Banks Manipulating Markets & the End of an Era
I have been warning that there has been a “Club” that has been targeting market after market to make a quick buck. The LIBOR Scandal has caused the tide to turn as well as having to bail out the banks in 2008 that has fundamentally altered the course of everything. Now the Swiss regulators said they are investigating several Swiss financial institutions for possible manipulation of foreign-exchange markets, which is a dramatic expansion of the latest probe into potential rigging of widely used market benchmarks. The Swiss have come out and stated the they are now cooperating with authorities in other countries very closely. They have also stated publicly that “multiple banks around the world are potentially implicated.” TheUNTOUCHABLES have started to lose their standing because they constantly blow themselves up and turn to government to save them whenever they lose money.
Our models on this issue of “The Club” have been spot on. The crisis came in 2008, which was 8.6 x Pi or 27.004 years from the date that Phibro took-over Salomon Brothers. That is the start date when the aggressive commodity trading culture infiltrated Wall Street. The full cycle for how long that would last should have been 31.4 years and that is when this trend came to an end idealized on February 24th, 2013. From here on out, the banks have push the envelope too far. We are starting to see J.P. Morgan charged criminally. When this turns down again after 2015.75, they will find that they are the escape-goats for politicians and will most likely be imprisoned.
The Year 1981 was truly monumental. It was the major peak on the 1981.35 Public Wave of the Economic Confidence Model. On January 20th, 1981, Ronald Reagan was sworn in as the 40th President. Iran freed the 52 hostages taken in 1979 on January 25th. By March 30th, 1981, Reagan was shot by a gunman in an attempted assassination along with his press secretary. On May 14th, 1981 Pope John Paul II was shot in an attempted assassination. On October 6th, 1981, Anwar el-Sadat was assassinated by Islamic extremists during a military parade in Cairo. Then, on December 14th, 1981, Israel annexed the disputed Golan Heights.
In 1981, seeking a larger and more permanent source of capital, Salomon Brothers agreed to its sale to Phibro for $554 million. Phibro was then one of the world’s largest commodities traders. John H. Gutfreund of Salomon Brothers became its chairman of the Salomon Brothers subsidiary and co-chief executive (along with the Philipp Brothers chairman, David Tendler) forming a new holding company, Phibro-Salomon Inc.
On September 28th, 1987, Warren E. Buffett, agreed to pay $700 million for a 12 percent stake in Salomon Inc., the parent company of Salomon Brothers Inc., Wall Street’s largest investment banking-house. That is how Buffett got into trading commodities instigated by Phibro.
This aggressive trading culture has led the world into all sorts of trading scandals and manipulations with numerous fine only prosecutions of the major players. This time, however, the LIBOR Scandal took place in London and the bankers do not control the Europeans as they do the Americans. This aggressive manipulating culture has now run its course and the cycle has changed direction.
Death of the Euro?
The feeling in Europe is growing darker by the day. Even the central bankers have been moving into the Australian and Canadian dollars as reserves shunning away from the Euro. Behind the curtain, central bankers are running away from the Euro after the German elections. The rising debt in Europe is out of control and now even the papers are warning there will be state bankruptcies. We are headed into a serious economic collapse when the ECM turns 2015.75. The magnitude of the decline will be far worse than the last turn on this model.
France Makes it Illegal to Close Your Company
Only in France is something so Socialistic-Draconian even possible. The French solution to rising unemployment, they have on Tuesday passed a law making it illegal for any company to close its doors as long as it is remotely profitable. I suppose this prohibits you from retiring and you must live forever while you’re at it. You now have to be absolutely brain-dead to open new businesses in France where it becomes illegal for you to close and even retire. Politicians simply never understand that what they do has two sides to every coin.
Anyone who cannot see that we are headed into a MASSIVE DEFLATIONARY Contraction as far away from Hyperinflation as possible, well I just do not know what more evidence you need. Will this become another great idea adopted worldwide like bail-ins and Argentina’s pension fund seizure? Where is “socialism” different from totalitarianism?
Real Estate Boom in Switzerland, Singapore & Elsewhere
QUESTION: I can confirm your post today in a small way for I have seen Singapore prices rise since 1990, naturally with cyclical fluctuations.Your 2015.75 year target is 26 years — can you indicate a correction period that corresponds thereto?
