Archive - Aug 24, 2015

My only conclusion is that the sensational bearish setups are firmly in place and, once the bounce is complete, you will be witness to a fury of plunging price quotes that will, in the end, prove that Monday, August 24th, was simply a shot across the bow.

Brazil's flagging economy, which is mired in stagflation and remains a slave both to China and to what looks like intractable political turmoil, has destroyed nearly 550,000 jobs YTD. As Barclays notes, " [the July] print is compatible with 140,939 job eliminations, pretty close to the historical low of -154,355 in June."

There’s an ill will blowing across the country. The economy is tanking. The people are directionless, and politics provides no answer. And like former regimes, the militarized police have stepped up to provide a façade of law and order manifested by an overt violence against the citizenry. Americans must break free of the apathy-inducing turpor of politics, entertainment spectacles and manufactured news. Only once we are free of the chains that bind us—or to be more exact, the chains that “blind” us—can we become actively aware of the injustices taking place around us and demand freedom of our oppressors.

The Carnage continues in China (and across AsiaPac) as Japan propagandizes and China throws more kitchen sinks at the market to stop the malicious sellers...

As asset bubbles are in the way of the Fed’s policy, a decline in stock prices removes the equity market bubble and enables the Fed to print more money and start the process up again. On the other hand, the stock market decline could indicate that the players in the market have comprehended that the stock market is an artificially inflated bubble that has no real basis. Once the psychology is destroyed, flight sets in.

It's a case of economic policy run amuck.  Real estate development can boost the economy, under the right conditions: lots of jobs and economic activity get generated when homes are built or refurbished.  And there is the wealth effect when home prices rise.  But when taken to extremes - as it is today and was in the previous economic cycle consumer spending gets squeezed out in order to pay mortgages and rent.  It becomes an incredibly unproductive use of capital. Simply put, we have a surge in college-age prostitution and it's the Fed's fault. It gives new meaning to the term "perverse monetary policies"

It's not just the Saudi riyal...

News That Matters

So to be technically accurate, what happened in May 2010 was one marketwide flash crash, while today we had a market paralysis which was the direct result of countless isolated mini flash crashes, all of which precipitated the market from failing for the first 30 minutes of trading.

This is not normal... Dow futures moved over 4,500 points intraday today!!!

The reason given by our rulers for suppressing cash is to keep society safe from terrorists, tax evaders, money launderers, drug cartels, and other villains real or imagined. The actual aim of the ?ood of laws restricting or even prohibiting the use of cash is to force the public to make payments through the financial system. This enables governments to expand their ability to spy on and keep track of their citizens’ most private financial dealings, in order to milk their citizens of every last dollar of tax payments that they claim are due.

Earlier today, as AAPL stock was plummeting and had lost a whopping $75 billion in market cap, dropping as low as $92/share, CNBC's Jim Cramer pulled a rabit out of a hat, or in this case a previously undisclosed email out of his inbox. An email from AAPL CEO Tim Cook which may have well be instrument in saving AAPL some $80 billion in market cap. An email which may also have been a rather blatant Reg FD violation.

Back in July, when it started to become clear that a succession of declarations, directives, policy rate cuts, and even threats weren’t going to be enough to alleviate the pressure on Chinese equities, Beijing looked to take back the narrative by banning the use of certain undesirable phrases. On Black Monday, they were at it again.

"We conclude that, under current circumstances, it is only a matter of time until Brazil loses its investment grade status."

My advice to my generation if they would like to buy various assets is to just literally say to yourself, "Don't think about the price or what other people are paying. Just ask: 'What would I pay for 1 share of XYZ, knowing it has an artificial edifice around it?'" Then take a swing while flying blind and pray you hit it.

But until that is no longer the case, count me out. Me and my entire generation.