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Market Plummets, but Had Anything Really Changed?

By Rick Ackerman Posted on June 2, 2011, 12:49 am EDT Last Updated June 2, 2011, 6:56 pm EDT

We searched in vain for news yesterday that might have explained the nearly 300-point drop in the Dow Industrials.  Granted, there were reports of dramatic weakness in home prices and a downward revision in Goldman’s GDP forecast for Q2, to 3% from an earlier 3.5%. But that stuff is old hat, at least in a newsletter world that has always viewed the recovery story as an unpersuasive hoax. And what’s the big deal anyway about a 4.2% drop in home prices when it seems entirely likely they will fall by a further 50% before the crisis ends?  To expect a better outcome is folly when residential real estate has already fallen 35% despite a multi-trillion dollar “stimulus” by the central bank. As for the GDP figure that supposedly knocked investors for a loop, the numbers were never even remotely credible to begin with, extrapolated as they undoubtedly were from the same murky sources that the Labor Department uses to understate unemployment each month by more than half. Why worry about economic reports that nearly everyone except the editors of the Wall Street Journal and the New York Times know are completely made-up?  It beats us.

Nor can we fathom why the supposed termination of QE2 later this month keeps surfacing in the mainstream media as a source of angst.  Does anyone actually believe the government will not continue to monetize Treasury debt as though there will be no tomorrow? The Federal Reserve has become Treasury’s biggest “buyer” by far and will soon surpass China and Japan combined in that category. Does that sound like a good time to go cold turkey?  That’s what we thought — and we’ll lay odds on it. Meanwhile, although some have argued that QE2 has been a bust, who besides Obama, Bernanke and a few benighted big-city newspapers would take the other side?  Perhaps in a world less enamored of bizarre ideas about the source of wealth and prosperity, we would expect investors to enthusiastically welcome an end to quantitative easing. Instead, economists who should know better — including a Nobelist who has asserted, apparently not in jest, that the stimulus was not large enough –continue to vest their hopes in Big Government to extricate us from this mess.

The news media have parroted and promoted such claptrap, but who even believes them any more?  Here’s the Wall Street Journal yesterday, soft-pedaling the recession-or-worse — and we can’t decide whether they were displaying cluelessness, or pure Goebbels: “The U.S. economy might be on a slower path to full health as manufacturing cools, the housing market struggles and consumers keep a close eye on spending.”  Talk about understatement.  If these guys are indeed shilling for Obama, Bernanke et al., at least they cannot be accused of not having their hearts in it.

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  • Rich June 3, 2011, 12:00 am

    Interesting empirical survey of the effects of QEs:

    http://www.gurufocus.com/news/134915/the-effects-of-quantitative-easing

  • Rich June 2, 2011, 10:49 pm

    Scintillating economic essay Rick.
    The only place I may diverge, along with Bill Gross, Doug Kass and El-Erian, is in wondering if we really will have another QEIII, and if debt defaults and higher long-term interest rates will drive money out of Bonds into Equities paying higher dividends than bond interest.
    (So far, no.)
    Yet if food and fuel prices plus Big Sister DHS TSA intrusions and taxes go up much more, we may see armed pitchfork rioting around all Capitols and Airports.
    The GOP know it, having squandered their political capital post 9-11.
    Would 0 or any governor get re-elected by firing on voters? Can they really rig the elections again and get away with it?
    Will Boehner or Bernanke blink first?
    That is the question…

    • Rich June 2, 2011, 10:58 pm

      Might as well add healthcare costs too, per Rick’s yesterday essay, with armed pitchforks around clinics, hospitals and gas stations.
      People getting pissed, and not enough FEMA concentration camps to go around.
      (You can only kill so many people with bioterrorism, depleted uranium and foreign troops on American soil, such is the American tendency toward Liberty.
      Family member’s 10-month journey to hell with open heart surgery, disability and MRSA leading to more open heart surgery seriously questions the value of American medical care anyway…

    • Rich June 2, 2011, 11:00 pm

      http://www.huffingtonpost.com/2011/05/12/wall-street-march-may-12_n_861367.html?view=print

  • DaveT June 2, 2011, 10:03 pm

    Carol,

    Yes, I think you’re right. Anyone who tries to fix this, simply ends up helping the current gang to stay in power. We do need to wait till they are gone, before any repair could be done.

