Bankstas At War

European Theatre

Just like the 2008 mortgage debt crisis we have a sovereign debt crisis in Europe. The major question is who is going to end up paying the bill? Will risk be again privatized by banksta’s with their politicians and socialized by the people?

The Big Picture – One reason why the NYT is the world’s most respected newspaper is they come up with outstanding charts and information “A Spectators Guide to the Euro Crisis”

800 LBS Gorilla – Hidden Derivatives Market

The NYT chart shows what happening on the surface. The real picture is full of smoke and mirrors because, just like the 2008 meltdown, the 800 pound gorilla in the room is the opaque, unregulated, derivatives market. Remember – Warren Buffets calls CDS’s (derivatives) “Financial WMD’s.”

Quite simply, once again, who knows what the exposure any major financial company is?  Remember – how interconnected  AIG was? MIT Economist Simon Johnson does.

Do they make a calculator big enough to measure the profits that banksta’s made off the European countries with debt problems in the opaque $500 trillion derivatives market?

Whose going to pay? The too big to fail interconnected (both globally and politically) banksta’s, the bond holders, or the people. The prevailing powers in Europe are now suggesting a 50% haircut for bond holders of Greek debt. (the most pressing problem country)

The austerity measures (raise taxes, fire workers, sell national treasures) imposed on Greece, already with 18% unemployment, would put the country into a long depression and benefit the financial elite who will pickoff Greek assets at fire sale prices. Bankstas war against people by Economist Mark Hudson quantifies this.

We have a broken globalized financial system that benefits a few at the expense of many. Banking used to promote growth, not make hidden bets (CDS’s) on repackaged debt. Profits gets privatized and risk gets socialized.


Two groups with very different solutions passionately recognize privatizing the gains and socializing the risk is tearing down the financial stability of western democracies.

Poverty creating casino capitalism is being fought by both Libertarians (Ron Paul) and the Occupy Wall Street believers. (the 99%)



Why the Rally – The perception by major market movers that in Europe the gains is being privatized and the risk socialize. Best measurement of this would be German financial companies- Thought to have largest exposure to European debt. Second best German stock market – Up 1.5% at 8:15 this AM.

  • Our #1 forecasting tool MO rose to 91.33. OMG overbought levels. The highest in 3 years. = BEARISH
  • Our #2 the PCR rose to 0.96. Shows pro’s who trade Puts and Calls are not very worried = Bullish
  • See Strategy section of blog for more on MO & PCR

Reading Tea Leaves

Same as yesterday – Right now the news out of Germany trumps everything – Their financials move higher and so does everything else. Pro’s are bullish (PCR) takes some of the sting off how overbought we are (MO).

Traders - rallies in the AM, should be met by selling in the PM.  Because  like the MO and virtually every oversold/overbought indicator like it is so high.

Investors – Technically we have broken out of this summers trading range – That’s bullish and the long Term Outlook is now CAUTIOUSLY BULLISH. More often than not we retest breakout levels. However, Investors411 is nibbling on the SPX. (Any ETF that tracks this will do) It was chosen because it tracks the S&P 500 and is relatively safe.

JS suggests the SSO and The Critic suggests FAS (although she has a Put/Call play on this.)  Both are good but involve more risk.

Paul tells us there is great risk out there – he’s right. Paul is at a HGSI stock seminar in CA this week.

Bottom Line - The only other time the MO was so high and did NOT see at least a 5% fall in stock prices within a week or two was back in 2009.  Right now the insiders seem to be seeing the same dynamic happening. -

Privatizing Gains and socializing risk works for short term gains – but in the end if you keep putting more and more people in poverty at the expense of a wealthy few the end result is revolution


Long Term Outlook

3 to 6+ months


*Investors411 has 5 different long term valuations - BULLISH, CAUTIOUSLY BULLISH, NEUTRAL, CAUTIOUSLY BEARISH, and BEARISH.

* Everything written in BROWN is a repeat from a previous day(s)




  • Share/Save/Bookmark