Jesse's Café Américain Mon 2009-12-28 18:59 EST

The US Bull Market in Smoke, Mirrors and Gullible Investors

Jesse

We have given quite a bit of coverage to the somewhat 'thin' veneer of recovery being spun by misleading government econmic statistics in the US. And we have certainly noted the almost blatant manipulation in many US markets, including stocks and commodities where the banks and hedge funds have been pushing prices around, sometimes with the help of the government, in a disgraceful repudiation of any notion of reform. Thanks to the Tylers at ZeroHedge we have two very nice charts to present the case that the recent continuation of the US stock market rally is attributable to price manipulation largely in the after hours markets when trading is thin.

Bull Markets; gullible investors; Jesse's Café Américain; mirror; Smoke.

naked capitalism Mon 2009-12-21 16:36 EST

The China Decoupling Myth?

One of the motherhood and apple pie items in econ-land is that the world needs global rebalancing, which is code for China has to stop being a mercantilist and currency manipulator, and the US has to quit borrowing a ton and overconsuming (or underproducing, which is another way to frame the same problem). But once everyone agrees that that's a swell idea, no one seems particularly inclined to do anything about it, except complain about the consequences.One of the things that has led to somewhat less attention to this elephant in the room is the perception that China has ``decoupled.'' If it has managed to fare reasonably well in this global upheaval, then surely it is becoming more self sufficient and therefore less dependent on US demand, so the situation is already righting itself, correct? Wrong, says Dror Poleg...

China Decoupling Myth; naked capitalism.

naked capitalism Tue 2009-10-27 12:37 EDT

Why is Zero Hedge claiming the Fed is intervening in equities markets?

Edward Harrison of Credit Writedowns

I just came across a post on Zero Hedge called ``An Overview Of The Fed's Intervention In Equity Markets Via The Primary Dealer Credit Facility.'' Now, that's a mouthful. As far as I can discern, the post's purpose is to expose alleged equities market manipulation by the Federal Reserve. However, I found the argument rather conspiratorial. And despite claims of an alleged smoking gun, there is no evidence in the post that that Federal Reserve is manipulating anything except interest rates. And the Fed made clear that that was what it intended to do.

equity markets; Fed; intervening; naked capitalism; Zero Hedge claiming.

Credit Writedowns Fri 2009-10-23 08:57 EDT

US angling to get Chinese to revalue renminbi

In what looks to be a central line of attack in the quest to re-balance the global economy, the Treasury Department has ratcheted up the rhetoric against China's currency peg. The Treasury's semiannual report to Congress slammed the Chinese for their lack of exchange rate `flexibility,' but stopped well short of accusing the Chinese of currency 'manipulation' as Tim Geithner had claimed...[dollar losing reserve currency status]

angle; Chinese; credit writedowns; revalue renminbi.

Jesse's Café Américain Thu 2009-10-15 16:38 EDT

Sumitomo Forecasts Dollar to 50 Yen, End of Dollar as Reserve Currency

Jesse

"We can no longer stop the big wave of dollar weakness," said Daisuke Uno at Sumitomo. ...The market is taking the dollar where it should be, where it needs to go. If only countries with obvious pegs and ongoing manipulation to support export mercantilism were also to allow their currencies to float more freely. It is going to kill off global trade. It is the great failure of the WTO and US trade policy to have allowed pegs and overt currency manipulation policies which are de facto tariffs and subsidies on trade.

50 yen; Dollar; ending; Jesse's Café Américain; reserve currency; Sumitomo Forecasts Dollar.

The Guardian World News Mon 2009-10-12 10:04 EDT

Kaupthing chief named as suspect

Iceland's most controversial banker, Sigurdur Einarsson, the former executive chairman of failed bank Kaupthing, has been made an official suspect by fraud prosecutors examining alleged market manipulation relating to an investment in the bank by Qatari royal Sheikh Mohammed Bin Khalifa al-Thani weeks before its collapse a year ago.

Guardian World News; Kaupthing chief named; Suspected.

Jesse's Café Américain Sun 2009-09-20 11:07 EDT

Stock Market Rally: Shenanigans Abounding

Jesse

...The US markets in general have every mark of a maturing Ponzi scheme...Bonds, stocks, metals, sugar, cocoa, and oil are all moving higher, while the dollar sinks. Is the dollar funding a new carry trade?...We remain guardedly 'optimistic' on the markets for next year ONLY because of the Fed's and Treasury's willingness to continue to debase the dollar to cover the massive unrealized losses in the banks' portfolios, even as they return to manipulating markets in business as usual. Inflation is good for financial assets, and we think another bubble is in the cards, at least for now given Obama's unwillingness to reform, unless some exogenous event or actor intervenes...

Jesse's Café Américain; Shenanigans Abounding; stock market rally.

naked capitalism Thu 2009-09-17 09:46 EDT

``How China Cooks Its Books''

We've commented from time to time on dubious Chinese data releases. But this report from Foreign Policy reports on an interest aspect: that the statistics are not manipulated only in the normal bureaucratic manner (fudging them) but also by getting companies to change behavior so it can be tallied in a more flattering fashion....unemployment is likely 40 to 50 million, as opposed to the widely reported 20 to 30 million; the statistical manipulations are a surprisingly broad-based initiative.

books; China Cooks; naked capitalism.

