Tag Archives: stock market crash

Deep State Stock Market Logic

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Download PDF Version Originally Published 3/13/2019

Even a modest bear market will go a long way towards destroying the deep state. Deep State operatives are buying outright to control the trend of the market.  What is their alternative?

The choice is to invest more outright or have ones wealth completely devastated by natural market forces. The Deep State has absolutely nothing to loose by using their own resources to support the value they already have. The only alternative is to absorb a guaranteed loss and run the risk of ceasing to exist. Continue reading →

The Political Battlefield

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There are three socialist armies currently vying for power. These are:

1.Non-Democratic Socialists Non-democratic socialism is my term. You won’t find it anywhere else. I use it because fascism is seldom used to describe an economic system even though that is what it is. Like the other two, non-democratic socialism is a system of economics by force. Continue reading →

Where Stupidity Rules

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NeumanAs Americans go about their daily lives as individuals, many are brilliant and completely adept at what they do. When they participate in groups or aggregations of people, all but a few are completely stupid.

Notice the discourse in the political arena. Do you hear are read anyone making well reasoned intellectual arguments as to why one way is better than another? How often are attempts made to get you to change your mind or adopt an idea without thinking? Look and read, you won’t find an exception. Politics is the art of getting folks to act according to another wishes without thinking. Continue reading →

Worshiping False Idols

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Natural law has preeminence over any principle derived out of human intellect.  This presents a problem for mainstream economists. The best sources of natural law are largely off limits to to academics. The ideal sources of natural law are found in ancient writings. The very best sources for Americans are the Old and New Testaments. Natural law is modeled in the stories contained in both books. When modern day activities parallel the stories in these books, it is easily noticed that there are common outcomes. Persons of antiquity thought very deeply and constantly looked for meaning. Now that knowledge has largely been reduced to letters, deep thinking is not that commonplace. People and institutions are observed according to how they are defined and not how they function. Packaged ideas are the norm. People and institutions are seen in terms of how we would like them to be and not according to the way they really are.

In democracy based governments citizens do not behave as modern thinkers insist they do. In these types of systems ordinary people are charged with controlling their various governments. What actually happens when leaders and representatives are elected? Citizens relinquish control and give it to those they have elected. The assumption is made that the motives of elected officials are pure as driven snow. This is complete fantasy. The practice of worship is not restricted to giving respect to and acknowledging a deity.  Humans are far more likely to worship each other than a supreme being. Leaders and representatives are worshiped as if they are in charge of providing essence to the population.  In the ancient writings this is called worshiping false idols.  Believing or not believing in God is a personal issue. One thing is certain. No living thing on earth is divine. The folly of worshiping false idols is constantly demonstrated throughout ancient writings.

Still mankind is prone to seek essence from higher powers. Higher powers are assumed to be possessed by all who govern whether elected or appointed. There may be no harm in denying the existence of a supreme being. There is great harm in deeming various individuals and institutions as being substitutes for a supreme being. Natural law guarantees that great harm will follow the practice of worshiping false idols. I will paraphrase the words of a very insightful person, Roy Masters. “Wherever you place your faith, there you unwittingly surrender your soul.”

The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

Fantasy Free Economics recommends the following blogs.

Woodpiler Report Of Two Minds Liberty Blitzkrieg Mises Institute Straight Line Logic Paul Craig Roberts

How Natural Law Works

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Mention the words natural law and what image does the mind conjure up? Say natural law and the brain might create for you and image of airheads living in communes preaching agape love. As a teacher of natural law, I treat the subject quite differently. Make an observation of a principle that works over and over again over all of history’s long timeline. Then, even with all of the effort in the world, folks can’t come up with a universally accepted, or even a good guess as to why it works. The cause is often unexplainable or elusive and not concrete at best.

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What a Real Bear Market Looks Like

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1929I will be clear. The economy in the United States is much worse now than it was in 1929 or in 1973. This will be the first economic collapse to occur following forty years of government intervention in the economy. Government has been supporting asset prices since 1987, off and on at first and finally on a daily basis.  Given the gravity of the current circumstances, the coming trouble will likely exceed what was experienced following 1929 and of course 1973.  Continue reading →

Stock Market Follow Up

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426537_img650x420_img650x420_cropLast week I made the point that the all of world’s money creating power will be employed in an effort to move the stock market higher during the time of year that is most likely to host a market crash. That effort is going on right now and that is why stocks are going up.

There are commercials on the radio advertising products to invest in to protect assets during the certain stock market crash that is just around the corner. A hand full of billionaires are now warning everyone about stocks being over priced. The only way a crash can occur now is for an huge negative external event to take place. Because of the nature of crashes, they don’t occur when folks are prepared.

Again, the various plunge protection teams around the world have unlimited funds to work with. They take no personal risk. Every day, just like today, key stocks on charts will look like they are just on the verge of breaking down. Experienced technicians will recognize the patterns. However, stock prices are not being determined by supply and demand. The overwhelming majority of traders, professional and amateur still believe stock prices are being determined just as they always have been. Short sellers are offering their necks to the high frequency trading firms.

