by Jamie Lee
“Bulls make money, Bears make money, but Pigs go to slaughter”
“Trees don’t grow to the stars and neither do markets”
“Timing isn’t everything, it’s the only thing”
“You’re either at the table or on the table”
“In this game you either Prey or Pray”
Old Wall Street adages.
For over 30 years, beginning in 1985, I worked on, in and around Wall Street right as the over the counter NASDAQ market was getting started. I began my career as a clerk at the New York Stock Exchange before computers took over all trading activities. In 1991, I started my own company after working for two investment banks as an institutional sales trader.
Back in the 1990’s it was still a good ol’ boys network where women were not even allowed to go into the 7th floor bar at the NYSE after the markets closed. We knew mostly who the buyers and sellers were since the trading of stocks was done through known institutions. It took several days just to clear and settle trades and brokerage companies were mostly transparent due to strict regulatory oversight. Hedge funds were just getting started thanks to the end of fixed commissions while derivatives and computer generated high frequency trading, etc. were non-existent.
The government and regulators promoted “level playing fields” so that all investors, especially the small time mom-and-pops, had fair and equal access to information to make decisions on where to invest their life savings.
There were many investment boutiques as well as large investment houses along with brokerage firms but no large banks because of the Glass Stegall Act, which kept banks from manipulating the stock market like they had done to crash the markets in 1929. All changed in 1999 when President Clinton gutted Glass Stegall, allowing banks to cross the “Wall of China” and use their own capital as well as manage client capital creating serious conflicts of interest.
Today, all financial markets are owned and controlled by a very, very few. With nearly everyone’s wealth and 401k’s tied to stocks and bonds, what happens to stocks affects us all. Through this concentration of wealth and control by a few banks, and complete compliance of the U.S. Treasury and Federal Reserve, they can crash markets in a matter of seconds (2010 flash crash 1,000 pt. drop in minutes).(Source)
Market Fundamentals 101
“You can not reduce debt obligations by creating more debt”
They can, and do this through actions by secret market manipulators like the not-so-secretive “Plunge Protection Team” (Source) or they can pump up markets by creating money out of thin air using completely absurd actions like “Quantitative Easing” that has increased our obligated debt to some $16 TRILLION dollars and our yearly debt to $1 Trillion in this country.
Additionally, all money policy, which directly affects all markets by stimulating or reducing money supplies, is directed by central banks of each country. In 2007 U.S. General Wesley Clark (Ret.) identified the “rogue states” that were on the U.S. target list. They included Iraq, Syria, Lebanon, Libya, Somalia, Sudan, Iran and later named North Korea, Cuba and Afghanistan. It is not a coincidence that the countries we are interested in regime changing are the same ones without membership to the globalist banking system. (Source)
What all these countries had in common was that they did, or do not currently, have central banks and were not members fo the World Trade Organization and the criminal Bank of International Settlements, which is used to launder Black Op drug money. (Source)
The introduction of the computers to investing and wealth accumulation has led to ever greater ‘quant’ trading, to the point now over 70% of all trading on major stock exchanges are done by High Frequency Traders who make guaranteed profits, at lightning speeds, running ahead of most stock investing customer orders.
Few understand how greatly this change in how markets move occurs and even the quant geeks themselves don’t really understand either. For a great explanation of how today’s markets are manipulated and can crash on a moments notice, see this excellent video:
Nearly everyone I know in the investment community is astounded and amazed how this charade has continued for so long. Most of us thought 2008 was the final market top yet the Fed massive money creation scheme bought them another few years.
Us old timers in the market like to cite facts like our Treasury has been buying over 70% off all the debt the Federal Reserve issues for years. Think about that for a moment. The Fed’s issue debt, which our government buys, with money it borrows…from itself. WTF?
The past few weeks we have seen natural gas prices rise by 59%, countries like Argentina see a 15% devaluation in its currency and massive unabated civil unrest in Thailand, Ukraine, Mexico, China, Russia, Turkey, Iraq, Greece and Sudan (Source).
These countries are all out of “Hopium” for their citizens and people are voting with their feet to take down the respective regimes and it is only time before all markets fall hard, very hard from their artificial levels, especially in the U.S., since we are the country with the greatest debt the world has ever seen and manufactures very little.
And the biggest elephant in the room, China is dominating the oil, energy, currency, gold and military markets like never before. Last year, the BRICS countries (Brazil, Russia, India, China, and South Africa) even have gone so far to start their own banking system. As other countries gain power the U.S. is the direct loser. (Source).
The U.S. dollar is finished as the world’s only reserve currency as the dollar has lost 98% of its value since 1930’s (Source). Consumer debt, student debt, mortgage debt has increased exponentially while savings by individuals in this country is nil or negative for years. True unemployment in this country is above 20% with little hope of jobs going forward due to business’ continual outsourcing and now the “Robotic Revolution” is replacing jobs everywhere, so now they are calling this a “jobless recovery”!
Getting cash, getting out of debt, greatly reducing your exposure to stocks and real estate investments as well as investing in critical food and water supplies may be critical now.
It’s been a lovely ride since 2008 for those who have believed in cyclic markets, based on fake stimulus using massive debt increases. Heck, it’s been a lovely century for investing in Wall Street but its over. In the past stock market appreciation occurred as our country created its wealth through needed goods and services to others. Since 2008, the rallies have all been through social engineering stocks, who provide no real wealth creation, only “Ap’s and Add-ons” through ever-increasing borrowing.
Going to cash, getting out of or greatly reducing debt, exposure to stocks, and real estate investments is critical now. Investing in critical life supplies like community, food and water supplies is essential. One always here’s some other in the business say “This time its different” and markets go in cycles yet they fail to realize that A) monetary policy based on debt always throughout history has collapsed and B) there are cycles within cycles within cycles over time.
In December, the Federal Reserve announced it was “tapering” its Quantitative Easing of over a Trillion dollars to date since 2008. They followed this announcement by goosing the markets using the Plunge Protection Teams actions but now that ship has sailed.
Then end of money creation by the Fed’s signals the end of the game of wealth creation by the printing money.
It’s over, get out.
Ken Jorgustin of Modern Survival Blog writes:
Is there a major financial crash in our near future? You must check out this stunning analogy between the current day Dow Jones Industrial Index compared with the time period 1928-1929 leading up to the memorable stock market crash…
The pattern of stock price movements looks VERY close to the lead-up to the 1929 top.
A lead-up to just any old top is one thing, but the 1929 top was followed by a memorable decline, which makes it all the more worthy of our attention…
For Those Who Believe in Cycles….
“Ken stops short of predicting that stock markets will do the same thing this January as they did in 1929, but take a look at this amazing comparison and decide for yourself if it’s possible that this whole thing will break wide open on or around January 14th of 2014:
Chart by McClellan Financial Publications via Modern Survival Blog