Under Pressure

We noticed the following chart and subsequent commentary from Investment Research Dynamics.

What are we to make of the information presented?

Market manipulation.

And no, there has never been such a sustained absence of volatility historically.

The FED wants to insure any volatility remains in check, for if the beta became uncontrollable, things could unwind in high velocity.

Although we have no documentation, it appears certain the FED is buying and selling stocks when the deem necessary to stop any downdrafts from gaining traction.

This cannot continue, as the market will take control of itself sooner rather than later.

We have great respect for the thinkers over at Investment Research Dynamics, particularity their spot on analysis of the capital markets, although we do part company politically on occasion.

IRD nails it again, and it is warning you should heed.

The U.S. collapse will happen either now or later. For the latter outcome, at some point the Fed will need to print 10’s of trillions of dollars to prevent that horizontal line on the graph above from turning into a downward-pointing near-vertical line. Of course, please review the history of Germany circa 1923 to see how the money printing alternative worked out…

Folks Are Placed In A Stranglehold

An article turned up on CNBC today that seemed to catch many economists and pundits by surprise, although it has been painfully obvious to anyone not slanted with Obamavision for over half a decade.

Please see the following pull quotes from the piece, which notes a what can only be described as increasing economic issues that are not only delaying millennials from purchasing a home, but from fully achieving milestone of life.

"The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33—in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments. Increasingly, too, they're facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports".

The greater majority of the issues plaguing the millennials, and the entire economy, are due interactions of the government.  Among the negative governmental influences have been the flooding of the market with money, which devalues assets and is inflationary, increasing taxation and regulation, attacks on small businesses and increasing infiltration in markets creating inefficiencies.

Due to these improper, and in many cases illegal decisions, the economy has been in an orchestrated decline. Our opinion for the reasons the administration would engage in such activity centers around the administrations effort with regard to the transformation of wealth, both an a micro domestic and macro global level.

At any rate, there have been scores of negative byproducts from these efforts, and for those seeking home ownership and unable to make that jump and boxed in the rental market, it should not come as a shock that rental rates are skyrocketing, hitting "crazy levels".  As such, escape from this viscous circle becomes increasingly more challenging, and folks are placed in a stranglehold.

As, professionally, we operate in this space, we so appreciate those that have chosen one of our properties to make their home over the years, but we note with sadness the increasing degree of difficulty faced by those who seek to climb the latter and purchase a home.

The economy is a wreck, and expenses and inflation are outpacing rises in income for those who do have meaningful full time employment, which decreases monthly with 94 million Americans underemployed or unemployed.

We know who is responsible for placing hard working Americans in this status, although many do not given the propaganda put forth by a complicit media and outright lies being told by Obama administration officials (unemployment rate is top example).

Elections have consequences, and we are paying a heavy price for 2012.

Cash is King

Recently, trial balloons regarding the move to a cashless society have been appearing in various media outlets.  Among those who champion this effort are Bill Gates, an elite progressive who along with his colleagues conclude that the ruling class can make your decisions better than you can, given their elite intellect.

While a cashless society seems pretty cool and reasonable on many fronts, including efficiency, the effort to push the idea is not by accident, and should be considered yet another clandestine effort to seize additional control over the citizenry.

In the aftermath of the housing bubble crash of 2008-09, which decimated wealth and left the economy staggering, President Obama and his team, in concert with the FED, made incorrect decisions that are cascading negatively behind the scenes.

The stock market has almost tripled since '09, which is good news; unless you note the money supply is up over 5 fold during that time making your investment worth less. Legalized theft. So, all the big banks got bailed out, but who bailed you out?  Nobody.

The slate is indeed about to be wiped clean, and arenas to hide in are very limited, and the collective damage could knockout the US economy,  which would likely have a nasty ripple effect globally.  Would the IMF step up to bail the FED out, and what price would US sovereignty pay for such action?

Or will you bail the US out?

In 2013, the Cyprus government took, or stole, approximately 10 percent of cash deposits from its citizenry without consent as a described "bail-in" to help the crumbling economy gain solvency.  Should the United States suffer an unprecedented crash, don't think for a moment it could not happen here.  It would be much easier for the government to seize cash in a digital economy than to confiscate cash from the citizenry.

But that is not all.

Have you ever had a credit card cancelled, or had your available charge amount decreased?  In a cashless society, just so to limit risk on potential defaults, your purchases may be declined by the ruling class who deem you incapable of making correct low risk purchases.

With the government in charge of health care, items in your grocery cart may be declined for purchase because they do not fit the dietary regime you have been placed on by the food police.  No chocolate cookies for you!

