Tag Archives: Troika

The U.S. Financial Markets Are The Biggest Joke In History

As would be expected after the Greek public voted down down the terms of the Troika bailout offer, the S&P 500 futures gapped down 30 points yesterday evening when global electronic trading of the markets commenced after the Greek “NO” vote. Gold popped up $8. The rest of the evening and overnight session was spent pushing the S&P 500 back up:


And gold back down:


The Shanghai Stock Exchange is down nearly 30% since mid-June. A veritable crash resulting from a crumbling Chinese economy which could no longer support Chinese stock market bubble valuations. The Chinese economy is tanking because exports to it China’s two biggest import countries are tanking. For evidence of this look no further than the Shanghai Containerize Freight Index – LINK – which is down 32% since late 2014.

If exports are not leaving Shanghai, it’s because of weak demand from Europe and the U.S. I have written several articles demonstrating that the U.S. economy is continuously growing weaker.

European stock markets are all down 1.5-2% today in response to the Greek vote.  Only time will tell how this Greek Tragedy will play out.  But if the Troika compromises with Greece, it will likely be forced into even larger compromises with Italy, France, Spain and Portugal.

The point here is that the global economy is falling apart  – quickly.  And the only markets in which that fact is not being reflected is in select U.S. stock indices and in the Comex paper gold and silver market.   As I started to write this, the Plunge Protection Team has pushed the S&P 500 into a gain from Thursday’s close.  It has since faded back into negative territory.

Many sub-indices and stock market sectors are reluctantly reflecting the underlying fundamental economic realities.  The financial guarantee stocks, which were one of the primary omens of the 2008 market collapse, are down 20% – 40% in the last eight trading days.  These stocks reflect the extreme financial risk embedded in the system. The Dow Jones Transports are down 11% since late November.  This huge divergence from the S&P 500 reflects the deteriorating condition of the U.S. consumer.

The only indices not reflecting reality are the Dow and the S&P 500.  These also happen to be the only stock indices that are reported to the public by mainstream media.   The only conclusion that can be drawn is that the blatant and interminable market intervention in these stock indices is a definitive reflection of the Government’s overt attempt to impose total control over our system and our lives.

Not only are the markets a complete joke, but they have become symbolic of the U.S. Government’s creep into a system of totalitarian control.   Once the TPP Agreement has been signed and ratified, our country will be changed forever.  THAT’S what the action in the stock market today is telling us.

Don’t Panic, The Fed Is Control Of The Markets

There’s no such thing as markets anymore – only interventions.  –  Chris Powell, co-founder and Treasurer of GATA

If today’s market action does not convince the last skeptics that the U.S. financial markets are completely rigged, nothing will.

The action in the U.S. markets today after the Greece/EU situation hit a wall today demonstrates the degree of control the Fed and the U.S. Central Planners have over the markets now.    The S&P 500 futures opened down 30 points when global electronic trading opened Sunday evening.   Gold and silver spiked up.  Both markets began to reflect some degree of the risk to the global financial system posed by Greece’s potential financial collapse.

Of course, as has been the case since the 1987 stock market crash, the Fed/Treasury – collectively the plunge protection team (PPT) – went to work containing the damage to the paper markets.  This entailed methodically working the S&P 500 higher during the course of the night and methodically pushing gold/silver back down – click to enlarge:


The manipulation of the markets reflected by these overnight trading charts of the SPX and Gold futures epitomizes the extreme degree of market intervention by the PPT. Ever since 1987, and since Reagan signed the Executive Order which authorized the PPT to prop up the stock markets, there’s been market intervention “creep” in this country. Robert Rubin’s role as Secretary of Treasury was to transition the Working Group on Financial Markets (PPT) from its stock market propping function into a full-fledged, all-encompassing market intervention mechanism.

A colleague of mine this morning remarked that after today the market intervention going on should become blatant to everyone.  I scoffed at this notion.  Most people in this country are either not aware of what’s going on in DC and Wall Street or don’t care.  I was watching CNN this morning and the Greek Tragedy was not even reported.  If you only get your news from CNN you have no idea that the EU could fall apart.  Therefore, you have no reason to believe that the stock market should be falling off a cliff and gold should be going parabolic toward the sky.

The markets have become unimaginably imbalanced in the degree to which the paper derivative securities misrepresent the underlying financial, economic and political reality. Yes, stocks and bonds are nothing more than simple derivatives in that they are pieces of paper which are supposed to “derive” their value from underlying entities that issue them. But the underlying entities are nothing more than cesspools of accounting fraud, criminality and Ponzi schemes designed to suck wealth out the system.

