Monday, February 24, 2014

No Middle Ground

Today's vulnerable financial paradigm still offers no analytical middle ground worth hanging a hat on. "Hyperinflate or die" remains the global banking system's mantra. Institutional response to the 2008 financial crisis desperately seeking to sustain the post-Bretton Woods status quo serves nothing more than to extend a transitory illusion. The credit bubble maintaining the global banking system's solvency is fatally unsustainable. Extreme monetarism characterizing the post-Bretton Woods era dominated by the "best and the brightest"—captains of finance and self-appointed masters of the universe—is inexorably leading the world toward inevitable, all-inclusive doom.

Practically speaking, too, the means of forestalling overt hyperinflation rather forcibly imposes death. This is by design and a direct consequence of widespread adherence to a game of make believe sustained by institutions of questionable character exerting considerable influence in both the private and public sectors.

Consider dire conditions in the euro-zone periphery and the nuance of the same imposed in Ukraine at the hands of neo-Nazi gangs. These are echoes of things destined to become only more pervasive. The game of make believe serving to elevate finance capital to its present day, dominant position demands both scarcity and violence. This is the means by which power is maintained over people and, most emphatically, their representatives in government. Indeed, per violence, here in the United States we might instead consider November 22, 1963 rather than August 15, 1971 as the date from which our journey toward doom began with a bang. Ever since President Kennedy's assassination not only has the meaning behind "the home of the brave" gained increasing cause demanding the fruits of the American Revolution be asserted and secured by citizens of good will and their political representatives alike, but circumstance whose portent could effectively nullify Section 4 of the U.S. Constitution's 14th Amendment have been persistently cultivated with increasing intensity. This latter point is not yet given much consideration among thoughtful individuals. It's only a matter of time.

The problem of those inclined to discount conspiracy theories is that sometimes facts support the truth of a conspiracy's probability. Consider the parabolic growth of indebtedness in both private and public accounts. More critically, consider the means of repaying this debt. Just look at the coincident, parabolic increase in the United States' current account deficit over the last several decades. Once a nation of producers maintaining a current account surplus in our economic dealings with the rest of the world, we have become a nation of parasites exporting IOUs. What's more, the velocity of increase in our indebtedness must be feverishly sustained lest the mountain of IOUs be left to collapse. Look no further than the ongoing actions of global central banks to substantiate this truth.

Where, then, are captains of finance who should be leading the charge to secure the means of freeing central banks from the now permanent necessity of actively providing a backstop to a banking system obviously in grave peril? Still infected with the due diligence disease? This at the very least we are left to conclude.

How about actively subverting the national interest? There's no shortage of evidence to back this charge! Must we wait for the day when the full faith and credit of the U.S. Treasury, indeed, is called into question?

Who would we rightly blame should this day arrive sometime in the not-too-distant future? Bought-and-paid-for fools in Congress who took, hook, line and sinker, the claim made by the few and far between among beneficiaries of wildcat finance insisting markets are perfect regulators of rational behavior? Or will we rightly condemn those whose illegitimate cause not only widened the gulf between the haves and the have nots, but imposed death sentences on an increasing swath of humanity at every turn?

Peril evolving over decades has solidified since 2008 into a foundation upon which its driver now is set to move into high gear. Why is this risk being tolerated? Plainly, the so-called "magic of the market" has been shown to be the black kind. Five years plus flooding the global banking system with but more dollar-denominated IOUs only further proves that, perpetuation of a Ponzi scheme does not a solvent banking system make. Why is the inevitable day of reckoning being postponed? Is there meaningful coincidence to the fact that, a significant component of the game of make believe sustaining an unsustainable Ponzi scheme requires the manufacture of geopolitical conflict and a permanent state of war?

Hyperinflate or die is the paradigm we are ensnared by. Vain attempts at forestalling the effects of the former requires death be increasingly imposed on fellow human beings. Make no mistake, friend. Enemies to the constitutional republic of the United States are at work here. What's more, this lose-lose paradigm threatens to bankrupt the U.S. Treasury. You can say goodbye to any chance of a real recovery if that should happen.

A Ponzi scheme is staring everyone in the face, one whose likes is still met with a consensus in denial. Shall we tally one stroke to the value of public education, then, as time spent in youth developing capacity to understand truth is time not wasted as an adult indulging fantasy in a game of make believe, such as careless children are wont to play?