2015 V8 Chevy Camaro

That new 6.2L 426-horsepower V8 Chevrolet Camaro you have been saving for simply does not meet the common guidelines for fuel mileage and is deemed a threat to the governmental efforts in combating global climate change; therefore, that purchase will not be granted through your bank. And cash is not legally accepted.

The list could go on, and on, and on.

While progressives make the push for a cashless society to become a reality, many are aware of the ominous threat to our freedom it really is.  Martin Armstrong, over at his Armstrong Economics blog, has an in-depth and outstanding piece where he discusses The New Age of Economic Totalitarianism.

Signature Bank Chairman Scott Shay was recently on CNBC discussing this topic, and wrote an essay noting the wide ranging threat to our freedom a cashless society is. As noted in the excellent piece attached, it would be most wise to keep your hand invisible to an oppressive and untrustworthy government.

"This would be the ultimate form of control. Because – without access to money – people couldn’t resist, couldn’t hide and couldn’t escape".

Forget going off the grid with any measurable success.

While a cashless society may ring logical to many, for those who embrace freedom, cash should always remain the base of financial operation in free markets eliminating potential manipulation.

After all, cash is king!

Counter Security

Lt. Col. Allen West, former republican Congressman from Florida, recognizes some very troubling facts regarding President Barack Obama and his leadership of the United States of America.  Back in August, West published on his website six examples of the Obama administration "purposefully enabling the Islamist cause".

It is unfortunate a large contingent of our citizenry is, as Aldous Huxley so brilliantly predicted, drunk on a sea of irrelevance; unwilling and/or unable to recognize the damage being done to our system of government.

With the media criminally negligent in failing to report the actual events taking place in various arenas, inclusive of the monetization of the debt, real unemployment numbers and engagements in international relations, it is increasingly difficult for the average citizen to make heads or tails of the going on.

As such, the citizenry relies on reported rhetoric rather than being able to decipher actions undertaken.   A determined examination of the actions of the Obama administration foreign policy in the middle east would lead the examiner to ponder decisions seemingly against previously established relationships, and as West noted, counter to the security of the United States of America.

Discarding the many false premises presented by the propagandist media and President Obama and his representatives, a non-biased look at the facts would find the conclusions drawn by Lt. Col Allen West as reasonable, credible, and sadly, true.

Tacking Tangible

The market indexes have been on quite some run.

If I could get a handle on all the lines of action going on on Wall Street, not only would I be a ventriloquist, I would be beyond wealthy. I am not.

The FED has increased the money supply by engaging in monetizing the debt, otherwise considered printing money, and that has resulted in excess money chasing too few assets, pushing the asset prices higher.

Due to the abysmal housing market, which cannot gain ground due to a horrendous job market and extensive regulation through Dodd-Frank, real estate investing has not been the avenue of choice for investors.  Gold and the stock market has.

A review of the NASDAQ after the close today shows the index increasing five year highs, and this has been a great run if you have been along for the ride. Take a look, but note the market level variance from the relative strength:



Weekly NASDAQ chart/Investors.com

While markets are forward looking and do not always reflect the current status of the economic realities on the ground, given our economy, it is reasonable to conclude the stock market should not be lurching into a parabolic assault on historical highs.  With an employment participation rate having retracted to levels not seen since the Reagan administration, a manipulated unemployment rate parked at levels not witnessed since The Great Depression, governmental assaults on small business, class warfare on the wealthy and putrid growth in the Gross Domestic Product, one has to wonder why the dichotomy between the capital markets and the reality on the ground.

As the excellent blog Zero Hedge accurately pointed out, many economic measures are breaking down, and while the Case Schiller Housing Index has shown signs of life depending on how you analyze the data, even though a shadow inventory remains, the housing market remains bottoming.

If housing is improving, with the state of the economy, one must conclude rising investor participation as first time home buyers are scarce.  If investors are becoming more interested in real estate, what market has fallen into disfavor and why? The stock market?

Indications are yes.

In fact, as BloombergBusinessweek reported, some $114 billion US Bank deposits have been withdrawn, at the fastest pace since the September 11, 2001 attacks. 

Apparently, few know why.

Paul Miller, a bank analyst with FBR Capital Markets, cautions against reading too much into the Fed’s weekly data. “It’s a noisy database,” he says.  No kidding.  With a media complicit in propaganda, and the FED intervening in market action in unprecedented levels, it is most difficult to accurately value equities.  It is the FED behind the curtain who is crowding banks out of the mortgage origination market and setting unreasonable credit requirements for lending practice, handicapping the housing market even with manipulated easy money.

But is there a correlation between rising housing investment and what looks to be a topping out of the DOW and NASDAQ?  Further, in anticipation of a market collapse, would tangible assets such as real estate become the favored investment?

