Karl M.

Tuesday's Action: Sign of a Bottom?

Are most of you kidding? The fundies are using whatever fresh money comes in to bid up the biggest sector of losing trash. The huge move in financials is key evidence of this. Its been going on at the end of every month lately. Criminal.

Let's see how long this lasts, and if longs from much higher levels decide to unload at the first acceptable loss level.

Bear Stearns’ Bailout by the Fed, JPM: A Century Old Conspiracy

The biggest cash out in the history of this country is underway. Now is the time for the wealthy to get theirs and call it a day with the U.S. being a preeminent superpower. Pundits asking for proof are either lazy or in denial, let them do their own homework. The printing of money and transfer of wealth from lower to upper classes will continue until they have milked it for all its worth.

Younger generations are in for a rude awakening. Bankrupt social security, a government massively in debt with no economic driver in sight, a federal reserve system mandated to ensure the protection of the wealthy at all costs and a lack of vision among politicians as to the next direction this country must take.

America is breaking into new, nonsensical ground by the day from the way the federal reserve deals with crisises to politicians political posturing in hopes of cashing in on votes. Thus we advance into uncharted territory and it looks like a dreary, hostile wilderland.

Monday's Economic Reports: The News Was Not Pretty

Yes indeed. The numbers were abysmal, lost in the BSC/LEH headlines, and simmering rate cut speculation. The financials, in the meantime were using free fed auction money to keep a floor under stocks for options expirations purposes. Somehow, despite the context of horrible financial news and economic data, money miraculously moves in to prevent a key breach of support in the indexes. Its a fascinating spectacle to behold, and the price action looks extremely fishy. Someone, something will not let the S&P take out 1260 which would be a 20% retreat from all time highs and officially signal a bear market in the index.

I suspect the money providing support is not retail money. Most retail cash is entrenched in the market from higher levels. Its likely the same liquidity that attempts to move prices in the aftermarkets. Despite a considerable amount of bearishness out there, the overwhelming sensation among average investors is not wanting to "miss the boat", and this only signals further failed rallies and retests of current lows. One thing is for sure, the markets will ultimately go where they belong despite what i suspect are manipulation and use of funny money to keep that floor in.

Sticking to the game plan. Short rallies. Don't hold long overnight. Beware of oil blasting off post fomc meeting and the dollar tanking off another highly inflationary solution from the fed. Its the traders of the world vs the federal reserve, and at the moment they are much more capitalized than Bernanke is. Unless he has some genius plan in store to force traders out of oil and other currencies, the markets will continue to be pressured to the downside.

Warning Signs of a Modern Depression: See 1990 Japan

Yes. Yes. Yes!

Contrary to other "safe" contributors, you tell it like it is.

Most people are still in big time denial. Its conditioning over the last 5 year bull market, indeed over the last 30 years. It's different this time. Much different.

The Bernanke Fed's Next Interest Rate Cut Will Be Its Last

Wait a second, why assume another rate cut will rally the market?

EVERYONE is making that assumption, and despite its former positive implications the markets will use that strength to unload with a vengence.

If anyone is smart, they will watch oil and the usd off that rate cut announcement. Perhaps not much reaction that day. Wait till wednesday. If the market rallies Tuesday, that just bakes another layer of long money into the indexes that will be used to finance the next leg down. To make money nowdays, you must stop thinking in terms of the markets typical response to fed policy over the last 10 years.

Any fed policy is highly inflationary. The world markets know this. Thats why they have cornered oil and the usd. Tuesdays decision is the big showdown. If oil moves to 120 wednesday while the euro goes to 160/usd, it will be further confirmation that the feds ability to inflate its way out of this financial crisis has been utterly compromised. 120 oil does not make for a sound rally, neither does printing money like its going out of style just to save wall street since that solution is horribly inflationary.

The excesses have gone on for decades, went way higher than it should have, and now markets will correct way lower than most expect. This is the way markets work.

CPI: 2008 vs. 1980

Soprano, you must be massively long. You are as out of touch with reality as our federal reserve. Upon reading this, i'm sure you've already been exposed to the news that JPM is offering BSC 2 dollars a share, the fed cut the discount window .25, asian markets are crashing, the dollar is down big, gold is at 1027 and u.s. futures are down huge. This is exactly how i envisioned this week going, with the fed rate cut backfiring because the world knows every solution the fed has is highly inflationary and counterproductive.

