Shortly after the market's initial decline from May 1st peak I suggested major indexes might trend sideways for some days (now extending a few weeks) before an Elliott corrective wave that has been forming since early-November 2010 (i.e. wave 4 of (c)) completed. Now, why did I think that?
And why following last Monday's thud (5/23) did I imagine a fairly decent bounce might develop before a final bout of weakness completed this corrective wave?
Simply put, the bankrupt pricks are running out of time to adequately support their wildly overvalued stakes in Adam Smith's Leveraged Ponzi Scheme. Every minute counts when denied is added time's futility.
Yet maintaining the appearance of solvency really matters only to the biggest sharks presently staring at a shrinking supply of nourishment, contemplating what might be eaten when the trap door caging the financial dogs of fascism (QE being the most recent manifestation) soon opens again. Just what thing might induce the necessary precursor (panic) is a matter that, increasing dissent on the other side of the globe toward austerity and a dead Osama bin Laden suggest could even be some terrible act of war, forcing capitulation to the full measure of sacrifice the deadbeats of the trans-Atlantic demand.
Of course, the framers of the IMF's alleged Jacques the Raper probably well-understand this dynamic's potential at this desperate moment for a dying financial system. So, Congress had better hurry up and restore Glass-Steagall, that our woefully confused President might be spared! (Ditto Germany's Angela Merkel.)
Ranking House Democrats, anyway, apparently perceive great risk ahead, as the likes of Waters, Slaughter and McDermott have become co-sponsors of H.R. 1489. This is a most significant development, as leadership finally is leading on something that emphatically matters, particularly if you are someone who desires that, the riskiest financial asset of all find durable support once the bottom falls out from under the collapsing Ponzi Scheme that is the trans-Atlantic financial system.
In the spirit of Memorial Day NASDAQ presents, Death Warmed Over: money aggressively leaving the preponderance of listed issues, and this amidst a buying interest incapable of stemming the tide. That is why I am betting today's pickup in NASDAQ volume was not driven by bargain hunters. Rather more likely was it the wiser fellow who understands that, Germany dropping its demand of a Greek restructuring does not mean Greece will not unilaterally default.
The risk of a chain reaction collapse starting in the European banking system and quickly engulfing everything on both sides of the Atlantic no doubt is intensifying. That political pressure has increased within (while political pressure without grows only stronger) rather suggests among the dead is bailout.
Funny how all kind of economic weakness is being reported and lamented at a time when lender of last resort liquidity gushers are near drying up. So much for avoiding another Great Depression...
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