This is not advice, This is my personal approach. I don’t give advice on trading. I have managed investments for others in the past, Doing so diminishes my judgement.
There are no good investments in the economy today. GDP is elevated just because the stock market has been goosed since 2006, Everything is overpriced, even gold. This is what happens when government is used as a tool for building wealth for those who control it. Tariffs will guarantee an outright depression. Free market attributes are necessary for launching a recovery, Continue reading →
The world we live in is governed by the laws of dominance and subservience. There is no way to escape the system until our tenure here is complete.
Most people are unwilling to entertain the idea that most of what we do in aggregations of people is instinctive and that we have inborn propensities that are always present. `
Two of the instincts are to exalt our species and exalt ourselves as we interact with others in in the various aggregations we belong to. Because we are so important and special to ourselves, it is normal to expect that others view us in a similar light.
From kindergarten on, children art taught that the United States is a peaceful nation and that its military promotes principles of democracy around the world. In the mind of the average American our military is constantly engaged in completely necessary operations that result in good things all around the globe. I reposted the photo above because it has a strong message. The photo is a repost from:
The flat tax is a gift to the donor class. Never support a candidate who proposes changes in the tax code without reductions in spending first. If you have no political power any change made through government will be a disadvantage to you.
There is one good reason for taxing the rich out of proportion to the rest of society. The rich lobby constantly to increase the size and role of government. The rich reap enormous benefits from the growth of government and thus should pay the majority of its costs.
The most valuable attribute of any tax is in keeping citizens aware of the cost of government. When spending is increased, citizens need to experience a loss of disposable income. Changes to the tax code in tax code by proposed politicians always facilitate more spending and guarantee citizens won’t object. If they don’t feel it, they won’t care.
The idea behind quantitative easing is to push asset prices, mainly stocks, higher with the notion that the economy will follow and there will be joy throughout the globe. It is kind of like the build it and they will come line out of the movie Field of Dreams. Unlike, the movie, in the real world, people don’t realize what a fantasy quantitative easing is.
As I have said many times, economists get paid to lie on behalf of their employers. The alternative is to tell the truth and their is no profit in that. I don’t make a dime for making my case and it is flawless. No sympathy is needed. I am retired and completely solvent.
When government buys stocks by proxy or directly, the rich do get richer and happier. Most of the rich who benefit had no part in influencing policy. The super rich and politically powerful are responsible for getting quantitative easing implemented. They don’t mind if others benefit. All that matters is that government guarantee their investment returns.
As I have explained, many times work is a second choice, even if it is treated as a first choice by all other economists. The rich may be the country’s greatest asset, but only if they innovate, invest in plant and equipment, and do the work society needs rich people to do. The rich and the poor do have at least one thing in common. That is for each group, work is a second choice. Quantitative easing gives the rich the chance of a life time. Countless gains of wealth and power are made just by virtue of government guaranteeing investment returns.
‘What is the problem with that?’, is often asked. “Are you not just jealous?’ Since work is a second choice, the rich get lazy just like the poor do when they get something for nothing. When rich people do not do the work that society needs them to do, there is little innovation, less investment in plant and equipment and no economic progress. There is no point in working if all one has to do is wait for government to push up the value of assets. Hype replaces productivity and the economy eventually stagnates, kills any recovery and a depression ensues.
The mere suggestion by Mario Draghi that the European Union buy equities should be terrifying to everyone. Unfortunately it is not. This is a guarantee that all of the European Union will be impoverished. The United States Federal Reserve buys stocks by proxy. This is just as bad.
Euphemism Mountain is a Curbside Jimmy Favorite. It is about life as Americans insist it is.
The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.
Fantasy Free Economics recommends the following blogs.
Below are two articles from a few weeks back. As it turns out, organized support has been ample in countering the traditional weakness during the month of October.
This is a gift to stock holders, at least those who can get out before it all comes down. In a genuine market there is an ebb and flow to prices throughout the day that is not present in this one. In a real market, prices hit small air pockets from time to time throughout the day. During a short squeeze that is not sponsored, there is not a steady push from the bottom up. A planned move has recognizable demand evenly distributed throughout the day and bolstered during critical time periods. The patterns are recognizable as clockwork. Odds are that organized support will be adequate to keep a rally of sorts going into year end. How and when will this change? Few investors acknowledge the wink and nod system that keeps corporate insiders, privateer firms and open market committee members all working together and in control of the market.
Still, none of this can be taken as a given. For example, if the open market committee can no longer efficiently guarantee corporations they will profit from buybacks more central banks will have to buy and hold stocks directly. The central banks have to be willing and the public must remain unaware of just how this kind of thing limits their income and destroys the overall economy. So far, the public remains docile and uninvolved. Corporations are still reporting non gap earnings, using every accounting trick known to man and violating securities laws with impunity. Do not forget that a high stock price is a pay day to a corporate insider, independent of any real profit. Buybacks are the quickest and most reliable way for insiders to pay themselves.