The financial markets – and specifically the U.S. financial markets – have become collectively the biggest Ponzi scheme in the history of the universe.  This condition has been made even worse by the fact that the people running these markets and our Government have become completely immune from prosecution or even indictment. They are criminals who are above the law.

Examples of this are becoming limitless, but consider that an open felon who, as Secretary of State, sold U.S. foreign policy to the highest bidders for her own personal gain is now the front-runner candidate to be the next President.  The only way that our system can become more distorted, debauched and depraved than that will be when the Government begins to herd malcontents and critics into “internment” camps.  Don’t think for moment that is not in the playbook…

…when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.   –  Ayn Rand, “Atlas Shrugged”


SoT #40 – Paul Craig Roberts: Greece / TPP – Omens The West Is Collapsing

Everything in this country is becoming Third World – nothing functions anymore.   –  Dr. Paul Craig Roberts, Shadow of Truth, in reference to the completely rigged financial markets and failed democracy in the United States

Based on the reaction tonight by the stock market futures to the EU/Greek situation – the S&P 500 futures are down 25 pts/1.2% – I would hazard the opinion that the zombies on CNBC were slighly off-base when they asserted last week that a Greek default was already “priced into the market.”

This idiocy displayed on CNBC is emblematic of the extreme degree to which propaganda has infected our media.  But it also highlights the degree to which the American public has willingly turned a blind eye to the Orwellian fog that has completely enveloped our system.

A perfect example of a dysfunctional financial market is the Comex silver market.  The open interest in silver futures is currently nearly 1 billion ounces of silver.  Against this, the Comex vaults are reporting 57 million ounces of actual physical silver that is available to deliver into the silver futures open interest.   Never in the history of the known universe has any commodities futures market experienced a dislocation this extreme between the paper contracts which represent the underlying commodity and amount of physical commodity available to deliver into those contracts.

This is a failed market because the Comex silver market no longer operates as a price discovery mechanism.  Furthermore, the parties (CME directors, the SEC and the CFTC) responsible for Governing the Comex and for enforcing the securities laws already in place that are designed to prevent markets from becoming corrupted like this have conspired to prevent the Comex from functioning as a bona fide price discovery mechanism.  Instead, the Comex has deteriorated into a cesspool of corruption and wealth confiscation.

The TPP Agreement – in our view – is the greatest failure in the history of this country of elected representatives protecting the Constitution and representing the interests of the people who put them in office.

What the TPP does is give transnational corporations immunity to the sovereign laws of any country in which they operate. Any time the corporation can argue that the sovereign law of a country is a retraint on trade. – Paul Craig Roberts, Shadow of Truth

I would argue that the TPP Agreement is the ultimate act of treason by the President and by Congress.  The TPP Agreement has displaced all Rule of Law with Rule of Transnational Corporations.  Incredibly, 99.5% of the people in this country are either unaware of what the TPP Agreement represents or are just outright unaware of it altogether.

Perhaps the default by Greece and the subsequent GREXIT will incite a political and economic upheaval not just in Europe but in North America as well.  If Greece leaves the EU, it will likely trigger the eventual unraveling of the entire EU.

The agenda of the creditors of Greece is to establish the principle that they can over-lend to a country and then force that country to privatize the public sector in order to raise money in order to pay the creditors and they can force that  country to cut back on social services to the citizens… in order to pay back the banks. So it’s an assertion that the creditors are above the sovereignty of the country.

The other agenda that’s operating is that the EU and the ECB are using the Greek crisis to establish the precedent that the budget and fiscal policy of EU members becomes the property of the EU – that this is something that is no longer done at the member-State level, it’s set in Brussels.   –  Paul Craig Roberts, Shadow of Truth

If we are lucky, a GREXIT will “blow up” the attempt by the western elitists to implement a plan of centralized Governmental control of everything – the so-called New World Order movement.  On the other hand, the risk is very real that the neocons who have seized control of the U.S. Government, especially the Pentagon, will resort to launching nuclear weapons in a desperate attempt to hold on to the United States’ global hegemony that is quickly slipping away.

If Greece Blows Up And Financial Armegeddon Hits, Gold Will Go “Bid Without”

Although the Fat Lady isn’t on stage singing yet, it looks like my view that the Troika/Greece situation would resolve with a “NO-GREXIT” was wrong. I’m actually relieved because perhaps this will be the catalyst that will trigger a forced re-setting of all markets globally which have been rendered catastrophically disconnected from any remote semblance of their representative underlying fundamentals.

