Say Hello to My Little Friend ~ The Risk Averse Alert

Tuesday, May 04, 2010

Say Hello to My Little Friend

Well, well, well. Hello crisis of confidence. It has been a couple years.

So, the imminent threat of default on the sovereign debt of the nation of Greece has necessitated a bailout package totaling EU135 billion whose approval awaits the German Bundestag which has scheduled a vote on a bill this Friday authorizing the swindle of German taxpayers, so to postpone the collapse of the European Monetary Union.

Hmmm. I seem to recall another political body having before it similar, extortionate legislation whose passage required, shall we say, not-so-subtle persuasion from "the market" to nudge an aye vote.

That effort took two tries ... and a river of tears streaming from trillions in lost wealth.

Most worrisome now is the fact that, the dynamic surrounding this new swindle is considerably more complicated by a European Monetary Union consisting of nations in which Greece is one of the least bankrupt. Suddenly, the world is awakened to the prospect of a chain reaction collapse reaching all the way to the U.S. Treasury.


There goes the 50-day moving average on one of the world's broadest, most richly capitalized indexes. Relative strength and momentum suggest a good bit more selling could be in store.

Should we be surprised if by the end of the week March '09 lows are being challenged? I for one would not be.

It appears the fraudsters of the financial media are about to meet their "global recovery." Lord knows the technical setup is complete, and that this very moment of increased fragility has been well-telegraphed to anyone with eyes that see.

Just to be clear, too ... at the root of present troubles is not a mountain of debt. Rather it is insufficient wealth-generating capacity needed to keep that mountain from imploding on itself. Such a condition is something the City of London - Wall Street axis of fraud has become quite expert in creating, as 2008's sub-prime mortgage crisis amply demonstrated. Truly, sufficient exercise of due diligence for decades has been sacrificed to an illusion of risk mitigation whose reality rather became a crowded, highly correlated, extraordinarily vulnerable trade.

Fast Money
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