Blood In The Water ~ The Risk Averse Alert

Wednesday, September 11, 2013

Blood In The Water

Increasingly more volatile swings defying anyone's capacity to maintain control over the market's direction, one way or the other, mean but one thing: liquidity-enhanced reactions attempting to forestall the negative impact of prior hits to highly leveraged positions bring both sides of the trade but closer to panic, wherein no promise of bountiful liquidity will incite willingness to double down, as to do so will only increase vulnerability to being completely wiped out. Truth is there's not a bank on Wall Street already well beyond the threshold of suffering the consequences of having over-extended themselves, making each and every one prime targets for swindle.

We see this dynamic featuring wild market swings in evidence both over recent weeks and months, as well as more broadly since about the 1997-1998 period. While its shorter-term manifestation makes a setback of indeterminable magnitude no less likely tomorrow than last week, its longer-term implication elevates to an uncharacteristically certain probability doom at the bottom of the capital structure.

As the reason for Capo Confetti's forced retirement is his policy of further inciting this very profound vulnerability throughout the banking system (that is even more so than was self-imposed when an "implicit guarantee" was milked for every dime fee farms masquerading as banks could squeeze out in the process of overexposing the global economy to leverage), bailout junkies hooked on fraud must elevate the efficacy of Confetti's policy by whatever means available now, lest they all fall into the abyss. The most critical aspect of Confetti's policy—a facet of our contemporary circumstance that, in fact is not of his origination and has been in place so long its crucial importance is widely overlooked—is the consolidation of control over physical and financial assets into still fewer hands: a policy raised to a religion by the gods of imperialism ever since August 15, 1971.

Rather than a more orderly consolidation of physical and financial assets which, paradoxically, might have been possible were a large chunk of Asia embroiled in war, this that the London-New York Axis of Fraud's war machine be fed capital needed to sustain its banking system's otherwise unsustainable leverage, a threatened, widening Middle East war's momentary avoidance necessarily means disorderly consolidation now is more likely to follow. The threat of suffering another Great Depression already having gained psychological cover rationalizing calls to bankrupt central banks and national treasuries alike, this that such undesirable fate in depression be "avoided," thus will the imperial cause be furthered in manufactured swindle no different than the last whose moment has come. Yet only bigger will the coming swindle's impact surely be. Such is the price of consolidating control over physical and financial assets into still fewer hands following 2008's entirely manufactured debacle. In other words, get ready for the "Confetti is dead, long live Confetti!" trade. In other, other words, brace yourselves for but the next leg of an endless spiral of chaos, volatility, and shutdown of the physical and financial economy. This simply is our fate until such time as the U.S. Congress discovers the wisdom and courage to Seize the Fed!

Of course, there's nothing new about this outlook. Rather we see its confirmation still born out even in the midst of a pervasively sanguine sentiment exposing an intellectual naivety no different than that displayed by those who took out sub-prime mortgages some years ago. We can look forward to yet more twisted logic assigning blame, too, when the next shoe drops. Whereas the least financially savvy were blamed for the mortgage market rout, those more financially savvy today cheering on Capo Confetti no doubt will blame Uncle Sam for causing what already is a manufactured debacle in the making, much as fascist trash running the European continent's banking system into the ground are claiming a "sovereign debt crisis" at the root of the EMU's woes.

Anyone claiming themselves an advocate of capitalism—recognizing its established value in the mix of exploiting finite resources and employing intellectual capacity available to harness these resources ever more powerfully and efficiently for the good of all—need hammer that very necessary turn of affairs wherein nationalization of the U.S. Federal Reserve is positively required if we are to have any hope of avoiding another World War breaking out at some point over the next 10 years, as this very undesirable likelihood is but extraordinarily heightened on account of imperial machinations gone wild in some of the vilest forms of fraud whose consequence otherwise is woefully misunderstood by an intellectually naive cheering squad dedicated to sophistry that simply cannot mask the fact we have passed the point where an increasingly unmanageable spiral into the abyss is become only the more certain, and this in spite of so many Pyrrhic "successes" enjoyed over the interim from August 15, 1971 to the present moment, and especially since 2008's collapse in particular. Capitalism is missing its anchor wherein promoted is mankind's creative progress, this securing abundance in the face of what by mankind's very nature otherwise is contrived scarcity. The anchor capitalism requires for the sake of securing unquestioned credibility necessary for summonsing the will to take risks for the cause of promoting prosperity a nationalized Fed whose credit creating capacity is suitably directed to the task of efficiently creating much more capital in all its forms—"something" from "nothing"—would begin to restore.

Listen, the "free market" isn't broken. It was a fraud from the start. Were unfettered markets any good, could we have fallen so far? Long before the march into the deregulated nirvana of wildcat finance did many forms of social contract exist, the likes of which those woefully ill-informed are wont to blame for today's travails, yet these commitments presented no burden until such time as reckless titans of tyranny masquerading as the best and brightest effectively had acted to corner sovereign nations the world over into obeisant servitude on what otherwise is a doomed ship. Truth is it was doomed on the very first day it was launched, whenever that was. Some years prior to July 4, 1776 to be sure. Truly, our generation could scuttle this wreck called a "free market" for good.

On the European front where blood sharks can sense from miles away is oozing and likely to create a feeding frenzy any day now, we learn today that, Spanish longer-dated yields dipped below rates offered on comparable Italian government securities. SCAM ALERT! What are there, all of 50 Spaniards currently employed, 38 of whom work under the table crushing grapes with a rusty shovel? Surely this development presents yet more valuable perspective on the true worth of assets at the bottom of the capital structure. Not to diminish the importance of the political element in financial affairs, but c'mon, Spain is a hopelessly insolvent wreck whose fascist past is a proven failure, so where are they going that's any more promising than what Italian political turmoil evidently portends? I'll tell you where they're both going: to the American System of Political Economy and nationalized central banks providing credit to finance the build out of physical economies worthy the 21st century, all raising the promise of life, liberty and happiness, while at the same time presenting today's corrupt oligarchs a choice: conform, or take a one-way trip to the North Pole. This course of affairs simply is inescapable, as its very necessity is the mother of invention. This was the case in 1776 and so again now...

Word on the Street
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