Tuesday, February 28, 2012

U.S. Health Care: The Good News

Now, let’s compare my snarky remarks about health care in the last post with a very different perspective.  Fortunately, none of it involves politicians.

In this documentary, health care delivery is being transformed by local health care professionals coming together for the benefit of community.  Often with a clean sheet of paper, and asked how they could serve all people in their community and do so with equal qualities of service regardless of how much someone can afford to pay.  Even if people can afford to pay nothing.   In other words, health care professionals who are willing to subsume the self to actually serve society.  A noble effort.  A nobility that I believe most health care professionals would embrace were they incented to or able to.  Many interviewed in this documentary actually state that in order for this type of system to work, doctors must be of virtue and willing to subsume their self-interests for the benefit of society.  Health care professionals will still make a great wage, as they should. 

Greed may ameliorate the unstable and disconnected self or ego but selflessness is a core value of every human being’s higher power.  When we are connected to our higher power or our own divinity, we naturally seek to be selfless when given the opportunity.   The health care solutions highlighted in this documentary are a manifestation of selflessness, inclusiveness and community.   The corporate state’s attempt to divide labor, citizens and society through hate, fear, bigotry, jealously and exclusion for countless reasons is not consistent with being authentically human.  Although it is consistent with the disconnected self.   The corporate state is a Godless incarnation of the unstable self.

It’s no surprise nonprofits and cooperatives are being used as delivery mechanisms in this documentary; two dynamics we have discussed as viable options on here.   When profit is the primary intent within health care, corporations will always become the dominant force.   When service, virtue, compassion as well as profit and a living wage are the primary motivators in health care, for-profit corporations will either become nonprofits, cooperatives, take massive cuts in profits  to compete with virtuous competitors or they will collapse.   Our health care system, like every other part of our economy, is broken because corporations rigged the rules to the game by bribing politicians.    All we need to do to fix health care is empower the people in local communities and realize that our entire nation is a community.   In other words, affordable health care is a basic human right.  There is nothing wrong with profit but as a primary intent, one cannot serve both money and truth. 

This documentary is truly an inspiring look at how average people are coming together to make their small slice of the world better for everyone.  Not just for patients but for those who work within a corporate culture of service.  Of health care organizations who seek to embrace human dignity and virtue by encouraging their employees to be part of something larger than themselves.   Who wouldn’t want to work for such an inspiring culture and a force for good?  A corporation that respects all of humanity?   Isn’t this always how change begins?  It’s always small groups of people driven by a dream or a desire to change their small part of the world.  It is always localization, which by no coincidence is a theme on here; that globalization is dead and we are returning to economic localization. 

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”  -- Margaret Mead

The seeds of change are germinating everywhere .  The status quo doesn’t realize how exposed their underbelly is.  Something I have noted before.  Something we will continue to discuss.  The corporate state’s perceived control is nothing more than an illusion.

posted by TimingLogic at 1:43 PM links to this post

The Endless Decline In Home Values Continues Unabated

Title link here.  Just wait until the foreclosures start to pick up again as part of Obama’s brokered settlement with banksters.  Then we’ll likely see the rate of decline pick up even more as supply increases substantially.

How about that economic recovery?   Record numbers of people dropping off of unemployment benefits, most new jobs being created with no benefits and poverty wages,  record numbers of people on welfare, record high government deficits to keep the system from imploding, high oil prices, high food prices, health insurance companies jacking policy rates through the roof.  (Mine have doubled in two years and doubled the two years before that even though I have never filed a claim.  I can’t wait to drop my insurance and simply pay ObamaCare’s fine when that option becomes available.  I just won’t work since much of my incentive to work has actually been removed by bureaucracy anyway.    Then my ObamaCare fine will be zero.  I can tell my health insurance company, who pays its executives tens of millions of dollars to deny coverage to sick people and to raise premiums to the point of pain for policyholders for their own personal greed, to effoff.  It’ll be a boon to my bottom line and I’ll still be able to get treatment.).   Now, this is what I would classify as sustainable economics.  That is, letting the state do what it does best; tell me how to live my life and then impose its will upon me to make sure I comply.  Living large aren’t we?

posted by TimingLogic at 11:48 AM links to this post

Monday, February 27, 2012

Watch The Documentary “Fresh” Free Until March 3rd

I highly recommend you watch this documentary.  It is sort of a follow up to the Documentary “Food, Inc” with many of the same voices.  It is available free until March 3rd at Mercola’s link.  You may have to give an email address for his newsletter for the link to work but that’s not such a bad thing.  Mercola speaks many truths about food, our dysfunctional health care system and the pill-popping insanity of our medical bureaucracy that will help you become informed. 

If you watch this documentary, I would encourage you to take much of what is discussed and apply it abstractly to economics.   The sustainable rules of economics are exactly the same as a sustainable biological ecosystem.   And, why wouldn’t they be?   Human economic behavior is in fact nothing more than a manifestation of our biology.   (As is the sustainable biology of the human ecosystem.  The human body/mind is a self-sustaining and self-correcting ecosystem most often capable of healing itself if the ecosystem is maintained using sustainable rules.  That is why we are so incredibly diseased, emotionally-unstable and overmedicated in this country.  The unsustainable rules embraced by the corporate state are destroying our minds and our bodies.) 

One of the dynamics I use to model our economy is the concept of a state machine taught within the disciplines of math and engineering design.   A state machine is essentially an ecosystem whose state is impacted by measurable inputs that leads to measurable outcomes.   The global economic ecosystem and that of individual countries are collapsing because politicians, corporations, dictators and elites have tried to subvert nature’s laws of a sustainable state machine or ecosystem.   Only by applying certain changes to the state of the ecosystem will we ever see a recovery.  Otherwise, the system will fail just as natural ecosystems often do.  And, then from that failure will come something new.  Something more sustainable.   Fortunately, we don’t need to see that failure for the system to re-adjust.  Our economy would become self-correcting and self-healing were the appropriate laws of sustainable ecosystems or a sustainable state machine applied to our economy.  But, because of corruption and subversion of truth, at this point, failure seems inevitable.  

posted by TimingLogic at 11:06 AM links to this post

The Crumbling: For-Profit Prisons In the For-Profit Corporate State

There is absolutely no doubt that money (control)  rather than truth is the driving factor in the corporate state.  Be that the military-industrial complex or for-profit banksters minting billions off of police state spending & wars or the role that money plays in the perversion of the medical establishment or  for-profit outsourcing of prisons or countless other dynamics.  They are all part of the same ecosystem or culture of subversion of truth in favor of corporate control enabled by a for-profit political system that puts our rule of law up for sale.  

At one time we showed the exponential rise in prison population within this country and how the knee of the curve (runaway imprisonment) started around 1980.  It is no coincidence that I have remarked countless times that economic activity in the U.S. peaked around 1980.   It also is no coincidence that runaway inflation and the debt bubble started around 1980.  

If economic activity actually did peak around 1980, then the illusion of growth could only be maintained through insidious money printing for purposes of self-interest, greed and corruption.  During that time we have had numerous crises that nearly toppled our financial system.   They were all driven by self-interest, greed and corruption.

The vast majority of crime is economic.  Social ills, be that the breakdown of the concentric rings of individual, families, communities and ultimately society and the subsequent rise of crime, gangs and illegal drugs are a direct result of lost economic determinism.     Without an ability to provide for oneself and family economically, the human condition becomes increasingly fragile and unstable and the manufactured self becomes increasingly destructive.   The old saying that bad money pushes out good money should be amended.  Bad money also leads to crime on a wider scale and thus a widening circle of bad money.  Sociological factors tell us that bad money leads to even more bad money.

How much in wasted human capital, lost economic opportunity, pressure on our health care system, additional state expenditures and most importantly, lost lives are a result of lost economic activity and economic determinism?  And, what would the true unemployment and underemployment rate be were those in our prison system, who might possibly be factored into economic-related crimes, factored into employment statistics? 

The crumbling of our society and the massive increase in prison population is directly a result of the increasing tyranny of the corporate state.   Let’s see.  Now, how would gold-backed money solve this?  It would only make matters worse.  Just ask the people who lived through the Great Depression.

Now, because our economy is so completely linked to the corporate state and the subset of that, the national security state, we have put countless citizens at odds with truth.   Many resist necessary reforms as a matter of survival because economic activity is so scarce.  Because citizens are pitted against citizens for the limited number of jobs that is a result of the corporate state’s subversion of economic determinism and economic activity through rigged economics, they remain enslaved to the limited economic opportunity provided by hegemonic corporations.    Even corrections officers lobby against much needed legal reforms that would possibly release many who committed victimless crime; most notably drug and marijuana users who should at worst be in drug treatment programs. 

