Fundamental Analysis – Always Questionable
I have warned many times that the greatest problem we face is the attempt to always reduced the event to being caused by a single fundamental as if for that instant everyone became democrat or republican. Even the criminal prosecution of Raji Rajaratnam on insider trading is bogus for the same reason. The assumption is a single piece of news caused the event in question. Even if a fund manager has been given a piece of inside information, it could be a plant. Nobody ever makes a decision based upon a single piece of news. Why? Professional know that the “news” is always interpreted based upon the trend – not the other way around.
MarketWatch out of London reported today:
“The U.K.’s FTSE 100 index dropped for a fourth straight day on Wednesday after the Bank of England said it will keep interest rates at historic lows until unemployment falls, but wasn’t as dovish as some had hoped.”
Here we have supposedly good news lower interest rates, yet the market declined so the news is just flipped to say it was not as “good” as expected. We have to try to always reduce events to a simple one-size-fits-all comment. Nobody wants to hear the 10 top reasons internationally for the event. When does good news not become good enough? When the market moves in the opposite direction! This human need to explain everything is the killer for when you line up the explanations and try to trade fundamentally, it becomes impossible to emerge with any coherent strategy that is consistent. Hence, gold declined for 19 years, money was still fiat, inflation soared, so the only explanation must be a grand conspiracy rather than the timing is just not right. The Trend is Your Friend. Good news is interpreted even more bullish in a bull market and bearish news is ignored. Likewise, in a bear market, good news is ignored as not good enough and anything bearish is see I told you.
The key is the trend in motion stays in motion until it is time to reverse.
Obama Cancels Meeting With Putin Over Snowden – Just Brain-Dead
If you talk about being brain-dead, President Barack Obama’s cancellation of a planned meeting in Moscow with Russia’s President Vladimir Putin is rekindling thecold war with a diplomatic snub that follows tensions over NSA leaker Edward Snowden. This absolutely stupid move.now guarantees that Snowden will remain in Russia. Why? Because Putin can not now be seen in Russia as jumping asking how high sir simply because Obama said so. Putin can now not hand over Snowden without looking weak.
You just cannot get any more childish than this and it demonstrates that those in the Obama Administration have no clue how to run a government. Putin can never now be seen as subservient to the US demands. Putin is from the cold war era. Russia is still in that mode of pride. Obama just rekindled the cold war perfectly in tune with our war cycle turning up next year. Brilliant! Absolutely BRILLIANT! What is next? We boycott the Olympics in Russia because of their policy on gays? Perhaps we should refuse to sell China American goods and our bonds because of their policy as well. What the hell. Just nuke everyone who disagrees and get it over with since we are being stupid anyway.
President Obama Wants to End Bail-Outs for Fannie & Freddie
Obama – End FANNIE & FREDDIE!
President Obama after almost 5 years FOLLOWING the taxpayers bailout of the mortgage giants Fannie Mae and Freddie Mac, said on Tuesday that it’s time to end government bailouts for the mortgage industry and for private investors to take a bigger role in the mortgage market. That is kind of like saying people should donate more to church.
Fannie and Freddie collapsed back in 2008 requiring a bailout with almost $200 billion in taxpayer funds dumped in. Obama made this announcement at an address in Phoenix on home ownership. He stated that it was time to wind down the two giant companies and make clear that the days of a guaranteed government bailouts are over. This is what I have been reporting that even the Fed has informed the bankers behind the headlines that they too will not be bailed-out on proprietary trading. Despite the rantings of those claiming hyperinflation is around the corner, the government is retrenching and it will not be a bailout as usual going forward. Welcome to the new age of Bail-In. When bankers lose money trading their accounts – depositors will now pay. Anyone else would go to jail for fraud. But what the hell. New York is the promised land – exempt from the rule of law.
Obama stated: “For too long, these companies were allowed to make big profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag.” He went on to say: “It was heads we win, tails you lose. And it was wrong.” But the bail-in is Government gets to keep their campaign donations and instead of ALL taxpayers paying for the bankers’ mistakes, now depositors will. So it is now Government wins – Banks win – Depositors lose.