Why did I mention the debates? The Republican Primaries are getting more competitive. Who will be the first candidate to point out the fact that equities market are and have been rigged? This is all more than an exercise in making money for the manipulators and the donor class. This is a power struggle and an important one. Power is more desirable even than money and it is largely interchangeable. Even candidates who are in opposition to them will protect the investor class as a path of least resistance. Don’t ever think that politicians understand the financial markets. I guarantee you that they don’t. As campaigns get more intense, politicians will become more willing to make waves where they otherwise would not.
Each month the amount of margin debt is released by the New York Stock Exchange. Notice that the September level is at its lowest level since February. This is important but even more important is that this bearish level has not yet been mentioned in the mainstream media. That is to be expected since both the media and the financial sector operate under the same incentives which is to prevent markets, financial and all markets from clearing. Do you not believe you are being manipulated? I advise you to do a reality check. You will find out otherwise,
The downside risk of owning stock outright is that of taking a huge sudden draw down when reality sets in. Government policy is to support stock prices. This is accomplished with complete cooperation by the Federal Reserve. Privateer firms are given unofficial licences to steal in return for using high frequency trading systems to create and manage uptrends. Stock buybacks are encouraged. Assurance is given to corporate insiders that the Fed has their backs. Corporations doing buybacks, like privateer firms are rewarded handsomely for their participation. For individual corporate insiders buybacks are a way of getting paid far more than they would be with just salary and bonuses. Corporate buybacks elevate insider’s income by leaps and bounds. Only a fool would turn down the opportunity. Fools do not reach such lofty levels in society. Central banks around the world are buying stock outright solely as a way of rewarding their most valued citizens. Our central bank may be doing so also. Federal reserve transparency talk is only for public relation purposes.
This is the environment regular traders deal with. Technical analysis and fundamental analysis give traders no advantage, otherwise it would make sense to short both hands. All that can be done is to stay solvent until reality sets in. The HFT firms know everyone’s positions and they have complete permission to use that information to their advantage.
The economy now is completely dependent on the rich having huge disposable incomes as a result of the gifts they have been given. Their added wealth has been the result of government policy. If the elite investor class starts experiencing value draw downs in their investments the economy will simply tank. So, it is important that no stock market correction ever gains enough downside momentum to cross the point of no return.
Remember, that the economy is in the process of being destroyed. Stock market corrections and recessions are completely necessary for an economy to grow. Stocks retreat when their share prices cannot be justified by their business operations. Recessions occur when businesses are producing too many products and services that consumers don’t wish to buy. When downturns occur investors put money into new ideas and businesses produce less of what is not currently in demand and more things people want. When this natural process is abandoned an economy becomes less efficient with every passing day.
The problem of government using the stock market to reward the wealthy goes back much further than the current time frame. Since 2003 we have seen nothing else.
The stock market could continue higher until so much damage is done that the harm can no longer be hidden. Things could fall apart much quicker.
This is the current strategy I see. We are at the end of the normal fall weakness in terms of the standard seasonal pattern. From mid October until year end is seasonally a very strong period. Look for this dialog in coming days. “O.K., we’ve been down about ten percent. That’s the correction. Its safe to dive back in.” Chances are this will work for a while. The buy side will never run out of money. Again, all actual people can trade with is money they have earned. The manipulators have no limits on their buying power. They can borrow money at less than the rate of inflation in endless amounts. In addition they get a guarantee that they will get advance notice of everything central banks say or do. They are also assured they can violate any law with impunity. Of course, this is contingent upon their using effort to push stocks up.
When the economy is destroyed, the elites will have already made their money, provided they can get out in time. This is not a vendetta against the great unwashed in the rest of the country. Its nothing personal. The rich just have an once in a life time opportunity to use government to bolster their wealth. They are using it as expected. Regretfully, when the system collapses completely the poor will suffer out of proportion to everyone else. The ignorant in all income classes will suffer but that is just the price of not becoming enlightened.
Here are some risks for the market.
1.) Earnings will be bad enough to overshadow everything else. This is hard because accounting laws are not being enforced and all kinds of accounting tricks are being used. Non-gap earnings can be just about anything a corporation wants them to be.
2.) Privateer firm’s activities may turn unprofitable. The Federal Reserve may no longer be able to give them enough of an advantage to justify their continued efforts.
3.) Outright war might break out. I have no doubt that various countries around the world are trying to draw the U.S. into a very inconvenient ground war. We have fewer friends these days than we like to admit. Even our allies don’t like us as much as they pretend to.
4.) The American public could start waking up and discover the degree to which they are being fleeced. The stock market is being supported with tax dollars. Prices are going up. Discomfort is increasing. When people get uncomfortable, they start blaming government. Don’t count on it. Americans are extremely ignorant and their views are mostly determined by fantasy and the sound bites they hear.
