Market Crash

"Leverage is risky. Purchasing assets with borrowed money can amplify small movements in prices into extraordinary gains or crippling losses, even default."

- San Fran Fed

The Bond bubble is not only an overcrowded trade, a bubble of historic proportions but it will cause the entire crash of the financial system.

I am not sure how long Mario Draghi can carry on this QE Charade, but it is quite obvious that there is nothing more to be gained from the program.

The beginning of the end of high frequency trading has arrived, and it has done so in a most unexpected fashion: with an HFT turning on other HFTs and revealing on the record, for the entire world to see, just how truly parasitic, manipulative and "market-rigging" the algorithms truly are.

Now this is just the tip of the iceberg when it comes to market manipulation, I thought I would just provide a concrete example of the kind of funny business that goes on every day in financial markets.

Next week is all about the Fed, and the positioning or should I say De-Positioning will be taking place right up until the last minute of this all-important Fed Meeting.

Yellen has created a narrative about the US economy, especially the (un)employment rate, and with the narrative is now firmly in place, Yellen and her stooges can claim they have no choice but to hike In short, Janet Yellen will go down into history as the person responsible for what may be the biggest economic crash ever, or at least delivering the final punch of the way into it, a crash that will make the rich banks even much richer. And there is not one iota of coincidence in there. Yellen works for those banks. The Fed only ever held investors’ hands because that worked out well for Wall Street. And now that’s over. Y’all are on the same side of the same trade, and there’s no profit for Wall Street that way.

Is this the end of the last great run for the U.S. stock market?  Are we witnessing classic “peaking behavior” that is similar to what occurred just before other major stock market crashes?

Financial markets should actually be begging the Fed for a June 25 basis point rate hike, the alternative is going to hurt a lot more... 

The Federal Reserve, and now the European Union have set the stage for the biggest collapse in bond markets that will make the sub-prime financial crisis look like a cakewalk

With the "Great Greek Tragedy" now behind the markets, for the time being, all eyes have turned towards the Nasdaq's triumphant march back to 5000.  (The graphics department at CNBC have been working overtime on banners and bugs for when it happens....watch for them.) For now, it is all about the hopes of a cyclical upturn in the Eurozone economy supported by the ECB's QE program starting next month. Market participants have been bidding up stocks globally in anticipation that the ECB's program will pick up where the Fed left off, and the flood of liquidity will find its way back into asset prices

• Central Banks With Negative Rates Spur Question of How Low to Go (BBG)
• DHS to keep running: Congress edges toward domestic security funding patch (Reuters)
• Setbacks for Tsipras Stir Discord in Greek Ruling Party (BBG)
• Greece’s Challenge: Appeasing Its Creditors and Its Population (WSJ)
• Buffett, a cheerleader for America, takes his checkbook abroad (Reuters)
• Oil’s Big Swings Are the New Normal: Market has rarely been more volatile (WSJ)
• Ukraine Left Behind as Russian Stock Gains Are Unmatched (BBG)
• Brent rises to $61, set for first monthly gain since July (Reuters)

Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. During testimony this week, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Janet Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide?

Financial markets and investing reflect the same characteristics as my attempt at keeping fit

With more than 60 percent of all Americans are living paycheck to paycheck, and a whopping 24 percent of the country has more credit card debt than emergency savings, when the coming economic crisis strikes, more than half the country is going to be financially wiped out within weeks. If you are trusting in the government to save you when things fall apart, you will be severely disappointed.