Cheaper Ponzi Finance Not Cheap Enough ~ The Risk Averse Alert

Thursday, November 07, 2013

Cheaper Ponzi Finance Not Cheap Enough

How does a surprise ECB rate cut not please insolvent American money center albatrosses? Wall Street no likey a Europe unwilling to indiscriminately flood a hyperinflationary deluge of central bank liquidity into a 3x more insolvent banking system it helped London create? Or was today's selloff just a case of the leveraged trade caught on the wrong side and in need of capital to meet margin calls? Let's go with this latter likelihood. We are way beyond central bank policy nuances having any discernible effect on markets levitated by desperate attempts to prop up a dead banking system (notwithstanding feigned sensitivity to Fed taper hype). Today's hopelessly insolvent lords of zero due diligence have only shades of reckless remaining in tool kits locked into Ponzi finance.

Let's consider evidence supporting the likelihood yesterday's prospective Elliott wave view might bear out and bring heartbreak even before year end. The possibility under consideration here finds very near completion 5 waves forming wave (c) and so too the market's counter-trend rally off March 2009 bottom.

We have regularly noted facets of an Elliott 3rd wave's typical dynamism as wave (c) has developed. Yet assuming wave (c) is completing an Elliott "b" wave forming off March '09 bottom—this being the middle wave of a larger corrective wave whose beginning in the S&P 500 dates back to the year 2000—we find something of an Elliott "b" wave's typical character displayed even in 3rd wave components of its wave (c). We are brought to the conclusion "something's not right." This diagnosis is typically conveyed by technical conditions accompanying formation of an Elliott "b" wave.

A notably muted NYSE advance-decline differential accompanying 3rd waves that have unfolded in formation of wave (c) off October 2011 bottom certainly presents this very sort of technical evidence. Increasingly muted advancing issue participation accompanying wave iii of 5 versus wave iii of 3 only the more suggests "something's not right." Likewise does this state of affairs support the Elliott wave count we developed here yesterday.

And so here we are just waiting for completion of wave v of 5, which too will complete wave (c) of B, and thus pave the way for wave C down, prospectively sinking major indexes to levels last seen in the 1987-1994 period. How quickly this could happen one cannot say. Yet considering a nasty deep state that in just the past year has stooped so low to murder school children in Newtown, set off explosives at the Boston Marathon (and in the process create a veritable Dallas 1963 scene), and send a bloody message at the Washington Navy Yard (evidently targeting anyone thinking of sending the U.S. nuclear armed submarine fleet to the English Channel), well, just how precarious is the present moment simply is undeniable, particularly given an $85 billion per month vote of no confidence in the banking system's solvency. In other words, levels last seen in the 1987-1994 period could be reached tomorrow, particularly as the ghost of 2008 has been voraciously gorging on lenders of last resort and, according to bought-and-paid-for jellyfish seeking a "grand bargain" gutting the social safety net while imposing health care sticker shock to buffet an insurance "industry" siphon, is hankering to increase its tribute.

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