Week's Events Point to Global Collapse; Max Keiser Speaks Out on Germany Bank Downgrade, Global Economy

Editor's Note: This was a particularly trying and nervous week for the markets, as political and economic tensions seemed to escalate on daily basis. From China's interest rate easing to the downgrade of Germany's banks to the rising wave of racism and bias, the swirl of history seemed to take on an unusually pungent aroma, one which permeated all levels of discussion and event horizons.

I am horrified at my own - and that of Max Keiser and many other non-mainstream journalists - prognosis for the future of the global financial system, which is being rendered apart by self-created forces which have taken on unforeseen lives of their own. A complete crash could occur almost at any time without warning, with a ferocity that would make 2008-09 look like a leisurely stroll. With all my heart, I wish my predictions turn out to be 100% incorrect, though continuing and recent developments point in the opposite direction.

Of course, the elitist coalition of bankers and sovereign leaders will continue to apply bandages and tourniquets as needed, even though they must know that a mortal wound cannot be patched, that wound being the complete insolvency of the world's largest banks, begun in 2008 and proceeding this week to completely engulf all of Spain's mightiest financial institutions.

As the week drew to a close, US markets garnered further gains on what had to be the lowest trading volume day of the year. (Money Daily does not keep complete records of much, but the daily volume reports at the end of each daily post provide that statistic - though scrolling through five-plus months of posts is a bit of an arduous task late on a Friday afternoon. Trust in the fact that if today was not indeed the lowest volume of the year, it was in the lowest three.)

Zero Hedge (zerohedge.com) reports that volume for the week was the slightest of the year, in a week which produced the year's best gains. This kind of rigged result is exactly what's wrong with markets and the economy in general: they aren't functioning. Today's plaster to the upside, accompanied by abysmal volume is manifestation of the banker Ponzi in full bloom, trading amongst each other in a rigged game to the detriment of formerly-free markets.

At some point, the manipulation will come to an end, and likely an abrupt one, fully engineered by Rothchilds and fellow Illuminati types.

A point of reference is the upcoming November US presidential election, which incumbent president, Barack Obama, is purposely throwing, having done his job for his bankster allocators. The first hint that Obama was not fully engaged or committed to winning a second term came in the form of his absurd opposition to the Keystone XL Pipeline. His stance to block the project - which would bring oil from Canada's oil sands to America, but, as of last notice may be headed to China instead - until after the election, baffled all but the mainstream press, who haven't the collective mind power or journalistic will to delve into matters that involve anything more than rehashing the contents of official news releases.

Today's statement that the private sector in America is doing "OK" is the second nail in the defeat of Obama at the polls. Such obvious policy blunders and plainly unfounded statements point to nothing less than self-imposed defeat to the weakest Republican candidacy since Bill Clinton's second term re-election. Mr. Obama is an eloquent, intelligent speaker, but he has failed to ignite any fire of passion in either Democrats or independents. It's a very good bet that handing the presidency to the biggest shill for the 1%, in the person of Mitt Romney, is a reality.

For the week - again, the best of the year on the lightest volume - the Dow gained an ungodly 456 points, this on the heels of the month of May in which the blue chips gave back more than 800 points. Bear in mind that this gain comes as global conditions worsen, with little to no positive data or news.

The same kind of ride-up occurred on the NASDAQ, up 110 points, and the S&P, which registered a gain of 45 points. The whole affair is nothing more than a dog-and-pony show, and one which is not particularly well-staged. The sheeple of the world take it all in without question, that being one of the keys to the problem.

Along with the low volume, the session was characterized by slender breadth and a slight edge for new highs over new lows. Commodities, which began with oil down by more than $2.00 on the current futures price, were relatively flat by day's end.

In line with developments of the past few weeks - and years, for more perspective - the contagion from banking to sovereigns to currencies is accelerating, nearing an extremely dangerous global condition of collapse.


If implosion happens within weeks, it would be no surprise to the growing number of people who view the past four years of currency manipulation and incessant printing with disdain and skepticism. Global elites are desperately clinging to largely Keynesian ideas and potential solutions which have little to nothing to do with solving the epic calamity unfolding in real time.

There's no telling how much longer the global condition can be restrained as events in areas around the world are spiraling out of control at a rate of speed that is nearly impossible to track.

