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Friday, March 16, 2012

Why markets Really are rising this week...

Even though this posting is not about St. Patrick's Day or the Irish, we chose themed art since the holiday is tomorrow and we love the people of Ireland and those of Irish ancestry (well, we love Most Irish people --  there's a handful we know that we think of as utter 'Shite') but we won't let that get in the way of how we view millions of others in a most positive manner

Anyways, onto the topic of the day..

Well its Friday.. end of a bad economic week.  Don't get me wrong- everything was supposedly "good" according to mainstream media, but really for everyday folk, it was bad.

The stock market kept rising and rising, including a day it went over 200pts.  That's good, right?  No its bad..  It didn't rise because of phony employment data or Greece, that corrupt nothing of a nation officially fastening their Master (or Mistress') collar around their scrawny necks..

Its anticipation of QE3..and A Lot of it..

From Goldman Sachs (parenthesis are ours):

"We still expect another asset purchase program that involves purchases of both mortgage-backed securities and Treasuries (That's Quantatative Easing).  This would expand the Fed's balance sheet (once more), but its impact on the monetary base would likely be "sterilized." (or minimal in effect) We expect this program to be announced in the second quarter, either at the April 24-25 FOMC meeting or the June 19-20 meeting...

"We see three reasons why additional Fed easing may well be warranted despite the improving (economic) data: 1) The improvement might not last... "
In other words, unless the economic "improvement" is guaranteed in perpetuity, the Fed will always ease.     Can not run the risk of Real Capitalism (you survive or fail on your own merits and no one bails you out) to get in the way of the US economy.

We all know this tired game by now:

a) Fed wants to give QE to banks, Wall St, etc.. but no political cover
b) Fed uses MSM shills like in WSJ to spread rumors and hype
c) This becomes financial 'talking point'; interest in QE spreads
d) Market rises dramatic and steady on anticipation and assumption
e)  Fed as "no choice" to give QE- market would pull back otherwise
f)  Printing presses in overdrive; US dollar further devalued

So how much QE would be released into the banks and financials?

Its hard to say the specific number the Fed will come up in the late Spring, with but one thing is for certain, whether it takes 3, 5 or 10 more "QE's", the Fed needs to pump another $3.6 Trillion dollars into the financial sector to get equities to pre-2008 crash levels to cover credit shortfalls.
These financiers-- they really aren't the brilliant minds that the media and others trumpet them as.  They're criminals.. no different than a burglar stealing your TV from your home or picking your pocket.  They just create complexity to keep up the ruse. Their actions of deviance are quite simple and straightforward-- acquire as much $$ as humanly possible from every outlet including governments using intimidation, corruption, bribery and/or fear, but do it in such a way that most people will be utterly confused and not bother to follow the trail.

The best way to explain it is to use the plot of the movie "Oceans 12", the sequel of the George Clooney & Brad Pitt film. Its not an exact comparison but the similarities are there.  To be very brief: At one point in the film, a 'master thief' with a giant ego offers a challenge to 'Ocean's 11' to steal an expensive Fabrege egg from a museum before he does.  If successful, they get a lot of $$ to be used to pay a debt to another.  If they fail, they can't pay the debt and all go to jail.

I won't go into every nuance of the plot but ultimately (Movie Spoiler Alert) while the master thief ends up stealing the Fabrege from the museum and thinks he's won, in reality, the 'Oceans 11' crew stole the egg by switching with a fake on a train en route to the destination, thus being in possession of the real one the entire time.   The master thief thus lost the wager.

But there's where the connection between the film and the financial system lies:  It wasn't enough for them to simply steal the egg like a common criminal.  They wanted to feel they were above what amounted to pickpocketing, so they created an elaborate ruse to still appear they were going to break into the museum and steal it.  Lots of deception and trickery and moving parts to keep everyone confused from the police on their trail to the film audience itself.
This is the 'M.O' of the financial apparatus not only here but abroad

Keep the con going using complex terminology, even more complex financial instruments and 'products' created out of thin air, revising and revision of US law by making bills so large, no one has time to read them, and on and on..

Funny how we find that kind of deception entertaining when sitting in a theater with a bucket of popcorn between our legs watching good looking, charismatic actors and not when its wretchedly ugly old white crones with beady eyes.

There's not much we can do to stop the corruption and utter bullshit which is Finance, but that should never be a valid excuse for not seeking to understand it.
Happy St Patrick's Day to those who properly honor the day & its meaning

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