Why Weinstein? Why Now?

After decades of being who he is with hardly a soul not knowing about his behavior, his friends and everyone else in the world has turned against him. The question here is not what he did or how bad it was but, why now? It was all common knowledge. Who in Hollywood has morals much if any higher?

Weinstein looks like a sacrifice. The candidates he normally supports have dug themselves into deep holes. The money he has contributed to campaigns no longer has the same utility it once did.  Perhaps he had lost influence.

Perhaps there is trouble in paradise. Relationships among the elite may be experiencing some stress. Our anointed citizens may be having issues with waining solidarity. This could have ramifications with respect to everything from healthcare to the financial markets.

One thing is for sure. Weinstein is not being brought down suddenly without a reason or an agenda attached. There has to be a need for one general scapegoat available for massive finger shaking. The pretense of innocence among all who knew him is quite colorful. Should we expect more theatrics and righteous indignation. Yes, of course.

For sure Weinstein’s fall represents emerging stress among the elite. Probably his circumstances will be used to focus on while issues with other important people are uncovered. Being a sociopath has some disadvantages. One of those is that others who are like you discard you like rubbish as soon as you are of no use to them.

 

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Why The Stock Market Always Goes Up

With enough wealth and political power it is possible for a group of very wealthy individuals to take over all governments and dictate government policy. Once this is accomplished, it is easy enough to dictate policy to central banks which are arms of governments. It then becomes policy to maintain and elevate stock prices in order to please powerful and wealthy constituents.

Again, any economic or political issue can be explained in a few sentences and in common language. The Fancy models and complex statistics evolve because the solution is unpleasant.

This kind of system does not depend on formal groups and public decisions. Individuals and entities with common goals and interests find one another naturally. There need be no formal conspiracy. Government tampering with the stock market started during the Reagan administration. The practice has increased steadily from then until know. Using government to manage stock prices has been so profitable that the private market for trading stocks has largely disappeared. As long as the public does not object or until both our economy and form of government are destroyed the asset enhancements will continue.

There are countless reasons why this kind of activity will destroy the economy. I will mention just one. The free market system is built on an uninterrupted system of out with the old and in with the new. Rigging the stock market destroys that natural process and the old disappears without anything new taking its place. I will also mention that unearned money corrupts the rich just like it does anyone else. The rich are naturally innovative and industrious. Laziness becomes the rule and productivity falls.

These days, the stock market never goes down because all kinds of algorithms have been developed to move it higher and keep it from dropping. The same moneyed interests which control government and central banks, also control the news media. The rich now have a way to profit endlessly by just having the government goose the stock market, effortlessly making unfathomable sums of money.

Don’t misunderstand, the rich are not purposefully trying to impoverish everyone else. They are just going after their hoggins. The poor and middle class just happen to be standing in the way.
The markets will go up until the system fails. That could be today, tomorrow or a number of years.

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History’s Greatest Cash Cow

Federal Reserve policy is and has been all along been a political directive to elevate and maintain asset prices, especially stocks.

Nature provides just one basic incentive, self interest. In economics studies and models, the incentive to serve is assumed into existence. In the real world there is no such incentive. Citizens petition government out of self interest. Those in government, elected and otherwise are there out of self interest. Federal Reserve Open Market Committee members are there to fulfill their own personal goals and aspirations. There is no such thing as an unbiased institution in government or in the private sector. The Federal Reserve functions in ways that help members achieve their personal agendas. That comes down to pleasing the people who help them get their jobs. Those people are part of the elite group which is powerful enough to dictate government policy.

The greatest cash cow in the history of the world, has been that of obtaining enough political power to control Federal Reserve policy. The current round of bubble building does not have an exact beginning date. Government tampering with the financial markets began in a small way after the crash of 1987 during the Reagan administration. The practice of using the Federal Reserve to enhance stock prices grew from that point to where we are today. After the financial crisis of 2008 the practice has gone parabolic but it all began much earlier.