The Nicholas Brothers

Forget about the press reports and news conferences with governmental/political leaders like Obama, Merkel, Draghi, et. al. Issues on the ground are overtaking the ability of the political process to deal with the expanding crisis. The powerful are becoming less so, and eventually will be held responsible, and thus, powerless as populations erupt in wave upon wave of tension, uprising, catastrophe. Greece is just the most visible example, while Syria is already a lost cause due to the inaction or inability of bodies such as NATO or the loosely-aligned Euro-American force majure to act properly - and promptly - to quell the spreading genocide. Spain, Italy and France continue their joint descent into anarchy which will eventually pull all of Europe down with it.

Must see TV: Host of the Keiser Report, Max Keiser, brilliantly lays out the present and near-future in this six-minute segment courtesy of Russia Today.



In keeping with our new-found hobby of digging up rich pieces of joyful Americana from bygone eras, the following clip from the 1942 film, Orchestra Wives, featuring the Glenn Miller band with Tex Beneke performing "I've Got a Gal in Kalamazoo" along with the fast-talking, high-stepping dancing duo, the Nicholas Brothers, the elder Fayard, and Harold.

It's a real piperoo! Enjoy.



On a strictly personal note: Many thanks to the two saints on earth who appeared today as needed. Whatever one's personal beliefs, there is a power in faith that is beyond our small level of comprehension.

Dow 12,554.20, +93.24 (0.75%)
NASDAQ 2,858.42, +27.40 (0.97%)
S&P 500 1,325.66, +10.67 (0.81%)
NYSE Composite 7,553.77, +33.94 (0.45%)
NASDAQ Volume 1,396,691,125
NYSE Volume 3,497,203,500
Combined NYSE & NASDAQ Advance - Decline: 3810-1757
Combined NYSE & NASDAQ New highs - New lows: 111-78
WTI crude oil: 84.10, -0.72
Gold: 1,591.40, +3.40
Silver: 28.47, -0.06

Tumultuous Thursday: Bernanke Comments Spark Selloff

(Editor's note: running quite late again today, which seems to be happening with more frequency here at Downtown Magazine HQ. It could be a sign that at least this little corner of the economy is experiencing a pickup in activity. Today's comments will be somewhat abbreviated, but a full recap of the week's economic events will follow on Friday at markets' close.)

Things were sailing along rather smoothly in the morning session, with all of the major indices up sharply and European bourses closing modestly higher at 11:30 am EDT.

Federal Reserve Chairman Ben Bernanke's non-committal stance on additional stimulus measures, which he delivered to a joint congressional committee, and a downgrade of Spain's credit rating by Fitch collided with China cutting key lending rates by 1/4 percent, sending US markets into a tailspin.

It was hoped by many on Wall Street that the Fed Chairman would offer a glimpse of fresh stimuli, though his testimony merely served to cloud the picture and was not what equity traders had hoped to hear. The Dow Jones Industrials, which peaked just prior to 10:00 am with a 140-point gain, dithered most of the rest of the session, and, along with the other indices, was traded off in the final hour, losing roughly two-thirds of the advance.

The NASDAQ, which had posted a gain of nearly 30 points in the early going, gave all of that back and then some, ending in the red for the day, along with the S&P, which wasted a 14-point gain and ended fractionally lower.

In reality, China's lowering of interest rates, while stimulative on the surface, actually should have - and could have - been interpreted as a negative, since the country is the world's leading exporter and a slowdown there, prompting interest rate easing, is nothing but a manifestation of the problems in Europe, which include slowing demand for what China produces.

Bernanke's wait-and-see attitude was not well-received, obviously, though the potential for the US sinking back into a recession without additional stimulus was murmured and whispered around trading desks during the day. For perhaps the first time in years, the Fed may be sending a signal that the free lunch for financial firms hasn't produced many positive results and it's time to try something other than plain vanilla monetization of Treasury debt and back-door policy easing. It would be a watershed event, should the Fed not engage the markets with more easy money, which has been the case since early 2009.

In other economic news, initial unemployment claims eased back by 12,000, to 377K in the current week, from an upwardly-revised 389K last week. Also, according to CNBC, Art Cashin reported that sources told him yesterday's huge upside advance was largely aided by the largest amount of short-covering in 2 1/2 years. Viola! Rally! Though, really, it was all just fun and games for Wall Street heavy hitters and insiders.

