Morning Update/ Market Thread 10/5

Good Morning,

Equity futures are playing ping-pong in between support and resistance… the dollar is tumbling, bonds are lower, oil is flying high above $82 a barrel, and gold is zooming now well above $1,330 an ounce.

One trend is clear, rises in our equities occur at night in the futures when most real people are asleep, these leave gaps in the charts. Sell-offs occur during the day and most of those gaps are filled. This trend is yet another marker of intervention, of a completely trumped up market. This morning’s run is completely artificial looking, moving basically straight up on no news or economic releases. It appears to be triggered by currency manipulation which bleeds over into other markets.

This is a major problem for the economy. In the race/ “war” to competitively devalue currencies the world over, not just one country but almost all are pumping in hot “money” (debt based) like crazy into a world already saturated with debt. How has that worked out for Japan? Despite this strategy being an obvious abject failure, Japan yet again intervenes into the market overnight, this time literally lowering rates to ZERO (already was close) while pumping further hot money into the market in an attempt to force the value of the Yen lower. This IS the definition of insanity according to Einstein. Take a look at the last two evening’s attempts… spike higher on the chart is lower Yen:



Each attempt literally costs the Japanese people trillions now. Each attempt now has an attention span the equal of an ADHD adolescent whose Ritalin was replaced with corn syrup. What they don’t understand is that they never should have went down that road in the first place because once you create artificially low interest rates, they also created a massive carry trade (distortion) and now they are paying the price as that carry trade they created is unwinding. They cannot stop it, and attempts to do so only rob the people of Japan (and the world) of their purchasing power. The Yen is therefore TOAST, as in it will be the first currency of the “modern” world to fail. The U.S., and the rest of the world, is now on a similarly psychotic path.

None of this hot money, currency destroying, pumping makes it into the hands of the people. Instead, those who touch it first (the speculating banks) use the money to pump up whatever they can. Right now it’s oil. Oil over $80 a barrel will crush our economy. Should food prices soar, then the placated masses may not stay placated.

And the beat goes on.

Meanwhile “rogue” French trader Jerome Kerviel gets sentenced to 3 years in jail and is fined $6.75 BILLION (U.S.) by a French Judge who found him guilty on all counts! This is typical of a corrupt and unjust judicial system. There is simply NO WAY he operated all alone with no one else’s knowledge or approval. He is simply just another scapegoat, a Patsy taking the fall for the banksters. His real crime, of course, is not having the sense to run away from a bunch of morally bankrupt narcissists who push debt upon the world and ruin what used to be at least somewhat free markets.

And in the real economy things just continue to deteriorate. “Foreclosuregate” is going to be a HUGE blow to the economy moving forward. I expect this to play out in a manner similar to how the subprime mortgage disaster did. It was simply the tip of the iceberg, once known the iceberg itself began to be exposed. The paperwork fraud that has been found related to foreclosures will be found in ALL mortgage paperwork going forward since it is the product not of the foreclosure process, but of the securitization of debt process. It will thus require a massive restructuring of the mortgage system, and will have to likely involve bailing out the banks via some sort of total refinance scheme. It’s coming, but the markets may have to tank some more in order to create enough pressure to blackmail our politicians once again. Again, it is the bankster’s problem and we will be coerced under pressure from our own monetary system to bail out the criminals who have been perpetrating fraud on a massive scale. Enron times a billion is an understatement.

The Service ISM is released at 10 Eastern this morning.

Volumes continue to be nonexistent as real people no longer participate in the fraud we call a stock market. Yesterday's selling, with only 77% down volume, started out strong, but in the end did not appear to be an impulsive start to wave 3 down. So far it appears to be yet another trip down within the same old trading range.

As I look across the charts this morning I see that everything is going up simultaneously… that is except for the dollar. I also see that the Euro is zooming higher, clearly they are losing the war to devalue. How high will they let the Euro run before they are forced to take action? These economic wars should not be taken lightly – they affect real people and real lives. They are the precursor to those “other events” some of which we’re already seeing, like tariffs. Use your imagination and combine it with your knowledge of history to see where this is leading.