Correction, Crash, Deflation, Depression: the Superfecta of Fraud

I'm writing in the first person singular today because I think today was very important. Stocks just don't go down as consistently as they have over the past few weeks unless there's a problem, and there are lots of them.

I'm not going to link to anything, but I am going to shoot my mouth off a bit about where we all are in the larger scheme of things, because, while small things matter, the big picture matters more.

The global economy is in its death throes. We've had zero interest rate policy (ZIRP) from the Fed for three-and-a-half years, and it's simply not working. The federal government is a chain around the necks of the citizenry and the media is largely complicit in shading the truth.

The US taxpayer has bailed out the TBTF banks and, culminating with JPM CEO Jaime Dimon's mea culpa last Thursday night, we find that these same banks are even bigger than before and still making risky bets with other people's money. For its part, the federal government can't collect enough taxes and still borrows 40% of every dollar it spends. Social Security and Medicare are bankrupt already, and, with millions of baby boomers retiring, the money will not be there for anybody under the ago of say, 60, right now.

Americans are awakening to the nightmare that is a leaderless, stagnating economy, brought about by the biggest fraud ever perpetrated on any nation, that of the sub-prime mortgage and consequent banking crisis of 2008. It took years for the criminals on Wall Street to skewer the American public and not a one has been prosecuted. Getting back to Mr Dimon, the most perverse, sociopathic criminal there is - who smiles at you while slowly jutting a knife between your ribs - while some of his subordinates have taken the axe for the $2 billion "London Whale" blunder, he's still CEO and in charge. Seriously, in another, saner place and time, he'd already have met his maker.

In the visage of Mr. Dimon lies much of the problem. The aristocratic, oligarchical mindset shared by the Wall Steet masters of the universe and their lackeys in the capitol, provides them with an aura of invincibility, inevitability and smug self-assuredness, while the truth is that most of them have never worked an honest day's work, steal and murder with impunity by their various market actions and bear no responsibility, guilt or shame.

Meanwhile, the bulk of the world's population lives day-to-day, wondering what miracles of stupidity these monsters will bring down upon them. Income disparity has never been higher in America; it gets worse by the day and the oligarchs, from their thrones of power on Wall Street and in Washington could give a damn. All they care about is their money and their power. The power to tax, to control, to cheat, to set prices, to ruin smaller competitors, to lie bold-faced to the American public and to have either the unmitigated gall to retain their positions or, worse yet, to run for election or re-election.

Nearly four years into this global crisis (that's what the IMF is now calling it), conditions are not getting any better. The empirical data says it is getting worse and will get even more dire as the year progresses. Unskilled and low-skilled workers cannot find reliable jobs. The self-employed must fight every day just to keep the doors open or the wheels spinning. Never has just getting by been so difficult for so many in the private sector.

I've said for years that the only things keeping this economy going are the government transfers: welfare checks, food stamps, disability payments, retirement checks, medicare payments and the like. There is no growth in the general economy, while in the public sector, despite some layoffs, employees are receiving their annual pay increases without a hitch as the government casually takes a portion of their pay and says it's going into their retirement funds, when, in fact, these funds are underfunded and will fail like the rest of the programmed, social-based government economy. Many of these public sector employees who expect benefits will get less than they paid in. Eventually, all will get nothing.

Europe is a complete basket case. The Euro is dead as a currency, an idea the supra-governmental EU magistrates are only now beginning to comprehend. When Greece departs, Spain, Italy, Portugal, Ireland, and probably Belgiu will depart in short order. The world's economy will be smashed to pieces, governments have fallen and will continue to fall, eventually reaching the United States, the final battleground for fairness, decency, honesty and civil rights. It will come sooner than most expect, and the majority of people will be unprepared, just as they were unprepared for the current setbacks delivered by the centrally-planned failure machine in Washington and on Wall Street.

Realistically, there's little hope for the immediate future except complete destruction of the economy and a reset of priorities from the bottom up. In time, people will no longer look to government, to Washington, to solve their problems. Matters must and will be taken into one's own hands and out of those of the corrupt conspiracy of criminality that extends from Beijing to London to Washington and to Berlin.

The end is not here. Not yet. But it certainly is coming and it's going to be brutal for many. Prices have begun to fall on all manner of commodities. Deflation, the one, true, unstoppable market force, will prove to be the end of the Federal Reserve and the all banking nightmares and false facades. The American public, and the general public of the rest of the world, cannot afford to have its wealth stolen by feudalistic lords disguised as nice guys like Barack Obama or Mitt Romney, just to name a few.