The rich get richer. The rest of us are supposed to just grin and bear it. Doesn't sound like much of a plan.

Gold and silver were smashed lower, for no apparent good reason, other than coordinated action by central banks who are worried that people may actually see precious metals as a safe and sound alternative to floating, devaluing, fiat paper.

Dow 12,460.96, +46.17 (0.37%)
NASDAQ 2,831.02, -13.70 (0.48%)
S&P 500 1,314.99, -0.14 (0.01%)
NYSE Composite 7,519.82, +2.36 (0.03%)
NASDAQ Volume 1,652,958,125
NYSE Volume 3,939,869,000
Combined NYSE & NASDAQ Advance - Decline: 2427-3168
Combined NYSE & NASDAQ New highs - New lows: 122-52
WTI crude oil: 84.82, -0.20
Gold: 1,588.00, -46.20
Silver: 28.53, -0.96

Short-covering, Algo Push, Promises of Free Money Boost Stocks

Stocks were boosted globally on a combination of an HFT algo push, technical bounce, short covering and something of an unveiled promise by the ECB's Mario Draghi, Germany's Queen Angela Merkel and US print primer-in-chief, president 0-blah-blah to create more money out of thin air until all the bad stuff goes away.

Good luck with that.

The sheeple will continue to follow their leaders, nothing will really be fixed, but the sugar high will be nice... until it's not.

If anyone is entertaining the impulse to buy into this rally, be reminded that the bankrupt US banks led the way back above the 200-day moving averages on the S&P, Dow and NYSE. There are more distortions and false tops in the current market than usual, and that's saying quite a lot.

Gold got a bit of a boost, but the day's real winner was silver, closing in fast on $30/ounce.

Nothing has really changed, except the big money on Wall Street placed some short term bets on what appear to be (they're not) cheap stocks. Moves such as today's usually result in tears and pain within a small time frame. However, if every central bank in the world is going to print until they run out of ink, there could be a bit of a lift. Events may change that.

Caution is strongly advised as the correction may or may not be over. Probably the worst time to buy stocks is during a snap-back rally, especially one like this, on no news, data or earnings.

Some of the biggest gains happen within bear markets, so, be advised that we are still in a cyclical bull market ensconced by a secular bear. Profit-taking should commence within the next three trading days. After that, anybody's guess is best, dependent largely upon what Chairman Ben says to the joint committee of congress tomorrow, though our hunch is that he's already let the cat out of the bag to his henchmen on the street.

Dow 12,414.79, +286.84 (2.37%)
NASDAQ 2,844.72, +66.61 (2.40%)
S&P 500 1,315.13, +29.63 (2.30%)
NYSE Composite 7,502.04, +163.41 (2.23%)
NASDAQ Volume 1,671,509,125
NYSE Volume 4,113,058,500
Combined NYSE & NASDAQ Advance - Decline: 4818-849
Combined NYSE & NASDAQ New highs - New lows: 93-33
WTI crude oil: 85.02, +0.73
Gold: 1,634.20, +17.30
Silver: 29.49, +1.08

No News Good News to Wall Street; Music for a Depression: Benny Goodman's Sing, Sing, Sing

Running a bit late today and writing in the first person singular, not because this is a critical day or anything like that, but because I'm just happy as a lark to see that financial stocks led today's absolutely nothing advance.

From years of personal experience (especially over the past four) any time our broken down banks lead the market, one can rest assured the move is nothing more than self-aggrandizement by the former "masters of the universe," thus completely meaningless in a macro sense.

The afternoon insider ramp job was notoriously devoid of volume, making the major event of the day nothing more momentous than the May reading on ISM services which leapt an entire 0.2, from 53.5 in April to 53.7 in May. Big whoopie, and not much of a reaction from the street, so hold off, for now, on the champagne. Europe's issues and the big fiat debt fiasco that pervades everything these days still lurks, waiting to pounce upon a suspect market.

Major events in this little corner of the world were the two rabbits frolicking in my back yard. From the looks of things, the planet may soon be blessed with a few more little cottontails soon. Ah, Spring...

The sun is shining again
and birds are singing in the trees,
My heart is open wide my friends,
I've just caught a summer breeze.

