I have tomorrow off so you know what that means. As is tonight's post will be a few quick hits and a thought on the future.
If it Does Not Work, Keep Trying
In a way I do admire Keynesian thinkers (The Keys). Faced with overwhelming evidence that their theory does not work (the ONE time it did it was WWII that stepped in and muddled history, maybe a little bit guys?) they have shown tenacity similar in style to a wounded wolverine. They just refuse to give up the ghost and move on.
This Bloomberg headline caught my eye as a punch in the face to the Keys:
Deathbed of Keynesian Economics Will Be in U.K.
The whole thing is worth a look.
Of course the Keys will never surrender and thus we have this hot on the heels of the above piece via Zero Hedge added drama headline:
Next Round Of QE In England Now A Virtual Certainty
Zero Hedge recounts a Market News story with juicy quotes such as:
"It is entirely plausible that as economic events unfold it will become clear that an even more expansionary monetary policy will be appropriate," Miles said.We have a winner!
"To deny such a possibility must mean that you either cannot imagine significant downside risks for economic activity and inflation - which suggests an imagination deficit disorder - or believe that monetary policy has become ineffective."
I submit for evidence the following:
Japan's consumer prices fall again in January
Nobody has been better than the Japanese with regards to the money game, yet here we are:
The drop in core CPI marked Japan's 11th consecutive month of deflation
Add this to the past 20 years or so. It will work, one day!
For a related read to see the US going down the same path, check this Marshall Auerback write up that argues the US cannot ever default as long as the debt ceiling keeps being raised (???). Ok Marshall:
Bernanke Gets It Right! America Has No "Insolvency" Issue
Wow, just wow.
Brick Wall Musings
I wrote about "Pretend and Extend" hitting a brick wall and Kid Dynamite caught a Market Ticker piece that has all the goods and provides great coverage:
Reality Bites: Mark to Wishful Thinking Fails Again
KD's closing sentence:
A peripheral lesson to be learned here is that rosy projections, hopes, and anticipations do not equate to a rosy reality.Indeed.
Too Cute By Half
Last Tuesday I wrote:
Bond Auction Complete = Market RallyI figured that with even more debt on tap for this week we would see a weak market all week and then a Thursday afternoon ramp job once the auctions went off. I mentioned to a friend of mine maybe a TZA play until Thursday afternoon and then a switch to TNA was a viable plan here based on the idea that these movements are indeed, perhaps, maybe, a little rigged.
The recent weakness in the market indices which was jumped on by technical traders as "the break" below double headed over the shoulder boulder holder trendline was erased very fast. The culprit? US Bond Auction calendar coincides with market weakness (and dollar strength) and then as soon as the paper is sold a low volume ramp up begins in earnest once again. Almost like the whole thing is rigged, almost.
So I am a tin foil hat type, yes? I am a conspiracy nut that probably thinks that gold and silver prices are manipulated, yes? I am a part time blogger that should stick with his day job, yes?, well yes probably. All that said, here is the weekly S&P 500 chart via Yahoo (5-day starts last Friday; Check Monday to Thursday noon):
And the one day to show my noon time switch move (TZA to TNA):
Yeah, I'm Crazy all right!
On this note I wanted to talk about how the players involved in these ramp up/ramp down jobs may be getting too cute by half. What do I mean?
I can see a point sometime in the next year where the indices are all maybe 25-35% higher and the headlines read:
-DOW/S&P 500 nears old highs (LOL, never the Nasdaq, bubbles die LONG deaths!)
-Banker bonuses at record level due to strong stock market
-Stocks show recovery is here
and other such related items.
Too bad unemployment will be at 15%, home prices would have fallen another 15% or so, consumer confidence is at like 5 (kidding), and tax revenues have fallen even further. I think that will really be the point of recognition that this has all been make believe. It is clear now, but too many are breathing a sigh of relief as they see their 401k coming back up and the promise of jobs for everyone and a home for all still have some kind of magic grip on the masses.
On a related manipulation theme, Clusterstock's Joe Weisenthal notes:
Careful Euro Bears, Greece Will Try To Dropkick You Next Week
I agree and think Greece will try and float a debt sale next week and if they actually put it out there it will go off so much better than expected it will make people's heads spin. Of course it will matter little that it is cheaper for the US/Euro central banks to buy the entire auction than hand out a bailout to Greece but I imagine that item will not make the headlines. Then again I am CRAZY!!!!!!
Have a good night.