Thursday, March 26, 2009

China and France Now Economic Advisors to U.S.


Beware those who appear to agree with CFRN on the surface, but may simply be another player in the "Great Deception". That's right, you heard it here first. Let me say it again, really slow.... this - is - not - the - next - Great - Depression....this - is - the - Great - Deception which we are being sold and it may very well end America and Capitalism as we know it... if we buy it.


We opened the show looking for an upside target of 828 which could lead to a downside target of 800. It took almost the entire show (2 hours) to finally reach the 828 upside target. We were engrossed in our chat with David from PageTrader and failed to pull the trigger when we hit our spot on air. The good news is, important prices are almost always tested. Right? See the chart and see what we mean.

Since we were convinced early on that we wanted to be short off of 828, couldn't we have just got long to that spot instead of waiting to get there to go short? Yep... BUT, that did not fit our trade. So we waited, and waited, and waited, and the trade came right to us.

I just scanned the Talking Heads and everyone (i mean everyone) is looking for a continuation of the rally. I'm still looking for a test of 800. We popped slightly higher on the Globex session and as I type we are back to 826 where we closed.

As Always....
Pray Hard & Trade Safe!


A Bailout in Disguise
by Bill Bonner
London, England

Three cheers for Topolanek!

Never heard of him? Neither had we until this morning. But on the front page of today's Financial Times, we discover two extraordinary things. Topolanek is the Prime Minister of the Czech Republic (and coincidentally, president of the European Union). And, he has a very accurate road map.

"The US is repeating mistakes from the 1930s," he says, "such as wide- ranging stimuluses, protectionist tendencies and appeals, the Buy American campaign and so on. All these steps, their combination and their permanency, are the road to hell."

We've said so ourselves. Many times. But we are surprised to find the president of the world's biggest and richest economy - Europe - say so. It made us feel if we weren't alone in the world after if we had a friend. And a friend in a high place.

At least, he was in a high place this week. He lost a non-confidence vote in his the Czech parliament on Tuesday...causing a stir in Brussels. No one knows how the European central government functions - certainly not the Europeans.

But as near as we can tell, it's a healthier system than the United States. The presidency rotates...with each member nation getting a turn. So, when the president of the EU says something, you can ignore him; he'll be gone before the milk goes bad.

Meanwhile, Europe's central bank seems to be of the same mind as its president.

While other central banks print up extra currency to help bailout their economies, the European Central Bank hardly seems to notice. Unlike the central banks of Britain, Japan and the United States, it hasn't cut rates to zero...and it isn't printing money. The economy will get itself out of the slump faster if the bank remains steadfast in its long term objectives of sound money and stable interest rates, says Trichet.

Well, as we Irish would say, "Tree cheers for Trichet, too!"

In America, the scammy bailouts come faster than European presidents. But each one gets a little cleverer at disguising what is really going on.

The idea behind all the bailout programs is always the same - to stick the losses onto someone who doesn't deserve them.

Of course, the stickers tell us not to ask questions; it's a national emergency! But when the stickees - the taxpayers - see what actually is done with the bailout money, they get a little huffy. So, now the stickers have a new plan: a public/private partnership, which makes it sound like Wall Street is helping to bail itself out.

Finally, the feds are going to harness the private sector...and get the people who caused the crisis to help get us out if it. Now, investors and government will be working together, as equals, to solve this problem. But if you believe are Tom Friedman. Which is to say, you are a moron.

Inviting investors into the game looks good on paper, but what's really going on? The losses are the losses. Why would investors want a part of them?

Of course, they wouldn't...unless they were paid to play along.

The public is fed up with bailouts. So, the feds have disguised this new one as an investment scheme. The lumpen yahoos are invited to imagine that "capitalists are now going to help solve the problem they caused" as it was described in the French press. They delude themselves into believing investors are willingly going to buy into losing positions...and somehow make them winning ones. "" is what they'd like to believe.

But the game is poker. And for every winner, there's a loser. And the big fellow who has just entered the game is every poker player's dream. He is almost infinitely rich and infinitely stupid. Before the night is over, investors are going to clean him out.

And the American taxpayer is getting fed up...knowing full well that none of this bailout money will ever make an appearance in his personal account. We've warned our dear readers before: you can't expect the government to bail you're going to have to take care of that for yourself. That's why we've put together our special "Emergency 'Personal Bailout' Plan. Get yours here.

The Dow rose 89 points yesterday. As near as we can tell, the rebound is still going on. For stocks globally, March has been the best month, so far, since 1989.

But don't mistake a rebound for a real bull market. House prices in California were down 41% last month, over prices from a year ago. Airlines are expected to lose $5 billion this year. IBM announced a further 5,000 job cuts. German business sentiment is at a 26-year low...

In short, this correction has a long way to go before it is over. By that time, most people will have stopped caring.

And now, we turn to Ian in Baltimore for more news:

"The U.S. Treasury auctioned off $34 billion in five-year notes yesterday - barely," writes Ian in today's issue of The 5 Min. Forecast.

"Demand for government debt was so low the Treasury had to adjust the bond yields mid auction, from 1.8% to 1.85%. Five basis points might not seem like a big deal, but it certainly turned heads at the Big Board:


"Even more notable," continues Ian, "this bond fallout happened on the same day the Federal Reserve announced its first series of Treasury bond purchases. Bernanke and company snatched up $7.5 billion of their $300 billion U.S. Treasury purchase program... and investors didn't seem to care. So much for the trader idiom, 'don't fight the Fed'."

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