Where are prisons often situated?  In the most impoverished communities whose economies have been decimated by the corporate state.  Prisons become a politicized gift of manna through the selflessness of politicians.  Those jobs are valued preciously as jewels because economic activity is so limited.   Mind you, the politicians giving the gift of prison jobs are the same politicians, who by supporting the corporate state for their own personal profit, helped create impoverished communities in the first place.  Politicians in the corporate state truly are rich.  They take with the left hand and give with the right.  They take your economic freedom with the left hand and give you state-based economic welfare with the right.

As we have remarked countless times, the U.S. didn’t win the Cold War.  In fact, our politicians on many levels have become the Soviets.  Just as happened in the Soviet Union, the internal contradictions, including lack of economic determinism, led to its collapse.   Ronald Reagan unleashed the tyranny of the national security state upon the United States through granting unprecedented power and authority to the military-industrial complex with his fatally-flawed strategy of outspending the Soviets.   Reagan effectively embraced the same national security state that destroyed the  Soviets Union.  Reagan embraced the tyranny of his enemy in an attempt to defeat it.  Now we see torture, state-sponsored murder, indefinite detention, endless pre-emptive wars, spying on citizens, lack of economic determinism and on and on.  Sound familiar?  We are the Soviet Union. 

“We must have courage and self-confidence to cling to our own methods and conceptions of human society.  After all, the greatest danger that can befall us in coping with this problem of Soviet Communism is that we shall allow ourselves to become like those with whom we are coping.”

In the final years and days of the Soviet Union, the central state bureaucrats had used all of their lines of credit from within western countries as their system of central planning continued to crumble.  Their politicians too resisted needed change that would encourage economic determinism and spur innovation and capital creation.   Doing so would have required the central state to give up control and empower citizens and local economics.  Instead, the Soviet central planners were left with an economic conundrum of how to shut down the national security state and its endless overproduction of weapons when their economy had come to rely so heavily on said military-industrial complex to provide economic opportunity of a centrally-planned economy.   Sound familiar?  It should.  It is the United States.  That great conundrum lies in the fact that central planners, whether they are American or Soviet politicians matters not, can never have the kn0wledge to run an economy any place except into ruin.  Truth is found in just the opposite dynamic.  It is the people of society who feed and clothe the bureaucrats, who are only then able to perpetuate their profligacy by living off of the productive assets in society. 

Bureaucrats in corporations and within the state never seem to get it.  It doesn’t matter if it is the Soviet Union or the United States or any other example of society.  Bureaucrats and the state derives their power from the people.  When the the power of the people is subverted, the system eventually and always becomes unstable.   It’s simply a matter of when. 

Then, as a last gasp, the state seeks to use control to maintain its illegitimacy… even though truth is right in front of its eyes.  

The truth is Obama’s stimulus package should be to dismantle the corporate state and corporate personhood and to throw out the corporate state’s endless red tape, then enact new, sweeping legislation to return economic determinism to the people of this country.  But, that doesn’t serve the powers of hegemony and for-profit politics.  It doesn’t serve the corporate state.  

Title link here.

posted by TimingLogic at 10:21 AM links to this post

Sunday, February 26, 2012

Diet Sodas Tied To Heart Attack And Stroke Risks

Ya think?  Well, that’s quite an epiphany.  Title link here.

posted by TimingLogic at 2:42 PM links to this post

Amnesty International – War Leaves Half A Million Homeless In Afghanistan

I already posted on here some years ago a link to  women’s rights groups who  were reporting that since the U.S. invasion of Afghanistan, women’s rights have actually been pushed backward and many women have suffered horrific atrocities. 

Now, Amnesty International is reporting that half a million Afghani’s are homeless.  That would be the equivalent of about five million Americans homeless.  That sounds about right.  The war state has no distinction in its victims.  It causes homelessness both at home and abroad.

If you believe preventative war (The Minority Report) or any type of violence creates peace and stability, then you most certainly have swallowed the Orwellian puppet master propaganda.   Statist mantras of war creating  peace are right out of 1984.

posted by TimingLogic at 2:42 PM links to this post

Saturday, February 25, 2012

Supreme Court To Hear Corporate Human Rights Case

posted by TimingLogic at 2:19 PM links to this post

Single Atom Transistor Demonstrated

Quantum computing, the holy grail for certain problems, takes one step closer to a possible reality.  Notice the U.S. military is funding this project.  The military and security apparatuses of government are highly interested in quantum computing for code breaking and other security concerns.  Quantum computing will make much of the existing world completely obsolete.      

Group leader, Michelle Simmons, talks with NPR in an MP3 available here.

posted by TimingLogic at 2:06 PM links to this post

Friday, February 24, 2012

This Weekend’s Alignment Of Jupiter’s Freedom, Morality And Law; Venus’s Unity And Harmony And The Moon’s Personal Security

How appropriate.  The alignment of morality and the rule of law leads to freedom. unity, harmony and our personal security.   Isn’t that pretty much what we have been saying?  The stars are calling humanity home or issuing an ominous warning to the status quo to embrace morality and the rule of law or deal with disunity, negative energy and chaos. 

Are you asking yourself if this guy is kidding or serious?  Nah, I’m just kidding.  The alignments the third week of March 19 are the ones that are most disconcerting.  Haha. 

Go outside this weekend and witness this celestial event regardless of where you live.  Title link here.

posted by TimingLogic at 11:14 AM links to this post

Thursday, February 23, 2012

Obama Administration Continues To Wage Economic War On The 99%

The latest policy in the war on democracy is by seeking a lower corporate tax rate that you, labor, will have to pay for through your debt serfdom or loss of government social services or cuts in Social Security or whatnot.  Corporate tax rates in this country are already effectively one third the published rate for the largest corporations as we noted numerous times over the years.  And, we have finally seen some of this with the exposure that many of the largest corporations in this country are paying almost no taxes.  That includes many manufacturers whom he is supposedly targeting.   

Let’s keep this really simple so even a caveman can understand. (Or a politician.  Same thing in most cases.)  In our economy there is labor and capital.  Labor would be you, dog breath.  It is the 99%.  Labor is the citizenry of this country.  It is We The People.  It is the only democratic content in capitalism.  Or, at least it is the only democratic content in capitalism the way it is has always been structured in our country.   Capital in our economy would be oligopoly multinational corporations, banksters and the 1%.   In other words, it ain’t you and it sure as hell ain’t democracy.  Got it?  (Capitalism doesn’t have to be structured that way as we have noted countless times.  A market-based, merit-based economic system can be made substantially more democratic by adjusting the rules.)

You, labor, had to bail out Wall Street to the tune of what is likely to be about $25 trillion.    Wall Street crooks granted themselves record bonuses in return for your gratuitousness.  You, labor, get the bill. 

Oligopoly multinational corporations ran roughshod over our economy for decades, and you, labor, lost tens of millions of jobs costing our economy trillions of dollars in tax receipts while running up a $15 trillion national debt.  Wall Street helped facilitate all of this as did politicians.  You, labor, get the bill.  

The military-industrial complex ran up a $4 trillion in debt by bombing the rest of the world into submission in the last decade, for democracy of course, and you, labor, get the bill.

Now, as a reward for these noble efforts of capital and fascist corporations, Obama wants to lower their taxes while punishing you, labor, with the bill.  Don’t worry.  The bill is in the mail.   Yeah, yeah, you already knew that.   :)

Ain’t corporate welfare and fascism grand?   Rather than corporations being a force for good, they are used to prey on labor, We The People, in a fascist state.  In a fascist society, capital is only subservient to the state; which is why Nazis and communist China both love(d) capitalism.  Which is why Wall Street and corporations love doing business in a massively corrupt China; capital runs roughshod over We The People there as well.   Just ask the suicide victims of slave labor camps making your latest shoes or electronic gadgets.  All of this is why elites, CEOs, politician and banksters looting our country love “free” markets; code words that really mean legalized looting.   In our society, capital runs roughshod over labor, We The People, with absolutely no accountability or service to democracy.  Democracy; that would be you, labor.  And in a system such as this, you, labor, will always be economically-powerless and always get the bill. 

Multinational corporations and banks now completely control the money supply in our country and that means we get predatory capitalism.  CEOs, banksters and politicians, who create absolutely nothing yet make a living preying off of productive people in our society, are minting trillions through this dynamic while We The People’s access to capital has completely collapsed.  We see this in record corporate profits and record corporate expenditures to fund political campaigns that has been building for decades.   But, there is no money to fund Social Security or health care or create jobs.  So, Obama proposes we lower corporate taxes to create jobs.  Hahahaha.  That is almost funny were it not completely ignorant as to the issues and how to resolve them. 