The job of corporate insiders is to make as much money as possible in the least amount of time. Any expectation that corporations would assist the country by tirelessly trying to save the world is misplaced. Ostensibly, corporations  would accept virtually free money and invest in plant and equipment and the economy would rebound. That is a way to make a profit but it is not the most possible in the shortest amount of time. The windfall came by engaging in stock buybacks, borrowing to pay dividends and overstating earnings. Friends of the Fed have made billions just by aiding the Fed in its agenda. Welfare for the rich by way of the Federal Reserve in one day surely surpasses the benefits the poor have received since the beginning of the country.

All during this time, the public has been completely fleeced and has no idea why. Profit margins have stayed high. Wages have been held down. Basic living expenses have skyrocketed. The public knows nothing about The Federal Reserve system. My wife Jean read that the majority of Americans believe the Federal Reserve is a nature preserve on federal land. When a population is this ignorant, it is easily fleeced. It is especially easily fleeced when the ignorant population is convinced that it is well informed.

The asset enhancement initiative is ongoing. It is not restricted to the United States. It will not stop until the entire system fails. It is hard to say when that will happen. This is the biggest money heist in the history of the world and is amazing that ordinary people are completely unaware of how much they have lost.

 

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More on Stock Market Manipulation

The Federal Reserve is under a political directive to elevate asset prices. Never forget that. So far, my forecast for the fall stock market is right on target. The only reason I can do this is that it is all complete manipulation. Suppose you were one of the elite who dictate policy to the U.S. government. What would you have the government do with respect to the stock market? The the degree it is possible, you would create an unending uptrend in asset prices that would be your cash cow as long as it was possible to keep it going. This is not rocket science. It is only an understanding of human nature and how the animals act upon the incentives in front of them.

Previous Articles

http://quillian.net/blog/the-fall-stock-market-crash/

http://quillian.net/blog/the-fed-unwinding/

So what is next? The deep state knows you better than you know them. Technical Analysis dogma survives even though it is a trap. One glaring bearish market indicator it that of breadth which I show as the percentage of stocks above their 200 day moving averages. The chart shows that while the market has been making new all time highs, the averages are being carried by a serious minority of stocks. The deep state folks understand that concept. If the breadth indexes can be turned positive, that will bolster confidence even higher and suck more money into equities. The focus on the part of the manipulators will be to change the breadth cosmetics while allowing the Fangs and other hot stocks to take a well deserved rest. Hope is that with improving breadth numbers, the fangs will experience a shallow correction and be brought back into the picture a little further down the road. Also, watch for serious short squeezes in stocks where short sellers may have accumulated profits.

In a market like this, the most dangerous time to short a stock is after it has completed an important technical pattern like a head and shoulders top. This is squeeze city and a gift. Talk of low volume is pervasive but volume is much lower than what is suggested. When the in for the day only and split second trades are subtracted, there is almost no volume at all. As long as there are no long term holdings being sold off, moving the market higher is a piece of cake.

So, for the foreseeable future look for breadth to miraculously strengthen as the middle of October approaches. Any time there are bearish articles by major research firms, shorts are being drawn in for a new round of squeezing. Other bearish articles are there for the same reason. The days of agenda free news are over. Watch the NFL stories start to fade. When news hurts the deep state it disappears. As the fall season all pattern turns from bearish to bullish expect the most wonderful news to be announced. The economy is rotting from the bottom up. If some kind of economic crisis emerges, central banks including our Fed will announce that they are buying up excess supply of stock “to save the world.”

Many understand that the market is being manipulated. Only a minuscule few understand that manipulation is all there is.

 

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The Cost of Certainty

Americans pay for certainty with both hands and with all the money they can muster up. How much certainty do they get? There is no certainty in the universe so they don’t get any at all, in terms of what is offered to them by others.

In small groups animals can enhance their chances of survival. Beavers build dams and people plow fields. Beyond those kinds of things, there is not much which can be done.

National defense is fine but is likely to cost far more lives than it saves. What people end up getting for their money are feelings of security at a very high price. The business of selling feelings of security is highly lucrative. The mere state of existing is terrifying because the state of not existing is less than one breath away, always.

