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Nic Lenoir: "People Stop Trading When The Market Is Not Reflecting Any Reality"
From Nic Lenoir of ICAP
Bring on The Fed Already
We expected a week of consolidation and ranging ahead of the Fed and we got just that. One could have thought equities would underperform a bit more but so far they are holding up. It is worth noting though that there is a lot of divergence on the 3-hour chart of the Nikkei, the Vix signal is still in place, and the Dow has also met critical resistance testing both channel resistance and the year's highs. It seems relatively unlikely we get a massive break ahead of the fed but one never knows: the market is ripe for a correction for sure, both in terms of technicals and fundamentals.
Fixed Income has seen some paring of the relentless rally of the last few months. I want to raw attention on the schatz where the market is sitting on critical support: we have tested channel support, C=A, as well as the overlap with the highs of 2009. I am a better buyer here.
In 10Y US Treasury future we have not seen the 61.8% retracement but we tested the levels of wave 4 of lower order and if we bypass 126-10 then the market will keep trading up toward new highs. Until you see 124-24 broken decisevely this is in theory just a pull-back before further advance.
I think what the Fed does will be irrelevant in terms of economic impact, and the more I talk to people about it the more I realize most share this view. The market is solely focused on the Fed and not the election as it is relatively understood that politicians are useless even though the list of tasks to fix our economy should in theory provide them an opportunity to make themselves useful. Given they will not rise to the challenge and will keep failing to deliver any concrete measures that could lead to progress, and that rates are at 0, as Bill Gross said the only thing for the Fed to do (OR NOT) is QE. I see no value but since they have made it their mandate to target inflation and now GDP I suppose Mr. Bernanke is at least consistent within his delusion. It is interesting however that even Bill Gross has joined the bandwagon. The ECB has also said the Fed is going in the wrong direction even though I bet they would be hard pressed to explain who is buying all these Spanish, Portuguese, Irish, Greek bonds and other turds they are trying to keep afloat. In that sense their only saving grace is that they sterilize their purchases, but they too are engaged in asset price fixing aiming at controlling GDP. Fighting a structural deficit and unemployment printing money is a bit like taking a leak in the ocean to warm it up, and you have to be careful because if the wind comes at you it can backfire. The only traders I talk to cheering the QE news are those who say "it would be so terrible if they let the market reprice". That's simply fear speaking as they want to protect their lifestyle at the cost of rebuilding an efficient capitalist society where government doesn't reward bankrupt entities. Most are actually getting tired of this fake market, low yields, low volumes (people stop trading when the market is not reflecting any reality as it becomes a joke), and they see that policies are unsustainable and will lead us nowhere.
Until enough speak their mind and a politician emerges that has the country's interest at heart and not his own... we wait for the Fed. The culminating joke of 3 months of anxious waiting rewarded by a bunch of professors out of touch with reality, or worse maliciously claiming, to be propping up asset prices which they view as a sign they do their job well. Yay!
Good luck trading,
Nic
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Remember how they had a deck of cards when they went into Iraq? The Ace of Spades is Ben Bernanke, now we just need to figure out the rest of the deck.
Discussing the Currency wars, and identifying the Oligarchy one psycho at a time,
http://PsychoNews.site90.net
its simple. if the democrats hold; buy gold and dont look back for the next 1.5 to 2 years.
think what im tryin to say is; either way, tea party or dem's, bullish for gold.
Excellent title to the article:
"People Stop Trading When The Market Is Not Reflecting Any Reality"
No chit maings, and how much longer will this "fiction" manage to continue pure nonsense. I see nothing but acts of desparation and it is becoming more and more obvious with each passing day. That big Primary Wave 3 is just lingering to start any day now.
GDP report Friday morning should be interesting. Primary wave 3 start or another miracle push up to the statosphere once again to amazement. And no POMO Friday but look out Monday the 1st.
+1
From the article:
Says it all.
No reality? Here and now is the reality. Up, down or sideways?
Maybe all 3 is the best bet.
Double top and really nice short or QE to infintity?
Did you know that Bill Gross was arrested by a Navy Captain for arranging predatory gambling onboard a USN destroyer during the Vietnam War?.......NOT in the Navy spirit , and whose interest?
The article is 100% true, but isn't it becoming a bit redundant? Every sane person already knows the market is a joke.
Sadly, that isn't true. Everyone *here* knows the market is a joke. But plenty of people out there have no idea what has become of our markets, and if you tell them you'll still get the tinfoil-hat treatment.