    On Nazi reference:

    I do not see your references to Nazi as wrong, I think they are just on the mark. Too often people do not realize that the well known event – the holocaust, was a direct result of a series of socio-economic events in Germany, and not at all the result of some single crazy person such as Hitler or even all of them.

    Germany created the national healthcare system in 1880, and that resulted in the country being economically ruined. Once it was ruined, then the Germany had to undergo a series of very unpleasant economic contractions.

    It were those contractions that the leadership of Germany preferred to have blamed on someone else. This is the main principle of leadership, – never to take blame for own crimes.

    This is the reason that such a parallel should be made. Obama, having absolutely no slightest idea of what makes economy work, is attempting to make a reform. He imagines himself a great reformer, all the while he would not be able to run an ice cream stand.

    His errors, namely the ruination of the American economy by his Obamacare (just like in 1880 Germany), will result in a series of economic contractions, much more painful than the present.

    Will he stand up and say, – “Yes I am an idiot and I ruined my country”? Of course not. He, or whoever there will be after him, will try and find someone else to blame, and this is where the holocaust will begin.

    That is why Rick’s reference to Nazis is quite accurate. Rick knows what all this means and he calls it as he sees it.

  • Oliver June 2, 2011, 8:04 pm

    The Nazi comparisons are perfectly apt. The indoctrination by the MSM to never compare the Nazi regime to other situations because of the Shoa is merely done to prevent people from recognizing the similarities. The Nazis did us at least the favor to give us a good inside look at how these things are done, because they actually happened to believe in what they did.
    This time, we will not have this advantage, as the fascists behind the curtains today are much more intelligent.
    They want world government, and it looks like they´re going to get it.
    The sudden speed at which the USA are turning into a dangerous police state is almost as breathtaking as it must have been after 1933 in Germany. Only difference is that everything is done in a much more hidden and deceitful way. Court rulings, even and especially by the high courts are plain unbelievable and are turning the US constitution into toilet paper by the day.
    Where is it written that these government and banking thugs are not going to start killing people by the millions eventually?
    Where is it written that Hitlers, Stalins and, hey!, Maos atrocities cannot be topped?
    Kunstler should have warned of the whole coming Palin circus of having similarities to the Hitler-circus. If Palin gets a chance there will be intelligent, unscrupulous people behind her, texting her mouth.
    A direct comparison is obviously faulty as Hitler was the real driving force and criminal genius behind the German fascism. Palin is just a puppet figure.
    They will not try to do it just like 1933, they will be much more “elegant” this time around, what am I saying? will? they are at it right now!
    What´s the lesson for decent people from the Hitler ascension?
    That it was precisely the decent people who refused to believe it all until it was too late.
    Mao and Stalin killed way more people than Hitler. What´s so special about him, that he´s always the super-rogue, forbidding any comparisons? That he picked the jews instead of absolutely everyone like Stalin and Mao?
    If I have to choose which bastard to pick, I prefer Hitler by the mile: he told everyone, who he will kill. With Stalin and Mao no one ever knew who would be next.
    I am darn well tired of people telling us any comparisons to Hitler are a no go!
    That´s how one learns of history, by making comparisons and checking whether there are similarities creeping up.
    And the similarities are damn well there. There are so many little fascist episodes accumulating, it has long begun to smell really bad.
    The president can now attack anyone he deems a danger to (o holy, holy) national security. Pentagon can retaliate cyber attacks with conventional weapons. No one will ever be able to prove where a cyber attack came from. Police can storm your house if they think fit.
    Beware the normalcy bias!
    Hello frog? Feeling the heat, yet?
    This comes from when you use your democratic rights to elect crooks, actors and the sons of former presidents.
    Jefferson, if he could, would not turn in his grave: he would come right out and slap everybody in the face to wake up.
    Make a personal experiment, where the US is currently standing on the fascist thermometer, call for a demonstration to Washington DC to clean out all rulings and regulations that obviously violate the Constitution. If anyone listens, you will be arrested for domestic terrorism, dear frog, and the Supreme court will throw away the key.
    And in Europe, let´s see what the method will be there. Smells like total chaos – again.
    One dirty nuclear device and civil liberties will be gone – and all of a sudden, you will have to turn on the internet everyday to report to get your daily dose of coin bits to go buy food.
    Unless you read sites like Rick´s – then you will get none. 🙂

