It’s (very) early Wednesday morning; and as I write, I can almost “feel” the banker-generated “eye of the storm” created by an historic mix of money printing, market manipulation and propaganda. No single issue stands out as any worse than the rest as we head into three days of potentially historic news flow. From this afternoon’s FOMC decision, to tomorrow’s ECB announcement regarding uptake of its “targeted long-term financing operation” money printing scheme, to early Friday’s Scottish independence referendum results and late Friday’s likely announcement that Moody’s is considering another French downgrade, the “wide world of horrible headlines” has never been uglier. Consequently, TPTB have maintained their ongoing market lockdown featuring a seemingly ceaseless string of “dead ringer” algorithms for the “Dow Jones Propaganda Average”…
…and “Cartel Herald”-imprinted caps of precious metals – in yesterday’s case, whilst oil and copper smartly rebounded; “same Bat-time, same Bat-channel”…
Throw in the “coincidence” that the all-important 10-year U.S. Treasury yield “magically” levitated back to the 2.6% “line in the sand” we wrote of four months ago – whilst simultaneously, Germany issued two-year bonds at negative rates – and the perfect “trifecta” of manipulation couldn’t be more obvious to all but “those who refuse to see”…
Regarding the Fed’s decision, what better way to describe the brainwashed madness of today’s rigged markets have promulgated? As the global economy crashes and burns, what’s left of the “investment community” debates whether the Fed will remove the words “considerable time” from its six-month propaganda that “the Committee continues to anticipate that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.” The fact that anyone still believes a word they say, or has the slightest modicum of belief in either its predictive skill or response effectiveness is beyond us; yet again, attesting to the near-term power of market manipulation.
As we noted yesterday, even Fed governors can’t be foolish enough to realize we’re amidst a massive global economic collapse and thus, even the slightest rate increase could destroy what’s left of it. This is why the aforementioned, infinitesimal goosing of the 10-year Treasury yield from 2.3% to 2.6% yielded the largest monthly plunge – to 14-year low levels – of mortgage purchase applications in a decade; and why further increases, no matter how miniscule could have catastrophic ramifications. And not just for the economy, but the stock markets they so vehemently protect. This is why the Fed’s “mouthpiece,” Jon Hilsenrath of the Wall Street Journal published yesterday’s article predicting “considerable time” will remain in today’s statement as the blatant collusion between the “evil troika” of Washington, Wall Street, and the MSM reaches new heights of transparency.
Yesterday’s “surprise” $80 billion Chinese QE announcement, its second such action in six weeks dramatically increases the odds of ceaseless Fed “co-operation” – which is probably why this morning’s mindless Yahoo! Finance headline reads “Fed, China stimulus hopes boost shares.” The fact that four rounds of QE – let alone, countless overt money printing schemes – has left America’s economy and financial situation in ruins; or that the PBOC’s unprecedented money printing spree has had as much impact on China’s economy as the BOJ’s ten QE rounds on the Japanese economy is not even a consideration in today’s 100% rigged markets – as the historically gaping level of financial cognitive dissonance mushrooms further. But trust us, in time – perhaps, far less time than most can imagine – the chickens will most certainly “come home to roost!”
Zero Hedge
Back to France, which we deemed an honorary “PIIG” two years ago – actually, a “PIFIG” – I’m not sure how more vociferously we can shoutas to how dire Europe’s political, economic and social situation has become. We continue to believe it a fait accompli that the European Union will eventually dissolve – either via secessions or expulsions; and if you think Scots are dissatisfied with the UK’s oppressive government, consider that with Francois Hollande’s approval rating down to an astonishing 13% – quite the infamous feat after just two years in office – the front runner to succeed him is an ultra-right radical, not even in one of France’s two major parties. As for Scotland, where I can only imagine how intense emotions have become ahead of tomorrow’s historic referendum, keep in mind that 88% of all independence referendums – over the past two centuries – have resulted in “yes” votes. Nothing would make us happier than seeing the imperialist, world-destroying English government taken down a notch, although we pity what the British population will endure when the UK Parliament “responds.”
Finally, I wanted to comment on the historic news yesterday that America’s largest pension fund, “Calpers” (California Public Employees Retirement System), has decided to discontinue the use of hedge funds as an asset class. In January 2013’s “Hedge Bombs,” I averred that “in the big picture, hedge funds are nothing more than a Wall Street SCAM.” Six years of market underperformance don’t lie – despite the tailwind of historic money printing and PPT support; and as far as we’re concerned, the sooner this economic cancer – “activist shareholders” and all – is eradicated, the better off Americans will be. It took me but a few months to realize this when I worked as a hedge-fund – or per the lingo, “buy-side” – analyst/trader from 1996-98; and thankfully, a mere 16 years later, Calpers realized the same.
And thus, when this week’s flurry of “horrible headlines” emerges, nearly guaranteed to validate what we have written these countless years, and TPTB attempt to “spin” them by manipulating markets, keep in mind what Bill Holter wrote yesterday of the paramount importance of deceiving the masses in these historically “horrible” economic times – as the inevitable “end game” of history’s largest fiat Ponzi scheme approaches its cataclysmic end. In the words of the great Ernest Hemmingway, “the first panacea for a mismanaged nation is inflation of the currency; and the second, war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
