Monday, June 16, 2014


I hate being right all the time. For years I have told people that the stock market is rigged via ways seen in movies like Superman 3 and Office Space, which many scoffed at it, until it was revealed this year that that is exactly what is going on in the book Flash Boys. I also have said banks are joining corporations and buying stock at record levels for unknown reason. Again, ridicule by those that "know better." Until today, when the Financial Times reported that they have uncovered hard evidence that banks are indeed buying equities to the tune of $29.1 trillion. To be clear, $29.1 trillion is roughly a third of what this country's total wealth is, and when they fall, which they inevitably will, do not have enough money to cover said losses. Point, The Warmonger.

400 public sector institutions, including just about every major bank, investment firm, and hedge fund on Earth in 162 countries, are invested in an asset that could potentially contribute to overheated prices, which many suspect the Fed to be behind in order to protect the collapse of the dollar. This could also explain the haste by which many countries seem to want away from the dollar, such as China moving to have the Rimini be the new world currency, which if it goes through could destroy our economy overnight. 

The FT goes on to say that many have explained the irrationality of the recent stock market (which also proves that while the MSM and government have all been rah rah rahing us to death while knowing the whole time the economy is a shaky house of cards) by corporate buy backs. But this new evidence suggest far worse going ons, that banks are gambling with money that far outweighs what they could pay back. Think gambling addict off the wagon and playing craps at Shifty Eddie's House of Broken Legs. Try the veal it's excellent.

This also explains how China is still going strong, making me wonder if what is really going on is some sort of cold war economic warfare that is going to destroy the one least prepared. Who honestly thinks we are ahead of the Chinese here? But China is indeed divesting heavily into equities that everyone else is bailing out of.

This is from Investment Watch:

Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.

In a survey of 60 central bankers this month by Central Banking Publications and Royal Bank of Scotland Group Plc, 23 percent said they own shares or plan to buy them. The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of Israel bought stocks for the first time last year while the Swiss National Bank and the Czech National Bank have boosted their holdings to at least 10 percent of reserves.

“In the last year or so, I have spoken with 103 central banks on diversification,” Gary Smith, London-based global head of official institutions at BNP Paribas Investment Partners, which oversees about $649 billion, said in a phone interview. “If reserves are growing, so are diversification pressures. Equities are not for every bank tomorrow, but more are continuing down this path.”

Managers of banks’ assets are looking for alternatives to holding government bonds after efforts to stimulate growth from the Federal Reserve, the Bank of Japan and the Bank of England helped send yields near to record lows. Central banks’ foreign- exchange holdings have increased by about $8.5 trillion globally in the past decade, exceeding levels needed for day-to-day currency administration.

And of course Europe is also is heavily invested with the Swiss National Bank and the Danish Central bank heavily invested (to name just two of many), even tough both are leveraged to the hilt and any sudden downturn and these two, among everyone's else, goes poof. Then what? When money ceases to have value, what will happen next?

This is a giant Ponzi scheme where dumb money is banks buying stock that everyone else has long abandoned. This means they are loaning themselves money to gamble with. Good luck with that strategy.

 Check out this graph

Cluster Of Central Banks Have Secretly Invested $29 Trillion In The Market 20140611 death 0

GDP continues to fall because no one is paying anything anymore, which means as bad as Communism was, Karl Marx saw the inherent failures of Capitalism as well. Capitalism is failing, make no mistake about that. We are rapidly approaching a singularity of technological advances, population overgrowth and radicalization of men; that a tragedy of epic proportions is coming. There are not enough jobs to pay everyone anymore. Corporations are not raising salaries. Hell, the GOP wants us to make LESS. Technology is going to make 40% of all jobs obsolete over the next ten years. Money is falling apart. So what next?

Look at how much debt this country is in. Notice that as soon as we started moving away from everything that was working like corporation paying taxes at all and the rich paying in the 90% range. The further we have moved from that, as well as stagnating salaries which this graph also follows, the worse things have gotten.

Total Debt

We have allowed the lunatics to take over the asylum. Notice it was starting to correct itself until politicians and corporations got involved and injected even more capital into a deflating bubble. They do know this thing is going to pop right?

The same can be seen below where people tried to get off of credit cards, that sounded awesome at first until it became apparent that you cannot survive on what you are being paid. Day to day is fine, but any emergency and it's credit card time. Because nothing changed for the average person, the Depression never ended. They just said it did and not to worry about it. WE need to.

 Total Consumer Credit

Consumer credit has gone up 22% over the past three years and record numbers of people used their cards in March, which explains the big jump in sales because the last two months NO ONE spent anything. If you exclude fuel and cars (which are being given away right now in a new bad mortgage scheme and average cost is around $450 a month), every single expenditure fell last month. Health care even dropped 2% which never happens. Did 2% of the population not get sick last month or did they not get enough money to cover their illness and decided to tough it out? The former seems unlikely as people seem to be getting sicker by the day, partially spurned by people not willing to get their kids vaccinated.

No one bought clothes, electronics, food, watches, nothing. And the ones that showed a profit where, surprise, surprise, high end retail outlets like Nordstrom's. This is not a sustainable society for much longer and we are letting it happen.

In short, we have a society drowning in debt in rising mortgage payments, unaffordable tuition, credit card debt, underwater houses (which 52% of this country still has) while the government is gambling with our pensions, 401ks and IRA's. Don't you think it's time for an intervention already? We need to give the democrats all the rope to hang themselves with and get rid if the insane GOP. When the democrats fail, which they most likely will, then we can decide on a new path, one that incudes neither. And if they won't let us, at that point, we will have to make them.

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