Seeking Alpha

Market Shadows'  Instablog

Market Shadows
Send Message
Market Shadows: Group of writers and investors: Paul Price, Lee Adler, and Ilene.
My company:
Market Shadows & Cycle Editing
My blog:
Market Shadows
View Market Shadows' Instablogs on:
  • Turning Sunshine into Performance
    Turning Sunshine into Performance

    vitamin d exposure By Ilene

    Does vitamin D have anything to do with investing and stock and options trading? Maybe. Preliminary research suggests that lack of vitamin D is associated with impaired mental abilities. And this may indicate that obtaining sufficient levels of vitamin D may improve cognitive performance

    Researchers stopped short of advising more sunshine, or fruit-flavored gummy D supplements (yum!), to improve one's cognitive function. But further research is warranted.

    In addition, and perhaps most importantly, many children appear to be deficient in vitamin D (see below) so it may be worth investing in some of those gummy Ds. 

    Does Vitamin D Improve Brain Function?
    New studies show low vitamin D levels may impair cognitive function

    By Diane Welland, in Scientific American  

    The push to prevent skin cancer may have come with unintended consequences—impaired brain function because of a deficiency of vitamin D...

    “We know there are receptors for vitamin D throughout the central nervous system and in the hippocampus,” said Robert J. Przybelski,... “We also know vitamin D activates and deactivates enzymes in the brain and the cerebrospinal fluid that are involved in neurotransmitter synthesis and nerve growth.” In addition, animal and laboratory studies suggest vitamin D protects neurons and reduces inflammation.

    Two new European studies looking at vitamin D and cognitive function have taken us one step further...

    The scientists found that the lower the subjects’ vitamin D levels, the more negatively impacted was their perform­ance on a battery of mental tests...

    A second study, led by scientists at the University of Manchester in England... looked at vitamin D levels and cognitive performance in more than 3,100 men aged 40 to 79 in eight different countries across Europe. The data show that those people with lower vitamin D levels exhibited slower information-processing speed...

    Although we now know that low levels of vitamin D are associated with cognitive impairment, we do not know if high or optimum levels will lessen cognitive losses. It is also unclear if giving vitamin D to those who lack it will help them regain some of these high-level functions...

    See Also:

    Vitamin D for Quicker Thinking?
    Men With Low Blood Levels of Vitamin D Fare Worse on Test Requiring Speedy Thinking

    By Miranda Hitti, WebMD Health News
    Reviewed by Louise Chang, MD

    The study, published in the Journal of Neurology, Neurosurgery and Psychiatry, included more than 3,100 men 40 and older in eight European cities:..

    Men in their 60s and 70s with low levels of vitamin D were the most likely participants to have low scores on the visual scanning and processing test...

    In the journal, Lee and colleagues call for further studies to test whether vitamin D supplements might help minimize age-related declines in specific mental skills.

    Vitamin D Deficiency: Children Need Vitamin D

    The Ledger

    This nation has many costly health care problems, but vitamin D deficiency shouldn't be one of them.

    A new analysis focusing on U.S. children ages 1 through 11 says about a fifth of youngsters that age aren't getting the minimally required level of vitamin D. Many more may fall short of the optimal dose.

    The deficiency puts those children - disproportionately African-American - at risk of ailments such as rickets, a disease that can cause a weakening of growing bones and cartilage.

    The potential for damage from vitamin-D deficiency in young children is so clear that the American Academy of Pediatrics now recommends that youngsters get a 400-unit, daily supplement...

    Some evidence indicates that teens and adults may need much more vitamin D, well beyond what would be consumed in a good diet. This too suggests that daily supplements would be helpful.

    References:

    Association of vitamin D deficiency with cognitive impairment in older women. Cross-sectional study. Annweiler C, et.al., Neurology. Sept., 2009.

    Serum 25-Hydroxyvitamin D Levels Among US Children Aged 1 to 11 Years: Do Children Need More Vitamin D?, Jonathan M. Mansbach, et. al., Pediatrics. Nov., 2009.