The longstanding call here that the U.S. federal government be possessed by persons of such moral and intellectual character as recognize the wisdom of seizing the Fed is once again reiterated. The Federal Reserve is a woefully underutilized weak flank made only more so by garbage it has willfully taken onto its balance sheet. A real recovery ending all grave threats such as we presently face will not occur until the credit-creating power of the nation's central bank is directed toward enterprises whose long-term consequence measurably increases the productivity of the nation's labor force. Today the Fed's credit-creating power is illegitimately directed toward enterprises that principally serve to marginalize and debase labor. As such, today's Federal Reserve is demonstrably unconstitutional.

You really have to wonder whether the Fed's present, hopelessly insolvent condition was in fact the very intention from the moment this institution was created a little over a century ago. Likewise, through its present day actions we might fathom how the 20th century's Great Depression remains a terrible curse in fact. Not because of what happened then, but rather because its worst consequence might yet be felt!

Risk of a Weimar Republic repeat sometime in the not-too-distant future is increasing with the spread of the due diligence disease to the very top of the capital structure—lenders of last resort. Our enslavement to the scourge of monetarism guided by belief free markets can do no wrong—a belief decidedly proven a delusion in 2008—rationalizes today's tsunami of misapplied (illegitimate) credit that, otherwise formalizes the Federal Reserve System's technical insolvency. This truth is made no less formidable by deception requiring Fed credit be backed by debt pouring from the U.S. Treasury, that today's confidence game be made to appear viable.

Momentary stabilization of a dying patient does not alter the patient's fate. Its doomed state under an ongoing and increasing starvation regime—further destroying the productive powers of labor—in fact is being purposely imposed for the sake of making the patient's grave condition nigh impossible to cure. Events in Ukraine warn that we have yet to see the worst state of this dying patient's spiral into the tomb. That the curse of the Great Depression is breeding insanity tempting a repeat of the Weimar Republic's hyperinflation vividly reveals the simple fact that, given our current paradigm, there is no middle ground.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.


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Thursday, December 19, 2013

My Backdated Wrap On Ill Fated Crap

My desire to comment on these fleeting moments of bird brains mindlessly pecking at the largest collection of trash on the planet trading on global stock exchanges is exhausted. I would sooner report on sea gulls circling a municipal garbage dump than continue mocking a deception whose objective ventures destruction of so many significant accomplishments of the past several centuries. Chief among these is the constitutional republic of the United States of America. It probably goes without saying the so-called "best and brightest" never would acknowledge this objective that today's rickety financial state imposes on a fate likely to be marked by unprecedented panic.

In terms the self-benighted should understand, there simply is much too much mispriced risk running straight up to the top of the capital structure. Lowly equities are nothing more than a sucker's game: a trap whose springing realistically could have the same effect on investors as baited mechanical devices have on rodents: from living to dead in an instant. This risk, indeed, pervades the entire capital structure. The inherent danger this presents is both fundamentally and technically apparent. One must be blind, or criminal, not to recognize it.

Every dire warning written here remains intact. The trans-Atlantic banking system along with central banks lording over it remain hopelessly insolvent. These are being levitated by the dying breath of the greatest Ponzi scheme the world has ever seen. Nothing has changed. Supposed financial de-leveraging and economic recovery are figments of twisted imaginations encouraging collective suicide. This extended moment sustaining profoundly mispriced finance in suspended animation is nothing but a fantastic charade. Same fraud, different day.

Likewise, there remains no middle ground providing escape from certain calamity destined to reach far and wide across the globe. A banking system whose capacity to paper over a mountain of illegitimate financial claims using still greater quantities of the same is the stuff of legend positively portending an historic deluge of tears. Granted, Ponzi finance added since 2008 finds no small portion presumed "trustworthy." No doubt, this quality about securities issued by lenders of last resort always has been proven. Yet this whole house of cards is doomed because, since 2008 nothing has been done to increase the productive powers of labor, its capacity to amass tangible wealth sustaining its productivity, which is the ultimate backstop underpinning finance, and on which a modern banking system's solvency critically depends.

