Thursday, October 31, 2013

A Light on NASDARK Elliott Wave

Some weeks ago we took into account how NASDAQ's cumulative advance-decline line, starting from November 2012, had strongly reversed its long-standing death spiral. Based on this we considered the proposition that, NASDAQ's Composite Index was forming wave (c) off mid-November 2012 bottom, which wave, too, then will complete NASDAQ's correction off its March 2009 bottom.

Assuming this wave (c) will unfold in an Elliott 5-wave fashion, consider the following wave count...



Me like this one. We see typical technical deterioration in formation of wave iv of 3 versus wave ii of 3. This both via RSI (top panel) and MACD (bottom). We see, as well, typical Elliott 3rd wave dynamism in peak technical strength being registered during formation of wave iii of 3.

Presently, negatively diverging RSI (top panel) we see registering since wave 3 peak in early August substantiates probability NASDAQ, near-term, will come under pressure.

The short and sweet is the outlook we have had for some weeks here remains intact. Across all major indexes a 4th wave is seen in the process of forming. Per NASDAQ's Composite Index, this 4th wave is part of 5 waves up from November 2012. Per other major indexes the 4th wave forming is part of 5 waves up from June 2012.

So, we're looking to early next year as being the earliest moment when the lug nuts will be at elevated risk of falling off the market, while there remains no doubt its wreck could be awful.

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© 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.


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Wednesday, October 30, 2013

Why QE Cannot Stop: Capitalism Died With Due Diligence

Shocking! No Fed taper. Steee...rike two! This while everyone's screaming "bubble" no less.

Now, why can't the Fed let go?

Because the banking system is hopelessly insolvent! It's almost like the Fed is begging for bank runs. This is not how confidence is built. Although there was not much reaction to speak of following Fed affirmation it is woefully trapped, evidently there was a spike in Treasury yields taking the wind out of the sails of the S.S. Trash-Transfer. Rising rates are exactly how this story will end if 2014 brings Confetti clone Yellen to lead the Fed.

Again, Confetti was let go for a reason. Much talk of a Fed taper is occurring for a reason. $85 billion a month—half of which goes to relieve insolvent albatrosses of their maggot infested garbage—continues being provided for a reason. Some have claimed that, if you tell a big lie long enough, eventually it will be believed. Yet they also say "to every rule is an exception." A Fed policy on course to bringing massive debasement of the purchasing power of savings is all the transparency so-called "deep and liquid" capital markets need, really. Someone, somewhere, is not coming clean, and more than just a few vested interests surely understand this. Thus, the price of uncertainty the Fed is breeding propping up a highly leveraged banking system by perpetuating a Ponzi dynamic sustaining appearances of the banking system's solvency surely will be panic.

Yet we must not assume the motive behind any panic detonator's lighting will be innocently benign. This is particularly true appreciating the great lengths being taken to maintain appearances of financial recovery following 2008's discontinuity marking the end of a wildcat finance free-for-all setting up millions to lose their most prized asset of all: their homes. Intentions behind ceaseless perpetuation of Ponzi finance going all the way back to a securities-based banking system's founding on lender of last resort implicit guarantees extending to today's explicit backstop should not escape critical scrutiny on account of some well-developed sophistry claiming the laws of capitalism working to the effect of raising uncertainty, and so hastening a mass exodus at some vulnerable spot in the capital structure. Rather some latent form of swindle necessarily need be assumed behind any panic brought to bear in today's environment.

The fact of the matter is capitalism died with due diligence. There is no escaping this reality. Indeed, this is the very reason why the hapless academic leading the Fed is failing to restore confidence in the ability of markets to facilitate price discovery, which fact dooms the Fed to becoming insolvent itself, having to sustain its infinite QE, lest depressed garbage burdening the books of so-called "systemically important" financial institutions becomes a weight promptly sinking the entire banking system, and the Fed along with it. Trapped as such and left supporting a lie, the Fed is reduced to providing devices sustaining thieves who are short on prospective victims, having only each other now to devour. Such is how supra-national banking dictatorship is to be further consolidated, while freedom guaranteed in economic opportunity stands to be more completely crushed in the aftermath of an entirely predictable swindle ultimately needed to hasten a shark feeding frenzy whose net effect will serve only sovereign-hating oligarchs, the likes of whom in fact are far more bankrupt than all the nations of the planet combined.

Were the banking system not so hopelessly insolvent, then its consolidation might be possible in a relatively peaceful, non-threatening climate. This, however, is not the way of it right now. The possibility of peaceful consolidation is not possible. No one in their right mind is willing to absorb "assets" marked to fantasy. So, financial claims on physical assets offering viable income streams necessarily need be marked down. Therein is the genesis necessitating some manufactured swindle be brought to bear.

I have said this before and will say it again, capitalism died long before QE. Albeit repeating this here using different language and a different frame of reference, the fact remains today's order promotes something other than capitalism. Our contemporary arrangement principally advances a cause antithetical to the founding principles of the American republic in fact. Thus do we side with all evidence suggesting the objective underlying the institutional reorganization occurring in the aftermath of the demise of the Bretton Woods System of fixed exchange rates ultimately aims at undermining the authority of the sovereign nation state and relegating it to the dustbin of history.

To most, of course, this will seem a radical view. Yet we must wonder to what extent must utter financial vulnerability be exposed to extraordinarily destructive effect before what becomes as widely acknowledged as a "bubble and bust economy" is the radical extreme to which most today display naivety?

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© 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.


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Tuesday, October 29, 2013

Catalyst Goes To Congress

Following NSA Director Gen. Keith Alexander's appearance before Congress today there simply is no need to wonder whether we should believe intelligence agencies otherwise paid to lie. The NSA director's claim that, news media reports about spying in France, Spain and Italy are "completely false" for all intents and purposes can be taken at face value. The intended damage is done and a political rift among protagonists caged by a hopelessly insolvent trans-Atlantic banking system is opened wide. So, rather than Italy evidently being isolated for an imminent attack aiming to weaken it economically and politically, all three apparently are being targeted, possibly with Spain's disintegration paving the way for the others.

As ever, there is in all probability more than just one objective behind this Venetian intrigue exploiting the emotionally charged issue of privacy. We see something of the push to destroy the U.S. dollar reserve system in this seeding of distrust among protagonists whose banking system's are founded upon it. Britain's Neil Clark evidently has been tasked to hasten this intention behind a mask pretending London serves as but a U.S. proxy promoting American intrigues on the European continent. This, he argues, is why the U.K's drive to leave the E.U. should be seen a good thing for Europe. It is not at all difficult to imagine here, though, how in the mix of what Clark is stirring might come a new dynamic, wherein crisis unleashed could lead hot money flows to London rather than New York. We will be eying the fortunes of those in the U.K. feeding on Clark's sentiment in effort to stimulate trust in Britain's financial haven.