Notice the stocks that have fallen off this fall. All but a few are the kind that earn actual profits, have real revenue and can’t make any pretences. Stocks where value is created by hopes, wishes and dreams are always first to fly higher. Moving the Big Cap indexes higher is always the first choice. If that doesn’t work efforts are made to move the mid-caps. If nothing else will move, the Russell 2000 gets goosed. On any down day that is initially uncontrollable, the high frequency firms start sending out feelers to find  any stock where shorts can be squeezed. Any time downward momentum slows the high frequency firm start stabilizing the price much like is done during new offerings. All consolidation patterns become bullish. Phone calls are made to firms with buyback plans assuring them someone has their back. Complex algorithms accomplish the simplest things. There is no need to know the formulas. These are some of the things the algorithms do.

The chances for a down market between now and 2016 has been seriously reduced. I am scaling back bearish positions. Patience will pay off. It looks like there will be more time to get short, unless of course the external negative event occurs. I will take that chance.

Two things can eventually happen and both are bad for the stock market. Americans who are dead from the neck up can come to their senses or the ongoing political agendas will do so much damage to the economy that even the hope and dream corporations will follow the path of stocks that have to rely on actual results that cannot be embellished,

 

 

World Series of Stock Market Manipulation

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indexFirst understand these things. Quantitative easing is a political agenda not an economic remedy. Economic forecasts coming out of the Federal Reserve have been wrong 100% of the time. Greek debt exceeds the assets of the Greek banking system. Friends of the Fed trade risk free as a reward to assisting the Federal Reserve in the execution of  its political agenda.

When there is an issue overhanging the market, central banks buy with both hands for the purpose of providing confidence to investors who still believe the financial markets are largely pristine. The worst time to short stocks, therefore is on a day or days when a global financial problem is in the process of running its course. As long as Greek insolvency is in the news, do not expect the market to drop.

Prior to the resolution of something like Greek insolvency, negativity is encouraged up until a particular day. This is to draw in shorts so that their stops can be run, driving prices suddenly higher. Short positions serve as demand for stocks on a day when bad news comes out.

After a strong opening, the averages are held in a consolidation pattern giving the impression that demand will soon give way to supply. All during the consolidation short sellers take positions waiting for the inevitable decline. Instead they get their stops run again and the market moves higher with a nice white candle.

Strangely, bears still haven’t adapted. They still use traditional technical analysis which only works in a market that is largely free from manipulation. This will change but it hasn’t changed yet. Usually the only cure for stupidity is suffering. Apparently bears have not suffered enough.

When will the market crash? Quantitative easing provides profits to those with the political power to control government. That is what Fascism is and it will eventually destroy even those who are reaping its early but temporary benefits. Misery starts at the bottom rung of the ladder and then starts moving up until the ladder just collapses. That could happen any day but on any given day, chances are that it won’t.

Never short. Just take positions in bear etfs on the S&P, Nasdaq and the Russell 2000. For now do not trade on margin and only use one third of your capital for etf positions. Odds still favor the Fed’s political initiative. Having cash is a priority. The best time to buy a bear etf is on a completely sponsored day such as what occurred on Monday. The market is being manipulated and this initiative will not be discontinued. It will end when it stops working. Then the market will crash.

Sweet Suzie’s Kool Aid, a timely tune by Curbside Jimmy

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Bull Market Over

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During the 1980s, while Ronald Reagan was president, government began tampering with the financial markets. In the spring of 2003 government started working aggressively with Wall Street to elevate asset prices. In spring of 2006, when asset prices were showing signs of weakness, Henry Paulson was named Treasury Secretary for the purpose building a larger and more active consortium to keep housing and stocks on an upward path. When this effort failed, TARP was passed partly as a face saving effort and partly to save the remaining assets of the politically privileged upper class.
Quantitative easing first under Ben Bernanke and now Janet Yellen provided unlimited funds for stock purchases. Laws prohibiting manipulation were not enforced. Friends of the Federal Reserve have traded risk free for three years. The U.S. Government has been reduced to an income redistribution engine. All laws that come before congress are for the purpose of rigging one market or another.
The poor and middle class have been robbed blind. Most are still clueless as to how the process has worked.
One by one the pillars of our free market system have been discarded. Central economic planning has allocated the nation’s resources so inefficiently that genuine growth is no longer possible. Government at all levels requires a high rate of growth in order to produce enough tax revenue to continue operating.
The bull market that began in 2009 has been politically engineered without much regard for the consequences. A hand full of billionaires has benefited and will never have any regrets. For all others, their financial futures have been destroyed. Most who haven’t already are going to lose everything they have.
But, it does look as if all efforts by all of the governments in the world are no longer enough to keep the market from falling. I do believe the bull market is now over.