Surely, we have seen the AAA-rated trash trick before! The U.S. Treasury is by no means immune to a behemoth, fraud-rife banking system's due diligence disease. The only thing that has changed following 2008's financial crisis is the extent to which the very top of the capital structure has been infected. There's simply no escaping the fundamental fact that, today's banking system is ultimately being sustained by a Ponzi scheme.

We are long past the point where unprecedented indebtedness, parabolically increasing over decades, might reasonably be regarded a "blessing." A stubbornly unchanged paradigm enslaving the creative capacities of humanity to the illegitimate claims of demons controlling the levers of finance positively guarantees still deeper systemic crises. Of little concern, really, is when the next leg hits because then it just might be too late for anyone to reach the exits without being stampeded. This risk is very real, my friend.

Concern over the legitimacy of finance underpinning the U.S. and trans-Atlantic banking systems is of supreme importance as we look ahead to the coming crisis of confidence certain to explode at some not-too-distant moment. There is but one sane course forward offering to re-establish economic stability, while shrouding today's illegitimate finance beneath structures possessing unquestioned viability. Only a robust, all-pervasive deployment of a Hamiltonian credit system financing the build out of a physical economic platform worthy the 21st century will put the U.S. and trans-Atlantic banking systems on solid footing. No measure of sacrifice, no reactionary dismantling of social progress made over the past two centuries, will substitute for full implementation of the practical means by which the cause underlying the American Revolution was, is and ever will be defended: through the use of credit financing physical capacity certain to raise the productive powers of labor. That nothing of this sort followed the financial crisis of 2008, while only the most vulgar social degradations instead were promoted, positively screams the viability of today's banking system rests upon the shakiest of confidence games. Remember this, foremost, when the so-called captains of finance yet again imply their power to subvert human progress is made legitimate as they spew their bunk claiming "no one saw crisis coming."

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.


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Wednesday, December 18, 2013

A Will To Be Fleeced Sighting

Probably the most insightful question asked at today's Confetti presser was whether the Fed's third attempt at decelerating the rate at which it is tempting insolvency will prove as fruitless and misguided as the first two did. The answer, of course, is yes, today's $10 billion per month QE taper is virtually certain to prove another case of wishful thinking from the gods of zero due diligence. We'll see if soon to be crowned Queen Confetti taps the brakes again when the fate of annual bonuses on Wall Street is not quite such an imminent concern. The Dow's leadership today pretty much gives away the motivation behind a market move otherwise counterintuitive to fundamental reality, which matter was raised in another question querying the Fed Capo about why the economy remains so sluggish in the face of the Fed's extraordinary subsidy. Naturally, Confetti wasn't about to state the obvious and admit the U.S. banking system is hopelessly insolvent.

Could $10 billion less per month push the banking system over the edge? You bet. In the face of a squeeze likely to develop on account of the mere prospect of less juice forthcoming from the Fed, an economy dominated by leveraged speculation fueled by fictional accounting creating reserves that in fact could evaporate in an afternoon's trading instead finds Confetti's meager attempt to manage market psychology no match to "wealth" waiting to be destroyed in a less liquid climate. The lesson of the Fed's two previous attempts to loose from life support the hopelessly insolvent banking system over which it lords is that, Ponzi schemes always need more grease, not less.

Not helping matters is a banking system whose assets are marked to fiction. Thus are its so-called plentiful reserves no less a fantasy. This reality has been coming home to roost in emerging markets over the past six months. The Fed is tempting the same hard lesson for the insolvent dung pile atop which it sits.

It's almost comical to watch this Fed puppet pretend he has any hope of removing the U.S. banking system from the trap into which Venice on the Thames has lured it. Of course, that's just me. There obviously are a number of people who buy into the idea the Fed will one day be able to normalize its balance sheet. Seeing as today's "God save our bonuses" trade brought to the table something more than the standard circle jerk manipulating a broken price discovery mechanism, today's fairly notable lift in the volume of shares exchanged reveals the will to be fleeced evidently is alive and well. We might add this to our alternate NASDAQ-based view of Monday. The same trait quite possibly has been influencing "the stock market for the next 100 years" since last November.

