Archive - Aug 2011 - Blog entry

When looking at these 3 charts – banking, emerging markets, and China – it is hard to make the case that we are NOT in a bear market already.

Stocks are now back to November 2009 levels. In plain terms, the last year and a half may as well have not happened. The second half of QE 1, QE lite, and QE 2… literally everything the Fed has done since the end of 2009 has been wasted money.

It's getting more confusing by the day. I doubt this is about to change.

And how did Treasury paper do following Standard & Poor’s bombshell downgrade of U.S. debt?  Why, T-Bonds, Bills and Notes came through unscathed, thank you. Actually, they did much better than that, rallying so sharply yesterday that one might have inferred the U.S. was the last citadel against the panic, confusion and fear that rein elsewhere in the world.

500+% in less than a week! Not bad. Expect to give some back as the kick the can down the road parade begins: QE3.56, concerted central bank buying, bannig shorts, outlawing puts, whatever. I fully expect a short term rally then realisty will rear its ugly head once again.

COFFEE RESTRICTION'S IN FORCE...

However, the fact remains that the market is on Red Alert mode. The financial system is more leveraged than it was during the Tech Bubble. Mutual funds are more heavily invested in stocks than at any other time in the last 50 years. And the cause of the 2008 Crisis (derivatives) still hasn’t been reined in.

Actionable US Debt Downgrade Research & Opinion for Monday Morning - Monetizing the Situation

First, concentration does not equal risk though the commercial investment industry really wants all their clients to believe this rubbish concept. Second, corrections in gold and silver, though they are very frequently sold by the commercial investment industry as the “bursting of the precious metals bubble”, are just that – corrections, and additionally buying opportunities to accumulate more physical, when they happen. Not owning a single ounce of physical gold and physical silver in this environment is absolute insanity.

“Some wags are saying this downgrade is already built in, but with the level of cognitive dissonance in the market I say otherwise. I am sure all the government put mucky mucks are meeting over the weekend and are stirring and preparing their usual toxins to stem any blowback." (Russ Winter)

Washington probably had it coming by handing S&P one necessary ammunition--the Political Soap of the American debt ceiling debate, but on the other hand, I would not give that much credence to S&P’s claim that “it's our duty to make that call" either.

This isn’t the time to hope.  This is the time to take some action to protect yourself and your money.

Just like in 2008 we’re going to see a full-scale market Crash. Only this time it will also involve countries defaulting on their debt, bank holidays, civil unrest, and more. In simple terms, it’s going to be 2008 on steroids.

You won't find this kind of hard hitting investigative roasting anywhere else folks...