    Defining Vitamin D Deficiency in Children: Beyond 25-OH Vitamin D Serum Concentrations, Frank R. Greer, Pediatrics. Nov., 2009

    Journal of Neurology, Neurosurgery and Psychiatry, Lee, D. May 20, 2009; advance online edition.

     

    Nov 07 9:51 PM | Link | Comment!
  • Double-Edged Sword: Swine Flu and Vaccines

    By guest author Terry Doherty and Ilene, of Phil's Stock World

    Terry Doherty is the Research Program Coordinator in the Depts of Biomedical Sciences and Academic Affairs at Cedar Sinai in Los Angeles, California.

    Double-Edged Sword: Swine Flu and Vaccines

    vaccines, autism, flu, mercury

    There's plenty that is unknown about the swine flu and the swine flu vaccine.  If searches on the internet are any indication, deciding whether or not to be vaccinated may be a tough, emotionally charged decision for many people.  So how - without having the background to write a swine flu grant proposal, conduct the research, and get the thing published in the New England Journal of Medicine - do we decide whether or not to get a swine flu shot?  

    One way is to attempt to evaluate and weigh the risks of the vaccine against the risks of the flu.  That is how I approach the subject, but it's easier said than done.  As is often the case with medical interventions, the risks are not fully known. And even if we could carefully assess the risks, our underlying assumptions may be wrong.  Percent risks are averages collected by studying large populations.  We may not be one of the statistical average.  Then there are the gaps in the available data, and own biases and belief systems.  Our view of the world affects our analysis and often we are not even aware of how large of an effect those biases may play.   

    In Vaccine War: Autism, Flu and Science, TIME, Maia Szalavitz discusses how emotion and biases play a large part in our risk-benefit assessments:

    Just in time for the national roll-out of the new H1N1 flu vaccine, Wired Magazine and the Atlantic have weighed in on the ongoing vaccine war: Wired has a profile of Paul Offit, a vaccine researcher and pediatrician who has consistently spoken out in favor of vaccination and pointed to the lack of evidence linking vaccines and autism; the Atlantic checks in with a piece questioning the science suggesting that flu vaccines and antiviral drugs prevent people from dying.

    Both articles have elicited heated debate all over the Web: Amy Wallace, who wrote Wired’s piece, excerpted below, has received vitriolic criticism and attacks from vaccine opponents, setting records for page views...

    This debate over vaccination doesn’t seem likely to end any time soon. For critics, vaccines have become a touchstone for cultural anxieties and a not entirely unjustified mistrust of government and big business. No matter what evidence researchers provide supporting the safety of vaccination and its clear benefit to global public health, opponents remain convinced that the vaccine industry is tainted and biased by commercial pressures and that anyone who supports vaccination must have financial motives.

    But for those who are concerned about health and safety, these articles and the related discussions offer a fascinating view of the controversy.  If we are to have a rational conversation about the best way to fight flu, infectious disease and autism, we need to recognize that these are scientific questions and use the best research—not the data that supports our preconceived views—to answer them. 

    Due to its newness and lack of conclusive information, the role of biases in affecting decision making-process may be especially true for the H1N1 vaccine.  Although several government-sponsored projects are attempting to evaluate the safety of the vaccines, the available data is limited.  But we have a rather unique opportunity to learn more. (See Swine Flu Vaccine: Watching For Side Effects, here or here.)  Ideally, we should strive to evaluate the data objectively, and perhaps free ourselves from an overwhelming amount of emotionally-charged misinformation that pops up in our well-intended flurry of google searches.

    What is the Incidence of the Swine Flu?

    One important factor in deciding whether to be vaccinated against a disease is its incidence, or likely incidence -- what are the odds that you will contract the disease?

    flu, vaccines, TIMEThe incidence of swine flu is not clear.  Mike Stobbe writes in 1 in 5 Kids Had Flu-Like Illness This Month, TIME, "about 1 in 5 U.S. children had a flu-like illness earlier this month — and most of those cases likely were swine flu, according to a new government health survey. About 7 percent of surveyed adults said they had a flu-like illness, the survey found."  Of course, flu-like symptoms are not synonymous with confirmed swine flu cases.  The error could go either way.  Some people presumed to have swine flu may have a different virus, while some people infected with H1N1 may have few or no symptoms.