FYI— the top of the market is currently sluggish but outlying areas are better and so the gap in $/psf has been closing. As you may know measures have been taken to tax purchases by foreigners and over-enthusiastic locals.
Some here expect a high-end recovery and a top in the next couple of years,the punitive measures notwithstanding.Would you agree or can the top come before 2015.75 ?
Best regards
Bill
ANSWER: We are seeing the same trend in Switzerland with prices rising because of foreigners moving in fleeing the EU. There is a large construction boom of offices going on in Switzerland as well. Traditionally, every study of real estate that we have carried out shows that the central core rises first and then when that becomes sluggish, the trend moves to the suburbs. The core does not come back, except in a last-minute rush on of foreign capital. Europeans are buying NYC and Florida right now in the States.
In Thailand, there is also a boom and about 70,000-75,000 new condominium units will be launched this year. This will be the highest level of new construction ever in history since the high-rise development was first introduced in Thailand, according to the Real Estate Information Centre.
It appears that we will see a peak in that trend and it will be most likely caused by government intervention, which is the norm in each cycle. The steep decline at first should follow the ECM into a low for 2020. However, we will then see capital flow into real estate simply looking to park for safety as banks are unsafe and government hunts down loose change,
Bitcoin Seized – Its Days are Numbered
U.S. agents have shut down what became known as the Silk Road Bitcoin Site where hackers and drug dealers sold their illegal wares using Bitcoins, and arrested founder Ross William Ulbricht this week on charges of money laundering, conspiracy to commit drug trafficking and other crimes.
The government is after Bitcoin and focus on concerns about criminal activity to justify taking down what they see as avoiding taxes. In August, New York regulators subpoenaed 22 companies active in the Bitcoin economy, including well-known venture-capital firms like Google Ventures and Andreessen Horowitz, seeking to uncover possible illegality.
I have stated before. I do not see where the government will sit on its hands when the G20 is already agreeing to hunting down money everywhere. They think if they can collect taxes, then they will retain power. That will fail. Nonetheless, we are in the age of Massive Deflation as government eats their own to sustain their own power.
Observing Things Do Change
It is time we stop taking Prozac to make it appear normal. The more things change, the more they very much remain the same. There are trends that exist in everything. There have been discoveries such as the Cocaine Mummies of Egypt that demonstrate the history of humankind has been created within prejudices that bind our realities. Pre-Columbian trans-oceanic contact is highly debated with academia simply refusing to accept any such evidence.
There is the story of Heinrich Schliemann (1822–1890) who challenged academia who pronounced that Homer was fiction – a story for children. When he discovered Troy and took a picture of his wife wearing the jewels of Helen, they accused him of fraud.
Then there was the Historia Augusta, a book written recording Roman emperors of the 3rd century that academia declared was a fake because they never heard of these people. Only when a coin was discovered with the name Saturninus did it prove they were wrong.
Then there have been books published that challenge the perceptions of history that have also been constrained by academics. Forbidden Archeology that was made into a TV special provoked Academia to demand the show be taken off the air because it exposed how wrong they truly were. Anything that did not fit their perceived world was kept in a drawer as far away from the box they displayed to the public.
Economics is no different. The accounting system is fatally flawed because it was based on Bretton Woods and assumed since money was of a fixed value, it did not require someone at the dock to count the number of Toyota cars being unloaded. Just measure the dollars and if you spent more, you bought more. India is blowing itself up because it does not understand that a current account deficit caused by asset purchases such as gold does not mean it is a “trade” deficit with consumers just throwing money away.
Likewise, foreign capital can flow in creating domestic inflation because they increase the local money supply. We will see real estate peak in Switzerland and Singapore with a bust coming on the next cycle 2015.75 for these have been 26 year cycles due to peak.
We now play with statistics to pretend that socialism still works. We are chaining inflation to control deficits because government borrow every year with no intention of every paying anything off. This is just subsidizing the banking industry – they regular welfare check.
We simply have to understand that the entire way we look at the world economically is SERIOUSLY WRONG! In the ’60s people took acid to make the world look weird. Now the world is weird and people take Prozac to make it appear normal.