There are still more suckers out there, I assure you.
It is worse than a joke, I have a feeling that a large amount of the stock market is indirectly boosted by federal money. They have been doing this over time to protect themselves from all directions. Here's how I see the steps from 2007 onward.
1. Economy crisis. People pull money out of stock market and it drops from 14000 down to around 6000.
2. "Emergency Bailouts" is enacted and all toxic assets are traded for real money for banks and investment companies. (around 2008 to currently)
3. Banks and Investment companies use money to buy treasury bonds (to artificially keep the dollar high) as well as investing money in the stock market. Banks show record profits despite recession. (2008-2010).
4. HFT becomes mainstream as other banks jump on the bandwagon to start conducting this corrupt process. (From my understanding, banks try to undercut each other with investors money. Companies like Edward Jones with several million dollars to invest in a single stock will go to purchase it only to be beaten to the punch by a HFT which causes the cost of that stock to be a little bit higher but the HFT bank makes a profit off of it. I could be wrong). This process is slowely bleeding out people's retirement funds.
5. We sit where we currently are with a probably 5000 point leveraged stock market due to federal money as well as a treasury leveraged dollar. The process has been so slow going that no one has noticed. If China took all their remaining dollar reserves and got rid of them I don't think it would have an impact on the dollar's value because it is so leveraged through itself(using banks and other sources). It seems we have won the currency war and can do what we want.
China's only option is to start calling export bans on things they think are valuable while still exporting a hefty supply of cheap plastics and other garbage consumers like to buy. I don't think our gov will step in until its absolutely necessary with everything else we have going on. In the end, I think China is trying to make themselves completely self sufficient, and when they do realize that they are getting nothing (of value) in return for their exported goods, then they may decide to stop exporting.
You haven't visited CNBC, yahoo, or WSJ lately.. You wish their bulltard hats were worn as a joke but these folks really believe that there is a correlation with the economy and the stock market..
Then so again are crap tables and blackjack tables but the deats are full around them. One day this will end badly and everyone will look back and wonder what they were thinking
In the movie "Stripes", didnt Bill Murray tell everybody " General Bernanke owes me money!" And ran in the house to play with his Bestest Buddy, Bestest Friend.
The political class is too afraid to raise taxes so the Fed is confiscating money for them through printing debasement while people are distracted.
When I wonder what to expect next, I just ask myself what would Fidel Castro have done in 1962 if he had huge debts from the revolution, an exchangeable currency and could print the money? Viola! There's your answer.
Note to politicians and Roubini: raising taxes and raising revenues are two different things. You can lower taxes and raise revenues. We don't need a debt commission, we need an anti-spending commission.
Nic,
What is with the NIKKI down at 9200 as compared to the SP up at 1180, DOW up at 11,100, DAX up at 6600, and Yen 80.65?
With a stronger yen, it is much more expensive to purchase Japanese stocks.
Hi Orly
What all this talk of QEII, no QEII, big QEII, Small QEII, Stealth QEII has done is to numb us to what QEII will really be.
It's a classic crowd control method, overwhelm and exaggerate. It's been priced in right? All of the above scenarios have been priced in, right?
And repetitive though it is in both tone and content, somehow, this lesson needs to be delivered again and again and again. Just like religion. A new belief system will be built on doing something differently, hopefully better, again and again and again.
Seeing the change in tone here at ZH is in and of itself instructive. More and more people putting their hands up (at least in comments, whether in real life or not).
Trouble is both the Casino AND the action in the Casino are both highly addictive. It's the old x+1 syndrome. My next trade will be my last......+1!
Game "off" and hunker down. We are in a preservation phase, not an expansion one. Any extra-ordinary paper profits will be unwound. Else, what you hold will be debased. Hold some gold, bag much silver, all good measures.
ORI
http://aadivaahan.wordpress.com
Had beers with 3 mid-30's guys who work in a large tech company this evening. All three said they had money but didn't know what to do with it. They each independently said, things are "uncertain". Pretty much sums up where most people are at.
BTW: I wrote down this website for each of them and told them at least they could hear what's happening out there without the haze of MSM.
One of the best ever lines ever; what should I buy?.........the tone of yours HW seem a step beyond.
Hmm... What to buy, what to buy...
Wait until they figure that out...
If you don't buy anything, you buy dollar anyway.
In general: if you have any savings, you must "trade".