    Countries are not keeping track of total number of H1N1 cases.  See U.S., Other Nations Stop Counting Flu Cases, TIME

    U.S. health officials have lost track of how many illnesses and deaths have been caused by the first global flu epidemic in 40 years.  And they did it on purpose.  Government doctors stopped counting swine flu cases in July, when they estimated more than 1 million were infected in this country.

    In Swine Flu Infected Millions in First U.S. Wave, CDC Study Finds, Bloomberg, Jason Gale notes that

    Swine flu may have infected as many as 5.7 million people in an initial wave that swept across the U.S. earlier this year, researchers at the Centers for Disease Control and Prevention and Harvard School of Public Health said. 

    The number of swine flu patients in the U.S. may have been up to 140 times greater than the reported number of confirmed cases, according to a study published in the CDC journal Emerging Infectious Diseases. A model used by the researchers to extrapolate total cases suggests 1.8 million to 5.7 million infections occurred from April to July.

    CBS News has also investigated the occurrence of swine flu.  According to CBS, state testing results suggest that H1N1 is not as prevalent as feared.  See for example, Swine Flu Cases Overestimated?:  "If you've been diagnosed 'probable' or 'presumed' 2009 H1N1 or "swine flu" in recent months, you may be surprised to know this: odds are you didn’t have H1N1 flu.  In fact, you probably didn’t have flu at all."

    Confusing? Given that estimates may be too high, or too low, the incidence of swine flu is not known. Similarly, the death rate in the population is not known.  

    What are the risks?

    In H1N1: Hitting the Young, Riskier for the Old, TIME, Alice Park reports:

    researchers are collecting more and more data on the spread of the pandemic flu and getting a clearer picture of its victims — who is most vulnerable to H1N1, how the most severe cases progress and which risk factors tend to contribute to life-threatening disease...

    The latest study, published this week in the Journal of the American Medical Association, offers a snapshot of 1,088 H1N1 cases in California that were severe enough to require hospitalization — or resulted in death — between April 23 and Aug. 11 of this year. Experts at the California Department of Public Health, who led the study, say their findings are largely in line with the growing body of data on the worldwide pandemic flu, confirming, for instance, that the 2009 H1N1 flu disproportionately affects younger patients....

    While H1N1 infection results in mild or moderate disease in most patients — indeed, the most severe cases account for a small proportion of overall infections — a subset of patients are harder hit, the data show. And in those patients, the disease can often quickly become life-threatening. "The major point of our findings is that there has been a lot of perception that this is a mild disease, and a lot of people may be ambivalent about vaccination," says Dr. Janice Louie, a public-health medical officer at the California Department of Public Health and the study's lead author. "But for those patients who were hospitalized, 30% required intensive care. This is something that clinicians should be aware of when patients walk into their clinic or office with signs of flu."

    Among hospitalized patients in the study, 118 died — an overall 11% fatality rate. Although the rate of hospitalization was highest among infants under 2 months old, the rate of death was highest in patients over age 50; H1N1 was least likely to turn fatal in patients under age 17. Yet with all the focus in the media on the vulnerability of younger patients to infection, the elderly may have been somewhat dangerously overlooked, says Louie. Although older patients may not be at high risk of getting infected in the first place (thanks to their residual immunity to the virus from previous outbreaks of H1N1), their risk of death from the disease may be higher than that of younger patients, primarily because of their higher rates of underlying conditions, such as heart disease, reduced lung function, diabetes and emphysema...

    The California data also reveal a potentially new risk factor for H1N1: obesity. Obese individuals were disproportionately represented in the state's sample of hospitalized cases...

    This study suggests that while the swine flu is usually mild or moderate, in the subset of patients with severe disease, the symptoms may rapidly become life-threatening. While the elderly may have some residual protection and are less likely than younger people to be infected with H1N1, once infected, their course is generally worse.

    How effective is the H1N1 vaccine? 

    Two other factors to consider when deciding whether to get a flu vaccine are the safety and effectiveness of the vaccine.

    In the Atlantic's Does the Vaccine Matter?, Shannon Brownlee and Jeanne Lenzer question the effectiveness of flu vaccines.