We see the flip side of the corporate money bubble in the economies of Detroit or Cleveland or East LA or New Orleans or thousands of other communities where the money supply has collapsed for its citizens.   The money supply has collapsed through rigging of the economic game.  That means entrepreneurship, individual proprietorships and small businesses, all expressions of democratic capitalism and economic determinism have collapsed over the decades as well.  We see poverty on a scale in this country that would make Robert Mugabe blush.   Why?  There is no money.  Why is there no money?  Fascism or the comingling of corporate power and politics.   There is no money because democracy doesn’t control the money supply.  Private, for-profit banksters and corporations do.  And, they have shipped much of your money out of the country where it yields them a substantially better return than paying you a living wage or retirement.   Because that is what unregulated capitalism does.  It preys on society.  

Those who say we are experiencing inflation show their economic ignorance.  Prices are higher because Wall Street is rigging commodity markets just like they are rigging every other economic market.  Those who focus on austerity and debt are useful idiots shilling for the status quo and for fascism, be it knowingly or dimwittedly.  We have been experiencing austerity at a greater and greater clip for decades as the money supply has collapsed.  That is why tens upon tens of millions of Americans are broke and our children aren’t being educated.  That is why we have a massive debt bubble.  How the hell is focusing on the debt bubble going to solve any of this?  Debt fear mongers are focusing society’s attention away from the real issues and doing all of us a disservice by perpetuating their ignorance and misinforming society with useless bullshit.  Debt is a myth.  An illusion.  I could blink and it would be gone tomorrow and none of our institutions or government or industry or food production would have collapsed. 

Misinformation and ignorance are fundamental deceptions key to the looting of our society.  No one in any position of authority benefiting from this predation wants to educate the citizens of this country because doing so would mean the looting would stop.   Or they would be fingering their fellow looters.  Only leadership of virtue would ever speak the truth.  But doing so would guarantee their own economic suicide.  So, many good men and women remain silent.   We have little leadership in this country but we have plenty of looters.   But, politicians all are quick to point out that God and virtue drives their very existence.

“All that is needed for evil to triumph is for good men to do nothing.”  -- Edmund Burke.

So, do any of you naysayers finally get why we need a public banking system (democratic capital) so you, labor, can have a fighting chance of achieving your dreams in democratic capitalism or a democratic merit-based economy?  Economic freedom and economic determinism are only achievable if the capital in capitalism is taken out of private, for-profit bankster’s hands and put into the hands of democracy or We The People.   It is private, for-profit capital that has throughout history, today and in the future will always corrupt capitalism and distort it into some dystopian, anti-democratic, slave labor world dominated by Soviet-style corporate bureaucrats who treat people as numbers with an efficiency rating.  

A private, for-profit bankster doesn’t give one rat’s ass about your economic freedom or democratic economics or your democratic rights to society’s capital or achieving your democratically-inspired dreams.   That is, unless your dream is to get up every morning, sit 90 minutes in traffic, go to a corporate desk and sit there all day long staring at a computer terminal, and then drive 90 minutes back home and go to bed.  Then start the next day all over again and do that for 40 years until you die.  This is not a dream of a free mind in a free nation.  It is the dystopian nightmare of a Soviet citizen who numbs himself with copious amounts of vodka to survive the meaningless and Godless existence of the corporate state. 

Private, for-profit banking is an ancient relic of tyranny and is an afront to liberty, democracy, economic freedom and economic determinism.    Going back to the gold standard with a private, for-profit banking system would simply make capitalism even more tyrannical by giving those who have the gold even more control over those who don’t; that would be you, labor.  We should seek to democratize society’s capital, not limit it to those who have the gold as was the case in past corrupt societies who used gold to enforce tyranny.   Gold is a solution to nothing unless you are the status quo seeking to consolidate your tyranny over democracy.

Change you can believe in.   That would be more change in the form that Reagan, Bush 41 & 43, Clinton and Obama loved to stick to you, labor.  Economic serfdom and corporate fascism are alive and well in the dystopian United Corporation$ of Amerika.

Paid for by Obama 2012 re-election committee for a better America.  Hahaha.  Just kidding Barack.  It’s a joke.   You keep up the good work. 

posted by TimingLogic at 6:09 PM links to this post

Monday, February 20, 2012

Equity Market Strength - Real Or A Mirage?

I have shown my unmanipulated advance-decline data numerous times on here.  It is a simple but accurate predictor of pricing action.  It has never been wrong regarding future pricing action.  I am well aware the day could come when it fails but I tend to be dubious given the method through which it is constructed.  That said,  nothing is perfect.

I don't believe I have ever shown a weekly view of the data. So, let's take a look. The rally post the 2008-2009 collapse has had five distinct upward waves as noted on the graphic below. (The S&P is also included in the graphic for perspective.) Except for the first wave, which was skewed substantially by buying to cover short positions, each of the next four waves of the data were just about identical in height. In other words, from trough to peak, they all rose essentially the same amount.  The fifth wave is just now completing but may have just a little further to the upside if this pulse remain consistent.    The market has responded less constructively to upward advance-decline pressure over time.  That is consistent with any market that eventually tires due to lack of new sponsorship or demand.  Given Wall Street has traded substantial demand out of financial markets, just as large corporations have done within the underlying economy, it really doesn't matter terribly much if the Federal Reserve would possibly issue a new quantitative easing.   In other words, the Federal Reserve cannot "paper" over the corruption and rot in our economy.  Additional easings by the Fed would more than likely just increase Wall Street's leverage even more.   That is, unless, easing took on a new dynamic to get money into the economy and hands of people and not banks or large corporations who are destroyers of jobs and economic activity.  That isn't going to happen as long as corruption holds sway in Washington.  In other words, monetary easing is having less and less impact over time because Wall Street's monopoly is keeping the money from getting into the hands of American citizens.  So, the breadth of financial demand continues to wane as Wall Street's corruption ensures its eventual demise.  That means leverage must be increased by the remaining players in the game to make up for that lost breadth of demand.

American citizens, not corporations are the source of our economic wealth.  Corporations come and go.  It is people who create, build and invent.  Not CEOs or corporate boardrooms who literally create nothing but, like politicians, live off the labor and talent of others.  In other words, as we have discussed ad nauseam, pro-business policies, supported by both political parties, kills economics.  Pro-markets policies empowers  democracy, a living wage, economic vibrancy and job creation.  

As you can see from the data, the April-May 2010 top was the peak in the advance-decline data as we have noted before on the daily view. Since, the market has skirted higher on less and less participation as measured by the advance-decline data.  This was predictable and in fact, we have discussed at least a dozen times in the last three years this dynamic would eventually develop.  In other words, while the market is making marginally higher highs and higher lows, the advance-decline data since April-May of 2010 is making lower highs and lower lows. (We have gained a little more than 100 S&P points over the last two years.  That's nothing to sneeze at but we have seen single days that have lost nearly 100 S&P points.)  The  divergence of demand, as noted in the unmanipulated advance-decline data, and price will resolve itself at some point.  Either demand will increase or price will correct.  Without fixing the corruption in our banking system and our politics.........

By the way, both Marc Faber and Warren Buffett have remarked recently that they are bullish on equities.  I respect both men immensely.  Faber for critical thought and Buffett for his accomplishments, but I clearly do not share their views that the crisis in equity markets has passed.  I'm not going to write a dissertation on their positions but needless to say I believe both men clearly don't appreciate the scope and scale of the financial  bubble and how it has distorted asset prices not over years but over generations and, therefore, has created a generation of systemically-incompetence boobs running our financial system.  That most definitely includes mutual fund managers, Wall Street, hedge funds, etc.  And, I think it has affected both of these men and their ability to appreciate some of the data points surrounding equity market valuations.  (I have an upcoming post on Buffett's recent investment in IBM that I hope to have up within the month.)

In closing, look at how volatile the data is since the 2008-2009 collapse comparative to before the collapse.  I suspect this is a result of how much leverage is being used in markets.  And, how that leverage is used to create substantial upward pressure to levitate markets.  In other words, leverage in our financial system has become even greater since 2008.  That is a fact not an opinion.   Additionally, look how far below the 2008 advance-decline top the unmanipulated data is.  Before this latest rally it was closer to the 2009 low than the 2008 peak.  This after the market has rallied for the past three years.  That is not a sign of a healthy market.  It is a sign of collapsing demand.  (We said for years this was going to happen and now we have the data to confirm it.)  Contrarily, the NYSE advance-decline data has made a substantially new high beyond 2008.  Of course, that data point is an aberration that is a result of Frankenstein finance.  It is manipulated.  Not consciously.  It simply isn't a reflection of true fundamentals.  The tranquility of low volatility we see on the surface of most financial markets is a mirage.  The cycle of volatility remains in full force.
Click on graphic for a larger view
posted by TimingLogic at 12:10 PM links to this post

Saturday, February 18, 2012

Wall Street’s Latest Egregious Acts Of Organized Racketeering - Manipulating Interbank Lending Rates

Now, we have no idea what the intent of this activity does because there is no transparency but this could be used to destroy other banks and create financial crises including electronic “runs” on banks.  Even if that wasn’t the intent, that is one such possibility of manipulating rates.  And, if it hasn’t yet been done, it will be some day.