  • Pertinent 2007 Quote, on QE3 and Beyond. June 2, 2011, 6:51 pm

    October 16, 1997

    “One of your recent posters wrote of (a widespread) belief
    that the government either has a plan to stop the market’s fall,
    or that they will step in to shore up the market if needed.

    Your response discredited the government- as -conspirator argument,
    noting that markets are simply too big to allow any one group the ability to control.

    Recent world history offers an excellent example of your view in practice.

    At its peak in 1989, the Japanese stock market stood at nearly 39,000
    and Japan’s real estate market was valued at more than $18 trillion,
    more than the combined value of the rest of the planet!

    As a trader there at the time, I was told ad nauseum about why the market would never fall,
    but more importantly why it COULD NEVER fall: the government would not allow it.

    As you know, the government of Japan controls, or tries to control,
    far more aspects of the economy and society than the US government would ever dream of trying to control.

    Shortly after the Japanese Crash began, the government began to try to put a halt to the skid.

    Since 1991, the Japanese government has spent more than $350 billion of the peoples’ savings
    (the Government run Postal Savings system and Postal Insurance system) to try to directly push up stock market prices.

    They have also spent more than $700 billion in “emergency budgets” and “supplementary budgets”
    in an attempt to reinvigorate the economy.
    Japan now has the highest debt/Gnp of all G7 countries as measured on a yearly basis,
    and second highest debt/GNP on an overall basis (now above 83%).

    What do they have to show for it?

    The Nikkei is at 17,000, down 60% from its high.
    Real estate prices, tough to measure because so few transactions are taking place,
    are in many places down 85% from their 1989 highs.

    The economy shrank by an annualized 11% in the last quarter, and it is looking worse so far this quarter.
    The pension system is underfunded to the tune of a trillion dollars,
    and the banking system has teetered on the verge of collapse for years.

    So much for any
    government’s ability to control the markets.”
    –A.G.

    • Pertinent 1997 Quote, on QE3 and Beyond. June 2, 2011, 6:54 pm

      October 16, 1997

      “One of your recent posters wrote of (a widespread) belief
      that the government either has a plan to stop the market’s fall,
      or that they will step in to shore up the market if needed.

      Your response discredited the government- as -conspirator argument,
      noting that markets are simply too big to allow any one group the ability to control.

      Recent world history offers an excellent example of your view in practice.

      At its peak in 1989, the Japanese stock market stood at nearly 39,000
      and Japan’s real estate market was valued at more than $18 trillion,
      more than the combined value of the rest of the planet!

      As a trader there at the time, I was told ad nauseum about why the market would never fall,
      but more importantly why it COULD NEVER fall: the government would not allow it.

      As you know, the government of Japan controls, or tries to control,
      far more aspects of the economy and society than the US government would ever dream of trying to control.

      Shortly after the Japanese Crash began, the government began to try to put a halt to the skid.

      Since 1991, the Japanese government has spent more than $350 billion of the peoples’ savings
      (the Government run Postal Savings system and Postal Insurance system) to try to directly push up stock market prices.

      They have also spent more than $700 billion in “emergency budgets” and “supplementary budgets”
      in an attempt to reinvigorate the economy.
      Japan now has the highest debt/Gnp of all G7 countries as measured on a yearly basis,
      and second highest debt/GNP on an overall basis (now above 83%).