The business of offering comfortable feelings to others for a price is highly lucrative. Services are offered from the strong to the weak.  O.K. there is no certainty, so what. That is not going to keep enterprising people from offering feelings of certainty to others for a high price. Not surprisingly merchants of feelings of certainty do end up enhancing their own lives by selling a perception of certainty to others.

Human beings are scared animals. The ones who are less scared  make the more scared feel comfortable for a price. This is what government does. Over a period of decades, society buys one illusion after another. Today, citizens fantasize over countless imaginary benefits and controls on the part of government. Government has no way to accomplish these things.

Currently there is a fantasy that a president’s job includes making sure various groups and individuals only hear nice words from fellow citizens. Government is expected to make all people be nice to one another. Today we have professional athletes protesting because others are not kind enough to people of the same race. There is nothing immoral about wanting these things to be true. We all must understand that government does not have a way to make these kinds of wishes come true.

Government is about getting, not giving. What happens when all discourse in a country is centered around fantasies to such a degree that all of the serious issues are ignored? The political system collapses.

 

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The Fed Unwinding

Back in August I told everyone what to expect out of the long anticipated fall stock market weakness.

http://quillian.net/blog/the-fall-stock-market-crash/ (for review)

Everything I predicted has happened. I am not that good of a short term trader. The fact that it is all unfolding exactly as I said it would is confirmation that the stock market is being purposefully managed. Lets call it intelligent design. I am not looking at numbers. This is all about understanding human behavior and focusing on incentives.

August was full of negative research reports warning of a coming crash. Lately even Goldman Sachs has been making bearish predictions. The only reasons for bearish reports is to draw in short sellers. Shorts on the books are an indispensable ingredient for maintaining an uptrend.

Here is what to expect for the foreseeable future. The Federal Reserve is unwinding its balance sheet. That means stocks will fall, right? No! The total balance sheet will shrink.  As the unwinding takes place stocks will be purchased as bonds are sold. It won’t be dollar for dollar. If there are not enough shorts to squeeze and the public quits buying, the Fed will buy enough to try and manage a controlled correction.

You will read this same thing other places and you may already have. People absolutely know the financial markets are seriously manipulated but they still trade as if normal market influences are in control. Even huge hedge funds and professionals say one thing and trade according to ancient dogma that applies to free markets. This makes it very easy to manipulate prices. Markets do not change directions with huge and sudden shifts in supply coming on the market. Markets generally top out when supply barely exceeds demand. Momentum takes a while to build. To keep an uptrend in tact it is only necessary to absorb a small number of shares. If enough short positions are on the books, no supply need be accumulated at all.

Again, don’t expect a market crash any time soon. All of the world’s central banks are in cooperation. Friends of the Fed are always available to carry their water and will be as long as the Fed can guarantee their profits.

The Federal Reserve is an integrity free institution. Understand that while many at the top are being richly rewarded, the economy is being destroyed from the bottom up. Chances are that the market will continue to be stable until serious damage to corporate profits can no longer be hidden or explained away.

 

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Socialist or Fascist Your Choice

Fantasy Free Economics provides one sentence explanations. Socialism is using government to take from others by begging. Fascism is using government to take from others by belligerence. Understand that both systems use force to control the population. Individuals who identify with socialism are begging government to sustain them. Those who identify with fascism use the belligerence of government to rig markets and guarantee a positive outcome to their efforts in business or employment.

Today all Americans use one of these two systems to get what they want. Talk to an American and you are either talking to a little Stalin or a little Hitler.

As an animal, mankind lives in the same system of dominance and subservience as other animals. Self interest is the only universal incentive nature provides. Predators, to facilitate survival, first try to live off the efforts of others. They hunt or work only when there are no other options.

Human beings look first to government to sustain them. When that option is not available they are truly industrious.