5.) There could be a high profile assignation. This is a completely reasonable expectation when all of what government does is corrupt. Politics is the most ruthless profession in the world.
6.) The does seem to be a breakdown of cooperation among the elitists. Somebody could completely blow their beets at any moment. There could be a financial sector equivalent to Snowden.
These are just a few possibilities. When government is completely integrity free, time for the good life is limited. The elitists have been blessed with unrelenting good luck. It won’t last for ever.
From this point on I am looking for more of the same. Look for long consolidation patterns and a slow push to the upside. The market can’t rise on even moderate volume. It has to be low. Look for the same endless ratcheting up we have been seeing since about fall of 2005. Sudden enlightenment news announcements will be common to elevate the market on various given days. Prices will then be held stable until short sellers finally start covering. This pattern will repeat. Watch the manipulation long enough and you will discover that they only run a few plays. The logarithms are complex but what they accomplish is easy to follow.
In short, I am not expecting a vicious sell off until sometime next year at the earliest. That is unless there is an early catalysts. I can’t make that kind of a prediction. Just know it might happen.
Seldom are the real reasons for things discussed in the media or anywhere else. The damage to the economy, done by high frequency trading firms is never discussed in the media or in academic circles.
Here are the facts.
It is not the speed of high frequency trading firms that puts investors at a disadvantage. Their speed is a function of these firms competing with one another. The faster a firm trades the more efficient it is in exploiting the unsuspecting behavior of the public, hedge funds, investors and traders of all kinds.
The only true advantages these firms have is that they are not bound by the constraints of existing securities laws. What we have is the equivalent of making robbery legal for an anointed set of citizens. That happens also, but folks are not aware of it.
No one has stated outright the high frequency trading firms are above the law. They don’t have to. Regulators simply fail to notice. Individual investors are sometimes prosecuted for spoofing. For high frequency trading firms spoofing is a constant trading technique from the open to close of trading.
High frequency trading firms and lawmakers have compatible goals so manipulation is overlooked as long as the result is higher stock prices. This puts all other traders at a disadvantage because they lose all objective criteria for studying price movements. Both fundamental and technical analysis become useless with respect to decision making.
The disadvantage to equity buyers and sellers is obvious. The general public suffers even more but for reasons that are not automatically grasped. Biggest of all are the changes in the incentives that govern the actions of the upper 1%. When all one has to do to get paid is run up the price of owned assets without respect of profits, the rich become lazy. Innovation and effort by the wealthy become highly subdued. Welfare for the rich has the same effect on the rich as it does on the poor. It reduces the incentive to do anything productive.
I mention these things today because we are on the cusp of an era where everyone together will suffer greatly as a result of years of abusing the financial markets. It is important that blame be correctly placed because someone will be blamed regardless.
There are overnight meetings and tomorrow there will be a renewed effort push the stock market higher.Today the effort was enormous but still fell short.
The fundamentals are not there and neither are the technicals. Today gave the impression of a massive human effort to push a stalled locomotive over the crest of a hill. As hard as they tried the locomotive still slipped back. I have been trading stock since the 1960s and can say with complete confidence, genuine markets do not behave this way. Don’t misunderstand. I am not claiming necessarily to know what happens next even in an honest market. What I will say is that there is always an ebb and flow to price activity. When stocks fall back from intra day highs, they don’t stabilize just before going negative 99% of the time. Stocks do not stabilize into consolidation patterns with volume increasing for the entire duration of the pattern. Each day there are key stocks that sky rocket as momentum igniters. The action does not rapidly move from index to index in an attempt to find some group that will move.
What we know for sure is that all of this is not working as well as it has in the passed. When it is time to ignite momentum there is always a wonderful news announcement for a key stock or key sector. Earlier on, every other stock would would follow the lead of an anointed stock’s. That is not happening these days as it is expected to do.
Don’t expect the billionaires club to throw in the towel. Not just money but the entire power structure of the world is dependent upon ever rising stock prices.
We know for sure there will be an new approach in place if not tomorrow, very soon. The old paradigm is not working. As I have already said, when enough damage is done, the market will collapse. The wealth and power structure of the world will be turned upside down. Central economic planning hurts everyone but the last to feel the pain are the ones central economic planning is designed to help. Everyone loses but the very rich who have benefited from quantitative easing and gifts of unearned money.
This is not advice, This is my personal approach. I don’t give advice on trading. I have managed investments for others in the past, Doing so diminishes my judgement.
The idea behind quantitative easing is to push asset prices, mainly stocks, higher with the notion that the economy will follow and there will be joy throughout the globe. It is kind of like the build it and they will come line out of the movie Field of Dreams. Unlike, the movie, in the real world, people don’t realize what a fantasy quantitative easing is.