      What do they have to show for it?

      The Nikkei is at 17,000, down 60% from its high.
      Real estate prices, tough to measure because so few transactions are taking place,
      are in many places down 85% from their 1989 highs.

      The economy shrank by an annualized 11% in the last quarter, and it is looking worse so far this quarter.
      The pension system is underfunded to the tune of a trillion dollars,
      and the banking system has teetered on the verge of collapse for years.

      So much for any government’s ability to control the markets.”

      –A.G.

    • Pertinent 1997 Quote, on QE3 and Beyond. June 2, 2011, 6:56 pm

      CORRECTION–SEE ABOVE.
      IT IS A 1997 QUOTE,
      NOT FROM 2007.

    • Bernankio June 2, 2011, 7:01 pm

      Oh hummm they only spent 1 trillion they just didn’t spend enough but I will make sure that I do spend enough just you wait and see 🙂

    • Rich June 2, 2011, 10:36 pm

      Worth noting the Nikkei 225 closed today at 9555.4.
      Lord spare US from anymore bailouts that reward Wall Street Financial and DC political institutions at the expense of the rest of the country…

  • nonplused June 2, 2011, 6:07 pm

    Chill ben. When talking about psychopathy it doesn’t hurt to reference past cases of psychopathy. These people don’t even care that everyone knows they are lying, and so long as they think nothing will be done about the fact that they are lying they will continue to lie. The parallels to Nazi Germany are more than just a little disconcerting, because this time the liars have the nukes.

    • ben June 2, 2011, 6:25 pm

      Robert’s comments were so outrageous to me that I wouldn’t even know where to begin a response. If the Nazis were not the ultimate form of evil, perhaps I need to look up evil in the dictionary and relearn the word. I guess declaring your intentions to commit genocide, as opposed to hiding them, somehow make you more honorable and less evil.

      As for “nonplused”…I think you need to think about this…what would you do if you were in control? Lying is the only thing preventing the whole house of cards from crashing tomorrow. America is on an unsustainable path that will end in misery, and the lies about our economy, and the lies about money itself, are now the only things that are keeping EVERYTHING from coming to a crashing halt with the concomitant starvation, death, anarchy. When you see things form this perspective, the “lies” that you lament about become more of a gray area…and maybe even the most honorable of men would likewise perpetuate the same lies to prevent a devastating collapse.

    • Carol June 2, 2011, 6:42 pm

      Ben,
      disagree. They only way to truely change ANYTHING that we presently have (any of the frauds and corruption that is) is to allow it to crash and burn (and yes there will be lots of pain why shouldn’t there be retribution for the wrongs done) and then and only then can a real rebuilding begin.

    • Jim N June 2, 2011, 11:04 pm

      Not to gang up on you Ben, but I’ve been to the camps and have seen first hand the evil and ugliness you refer to. Agreed that it is the standard if you want to rank evil, which i think is pointless. What you are referring to is the after the fact judgement of a decade of time or so. It got its start out of economic issue and you rightly judge where it ended up. You indicate that the current problems we have are economic only, and there i must disagree. We are going down a road where families will be torn up due to the impacts they are facing. Consider where this might go in the next 10 years. consider the pain and suffering that may start occuring. Consider a war that may start that all got its start out of economic greed. The effect isn’t completed. The one parallel that is SO CLEAR is the one RA used. Propaganda. It was the tool that the elites used to cause the mess. Us vs. them. The same tool is being used today, and it is one of the most powerful ones in the elite tool box to get us fighting the wrong battle and taking our attention off the things that matter. Stay tuned for the next 8 years and lets see what the real outcome brings. I betcha it won’t just be economic hurt in our checkbook.

  • ben June 2, 2011, 5:43 pm

    Rick…your analogy may not be nearly offensive as JH Kunstler’s recent comparison of Palin to Hitler…but I think you could have made your point just as easily without the Nazi reference. In fact you probably would have made your point a lot better. There really is no need to invoke images of the Holocaust to call the government a bunch of big fat liars. Rather it is a distraction form your message.