This is part of an overall strategy to abandon the idea of the social state insofar as the New Deal sought to guarantee everything. No administrative agency from the SEC on down has EVER prevented a single economic decline. Homeland Security nor the NSA were able to stop the Boston Bombings with all their surveillance because they are hunting taxpayers to shake-down not terrorists. The massive government that has grown beyond belief post 1934 has consumed a tremendous amount of wealth and has failed to deliver its goal – to flat-line the economy eliminating the business cycle swings. They have paid themselves well and lined their pockets with perks forever. Even the soldier on trial for the Fort Hood shootings has earned $300,000 in military pay while pending trial because he cannot even be suspended.
Hence, government is turning away from the bailout models and is adopting the M.F. Global approach of Judge Martin Glenn – Bail-In taking it from the depositors. In reality, what this means is let’s say you rent a room in your house to a stranger. He needs money, so he just takes your credit cards and buys what he needs. You say hey! The judge says he lived under your roof so all is fair in love and war. The New Deal and Socialism are dead. Long Live the Corrupt Republic. Neither the Democrats nor the Republicans will ever correct this mess. We sadly just have to crash and burn before reform will emerge.
Russia Returns to Cuba
Putin is increasing Russia’s Presence around the globe. Russian ships return to Cuba for the first time in decades.
CONFIDENCE = Everything
It maybe corny, but it is true. Confidence is not about merely being outwardly proud, it is all about believing in your own ability. The same is true with regard to the economy. Even Keynes realized it is WHAT you believe that counts, not even if it is actually true. Indeed, a false GOOD rumor will still move markets. Consequently, even Keynes knew you have to rekindle the “animal spirits” that led to confidence after a turning point.
In commodities, they have been moving them around for decades to try to create the impression there is a shortage and you better buy for it’s a bargain. That was the game when Buffett was buying silver in London so the supply declined in NYC as it was shipped to London. This old trick has suckering in even the well educated for decades. It sounds logical that a decline in supply means prices should rise. But prices will rise only with CONFIDENCE not supply. Something can be in short supply for decades and nothing will happen.
“Animal Spirits” is the term John Maynard Keynes used to describe the instincts, proclivities and emotions that ostensibly influence and guide human behavior, and which can be measured in terms of, for example, consumer confidence in his 1936 book: The General Theory of Employment, Interest and Money. It has since been argued that trust is also included in or produced by “animal spirits”. It is effectively the BELIEF in the market that counts – never reality.
This is why in a bear market GOOD news is never “good enough” and in a bull market “bearish news” is always ignored. It is what you believe that counts. So pay no attention to the promoters who say buy now because inventories are declining. Inventories in commodities decline in bear markets and always have. That is NEVERanything to pay attention to – only price movement. Look at all the yelling about the $3 trillion expansion by the Fed – it did not produce inflation. It is what the majority believes that rules the day.
So as everyone swear the stock market will crash and the dollar will crash, they have been saying the same nonsense for quite some time now. Silver fell 35% with declining inventories as did gold but it declined only 23%. So focusing on single isolated trends in the domestic economy is like assuming the world is still flat. Sorry – the world is round and it is a global economy – not just domestic.
Dow & The Correction?
The Dow Jones has been crawling higher but it has been unable to get through the key resistance at 16000. The oscillators are now starting to get tired on a daily level. A daily closing back below 15390 will shift the market into a declining position. We need a weekly closing below 14805 to suggest a correction will unfold perhaps into September. Keep in mind that the Weekly oscillators are still positive. Therefore, a sustainable correction is not yet likely. We would need a monthly closing below 13920 to shift the trend for more than a couple of months.
There still appears to be nowhere to go but up in a major way. We may see the Dow still double in value by late 2015. Pension funds will be insolvent unless they start to move to higher yields. They cannot continue this type of investment in fixed income with rates so low.
Congress Has Been Denied Access to NSA Information – They Cannot Oversee Anything
Obama effectively has outright lied to the world and the American people. He said the NSA posed no risk because it was overseen by Congress. What has emerged now is that is simply not true. This is a hunt for money on a grand scale. If this statement is wrong, then simply pass an act that says any information obtained on an American citizen regarding taxes or money held anywhere means that the citizen is then exempt from any prosecution or civil penalty. They will NEVER do that because that is the real objective. They could not stop the Boston Bombings by two kids using cell phones even when Russia warned them. Knock off the bullshit. Stopping terrorists costs money – hunting down citizens for money is profitable.
The outrageous comments from various members of Congress demanding that Snowden be prosecuted to the full extent of the law, ignores the fact that anyone testifying before Congress who lies is guilty of perjury and they refuse to prosecute anyone in government who lies to the people or Congress. This double standard is simply unacceptable from a pretend democratic government.
