The Eve of the New, New Normal ~ The Risk Averse Alert

Wednesday, June 27, 2012

The Eve of the New, New Normal

Hold tightly those precious gems whose price today in no way discounts the shock likely to hit bond markets right to the very top of a heap now reaching heaven. When Congress either forces Bernanke to flip the endless QE switch (sans any backstop from Treasury), or write down garbage on the Fed's book (a la Glass-Steagall), suddenly the unthinkable — relentlessly rising rates — stands to become the new, "new normal."


The only other thing to say about today's decidedly muted volume is an apparent lack of urgency to sell wildly overpriced garbage probably buys time for trapped weak hands to offload more trash at prices not far from current levels, as these are well above where every bit of it soon will be buried. Thus, continued formation of a 2nd wave of five waves down from this year's peak is probability further raised.

Should the rumor mill go out of business on account of continued German intransigence to imperial schemes venturing to burying it in a Versailles-like arrangement, then pressure applied on Congress in a language spoken fluently there, where every sentence begins and ends with a dollar sign, likely will coincide with the market's collapse to levels last seen in 2009. Then can Congress reply to shrieking incompetents like Volcker who claim Glass-Steagall aims to "punish banks" that, the banks are punishing themselves, as these are the principal owners of every form of garbage whose survival in the current arrangement requires endless bailout. With this the purging of human garbage defending causes promoting national suicide can move into high gear, starting with a murderer the Financial Times of London endorsed for President of the United States.

Fast Money
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