FBI

In part one of this two part series – Hey You – we examined how an invisible government of wealthy, power hungry men have utilized the propaganda techniques of Edward Bernays and lured the American people into a narcissistic, techno-gadget, debt based servitude. Over the last one hundred years they have created a totalitarian state built upon egotism, material goods, and fulfilling our desires through Wall Street peddled debt and mass consumerism. It has been an incredibly effective form of control that has convinced the masses to love their servitude. The lyrics to Pink Floyd's 'Mother' had both a literal and figurative meaning for Roger Waters. Having seen his Wall Tour performance this past summer at Citizens Bank Park with a diverse crowd of 40,000, ranging in age from senior citizens to teenagers, it seems this song has gained new meaning. He sang a duet with himself from 1980 projected on the Wall and when he sang the lyric, “Mother, should I trust the government?” the entire stadium responded in unison – NO!!! This revealed a truth that is not permitted to be discussed by the corporate mainstream media acting as a mouthpiece for the ruling class. A growing legion of citizens in this country does not trust the government. This is very perceptive on their part.

A Fiscal Cliff "deal" that reduces GDP and squeezes the consumers; a Fed whose policies have forced massive capital misallocation away from growth investment and are leading to an unprecedented corporate "revenue cliff"; and now, in the aftermath of the government response to the Newtown massacre which threatened to curb the second amendment, we get this via Reuters:

• BACKGROUND CHECKS FOR US GUN SALES REACHED RECORD IN DECEMBER AT 2.8 MLN CHECKS - FBI

Because when everything is an unintended consequence, nobody has to take any responsibility for anything. And so the New Normal marches on.

Mussolini Would Call It Fascism

Failing to Prosecute White Collar Crime Guarantees a Weak and Unstable Economy … and Future Financial Crashes

Presenting Dave Collum's now ubiquitous and all-encompassing annual review of markets and much, much more. From Baptists, Bankers, and Bootleggers to Capitalism, Corporate Debt, Government Corruption, and the Constitution, Dave provides a one-stop-shop summary of everything relevant this year (and how it will affect next year and beyond).

Something BIG surely must be coming to justify the ferocity of the cartel. We will wait and see, and wonder where they are getting the physical to pull this off. Non-physical gold investors may come to better understand the phrase "getting Corzined".

Why Did We Lose Our Rights if the Government Isn’t Even Keeping Us Safe?

It is no secret that for many years the SEC has been looking into ways of taking down the most infamous of all "information arbitrage" abusing hedge funds: Steve Cohen's SAC Capital, a quest that has finally accelerated to its inevitable terminal point weeks ago. Of course, had the SEC been reading Zero Hedge, the time to get to that critical civilian conviction would have been far shorter. But where the SEC was demonstrating ongoing incompetence, its peer organization - one with all-important criminal enforcement powers - the FBI, was actually several steps ahead, and as Bloomberg reports, is now probing specific trades by SAC, a process which very likely will culminate with criminal charges against one or more people not at CR Intrinsic, but SAC itself. Of course, by several steps ahead, we do mean two years behind Zero Hedge.

Once upon a time Diamondback was one of the most prestigious, most desired to work for hedge funds. That is no longer the case, because as Bloomberg reported moments ago, the Stamford, CT-based fund, which as recently as 2010 had nearly $6 billion in AUM, is closing down, due to concerns it could be the next SAC, and following a flurry of redemptions, has no choice but to liquidate. What equities will be dumped wholesale by the fund? Full list of top 30 holdings is presented below.

More Spying On Citizens than in Stasi East Germany

If the beginning of the end started two years ago as we predicted, is this end of the end?

• CITIGROUP PRIVATE BANK SAID TO PUT SAC CAPITAL ON `WATCH' LIST
• CITIGROUP SAID TO ADVISE CLIENTS AGAINST ADDING MONEY TO SAC
• CITIGROUP PRIVATE BANK ALLOCATES CLIENT MONEY TO HEDGE FUNDS

Next up: all other private wealth groups halt capital allocations to SAC? Redemptions of all non-employee funds and liquidations? FBI raids, but only after orderly winddowns? It sure gets interesting...

And without Stevie Cohen running stops 24/7 in ES and every other stock that is still widely traded, what then? Will GETCO run the entire market?

We find ourselves more amazed than ever at the ability of those in power to lie, misinform and obfuscate the truth, while millions of Americans willfully choose to be ignorant of the truth and yearn to be misled. It’s a match made in heaven. Acknowledging the truth of our society’s descent from a country of hard working, self-reliant, charitable, civic minded citizens into the abyss of entitled, dependent, greedy, materialistic consumers is unacceptable to the slave owners and the slaves. We can’t handle the truth because that would require critical thought, hard choices, sacrifice, and dealing with the reality of an unsustainable economic and societal model. It’s much easier to believe the big lies that allow us to sleep at night. The concept of lying to the masses and using propaganda techniques to manipulate and form public opinion really took hold in the 1920s and have been perfected by the powerful ruling elite that control the reins of finance, government and mass media. How many Americans are awake enough to handle the truth? Abraham Lincoln once said that he believed in the people and that if you told them the truth and gave them the cold hard facts they would meet any crisis. That may have been true in 1860, but not today.

• Rough start for fiscal cliff talks (Politico)
• Europe Fails to Seal Greek Debt-Cut Deal in IMF Clash (Bloomberg)
• Japan’s Exports Reach Three-Year Low as Recession Looms (BBG)
• Beggars can be angry: Greek leaders round on aid delay (FT)
• More financial blogs launching soon: Financial Times Deutschland closing (Spiegel)
• China's backroom powerbrokers block reform candidates (Reuters)
• BOE Voted 8-1 to Halt Bond Purchases as QE Impact Questioned (Bloomberg). In the US the vote is 1-11
• UK heads for EU budget showdown (FT)
• Eurodollars - another epic scam: How gaming Libor became business as usual (Reuters)
• Clinton Shuttles in Mideast in Bid for Gaza Cease-Fire (Bloomberg)
• Fed Still Trying to Push Down Rates (Hilsenrath)

Linda Green Bitchez!!!

Over two years ago, on November 5, 2010, weeks before news broke out that the SEC had caught hedge funds in a massive insider trading scheme involving expert networks, and before the phrase expert network was even mentioned in places away from hedge funds, we wrote an article, titled "Is The SEC's Insider Trading Case Implicating FrontPoint A Sting Operation Aimed At S.A.C. Capital?" that predicted everything that has transpired with SAC since then: we said expert networks would be exposed as the root of virtually all "information arbitrage" alpha by Steve Cohen, more importantly, we exposed various biotech stock trading patterns, where the informational benefits from easily bribable doctors would result in immediate profits courtesy of advance knowledge of Phase 2, 3 and NDA results. Today, we discover not just how deep the SAC insider trading schemes went, but that the profit from such information abuse amounted to hundreds of millions in standalone cases. Adding these together and one can see why Steve Cohen - whose knowledge of these epic inside trading scheme is of course never implied by us: after all, that's what the DOJ, the SEC and the various DA offices are for - was generating 20% returns year after year and able to pocket 3% and 50%.