    But what if everything we think we know about fighting influenza is wrong? What if flu vaccines do not protect people from dying—particularly the elderly, who account for 90 percent of deaths from seasonal flu? And what if the expensive antiviral drugs that the government has stockpiled over the past few years also have little, if any, power to reduce the number of people who die or are hospitalized?...

    [The] impact of flu vaccine has been harder to determine. Flu comes and goes with the seasons, and often it does not kill people directly, but rather contributes to death by making the body more susceptible to secondary infections like pneumonia or bronchitis...

    [S]tudy after study has found that people who get a flu shot in the fall are about half as likely to die that winter—from any cause—as people who do not. Get your flu shot each year, the literature suggests, and you will dramatically reduce your chance of dying during flu season.

    Yet in the view of several vaccine skeptics, this claim is suspicious on its face. Influenza causes only a small minority of all deaths in the U.S., even among senior citizens, and even after adding in the deaths to which flu might have contributed indirectly. When researchers from the National Institute of Allergy and Infectious Diseases included all deaths from illnesses that flu aggravates, like lung disease or chronic heart failure, they found that flu accounts for, at most, 10 percent of winter deaths among the elderly. So how could flu vaccine possibly reduce total deaths by half? Tom Jefferson, a physician based in Rome and the head of the Vaccines Field at the Cochrane Collaboration, a highly respected international network of researchers who appraise medical evidence, says: “For a vaccine to reduce mortality by 50 percent and up to 90 percent in some studies means it has to prevent deaths not just from influenza, but also from falls, fires, heart disease, strokes, and car accidents. That’s not a vaccine, that’s a miracle.”...

    Flu researchers have been fooled into thinking vaccine is more effective than the data suggest, in part, says Jefferson, by the imprecision of the statistics. The only way to know if someone has the flu—as opposed to influenza-like illness—is by putting a Q-tip into the patient’s throat or nose and running a test, which simply isn’t done that often. Likewise, nobody really has a handle on how many of the deaths that are blamed on flu were actually caused by a flu virus, because few are confirmed by a laboratory....

    In Jefferson’s view, this raises a troubling conundrum: Is vaccine necessary for those in whom it is effective, namely the young and healthy? Conversely, is it effective in those for whom it seems to be necessary, namely the old, the very young, and the infirm? These questions have led to the most controversial aspect of Jefferson’s work: his call for placebo-controlled trials, studies that would randomly give half the test subjects vaccine and the other half a dummy shot, or placebo. Only such large, well-constructed, randomized trials can show with any precision how effective vaccine really is, and for whom.

    In the flu-vaccine world, Jefferson’s call for placebo-controlled studies is considered so radical that even some of his fellow skeptics oppose it....

    All of which leaves open the question of what people should do when faced with a decision about whether to get themselves and their families vaccinated. There is little immediate danger from getting a seasonal flu shot, aside from a sore arm and mild flu-like symptoms. The safety of the swine flu vaccine remains to be seen. In the absence of better evidence, vaccines and antivirals must be viewed as only partial and uncertain defenses against the flu. And they may be mere talismans. By being afraid to do the proper studies now, we may be condemning ourselves to using treatments based on illusion and faith rather than sound science.

    Does the Vaccine Matter? points out problems with vaccine research, highlighting our need to make decisions based on incomplete information. This is not uncommon in medicine. Ultimately, we make choices within the framework of our beliefs, often based more on faith than on science.

    Is the vaccine safe?

    In the case of a widespread, potentially deadly disease, it makes sense to risk rare side effects associated with a vaccine. Nevertheless, fear of serious side effects may prevent some people from getting vaccinated.  For example, Swine flu 'debacle' of 1976 is recalled discusses Guillain-Barré Syndrome, thought to have resulted from the 1976 swine flu vaccine program:

    The episode triggered an enduring public backlash against flu vaccination, embarrassed the federal government and cost the director of the U.S. Center for Disease Control, now known as the Centers for Disease Control and Prevention, his job.

    The pandemic fears of the time and the resulting vaccine controversy may be fueling some of the public's -- and media's -- anxiety about the current outbreak, said health officials who recalled the previous event...

