A Market Certain Europe Is Doomed ~ The Risk Averse Alert

Friday, November 11, 2011

A Market Certain Europe Is Doomed

There isn't a technocrat in the world possessing power either to stop the trans-Atlantic banking system's imminent slide into the abyss or contain social chaos likely to blossom as a consequence of continued political obeisance to an ongoing game of make believe pretending the trans-Atlantic banking system is solvent.

Nor is there anywhere a central bank able to do a thing right now without in fact hastening the banking system's ultimate collapse. "Monetize" debt all these like, the pace of the physical economy's chaotic unraveling will only quicken with each new tranche of "quantitative easing" delivered. Absent a burgeoning supply of new AAA-rated securities which to leverage and hedge, where to will fresh capital run but "things" — commodities and raw materials — raising input costs, squeezing margins, accelerating the pace of bankruptcies and only all the more increasing the burden on a banking system already stuffed with "assets" currently valued at prices 60-90% higher than can be fetched in any market.

What's broken is beyond repair, at least within the framework of anything even remotely resembling "business as usual." Thus are extraordinary swings in the stock market since August best understood. Being nowhere near resolution of credit market dysfunction whose effect these days rather adds political bodies to the parade of hopelessly bankrupt institutions at the core of today's arrangement, extraordinary swings in the market are well on course to becoming all the more profound, and this for as far as the eye can see. The risk that, a period wherein panic precipitating relentless collapse wins the day has never, ever been greater in the lifetime of most everyone presently living — the probability such panic is near, undeniably elevated. Why else has it remained necessary to pay up for relatively expensive "protection" in the midst of the stock market's unprecedented rally off early-October bottom? Those in the know appreciate today's danger.

Given this most precarious backdrop the threat of expanding war is not to be ignored. Desperate times call for desperate measures, and if there is anything prospectively offering the means to control the process of the trans-Atlantic banking system's implosion — this presently set to accelerate — unimaginable acts of war could provide a framework allowing today's financially and morally bankrupt cover to remain in business, that continued, destructive financial intervention and the march toward a fascist police state might proceed, while every conceivable nut bag thus enabled faithfully pitches "reasons why" (all insane) things must be this way. Sabre rattling today directed toward Iran is honestly explained only in this context. This week's IAEA report but a lever venturing to make loyal suckers out of today's faithful suckers who today call equities "cheap."

Not to worry, really. It's not like everyone in the neighborhood is unaware of what in fact is going down. Indeed, considering that well-understood is the physical reality inspiring the drive toward expanding war, one might better ponder counter-actions prospectively venturing to preempt this threat. There's little doubt conditions are conducive to financial war, particularly with so many qualified "false flags" to blame. Ditto assassinations. In other words, one could reasonably expect an increase in intrigues of the most extreme sort, generally speaking, in response to clear indications those among the hopelessly bankrupt are venturing a last ditch attempt to sustain the unsustainable, as revealed by an increase in provocations intending war's expansion. Time will tell, no doubt, yet more to the point is undeniable truth the hour, indeed, is late.


Today's turnover on the NYSE was among the lowest of the year. Just for grins I marked those prior occasions this year when, similar to today, weak hands itching to be fleeced apparently were in short supply. Rather than supposing anything significant in prior similarity, though, just the fact in short supply are weak hands hankering for toilet paper is the more salient takeaway on a day like today when all appeared so right in the drive toward a global, fascist police state called governance, such as was evidenced on the European continent with decimation of democratically elected governments in Greece and Italy.

Speaking of which, consider the implications of Iceland's New Bank Disaster. In speculating the other day on fast approaching restructuring "[one] alternative ... sure to venture but extending today's fantasy lending 'value' to the greater bulk of current debt" Iceland appears a test case for this sort of abomination.

Rather than giving any further air to things hideous, such as are vulture capitalists made banking system commandeers, better to enlighten reality of the pending doom of even these, sometime not long after the euro-zone's imminent demise. Proof of this eventuality was laid out more than two centuries ago:
"To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients by which the wealth of a nation may be promoted."
—Alexander Hamilton "Report on Manufactures" (1791)
Truth is there is no financial leverage ultimately secure absent robust facility to leverage the industrious fruits of human creativity. Such alone is how wealth is made: creating things vital to human existence essentially out of nothing, and in the process elevating productivity. Suppress this facility much like Europe's dull fascists today are demanding (evidently being stuck in the 19th century), financial leverage effectively is doomed to collapse, and that's a fact. Thus, the euro-zone's imminent demise rather is assured. Likewise vulture capital.

Wisdom suggests there isn't a police state capable of erasing history's greatest accomplishments, let alone physical reality, such as might possibly sustain leverage burdening the trans-Atlantic banking system. Fantasize as many do thinking "well meaning" is intention underlying actions keeping this moribund beast alive, truth is chaos is the intended object. Such is life when misplaced leverage invariably meets its unwind. Come what may, a United States born of the American Revolution need be awakened before any 1932-like bottom is reached.

One might struggle these days imagining such prospect possible, yet the record so far suggests treachery this side of the planet eventually succumbs to resistance. So, although it is good to see this increasing, it is likewise critical that, such principle as resistance embraces gains foundation in crises past, for there has never been a more opportune time in U.S. history to export to England such fruits of the American Revolution as could depose a tyranny still dominating that old island home, which through her free market, imperial fraud bares blame, indeed, for inciting today's dissent.

* * * * *

© 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...

Get Real-Time Trade Notification!