What will be done about this?  Well, it’s a “back page” article that will be stuffed under the mattress along with all of the other “dead bodies”.  Some settlement where banks use taxpayer money they are given privilege to protect will be offered up as a settlement and the next crime will be just around the corner.

posted by TimingLogic at 9:25 AM links to this post

Friday, February 17, 2012

Indeed

posted by TimingLogic at 2:41 PM links to this post

Apple's Stock May Not Be As Cheap As It Looks

Is that a joke? Well, it's the title of a Bloomberg article today.

From a post on here of four years ago I wrote...  MarketWatch highlights a small cap fund manager who sharpens his edge with the timeless principles of value investing made popular by the greatest investor of all time, Ben Graham. While Wall Street was blowing all of their cash at the very peak of a major cycle top, this fund manager was building his war chest of cash based on actionable intelligence. On timeless truths. Very, very few can actually walk the talk when it comes to the great discipline required for value investing. For the only true method of successful investing. I wrote on here long ago that only fundamentals-based investment knowledge would provide a safe haven in Wall Street's mad world of quantitative Frankenfinance. How true that has become. We live in a world where Graham's principles have been chucked to the curb like a bad habit. Instead I still hear the mindless blabber of physics majors using financial derivatives to hedge factors they don't understand. And none of them can spell economics, sociology, timeless investment ideals or fundamentals. What we see on Wall Street isn't science. It's voodoo backed by funny math. 

"To the extent that Wall Street gets away from book value, it is headed into potentially dangerous areas of thinking.  It then introduces factors – chiefly the notion of increasing future earnings – which are very difficult to measure and which therefore may be badly measured."  -- Benjamin Graham, most likely the  greatest investor of all time.  I mean investor.  Not gambler like those who are buying Apple's stock based on generally accepted bulloney of what quantifies an investment in today's financial freak show.

Okay, this is really simple.  I'll type really slow for Wall Street MBAs and Bloomberg reporters.  (That means you read this really slowwww.)  Read Ben Graham's simple statement above.  Now read the rest of this paragraph.  Apple's revenue has increased about 7x over the last seven years or so.  It's book value even less.  It's stock price has increased about 100x over that same period.   Do you see a potential issue here?  Bueller?  Bueller?  Anyone?  I mean come on.   This isn't rocket science folks.  You simply don't have to be an effing idiot.  In other words, don't let your Ivy League education interfere with your learning.

Apple's stock price has traded in a very, very tight linear regression band since 2009.  That tight linear regression band tells us the stock is being driven by program trading or Frankenstein finance.  It's price has absolutely no relevance to anything other than how much leverage and pump Wall Street and hedge funds can create to drive the stock into the stratosphere for personal profit.  There is no logic behind the valuation of Apple any more than there was logic behind the Internet bubble pump and dump or any other financial scheme Wall Street dreams up.  Earnings used in this Bloomberg article to finally ask the question whether the stock may not be cheap are as preposterous as stating the stock is actually cheap in the first place.  Apple's stock is a massive bubble.

In the past few weeks, the stock has shot through the roof and out of the manipulated regression band.  That is most certainly some type of squeeze or manipulation accomplished using derivatives.  What the hell does any of that have to do with anything?  Does Apple make unique products?  Sure they do.  But how does that have anything to do with a stock that has been pumped up 100x in a handful of years?  NOTHING.  The stock market reflects nothing of any type of reality.  It's an illusion created by an Orwellian world of finance gone mad.   

posted by TimingLogic at 2:33 PM links to this post

Volume At Price For SPY



Let's take a gander at Volume at Price. We wrote extensively of this not long after starting the blog. I'm not going to rehash that post but essentially this is a graphic of the SPY S&P 500 ETF going back about 15 years.  The volume over that time frame is shown horizontally at corresponding price levels.  The yellow bands highlight major support and resistance levels based in large volume levels at particular prices.  You'll notice that these large volume levels provided both support and resistance for corrections and upward price targets.  Today, we are caught within the orbit of major volume levels at current prices as shown by the top horizontal yellow band.  With current upward volume being absolutely horrible, it will be interesting to see if the market can break out to a sustainable new high above 1400.   Given the macro factors we see today and the amount of leverage contained in this market........  the Federal Reserve or Congress or the President is going to have to give away more free money to Wall Street for that to probably happen.  All continue to work feverishly to that end thus making bubbles even bigger. 
posted by TimingLogic at 1:56 PM links to this post

Obama’s Mortgage Settlement With Wall Street Bilks American Taxpayers For Billions. Heretofore Unknown Settlement Details Called Scandalous.

Any time a politician is brokering a legal settlement, I want to know what the hell is going on and why(You need a free password to access the Financial Times.  As I have said before, it’s worth it.)  Did Charles Manson get a politically-brokered settlement for his egregious acts?  What’s the difference?  I am completely serious.  What is the difference?  Charles Manson, for all of his heinous acts, can’t begin to compare to Wall Street’s crimes against humanity including untold deaths of impoverished people by rigging commodity prices. 

After reading the settlement, former TARP inspector general Neil Barofsky remarked, “It turns the notion that this is about justice and accountability on its head.”.  Well, you had to know something was wrong when a politician was subverting the legal process to broker a settlement in lieu of potential legal prosecutions. 

Washington politicians continue to subvert our legal system and our Constitution for personal political gain.  How can we have such egregious wrongdoing on Wall Street and no CEO has been investigated or taken any legal responsibility?   Wall Street is a crime syndicate and should be investigated using RICO statues used to prosecute any organized crime syndicate.  Then it should be shut down and replaced with a public banking system outside of the control of political idiots.  Our political system is so massively corrupt words simply don’t do it any justice. 

posted by TimingLogic at 10:46 AM links to this post

Thursday, February 16, 2012

Rick Perry Doesn’t Want To Go Away. Who Can Blame Him? Politics Pays For People Like Perry.

You know, most of these political masters of the universe have no skills to actually do anything.   They generally have no idea what they are talking about beyond a few canned paragraphs on any particular topic.  They have to suck the life out of someone else.  That’s what politics is in this country; living off of productive people in society.   Or, should I say preying on productive people?   So, politicians simply recycle themselves as lobbyists or get appointments with politically-active law firms or ‘thinkless’ think tanks or members of PACs or televangelists for the 24 hour TV “news” networks.  Of no irony, all of these entities rely on the good graces of productive people for their economic success.

From what I’ve seen, Rick Perry has no known economic skill or ability to be self-sufficient or add much economic value to our society.  (Btw, Matt you still owe me a pizza on this bet. lol.) Now, I suppose we might be able to conclude that is how he actually ended up in politics; he had no skills to land a real job.  So, here he comes again.   PACman Rick. 

If we had a system of self-rule where society nominated candidates to serve society for one term rather than power-mad candidates nominating themselves and becoming an infestation that never seems to go away, what would politicians do?  I suppose most would be flipping burgers or chasing ambulances.   Regardless, they would be irrelevant.  And, in a merit-based society, that is how it should be.

posted by TimingLogic at 2:47 PM links to this post

President Obama Proposes More Bloat And Wasted Taxpayer Money At SEC And CFTC To Regulate Financial Crack Dealers

We have discussed the Dodd-Frank reform bill as an atrocious piece of rot numerous times.  Chris Dodd is now working on equally atrocious bills of SOPA and PIPA corporate control legislation as head of the Motion Picture Association.  Not sure what a lifelong politician knows about motion pictures.  But he does know how to buy political influence.   Guess we know SOPA and PIPA were premeditated when Dodd left Washington in the revolving door of lobbying, corporate influence and politics.   Because of that, we can be assured Dodd is the author of one fine piece of legislation that is financial reform. 

I read an editorial recently that inferred Dodd-Frank was “good” legislation.  That is preposterous.  The bill wasn’t even codified when it was passed.   It still isn’t.  It was ramrodded through before anyone even knew what the bill was going to look like in any final form.  This, for political expediency.   The bill is approximately 2000 pages and will continue to grow as lobbyists work with politicians to actually codify the final code.  As we discussed, this compares to the two dozen pages of Glass-Steagall that protected our banking system for 70 years before Wall Street spend hundreds of millions of dollars legally bribing politicians to overturn it.  (In today’s dollar terms, that could very well be between $500 million and $1 billion)

So, now President Obama wants to beef up the CFTC and SEC with major budget increases.  On the surface this sounds like a constructive move.  But, is it really?  As I commented on the editorial inferring Dodd-Frank was good legislation, I would like to know how many people it would take to enforce what is likely to end up being 2500 to 3000+ pages of red tape that is Dodd-Frank?  

