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Monday, July 15, 2013

Controlling the Expectations = An (Artificially) Higher Dow

So how does one control expectations?

Let us say for a moment we borrowed $5 from you dear reader at a previous point and today was the day you expected and received repayment...

And instead of $5, we gave you $20 and smiled...

What would your reaction be?

Surprise?  Happiness?  Joy?
Now let us say we borrowed $200 from you and today placed that same $20 bill in your hand and smiled..

We imagine your reaction would begin with 'WTF?!'

OK-- why?   Obviously if/when we borrowed $5 to be repaid later, your anticipation and expectation was to receive $5, so $20 in the hand was quite a little perk; a nice feeling of jubilation..

And when owing $200, that $20 was an insult and cause for annoyance

All pretty obvious stuff...
This is one of many ways the finance media and professional Investors, economists, etc.. manipulate the market to go higher...

Let's take China and what we alluded to in our last post.   Those 'little birdies' were saying to prepare for a very low GDP number out of China for 2nd Quarter 2013.

The number being thrown about by many was to expect an announcement late Sunday night/early Monday of 6.7% GDP

'Officially', the 2Q GDP for China is 7.5%
Now 7.5% is horrible for a nation that for many, many quarters was producing double digit growth.  Just one year ago, China's GDP was averaging 13% per quarter....

So 7.5% should by rights cause the global markets to collectively drop on the news-- a clear sign of a collective slowdown that is the canary in the coal mine that QE worldwide hasn't worked and we need to all brace ourselves for bad economic times in the near future...

But did it?

From Reuters:  'Asian Stocks, Australian Dollar bounce on China Data'

Why?
Expectations were controlled...

7.5% is terrible compared to 13% BUT...  when you compare it to 6.7%, it looks quite good doesn't it

None of this was accidental...

They play this game with jobs' figures too..

Every month, economists who are nothing more than shills bought and paid for by Wall St release predictions on what they thing the job hiring numbers and overall unemployment will be...
Here's a CNN/Money article from July 5th on June's jobs report:

"The U.S. economy added 195,000 jobs in June, the Labor Department said. However, the unemployment rate held steady at 7.6%

Economists surveyed by CNN/Money predicted the U.S. economy added 155,000 jobs, while the unemployment rate was expected to have ticked down to 7.5%"

Did you notice that..  Did you?
195k jobs created in an economy which needs At Least 250k new jobs per month to keep up with population growth, is really a shitty-low total..

BUT...

When you compare it to the so-called 'expert' economists who predicted 155k, then Heyy.. That's 40k More jobs then anticipated and that's 'Wonderful' news isn't it...

And few to none bothered to mention that 120k or 62 percent of the June payroll gain consisted of part-time jobs in restaurants, bars, hotels, retail and temp agencies.

The average pay check in this segment amounts to barely $20,000 per year, which is a sub-poverty level income for a family of four
Stocks that day spiked on the news..

Nothing the Big Boys love more than worker-bees working longer and harder and for less..

Well, OK they just Love even more when that weasel Bernanke bends over and spreads his bum-bum cheeks to them by promising QE will not be tapered any time soon...

Did you know the yearly budget for NSA to spy on Americans and people of other nations around the world is $80 Billion?

Did you know if you add $5 billion to that sum, you get 1 mth of QE..
Wall Street and by extension the stock market is insidious.  Always has been.. Always will be.

This principle of controlled expectations works in all aspects of life...

If you go on a first date not expecting sex and it ultimately leads to it, you're a pretty happy camper..  If you expect sex and it doesn't happen, you're pretty pissed off and thinking 'well that Lobster dinner was a waste!'

If you have no expectations of your elected leaders and they turn out to be immoral degenerates or smooth, slick-talking liars with no intention of ever following through with campaign promises, you just shrug and go 'Ehh'..

If you expected more, its a great let-down.
Its all one big psychological game.  The Big Boys need your money invested in that G-D stock market...

It needs you to feel confident; to trust and believe in it..  like some slot machine that magically always pays out, that it will always go up and no one ever loses...

They tell you the word 'sell' does not exist.. wipe it from your minds

They prey upon your naivety.. your patriotism... your need to generate some kind of interest from your life savings because bank rates of 0.1% just doesn't cut it..
And they control the expectations so anything that is 'bad' appears as 'good'

Trust us.. the Big Boys know the difference and invest accordingly..

Now let's see you get this level of honesty on CNBC or Bloomberg!

Enjoy your Monday...