We might take a step back for a moment, though, and ponder whether destruction of the U.S. dollar reserve system—how ever certain is this eventuality given extraordinary vulnerability the present Ponzi dynamic propping it up bakes in—could be a work-in-progress whose climax still might be some years off.



Here we would be looking at the vicinity of the year 2021 before major indexes bottom within ranges last seen in the 1987-1994 period. Depicted above is a prospective, upcoming setback initiating a new phase of the U.S. dollar reserve system's inevitable demise (all things remaining equally bankrupt as they are right now, likely evolving to become even more so at that). Following the bounce I have drawn would come Titanic's slipping below the waterline, so to speak, sometime later this decade.

We need not imagine what circumstance—what "catalyst"—might precipitate the market's initial setback projected above. There is more than enough vulnerability whose imminent fruition could get 'er done. An out-of-control national security state owned by a European-based, Venetian-modeled oligarchy and operated by the London-New York Axis of Fraud is the bigger worry on this account (shall we add today's "victim" Frankfurt, a la Merkel the spook juke, as it too is a witting advocate of imperial finance?). Its ever present drive to promote a perpetual state of war is the calling card whose arrival we rightly should fear. Now, "Saudi suicide" might deliver the right kind of chaos needed to kill several birds with one stone. At the top of the list, of course, and as ever, is freedom. All the better, too, if this truth should continue going unacknowledged, much as has been the case over the entirety of the post-Bretton Woods period. There is nothing like an economic squeeze for raising rage and motivating warfare, particularly when its victims are too stupid to see their freedom being stolen.

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© 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.


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Monday, October 28, 2013

Systemic Collapse Certainty

As I said Friday, we can be rather certain the "Grand [Fascist] Bargain" is DOA. No Team Fraud tribute will be had on this front. This is the downside for those who insist on playing make believe, doing so in fact out of utter necessity, pretending the banking system is solvent, promoting a fantasy supposing a mountain of debt built up perpetuating a Ponzi scheme over the many decades since the collapse of the Bretton Woods system of fixed exchange rates presents no dilemma now that lenders of last resort are "all in," vainly attempting to sustain the Ponzi scheme that has become the U.S. dollar reserve system.

Yet the fact of the matter is there are many ways to skin a cat. The Grand [Fascist] Bargain might be DOA, but so, too, is the U.S. physical economy—decimated in the era of globalization and Ponzi finance—extraordinarily vulnerable to external shock whose effect in gouging the average American will prove even worse in its effect than were the social safety net viciously gutted right here and right now.

More on this shortly. First we need reiterate our view on the state of today's banking system. What makes it hopelessly insolvent? What is the nature of the present arrangement preordaining the banking system's collapse, all things remaining equal?

Never is it discussed in supposedly well-educated, well-informed circles the nature of today's real threat to the banking system. It's not the size of the mountain of debt superimposed on a physical economy whose functioning will determine whether all debts will be satisfactorily extinguished. Nor is it the degree to which the banking system is leveraged on account of it. Those who claim the banking system's leverage since 2008 has decreased, thus making it less vulnerable to collapsing, just don't get it.

First matter fundamental to our present day's precarious state is the fact that, increased leverage achieved through the addition of what rightly is called "illegitimate debt" imposes systemic risk in and of itself—this debt can never be extinguished, never paid back with new, tangible, physical economic wealth such added debt should otherwise help marshal. Well enough is the fact that, when leverage is superimposed on a vibrant, expanding physical economy there's risk of some unanticipated event causing a crisis threatening a negative effect extending beyond institutions directly exposed to debt facilitating leverage. Enter this natural risk into what has become a Ponzi dynamic, where more debt is needed to roll over and sustain debt of old. Risk of financial collapse is but amplified as a result. It does not matter which enterprise within the order of things is more, or less, "leveraged." All are more greatly exposed to risk of being caught in a chain reaction collapse initiated anywhere within a configuration sustained through Ponzi dynamics, such as alone props up today's banking system.

We must never forget it was reckless banking system policy perpetuated since August 15, 1971 bringing us to the present day's grave threat of systemic collapse. All the while the mantra rationalizing an increasingly financialized economy was "self regulating markets." Anyone with eyes sees there was no "self regulation." Rather there was a lemming effect fostered by "creative finance," enticing all captive interests to become utterly reckless. Of course, this arrangement was effortlessly perpetuated while "demand" for all things sustaining our modern day's securitized banking system could be easily increased in variety, quantity and "value" without negatively impacting broad confidence. Unfortunately, that capacity was extinguished in the 2007-2008 period. Confidence since has by no means recovered despite lender of last resort efforts. By "confidence" we mean unquestioning faith in the viability of the capital structure whose demonstration is in deeds, not words (money talks, and volume of securities exchanged reveals an increasing silence). Thus does today's banking system claimed to be less leveraged and better capitalized than in 2008 lie at the apex of a ruse sustaining today's woefully vulnerable global economy anchored by a U.S. dollar that is aggressively being debased. Truth is there's no other choice now but play make believe.

Enter the second matter fundamental to present day circumstance finding the banking system hopelessly insolvent: trapped lenders of last resort everywhere. Only to the degree these have allowed underlying conditions to become so threatening as to completely force their hand does responsibility for today's risk of systemic collapse lie at their doorstep. Truth is lenders of last resort exist never to be tapped so thoroughly as they are being tapped right now. That's the bottom line. The Federal Reserve, most emphatically, under the stewardship of King Ponzi, Alan Greenspan, bears the full brunt of responsibility for trapping lenders of last resort in today's hopeless cause that is the trans-Atlantic banking system. Implicit guarantees must never become explicit backstops. That's what regulators are there to prevent. Greenspan sold us "risk mitigation" and "self-regulating markets." As a result, the Fed has become captured—trapped—by the Ponzi dynamic Greenspan's sophistry ultimately wrought.

This amply summarizes why fear of the banking system's complete and utter collapse, a la the Florentine banking empire of the 14th century, is not the least far fetched and, indeed, ought dominate fear. So, how do we not suppose this state of affairs was intentionally imposed? Being it is impossible to deny today's frightful risk threatens systemic collapse, it is likewise impossible to think this state is something other than intended.