    Since the 1976 episode, annual flu vaccines have been provided without the serious side effects seen then. A study from CDC scientists published in the current issue of the journal Drug Safety concludes that evidence exists for a link between the 1976 swine flu vaccine and Guillain-Barre syndrome but not for most other vaccines developed in the last 55 years."

    According to a recent study published in Lancet, there is no evidence that the swine flu vaccine causes serious side effects, including an increased risk of Guillain-Barre syndrome or death.  

    Unfortunately, the availability of the internet together with an increased public concern and engagement in interpretation of vaccine adverse event data have increasingly allowed for spurious associations to be promoted as fact. Widespread beliefs that such false associations are true can and do disrupt immunisation programmes, often to the detriment of public health.  Lancet, October 31, 2009 DOI:10.1016/S0140-6736(09)61877-8 

    In Side effects not always due to swine flu shot, Maria Cheng writes:

    As millions of people worldwide begin getting the new swine flu shot, public health officials are bracing for rumors about dangerous side effects linked to the vaccine.

    To provide context, experts combed hospital databases and population samples in Britain, Canada, Finland, the United States and elsewhere to find daily baseline rates of commonly reported events like Guillain-Barre syndrome, sudden deaths, seizures and abortions...

    "People die every day for lots of reasons, but we tend not to think about that when a mass immunization campaign is happening," said Steven Black of Cincinnati Children's Hospital in Ohio, one of the paper's authors. "We're not saying we don't need to look at vaccine safety, but let's do it judiciously."

    In the end 

    After spending weeks reading through available information and realizing what I don't know still exceeds what I do, I'll conclude with co-author Terry's words:

    In the world of medicine, safety is a double-edged sword. What if you refrained from having your child vaccinated because of some vague fears about the safety of the vaccine, then watched as your unprotected child contracted swine flu and died of it? The probabilities that this could happen are every bit as relevant as the probabilities that your child may have some side effects from the vaccine, and arguably, quite a bit more relevant. These potential disastrous outcomes associated with declining treatment must be factored in to overall risk.

    Consider this: one day you find yourself in a space shuttle awaiting launch, would you rather that the space shuttle was designed, built, and operated by the "establishment" (that is, NASA), with it's political agendas and various faults and self serving interests, or by a group of amateurs who had done a whole lot of reading and research on the Internet about space shuttles? While nobody can guarantee your safety no matter which of the above two options you pick, I think the best decision is self-evident, and anybody who decides otherwise makes a decision that is not in their own best interests.

    We have to entrust our fate; we have to rely upon expert consensus opinion. That is a hugely important source of guidance. If you encourage everybody to read literature and make up their minds, you’ll get a wild spectrum of interpretations and judgments by people who are in no real position to make such judgments generally. This isn’t politics; lives may depend upon this process.  Medicine in general relies heavily upon expert consensus guidance. Professional societies are constantly assembling groups of experts, sometimes very large groups, to meticulously comb through the available data, synthesize interpretations, and make recommendations that are widely promulgated and deployed. That’s because they know that individual physicians could never hope to do as well, as a rule.

    So, what exactly are the consensus guidelines? These cannot be just ignored because they represent the medical establishment or because available data is incomplete. If it is incomplete for experts, then it is also incomplete for everybody else, so that is not a useful criteria. As for experts representing the “medical establishment,” I have participated in formulating some of these kinds of expert advisory statements. I can tell you that there is no central dictatory control. They are prepared to print whatever the group as a whole decides and writes, and that’s why they assemble the group in the first place. There is rarely or never any kind of agenda, in terms of the “establishment” foisting something onto the public for some self-serving reason or other. There is no central editorial oversight. The group basically writes whatever the members think is correct. There are usually several leading members of the writing group assembling and writing things, but that’s it.

    If you encourage people to just examine whatever information they can find and come to their own conclusions, then you do people a huge disservice. That’s because it is inevitable that they will encounter wrong information, poorly done studies, falsified data, and papers written by people with hidden agendas and ulterior motives. But they will have no way to determine that this is the case, and will tend to give equal weight to articles published in the New England Journal of Medicine by Nobel laureates as articles written in the International Journal of Obscure Tropical Lagoons and Puddles by hucksters, charlatans, shills, frauds, and hired guns.