-- from the soon-to-be-released Flowers in Your Garden, a love song by Fearless Rick

There was an "urgent" conference call by leaders of the G7, bemoaning the fact that Europe's crisis might just be spinning out of control, unlike the Earth itself, which, last we checked, was still orbiting the sun and rotating smoothly without any help from the Fed, central bankers or any over-indebted sovereign nation.

When the global financial system finally falls completely apart, those of us with good minds, bodies and hearts will know what to do: Make sure our gold and/or silver is safe, our guns well oiled and our crops bathing in sunshine, pour another drink and watch the crooks being harnessed by their own hangman's noose.

It's really just that simple.

Since we're already well into the Greater Depression, I thought it appropriate to post a couple of Youtube videos - actually they're more music than anything else, in hopes that we might all come to understand better how things were during the Great Depression of the 1930s.

My father, who was born in 1924 and passed away in 2009, was a spry lad of five years old when the markets crashed in 1929. He used to tell me that they didn't know they were poor, as just about everybody was in a similar situation. It's somewhat the same today, except that the many of the truly poor and unemployed now receive all kinds of benefits such as food stamps, free rent and free health care, which makes them much better off than many of the working stiffs who grind out a living on wages that have been stagnant or declining since the year 2000.

At the end of this post there are two videos posted. The first (to which you are encouraged to stand up and dance to) is of Benny Goodman's original recording of Louis Prima's (my dad's favorite) Sing, Sing Sing.

The year was 1937, the depth of the Great Depression, but Goodman's big band orchestra really let it rip in this rendition, which helped Goodman earn the reputation as the "King of Swing." The band leader and on clarinet, Goodman was aided by Gene Krupa on drums (amazing, by any standard) and Harry James on trumpet, among others. The piece is an absolute classic, a treasure of Americana, showing that even as hard as times were for millions, the spirit of the day was one of joy, a never-say-die attitude and unbridled musical genius.

While Prima's original version carried lyrics, Goodman's arrangement was purely instrumental. With Krupa's driving beat and Goodman's flawless orchestration and leadership, the tune became an instant hit crossing generations of music fans. The title is a bit misleading; it could easily be re-named "Dance, Dance, Dance."

If you can't get up and dance to this tune, you either have no sense, no rhythm or no business being alive. All you oldies out there, be careful. Don't bust a disk or pull a muscle. This one's a mover. Enjoy.

The second video (again, it's all for the music) is of the same tune at the fabled 1938 concert by Goodman's band at Carnegie Hall in New York. The piece is longer, lasting 12 minutes, and includes some introspective solos by Goodman and notably, pianist Jess Stacy's solo work, which the Wikipedia entry calls, "exceptional, a four-chorus, chromatic impressionistic masterpiece distinct from everything that preceded it." The entire track is marvelous. Turn your speakers up for this one.

As the global depression expands and envelops more and more of the world, music like this may be the best antidote to the craven antics of thieving bankers and incompetent politicians.

Dow 12,127.95, +26.49 (0.22%)
NASDAQ 2,778.11, +18.10 (0.66%)
S&P 500 1,285.50, +7.32 (0.57%)
NYSE Composite 7,338.65, +53.10 (0.73%)
NASDAQ Volume 1,627,906,750
NYSE Volume 3,403,227,500
Combined NYSE & NASDAQ Advance - Decline: 3882-1641
Combined NYSE & NASDAQ New highs - New lows: 54-117
WTI crude oil: 84.29, +0.31
Gold: 1,616.90, +3.00
Silver: 28.40, +0.40

Markets Take a Breather, But Issues Remain Unresolved

US markets took a bit of a breather on Monday as news flow from Europe was more a trickle rather than a deluge and the only data that moved US indices was factory orders for April, which came in below forecast at -0.6% on expectations of a move lower of -0.3%. March was revised lower - from -1.9% to -2.1% - which made the current numbers look better by comparison.

After opening briefly to the upside, stocks quickly turned red, even before the first half hour of trading, a signal that the more experienced traders were still trimming their risk exposure, but stocks stabilized, traded in a narrow range, bottomed between noon and 2:00 pm before rallying fairly strongly into the close.

If today was something resembling a dead cat bounce, the kitty remained room temperature, and the bounce was more of a flopping over on one side, that being the upside on the NASDAQ. Essentially, following the worst decline of the year this past Friday, traders might actually be encouraged with a session in which the Dow fell by less than 20 points and the NASDAQ actually ended slightly higher with the S&P unchanged. In the current environment, that kind of performance is about the best one could hope to see.