Surely, the regulatory mechanisms necessary to prevent dire threats from ever developing once were in place, yet have been persistently subverted over the course of the past several decades. Surely, too, the destruction of the social fabric in Europe has been less so necessary than it otherwise in fact has been utterly desired, and so actively pursued. Thus we arrive at another "bottom line" matter in the view we take here. The intention behind the imposition of today's extraordinarily vulnerable circumstance is the very destruction of the institution known as the sovereign nation state. The object of this intention extends all the way up to the destruction of the constitutional republic of the United States, itself.

There simply is no denying this, given the frightfully vulnerable condition in which the United States presently finds itself: by all moral standards an emperor with no clothes. Assigning "greed" as the underlying cause will not do. Greed is a symptom that has been deceptively exploited. Something far more sinister lies at the root of today's profound vulnerability threatening financial, economic and social chaos on a scale not seen in centuries.

Returning to the immediate moment, we have entering stage right a fascinating dynamic—intrigues putting the feudal monarchy of the Kingdom of Saudi Arabia dead center in the crosshairs. Or, said differently, a back door tax on the physical economy and on all who are sustained through its functioning appears on the verge of being astronomically raised. An energy market thrown into chaos by the breakup of Saudi Arabia seems a more or less certain outcome were we in fact witnessing a "Saudi suicide" in the making. Such an event's near-term consequence could trigger the banking system's final, fateful crisis, this in anticipation of the physical economy grinding to a halt in the face of skyrocketing energy prices.

As for Europe, belated claims of NSA spying made by the Spanish government appears to make Italy the target of the next round of euro swindle. This makes sense in fact, given that Spain is entirely decimated and has no more left to easily extort without prospectively risking blocking actions by other EMU member nations aiming to forestall a destructive swindle whose demand otherwise is the price of admission in fantasy land claiming the trans-Atlantic banking system is anything but hopelessly insolvent. Furthermore, Spain's political disintegration is considerably more advanced than is Italy's, and so having some catching up to do in the matter of intention being imposed by a Venetian-modeled oligarchy seeking destruction of the sovereign nation state, it stands to reason Italy's political destruction might be hastened through deep state initiated intrigues aiming to appreciate the euro's exchange rate value in a cause aiming to decimate Italy's physical economy, that its political surrender be provoked and prospect of its disintegration as a sovereign nation be furthered, much along lines as presently threaten Spain's continued existence as a unified nation consisting of autonomous republics, some of which already are well along in their pursuit of independence. We might imagine here, too, how the threat of Saudi Arabia's disintegration and consequent dislocation of energy markets would but hasten demise of sovereign nation states more generally, right up to the United States itself.

This is mighty strong language to be sure. Yet it is warranted on account of extraordinarily dire circumstance underlying everything, everywhere. Anyone with eyes that gaze beneath the veneer sustaining what is otherwise an unsustainable fantasy should realize what's at stake is beyond anything that has occurred in living memory. Although no one can say when systemic collapse might happen, there is no escaping the fact its occurring is both inevitable and intended.

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© 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.


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Friday, October 25, 2013

NSA Paves the Way for Euro Swindle

So, what is up with this week's revelations of NSA spying on European and other world leaders? And how does the German weekly magazine, Der Spiegel "research" into this matter and become compelled to forward to German intelligence its finding that, Chancellor Angela Merkel's cell phone was being bugged by the NSA?
"While European leaders have generally been keen to play down the impact of the whistleblowing disclosures in recent months, events in the EU's two biggest countries this week threatened an upward spiral of lack of trust in transatlantic relations."

We simply must see this "upward spiral of lack of trust in transatlantic relations" the very intention behind this week's revelations. As for the act of NSA eavesdropping itself, we might assume this is how Team Fraud stays ahead of the curve and plots its way forward. That there could be a dual purpose here to these intelligence service intrigues seems a reasonable conclusion. Certainly, soured relations between the U.S. and the E.U. would serve a London-originated effort to weaken the institution of the U.S. presidency, and by extension advance a developing intention—a work in progress—aiming to bring the City into a more favorable position relative to Wall Street.

The French Le Monde and German Der Spiegel being among"the most prestigious press organs in the world," for some reason initiated this week's trans-Atlantic fracas. Selling advertising surely was at best a secondary objective. Something bigger is brewing, and has nothing to do with the Grand Fascist Bargain, as that thing is DOA.



Seeing the euro-zone being squeezed in the straightjacket of a currency crushing its periphery, while its core is put under greater pressure to dismantle its physical productive capacity, competitively priced out of the global market as a result of being beneficiary to hot money flows momentarily propping up a hopelessly insolvent banking system, we might reasonably conclude something has to give. Likewise reasonable is suspicion that, this week's deep state intrigues are intended to hasten a crisis in the euro-zone, that the "give" come sooner rather than later.

One step back promotes euro strength pressuring the euro-zone's core, while two steps forward come when a periphery weighing on the core is but more decidedly broken. Oddly enough we heard nothing about NSA spying on either the Spanish or the Italian governments. Thus, might French and German "outrage" over NSA spying be little more than cover for a euro swindle in the works. The mechanism for "explaining" market forces set to break the euro-zone's periphery appears to have been set into motion this week.

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© 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...

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Thursday, October 24, 2013

Goodbye Debbie Downer, Hello Dire Diann

The Fed's sugar babies simply have no choice but play make believe they're solvent. This much is well-established. Yet also moving into the light of possibility, however, is a sudden catharsis—a systemically seizing, Bear Stearns, Lehman Brothers moment positively decimating the bottom of the capital structure.

Now, such an event seems unlikely to be triggered right from the market's top. If history is any guide, some insiders seeing the writing on the wall will take time to slowly drain (relatively speaking) capital from risk assets before the floor buckles and the whole shebang comes tumbling down. That's the way the end came to both Bear Stearns and Lehman Brothers back in 2008.

However, this is not 2008. Lenders of last resort are "all in." Likewise, if everyone in lower Manhattan does not know today's is a game of make believe feigning solvency, then this must be the best kept secret ever. Although once transparent capital markets have become deceptively opaque, there is one fact of our contemporary reality that simply cannot be hidden, and so just how it is today's utterly desperate situation can escape the discerning perception of insiders makes for a mystery greater than Christian faith itself! Forgive me for stating the obvious, but its presence is too greatly underplayed on a day-to-day basis. The fact is central banks are SCREAMING the banking system is hopelessly insolvent.

There is no getting around this fact. Thus, everyone in lower Manhattan knows, or should know, the evil "experiment" that is Quantitative Easing will end badly. My point here is we can throw history out the window. There is every reason to believe more possible is an unimaginable, discrete discontinuity whose devastating effect is entirely unforgiving right from the get-go. Not at all remote is the likelihood that, once top is reached the most spectacular collapse in the modern history of "capitalism" will ensue, sinking major indexes in a mere matter of weeks to levels last seen in the 1987-1994 period (capitalism is in quotes because American System capitalism since August 15, 1971 has been subverted by slavery fostering imperialism).