Without government interaction, even though they have been replenishing their balance sheets borrowing free money from the Fed, banks could not withstand a major economic collapse.  Further, unwinding the hypothecation would be catastrophic.  If the clients of Jon Corzoine at MF Global are any indication, get your money while you can.  Maybe investors are.

No matter what market developments lay in store for us, a few things are certain in my view.  The housing market remains broken and cannot recover without a recovering job market. The market has been compromised and true evaluation is not possible. And, unfortunately and most notably, the rule of law and trust of the marketplace, integral for the survival of a free market capitalist system, has been violated.

As I have previously mentioned, until the rule of law is reestablished with the government becoming a bystander, allowing the FED to resume normal open market operations, the market place will remain compromised and a playground for the crony crowd.

Given the increasing turbulence, while I don't know what I am having for lunch tomorrow, I sense a major storm brewing both port and starboard. Caveat Emptor.

Inside Outside Upside Down

In my daily whip around the world wide web in search of credible information, I usually make a stop by The Drudge Report. In recent days, some of the stories I came across there echo what I feel in my gut, that the world has practically turned inside, outside, upside down.

Presented below are a handful of recent stories with some short commentary on each.

China downgrades US as our economic situation continues to worsen. China is not innocent in destabilizing trade and currency manipulation, but given they hold so much of our debt, we are in a pickle. Hopefully, we learned from The Great Depression that protectionism is not a prudent avenue to travel, but given our recent actions we have not. Not only are we engaging in dangerous trade policies, we are manipulating our own currency.

It appears there is an Orderly Decline of the Dollar taking place. Central to sound economics, and a pillar of the Reagan Revolution, is a strong dollar. With The FED exhausting the printing press, it would seem that our debt is being monetized, decreasing the value of the dollar, which is quite dangerous. Billionaire hedge fund manager George Soros, who Glenn Beck is accurately exposing this week, has called for global governance. Soros, who has crashed foreign currencies and is noted as the man who broke The Bank of England, controls through media operations and financial positions much of the progressive agenda wrecking our sovereignty. Through an orderly decline of the dollar, Soros and his agents can remove monetary power of the single largest obstacle to global governance, which is the free market capitalists of The United States of America. This is quite alarming, and even The Maestro, former FED Chair Alan Greenspan, is concerned.

Off the west coast, low and behold, we find Unidentified Flying Missiles. After decades of being spooked by the potential existence of spaceships and aliens, nobody seems the slightest bit alarmed that the apparent missile launch cannot, at least publicly, be explained by any US military or governmental official. Surely, with all the high level security we got over at Area 51, we can come up with something plausible. It seems the public thinks this is no big deal. Maybe Big Foot water skiing on Lake Tahoe would do it, but given the American Idiot society we live in these days, maybe not. Then again, what is this firestreak across the NYC skyline?

Obama Slams Israel yet again, which is the opposite position of every President of my lifetime. It boggles the mind how this guy got elected, but I can assure you the greater majority of the US citizenry does not concur with his repeated Israel bashing. Nor do we appreciate his continuing assault on America from foreign soil. Back in the day, this would not be tolerated, and should not be now.

Government Elites Living Large during high level meeting to discuss fraud in the stimulus package. The whole thing is a fraud, and the administration going around pontificating about the several million jobs they saved or created is nothing short of lying to the American people. This erroneous rhetoric raises my already elevated blood pressure. Since when do we tolerate our President lying to our face in discussion of his stimulus package, and then, having his administration slap us upside the face by having lavish meetings to investigate fraud in the package. I recognized the fraud the day it was announced.

A Stranded Ship Although I have always been a boater and have been offshore in my own boat on many occasions, I have always been inclined to steer clear of the cruise ships. Perhaps it is a control thing, who knows. Warnings after 9-11 about terrorists potentially unleashing some sort of deadly virus aboard one further extended my apprehension. I now read of a Carnival cruise ship floating powerless in the Pacific due to an engine fire, creating less than favorable conditions aboard while waiting rescue. No doubt, an odd turn of events which one would not wish to be part of. On top of that, the beer was warm.

Obama AWOL on Veterans as he barely recognized the heart and soul of our great nation, our Veterans, on Veterans day. The sacrifices made by our Veterans go far beyond what any words can describe, but one word I never hear from President Obama, is victory, Our country exists today because our Veterans were victorious. Today, Hail to the Victors! My heartfelt thanks and may God Bless You All!


There are many very puzzling things going on these days, so much so it seems that life has turned inside, outside and upside down. I conclude the worst is not behind us yet, so adhere to the principles of your faith, the founding fathers and free market capitalism to weather the storm.