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We Are All Liberals Now

Left wing socialists and right wing socialists work day and to get what they want out of government which comes down to living off the efforts of others. Conservative is only a noise right wing socialists make. Profess constantly to be a small government conservative while protecting the benefits you receive from government and trying to get more. That is what passes for conservative today.

Notice that there are no free market medicine bills being proposed. Conservatives are not asking for free market medicine? That is not a paradox at all. People are what they do. What they say makes no difference at all. There is no interest in free market medicine. There is no interest in free markets in any other capacity.

The Full Employment Act of 1978 mandates central economic planning by Congress, the Executive Branch and the Federal Reserve. Ask a conservative, do you believe in central economic planning? The conservative will say something like. Heck no, what do you think I am a liberal? No one in congress wants to repeal this act. Constituents have no interest in getting it repealed. There are no conservatives. Is anyone interested in repealing the Federal Reserve Act of 1914. There is no interest there either.

There are differences between right and left wing socialists.

Left wing socialists beg. Begging used to work. Now begging is not that productive.

Right wing socialists use belligerence.  From war for profit to using the Federal Reserve to steal the interest on Granny’s savings to give it to Goldman Sachs, it is belligerence.

Democrats have largely given up on begging. It gets them nowhere. Most Democrats still claim to be liberals but are are now right wing socialists and have adopted belligerence as the tool of choice.

Do not expect Donald Trump or any president to reduce the size of government. Power is acquired and maintained by spending. There are no conservatives so don’t expect smaller government.

 

 

 

 

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North Korea, Will We Take The Bait?

For a number of years, I have known that the CIA, FBI and United States intelligence is not good for much of anything beyond providing high paying jobs to the people who work in the agencies.

North Korea is trying to bait the United States into attacking them. There is more going on here than just a crazy kid with too much power. I do not know who the other players are here but North Korea is not alone. Americans misunderstand how our military is viewed in other places around the globe. The notion here is that we are the good guys in white hats doing good around the world and that we are largely appreciated.

This viewpoint is completely unique to the imaginations of American citizens. For a long time, I have conjectured that there is a consortium of opposing interests which is looking for a way to engage the United States in a mindless ground war. Nuclear war is a possibility but the goal is to put the U.S. in a war where casualties are unavoidable so as to force American citizens to take an interest in the wars the military fights.

The United States probably could not be defeated on the battle field but the citizens can be put in a position where they would likely oppose the government. Deaths of foreigners in their own country’s at the hands of our military is not of concern to American citizens. American citizens only appreciate their own pain and suffering to the degree they have any.

So, it makes since to foreign nations to put Americans in a position where they can’t avoid knowing what is going on. This is what the tension in North Korea is all about. Don’t count on American intelligence for guidance. They don’t have the insight for such a thing.

 

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The Fall Stock Market Crash

September through October is crash season for the stock market just like July through early autumn is hurricane season. Some years there are no hurricanes. In all but a few years there is no Stock Market crash. Generally there is a little market weakness in the fall but nothing dramatic.

The stock market is way overvalued. Few dispute that. The economy is falling apart right before our eyes. So, doesn’t it make sense that the market would crash in the fall? It makes so much sense that big money is hedged up to its eyeballs. It makes perfect sense except that stock prices are being aggressively managed. Despite years of organized intervention in the stock market, all but a few still subscribe to the dogma relevant to a market that is governed buy supply and demand.

Plans are in force to prevent any serious fall weakness. Traders are lined up on the starting line just waiting for the starting gun to go off. This mind set is easily exploited. I am keeping my powder dry and staying in cash. Having cash on hand when the eventual collapse comes is much more important to me than trying to make a killing on one or two disastrous days.

There will be no limits on resources devoted to supporting the market this fall. So, I am not shorting.

Don’t forget that central banks are being used to consolidate and control the factors of production of the major economies of the world. Their buying will be without limit any time markets are in serious stress. Part of this is driven by political agendas. Don’t forget that central banks will buy to protect their existing equity portfolios.

When will stock prices drop? Probably it will not happen until the economy and political system are damaged beyond repair. That exact moment is not knowable.

 

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