Credit Writedowns Mon 2009-09-14 14:43 EDT

Murder-Suicide in Chimerica

Edward Harrison

threading the events of 2008 and 2009 together makes a compelling case that the Chinese -- U.S. marriage is coming apart...GSE collapse, Geithner's charges of Chinese currency manipulation, Chairman Wen slamming the U.S. as a profligate nation, stimulus bill buy-American provision, a steady drumbeat of ditch-the-dollar talk coming out of China, Chinese central bank head Zhou's call for a new international reserve currency, Obama's chinese tire tariff was ``proverbial serving of divorce papers''. Expect prices to rise, look for Chinese retaliation on U.S. poultry and auto products...This marriage is over. The question is whether it will end gradually and peacefully in divorce or violently in murder-suicide.

Chimerica; credit writedowns; murder suicide.

Jesse's Café Américain Sun 2009-09-13 12:32 EDT

Japan: The Triumph of Crony Corporatism Over the Individual

Jesse

The former Japanese Central Banker Toshiro Muto says that '"in principle equity values should be set by the market and authorities should avoid manipulating prices because doing so would hurt the stock market's reputation." Apparently in this case 'in principle' means 'theoretically, as is convenient," because Mr. Muto goes on to recommend that the Japanese Central Bank and government throw principles aside and buy stocks to support the Japanese banking cartel, which has crippled that country for the past fifteen to twenty years.

crony corporatism; individual; Japan; Jesse's Café Américain; triumph.

Jesse's Café Américain Sun 2009-09-13 12:21 EDT

Signs of an Approaching Decline in US Equities That Could Be Quite Impressive

Jesse

There is a strong correlation between this US equity rally and the Fed monetization of debt, which indicates a 'hot money' flow into US stocks but with thin volumes from a significant market bottom. This points to 'technical price trading' by the financial sector, also known was price manipulation, or trading stocks like commodities. Continued heavy insider selling from those with the best forward view of the real economy is a clear sign of a top. No one can trust what the Fed or the Administration are saying about an economic recovery, as much now as ever. Obama's administration is no reform government ...We will not be surprised if there is a significant decline, first to a pullback of about 7 to 10 percent. Then we will see if the market can rally on renewed dollar devaluation and if not, then another major slide to test lower levels.

Approaching Decline; Equities; impressive; Jesse's Café Américain; signed.

Jesse's Café Américain Sun 2009-09-13 10:32 EDT

Barrick Capitulates

Jesse

Barrick and their partner J.P. Morgan were the target of lawsuits by the gold bulls, most notably Blanchard and Company, for price manipulation through the use of their forward sales in their hedge book. Barrick's original defense was reported to be that they were acting in conjunction with J. P. Morgan and the central banks to cap the price of gold, and were therefore immune from prosecution since the central banks are immune from prosecution. Gold market manipulations.

Barrick Capitulates; Jesse's Café Américain.

Jesse's Café Américain Fri 2009-09-04 19:42 EDT

"Let's Just Whack the Oil"

Jesse

``The markets used to be about capital formation,'' said Mr. Quast, the consultant. ``Now 80 percent of trading is driven by some form of statistical arbitrage. We are buying into a statistical house of cards that could unravel very quickly.'' ...this manipulation is getting so blatant and widespread and regular that it is crippling daily market operation, not to mention robbing the general public of millions of dollars every day in their 401K's, pensions, and investment accounts. It has more of the appearance of organized crime than it does of a financial system.

Jesse's Café Américain; Let's Just Whack; Oil.

Bruce Krasting Fri 2009-09-04 19:39 EDT

On Fed Intervention and the Blogs

Bruce Krasting

A week ago a great debate was stirred in the financial blog world. As is often the case Zero Hedge was in the middle of the fracas. Mr. Durden penned a piece that suggested that the Fed was manipulating the auctions in such a way as to benefit the primary dealers. It got to be a very sophisticated discussion that brought in some thinking from Yves Smith at Naked Capitalism and John Jansen at Across the Curve. The debate is over is far as I am concerned. The Treasury had another successful auction today of the 30 year. But in order to make it a success the Fed bought $27 billion of 15-30 year mortgage paper. The curve is the curve...This is timed intervention. That is a polite way to say manipulation. Federal Reserve manipulating Treasury auctions; quantitative easing.

Blog; Bruce Krasting; Fed intervention.

zero hedge Tue 2009-09-01 19:43 EDT

Oil And Treasuries Paint A Divergent Inflation Picture, Yet Is It Even Relevant?

...bonds are reflecting a deflationary environment while commodities and stocks are betting on inflation...Yet...both stocks and bonds are potentially being manipulated to a point where they bear no reflection of the underlying assets, whose values they are purported to represent...is the debate about inflation versus deflation based on asset trends really relevant: a bizarro market dominated by animal spirits and intraday greed has ceased to indicate any long-term trends and our advice is to simply enjoy it for what it is - a ponzi casino...

Divergent Inflation Picture; Oil; relevant; Treasuries Paint; Zero Hedge.

Tue 2009-06-16 00:00 EDT

naked capitalism: Guest Post: The Imminent Disinformation Schism

``naive, easily-manipulated, small-time mom and pop investors, who only care about looking at their daily yahoo finance screens and 401(k) statements...and the forward looking taxpayers, who see the upcoming budget deficit fiasco, the social security ponzi scheme, the Medicare/Medicaid debacle, the ridiculous underfunding in public and corporate pension funds, the rising city and state taxes, the shuttering factories, the rising unemployment, the plummeting American production base, the "seasonally" upward-adjusted economic data coupled with consistently downward revised prior economic releases, the increasing savings rate and the multi trillion discrepancy in consumer purchasing power.'' Time contributing author Douglas McIntyre declares end to 2008 banking crisis

Guest Post; Imminent Disinformation Schism; naked capitalism.