I would like to see those who crow about the success of Dodd-Frank, that is President Obama, Barney Frank and Chris Dodd, actually write business and procedural plans on how any regulatory agency enforces thousands of pages of code and the literally unlimited numbers (surely millions) of legal interpretations.   The SEC and CFTC would need a staff larger than the Soviet army to enforce Dodd-Frank equally and consistently.    Politicians should be responsible for the bills they pass.   First and foremost that means they should read the entire bill and be able to explain every word.  Then that means being responsible for explaining how they will be enacted and implemented.  Dodd-Frank most certainly has not been read and beyond any doubt it cannot be explained.  It is an abomination that cannot actually be executed with any type of reasonable business plan.   At best, it will be enforced selectively given its massive size.  And, that means political favoritism and corruption will again decide what gets enforced.  Guess what?  That is exactly what its authors wanted.  Its authors were Wall Street lawyers and lobbyists.   Instead, President Obama simply throws more of other people’s money at the SEC and CFTC without any idea how they will actually enforce this nonsense. 

This is truly rich.  First Wall Street lobbyists and lawyers work with Democrats to write rigged reform legislation.  Then when it comes to funding the enforcement of this bloated mess, said lobbyists turn around and howl to Republicans that Democrats want to spend too much money.  And, like the good fascist toadies they are, the Republicans do the will of their corporate masters and howl about how Obama wants to turn our country into a Muslim communist state.   Then Obama and Democrats retort that Republicans don’t want regulation.  Both are ridiculous.  Politics truly is a game for idiots.  All the while, Wall Street continues to pilfer and steal from our society and millions of Americans rot. 

Honestly, I would rather have Wile E. Coyote running our country than another Republican or Democrat.  That’s not a joke.  At least he was smart enough to create a business plan to catch Bugs Bunny.  It’ll be a cold day in hell before I ever vote for another Democrat or Republican on the national stage.   

Washington missed its opportunity to re-enact Glass-Steagall.  Our banking system should not be playing Russian roulette with our savings.  Deposits and business/mortgage lending.  Period.  Simple legislation is required to regulate this.  Any activity other than that should be banned.  Period.

By the way, a nonprofit public banking system that served human development and democracy would need zero regulators.   That’s right.  Zero.  It would have a charter (business plan) to do two things.  Lend and protect society’s savings.  No derivatives, no Ponzi schemes.  No computer trading.  No credit default swaps.  No lobbying government to overturn regulation.  No mortgage bubble traunches.   No private equity scams.  No destructive investment banking schemes.  No IPO bubbles for firms without business plans or earnings.  No endless list of predatory fees.  No predatory credit instruments.  Nothing.  Simply lend, without usury might I add, for the purpose of human development and business creation and protect society’s savings.  Nothing more.  And because it would be required to be completely transparent in all of its activities and therefore could be monitored by citizen watchdog groups and, if necessary, (not likely) government investigations into wrongdoing, there would be no need for regulators.   In many ways, this reflects community, for-profit banking.  And how much better did our economy work before monopoly banks hollowed out communities and essentially destroyed much of community banking?  The difference between community banking and public banking being a profit motive and a motive to serve human development and democracy.  Capital in a democracy should be a facilitator for our society first and foremost.  Being nonprofit, a public, bank would not attract psychopaths to its employee ranks with the latest attempts to overturn and manipulate regulation in order to create the next Ponzi scheme or using derivatives to threaten society’s savings or our economy in the name of personal profit.   Sure there could be individual cases of crime but nothing on the scale of trillions of dollars that we have seen since the beginning of private, for-profit banking. 

How much wasted money on banking regulation, using society’s money to lobby the state, predatory financial usury and endless schemes of theft dreamed up by Wall Street could then be allocated to more productive investments into society, our children’s health and education, our citizens and our economy?  Trillions upon trillions upon trillions of dollars freed up for the economic development of our citizens and democracy.   Systemic poverty in our country is a result of one dynamic; denying our citizens their democratic right to capital.  This is accomplished through many avenues including private, for-profit banking.  

Private, for-profit banking is a relic of empire, feudalism and control from ages gone by.  It serves no purpose to democracy and certainly serves no purpose to human development.

Obama proposes more wasted taxpayer money in big budget increases at CFTC and SEC for regulation he cannot begin to explain and they cannot ever dream of effectively enforcing.

posted by TimingLogic at 9:58 AM links to this post

Wednesday, February 15, 2012

Defeat Eric Cantor’s Insider Trading Scam For His Cronies By Signing Congressional Petition

Eric Cantor needs to find a new job other than shilling for the corporate state and subverting democracy for political favors.   I look forward to the day when he is sent packing from Congress. 

Sign the congressional petition here.

posted by TimingLogic at 3:52 PM links to this post

Similar Patterns In The S&P 100 And The Euro

The S&P 100 and its wider cousin, the S&P 500 are where the preponderance of equity market derivatives are written. This is especially true of index derivatives. We have shown this chart of the S&P 100 before. While the S&P 500 made a massive top near the year 2000 top back in 2008, the S&P 100 didn't even come close.

We have talked about patterns on here countless times.  For me, the most telling pattern we have posted is the 21 year pattern of the Dow leading up to the 1929 collapse and the 21 year patter of the current commodities index leading up until the 2008 collapse.  These two patterns are identical.  It’s no irony that 1929 and 2008 rhymed quite nicely as it pertains to fundamentals surrounding those two indices.  Although policy and monetary decisions after 1929 and 2008 didn’t rhyme and therefore, we should not expect the financial market patterns to be similar.  Additionally, our economy is in a different type of bubble. 

Patterns in nature repeat themselves endlessly be it the patterns of seasons, of heart rhythms, of ecosystems, of planets, of life and death, etc.   You identify much of the world around you through your sensory identification of patterns.   Without patterns, each morning you would awaken to a completely different unknown rather than the pattern of your daily routine of corporate monotony. :)

Financial markets exhibit repeated patterns as well.  And, the longer the pattern has been in existence, the greater the chances are it is not just a minor perturbation but will fulfill outcomes of similar  patterns.  

Below are current patterns of the euro and the S&P 100.  These patterns are still in the process of working their way to completion.   Do you see any similarities?  You should.

  • Both started with a period of weakness or consolidation.
  • Both then rose substantially and really without moderation into their first peak.  In the euro, that peak was 2005.  In the S&P 100, it is less noticeable but just as substantial.  That was the 1998 crash involving Long Term Capital Management.
  • Both then resumed their climb to their ultimate peaks.
  • Both the euro and the S&P 100’s two waves upward to their highest peaks exhibited the same ratios    
  • Both are possibly exhibiting three lower highs and three lower lows in their culmination.
  • Both exhibited what appears to be very clear ABC waves in their final pattern of three successively lower peaks.  
  • Both may exhibit time symmetry between the three peaks if the S&P follows a similar pattern resolution. And, if that happens, we would expect the S&P to top some time this year.  Maybe even within weeks or as late as the fall of this year.

If the current action is indeed a third peak in the S&P, that peak may make a marginal new high over last year’s peak before starting a decline.

So, what happens next in both instances?   We shall all watch in real time. 

Euro

 

2012-01-30_1210

posted by TimingLogic at 9:35 AM links to this post

Monday, February 13, 2012

A Gasping Plea From The Status Quo – Why The World Needs America

Somehow it doesn’t surprise me that this article is one of the most read at the Wall Street Journal given its readership.  That along with an article highlighting the design of a new $100,000+ automobile.  Or that the author’s book is apparently selling well in the Washington political bubble.  Confirmation bias is a favorite delusion of the political mind.   In other words-

“Power always thinks it has a great soul and vast views beyond the comprehension of the weak; and that it is doing God’s service when it is violating all His laws.” – John Adams

Reading this article, I don’t think I found a single sentence that is defensible as a moral or absolute truth.  This is nothing more than a plea from the status quo to maintain its illegitimacy.   It is apparent Robert Kagan understands literally nothing about how or what forces pushed the world to this point.   His self-interest as a Washington insider making money off of a failed political system of money, lobbying and their dubious outcomes drives a twisted view of reality.  (Washington think tanks are politically-motivated institutions that survive through the illegitimate comingling of money and politics. Seldom is there any truth derived in the perspective of politically-motivated think tanks.  Rather their perspectives are motivated by and twisted by self-interest and money.  Were I king for a day, I would enact a rule of law to bring these and all other political institutions into extreme transparency.  That includes all of their meetings, dealings  and objectives with politicians and donors.)  

