The Fed’s tools (QE and otherwise) are now going to be implemented to “avert catastrophe,” NOT to “improve the economy.” The bulls don’t want to hear this but it’s true. The game has changed dramatically in the world. The next time the Fed acts, it’s going to be in reaction to some BAD happening.
Anyone who thinks Buffett’s decision to buy BAC is a positive for the market needs to get their heads checked. Buffett bought GS right before the entire financial world imploded!!! You think he somehow timed this purchase well?
With another Crisis already at our doorstep, the litigation is going to be fast and furious. Blankfein is just the beginning. We’re going to see more investigations, more lawsuits, and more accusations of lies and corruption. Do you really think Wall Street CEOs are going to let themselves be the scapegoats for this? All they have to do is say, “we did it because the Fed told us to,” and the legal focus shifts over to Bernanke.
With the German economy slowing, the underlying tensions between the ECB and Germany are intensifying. And with Germany’s next round of elections due in late September, the chances of Germany moving to backstop any additional bailouts are diminishing by the day.
This is a major signal that QE 3 is not coming. Those who are hoping it will need to look at what the markets are telling us. Ignore stocks and pay attention to the credit markets: they’re on DEFCON 1 RED ALERT.
It is quite telling that the S&P 500 has fallen far less than the BRIC markets: the S&P 500 is 16% off its highs, while Brazil is off 23%, Russia is off 22%, China is off 20%, and India is off 28%.
This is a rather odd turn of events… a former Fed official urges the Fed to step in and buy the stock market… just three hours before the markets mysteriously reverses and rallies hard on no real news of note.
This reveals QE for what it really was: just another “hit” for drug addict that is the global debt system. We’ve already passed the point at which the negative effect of monetary easing (inflation) outweigh its positive effect (markets rallying). This is similar to the state of drug addiction in which the drug barely creates a “high” but is ravaging the user’s system with health problems.
I warned to get defensive several weeks ago. That warning is even more important now. I would avoid stocks and Treasuries as neither are particularly safe. I’d have increased exposure to cash and PHYSICAL bullion (Gold and Silver). If you have to remain long stocks shift into large-caps and companies that will exist a year from now (brands and industries people will need regardless of how bad the economy gets).
Courseille had created something that was not only delicious, but an additional revenue stream for his employer (the “chicken” sells for $12, and to be honest, I would have paid $20 for it, it’s that good). Whether the guy knows it or not, he’s a marketing genius (on top of a master pastry chef). I had to meet him.
In plain terms, we’re entering a period in history that will rival the Revolutionary war. This country will be very very different by the time it has ended. Many people will lose everything in this mess. Yes, everything.
The Fed has reopened FX swap lines to Switzerland. The Fed ONLY does this when things are on RED ALERT. It’s now only a matter of time before a big bank goes down and takes the European banking system with it. Forget al the headlines, the ECB and regulators over there have lost control.
We’re fast approaching a time in which neither the Fed nor the ECB will be able to hold the market together. Indeed, we got our first taste of what it will be like at the end of July when the S&P 500 wiped out nine months’ worth of gains in about two weeks’ time:
We’re now officially in the Second Round of the Great Crisis. And if you thought the first Round of the Financial Crisis was bad, wait until you see the next one. Indeed, I fully expect that what’s coming is going to be 2008 on STEROIDS. I’m talking about market crashes, civil unrest, riots, bank holidays and more.