      
    Whether the information and thoughts compiled here help anyone decide whether or not to get a swine flu vaccine, or the next one when another pandemic strikes, we can only hope.  Jon Stewart, perhaps, says it best, or at least with the most laughs:  http://www.thedailyshow.com/watch/thu-october-15-2009/doubt-break--09

    For a free 90 day trial subscription to Phil’s Stock World, click here (it’s easy, no credit card required). - Ilene
     

    Nov 05 5:03 PM | Link | Comment!
  • Wonderland Market

    Here’s Phil's long answer to a question in the comments section regarding his thoughts on which way the market is going. - Ilene

    Wonderland Market 
    The Queen of Hearts, 1999 (oil on canvas)

    By Phil at Phil’s Stock World  

    Market direction - Interesting that this is what’s on your minds as it’s what’s on my mind too.   What is real and what is not?  Keep in mind that when the market was down 50% in March, that was not real either.  You can go back and read all my posts back then, but the gist of my argument was, short of annihilating a good portion of the global population, the global GDP is very unlikely to fall below $40Tn (down 20%) so anything beyond that is, by definition, an overreaction. 

    On the other hand, the run up to S&P 1,500 was itself overdone as we can’t just keep expanding insanely forever (outside of inflationary expansion).  There’s an interesting article in Scientific American this week asking if current economic assumptions inherently violate the laws of physics, something I used to rant about back in ‘07 but got bored with as the market went up and up anyway - despite my efforts to talk sense to it…  Oddly the chairman at Utah State is feeling my pain already, saying: ""Of course I’m trying to send a message - I just don’t expect there’s anyone out there to receive it." 

    So we have a low that was too low coming off a high that was too high.  We have MASSIVE government stimulus and I not only don’t use the word MASSIVE lightly but MASSIVE is wholly inadequate to describe the level of stimulus in comparison to anything that has ever happened in the history of the world.  We have a runaway global money supply, the worst global unemployment since the great depression (and that didn’t end in 12 months you know) and pretend shortages of commodities, which is usually something that ENDS expansion, not kicks it off.  We have a delusional population where 60% of the people surveyed believe their home prices have appreciated over the past 12 months while anyone who read this week’s housing reports can see that there is virtually not a single zip code in the united states that hasn’t lost 10%…

    To say the media is uncritical is like saying my mom doesn’t think I suck.  This is not surprising when you consider that the Media, as foretold by Mr. Beatty over 30 years ago, is controlled by the same corporations that require you to be a happy little consumer to buy their stuff.   Do you know there is a show on TV where Frasier is a CEO who lost his company and now has to live in a small town in Virginia with "regular" people?  He’s such a warm lovable guy and it’s not his fault that his shareholders were wiped out and hasn’t he suffered enough by losing his maid?  Insert brain - wash, rinse, repeat.  By the way, whoever does the laugh track on this show needs to die. 

    Speaking of the MSM.  Check out this clip from Letterman (1987) where the guest tries to say something negative about GE (starts about 6 min in).   They cut him off by playing music over him.  The show is taped now so this can never happen again. 

    Anyway, where was I?  Oh yes, the economy.  So the media shouldn’t have anything to do with the economy but it sure does because they are, in large part, driving the economy by keeping consumer attitudes from getting depressed.  There is good economic logic to avoiding a depression - as I said, the economy really can’t fall more than 20%, anything else is just attitude adjustments. But the economy CAN fall 20% and pretty much has and failing to grasp the reality of that situation is dangerous.  

    In a normal correction, food, energy and housing costs would come down to the point where people earning 10% less money can afford them but that is not what’s happening.  By pretending everything is great and getting better, we pump up the commodity prices and people go 10% further in debt to support those prices as they aren’t being supported out of rising wages.  That is physics - 300M people had $100 last year and they spent $42 on Housing, $15 on Food and $5 on gas and another $13 on Transportation and $6 on Health Care. 