The market's still deteriorating, short-term technical state raises odds today's lift will be given back and then some. As there has been more than enough time for the weakest of weak hands to demonstrate their willingness to be fleeced, it's hard to imagine the group stepping up today has much powder remaining. Combine this with what for some money managers must be an almost insatiable itch to lock in profits for the year, these last two days of the week preceding the holiday doldrums seem likely to see the market flat line at best, if not come under pressure. Lord knows in just a matter of a couple hours today, short-term technical measures went from moderately oversold to decidedly overbought, so save maybe some capital fleeing Saudi Arabia looking for wildly mispriced, dollar denominated trash to diversify portfolios otherwise heavily invested in battered cannibals doing business in Syria, Confetti's swansong probably will find high notes straining for more liquidity, the likes of which the delusional Fed thinks it can refrain from providing.

(p.s. Any Federal Reserve official who argues for an "inflation target" should be shot on the spot. The Fed's well established imperative to impose paradigms facilitating backdoor taxes simply is criminal. Should we simply be satisfied with the Fed's apparent willingness to confess its criminality, as such, advocating inflation targets? I think not. What good, really, comes from the Fed's increased transparency when in fact it only strengthens Madoff's case for appealing his well deserved life sentence?)

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.


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Tuesday, December 17, 2013

Walking on Water and Certain to Sink

The crème de la garbage is a disaster in waiting...



I would sooner believe Jesus actually walked on water during his time on earth than suppose bankrupt financials could withstand the Fed withdrawing a dime of its extraordinary support. We might only conclude that, the very picture of the banking system's utter insolvency is presented here.

Were the corrupt Fed's insane intervention—serving only to temporarily sustain a mountain of illegitimate debt, this by adding but more of the same to it, much as any rotten Ponzi scheme requires—something other than a lever greasing the way for a Wiemar style outcome whose ultimate aim is annihilating the U.S. Treasury, rendering it in breach of the U.S. Constitution's 14th Amendment, section 4, then some well played fright venturing to shake weak hands of their shares would have been ventured in the interim since Capo Confetti took QE nuclear last year. This, of course, would have served strong hands preparing for a market advance of exceptional breadth and duration. Instead, we have seen a dying circle jerk exploiting a broken price discovery mechanism, buying time while conditioning the masses to accept their doomed fate (in the current iteration vis-à-vis ruthlessly imposed bankruptcy and consequent, thieving bail in). Having seen no demonstration of strong hands willing to shake the weak, this that substantial stakes in a likely long lasting run higher be secured well in advance, we might reasonably conclude our view on the banking system's utter insolvency is one strong hands in fact share.

Our contention has been, and remains, weak hands dominate the market. Their desperate need for both Fed largesse, as well as sustained perceptions of the institution's legitimacy in its present, über corrupt form, rather serves to cultivate a lemming mentality likely to say and do the "right" things in reaction to any abuse sure to be experienced in the upcoming period. This already well established cultural corruption—Shemp—is bound to swimmingly serve oligarchy only more profoundly once the boom is lowered initiating the next leg collapsing the physical economy and pushing both the Federal Reserve and U.S. Treasury further into an overt hyperinflationary posture yet more closely approximating the Wiemar experience. The means by which this likelihood would be accomplished seems rather certain to involve an energy crisis, much as we have ruminated over recent days.

As for "walking on water," this is a feat only those still living in spirit accomplish. No David Copperfield like optical illusion—no apparition—nor any defiance of physical reality we in the flesh are bound to is conveyed by the idea. To "walk on water" is to meet the resurrection of the God of Abraham, Isaac and Jacob, who is not the God of the dead, but of the living. It is to die in the flesh, but leave an empty tomb. With that established, then, we can be certain Jesus did not walk on water while he was a living, breathing man of the world, much as you and I are right now. Rather, his extraordinary feat walking on water is being accomplished this very hour. How do we know this? Well, what is water to life? Why, it is everything. Without water there can be no life. So, now we come to the heart of the matter: Is Jesus dead or living? If the latter, then that's how it is possible to walk on water, and likewise why I am certain no one ever in the flesh did such a thing. As I raised the matter above, I thought this might be worthwhile explaining.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.


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Monday, December 16, 2013

Unprecedented Occurrences Guiding a Dire Forecast

The following presentation of NASDAQ's cumulative advance-decline we previously have put forward in support of an Elliott-based view supposing NASDAQ's Composite Index has been forming an Elliott "c" wave since mid-November 2012...