Not to sidetrack from our view that, some weeks likely remain before the market's ultimate top is registered. Rather, only to lay the groundwork for screams of panic likely to be heard here as top is approached. Yesterday's marked only the start of it.



Although the above measure has proven somewhat less reliable this year in signaling a market at increasing risk of coming under pressure, here we are again. Its diminished utility this year can be attributed to that typical "dynamism" associated with Elliott 3rd waves. If anything, since start of the currently unfolding Elliott 3rd wave forming off early-June 2012 bottom (i.e. wave (c) of an a-b-c corrective wave up from March 2009), the opposite end of the above measure's spectrum has indicated an imminent market turn higher. Hindsight is 20-20, as ever.

Now, given assumption an Elliott 4th wave currently is in the midst of forming (this of the same 5 waves up from early-June 2012 bottom), we have reason to look forward to the above measure decidedly taking out its low of mid-November 2012, which period marked the completion of the 2nd wave's formation. Such imminent eventuality, too, likely will provide confirmation of a most dire outlook whose unfolding, although yet some weeks from commencing, very well could bring devastation far beyond anything imaginable among the consensus of present day analysts.

The prospect of an unprecedented market swoon is neither far fetched, nor an unlikely possibility. Rather the greater bulk of circumstance, both fundamental and technically based, suggests a dire, earth shattering collapse trapping the vast majority of vested interests is anything but remotely likely to occur sometime in the not-too-distant future, say, sometime early in the new year.

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© 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.


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Wednesday, October 23, 2013

Janet Tavakoli Puts Her Doom On

Today we learn Mark Spitznagel, Universal Investments founder, expects a 40% drop in the markets within a year. Of course, the first thing Fantasy Central (CNBC) wants to know is what will be the "catalyst"?

We covered this on Monday. Spitznagel might as well have told Maria the catalyst will be failure of NASA's Curiosity rover to find benevolent life on Mars willing to securitize rock extracted from Mount Sharp, thereby providing an avenue for Ponzi Finance to continue sustaining the ruse claiming the trans-Atlantic banking system is anything but hopelessly insolvent.

Yet what if 40% is wishful thinking? What if the banking system is about to collapse with no hope whatsoever of recovering under the current paradigm?

This is a question Janet Tavakoli of Tavakoli Structured Finance effectively raises in a piece titled, "Currency Manipulation and Derivatives." You see, we are not alone perceiving today's risk is much like that sinking the Florentine banking empire of the 14th century. Not that Janet is openly making this comparison, yet for all intents and purposes she in fact is.

Maybe ... just maybe ... we are being much too kind calling equities "garbage." After all, one man's trash is another man's treasure, and this fact Capo Confetti and crew are hell-bent on proving as fully as humanly possible. Still, we can be positively certain this will end badly. Just how badly no one can say with any certainty: not us and not Janet Tavakoli.

Nevertheless we might wisely entertain the credible possibility all eyes today fixed on the exits will one day find every exit blocked. There's a chance we might wake up one fine day in the not-too-distant future to learn markets have been closed for an indeterminate period. It is then the "saving the world from another Great Depression" crowd of sovereign treasury subversives will find itself woefully trapped and defeated.

The question then will become who takes their place? It had better be the Tax Wall Street Party or markets very well might never again open...

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© 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.


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Tuesday, October 22, 2013

Resilient Desperation

Let's return to last week's outlook attempting to put into perspective the market's bounce off its Wednesday, October 9th low...



The S&P 500's relative strength surge late in the day on Thursday, October 10th was thought likely coinciding with formation of an Elliott 3rd wave higher—typically, 3rd waves are the most "dynamic" Elliott wave. So, by the close of trading on Wednesday, October 16th it appeared the 5th and final wave higher off October 9th bottom was nearing its completion.

Then came last Friday's open (Oct. 18th) and bankrupt wards of the state who double as usurpers of legal justice (no doubt out of dire necessity), flush with Confetti, ramped the S&P to the effect of lifting the index's relative strength (at 5-minute intervals) beyond its peak of October 10th. This raised the question of whether the 3rd wave higher, thought to have unfolded into last Monday's late-day peak (Oct. 14th), might instead have begun its ascent off the late-day low on Tuesday, October 15th, precisely one week ago.

Trouble is coincident momentum (see MACD, bottom panel) has been, and continues to be, seemingly failing this view. Its best was registered eight days ago during formation of what last week was thought the 3rd wave higher off the S&P's October 9th bottom. Indeed, we see the same momentum failure today, too, coincident with the index's relative strength having at today's open yet again surged to a higher high than any reached since October 9th bottom.

So, with regard to formation of 5 waves up from October 9th, we might be looking at a "5th wave extension" unfolding since last Tuesday's afternoon low (Oct. 15th). It's entirely possible, too, this 5th wave completed today, or is very near completing.



Taking to a weekly view of the S&P 500 we return to comparison of the present moment with prior periods when the index's technical state was similarly situated. No change in the weather, or in our anticipation of imminent weakness. All we see technically is a 3rd wave's typical dynamism manifest in a resilient S&P 500 defying the index's deteriorating relative strength and momentum. (Our view holds this "3rd wave" is forming wave (c) and is set to complete the market's counter-trend advance off March 2009 bottom.)

All told, then, seemingly expanding technical dynamism evidenced in the S&P 500 at 5-minute intervals—a mixed picture, as indicated above, raising likelihood some Elliott "c" wave [higher] is forming off October 9th bottom—meets a longer-term view of the S&P 500 that still is foreboding. Appreciating just how insolvent is today's banking system, we can more easily swallow the ongoing ruse suggesting it is anything but, as well as understand the need to do whatever it takes to sustain the illusion of its solvency via extraordinary machinations forcing capital into the bottom of the capital structure. We might conclude, however, the more they try to maintain appearances, the more desperate the situation likely is, and suppose the relative strength picture at 5-minute intervals rather vividly exposes this truth.

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© 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.


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Monday, October 21, 2013

Ponzi Finance Terminal Phase: No Middle Ground

Friday's Credit Bubble Bulletin titled, "Terminal Phases" deserves comment, as the viewpoint Doug Nolan expresses is harmonious with our outlook here, both in the near-term as well as looking further out. Nolan's analysis this week centers on China, the world's premier emerging market.
...And while the consensus sees China’s recovery as fundamental to a bullish global backdrop, I’ll offer a contrary opinion.

