It’s still Wednesday evening, and for those of you trying to figure out how I write so much, I have no kids, a wife that works three nights a week teaching ballet, and a habit of waking up shortly after 4:00 AM. More importantly, I love what I do, particularly writing this blog.
Before I start, below is a link to an archive of RANTING ANDY audio interviews, which will be updated each time I have a new appearance, such as the two-hour spot tonight on John Stadtmiller’sNational Intel Report, which can be listened to live at 5:00 PM EST. Kudos to Miles Franklin’s resident computer whiz, Laura Drake, who edits the two daily blogs and creates all its graphics and functionalities.
The first thing I want to do is go over today’s BLATANT market rigging, particularly that of the PPT, which has never been more conspicuous in its goal of supporting KEY ROUND NUMBERS and portraying a picture of “economic stability,” particularly as regards the prospects for a “solution” to the European debt crisis. Readers know there is no solution, and NEVER will be. Math 101 tells you the Western world’s debts can never be repaid, and each day these debts continue to grow. Just google “U.S. debt clock”, “German debt clock,” etc., and you’ll see that, no matter what the Fed, ECB, BOE, BOJ, and SNB leaders say or do, the debts continue to rise at accelerating rates, soon to become exponential.
Think about it. Last week’s announcement that the Fed would provide unlimited, low interest loans simply means borrowers took on HUGE amounts of additional debt, making the overall problem that much worse. As I noted in yesterday’s RANT, in thefour days following this announcement, European banks took on an additional $52 BILLION of debt, hardly what I’d call a “solution” – in fact, to the contrary, it just makes things worse.
Early this morning, we were treated to yet another barrage of bad news, the same bad news that has NOT SUBSIDED ONE BIT despite last week’s GLOBAL QE announcement, and WILL NOT SUBSIDE until the entire system collapses – BANK ON IT! I continue to vehemently maintain we will NEVER see a credit upgrade in this GENERATION for a bank or sovereign nation, just a steady stream of downgrades that, eventually, will become a raging, uncontrollable torrent, likely sometime in 2012.
First we see the desperation of the Japanese government, whom I only mention because Japan is still the world’s third largest economy. How it is still a factor in the global economy is beyond me, as it has, BY FAR, the most per capita debt, the worst demographics, and a nuclear holocaust that will continue for generations due to suicidal engineering decisions. The Bank of Japan is the only financial institution as inept as the Federal Reserve, and only the nation’s saving culture prevents it from disappearing into oblivion.
Ah, a saving culture, if only America understood that concept. Saving money makes up for so many ills, just like a 30-foot putt makes up for three bad irons. Unfortunately, America is the anti-saving culture, which has already taken it to second-world status, on its way to the third world. As bad as Japan is, and things will get dramatically worse in the coming decade, America will pass it on the downside, as thanks to Japan’s savings its citizens will likely avoid hyperinflation and somehow survive the all-consuming Western economic conflagration.
Today, Japan announced it is reconstituting its GDP calculations to make the numbers look better. America, home of the “world’s reserve currency” and, consequently, a level of arrogance rivaled only by the Romans and Nazis, is the “gold standard” of data manipulation, which believe it or not started with “Saint Bill” Clinton long before America’s structural problems were common knowledge. However, the Japanese government has in the past resisted the urge to LIE to its citizens about its financial condition, until NOW. This pathetic act of desperation shows how low Japan has sunk from its standing of undisputed industry titan in the 1970s and 1980s, a sad reminder of how “irrational exuberance” and poor financial management destroyed one of the world’s great economic empires.
Next, an attempt on the life of Deutsche Bank’s CEO, Josef Ackermann. Hardly market moving news, but it demonstrates how the public is coming to despise the bankers that have destroyed their economies. Too bad it wasn’t Lloyd Blankfein, Ken Lewis, or Jamie Dimon, but for all I know Deutsche Bank has perpetrated an equal amount of evil on Europe as the former three criminals in America.
It was inevitable the BANKRUPT American Airlines would see its stock surge on “rumors” of deals to save the company. Despite soaring earnings, mining stocks are always under pressure due to the gold Cartel, but find me a bankrupt company, particularly a bank or other criminal financial enterprise, and wildly bullish speculation is guaranteed.
No matter that the American Chapter 11 filing has caused surging yields across the junk bond sector, or that derivative bombs have since exploded left and right. The few remaining “market participants” (i.e. NOT government or HFT computer algorithms) still are clueless as to the REAL state of the economy, and fraud of the markets, and thus still focus principally on the “trade of the day,” even if such trades involve taking huge positions in companies that declared bankruptcy last week. (NOTE while proofreading Thursday morning – AMR stock down 30% as the aforementioned “rumors” didn’t pan out)
Next, the “bombshell” that S&P is not only reviewing 17 Euro Zone nations for potential downgrades (including Germany), but the European Union itself. I say “bombshell” in quotes because it should not be surprising that the “parent” of a group of bankrupt children is bankrupt itself. The Dow immediately dipped on the combined impact of this bad news, and thus it appeared the PPT would actually allow it to decline for once…
I mean, heck, American retail investors have pulled money out of the stock market for the past 15 WEEKS, but somehow the Dow continues to rise. In fact, while the Dow surged on the “good news” that the Fed would lend unlimited TAXPAYER DOLLARS to any and all European deadbeats for next to no interest, actual market participants were selling in droves. THAT is your “President’s Working Group on Financial Markets,” i.e. the PPT, in ACTION!
Yet again Dow futures were up for the ENTIRE PRE-MARKET SESSION as the PPT performed its daily chore of “setting the tone” for the day, while, AS ALWAYS, I ran on the stair climber this and watched gold under severe pressure.
And then, what a shock, yet another HAIL MARY rally at day’s end, in this case supposedly catalyzed by the most asinine rumor yet, a $600 billion European bailout by the very same IMF that has been vehemently against such action from DAY 1.
No matter that it was denied minutes later, as the PPT is going hog wild in its attempt to mislead investors that last week’s GLOBAL QE announcement and tomorrow’s MAJOR EU SUMMIT will somehow achieve some type of “solution” to the European debt crisis – you know, the crisis THAT HAS NO SOLUTION.
One thing I do know is the ECB is highly likely to lower rates tomorrow from 1.25% to 1.00%, its second rate reduction in a month, and the strongest evidence yet that gold and silver prices will shortly go parabolic.
Which is EXACTLY why they continue to be pressured, every second of every minute of every trading day, as seen by yesterday’s trading activity.
PAPER gold prices, which yet again rose in Asian trading, yet again peaked at EXACTLY 3:00 AM EST, and yet again were walked down into the COMEX open. To the Cartel’s bemusement, gold took off at the COMEX open, and thus needed to be STOPPED COLD at EXACLTY 10:00 AM, as always, when it experienced its DAILY WATERFALL DECLINE. It then shocked the bad guys by rising anew, but was held well under the 1% daily cap limit, while silver, of course, was pummeled and the mining stocks held to miniscule gains.
Not only is the world expecting the ECB to cut interest rates, and the two-day EU summit to produce a “solution” to the debt crisis (i.e. an agreement to PRINT UNLIMITED MONEY), but word emerged that Germany is planning mandatorybailouts, which would be still more bullish for Precious Metals. As I wrote yesterday, I am 100% certain that last week’s Fed MONEY PRINTING orgy was exactly the same, a mandatory acceptance of Fed overnight swap financing to the most distressed banks, such as Credit Agricole, in EXACTLY the same manner that TARP was forced on U.S. banks at gunpoint by Hank Paulson.
I guess we’ll just have to see what happens in the morning.