The somnabulent tone of trading did not prevent another negative read on the advance-decline line nor a persistent gap between new highs and new lows, both of which continue to indicate worsening conditions.

It was a lackluster session on average volume in a wait-and-see scenario. Elections in Greece are the main focus of global markets, with the nation going to the polls on June 17 to try and elect a new government after the previous round could not produce a ruling coalition.

Hope is that the Greek people will do the right thing, which, to the technocratic base of european politics, would be to form a government that favors remaining in the Eurozone and swallowing the bitter pill of austerity, though even the most ardent supporters of the unified currency will concede that the continent faces further problems and keeping the union intact is only a first step.

While Greek voters may indeed vote for a continuation of the current ruinous policies, there is a heightened awareness that the tide of populism in Athens could produce a more radical government that eventually rejects the euro and favors a return to the drachma as the nation's official currency. Such an outcome would likely produce massive dislocations of capital not only in Europe, but worldwide.

Another topic of discussion on the street is one of whether or not the Federal Reserve will signal or engage in another round of QE, which would provide temporary relief to markets, though, as has been seen with the previous two rounds, it would probably amount to nothing more than a sugar coating over economic conditions that are unstable at best and deflationary and point to recession at worst.

The FOMC is set to meet again on June 19 and 20 with a press conference with FED chairman Ben Bernanke and a summary of Economic Projections following the policy decision, Prior to that, Bernanke is set to testify before the Congressional Joint Economic Committee on Thursday of this week and the calendar is full of other Fed speakers who might give a clue to the next move by the nation's central bankers.

Speculation is rising that the Fed will be forced into a position favoring more easing, since without it, stocks and the general economy don't appear to have enough momentum to continue growing on their own. The same logic applies to Europe, where the message is to bail out, loan and print as much as is needed to keep the titanic economy from listing and sinking.

The main problem is that the issues that contributed to the crisis - now nearly four years old - have still not been resolved, the main point being the necessary deflation of the global credit bubble, which has not occurred. Instead policy has pointed to even more credit creation, prompting the need for more and more of the same policies that will not provide a long term solution. The entire vicious cycle is spelled out in some detail by Charles Hughes Smith on his Of Two Minds blog, an essential read for those not quite equipped to handle the myriad details of credit, collateral and derivatives.

Basically, Smith opines that the problems of the crisis have remained unfixed and continuation of current policies only are buying time before an ultimate collapse. Along similar lines, investor George Soros recently quipped that Europe has only three months in which to get its act together, a time frame that coincides almost neatly with the upcoming US elections in November. Should Europe stumble, fall, crash and burn within the near term, the tide will almost certainly turn against president Obama and toward Republican candidate Mitt (Adolph) Romney.

That seems to be the preferred strategy of the clandestine rulers of US politics, as any further slippage into the abyss of global depression could then be blamed on Mr. Romney's predecessor, just has Obama, even three-and-a-half years into his term of office, continues to lay blame on former president Bush.

The truth is that each president has had his own set of blunders and misfortune, and not all of the economic distress can be placed upon their shoulders. Congressional dithering and inaction and the global banking cartel are responsible for at least two thirds of the malaise, if not all of it.

The coming two weeks will be ones of nail-biting and indecision, with a fairly light schedule of news and data flow, all of which seems to in the range from bad to horrifying of late. The Greeks, Bernanke, and to some extent, the parliamentary elections in France on June 10 and 17 should be the major catalysts for market in the near term.

Much of what's already occurred and what will happen is still murky, and, since markets hate uncertainty, the chances for a rally in the near term are quite slim. A continued correction and possible bear market conditions (down 20% or more from recent highs) have become distinct possibilities.

Dow 12,101.46, -17.11 (0.14%)
NASDAQ 2,760.01, +12.53 (0.46%)
S&P 500 1,278.18, +0.14 (0.01%)
NYSE Composite 7,286.74, -5.49 (0.08%)
NASDAQ Volume 1,661,424,125
NYSE Volume 3,922,442,750
Combined NYSE & NASDAQ Advance - Decline: 2564-3054
Combined NYSE & NASDAQ New highs - New lows: 36-293
WTI crude oil: 83.98, +0.75
Gold: 1,613.90, -8.20
Silver: 28.01, -0.51