    That’s $81 out of every $100 GONE before the consumer even gets to make a decision on whether or not to get a new pair of sneakers or an IPod.  Another 2% goes on Communications, that’s kind of mandatory and 4% goes on education, also kind of mandatory, and 2% goes to Cable and Home Electronics, which I think you’d have a pretty hard time telling most Americans isn’t mandatory.  So now we’re up to $89 out of every $100 out the door on non-discretionary spending.

    It’s easy for us (the investor class) to forget how limited the choices of average people are because, for a person earning $50,000 a year and taking home about $35,000, that 11% of their income that they get to "choose" to spend is just $3,850 over 52 weeks or just over $74 a week.  That’s why it’s ridiculous to pretend that it doesn’t matter if health care goes up $400 a year or a tank of gas goes from $30 back to $60 - These people are being boxed into their homes with no ability to go out and no ability to do anything other than sit in front of those TVs and decide WHICH food they will spend 15% of their income on and WHICH car to buy. 

    I pointed out this week that consumer spending on food was down 5% - that right there is a sign of how close to the bottom people are scraping as it’s the only place they can really cut (outside of giving up cable).  THAT’s the American economy at the moment and just because GE/CNBC and DIS/ABC and Bilderburg Billionaires like Murdoch (Fox) and Redstone (NYSE:CBS) tell us that everything is great and it’s OK to go to the mall and sign up for a new washing machine or whatever - doesn’t mean it is. 

    YOU are CUSTOMERS - Corporations, including media corporations and including GS and the Gang of 12 have meetings every day thinking of ways to advertise to you and issue press releases and go on media junkets — whatever it takes to get you to BUYBUYBUY what they are selling and the most powerful companies in this world right now:  GS, JPM, MS, BLK, CS, DB, BCS….  They are in the business of selling you stocks.  They don’t give a rat’s ass whether the stocks go up or down because, as Eddie Murphy pointed out in Trading Places, those guys are just bookies.  They make money every time you get in and every time you get out.   What they make on their own manipulative trading is just a bonus. 

    So what is real and what is not and, more importantly, how do we make money on it?  The market doesn’t have to "make sense" for you to make money in it but you can’t ignore what is happening.  If you are with Alice in Wonderland, you can be forgiven the first 3 times you bet that the next animal you meet won’t be able to talk but, after you take a consecutive string of losses, you are just kind of an idiot for betting the next animal won’t talk either.  That’s what these rallies are like - you don’t have to like them, you don’t have to accept them as "normal" or even "real" but they do happen with a lot more regularity than a sell-off so until we are sure we are out of the rabbit hole, it’s best not to bet that the next dog you see will have fur and just bark.

    Wonderland Market Part II: Whodunit?
    Letter For Poirot

    We have to put on our deerstalker caps and do a little deducing and see who has motive, means and opportunity to commit the crime of market manipulation.  I think, in the end, this is going to read more like a Christie novel than a Doyle one as Holmes usually had one guilty suspect while I think our current situation is more like "Murder on the Orient Express," where they all did it!  Suspects are:

    Our beloved government:

    • Motive - They are broke, the people are revolting, they need money, they want to stay in power.
    • Means - They write bad checks to buy stuff to cheer the people up.  They print money to pretend they have some and the sugar-coat the data, also to placate the people.  They do favors for the powerful people who do favors for them, passing laws to protect their friends and punish their enemies.
    • Opportunity - They own the printing process, have an open checking account backed on promises, they make the laws and control the statistics. 

    The Gang of 12:

    • Motive - Greed (they want more money).  Fear of retribution for past actions (no need to list I hope).  Power (keeps them from being prosecuted) and the cover up (they may be broke through derivatives but can pretend they are not as long as the government lets them).  They own a significant amount of stocks and commodities. 
    • Means - They interpret the data for the government and the media (like Royal Astrologers).  They have insinuated themselves throughout government.  Extortion (they threaten the destruction of all financial life on Earth if their terms are not met).  They control the computers that control the markets.  They control 80% of the flow of capital that goes into the Markets.  Their advice is followed by the masses.  They spend Billions on lobbying and contributions. 
    • Opportunity - They have the ear of the king.  They have the ear of the media.  They control light and dark pools of capital and they employ virtually every person on Earth who actually understands how the system works which allows them to both rig the system AND make sure there is no one smart enough on the other side to blow the whistle on them.   They own a significant share of companies and sit on the boards of most of the fortune 500 - this allows 12 men to synchronize the reporting and guidance of the entire S&P. 