It's impossible not to trade.
Yep - people are nervous and uncertain now - not like back in , say, late 1999 - when they had no such concerns.
I'll assume you also told them to buy AAPL.
A commentor from ZH wrote it a while back......it was meant to illustrate how consumer thinking is conditioned to be a one way street - sorry, I cannot find the original post but it was a brilliant insight.
I do believe the banks and the politicans are criminal and the FED is corrupt. My preference is too look for short opportunites, however when I trade I do not want to be run over by the manipulation so try to trade price and take what the market gives, if it can be called a market.
Best...
Lenoir Post...
Ever...
I know a bunch of unemployed college grads. They aren't buying / holding stocks, either.
As CD purports, it is our 'denial' that we are ruled by. Might I add a disturbing little side note...
By now, anyone having read CD's withering diatribes should now have an understanding that we embrace our conditioning, and dive deeper into that conditioning to escape cognition at the unacceptable levels of our recognition. But pointedly, in denial we must necessarily know the truth. Denial requires knowledge of truth. That said, unfortunately, everyone of us here felt-up and embraced the ponzi, the fraudulent exchange of value. We loved the self-stroking as we catapulted our ego and scooped up purchasing power stolen from others.
This somewhat regrettable epiphany slammed me hard. You see, when I was 18 I escaped the tyranny of church, but I mistakenly threw out it's works in entirety, and spat upon the valuable principles that lay dormant.
Does anyone remember that line by Senor Jesus (whether it was attributed to him, real, is irrelevant), 'give unto Caesar what is Caesars'. It wasn't just a clever retort, it was much more, a clear observation and recommendation; if you want to rule this world, be prepared to swim in ultimate rebellion. The one that blinds, the one that turns the everpresent possibility into the eternal repeating nightmare.
You see, giving to Caesar what is Caesars is not defeatist, it is the way of the world. Unless you are prepared to become just like Caesar, then you better sure as feces be giving, and I mean generously. This world has one master, and one way of staying the master. Now and forever.
Here then, it time for us to embrace the fact that we are an asset. An asset of the corporation of the U.S., whose shareholders own other corporations as well. The board of this corporation is small, the creamed corn of the crop, almost God-like in their tentative glory. The chairman sits with a few hundred other chairmen from around the globe. And for most of us, whether we fancy ourselves Christians, Muslims, Hindu, or Pagan, their stinky God is our God. We just don't know it, and for those who do, don't speak of it in polite company.
And sometimes an asset becomes no longer productive, and therefore becomes a liability. From the Grand CEO's POV, ask yourself, are you a useless eater? Or, are you an asset? How better can you serve the beast, your beast? Do you think your complaining absolves you from paying patronage? Do you think you haven't already sold the majority of the rights to your soul? You know you have. What? You say you haven't? Well squeeze me lemons! Now thats our lover named denial at work! Choice exists, but is relegated to the realms of the micro-world. You can choose to smile, to feel the sun on your skin, have empathy for others, make light act as a particle or a wave, or do none of the above.
Whatever conclusion you come up with now, you may want to ask yourself, how is the corporation changing right now, and what do they want? You may think its going bankrupt, but you are wrong. Only a small component is changing, but you believe it is the crashing of an entire system. The entropy is perceived only in your head. It is only the medium of labor value transfer that is being debased for the sole purpose of a new and improved modification. So understand, if you're bent on being the pollution, the solution to pollution is dilution.
You were all born within the corporation, and profited from the corporation, and raped along the side of the corporation because it was your duty. We complain about Orwellian doublespeak, when in fact we've had our own set of internal-doublespeak since we organized our own handy personal system of denial. You did as your were told. That part of you knew the truth.
Don't you fuckin' lie to yourself now! You're all lamenting, just like me, because there's a new steam-engine in town, and its either time to step into the liquidation chamber, make yourself more useful to your master, or pretend that your version of 'fighting back' will change anything more than the relative/tentative condition. Now don't misunderstand me, by all means fight back according to your level of delusion. I surely will. There are a lot of competing Wills out here that are eager to make the new rules. The absolute condition is bondage while our feet touch the soil, whether you're master or servant, shareholder or temporary human resource.
If you don't integrate the fact that you are at war with yourself as well as those with competing Wills, don't be surprised if your soul spirals out of control to places that are very hard to return from.
Otherwise, your choice is quite bleak... physical death, spiritual death, or both.