My Macro Credit thesis holds—and there is ample fundamental support for—the view that we’re now five years into history’s greatest global Bubble. I have posited that China is deep into its “Terminal Phase” of Credit excess. With China’s 1.35 billion people and Trillions of unrestrained Credit expansion, I’ll argue China’s “Terminal Phase” is integral to the overall “Terminal Phase” of a most protracted and dangerous global Credit Bubble. In general, post-2008 global monetary inflation pushed EM to precarious “Terminal Phase” Bubble excess, leaving deep wounds of economic maladjustment and financial fragility.

So, first to the late-stage credit securities hyperinflation dance in the post-Bretton Woods era were NASDAQ's technology dominated issues back in the late 1990s. The values assigned to these equity securities were hyperinflated by way of the GSEs having become proxies for the Fed as conduits of credit. Their transformation as such in the age of King Ponzi (Greenspan) was instrumental in feeding a decades running bull market in bonds—a role since picked up by the Fed following 2008's rout of these former central bank proxies, who in their heyday were even more powerful credit transmission mechanisms than the Fed itself, effectively being equipped with an infinite multiplier employed through "creative finance" feeding a securities-based banking system. All it took was the turn of the calendar from 1999 to 2000 and no further threat of an Information Technology Armageddon for insane valuations assigned to technology-related equities to be subjected to the writing on the wall. Once the word "bubble" came into the public discourse early in the year 2000 it was all over for NASDAQ.

Still, a myriad of credit securities required support, lest the entire mountain of these built up through momentarily profitable operations of the Fed's GSE proxies up to then be doomed to collapse, thereby bringing down the banking system with it. Enter the Great Mortgage Finance Bubble of 2002-2007. We all know how that ended. Once this wildcat finance free-for-all (er uh Ponzi scheme) was being hyperinflated only by what came to be known as "subprime loans"—these at their peak representing 20% of outstanding mortgage finance—all it took was collapse of a couple of Bear Stearns hedge funds playing with this garbage and it was all over.

Nevertheless, there was an even bigger mountain of credit securities requiring support following the Great Mortgage Finance Bubble's implosion. This evidently has been accomplished through emerging markets. Their credit markets are being hyperinflated in much the same manner as was done here in the U.S. during King Ponzi's reign at the Fed.

Nolan goes on to develop the details behind these "deep wounds of economic maladjustment and financial fragility" that are becoming increasingly evident in China.
The value of China’s September residential apartment sales surged 34% from August to $113bn. Year-to-date sales are running up about 35% from 2012. After bouncing back strongly in August (almost doubling July), September’s total system Credit growth (“social financing”) was reported at a stronger-than-expected $230bn. This puts year-to-date “social financing” at about $2.25 TN, a pace almost 20% above a record 2012. Some reports have mortgage Credit growing at a rate about 50% faster than last year. Additionally, forecasts are calling for Q4 corporate bond issuance to jump to $135bn from Q3’s $40bn.

There are multiple facets of “Terminal Phase” Credit Bubble excess at play today in China. In asset-based lending Bubbles, the rapid growth in both transactions and prices combine for exponential growth in underlying mortgage Credit. It’s worth recalling that annual U.S. mortgage Credit growth increased annually from 1997’s $313bn to 2003’s $1.011 TN to 2006’s $1.410 TN. Importantly, along with the exponential rise in mortgage borrowing comes a corresponding spike in the riskiness of late-cycle lending booms. Indeed, and fundamental to Credit Bubble analysis, “Terminal Phase” excesses foster an unsustainable parabolic rise in Credit and economic risks. Systemic stability becomes a major concern anytime circumstances dictate that officials prolong the “Terminal Phase.”

The surge in risky Credit tends to have myriad distorting effects on financial and economic systems. On the financial side, increasingly creative/aggressive risk intermediation is required to transform progressively risky mortgage debt into more “money”-like instruments palatable to savers, speculators and institutional holders. In the U.S. and now in China, so called “shadow banking” came to play an instrumental role. Here in the U.S., 2006’s $1.0 TN of subprime CDOs (collateralized debt obligations) provided a key and fateful risk intermediation mechanism. In China’s historic “shadow bank” Bubble, there is huge ongoing growth in trust deposits and various “wealth management” vehicles. A rapidly expanding chasm - between the perceived safety of “money”-like deposits/savings vehicles and the mounting risks inherent in system Credit - is fundamental to “Terminal Phase” processes and fragilities.

Apparently, we have been somewhat premature here imploring NASA find benevolent life on Mars willing to backstop the trans-Atlantic banking system. China evidently took it upon themselves to further leverage wealth it amassed as manufacturer of the world, playing the same financial games as the West in the face of its developed physical capacity languishing (this latter fact being evidenced by both a CRB and an equities market intimately tied to the nation's manufacturing fortunes coming under pressure in the post-2008 era, particularly since infinite QE was implemented).

We need recognize here that, China's hyperinflation of marketable credit securities has served to sustain the trans-Atlantic banking system's Ponzi-fied capital structure, this by providing a conduit through which the "saving the world from another Great Depression" crowd and its promoters claiming "recovery" could sustain fantasy insisting intrinsic "value"—tangible wealth—indeed underlies our securities-based banking system, whose likes in fact have been only further hyperinflated in the post-2008 period. Having new breeds of securities which to hyperinflate, accomplished has been the means of masking the continued collapse of physical capacity necessary for increasing capital stock whose purpose—whose critical existence—ultimately lends finance its backing.

So, it's official: the "Made in China" that once served to mask a hyperinflationary trap used to captivate sovereign treasuries throughout the trans-Atlantic, this that their inevitable destruction be invited and made a virtual fait accompli—all the while dismantling their physical economies whose capacity to create "something from nothing" once provided backing (through taxation) to securities sovereigns have been issuing in ever greater quantities—has been extended to include Ponzi finance itself, whose principal domain in the trans-Atlantic has been widened to trap emerging markets, as well. As recent history already has amply proven, every means of extending Ponzi finance faces a breaking point. Wildcat finance exported to emerging markets certainly will prove no exception.
I believe the initial cracks in the EM Bubble developed this spring. Market turbulence from May and June provoked further global monetary accommodation, which somewhat reshuffled the deck in the global liquidity chase. And I wouldn’t be surprised if history looks back at this period as a final manic speculative blow-off in U.S. and global equities.

...The above reference to “serious imminent issues” reflects my expectation that the Chinese are likely gearing up for another stab at restraining Credit Bubble excess. It’s reasonable to presume they won’t do anything that would cause serious disruption. Yet, from my perspective, if they are serious about disrupting an increasingly destabilizing Bubble, there is no way around major global ramifications. And with international securities markets turning more intensely overheated by the week, this creates a potentially volatile dynamic.