The world does need America.  But it doesn’t need the America that Kagan represents or waxes poetic about.  Nor does it need an American empire that crushes democracy, freedom and economic determinism both inside of our nation and around the globe.   The America that Kagan writes about is an America driven by power, greed, political control and domination and not driven by the virtuous search for truth, reason, justice and self-determinism.

The world needs an America that embraces the ideals of democracy and freedom.   The world needs an America that embraces the economic determinism of a free people.  The world needs an America that assists the rest of the world in achieving democratic and economic freedom through the benevolence of our citizens and our compassionate assistance to achieve those virtuous goals.  The world needs an America that is self-governed by our citizens and not a self-appointed authority of a political class.  The world needs an America who will stop the belligerence of bullies and thugs via the protection of human dignity, virtue, justice and the rule of law.   The world needs an America that is truly an arsenal of democracy and virtue in the face of evil.  The world needs an America who will openly embrace new citizens who have been persecuted by tyranny yet who yearn to be free.

Bloviating propaganda here.

posted by TimingLogic at 10:56 AM links to this post

The CIA - Control vs. Truth. Secrecy vs. Freedom.

I want to use the story Waging War in Secret vs. American Democracy at The Atlantic to make a broader statement about the perniciousness of state secrecy than is made in this story.   The growing audacity of the state over the last handful of decades makes it difficult to turn our eyes from state-sponsored secrets and their many implications.  

Secrecy is the most repugnant of all activities by the state.   Secrecy is what enables Control Fraud, as we have discussed.    For the first time, secrecy is being used to divert prosecution of crimes by U.S. politicians as we highlighted in the documentary titled Secrecy.   Any call for investigations into alleged political wrongdoing are now met with responses that information sought to determine wrongdoing is classified as secret by the state.   Secrecy is behind the lack of investigation into wrongdoing on Wall Street.  Secrecy is behind the president’s recently brokered deal with state’s attorney generals in the ludicrous mortgage fraud settlement. (Why is ANY politician brokering any legal deal to stop criminal investigations into wrongdoing?  This is an atrocious subversion of the rule of law and the duties granted to our legal system.)  Secrecy is behind lobbyists dismantling the rule of law in our society.  Secrecy is the basis of everything that subverts democracy.  Secrecy is the ultimate manifestation of the war on democracy.  Political parties and their objectives are determined entirely in secrecy.  Democrats or Republicans, it matters not.

Politicians hiding behind secrecy in the United States have granted themselves the power of God to perpetrate torture, war crimes, crimes against humanity, selling illegal drugs to Americans to fund terrorism, supporting terrorism against other countries, murder of American citizens, secret medical experiments against Americans, propaganda to deceive Americans and who knows what else.  Who knows because of secrecy.  Sounds more like Nazi Germany than democracy.  Truly.   There is no benevolence in secrecy.  Only the intent to control.

The CIA is the vehicle through which much of these secret acts in our country have been committed.  I have remarked on here before that I believe the CIA should be shut down.   Period.  I base that remark on an very simple democratic ideal fundamental to suppressing tyranny.  That is, the CIA, as a fundamental entity, is an anti-democratic organization.  It is organization of men and not of laws.   We have seen this time and again when illegitimate CIA operations have been exposed through leaks or freedom of information acts.  Because it is an institution of men and not of laws, means justify the end.   In other words, there is no law that is above being broken to justify any desired outcome.  To any organization of men, laws mean nothing.  Think about that.   Were the international activities of the CIA perpetrated on American citizens, its actors would get life in prison, convictions of crimes against humanity or treason or all three or maybe even worse.  Stalin and Hitler thought any means justified an end too.  The rule of law protects a democracy from people and institutions that believe a rationalized means justifies and end. 

I think many would find it plausible to conclude, from the very little we know of this undemocratic institution, that it is a source of terrorism for many people around the world.  Even known acts of terrorism have been perpetrated against American citizens here in the United States.    There are many conspiracy theories surrounding the CIA.   That is to be expected.  We have no idea what is true and what is not but what we do know is any time there is a subversion of the rule of law through secrecy, there will always be paranoia and conclusions about why that secrecy is required.   That, because secrecy only serves one purpose; to deceive.   As President John F. Kennedy remarked, secrecy is repugnant to a free society.

We really don’t know how heinous many of the CIA’s actions are.  But, we do know some as information has leaked out over the decades.   This appears to be a reasonably fact-based documentary on the CIA and its origins.  One of the points outlined in this documentary are that quite a few hundred documented Nazis war criminals who helped create the CIA.   Is that really any surprise for an organization that embodies much of the ideals and intents of a tyrannical state?  Of an organization of men and not of laws?

How many Americans would support an organization such as this were state-sponsored secrecy not used to deceive our citizens?

posted by TimingLogic at 9:32 AM links to this post

Wednesday, February 08, 2012

Financial Market And Economic Update: The Magical Levitation

Let's step back and take a more detailed look at underlying factors in financial markets.   By doing so, I am going to pull together many posts over the years into a cohesive message that gives more insight into what is actually going on in the economy and financial markets today.  I hope many might appreciate this post.

We can start by taking a look at the SPY or the S&P 500 ETF over the last handful of months.  The first graphic is a normal candlestick chart.  In a normal, functioning market the opening and closing prices generally overlap.  In other words, the close today will be very similar to the opening price tomorrow.  But, what we see more so than at any time in the last one hundred years of equity prices are enormous gaps starting to develop between closing prices and opening prices.  This dynamic has accelerated over the last six months.  The SPY, as one example, looks like a shotgun blast.  Prices are all over the place.  Closing prices to not match opening prices in a large number of circumstances.  Recently, prices are often ramped up before the market opens then they  literally levitate in a small trading range all day.  That levitation usually lasts a few days and then the market is ramped again.  We see that behavior in the gaps between closing and opening prices.  There are two dynamics at work here.  One is derivatives that are used to manipulate and ramp markets and, thus, create aberrations in price and the second is market liquidity or a lack thereof.  The gaps that are so prevalent in this market are in fact gaps in market liquidity.  Gaps in market liquidity used to be the domain of thinly traded pink sheet stocks.  But today, it is now part of what used to be the most liquid equity market instruments in the world.  That should concern anyone who uses their head for anything other than a hat rack.

Additionally, as we discussed a few years ago, the movement of individual stocks are very highly correlated to the S&P index.  The highest correlation since 1987's crash.  1987 was a manifestation of derivatives and Wall Street's deluded beliefs that they could be used to provide protection against loss.  That same dynamic exists today but at a much more ingrained and broader level.  By ingrained I mean there is an incredibly high acceptance that the normal functioning of derivatives is just a given fact of life.  Markets and individual stocks are so highly correlated to the S&P because S&P index and future derivatives are the predominant trading method used to buy and sell this freak show of an Orwellian financial market.  In other words, computer programs buy or sell stocks in massive lots.  So, everything either goes up or everything either goes down.

I talked to an individual who was a member of a subscription trading service that heavily used derivatives in its strategies.  I told this person for months that they were playing with fire and at some point in this environment there were likely to be counterparty losses that would leave them holding the bag.  Indeed, this subscription service was using MF Global and lost all of its account for that very reason.  What I told this person was going to happen eventually came to pass.  Picking the dates for much of these dynamics and others are nearly impossible.  But as we have often discussed, this dynamic could clearly manifest itself in a much broader dynamic at any point in time without warning.  In fact, as Nomi Prins pointed out in a link I provided some months ago, Goldman Sachs apparently was covertly bailed out by the Federal Reserve late last year for a bad bet.  Without that bailout, we may have had the makings of another counterparty crisis on our hands.  So much for Obama's rhetoric during the State of the Union address that we would never bail out Wall Street again.  The Federal Reserve's actions continue to regularly bail out systemic incompetence in these systemically-dangerous firms.  The IMF, a tool of U.S. hegemony, even labels Wall Street firms as systemically-dangerous.   But politicians do nothing.  The only question I have is the president simply ignorant of what the Federal Reserve is doing or are his remarks disingenuous?  I would say the president is most likely an honest, although I believe very misguided, person so it's probably ignorance.  I only say this because I have yet to actually hear more than a few politicians ever utter anything intelligent about monetary policy, economics or Wall Street.