At least at this moment in time, the Eurozone has rejected any bailout extension beyond June 30th, regardless of the outcome of the Referendum on the matter declared by Tsipras. Perhaps this is the Troika’s most extreme effort to get Greece to “blink” in what has been, up to this point, a childish game of chicken.

However, that not being the case, it will be interesting to see how the markets will react on Monday, assuming the Central Planning Network of western Central Banks exercise ultimate control by cutting the “electricity in the casino” by making sure all the markets “break” ahead of Monday’s open.

Per a report posted by Zerohedge, one Cyprus-based FX brokerage firm, Mayzus, that would have had to look at somewhere such as this Leverate CySEC license page, or a similar license provider, in order to be allowed to trade within Cyprus has declared at FX instruments to be “Close Only” mode until Monday morning: LINK. It will be interesting to see, assuming no changes to the latest status of the GREXIT drama, if most, if not all markets, decide to declare a trading holiday on Monday.

Please understand that if the credit, derivatives and equity markets had not been inflated with printed liquidity to such an extreme degree, there would never be a need to “break” the markets to stop trading or declare an outright “holiday” as Mayzus has.

Why? Because the relative price level of the markets would have already incorporated a significant amount of the expected risk attached the probability of a GREXIT. Unfortunately the Central Banks have, up to now, successfully prevented healthy volatility and have completely insulated the markets from all measures of risk.

Thus, the only way to prevent financial Armageddon is to declare all markets on holiday. However, the most interest market to watch will be the re-pricing of the market for physical precious metals. Even if they suspend the trading of fraudulent paper futures trading, an over-the-counter – or even “black” market – for physical bullion will develop. This is because, unlike futures contracts, buyers and sellers can effectuate an exchange of physical for fiat paper. Of course, I believe that this market would open up “bid without,” meaning buyers will stick bids out looking for offers.

There’s nothing more terrifying in the markets than trading a market that goes “bid without” when you are short. Theoretically markets have a bottom – zero – but the upside is infinite. Speaking from the experience of being a market maker in a relatively illiquid market – junk bonds – it is more than just an “uncomfortable” feeling when you are short and the market goes “bid without.” It seems like an eternity until the first offer might appear and the pit in your stomach goes bottomless when an offer finally appears at a level much higher than the level for which you were praying. The short position will cause heart attacks and Bill Murphy’s prediction that they will eventually carry gold shorts out of the Comex on stretchers will come to fruition.

The only advice I would give to someone who decides to throw an offering out in physical gold is this: make sure you offer your gold at a price at which you are willing to own fiat paper currency instead of hard currency devoid of counterparty risk. Regard the value all fiat currencies like you might regard the value of new drachma relative to the value of physical gold bullion.

If You Don’t Like The Outcome Of The Game, Just Change The Rules

Perhaps this could be the “Force Majeure” event the Comex bullion banks are looking for in order to get out of their massive naked paper short position in silver by declaring that all contracts are to be settled “cash only.” At that point, may as well just shutter the Comex because no one will want fiat cash.

Speaking of changing the rules, BlackRock is seeking Government clearance to “change the rules” governing their mutual funds in order to set up an internal program in which mutual funds that get hit with big redemptions can borrow cash from internal funds that have a lot of cash: BlackRock Seeks To Change The Rules Of The Game

Not only does this tell us that the elitists running BlackRock expect a big run on mutual funds at some point soon, but it’s a signal to everyone to get their cash not only out of the rigged markets, but out of the financial system entirely.

More on this later, but anyone reading this who owns BlackRock mutual funds of any variety is a complete idiot if they don’t call up their brokerage or financial advisor and demand immediate redemption. That is, of course, if the markets open Monday….

SoT #38, SRSRocco – Seneca’s Cliff: Greece, Debt and Paper Silver

The path to growth is gradual but the road to ruin is rapid.  – Lucius Seneca, Roman philosopher

We hosted Steve St. Angelo at the Shadow of Truth for a fascinating, if not startling, look at the big developments that look to have the west – and possibly the entire world – headed for an unexpected collapse.

When the system finally starts to unravel, the speed at which it will unravel and how it takes down the fiscal economy will be breathtaking.  – Steve St. Angelo, Shadow of Truth

There’s really no good solution.  This is the dilemma faced by every western country.  The west, including Japan and the United States, has accumulated a catastrophic level of debt in order to sustain a standard of living that is not even remotely supported by economic output.  The Greece situation is the poster-child for this dynamic.  However, make no mistake about it, the United States is Greece on steroids.