Don't you fuckin' lie to yourself now! You're all lamenting, just like me
This world has one master, and one way of staying the master. Now and forever.
Stomping kittens, Hook? Does someone need a hug?
H,L&S - As I have meditate on the passage you mentioned where Jesus is responding to the Pharisees here is my take (which seems to go a different direction that what you have written):
The Pharisees wanted to force Jesus (as either teacher or prophet) to make a statement which was either 1)going against Ceaser or 2)going with Ceaser, in terms of paying tribute taxation (a binary either/or).
In the first case they would have turned him over to the Roman authorities as one who they would have imprisoned or killed him for rebellion.
In the second case (siding with paying the tax) they sought to get him to undermine his own popular support among those who wanted to throw off the Roman yoke.
But Jesus knew their intentions and took this as an opportunity to go deeper with them.
He uses the Roman coin, whose face shows the face of Ceaser, as a metaphor of the reality that we are created in God's Image - stamped with that image and are indeed His possession (also implying that we are precious to Him).
Jesus confronts the Pharisees that they are really not giving themselves back to God as a tribute to His sovereignty over their humanity. And he also rightly points out at the same time that governments can only attempt to control the material, not souls of men, which are reserved to the realm of God.
We also are confronted with the same reality as we read his words today.
What's a Bear to do these days?
hibernate
find more gold before the snow falls..
Two things about QEII expectations:
1) central banker are lying all the time,
2) CHF falls against USD.
Could it mean smart swiss money is leaving CHF and go into USD ? Because they know, Bernanke is lying ?
Everything (that counts) is up against Swiss right now, except Yen.
"People"? I ain't "people." I am a - "a shimmering, glowing star in the cinema firmament."
[picks up newspaper] It says so - right here.
- Lina Lamont
That's Mr. Market all dressed up in drag. Heckava job Ben
Hook Line and sinker, which side is your bread buttered then, are you with us or against us? I think you give the elite too much credit, we are many and they are few, it's like David Icke says, the power in the pyramid comes from the base not the top, without the support beneath it collapses, the ponzi scheme goes with it.
Rise like Lions after slumber
In unvanquishable number,
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.
'What is Freedom? - ye can tell
That which slavery is, too well -
For its very name has grown
To an echo of your own.
'Tis to work and have such pay
As just keeps life from day to day
In your limbs, as in a cell
For the tyrants' use to dwell,
'So that ye for them are made
Loom, and plough, and sword, and spade,
With or without your own will bent
To their defence and nourishment.
'Tis to see your children weak
With their mothers pine and peak,
When the winter winds are bleak, -
They are dying whilst I speak.
'Tis to hunger for such diet
As the rich man in his riot
Casts to the fat dogs that lie
Surfeiting beneath his eye;
'Tis to let the Ghost of Gold
Take from Toil a thousandfold
More that e'er its substance could
In the tyrannies of old.
'Paper coin - that forgery
Of the title-deeds, which ye
Hold to something of the worth
Of the inheritance of Earth.
'And these words shall then become
Like Oppression's thundered doom
Ringing through each heart and brain,
Heard again - again - again -
'Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.'
Exerpt from The Mask of Anarchy, by Percy Bysshe Shelley, written on the occasion of the massacre carried out by the British Government
at Peterloo, Manchester 1819. http://www.artofeurope.com/shelley/she5.htm It is rather longer then this brief excerpt, but well worth the time to read it. Written almost 200 years ago, it is highly relevant again, as we are shortly going to be fighting those same battles over. It took us well over 100 years to wring some concessions from the powers that be after the beginning of the industrial revolution, concessions that allowed most of us, at least in the developed world, to have a little something beyond mere subsistance. People fought and died for that and thought it worth the price. The industrialists have rediscovered the joys of slavery and child labor in the far east and we have to compete with that. The party is over, boys. You'll work 12 to 16 hours a day 6 days a week for your daily bread and be grateful for it.
EZYJET,
I'm on your side whether you like it or not! The point is that you shouldn't ever expect the fight to end, even after it 'ends'. We are all our own little pyramids within the big one. Sometimes we don't like to conceive of ourselves that way.