Congress is certainly not on the side of the people. They want their pensions and perks paid out of the blood, sweat, and tears of the American people. But denying Congress access to what the NSA has been up to and outright lying to Congress is ant-American, anti-democratic, and is plain authoritarianism if not a political coup in and of itself of a once free society.
http://www.theguardian.com/commentisfree/2013/aug/04/congress-nsa-denied-access
Members of Congress denied access to basic information about NSA
Documents provided by two House members demonstrate how they are blocked from exercising any oversight over domestic surveillance
- Glenn Greenwald
- theguardian.com, Sunday 4 August 2013 08.26 EDT
Members of Congress have been repeatedly thwarted when attempting to learn basic information about the National Security Agency (NSA) and the secret FISA court which authorizes its activities, documents provided by two House members demonstrate.
From the beginning of the NSA controversy, the agency’s defenders have insisted that Congress is aware of the disclosed programs and exercises robust supervision over them. “These programs are subject to congressional oversight and congressional reauthorization and congressional debate,” President Obama said the day after the first story on NSA bulk collection of phone records was published in this space. “And if there are members of Congress who feel differently, then they should speak up.”
But members of Congress, including those in Obama’s party, have flatly denied knowing about them. On MSNBC on Wednesday night, Sen. Richard Blumenthal (D-Ct) was asked by host Chris Hayes: “How much are you learning about what the government that you are charged with overseeing and holding accountable is doing from the newspaper and how much of this do you know?” The Senator’s reply:
The revelations about the magnitude, the scope and scale of these surveillances, the metadata and the invasive actions surveillance of social media Web sites were indeed revelations to me.”
But it is not merely that members of Congress are unaware of the very existence of these programs, let alone their capabilities. Beyond that, members who seek out basic information – including about NSA programs they are required to vote on and FISA court (FISC) rulings on the legality of those programs – find that they are unable to obtain it.
But it is not merely that members of Congress are unaware of the very existence of these programs, let alone their capabilities. Beyond that, members who seek out basic information – including about NSA programs they are required to vote on and FISA court (FISC) rulings on the legality of those programs – find that they are unable to obtain it.
Two House members, GOP Rep. Morgan Griffith of Virginia and Democratic Rep. Alan Grayson of Florida, have provided the Guardian with numerous letters and emails documenting their persistent, and unsuccessful, efforts to learn about NSA programs and relevant FISA court rulings.
“If I can’t get basic information about these programs, then I’m not able to do my job”, Rep. Griffith told me. A practicing lawyer before being elected to Congress, he said that his job includes “making decisions about whether these programs should be funded, but also an oath to safeguard the Constitution and the Bill of Rights, which includes the Fourth Amendment.”
Rep. Griffith requested information about the NSA from the House Intelligence Committee six weeks ago, on June 25. He asked for “access to the classified FISA court order(s) referenced on Meet the Press this past weekend”: a reference to my raising with host David Gregory the still-secret 2011 86-page ruling from the FISA court that found substantial parts of NSA domestic spying to be in violation of the Fourth Amendment as well as governing surveillance statutes.
In that same June 25 letter, Rep. Griffith also requested the semi-annual FISC “reviews and critiques” of the NSA. He stated the rationale for his request: “I took an oath to uphold the United States Constitution, and I intend to do so.”
Almost three weeks later, on July 12, Rep. Griffith requested additional information from the Intelligence Committee based on press accounts he had read about Yahoo’s unsuccessful efforts in court to resist joining the NSA’s PRISM program. He specifically wanted to review the arguments made by Yahoo and the DOJ, as well as the FISC’s ruling requiring Yahoo to participate in PRISM.
On July 22, he wrote another letter to the Committee seeking information. This time, it was prompted by press reports that that the FISA court had renewed its order compelling Verizon to turn over all phone records to the NSA. Rep. Griffith requested access to that court ruling.
The Congressman received no response to any of his requests. With a House vote looming on whether to defund the NSA’s bulk collection program – it was scheduled for July 25 – he felt he needed the information more urgently than ever. He recounted his thinking to me: “How can I responsibly vote on a program I know very little about?”
On July 23, he wrote another letter to the Committee, noting that it had been four weeks since his original request, and several weeks since his subsequent ones. To date, six weeks since he first asked, he still has received no response to any of his requests (the letters sent by Rep. Griffith can be seen here).