The only difference between Greece and the United States with regard to its lethal level of debt is that  1)  the U.S. has the unfettered ability to print money and create more debt in quantities needed to service its existing debt and pay ongoing expenses and 2)  the U.S. has a world-ending arsenal of nukes  – Shadow of Truth

What we are seeing occur right now going on in the market for physical gold and silver is Gresham’s Law in motion.  Bad money chases good money out of the system.  This means that anyone who is holding “bad” money – and understands it to be bad money – will take the bad money and exchange it for good money – physical gold and silver – and remove the good money from the system.  This is exactly what is occurring with massive transfer of gold and silver from the west to the east:

In the last 15-20 years, money has been funnelled out of physical things and into paper digits and assets…money stored in a safe in the form of physical gold and silver – that’s stored economic energy…Unfortunately, 99% of U.S. citizens and folks around the world took the all the excess surplus paper money [money that has been printed] and put it in “digits” and they think they’re going to get that back. And that’s the reason that gold and silver are so undervalued…and the market hasn’t realized that…Steve St. Angelo, Shadow of Truth

The mining stocks currently are more undervalued now in relation to the current price of gold and silver than they were at the beginning of the precious metals bull market in late 2000.  Many of the junior mining stocks can be bought at a stock price that equates to a few dollars per ounce of the amount of proved gold and silver they have in the ground. Every surviving company, large and small, has cut its costs to the bare bones.

When the price of gold and silver resumes its bull market trend – and we believe it has this year – the price moves will be amplified by the declining supply of mined gold and silver globally.  The increasing price will fall right to the bottom line of mining companies.  Junior miners which have “fattened” up their proved gold/silver resource base over the last four years will see their acquisition value spike significantly higher.

By the end of this year, or let’s say by September/October, I think it’s a perfect scenario for things to get out of hand. If people don’t buy silver right now, I really don’t think they’re going to be able to find it in the future.  – Steve St. Angelo

Shadow of Truth: Economic Collapse, Greece, Gold and Blood Money

The markets have become very volatile and unpredictable as an unintended consequence of over 6 years of ZIRP and QE (note: mortgage QE has never stopped). It was released yesterday that from April to May this year U.S. housing starts plunged by 11% yet, gold and silver yawned and did not move up. The latest reading of the Shanghai Containerized Freight Index (SCFI), which measures spot price for container shipments coming out of China– has literally collapsed by 6.8% in the last week; gold and silver continue their nap time and did not move up.

That gold and silver are not reacting is highly significant. Gold and silver function in free markets as the fire alarm when smoke appears from somewhere. Smoke and small flames are appearing from a lot of sources but the Fed and the bullion banks have cut the wires on the fire alarm. While all of the markets are highly manipulated and controlled, the Fed and the U.S. Treasury have thrown all their weight and available resources at keeping gold and silver capped in price. This effort is for blood money.

Exports from China are a direct function of economic activity – and its relative vitality – in both Europe and the U.S. If the SCFI is plunging, it’s because economic activity in Europe and the U.S. plunging. A consistent flow of negative economic reports over the last several weeks in the U.S. confirms the U.S. is in an economic contraction.

Housing and auto manufacturing are two of the three primary support beams for the U.S. economy. Government spending is the third. Auto sales are on their leg of an enormous demand stimulus push from a flood of QE liquidity into deeply subprime auto loans. If you can fog a mirror, you qualify for a loan to buy a new car. Housing is on its last legs of a QE stimulated buying spree, first from big institutions and next from mom and pop investor/flippers. The big guys have for the most part stopped buying and some are selling – to the individual “retail” flippers. The music in this game of musical chairs is about to stop playing. Everyone got their seat?

The stock and bond markets are completely immune from any concept of valuation fundamentals or risk. The Fed has effectively sterilized all fear of risk from the market. At this point, nearly every single investor – professional and retail – is “on the same side of the boat.” It will turn ugly – it’s just a question of when.

If you combine this with the European situation, specifically Greece, and the strong possibility of Greece leaving the EuroZone and the Euro, it appears our global financial markets are in for some serious shock therapy. When the Prime Minister of any country stands up before the world and announces the national debt of their country is “illegal and odious,” it should send chills through the economic and financial news outlets, not to mention the equity and bond markets around the world. But it didn’t. No one seemed noticed or care.

Complacency breeds failure. Right now the enormous degree of systematic and non-systematic risk embedded in the markets and in our political and economic system is nothing more than a silent scream. But there’s a dull roar of volatility that’s slowly rising in volume. There’s no telling which event – known or unknown – will turn the public’s hearing aid up to 10 from zero. But when that event hits, everyone including the those of who can see it coming will likely be shocked by the unintended consequences which will be unleashed.