    • Robert June 2, 2011, 6:01 pm

      “I think you could have made your point just as easily without the Nazi reference. In fact you probably would have made your point a lot better.”

      The analogy is apt.

      The Nazi’s were nothing more than the ultimate community organizers. They favored their supporters, and sought to demonize those who did not buy into their claptrap and complete political wrongness.

      If you are so sensitive that mental images of the holocaust still offend you, then you, my friend, are completley ill-equipped to deal with the future urban realities that are bearing down on us all like a 1000 ton freight train.

      At least the Nazi’s publicly declared their intentions of genocide and stood fast to their convictions.

      Contrast that to the seedy, shady evil that underlies the global monetary policy distortion that kills innocent children in Africa only because they happened to be born there, and not Virginia….

      Humanity is sick; and the Nazi’s, while completely repulsive, were still not the ultimate form of evil in this world.

    • Rick Ackerman June 2, 2011, 7:17 pm

      I’m Jewish, Ben, so it is like an African-American using the n-word. Besides, there were no references to the Holocaust in my commentary — only to Goebbels, the Nazi propagandist. And if you think my allusion to his mendacity was merely distracting, you’re not paying attention to the dumbfounding lies our own government is putting out. Truth itself has lost its mooring in political America.

    • ben June 2, 2011, 7:47 pm

      Rick…I am much more aware than most people of the lies being pumped out by our government. But unlike the Thrid Reich…thse lies are not being pumped out with the aim of genocide and world conquest. While the motives may be largely selfish and greedy, maintaining the power of a group of elites, their motives are primarily to maintain the status quo. Almost every government in the annals of history lied to its populace to maintain order. While I know this discussuion is a very emotional issue, resorting to hyperbole, instead of bolstering an argument, often just leads to a breakdown of the discussion.

  • Sammi June 2, 2011, 5:04 pm

    And this is truly the only good news one can hope for these days.

    All these “retirees” (profligate spenders that spent their whole lifetime consuming and not saving, and if they saved a tiny bit, they wanted to help the fascists and so did it through govt programs, they who voted for the Social Security to enslave me without as much as even inquiring my opinion, can they be punished just this once?

    All these “poor” who sat on their $400 a week regiment of weed while watching TV and complaining that the life is too hard for those who are too fat, they are sure that it is my responsibility to wake up and come to work, to pay for their “pursuit of happiness in healthcare”, for their dumb kids who consider spelling a worthy achievement of 14 old, who insist it is my responsibility to pay their healthcare costs, can they go bust?

    All these “never lifted a dickweight in a lifetime” government “workers”, community organizers, sustainable developers and social scientists, who keep insisting that I need their service, all these groups, can they lose their money to may-be get a hint that they are too dumb to exist?

    Would it not be only fair for all the “bad” forecasts to come true? Just once, please?

    • Robert June 2, 2011, 5:52 pm

      It would only be bad if you ended up on the wrong side of a gun barrel when desperation sets in…

  • Rantly McTirade June 2, 2011, 3:29 pm

    Of course, official Chinese government economic stats make American ones look like they’d come direct from the lips of the Virgin Mother.

    • mario cavolo June 2, 2011, 3:57 pm

      Rantly……..mmm well sort a kinda not really…

      Chinese openly acknowledge that they have a gray market economy in the trillions permeating through all levels of the asset and income scales outside of, separate from the official stats….truth is, they don’t even know, so they just put out known estimates as guidelines.

  • gary leibowitz June 2, 2011, 2:54 pm

    It’s over. This shell game has no more buyers left. I suspect an intermediate bottom will be seen by mid-june followed by one more weak rally. Thats the optimistic view.

    I also expect the dollar to rally against a falling stock market. Commodities should also fall hard given the fact that Chine is slowing.

