Friday, February 7, 2014

Stocks Begin to Rally

Following this morning's disastrous jobs report, Wall St is already beginning to rally stocks now. Stock futures just went green! What a twisted world, in which central bank shenanigans have so distorted markets that such awful news would lead to a rally, despite the poor economic showing and weak performance.

Huge Jobs Miss

Stock futures gyrating wildly 1 hr before market open. US jobs report was released a few minutes ago.

This was an IMMENSE miss from expectations. 180,000 jobs were expected. We got just 113,000. That is a VERY BIG MISS! Wall St was expecting a relatively strong report due to unusually good weather during the reporting week.

This is such a disappointment that it wouldn't surprise me if Wall St rallies stocks on the expectation that now, the Fed will back off its debt purchase taper, and INCREASE the debt monetization instead. Anything could happen! It could be a volatile day!

Five Years of QE

Central bank "unprecedented measures" around the world have ultimately been nothing than simple debt monetization schemes that ultimately bring inflation, and often hyperinflation and depression that impoverishing and destroys the working class in countries around the world. Those are called "consequences".

This article explores when that might occur. It's likely to occur first in Japan. Japan's government doubled down this week on its own debt roulette, causing the US stock market to leap 180+ points yesterday, based solely upon Japan's central bank money-printing bet.

It was five years ago this month that the Fed began its own debt monetization scheme, called quantitative easing (QE). Bubbles Bernanke himself referred to this scheme using the phrase "unprecedented measures". But if you think about it, "unprecedented" also means "untested". It means they don't know the long-term consequences. But they should. History shows us again and again the catastrophic consequences of monetizing debt.

Thursday, February 6, 2014

Here's Why Stocks Are Exploding Higher Today

It's called a "carry trade".

The Japanese government this morning has doubled down on it's own QE. It has announced that it will monetize even MORE debt.

Investors worldwide are borrowing cheap Japanese Yen at suppressed interest rates, exchanging those rapidly-devaluing yen into dollars, and dumping them into the US stock market! The USDJPY (Dollar/Yen) currency cross is exploding higher, with much of that money being funneled into US stocks. This is the result:

Central bankers are desperate to keep the bubble blowing, and they are willing to do whatever it takes, even though it will eventually cause ruination. This is not happening because stocks are a good value. It is happening solely based on complicity by central bankers to keep the illusion going!

Likely Downward Revisions to GDP

Stocks Leap Reflexively

After the Dow lost 1200 points in the first weeks of 2014, Wall St traders, who are now hopelessly addicted to endless stimulus and easy money, are reflexively buying stocks on a slow news day.

Tuesday, February 4, 2014

Wall St's Reflex to Buy, Dismiss Risk

Today, we saw another manifestation of Wall St reflexive "buy the dip" mentality. Stocks had been up most of the night, and throughout the trading day. Only within the past few minutes have we begun to see a sell-off into the close. This is a screen capture of the market as we approach the close, now less than 30 minutes away.

I wouldn't be surprised if we see more buying step in within the last few minutes. Wall St has now become so reflexive in its dismissal of risk, carefully programmed by easy monetary policy from central bankers, that they view all sell-offs as a reflexive opportunity to buy the market and continue to profit from the latest asset bubble.
Ultimately, this dismissiveness of risk will only exacerbate the very risks that are being spontaneously and habitually disregarded. It will only amplify the downside risks when the ineluctable day of reckoning arrives and the music stops, causing all Wall St participants to run in a panic for the few chairs left.

In the time that it took my to dictate the above, this is the reaction of an impulsively bullish response to risk perceived just within the past 24 hours. It is contemptuously and haughtily swept aside in a paroxysm of mindlessly cavalier buying.
Wall St has a worship reflex toward central bankers that borders on granting godship status. But ultimately, it will fail again because in the end, Babylon the Great shall fall. It is unavoidable! It is as certain as that the sun will rise tomorrow!

Monday, February 3, 2014

Broad Weakness In ISM Data

Dow closed down 326 points today. Economic data shows broad weakness, and a shift toward recession, even as Fed policy is already at zero interest rates. What now?

Dow Slammed 300 Points

Stocks Steepening Losses

ISM Disappoints, Gap Widens Between Expectations and Reality

This is the largest miss of expectations in history. This widening gap between reality and perception is, itself, a sign of a bubble.

The Global Debt Monster

"We've created a global debt monster that's now so big and so crucial to the workings of the financial system and economy that defaults have been increasingly minimised by uber aggressive policy responses. It’s arguably too late to change course now without huge consequences... It’s been many, many years since free markets decided the fate of debt markets and bail-outs have generally had to get bigger and bigger." Jim Reid, head market analyst at Deutsche Bank (Germany's largest bank)

Isn't he telling us that central bankers have now painted us into a "debt monster" corner from which there is no escape? I'm pretty sure that's what he's saying. But he then also admits that they will have no choice but to continue, continuing and even increasing the bailouts without end. Unbelievable!

Amazingly, it's even worse in China:
"China's Services PMI printed at its lowest on record and its biggest 3 month slide in 16 months."

A Harbinger of Things to Come