Back to the correlation dynamic.  A program I use to calculate correlation shows the equity market and many other financial markets are correlated to the S&P between 98 and 99.4%.  Pull up a 10 minute forex chart in real time and its actions will match that of the S&P exactly.  The same goes with Apple, as an example.  Or crude oil.  This is the manifestation of Frankenstein finance where markets move not because of fundamentals but because of massive computer programs using leveraged derivatives.  Leverage enabled by a corrupt monetary system.  Skynet is running global financial markets.  The outcome will be similar without reform.  That is, disaster.

As we have uniquely discussed before, there is not enough demand for all of the financial wizardry that the psychopaths on Wall Street have created.   There are two fundamental reasons for this.  The primary reason there is not enough demand for traditional investing instruments such as equities and bonds is because Wall Street has shut down the money supply to our economy over decades of ever-increasing monetary treason.  That is why poverty and unemployment is rampant.  There is no money in our economy.  It isn't because people are lazy or stupid or uneducated or unskilled other equally ludicrous bullshit reported by the carnival barkers in the mainstream media, politics, human resource departments and corporate executive offices.  There are endless skills available in our economy.  They just aren't skills that necessarily serve the needs of the corporate state.  The second reason there isn't enough fundamental demand is that Wall Street has oversaturated financial markets with derivatives.  In other words, they have financialized every single speculative con game one could imagine using some type of derivative.  So, only "professionals" or Federal Reserve-funded institutions that are given endless supplies of free taxpayer-funded money have the depth of liquidity available to gamble endlessly in these schemes.   And, because there is no transparency into these products, these derivatives are used to prey on our schools, our corporations, our municipalities, our airlines and our citizens as counterparties.   With counterparties evaporating because of the self-fulfilling economic crisis Wall Street has unwittingly created, the only way the system as it is structured can replace that lack of fundamental demand in both of these situations is through the use of leverage.  Derivatives.  That is the only way financial markets are being levitated with a lack of fundamental demand.    That is even how Treasuries are being levitated; the Fed is leveraging up its balance sheet with Treasury purchases in lieu of fundamental demand.   This is all like the housing bubble except the leverage today is massively greater.  Millions of times more leverage in some instances.  I haven't been pounding my fist on the table for seven years that this is the biggest financial bubble the world has ever seen just because I'm bored.  We are living through history and massive change is headed our way.  Massive.  It isn't likely to be willing change either.  But change foisted upon us because of the inevitability of unsustainability.  There is absolutely no concept of risk on Wall Street.  How can you manage risk with leverage as we are seeing it?   All Wall Street CEOs, every politician involved in oversight of financial markets, all financial regulators and everyone at the Federal Reserve, CFTC, and other oversight agencies are systemically-incompetent for allowing this Frankenstein to continue to grow.

We wrote a few weeks ago that seven days out of more than one hundred comprise the entire move of this rally in the last five months.  And, not only that, but volume (liquidity) is horrendous and getting worse.  You can see this in graphical form on the second chart below.  The second chart is also the SPY ETF but it is not a standard candlestick chart but instead a candlevolume chart.  In other words, the width of each candlestick is the graphic representation of that day's volume.   Now, in addition to gaps, on this graphic we see the horrendous upward volume of this rally compared to substantial downward volume we saw in the correction last fall.   Recently, the upward candlevolumes are so small, you have to squint to see them.  Well, if you are my age, you do.  Low liquidity, highly leveraged, completely correlated rallies are not a sign of a healthy market.

Click for larger view

Click for larger view

What is happening in financial markets is the same thing that has happened in our economy over the last three decades or so since corporate power and elites have corrupted our political system.   In other words, monopoly is no different whether that is the market for capital, global economics or financial markets.  The same impacts on supply and demand affect the price of wheat also impact the price of equities or the financial derivatives markets dominated by quantitative finance.  As we have discussed, CDO prices don't represent anything other than a criminal enterprise manipulating the debt of Italy or Greece for personal gain at society's expense.  Equity prices don't represent any reality beyond the endless supply of money granted financial criminals to speculate prices higher and higher over the last twenty years until now the average equity price is massively overvalued comparative to even 1929 when prices collapsed 90%.  Earnings mean nothing to the future valuation of equity prices regardless of what intellectually-deficient Wall Street mobsters say.  It's all about supply and demand.   You simply believe they are intertwined for factors associated with correlation rather than any causational metric.

I want readers to consider something when looking at these charts.  Something we have discussed at least a dozen times since the rally started in 2009 and some of which we have discussed since our first posts on monopoly and their causational effects on economic depression seven calendar years ago.  These are dynamics no one else in the economic or financial community have discussed in that period of time.  If you don't understand the illness, how can you prescribe the appropriate cure?  What has happened with Wall Street's rigging of the game is that the corrupt Wall Street monopoly in financial markets has forced out more and more competition or counterparties in these markets.  Think of this as a rigged game of poker, if you will.  There are certain players whose bets are constantly being replenished by an endless supply of money.  And, they are actually able to see the other player's cards.  In other words, the game of poker is rigged.  Other players, or in this case, counterparties, have limited funds and no access to other player's cards.  Eventually, Wall Street is going to bet the other players or counterparties with limited funds out of the game.  So, these counterparties must eventually leave the game.  As time goes by, financial liquidity is drained out of markets and fewer and fewer counterparties remain, thus concentrating risk and loss.  This is the dynamic of monopoly applied to Wall Street's financial scams.  This dynamic is driven by an economy that isn't spinning off any capital creation or enough new investment to feed the financial Frankenstein.   And, the economy isn't spinning off any capital creation because Wall Street, and even non-financial corporations, control our money supply and are therefore choking off economic activity.  That rigging, both by financial firms and multinational firms in every industry, are diverting money out of places like Detroit, Cleveland, Buffalo, East Los Angeles and other areas of extreme poverty in our nation.  As that dynamic intensifies and affects more and more counterparties in the underlying economy, over time the middle class ends up as a loser in the rigged game, the tax base disappears and economic winners become concentrated into the hands of a very few.  Typically, those very few are the most willing to do whatever it takes to get to where they are.

"Power tends to corrupt, and absolute power tends to corrupt absolutely.  Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or certainty of corruption by full authority." -- John Dalberg-Acton

So, with this dynamic, eventually quantitative finance are the only players left in the game.  Not only the game in financial markets but in the economic game.  So, we cheer these criminals as our economic heroes and young students rush to Harvard and Yale to learn how they can get to be a part of the rigged game.  Unwittingly, of course.  And, our society's values are then mocked and turned on their head.  Greed becomes good.  Virtue is for poor bastards.  All while engineers and scientists can't find or create sustainable employment because Wall Street is choking off our economy more and more over decades of bribery and collusion to rig the game of for-profit banking.  So, what do engineers and scientists do?  They adapt to survive.  They go to work on Wall Street to feed this Frankenstein even more.  They follow the Marching Morons we have written about.  They follow the most systemically-incompetent forces in our economy in order to make a living.  That would be the Wall Street banksters.

We have seen this market-rigging dynamic that eventually crowds counterparties out of financial markets  developing for a long time.   It started decades ago.  That is what happened in 2008 when Wall Street was trading mortgages.  That is also what happened with MF Global a handful of months ago.  MF Global made enormous bets but were a weaker hand that the Wall Street's rigged monopoly torched.  Ditto with Barclays that just reported massive losses trading commodity metals.  Even Goldman Sachs who had substantial losses in forex trading late last year.

As Nomi pointed out in her post, Goldman's forex trading losses added up to gains shown by other large firms.   And, Wall Street firms that just a few years ago were reporting profitable trading days every single day of its quarterly results, are now starting to report large losses on many days.  To compensate they are upping their risk profiles.  In other words, adding even more instability into the system.  Do you know what rising bad bets at major financial firms means?  The virus of economic suicide that Wall Street has created, the economic model of the United States, is working through to the very top of the economy.  With counterparties traded out of financial markets, Wall Street is now eating its own.  We have large, systemically-dangerous financial firms now betting against each other.  That is exactly what happened in 2008.  With counterparties gone, Wall Street is now taking major bets against other major international financial firms in order to keep this abomination going.  The financial reform act did nothing to solve anything.  As we wrote, it was simply more red tape meant to rig a corrupt game in Wall Street's favor.

So, in the future, we could expect to see substantial losses and even failures in derivatives markets as counterparties make massive bets against firms without the necessary liquidity to make payoffs.  Wall Street has essentially opened Pandora's Box by creating a self-fulfilling liquidity trap of sorts.  If Wall Street continues to make these massive, unfunded bets against other equally systemic firms, they will continually require the Federal Reserve/other central banks to squirt more money into financial markets or monetize more government bonds to inject more money into the economy to re-liquidate counterparties to their betting parlor.  Endless bailouts be they covert or in the open as was 2008.