    The lack of financial reforms indicate that we will fall very hard and long. The corruption is now common place. Congressman no longer has to put their assets in a blind trust. They are exempt from inside trading law. They conveniently exempted themselves. There used to be a law preventing congress from such exemption but they managed to reverse that minor inconvenience.

    Do not for a moment think that the Fed and Congress is omnipotent in its ability to prop up the markets. Their meddling has only created a larger wave to be pulled down by gravity.

  • C.C. June 2, 2011, 8:25 am

    Timing may prove interesting – and critical. The job of the fed and the political class (actually, aren’t they really one in the same?), is going to be more difficult, requiring precise timing. If a precipitous market fall were to commence at this stage in the game – after already being down that road once, and with reasonable understanding among all participants that none of the imbalances have been addressed or worked out, might not be orderly.

    If events throughout history rhyme, but rarely repeat, one cannot assume that we will necessarily repeat the events of last summer, leading up to the Jackson Hole moment. I have a hunch that if confidence wanes in the next few weeks to any appreciable degree, one might anticipate action – and implementation equaling or surpassing the action taken last August/September time frame, in speed and intensity.

    We are certainly inching closer to tipping point with cascading circumstances in either direction as a direct consequence.

    • Cam Fitzgerald June 2, 2011, 9:43 am

      I do not anticipate any immediate action. None. Far from it actually. I think that belief could cost you dearly if you are depending on a life preserver that includes words of hope or your being saved financially by Fed interventions.

      Not yet anyway.

      The market is set to punish bulls and shift the general dynamic to the downside over a period of a few months. There will not be any saviors during this time.

      There will only be a glimmer of hope until is all done.

    • mario cavolo June 2, 2011, 3:54 pm

      Hi Cam! …….that idea makes perfect sense…! When are you coming to China my friend?

      Cheers, Mario

  • Cam Fitzgerald June 2, 2011, 5:26 am

    Another round of stimulus is virtually assured. I expect it will come in the fall. That means another healthy leg-up in the stock markets is inevitable as money chases equity opportunity. To fully capitalize on it though and slingshot to the new highs a sell-off is required first to loosen weak hands and trigger stops thus creating a new bottom from which to build. News is not required. Just surprise and a little panic selling by those caught unaware.

    • Cam Fitzgerald June 2, 2011, 5:56 am

      I just want to add that I believe what we saw today is just a taste of what is to come by summers end. I have little doubt the Dow will fall below 10,000, possibly as low as 9000 before it is over.

      Investors and the public will need a reason to demand another round of stimulus measures. Seeing their pension funds evaporating over just a few months should do the trick for those heading into retirement. They will be apoplectic and anxious as markets continue to decline….

      First the pain,…then the medicine. We will demand a cure.

    • VegasBob June 2, 2011, 7:40 am

      I do agree that Mr. Bernokio will have no choice but to implement QE3, and probably sooner rather than later. Congress will not rein in its profligate spending, which will force Bernokio to monetize a substantial portion of new debt issuance.

      But I’m not sold on the idea that Bernokio will once again get a huge stock market pop as he did with QE2, simply because QE3 through QE18 are going to ultimately force the cost of necessities into the stratosphere ($20 gasoline and $10 milk, anybody?). This will effectively zero out discretionary spending for all but the very wealthy. Somehow I don’t think this will be good for Corporate America’s profitability.

  • Erin June 2, 2011, 5:25 am

    Wow…I spent quite a bit of time growing up in Vail at an elevation over 8000 feet and I don’t ever remember it looking like that on June 1. That is just not right after a long winter in the mountains.

    Isn’t the real problem that the Fed has no control over where all the free money goes. Even when you give cheap money there is a point of diminishing returns in the economic cycle and for this country twice now it has been $4.00 gas. Not to mention all the other soaring commodity prices. You cannot destroy the buying power of your money (inflation) and expect to just keep growing (with debt) at the same time!