Frankly, you are way way too optimistic, and that sort of looking at the glass half full is reserved for a much future date, not the onset of the worst financial crisis in history. Misery loves company. Keep funding the exit of these rich executives in U.S. companies, especially the financials. They will thank you profusely later while you watch your life savings dwindle away.

All these warnings over the last 20 years about excess, too much liquidity, dangers of inflation, the dollar headed for a fantastic crash and perhaps the fall of our great nation into second rate status are coming to fruition. Why are the implications so dire now? Because the Fed has been totally compromised, and the U.S. is broke. We don't have a huge surplus to fall back on, a new war to conjure up to kick start the economy or cushion with our currency to fall back on temporarily until we get back on our feet. Every desperation effort the fed makes to bail us out is further doom for the usd and our great nation.

Bearish Bloggers Too Optimistic!

Sure, i may seem judgemental regarding the fed. It's impossible to prove they are resorting to deception, but this is not a court case. For those trying to put hard earned money at work with much risk, you have to come to unpopular conclusions at times and use best judgement. Go question those who went long financials at much higher levels (many people) off the infamous fed "subprime is contained" statement and try not to get lynched.

Many including myself are really feeling the heat with higher food and energy prices. Most every other country on earth reports inflation numbers realistically, and are taking steps to keep it in check. Their data is consistant. The U.S. data is not, and i don't believe the majority of Americans buy those numbers for a second.

Point is, the fed has in the least been minimizing the seriousness of our economys problems and in all probability flat out lying about the more serious issues (inflation, health of the economy, etc.), moreover, only after indisputable facts surface do they recant and make any admission or begin working it into policy. No preemptive policies, only firefighting and uttering postdictive nonsense which does nothing to stay ahead of the curve.

Regarding Barrys feelings on that report, i wasn't suprised at all with his response. Take a look. That is a very minor side issue, my opinions may seem "unrealistic" but so are investors expectations all the time, and if i seem too "judgmental", that is just a function of being an investor. You make judgements on every trade based on a constant flow of information including numbers coming out of the federal reserve. Then, you put your money to work based on your first impression of that "judgement" and hope its not your last.

Bearish Bloggers Too Optimistic!

People have to start being realistic, not just optimistic. Many fundamental changes are taking place on every level of our existence, particularly affecting soundness of our financial system in the U.S. Take the ongoing deception from our central bank as an example.

They have distinctly stated that the u.s. will not fall into a recession. Low and behold, what do we have here? Yesterday, according to the wsj poll, 71% of economists now say we are in a recession.

online.wsj.com/article......

This is the problem with lying incessantly about everything from the seriousness of subprime to well anchored inflation to strong jobs numbers based on a fantasy birth/death model. It all comes full circle and that deception needs an accounting for. It's worse enough that the financials fed us that crock of crap the last six months and greatly minimized the seriousness of their situations, but it turns out that the fed is an even worse offender when it comes to being truthful about the health of our economy and all relevant data supporting their views.

Whats it gonna take for Americans to wake up and see this deception on a massive scale from the president on down to the head of the federal reserve? All these lies starting with WMD's out of the bush administration to Bernanke's crap about money supply, inflation and so forth are ALL ABOUT CASH. They want it from you. By the time we are broke and this country is second rate, the wealthy in the u.s. will be set and won't care much about America's integrity. They are set up with social security and exploited the economic viability of the u.s. to the last drop. Game over.

We have a scary future ahead, particularly those of us who are younger. Those out there not recognizing this now will in due time.

Bearish Bloggers Too Optimistic!

I'm sure Barry's gonna have a field day with the latest CPI numbers. More lies and denial from the Fed. Inflation is raging in every part of the world, yet we are led to believe that the biggest oil consuming nation on earth has inflation in check? We should not be experiencing blips between reports at this juncture, core inflation should be running in the 2.5+ range at every report.

This was no doubt devised to create wiggle room going into Tuesdays FOMC meeting, where the fed needs to cut 75 to 100 basis points. A secondary benefit out of this bogus number would trigger a sell-off in commodities and shore up the dollar, but i highly doubt those positions will be unwound going into Tuesdays meeting. With any luck, they will all blast off and teach the Federal Reserve a good lesson that honesty is the best policy, and that there will be no easy way out of our current situation.

This deception by our central bank must come to an end. Let's get this recession over with, quick, hard and fast if need be.