    I don’t want to go off on a tangent re. Goldman but here’s a great article by Bruce Wiseman on the subject as well as this cool graphic (click to open):

    goldman-sachs-chartsmall

    So suffice to say Goldman Sachs controls the world and they are just one of the Gang of 12 so you can imagine how deeply filled in these spaces are.  Obama already has 4GS people in cabinet in his first year and 2 at Treasury.  They are at the IMF deciding which countries win and lose funding (so they control 90% of the World’s governments through purse-strings) and they run the World Bank just to make sure there are no alternatives to the IMF.  GS people run the MER, NYSE, AIG, the NY Fed, WB and the CTFC - talk about the fox guarding the hen-house! 

    Is it a conspiracy?  Perhaps no more of a conspiracy than pointing out how many Harvard MBA’s are business leaders - that’s kind of the point of Harvard or GS - they teach their people to be the best and the best people end up in the best positions but, even if it’s not a conspiracy - why do you think Harvard’s endowment did so well?  Not "insider" trading per se but enough inside information around the country from a very loyal alumni base that they just "knew" what was going to happen.  What killed their fund was Jack Meyer, who ran the fund since 1990 and took it from $5 to $35Bn, used to work the phones and all the well-placed alumni would pick up the phone and tell him stuff they wouldn’t tell Mohamed El-Erian, who lasted a year or Jane Mendillo, who took over last year as the fund contracted 25%. 

    You can’t live up to the legacy of Jack Meyer because it’s a legacy of insider trading, although it’s not fair to Jack to call it that as he pretty much just gathered good information from well-placed sources in a way that, this year, would probably get someone arrested but, at the time, was considered good, solid fund management. 

    So that, more or less, sums up the motive, means and opportunity of most funds:

    Funds in general:

    • Motive:  They need investors in the game to make money.  They want to make money.  They want to keep their jobs.
    • Means:  They can plant rumors, create "news," which they feed to a media machine that hasn’t checked a fact since it became fun to say Al Gore said he invented the internet
    • Opportunity:  The famous Jim Cramer video sums it all up nicely.  Cramer is talking about what anyone with $5-10M can do to stocks like RIMM, AMZN and AAPL. 

    Any one fund (and there are over 4,000) can pump a stock when they need to or take it down but what happens when the vast majority wants to see the market go up?  It’s not a conspiracy but a series of regulations written by Congress or coming through the GS-controlled CTFC or pushed by Obama’s 4 GS advisers (and again, there are also guys from JPM, MS, CS, BSC… who’s interests are clearly aligned most of the time anyway) make it MORE beneficial for the thousands of smaller funds to push the markets up than down. 

    The need the market up to attract investors (there are very few short funds and short funds have been murdered this year).  Short selling regulations make down difficult and up easy and selective enforcement aimed at "getting" people who dare to take a stock down but allowing the up movers to get away with murder is another way to get all the cheaters on the same side of the fence. 

    So funds are a business and their business is to get you to give them your money to trade or to trade through them for a fee.  They have a business plan and the business plan is how do they get you to give them your money.  They do that by looking smart - so they make sure they make predictions that come true.  They do that by creating an exciting investing climate so you feel like you are missing out if you put your money in bonds or cash or real estate.  They market to you by releasing non-stop news that tells you that if you don’t act NOW, you will miss your opportunity. 

    The same psychology being used to sell you a slap-chop is being used to sell you on buying into the market.  It will make your life better, it’s on sale, any idiot can do it, it’s safe, it’s easy act now and they will throw in a Santa Clause rally.  Jamming up the high-profile names like AAPL, AMZN, GOOG etc creates a media frenzy that pulls in more customers and more customers = more fees.  That’s some pretty major motive! 

    More after breakfast…

    For a free 90-day subscription to PSW Report, click here.   


    Oct 26 2:17 AM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.