THE ROLLER COASTER CONTINUES
Up 2% which is huge generally – down 2% as the market adjusts back and forth. Generally as we suggested in our January market reporting the USA Market is decoupling from oil. Still the manufacturing recession is entrenched – the earnings recession is growing as guidance from 110 American leading reporting firms came in with 88 giving he market MUCH LOWER than expected down side earnings for the first quarter result. Companies are conservative in guidance and actual earnings may be higher. If they are at or lower the downside pressure will continue.
As the IMF warned the G 20 this last week – the risks to the downside are LARGER TODAY than in 2008. Why? The market leverage is fantastic. A new frontier. The wealth of nations is now globally investing in a casino market. They are buying at unimagined unregulated leverage side agreement “bets” on which WAY the market might go betting on both sides of the transactions and manipulating market share prices at 400 to 1 ratio’s on the bet – and pocketing the up down profits along both sides of the rope using software. The problem is that when the bet is wrong and the entire market goes DOWN in any Super Crash the leverage calls margin pay off’s in when bets must be dumped – and insurance contracts that are bogus frauds with no ability to pay as in 2008 fail – institutions fail – all at once and its quick. That is what the global agencies fear while they attempt to design a NEW WORLD ORDER of a new SYSTEM OF REGULATORY REFORM that would span the G 100.
The systemic risks are rising because the stake holder investing in long term growth is collapsing and the SUPER RISK of highly leveraged casino betting has reached a position the world has never in history experienced before. This house of cards falls as debt that is unpaid triggers a SUPER CRASH run on all the liquidity. Credit freezes. Trade stalls. Recession even global depression is possible.
This condition in much lower leverage ratios and lacking the obscene bad debt banks and investment banks presently book as good performing assets on their books- which we feel is fraud – comes home to all of us as the true state of balance sheets is understood as in China India Pakistan Spain Italy Greece and others – where the bad debt will never not ever be repaid. The system bankrupts on this news. Meanwhile the powerful money institutions fiddle while Rome burns. There is no riskless risk.
Speculation is not a market. Regulations that are wise and prudent moderate tendency to construct opaque non transparent investment pools for trillions forged on fantastic leverage that adds no economic value to Global trade, into channels of real market investment in growth and economic expansion for all of us. The lack of a GLOBAL FRAME WORK when the trades are in the cloud and the regulations are on the ground local only makes no sense and the cattle have run from the barn that is on fire ( the old world order unable to regulate financial trade that is digital and without borders. )
The solution is a G 100 Economic Constitutional CONVENTION to over several years set up a legal global frame work in which:
- All speculation is made a crime as it was in 1999.
- All markets are fully reporting no secrets no lack of full transparency.
- Public firms report earnings every 180 days versus monthly -which is insane.
- Trade rules are global inclusive and fair and all G 100 sign on to them.
- Non aligned nations are welcomed in and boycotted for black markets.
The world is repaired and the NEW WORLD ORDER rises from the ashes of the debt ridden old order. Debt is unwound and over time and where possible reset with SUPER BONDS at 200 year maturity for sovereign G 100 participants to the global economic constitution.
Without FRESH PLANS to FIX THE MESS the mess will fix itself and the pain may be world war. Historically speaking.
But the market was up today.
Berny Dohrmann – Chairman CEO SPACE