Herein we face a transition in the hyperinflationary dynamic that has been in place during the post-Bretton Woods period, this from one masked by inflating both the supply of and value assigned to financial securities (as well as increasingly marginalized physical "assets" backing these), to one where parallels to the 1923 Wiemar Germany experience become unmistakeable—indeed, unavoidable, unless a radical departure from today's imperial monetarist lunacy is ventured. So, as there is "no way around major global ramifications," we can look forward to an impending catharsis in Ponzi finance. Securities at the bottom of the capital structure surely will be disproportionally impacted in a desperate attempt to sustain leverage exerted higher in the capital structure.

The question we cannot answer at present is what will follow this approaching incapacity to sustain appearances of the viability of Ponzi finance? The means of inflating the supply of credit securities exerting leverage over increasingly marginalized physical "assets" is being exhausted, so the question is can sovereigns be permanently sunk in an overt, hyperinflationary morass the likes of which every vested interest today supports behind a mask pretending another Great Depression is being avoided? Could this ruse be sustained in a rising rate environment sure to result once central banks are forced to ever increasingly monetize sovereign securities in a desperate bid to pretend their effort ventures avoiding another Great Depression? The effect on the physical economy would be immediate and profound, displaying Wiemar Germany tendencies with increasing intensity, while pressure on interest rates surely will make the likes of former Fed chair Paul Volcker blush, even as stock markets surge in a desperate bid by savers seeking ROI to stave off their increasing marginalization at the alter of overt hyperinflation employed by central banks turned even more criminally reckless than they are today. This is a real possibility. Yet so too is deflationary collapse mitigated in the financial realm through bail-in. These are the only two choices given today's state of things. There is no middle ground, much as we have insisted here for time immemorial.

Thus, today's fundamental backdrop as highlighted by Doug Noland's Credit Bubble analysis substantiates our Elliott wave-based, technical view toward major U.S. stock indexes. Being as Ponzi finance is in its "Terminal Phases," we have the basis for supposing the infinite QE regime is about to meet a fateful challenge. Not coincidentally, our view of the stock market's technical state concurs. We'll probably see every last bit of fantasy sustaining valuations at the bottom of the capital structure milked in the lead up to Confetti being put out to pasture early next year. Once Confetti is gone, look out. We might be wise to remember that, only a few short months after King Ponzi ascended to take the reigns of Fed leadership, the crash of October 1987 happened.

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© 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.


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Friday, October 18, 2013

Bullish Ruse Further Exposed, Technically Speaking

There are some views that scream of just how desperate today's bankrupt pricks are, trying to maintain appearances of the solvency of the system in which their skim is sustained. Following is one such picture...



The fact there has been a "death cross" of the S&P 500's Bullish Percent Index 50-day moving average below its 200-day moving average is compelling evidence suggesting today's surge carrying the S&P 500 yet higher into record territory is on its last leg.

Occurring within the confines of an Elliott 3rd wave (i.e. wave (c) higher unfolding since early-June 2012), here again we see a display of "dynamism" typically accompanying formation of Elliott 3rd waves. Levitation of the S&P 500's Bullish Percent Index this year certainly testifies to this. Having reached a peak at over 90%(!) in May, we can cite another feather in the cap of a market displaying technical dynamism.

Yet undeniable is this measure's decided weakening since May. Bankrupt garbage pushers are hitting a wall. Thus, we close out this week pressed right up against it, with nothing to do but fall.

So, returning to the Elliott-based view covered here this week, we can expect technical weakness accompanying formation of the 4th wave of 5 waves higher since June 2012 to bring the S&P 500's Bullish Percent Index below its level of mid-November 2012. The setup for this likelihood presently is compelling. Already, the S&P 500's Bullish Percent Index is showing a decided tendency toward weakening, so our outlook for the market to come under pressure over the near-term is further supported here.

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© 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.


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Thursday, October 17, 2013

Seeing Through a Bullish Ruse, Technically Speaking

Here's the picture highlighting remarks made at the conclusion of yesterday's post...



We might not yet have a handle on the exact subdivisions of the waves forming the 4th wave of 5 waves up from early-June 2012. Likewise, we might not yet have even seen the 3rd wave complete (this suspicion is raised by the prospect a "rising wedge" is forming in the position of the 5th wave of the 3rd wave, a possibility revealed by black lines drawn over $SPX).

Yet it's clear that, at least 4 of the 5 waves forming the 3rd wave up from June 2012 have formed. We see typical technical weakening accompanying the 4th wave versus the 2nd, both via RSI (top panel), as well as MACD (bottom). Looking ahead we can anticipate much the same 4th wave versus 2nd wave technical deterioration as the 4th wave of 5 waves higher from June 2012 unfolds, this in relation to technical readings registered when the 2nd wave unfolded into mid-November 2012 bottom. The fact this technical weakening has yet to occur is noted via green lines drawn above.

Further highlights made above in the MACD panel show a similarity in present technical deterioration with that occurring in the September-October 2012 period, and this suggests our near-term anticipation of weakness is well founded.

All we might conclude from persisting "strength" positively impacting indexes is that, a 3rd wave's typical dynamism is decidedly being displayed. The Elliott 3rd wave we're referring to here is wave (c) whose 5 waves have been unfolding off June 2012 bottom.

Once wave (c) higher has completed we can anticipate another 3rd wave unfolding, but this one pointing lower, and much lower at that. This will be wave C completing an a-b-c Elliott corrective wave whose beginning goes back some years, whether to 2007 in the case of the NYSE Composite index or Y2k in the case of the S&P 500. At any rate, wave C lower will feature a taste of today's medicine, tough to swallow, but in reverse.

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© 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.


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Wednesday, October 16, 2013

Fascist Left and Right Together Bite Satan Sandwich

Here's your worthy rant over tonight's capitulation of Fascist Left to the generally indistinguishable agenda of Fascist Right. So called "Democrats"—holding all the cards, among which included military veterans and Social Security recipients whose benefits were being withheld, as well as furloughed government employees denied a paycheck as a result of the federal government's shutdown—have put on a disgusting display snatching defeat from the jaws of victory. And so the political agenda set by insolvent albatrosses who own these jellyfish remains perfectly intact. Bankrupting the U.S. Treasury still is the plain intention—anyone with a functioning braincell should be able to see this—which mark remains dead center in the crosshairs.

