Will We Hold It Wednesday – The Lies We Tell Ourselves

S&P 1,886 – a new record!  

Sure only 86M shares were traded on SPY (see Dave Fry's chart [21]), which is about what's usually traded on a holiday but why should we let that bother us? As Dave noted in his post last night:

[Chart by Dave Fry]

Predicting market movements is a waste of time even for the best strategists. This is a period when following technical systems pays off, especially remaining disciplined and systematic. This includes having cash available to move as conditions change. It’s fun to predict the future marked by witty and amusing comments. That’s just entertainment.

Following trends is no different than following the money. Over the past 5 years this has led to following gifts of liquidity from the Fed and other central banks. A more dangerous method is to guess central banks next move. Janet Yellen has already laid her marker down the Fed will continue to be accommodative for a long period ahead. Bulls interpret this as bullish for equities and being nobody’s fool, they’re just going with the 5-year historical trend. The ECB is expected to provide more stimulus at its next meeting Thursday. The PBOC is expected to do so as well soon even as the finance minister has said they wouldn’t. Bulls don’t believe him for now.

With bulls believing the “all clear” has been sounded by Yellen, bulls can return to a “bad news is good” modus operandi enjoying or ignoring bad news.

[Chart by Dave Fry]

As pointed out by Zero Hedge [22], "While QE may have tapered to a "measly" 55 billion per month, on just the first day of April risk assets experienced the additional benefit of over two full months of QE injected into the stock market in one single day!"  And now you know where yesterday's buying deluge came from."  

That's right, I showed you the chart yesterday that highlighted the $250Bn worth of "reverse repo" handed out to the banks on the last day of the month to goose the markets and, unlike Jan 1, they didn't drop it back to $50Bn the next day. Instead the Fed fed another $113Bn to the Banksters yesterday and, despite the fact that it was a slow day, they jacked the indexes right back to record highs again.  

Does it sound like a conspiracy theory?  Watch Jon Stewart's interview with Michael Lewis, which begins at about 8:45 in this episode:  

Yes, it's RIGGED. It's rigged and it takes the cooperation of EVERYBODY involved to rig it. The SEC has to look away, your broker has to lie to you that you are getting the "best executions" while they are SPECIFICALLY selling better executions to HFT houses. The media has to cover it up as well, lest the consumers get outraged. That's why the FBI has launched an investigation and not the SEC but, at this point, why trust the FBI?

Certainly you can't trust the media. Did you even know that there was just an oil spill in Lake Michigan [23]?  Yes, it's BP again. That's OK though, turns out Bayelsa has 40 oil spills per month [24] – thank goodness they don't have them nasty Government Regulators getting in the way of progress in Nigeria! I love this quote from AllAfrica.com:

Sadly, the very existence of the people depends on the environment, which is being destroyed with impunity due to oil and gas activities, crude oil thieves and illegal refinery operators.

This is what the World looks like when you let the energy companies "regulate themselves." 

The "news" you get is manipulated by the same corporations that are committing these crimes. I was watching Bloomberg this morning and I saw something outrageous. Lufthansa's pilots are striking in Germany and, as they usually do, the networks like to pull random  strikers from the crowd to ask them questions, rather than allowing the actual leaders of the unions to speak on TV. This way, they hope to present the striking workers as radicals with unclear agendas and hopefully catch them saying something that damages the cause, rather than interview the people who have been elected to speak for the group.

Go here [25] for the video.

But that's not enough for Bloomberg, they actually went out and found a guy named Streicher to interview but the joke was on them as he held his own quite well. That wasn't what I thought was outrageous – what was outrageous (and I hope the boys at the Daily Show pick this up for me) was that the pilot knew enough to talk into the camera and the guy from Bloomberg said to him "no face me."  It's not in the clip but I swear that's what happened live on TV. Obviously, not facing the camera makes him seem less sincere – this is just one of the little ways the corporate media manipulates the message for you!  

Why should this matter to you? Because the same kind of blatant manipulation goes on in the broader market and, if you are considering buying stocks at record highs or bonds that pay you record low interest rates – you have to consider AT LEAST the possibility that they are being manipulated and the prices you are paying or receiving are screwing you and benefiting the manipulators. 

The Nikkei shot up last night not because anything good happened in the market (and yes, we are short the Nikkei), but because the Yen was weak and, best of all, Japan's $1.25Tn pension fund will be handing money to Goldman Sachs and other Banksters to put into the stock market – the same plan the Bush Administration had for our Social Security funds in 2006 – that would have worked out terribly, wouldn't it have?  

[Chart by Dave Fry]

There were no Democrats to block this evil scheme to loot the pensions by the Banksters and Conservatives in Japan, so off the money goes with the brokerages each expected to invest between ¥200 billion and ¥400 billion, concentrating on companies with high return on equity, according to the Nikkei [26]. The WSJ is, of course, ecstatic with this idea – the author of the article couldn't find anyone with anything bad to say about it! The headline says the Nikkie could pop 5% on this news – WOW!  

And it would be WOW! if the same news hadn't already lifted the Nikkei off the 14,000 mark in November, when the idea was first put forth by Abe [27]. We discussed it in our Member Chat Room [28] that day and decided to go long on the Nikkei and EWJ at the time. Now, at 15,000, the Nikkie is not 5% higher but 7% higher and it's time to flip short – we didn't change our position – the Nikkei simply overshot the mark.

Warren Buffett made a great point of warning us about the trouble facing public pension plans in his recent letter to shareholders [29] – just one of the many problems both the market and the Mainstream Media are choosing to ignore – so far.