it never seemed to spook the markets at all. In fact the bananaheads were often chirping on just how strong the markets were to be able to climb the wall of worry. This has always been interpreted as a sign of the markets looking ahead to a recovery. Fast forward to the present and suddenly the narrative has changed and the supposedly the driving force is the threat of another dip into recession.
Nothing - absolutely nothing - has changed during the last few quarters. The only big difference at the current time is the lipstick has been taken off the pig.
The spin is now suggestive of dark economic clouds ahead. Well ... bullshit on that too. The only source of stability during the last couple of years has come from the fire hose of money printing. The Obama regime has even seen fit to hand over hundreds of billions of dollars to foreign banks, all of which the US taxpayers are on the hook for by the way.
This allowed for the illusion of a recovery at the same time the efforts of the PPT and the propaganda blitz allowed the illusion of a strong market. Take away that puppet show and we are back to the stark horror of an imploding economy that remains fully leveraged to the inflationary impact of printed money sloshing around. We have been in recession for the last 2 years, but the effects of this recession have been masked by handouts and phony data that distort the real truth.
Allowing unvarnished economic data to show how bad things are at the present time, plus letting the market hit air pockets and scare the shit out of everybody, the conditions are being set up to allow for the FED to run to the rescue with another openly acknowledged stimulus spending spree.
The credibility of the FED is at stake here after so recently stating that no more easy money was on the way. It would take a very nasty episode to allow for a complete reversal of policy and the reluctant announcement of another 'temporary' spending package to stabilize the situation.
This has all been carefully orchestrated. It has been the plan since day one.
The leadership of the current administration is a collection of complete idiots but even they are not so clueless that they could fail to appreciate how weak the entire system has become. Take away the easy money flowing through the economy and the situation is more severe by far than at any point in the great depression. They know this and so it becomes a great confidence game to keep flooding the money into the economy and pretending at the same time that things really are getting better and normal economic growth can resume.
If there was a hint to the severity of the situation, it came from the FED agreeing to maintain zero interest for 2 years into the future.
That is the most obvious admission of failure in the history of the nation and yet people appear to be so out of touch with reality that it went by with barely a hiccup. This fits right in with the failure for the majority to comprehend the magnitude of market intervention that is ongoing daily. No one wants any part of reality as long as the illusion is palatable and people can pretend that things are okay, and that no major sacrifice or pain will be called for to fix the problems. Printing money has been accepted as the solution to all of the problems. Well, it is like booze - the cause of and the solution to all of life's problems. The hangover is what we have to look forward to and that will be felt in the mother of all inflationary crackups.
So I am not at all impressed with the depth of the selloffs lately, nor the appearance that the PPT has not been able to prop things up. They have been told to stand down and the HFT players will trample the longs today, and then run the shorts tomorrow. There will indeed be shock and awe. I will be very surprised if we do not hear of an emergency stimulus package before mid-September, and then at last we will see the mania in the mining stocks commence along with the overall rally that will run through the fall in the major markets.
None of this will be good for the long term. But it is what it is and a few people can connect the dots to see what is coming.
www.LeMetropoleCafe.com
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Submitted by Bruce Krasting on 08/18/2011 20:52 -0400
Last evening I got the WSJ breaking news story that busted the global capital markets today. Note the time, 8:06.
Look at the immediate consequence to the EURDLR fx rate. There are big gaps down for EUR shortly after the story hit the tape in Asia. That knee jerk reaction was the same market “read” that gutted a number of Euro banks today:
I looked at the WSJ story and concluded that it was a game changer. I wrote Tyler Durden at Zero Hedge about this. The “Re:” that I used was:
Stink on Shit
TD responded:
Obviously a plant.
ZH had a piece today on the WSJ story that caused all the trouble. The “plant” theme was repeated. from the ZH article:
Why would (the Fed) use its traditional mouthpiece the WSJ to spread fear?
Tyler answers his own question with:
Why QE3 of course.
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This is very important stuff. Three critical questions:
I) Was the WSJ story a plant?
II) If so, who planted it?
III) Why in heaven’s sake would anyone (especially the Fed) want to bomb the capital markets?
IMHO opinion this was a plant. The author was Carrick Mollenkamp. This guy is a seasoned pro. This story was vetted at the highest levels at the WSJ. The editors knew full well the implication of this article. Every ‘i’ was dotted and all quotes were checked. There are no mistakes in this article.
But who were those “sources” that the WSJ hung their hat(s) on? This was one of the biggest stories of the year. Who are the readers of the WSJ supposed to rely on regarding the serious issues raised in the article? Easy. No one is the answer. These are the attributed sources for the guts of the story:
Federal and state regulators, signaling their growing worry that Europe's debt crisis could spill into the U.S. banking system, are intensifying their scrutiny of the U.S. arms of Europe's biggest banks, according to people familiar with the matter.
The Fed is demanding more information from the banks about whether they have reliable access to the funds needed to operate on a day-to-day basis in the U.S. and, in some cases, pushing the banks to overhaul their U.S. structures, the people familiar with the matter say.
Fed officials recently have held meetings…………. according to the people familiar with the matter.
The New York Fed has also been coordinating with New York's superintendent of financial services, Benjamin M. Lawsky, to monitor the foreign banks' funding positions, said people familiar with the matter.
You can come to your own conclusions on this. It is my opinion that there is no way the WSJ could have run this story without direct confirmation from the Fed. Those people who are so “familiar” with this matter are senior Fed officials.
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That, for me, answers #s I & II above. But it begs the question, “Why”?
Is it remotely possible that the Fed deliberately engineered a collapse in markets in order to get the necessary political “cover” to initiate some new massive monetary policy as TD suggeted?
There is one possible clue in the article that points to this conclusion:
Until recently, that (Euro funding problems) hasn't been a problem. Thanks partly to the Federal Reserve's so-called quantitative-easing program, huge amounts of dollars have been sloshing around the financial system, and much of it has landed at international banks
This observation from Mollenkamp is from the Feds lips. The obvious conclusion from this paragraph is that to reverse the crisis now boiling over in Europe more “QE” is required.
What is QE? It can be anything that stimulates the price, velocity and availability of money. It does not have to be LSAP (traditional QE) or an extension of ZIRP. It can take other forms.
The most convenient of which is to open the Fed’s $ swap lines to the Euro banks. We may get this development by Monday morning.
My take on this is that the Fed manipulated the news. It did so very deliberately. The Fed had an agenda; they did whatever they thought necessary to gain acceptance for what they have up their sleeve.
The story was deliberately timed to undermine (further) the European banks. It worked. Now Bernanke and his cohorts have the excuse they need to act.
That's my take on this story. We may never know the truth. I wonder if Governor Perry understands this stuff. If he did, and he got the facts on this “out there” he would have a very big cannon to shoot. If the Fed did manipulate both the press and the markets to justify its actions it would be a very big deal indeed.
http://www.zerohedge.com/contributed/fed-bombed-market-i-ask-why?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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