What pathetic excuses for "leaders." The spineless jellyfish in the White House is the worst of all. What was the point of allowing a shutdown when by simple executive order, this could have been averted? Was this the means by which Fascist Left could do its part to keep all eyes fixed on that feigned Republican attack against the Affordable Care Act, while the real intention of this whole shutdown exercise could slip under the radar? As if Tea Party tools of Venetian buttons on Wall Street were serious about withholding the mega-subsidy to Venice's insurance "industry" the Affordable Care Act delivers! Get real! This so-called opposition to "Obamacare" served only to solidify Fascist Right's base, while killer austerity—economically devastating and a frontal attack on every last principle the U.S. federal government is supposed to uphold and defend—was given a free pass by an oh so penetrating "free press," as intended. By no means did Republican subversives lose, and this because Democratic subversives handed them victory. Yet another bite of the Satan Sandwich their shutdown now forces the American people to swallow.

Still, "enlightened" racists who believe slavery should be color blind are rather mistaken thinking further enslavement of Americans to the U.S. Treasury's debt will not devastate those masters of a treasonous austerity policy whose enterprise in fact is hopelessly insolvent and doomed. "Fiscal sustainability" Fascist Left calls the Satan Sandwich. Well, just as those better informed Americans outside the mental retardation grid that is the mainstream media demanded proof of Syrian President Assad's use of chemical weapons in the Damascus suburb of Ghouta, so too do we demand proof of this "fiscal sustainability." Where in Europe do we see this working to any degree acceptable to the high standards of American leadership, oh Fascist Left? Who doesn't know the truth there is no example of austerity's success, past or present? Evidently, only these spineless, fascist jellyfish in Washington.

So now we have a reprieve until early next year. Fascist Left says there won't be a repeat performance of the federal government's shutdown. Yet if this were true, then the very least these pathetic hacks could have won would have been repeal of the law putting a ceiling on the Treasury's debt. Why didn't the Democratic party's "leadership" shoot for this? They're fascists! They're owned by bankrupt albatrosses whose garbage is backed only by the nation's mighty nuclear arsenal and nothing else. The debt ceiling is little more than a 14th amendment short circuiting mechanism, and it's there for fascists to do what they always do: run wild over humanity. And run wild again they most certainly will. Our fascist-in-chief still is hot for a "Grand Bargain" which to promote death and destruction euphemistically called "fiscal sustainability." This push now conveniently will be made in the dead of winter when a mass strike is least likely to occur.

The one silver lining to this madness came today by way of Warren Buffett's claim that, "banks are in the best shape than [anytime] I can remember." Swell, then, this makes demand for a 1% Wall Street Sales Tax all the more palatable! It's obvious spineless jellyfish in Washington calling themselves "leaders" are going to need this policy if there's any desire among them to remain in power. Yet being fascists, odds are they will find some way to move further off the reservation. Some manufactured hit on financial confidence (a species already long extinct) perhaps will be the order of the day once we are in the dead of winter. That more immediate hit yesterday I was thinking likely rather appears to have been averted for the moment.

Of course, with aid of paid promoters of the most incredible modern fantasies in which are claimed the banking system's solvency and the economy's "recovery," the groundwork is laid for the kind of market fluctuations we have been thinking likely going into early next year. That view projects major indexes presently are in the midst of forming the 4th wave of 5 waves up from early-June 2012 bottom.This outlook remains intact.



Within the framework of the view projecting a 4th wave is in the midst of forming, one of the sub-waves of this 4th wave is seen unfolding in 5-wave fashion off last Wednesday's low (October 9th). Of these 5 waves it appears 4 have completed and the 5th is very near completion.

Once this sub-wave forming off last Wednesday's low is completed, a hard turn down still can be anticipated. The likes we expect to have an effect that is typical in formation of 5 waves higher. To wit, we should see technical weakening coinciding with ongoing formation of the 4th wave of 5 waves higher from early-June 2012 bottom. This technical weakening will be in contrast to coincident readings of various measures registered during formation of the 2nd wave, which bottomed mid-November 2012.

By some measures we have already seen this technical weakening. Yet by others we have not. For example, take index RSI and MACD. These we can expect to fall below levels reached in November 2012 as the currently unfolding 4th wave develops.

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© 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.


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Tuesday, October 15, 2013

A Team Fraud 1-2 Punch on the Swindle Bag

It appears there's a problem developing somewhere in a rotting capital structure, and we can be absolutely certain it's not where it looks to be...



Someone's got a hole to fill, and hitting up short-dated Treasuries for much needed capital. Funny, something of a similar problem developed back in July 2011, the last time the euro-zone periphery was swindled. My guess is trouble originates somewhere in the French banking system. Why else would Fitch be out in front putting the U.S. credit rating on negative watch?

Then again, it's probably best this time around Fitch take the lead rather than S&P. Lord knows, bankrupt Venetians are hankering for a heist and their U.S. thugs at Standard & Poors took a lot of heat following their August 2011 downgrade of U.S. sovereign debt. Better wine swilling surrender monkeys lead the charge, if only for the sake of the symbolism. There's about to be a panic manufactured in a bid to gut the U.S. Treasury on the road venturing its outright destruction.

Picking up the ball for the beleaguered S&P were a couple of Team Fraud fleas. First was CNBC.com finance editor Jeff Cox claiming Washington was playing chicken with Wall Street, trying to "scare it into some sort of visceral reaction." Cox claims Wall Street is not willing to play Washington's game. Please, Jeff, you're insulting our intelligence. We know that, because you're deep in the bowels of fantasy land it is your job to pretend 2008 never happened.

Then came everyone's favorite blind bank analyst, Dick Bove. He says "the market is sending a signal to Congress: don't do anything; we don't care." Yeah, right. And the market isn't looking at the current partisan divisiveness pitting policies of Venetian lap dogs against Americans tired of being swindled, and projecting a very difficult Janet Yellen confirmation becoming increasingly likely? Alright, this might be some near tomorrow's greater concern, while for now there's a U.S. Treasury to be bankrupted gutting the last prop of a decimated physical economy. Market extortion demanding deep cuts coming up...

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© 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...

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Monday, October 14, 2013

The United English States v. Bankrupt Venetian Oligarchy

Although we live in extraordinary times, most remain blind to it. Today there is real risk the asset class called equities sometime in the not-too-distant future will be threatened with extinction, at least in present form generally. Some "out with the old, in with the new" reorganization whose coming will be subsequently masked for all time by macro, index-based views, such as are detailed here, surely will mark events on the immediate horizon. A swollen market of corporate debt, ultimately unpayable, virtually guarantees this. What's more, this fear-worthy inevitability represents a best case outcome. Much worse just as likely could ensue.