Today's headlines were rife with departures of top executives, scandals and defections. The icons are beginning to tumble at a more rapid pace. The rats are jumping off the ship, not one by one, but in bunches now, as collapse - in the inner power circles - is seen as inevitable.

The emperors of the power and political structures have no clothes and nowhere to hide.

When the history books are written, they will note that the second Great Depression began in 2008, and, through various means of both government intervention and inaction, worsened in 2012.

There is now no doubt.

Dow 12,695.35, -125.25 (0.98%)
NASDAQ 2,902.58, -31.24 (1.06%)
S&P 500 1,338.35, -15.04 (1.11%)
NYSE Composite 7,705.45, -110.44 (1.41%)
NASDAQ Volume 1,691,608,250
NYSE Volume 3,688,124,000
Combined NYSE & NASDAQ Advance - Decline: 1105-4571
Combined NYSE & NASDAQ New highs - New lows: 65-204 (WOW! Screaming red!)
WTI crude oil: 94.78, -1.35
Gold: 1,561.00, -23.00
Silver: 28.35, -0.54

Bad News For Small Business: The New 1099K Tax Form

Here's what your federal government is doing to help small business in America, burdening it with an overbearing, egregious, complicated new tax form. Infographic courtesy of outright.com.


Brought To By Outright.com

Wall street's Week of Worry Ends With JP Morgan Mea Culpa

In a week that will be remembered as one in which the Euro crisis came front and center, Wall Street turned its eyes upon an unlikely victim Friday, that being JP Morgan Chase.

The bank known for its "fortress" balance sheet (pure baloney) confessed to have had made a terribly wrong bet on a risk hedge - a la MF Global? - and poof went $2 billion. CEO Jamie Dimon explained how badly the bank had mistaken the markets in a conference call with journalists Thursday night after the close.

Details were sketchy, though it was widely assumed that there would be other victims in the trade involving a British trader known quaintly as "the Whale." The issue points up that even the brightest of the bright can make mistakes - and big ones at that.

While JPM's misplaced risk hedge sent futures into the tank pre-open (as if they needed any help with that), stocks initially sank, then rallied sharply into positive ground in the morning session, though all gains were ephemeral and summarily whisked away by the close, ending Wall Street's worst week in more than seven months.

Even though losses were tiny - and the NASDAQ managed to close positive by 0.18 points - signs of calamity were everywhere, from German citizens daring Greece to default and leave the Euro, to massive misapprehension over the proposed "Volker Rule" in light of the Morgan fiasco, to spiking Spanish bonds, slowing growth in China and a deflating PPI, which came in under expectations at -0.2% for April.

As the session ended with everybody closing positions in case some new, terrifying developments took place over the weekend, the once mighty, banker-run trading casino closed out the week with players seeking solace and probably more than a few strong drinks to soothe their jangled nerves.

Nobody can tell how events will play out exactly during the coming weeks, though, from the tenor of the trade this week, it seems pretty likely that conditions are not going to materially improve any time soon.

TGIF, indeed.

Of note, the Dollar Index advanced for the tenth straight day, explaining why precious metals have been pounded down so roughly over the past two weeks; and, new lows bettered new highs for the fifth day in the past six.

Dow 12,820.60, -34.44 (0.27%)
NASDAQ 2,933.82, +0.18 (0.01%)
S&P 500 1,353.39, -4.60 (0.34%)
NYSE Composite 7,816.48, -36.27 (0.46%)
NASDAQ Volume 1,692,045,125
NYSE Volume 3,727,488,000
Combined NYSE & NASDAQ Advance - Decline: 2225-3322
Combined NYSE & NASDAQ New highs - New lows: 107-131
WTI crude oil: 96.13, -0.95
Gold: 1,584.00, -11.50
Silver: 28.89, -0.29

Relief Rally Provides Little Comfort as Europe's Woes Weigh

Rick Santelli, one of the very few talking heads on CNBC who delivers honesty more often than not, said this morning that ignoring Europe is usually a big mistake.

Apparently, some of the computers and traders were taking notes, because today's highly-anticipated relief rally delivered less relief than angst to a market that seemingly wants to go nowhere but lower.

Stocks traded higher through most of the session, but, in classic bear market fashion, gave up their gains late in the day. While there was little more than whispers from across the Atlantic, the tone was dire, with Greece and now, Spain, topping the list of countries seeking to escape the clutches of an intractable currency clutch.

The general gist of the the thinking is that when - no longer "if" - Greece departs from the 17 nations who use the Euro as a common currency, Spain will likely follow, and then the others fall like dominoes: Italy, Portugal, Belgium, Ireland, in a disordered departure from a failed fiat folly.