As I just mentioned to Cog Dis in another thread, I sometimes speak in whipsaw. I tell you that you can't escape your inner-slave. The mind does not accept negatives. 'Can't' is rejected. The message is 'street gestalt' to break the denial of the reader by acting as a bridge. It's a filthy, dirty job. The other voice is a purposeful weak hand of hope without active encouragement. Overt hope and reason without a slap in the face is what Cog Dis provides so well.
http://www.financialcrisiscards.com/
I have always thought it was JUST ME. JUST ME AND I AM TOO HIGH...Im obviously so baked that I am imagining this shit...save the market every single time...with no volume. It is a joke....but becoming more widespread. Droll....real droll.
Bizzaro world.
Two stocks. Arena Pharma & Vivus
FDA rejected both of their obesity drugs. Both stocks going to the moon.
When voting with their hands stops working, smart people start voting with their feet.
I have a contribution to your note. There is yet one more door to go thru after denial. It’s what denial is trying so desperately to hide. What is behind the door? Shame. Shame is a negative experience of the self, it is an implosion or momentary destruction of the self in acute self denigration. Shame however is an acutely painful state which adults regards as childish or inappropriate. Overt unacknowledged shame humiliation illuminates the sequence from shame into humiliated fury and insoluble guilt.
Humiliated fury has very little place to go except back down on the self, when one has been seduced, to become a component to ones humiliation. Shame breeds more shame of being inappropriate. It is simultaneously evoking a retaliation both at the self for being humiliated and at the other, who has been experienced as betraying, disapproving or scornful. Humiliated fury is inevitably directed against the offending other and retaliatory impulses are evoked to turn the tables on the other. Not only is there risk of further estrangement and loss but of injury to the other for which the self is immediately in a state of guilt. Humiliated fury is a state to with one does and does not feel entitled. Whether or not one is entitled to it, is a state one cannot help.
The contrast between humiliated fury and righteous indignation to which one does feel unambiguously entitled makes it easier to follow the course of humiliated fury in the state is called self righteous rage. The ambiguity can be crazy making. Often states of shame and guilt exist without being correctly identified. In addition shame is often perceived as irrational.
Shame however involves more self consciousness and more self imaging than guilt. The experiences of shame is directly about the self, which is the focus of a negative evaluation. Because the self is the focus of the awareness in shame, identity imagery is usually evoked. At the same time that their identity imagery is registering as one’s own experience there is also vivid imagery of the self in the others eyes, or “internal theater” of the self in its own and others eyes that is so characteristic of the hysterical.
Fascination with the other and sensitivity to the other’s treatment of the self renders the self more vulnerable to shame. Shame is close to the feeling of awe. It is also the feeling state in which one is susceptible to falling in love. Out there or with in the self. Both localization's are registered as one’s own experience. Shame which involves more self consciousness and more self imaging than guilt is likely to involve a greater increase in feed back from all perceptual modalities.
Shame thus has a social affinity for stirring autonomic reactions including blushing sweating and increased heart rate. Shame usually involves more bodily awareness than guilt, as well as visual and verbal imaging of the self from the other’s point of view. Shame is thus more acutely painful experience than guilt. Because the self is involved in imagery of itself in relation to others it can appear as if shame originates out there were guilt appears to originate within.
This characteristic makes shame appear to be more primitive or irrational reaction than guilt. Both states however involve the self in trying to maintain affectional ties to significant others. Shame is the experience of losing self esteem in one’s own and others eyes. Guilt is the experience of failure. Guilt is the experience of injuring others or things and requires that one make appropriate reparation.
A difficulty in the resolution of states of shame and guilt arises from the fact that the stimulus to shame can be two fold. Either a moral transgression or failure evoke shame. Either can be moral or non moral shame. When non moral shame is evoked it readily connects with moral shame. One can search for the transgressions that make sense of the injury one has suffered. Thus shame has a potential for a wide range of associative connections between failures of the self and it transgressions. There are many varieties of shame that need to be identified accurately. Mortification, humiliation, embarrassment, feeling ridiculous, chagrin, shyness and modesty are all different psychological states.
Humiliation is experienced either in one’s own or in the other’s eyes and can involve rapid shifts of position of the self from one stance to the other. Embarrassment involves the self in a feeling of temporary paralysis or loss of power in relation to the other. Mortification has a clear element of conscious, wounded pride and involves the self in a more distant relationship to the other.
Most appropriate discharge of the shame states is the awareness that shame can be discharged in good humored laughter at the self and its relation to the others. One is I ashamed of being ashamed of being ashamed, thus compounding the difficulty of finding a rational solution in some gentile ridicule.
Pretty pictures. But this guy ever make a dime trading?
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