    While I agree that QE3 will come at some point to save the system once again, it can’t happen now because we are again at unsustainable price levels of everything. They have to let prices of everything fall and the stock market will have to go with it. The market is a mechanism for all the commodity prices which are choking the country. If the currency is not getting stronger and/or wages are not growing then nothing can be done once the law of diminishing returns kicks in.

    Bernanke at this point certainly knows that what he is doing will not work. Basic economics is at play here. He must be quite a coward to not admit that what he is doing will not work and instead continue to destroy the poor and the middle class. In 2008 we had over 31 million on food stamps…the latest report as of May 2011 is 40 million. Government assistance in this country across all programs continues to soar.

    You would think one politician leader in this country would look at these numbers and say…”Maybe this is not working and we need to try something else”.

    I don’t know how anyone could not wish for Ron Paul to get elected. No matter what you think of him, his economic predictions (Austrian school economics) has been spot on for his whole career. How can anyone argue against that as we stare in the face of a complete collapse of our way of life. Unbelievable!!!

    • DG June 2, 2011, 5:40 pm

      half the populace (roughly) HATE Ron Paul simply due to the fact that he morally opposes abortion. One should listen to him speak about that before they ridicule him with a “duh”. The gurgling fetus dying in the bucket for an hour is what did it for him.
      Paul lifts a mirror to us all and forces us to study our own issues and deal with the truth. Most folks don’t want that. They want to elect some smooth talker that convinces them that somehow they will be given much without doing much more than voting. If I were running Paul’s campaign, I would drop all positions on abortion. We can’t handle the truth.

    • jazzmaniac June 2, 2011, 6:17 pm

      DG What!? Half the population has never heard of Ron Paul let alone his position on abortion. We already have way too many clowns playing the cater-to-the-conservative-social-interventionists game. Ron Paul can believe anything he wants about abortion but I’ll be voting for him (given the chance) because of his principled stand on spending. And that includes a big chunk of the military industrial boondoggle as well, if you’re really familiar with his views.

  • John Jay June 2, 2011, 4:39 am

    Ever since JFK was taken out of the picture, we have had increasingly oafish puppets presented as candidates for POTUS, the Senate and the House. As a result, the winners of the elections have reflected that fact. The big money that pulls their strings now barely go through the motions of a representative democracy for the USA.
    The big investment banks etc. that account for most of the market volume, ( other than the Fed in the bond market) never have a losing day trading, so 300 points up or down makes no difference to them, they always win. With so many people either wasted on drugs, on the dole or working for the government, or consumed by celebrity worship (from Oprah to the Lakers) there is absolutely no chance of any change in the status quo.
    If you are on the right side of the day’s HF/Program trading you can make some money, but don’t expect it to make any sense, that’s a forlorn hope.

  • GlennH June 2, 2011, 2:24 am

    Rick, not sure what the sell off means or how it applies to historical periods like Germany in 1937 but I can tell it is one cold spring, check out the June 1 webcam at Sunshine Village west of Banff. It is right on the continental divide.
    http://media.skibanff.com/webcam/134-l.jpg

    looks like a decent mid winter ski day.

    I am going to cover some long positions, and spend the cash and get the early bird pass, We might be skiing in September next fall. That is an exceptional situation to be in as the world is going to end on October 21 and I still have some decent Line Profits (fat skis) to bang through the powder. If debt starts to implode and deflates M3 Prechter wins, if debt is sold off in an orderly fashion and redeployed in private assets then Armstrong’s “the man”. Either way I am getting one more season on the boards 🙂

    • jhenry June 2, 2011, 6:52 am

      Cold and wet in Utah mountains, as well. Snowbird ski resort, east of Salt Lake City was open over the Memorial Day weekend. They had 10 inches of fresh powder and said they have lifts open until June 12 and may keep on open until the 4th of July. skiutah.com says they had 7 inches on May 30 and 10 in the last 48 hours. Total of 772 inches for the season and with a base of 180 inches.

    • Rich June 2, 2011, 10:28 pm

      Squaw was open Memorial Day Weekend with fresh snow. Will be open on 4th of July also. Some global warming we’re not having…


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