It is testament to the frailty of centralized government planning that the Euro experiment will have lasted less than 20 years before the nations of Europe finally bite the nationalist bullet and return to their various sovereign currencies, like the lira, drachma, peseta, and various forms of francs, et. al. Current analysis has Greece departing within a year, followed in quick order by at least five other nations.

There will be opposition, and the usual courses of anxiety and cries of imminent depression, but, as it has in the past, Europe will return to nationalism, as quaint as that may be, and independence from an additional layer of government it never needed in the first place. Time will tell how it all turns out, though the final result is probably going to be a better condition for everyone from where things stand today.

Dow 12,855.04, +19.98 (0.16%)
NASDAQ 2,933.64, -1.07 (0.04%)
S&P 500 1,357.99, +3.41 (0.25%)
NYSE Composite 7,852.72, +32.46 (0.42%)
NASDAQ Volume 1,915,262,500
NYSE Volume 3,598,696,000
Combined NYSE & NASDAQ Advance - Decline: 3398-2161
Combined NYSE & NASDAQ New highs - New lows: 139-73
WTI crude oil: 97.08. +0.27
Gold: 1,595.50, +1.30
Silver: 29.18, -0.06

Stocks Exhibiting Serious Weakness as Correction Completes Day Six

For the fourth straight day, US markets exhibited the same trading pattern on the major indices: A plunge at the open and the rest of the day spent trundling back higher. This is the effect of an overabundance of trading algos all programmed to begin buying at certain levels. Fully 85% or more of all trades are handled by machines, drwing into question the overall wisdom of a market built on lies, false assumptions, sketchy models and the overwhelming directive that stocks MUST go higher, all the time, no matter the news or events in the real world.

In any case, it's made it easier for real, human investors to get the heck out of dodge, and it's likely that a good portion of the really smart money has already exited. This is apparent from the price of bonds, which have been in rally mode all week, pushing yields near historic lows.

The cause for all of the latest market turmoil is no big surprise; it is Europe, specifically Greece, but peripherally Spain and France, which seem the two most likely targets for increased political volatility, and thus, stock declines.

The Greeks have the world by the proverbial short hairs at the moment. At any given time, the EU, ECB, IMF or any of the nearly nations could tell the the government of Greece that it's game over, or that they'll loan them money anyway, which is exactly what happened today.

It was reported that the Greek government, even if it received the latest round of bailout money, could not meet it's obligations, so, one has to wonder, why bother? That's the line of the hard left parties in Greece at the moment. They don't want any more IMF or ECB bailout funds, preferring to go it alone, presumably to leave the Euro as a currency behind and take back up the drachma as its national money.

Of course, all of this uncertainty has a negative effect on stocks, though US markets have suffered much less than their European counterparts, some of which have already fallen into bear market territories, along with China, which has been in the grip of the bear for the past two years, but that's another story, and something that is also worrying the gloablists and their plans to control world commerce.

There is a problem with the US markets and their repeating pattern of falls and rises. The intra-day plunges keep getting deeper and deeper, setting new support levels which will, over time, be proven to have about all the holding power of a paper towel in a hurricane. Eventually, the computers will either be turned off or reprogrammed and the flush of stocks down the drain will be swift and complete. Even as it stands, stocks are off sharply over the past six sessions, with the Dow down all six, and the S&P and NASDAQ down five of six, the only positive returns for the duo being extremely marginal gains on Monday - a point on the NASDAQ, less than that (0.48) on the S&P.

Tomorrow, the drama continues, with the US throwing in with initial unemployment claims, a number that may be secondary to the uneasiness in Europe, but should provide a secondary betting point for the open. Stay tuned. It's just beginning to get interesting, as the same pattern as 2011 is playing out again, almost to to day, when stocks peaked at the end of April.

Volume was elevated once again and new lows beat new highs for the fourth consecutive session.

Dow 12,835.06, -97.03 (0.75%)
NASDAQ 2,934.71, -11.56 (0.39%)
S&P 500 1,354.58, -9.14 (0.67%)
NYSE Composite 7,827.75, -59.51 (0.75%)
NASDAQ Volume 1,959,315,250
NYSE Volume 3,949,908,500
Combined NYSE & NASDAQ Advance - Decline: 1865-3709
Combined NYSE & NASDAQ New highs - New lows: 106-161
WTI crude oil: 96.81, -0.20
Gold: 1,594.20, -10.30
Silver: 29.24, -0.22