Look, we wrote this was going to eventually happen literally at least a dozen times over the years.  Wall Street has won nothing through the bribery of politicians and rigging of the economic game.  The virus is instead working its way upward and will eventually infect the entire system without reform.  There's no way to stop the virus without transformational economic and monetary policy reform or more and more bailouts.  Monopolies crowd out competition and money.  That is what has happened in financial markets as well as the economy.  Wall Street has unsuspectingly sealed its own fate due to its endless greed, corruption and manipulation.

Money's velocity hasn't imploded because of a massive debt burden.   The massive debt burden exists because true economic monetary velocity has been imploding for decades as corporations gained greater and greater control over our money supply.  That people show monetary aggregates exploding higher and warn of inflation is ludicrous.  It shows how little anyone in the system actually understands.  There isn't a mainstream financial blogger, economist, Wall Street "expert" or politician who seems to get it.  Millions of Americans get it because they are living it.  Trickle down economics and private, for-profit banking are both a fucking joke.  Excuse the French.  I am bored of politically-induced freedom fries.

When an engineering firm can manufacture the next iPhone in our country or a shoe designer can manufacture shoes in this country, and this is accomplished through a living wage, our democratically-guaranteed economic determinism will be realized.  Our economy will then be on its way to recovery.  And, we don't need President Obama or any other politician being the gate keeper to economic freedom by telling us who gets subsidized for investing in the U.S. and who doesn't.   That's more political dunces picking winners and losers.   That's why we are in this mess.  We need democratic economics not political economics.  Only the government can fix this mess by unrigging the game they rigged to create this mess.

Does anyone buy the endless rhetoric that this environment or our economy are ever going to recover through some magical words of a politician?  Is our economy better than when Obama took office?  Are you kidding me?  Tens of trillions of dollars in bailouts and backstops, more homeowners wiped out, no increase in employment, jobs continuing to be cut and replaced with lower wage, often benefit-less jobs.  Republicans or Democrats, it doesn't matter.  It's right versus wrong and they are both wrong.

"A leader is best when people barely know he exists.  When his work is done, his aim fulfilled, they will say, 'We did it ourselves.'."-- Lao Tzu  

We need government leadership that knows how to lead.  Not another talker like Obama or bankster like Romney or demagogue like Gingrich.  Someone who knows how to unleash the creativity, desire and ability of any and all Americans who have an ability to create and express themselves economically.  We need a monetary and banking system controlled by democracy to serve democracy.  We need to restore merit and virtue to leadership and economics.  We need an economic constitution and a public banking system.  We need to ban corporate personhood.  We need one person, one vote publicly-financed elections, and not a rigged election process controlled by money.  When that happens, politicians won't be able to tank our economy regardless of how much buffoonery they can dream up.  Let the government do what government is supposed to do.  Help those who cannot help themselves, provide a fair set of rules provided for economic creative expression, make investments that benefit and protect democracy and provide for the defense of our nation.

Get the Marching Morons, who rigged the game from one of freedom to one of control, out of our economy and our politics and let the citizens of this country do what we do best.  That is, repair the damage caused our economy and our democracy by financial criminals and political idiots.
posted by TimingLogic at 11:14 AM links to this post

Tuesday, February 07, 2012

Romanian Government Collapses Under Peaceful Pressure From Citizens

I’m not going to sit here and write the same story every day - Europe as it is configured under the euro is toast without reform.   All of the daily nonsense of euro-zone bureaucrats and the European Central Bank are meaningless.  They are simply playing  Whac-A-Mole.  It is lipstick on a pig meant to deal with crises they see today rather than any sustainable reform. 

We discussed that the euro was headed for serious issues long before any crisis was present.  In fact, when the generally astute Marc Faber remarked that the euro was a legitimate and safe currency comparative to the dollar’s illegitimacy I mocked him for such nonsense.   Not one of Faber’s greatest moments and a sign of how his emotional bias deluded reality from his thinking.  ie, He was living in a fictional dream world that only existed in his mind.

Romania is simply the latest in a long line of illegitimacy that is collapsing around the world.  Mock crises requiring nonsensical and corrupt austerity sacked Romania’s leadership.  

All authority other than the rule of law protecting the rights of self-rule and economic determinism are illegitimate.   There is no crisis in Europe except one that has been created by a blatantly corrupt ECB and unelected and unaccountable Euro zone leadership.  Peaceful protests drove this outcome.  Not violence.  Not war.   The only way to affect permanent and lasting change, other than stopping psychopaths like Hitler,  is through peaceful activism and the peaceful restoration of reason and the rule of law.   Romania’s government fell because it didn’t represent those universal truths. 

“Unthinking respect for authority is the greatest enemy of truth” – Albert Einstein

Today, reason, truth and the rule of law won.  Unjust tyranny lost.

Title link here.

posted by TimingLogic at 5:44 PM links to this post

Monday, February 06, 2012

Public Citizen’s Live Discussion With Jack Abramoff About Lobbyist’s Legalized Bribery

Tune in here at 1 p.m. EST on Monday, February 6, 2012, for live streaming video of a discussion with Jack Abramoff at the Washington, D.C., headquarters of Public Citizen.

Abramoff was convicted in 2006 on charges of fraud, corruption and conspiracy, including bilking millions of dollars from Native American tribes who hired him to help them open casinos. Since his release from prison in 2010, Abramoff has been speaking out against his former occupation, now characterizing lobbying as legalized bribery.

posted by TimingLogic at 10:31 AM links to this post

Sunday, February 05, 2012

Graphene Computing For Your Head

Even though I have been out of the computer-semiconductor design space for some time, I still closely follow research into quantum wells, quantum computing, solid state design and computer architecture.  Nothing has really changed in mainstream computing for a long time.  The software tools are better and the hardware is faster-smaller and the technology to create semiconductors is more advanced but the bloviating that we are going to see a  computer with human abilities is nonsense unless we see an exponential leap in the understanding of human consciousness, the human mind (Not the brain but the mind.  I have a sneaking suspicion that science is completely wrong and that it wasn’t the evolution of the human brain that led to greater abilities of our mind but, that in fact, it was the human mind’s greater abilities that required the development of a larger brain.  Physics and an understanding of basic laws of nature would tell me I could possibly be more accurate in that statement than Darwin ever was.  Darwinism is so inconsistent with so many fundamental theories of basic science.  The mind is not the brain, folks.  It’s kinda like that chicken and egg thing.) and the dynamics behind the creation of intelligent life.  In order for that to happen, additional capabilities within the human mind will need to be unlocked or evolved to discover well beyond what is now known.  That may be happening as I type this without us actually realizing it.  

I would suppose the ability to create intelligent life, as defined by human ability,  may never happen for one very simple reason. (That is, if biological research, which is often unregulated and therefore steps over the line of bioethics and safety, doesn’t open Pandora’s Box and send us all to an early retirement and a dirt nap.)   It is the same reason that ancient yogis, philosophers and other masters of consciousness have known for thousands of years.  That is, if human consciousness is beyond the ability of the human mind to grasp, we will never produce that type of ability.   If you are questioning what I mean by that, maybe its easier to understand that chickens didn’t hypothesize Einstein’s theory of relativity.  In this case, we would be the chickens.  A little bit of you don’t know what you don’t know or as politicians generally understand it, ignorance is bliss.  Today, we literally have no idea what the human mind-brain is or what it is capable of.  If you think you know, you are so lost that you’ll never get it.

I see some who pump some convergence of human intelligence and computer intelligence or artificial life with abilities far beyond that of humanity.  In actuality, that’s just a lot of bullshit and hyperbole meant to sell books or self-importance. 

Now, as a seeker of truth and an unconditional supporter of ethical science, we should never give up on the purity of the search for truth that science represents.  But the whole creation of intelligent computers reminds me of the scientists who were telling us sixty years ago that commercial fusion was just around the corner.  Sixty years and billions of dollars later, we know more of what we didn’t know then and that’s about all we know.  ie, We are less ignorant but still wildly so.   

One of the more practical innovations in computing research over the last handful of years has been in the area of graphene.   Graphene offers the the potential of a quantum leap over any existing silicon-based technologies.  Speeds (1Thz and beyond) and three dimensional densities that could create systems with processing ability as powerful as any that exist today that you would wear on your wrist.  Or in your head.   Who needs a laptop or iPhone?  You wake up and tell your head to log into the wireless global network.  (There is hope yet for Rick Santorum and Newt Gingrich.)   I was wondering if Sofia Vergara is logged in today and if we could do a mind meld.  Just curious.  Don’t get all pissy. 

Recently, there have been two exciting announcements in the field of graphene transistor research. 

Graphene transistors compatible with living cells. 

Graphene transistor goes vertical.

Graphene transistors could herald more computing power.

posted by TimingLogic at 6:15 PM links to this post