Thursday, December 2, 2010

Trichet Promises More Money for More Banks in Europe

As the Fed's already-discredited quantitative easing (it was supposed to lower interest rates, not raise them, so we can assume Ben Bernanke was lying, again) funnels money from the Us Treasury to the Federal Reserve to the Primary Dealers (big banks), Europe has apparently taken notice and today, EU President Jean Claude Trichet announced a similar plan for the whole of the European Union, in which the ECB will purchase government (sovereign) debt outright and funnel it to the banks, which, like ours in America, are largely insolvent and lying about their financial conditions.

The race to the bottom, to devalue currency, has reached a new, more insidious stage that threatens the entire economic system of the world, in more pernicious and devious ways than the creators of sub-prime mortgages and credit default swaps could have ever imagined. With endless creation of money out of thin air, rampant inflation is inevitable, in everything except wages, that is, and possible home prices.

Choosing the path of least resistance, kicking the can down the road, so to speak, will lead to unimaginable horrors for millions of Americans and Europeans in terms of decreased buying power and slave wages, a fact that our so-called "leaders" know all too well.

With another $8 billion pumped into the coffers of the banks, Wall Street once again took off and ran with the money, pushing equity prices close to their peaks of early November.

Dow 11,362.41, +106.63 (0.95%)
NASDAQ 2,579.35, +29.92 (1.17%)
S&P 500 1,221.53, +15.46 (1.28%)
NYSE Composite 7,712.25, +108.52 (1.43%)

Advancing issues finished well ahead of decliners, 4442-2054. There were 501 new highs and 42 new lows, very similar to yesterday's figures, which implies that many of them were the very same stocks, pumped by the banks only to be dumped to the johnny-come-lately funds and individual investors. Volume was moderate, since most of the buying was by large firms with super-fast computers.

NASDAQ Volume 2,053,117,000
NYSE Volume 5,584,217,500

Commodities joined in the ramp-up. Oil gained $1.25, to $88.00. Gold was up a mere $1.00, to $1,389.30. Silver added 16 cents, to $28.57.

Tomorrow's non-farm payroll data for November should send stocks to higher highs and even more ridiculous valuations. Scheduled for 8:30 am, the fraud bankers will have plenty of time to adjust the algos on their computers for another glorious day of stock buying.

The following video contains some strong words from Vermont Senator Bernie Sanders over the increasing social inequality in America, citing how, as the middle class collapses, the top 1% earns 23.5% of all income, more than the bottom 50% of all earners. Further, the millionaires and billionaires on Wall Street are making more today, after we bailed them out, than before the bailout. It's poignant and very well worth watching.

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