The means by which leverage higher up in the capital structure has been facilitated, exploding the supply of credit securities in the modern, post-Bretton Woods era, and the imperative to protect (bailout) and fortify (bail-in) the claims on wealth this mountain of credit securities represents introduces a dynamic far more dangerous and threatening than existed in the 1929-1932 period. Herein is the very threat of the destruction of capitalism altogether, and today's commonality with the orchestrated collapse of the Florentine banking empire in the 14th century, leaving Venice in a position to pick up the pieces, all the while exposing itself as the center of an evil cult whose machinations opened the door for the Black Death to spread throughout Europe.

Today's Venetian cult is headquartered in London and is busy attempting to destroy the one-and-only refuge against its ageless machinations to impose its will on the world, that a long reigning oligarchy assimilated there over the past several centuries sustain its influence over the world's affairs, and so remain at their center. The object of this oligarchy's present attention is "the full faith and credit" of the United States Treasury.

We should have no illusions here. In the eyes of today's Venetian oligarchy the British Royal Family is entirely expendable, just as the destruction of the constitutional republic called the United States of America is eminently desirable. Thus is it worthwhile to throw into the aether the extraordinary idea that, wisdom might better advise the British aristocracy reorganize its political system to mimic that of the better part of the English-speaking world. There's no reason the Royal Family could not be assigned the role of a permanent Executive, nor the House of Lords made into a Senate. Meanwhile the House of Commons could function like the U.S. House of Representatives, with today's Prime Minister becoming House Speaker. The critical point of this desirable reorganization (and I would submit necessary, too, if the English of the Eastern Hemisphere are to avoid a terrible slaughter) is that, ultimate political power rest with that political body directly accountable to those being governed. Here in the U.S. Congress has the final say, through power to override an Executive veto. Not so today in the U.K., where the common man remains a "subject" and not a citizen equal to his or her permanent rulers.

Why the U.K. should bother pursing such profound political change is answered by incredibly elevated odds the world presently is at the brink of financial, economic and social calamity whose only known precedent in the Common Era is the collapse of civilization occurring in Western Europe in the 14th century. There should be no illusions about this threat, whose potential to adversely affect everything from the bottom of the social order straight up to the top is profound.

Yet were such a desirable turn of affairs in the UK to have any hope of becoming reality, necessarily required will be a political renaissance in today's refuge of the English-speaking world whose shores are buffeted by two great oceans. Needing assertion, right here and right now, is the fullness of spirit in the nation's founding principles, such as are eloquently stated in the U.S. Constitution's Preamble. More than a face-saving means of protecting the best of civilized culture, English and beyond, need be advanced at this extraordinarily critical moment, however. We need unlikely, forsaken allies hungry to belong. Victims of the Venetian slave system—a common, timeless characteristic of the true enemies of mankind and God alike—all need be joined here.

Thus are those who today would enslave the United States to its Treasury's debt more than irrational racists. These treasonous subversives wrap themselves in the Constitution only to then reveal their "enlightenment" judging slavery color blind! Have no doubt, this is a bi-partisan plague. Any so-called "leader" advocating austerity for the sake of "fiscal responsibility" is promoting the Venetian slave system, and is a self-declared enemy of both man and God alike. Theirs is treason to the United States to be sure.

In no way is Justice established, domestic Tranquility insured, the common defence provided, the general Welfare promoted and Liberty secured enslaving a free people to an indebtedness whose existence is the very work of an enemy to freedom whose every effort over many centuries, let alone the past several decades, has ventured to shackle and kill all manner of creative means for advancing harmony among God's creation, the likes of which finds mankind, blessed with cognition and inclined toward reason, at the very top. Those today whose actions even so much as threaten a U.S. Treasury default must be fought, discredited and thrown out.

For the sake of countering evil political forces, then—let's not mince words—do we here advocate the U.S. Congress seize the Federal Reserve and transform it into a Hamiltonian national bank issuing credit to finance the build out of a physical economy worthy the 21st century, venturing this to such profound extent as brings today's 30 million U.S. citizens desperate for productive work coming up short of what's actually needed, thereby raising motivation to open U.S. borders, that but more of the world's tired, huddled masses be welcomed. Similarly, for the sake of those today in dire need do we advocate a 1% Wall Street Sales Tax, that, first, the safety net provided those in whom the nation already has made a considerable investment be fortified and, second, that the means of leveraging our citizenry's creative potential resulting from investment already made be foremost advanced.

These two policies need be brought to the forefront in resistance to today's push in Congress aiming to subdue every U.S. citizen's natural right to life, liberty and happiness through contrived enslavement to the national debt in a cause advanced by intellectual misfits advocating vicious austerity in tribute to unrepentant criminals—all of whom, both foreign and domestic, are animated by today's Venetian-modeled oligarchy—whose recklessness has brought the U.S. Treasury to its knees and evidently will not cease until Treasury is dead and buried. We see plainly how austerity is working in Europe and we must have none of it here. Americans must see themselves not nearly as submissive as, say, the Irish, whose Prime Minister now claims the bailout regime to which it submitted these past few years will come to its conclusion in December, while the austerity regime this ill-gotten bailout policy coincidentally imposed on the Irish citizenry is set to live on indefinitely. What have the Irish gained from this? Respect among criminals? Well, they can have it on their island which now has more in common with other things where the sun don't shine. The Irish are by no means out of the woods, and never will be so long as the insolvent euro-zone core remains ripe for criminal picking. Supra-national EMU suppression of the Irish, Portuguese, Spanish, Greeks and Italians is certain to continue once core countries too are made victims, robbed blind—swindled—just as their fellow Venetian dupes in the euro-zone periphery have been already. Prime Minister Kenney can sell Ireland's so-called "success" to the west wind blowing toward London, because most Americans simply don't buy it.

Here on the political home front we recognize gloating over the Republican party's evident will to self destruct is entirely misplaced. Neither party has yet advocated Congress seize the Fed. Neither party has yet offered up a 1% Wall Street Sales Tax to cure the U.S. Treasury's revenue needs. Both parties remain in the running, then, to lead the charge raising the urgency of these two necessary policies. Both parties will remain utterly useless and worthy destruction shunning these viable policy alternatives.

Meanwhile, provocateurs who went unchallenged dismantling entry barriers set up at the World War II memorial in Washington, carrying these to the White House and hurling them onto the lawn, rather suggest that, equally useless is a national security state bureaucracy whose dereliction of duty infers some treasonous intention in apparent willingness to facilitate a coup d'├ętat. So, our opposition to austerity is not entirely unbending, then, so long as there is good cause.



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© 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.


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