“I know many of my constituents will ask about this when I go home,” he said, referring to the August recess when many members of Congress meet with those they represent. “Now that I won’t get anything until at least September, what am I supposed to tell them? How can I talk about NSA actions I can’t learn anything about except from press accounts?”
Congressman Grayson has had very similar experiences, except that he sometimes did receive responses to his requests: negative ones.
On June 19, Grayson wrote to the House Intelligence Committee requesting several documents relating to media accounts about the NSA. Included among them were FISA court opinions directing the collection of telephone records for Americans, as well as documents relating to the PRISM program.
But just over four weeks later, the Chairman of the Committee, GOP Rep. Mike Rogers, wrote to Grayson informing him that his requests had been denied by a Committee “voice vote”.
In a follow-up email exchange, a staff member for Grayson wrote to the Chairman, advising him that Congressman Grayson had “discussed the committee’s decision with Ranking Member [Dutch] Ruppersberger on the floor last night, and he told the Congressman that he was unaware of any committee action on this matter.” Grayson wanted to know how a voice vote denying him access to these documents could have taken place without the knowledge of the ranking member on the Committee, and asked: “can you please share with us the recorded vote, Member-by-Member?” The reply from this Committee was as follows:
Thanks for your inquiry. The full Committee attends Business Meetings. At our July 18, 2013 Business Meeting, there were seven Democrat Members and nine Republican Members in attendance. The transcript is classified.”
Thanks for your inquiry. The full Committee attends Business Meetings. At our July 18, 2013 Business Meeting, there were seven Democrat Members and nine Republican Members in attendance. The transcript is classified.”
To date, neither Griffith nor Grayson has received any of the documents they requested. Correspondence between Grayson and the Committee – with names of staff members and email addresses redacted – can be read here.
Denial of access for members of Congress to basic information about the NSA and the FISC appears to be common. Justin Amash, the GOP representative who, along with Democratic Rep. John Conyers, co-sponsored the amendment to ban the NSA’s bulk collection of Americans’ phone records, told CNN on July 31: “I, as a member of Congress, can’t get access to the court opinions. I have to beg for access, and I’m denied it if I – if I make that request.”
It is the Intelligence Committees of both the House and Senate that exercise primary oversight over the NSA. But as I noted last week, both Committees are, with the exception of a handful of members, notoriously beholden to the NSA and the intelligence community generally.
Its members typically receive much larger contributions from the defense and surveillance industries than non-Committee members. And the two Committee Chairs – Democrat Dianne Feinstein in the Senate and Republican Mike Rogers in the House – are two of the most steadfast NSA loyalists in Congress. The senior Democrat on the House Committee is ardent NSA defender Dutch Ruppersberger, whose district not only includes NSA headquarters in Fort Meade, but who is also himself thesecond-largest recipient of defense/intelligence industry cash.
Moreover, even when members of the Intelligence Committee learn of what they believe to be serious abuses by the NSA, they are barred by law from informing the public. Two Democratic Committee members in the Senate, Ron Wyden and Mark Udall, spent years warning Americans that they would be “stunned to learn” of the radical interpretations of secret law the Obama administration had adopted in the secret FISA court to vest themselves with extremist surveillance powers.
Yet the two Senators, prohibited by law from talking about it, concealed what they had discovered. It took Edward Snowden’s whistleblowing for Americans to learn what those two Intelligence Committee members were so dramatically warning them about.
Finally, all members of Congress – not just those on the Intelligence Committees – are responsible for making choices about the NSA and for protecting the privacy rights and other Constitutional guarantees of Americans. “I did not take an oath to defer to the Intelligence Committee,” Rep. Griffith told me. “My oath is to make informed decisions, and I can’t do my job when I can’t get even the most basic information about these programs.”
In early July, Grayson had staffers distribute to House members several slides published by the Guardian about NSA programs as part of Grayson’s efforts to trigger debate in Congress. But, according to one staff member, Grayson’s office was quickly told by the House Intelligence Committee that those slides were still classified, despite having been published and discussed in the media, and directed Grayson to cease distribution or discussion of those materials in the House, warning that he could face sanctions if he continued.
It has been widely noted that the supremely rubber-stamping FISA court constitutes NSA “oversight” in name only, and that the Intelligence Committees are captured by the agency and constrained to act even if they were inclined to. Whatever else is true, members of Congress in general clearly know next to nothing about the NSA and the FISA court beyond what they read in the media, and those who try to rectify that are being actively blocked from finding out.