Generally speaking, NASDAQ's cumulative advance-decline line has been in a death spiral ever since Y2k. Indeed, it remains so notwithstanding its turn higher over the past year. Furthermore, no positive divergence was registered by this measure going into NASDAQ's mid-November 2012 bottom and this rather suggests NASDAQ's cumulative advance-decline line in all probability will see its death spiral deepen coincident with NASDAQ's Composite Index sinking to levels last seen in the 1987-1994 period.

Of course, it is equally possible that, the relative handful of NASDAQ-listed issues more or less providing the lifeblood keeping "the stock market for the next 100 years" alive will receive the full brunt of selling in panic likely to mark wave C down from NASDAQ's Y2k peak, while the greater bulk of NASDAQ-listed issues might be left more or less intact over what could prove a fairly short duration lasting only some weeks, during which time major indexes collapse back to levels last seen in the 1987-1994 period. In other words, after having been locked in a death spiral for so many years NASDAQ's cumulative advance-decline line could register a noteworthy, positive technical divergence upon NASDAQ's Composite Index reaching bottom somewhere in its range established during the 1987-1994 period. This, then, would set up NASDAQ for a screaming rally carrying its Composite index to new all-time highs coinciding with the scramble for ROI in the onset of hyperinflationary hell.

To be sure there probably are very few people on the planet considering this possibility. Yet were a massive sell-off to unfold over a very short period of, say, 5-8 weeks and sink major indexes a good 70% or more, then this scenario wherein a positive technical divergence in NASDAQ's cumulative advance-decline line registers might in fact come to pass.

Certainly, the market's utter collapse over such a short duration would be unprecedented. Then again, ever since August 15, 1971 there have been a number of unprecedented occurrences, both in the stock market and in our broader social experience. October 19, 1987 first comes to mind, an all-time record one day throttling of the U.S. stock market. Imagine a 3-5 day bender of that sort. Then was the unprecedented five straight years of 20+% gains in the stock market from 1995-1999, this being fueled by an unprecedented, derivatives-fueled expansion in indebtedness. And who could forget October 2008 when an unprecedented 83% (I believe that was the number) of NYSE-listed issues hit new 52-week lows.

Now, what manner of calamity could in very short order make for an unprecedented Elliott "c" wave down, sinking major indexes to levels last seen in the 1987-1994 period? Well, there are the unprecedented events of September 11, 2001 to consider here. Something along those lines could easily do the trick.

Yes indeedy, Venice has been running wild and the intent of her anti-social oligarchs is sink the United States. This should be as plain as the nose on your face. Then again, this is a tough sell to suckers who believe cave dwelling, monkey bar climbing, dog gassing cannibals are capable of attacking the one nation on the planet spending more on its defense and intelligence than all other nations combined, doing this with extraordinary military precision using large jet aircraft whose skillful navigation flight training using Cessna propeller planes is more than adequate.



Now, per our Elliott wave view applied to NASDAQ's Composite Index, we might consider an alternate possibility wherein 5 waves up forming an Elliott "c" wave and completing NASDAQ's counter-trend rally off March 2009 bottom in fact began unfolding off NASDAQ's early-October 2011 low. This view's heightened probability is raised on account of coincident technical circumstance we see above accompanying formation of these prospective 5 waves higher.

To wit, consider that both NASDAQ's RSI (top panel) and MACD (bottom) registered their best readings during formation of the prospective 3rd wave higher unfolding from late-November 2011 to late-March 2012. Indeed, on both accounts this was the best technical read on NASDAQ since March '09 bottom. Of course, this stands to reason on account of the fact technical "dynamism" is a quality typically accompanying Elliott 3rd waves, and a 3rd wave of a 3rd wave is seen forming here (i.e. wave 3 of (c)).

Then we see typical technical deterioration registering during formation of the 4th wave versus the 2nd wave, this via both NASDAQ's RSI and MACD. So, there's another feather in the cap supporting this alternate Elliott wave view.

What, then, are we to make of NASDAQ's cumulative advance-decline line in the context of this alternate view? A case of suckers taking the bait at the worst possible moment? Well, only time will tell and we may not have to wait much longer, either...

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.


There's an easy way to boost your investment discipline...

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