Right now, thanks to the Fed, the dealer community, particularly the Fed’s Primary Dealers who dominate not only the Treasury market but the stock market as well, are rolling in oceans of cash, pumped directly to them by the Fed. They are using most of it to pay down debt by selling much of their questionable assets to the Fed, particularly mortgage debt and corporate debt, but they are using some of it to manipulate stocks higher. They do that because, one, it’s easy for them to do it, and two, because it’s much easier to get the suckers, oops, I mean the buy side institutions, to take the other side of the trade when prices are rising.
So as long as the Fed pumps this cash to them, stock prices will go up. It has nothing to do with the economy. It has nothing to do with discounting the future. The idea that stock prices discount the future is ridiculous. Stock markets are comprised of people, or at least the people who wrote the computer programs that do most of the millisecond trading that dominates price action. .... The media continues to feature the same people telling the same idiotic stories, pursuing the same tried and true practices of distributing insider stock, especially their own, at high prices to the masses. The cash goes right from our pockets to the pockets of the financiers, with the media getting a huge cut in the process. They are co conspirators in a massive criminal scheme, some of it legal, some of it not, to separate people from their money. This time they did it a little too well, and therein lies a problem for the economy. Few have any money left to transfer. The Fed and Treasury have set up a scam over the past year to make it look as if there’s still money, but what they have actually done is to transfer risk from the private sector to the public sector, in other words us, current and future generations of US taxpayers. In the process they’ve pumped a couple of trillion of new government debt into the economy and the markets over the past couple of months making it look as though everything is gonna be all right. .... In fact, things are getting worse as we speak, and they will continue to get worse for the short term, the intermediate term, and the long term– for as long as the same people are in charge who caused this mess in the first place; for as long as the media continues to give a platform to those same people who were responsible for all the–let’s call them what the are–crimes– that put us where we are. For as long as those in power in Washington give those same people the same power they have always had, rather than punishing them for their “mistakes”, we are going to be in this mess. So now we have transferred trillions of bad debt, some of it completely worthless paper, on to the books of the Fed and the Federal Government. What can the outcome possibly be? Ultimately default? Devaluation? Hyperinflation? Slow motion economic collapse such as that which is currently under way? One of the problems is that zero interest rates forces both people and businesses to liquidate principle in order to pay the bills. So the capital pie shrinks. A shrinking capital base means shrinking income. Shrinking income means that people will need to liquidate even more capital. The system collapses in a chain reaction." http://wallstreetexaminer.com/wp-content/uploads/2009/08/taxreceipts.png
"Meanwhile lending institutions and now the government pretend that the losses don’t exist, reporting unbelievably, that the money supply hasn’t collapsed along with everything else. They have no choice. They have to keep the con going, lest there be one final, fatal run on the banks and/or the money market funds.
The Fed’s zero interest rate policy is causing the very contraction it is seeking to avoid because it does not allow anyone to earn a fair and reasonable return on their investments. In order to pay the bills people and business must liquidate assets. At the same time, they are desperately trying to pay off debt. So the pie shrinks and money disappears. The media is the sole decision maker about who we get to pay attention to. If they feature only liars and fools, then of course it will seem that no one saw this coming. And they feature almost entirely liars, fools, and criminal manipulators. ....Because the media was and is a co-conspirator, witting or unwitting, with the Wall Street criminal distribution machine. The media is populated by conformist morons, too fat and lazy, too coddled by their Wall Street sponsors to be bothered by anything so mundane as to search for the truth. I mean, it’s not like it was hard to find. ...A whole lot of ordinary people “got it.” Only the mainstream infomercial media didn’t get it, because they are, after all, on the payroll of the Wall Street We are facing a crisis much greater than any we have faced so far. The Fed will not continue to pump cash into the pockets of the Primary Dealers indefinitely as they have been doing since March. When that cash gusher stops, or even slows, the stock market will again collapse. It simply cannot be sustained at these levels without that subsidy. They missed the biggest collapse in the last 75 years. Knowing what’s likely to happen is not their job. Their job is to talk a good game so that Wall Street can continue its game.
Ripping off the rest of us.
So Good Night, and Good Luck." http://wallstreetexaminer.com/get-instant-access-to-real-time-insights/
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