Ponzi Finance Calls Madoff $50 Billion And Raises $50 Trillion ~ The Risk Averse Alert

Monday, December 15, 2008

Ponzi Finance Calls Madoff $50 Billion And Raises $50 Trillion

So, why now the exposure of a $50 billion Ponzi scheme? Why, suddenly, did Bernard L. Madoff volunteer to the sleepy SEC late last week his confession admitting to a decades-long financial fraud?

Well, I couldn't tell you why. Smelling a political rat, however, one wonders whether this might have something to do with the crisis Vice President-elect Joe Biden predicted back in October.

Is some [now formerly] powerful constituency being neutralized in preparation? Or are they being set up as a scapegoat to be blamed once the unraveling of the real Ponzi scheme — the securities-based global financial system — proceeds to its logical, hyperinflationary conclusion?

Hard to say right now. I simply find the timing rather curious.


An interesting price-RSI comparison of the current period to late-July, when the 50-day moving average similarly stood overhead. Curiously, RSI presently is behaving less erratically, rising off bottom in a manner demonstrating better balance between buy-side and sell-side strength. This is constructive and sets up for a more decisive upside penetration of the 50-day moving average, as well as a probable return of MACD to positive readings.

Taken all together, the similarity of the current period to late-July is not likely to immediately lead to the same negative outcome. Nevertheless, the manner in which the market stalled in August could be something to look forward to as overhead resistance is approached.

OEX 5-min

If downside pressure persists tomorrow, chances are it won't take the market much lower than was reached Friday (12.12.08) at the open. Once five waves down from last Monday's peak are completed, the market should explode upward...

Fast Money
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