Twilight Zone Wednesday- GEES Scale Flashing Warning as Systemic Breakdown of Global Financial System Begins; Stock Broker Jumps Out Window Over Losses; London Riots Spreading; French Banks Take Dirt Nap; Contagion Spreads as Sarkozy Cuts Vacation Short For Emergency Meeting; Fukushima Events Are Terrifying; Much More




We are living it.
If you've been reading this blog and keeping up to date with all of the developments, you are not shocked to see the markets in total chaos. You know the world has entered the end game it's pathetic when the direction of "the markets" is based solely on whether or not Dr. Deficit will run the printers. Fundamentals have as much meaning as a tooth pick holding up the Empire State Building. Worse still is the fact that direct intervention by every central bank in the markets is making the situation much worse. Sure, the indexes have been propped up to 2007 levels with all that free money, giving the illusion to the sheeple and bimbos on CNBS that all is well. But what justifies P/E ratios of 1200x is mystifying - no, it's comical.

Just yesterday, we alerted our readers that our Goldman Sachs fighting GEES Scale algorithm is flashing the big neon red "WARNING" sign, as we were about 75% of the way through level 6 already. Today, thanks to the VIX exploding and gold itching to move over $1800 cleanly, the GEES scale has moved up a few notches to about 92% of level 6. You already know the next level and what you should expect if that hits.

Granted, the GEES scale is still in the late "developmental stage" and there are still kinks to work out but without a doubt, and very frighteningly, it's been spot on so far. Just re-read the Level 6 definition. It reads like today's news.

Obviously, the chaos that is "the markets" is starting to shape up like the first Great Depression (as opposed to this Greatest Depression) and not just on the financial loss side of the equation but also on the social unrest and mental depression side. Just today, we learn that a Korean stock broker leaped to his death amid the market turmoil. Sadly, this will be the first of many cases. However, we find it odd that NBC LA decided to list this news in the "weird news" section. Why is that news weird?

It's interesting to note that the London riots were not about race but about social unrest and poor economic conditions we see spreading all around the world as this article points out. According to the BBC, the riots are just getting worse minute by minute. Social unrest is a good indicator of the real economic conditions as it's directly related to overall well being. You do the math here. Once again, everything that we predicted was based on basic math - 1+1=2. That's how simple it's to see where everything is heading. Our GEES algorithm is based on the same principal of 1+1=2, unlike in Greece where 1+1=4.

The same can be said of what is happening in the banking industry. Today, France's largest bank, Société Générale, got the proverbial boot to the groin as it takes a 20% stock plunge on rumors that it's game over for the big baguette and the countries AAA credit rating is about to be cut up like fresh bread. Oops.

Needless to say, most of Europe followed the same course because, the ironic economic twist called the circle jerk EU, whereby every bank is somehow on the hook for the other bank. Oops again. Which could be why President Sarkozy is not feeling so cozy today as he cuts his vacation short to hold closed door emergency meetings. Double oops, because now he's got to explain that to the wifey.

A whole boatload of Italian stocks saw the big halt order as they plunged 10% or more, only to plunge after restarting. Contagion - It's what's for dinner.

Of course, American banks are over exposed over leveraged insolvent not immune to contagion as they all feast off one another. Which means BofA's problems are Duetsche Bank's problems and Deutsche Bank's problems are BofA's problems and SocGen's problems. Which means BofA's CEO has got lot's 'o 'splaining to do about putback risk. Oops. Watch for TARP QE 2.5 to begin if BofA's stock plummets another 20% or so. Is QE2.5 and QE3 and QE9 to QE Infinity coming? Eventually. As soon as hyperinflation in other countries slows down.

Let's not forget that the global economy is still in a full swing recovery like the bimbos on CNBS and the whole MSM have been telling us for the past two years - jobs are plentiful, the cost of living is going down, length of time for the unemployed is next to nothing, and who need's food stamps when everyone's got a job? In short, everything is just great. And there is no inflation. Did I forget anything? Yes. Hu Who wants to own that "worthless tradition" called gold? Nobody!

And Fukushima? Forgetaboutit! Everything is great and getting better by the minute. First, we learn that a recent environmental study that collected fish about 35 miles (55 kilometers) from the coast of Japan, showed that every single sample taken contained deadly levels of radioactive cesium(!). It goes without saying what that means for every living creature in the ocean, hundreds of miles out. We'd advise you cross off all sushi and fish from the Pacific Ocean if you care about living. We have been warning everyone that this would happen based on simple mathematical calculations and data from "rogue" citizens armed with radiation detectors. And as the resigned and now possibly dead former official who said two months ago - 'the revelations that will be discovered will be shocking [...].' Nothing is more bullish for the economy than an "extinction level event" such as Fukushima.

Next, we learn that now for a third time in recent weeks, another shipping container was seized by Egyptian authorities because they were "infected with deadly radiation." Oops. If shipping containers are spewing deadly radiation, well - again, it goes without saying. We told you so. And there is more coming.

And finally (for now, only because there is so much activity going on), from our favorite source of Fukushima news, Energy News is reporting that a Tokyo man who never even visited Fukushima has just tested positive for 7,000 (that's seven thousand!) Becquerels of Cesium 134 and 868 Becquerels of Cesium 137(!). In other words, if he was a fish, the Japanese gov't (who raised the "safe" limit from 250 Bq/kg to 500 Bq/kg after the accident because suddenly radiation became healthy for you) would have tossed him in the incinerator. According to world renowned radiation expert, Ann Coulter, this must be the healthiest man on the planet, along with the millions of Tokyo residents.

If this is not the Twilight Zone, then I don't know what is.