BERNY DOHRMANN WHAT IS REALLY GOING ON OUT THERE

The end of Active Investing? Humbug

WHY SHORT ETF’S BEFORE – THE SUPER CRASH?

 

The market of the past twenty years moved into digital trading and outside all nation regulatory frame works. Regulations are local. Trades are in the CLOUD and unregulated moving through favored nexus and jurisdictions for trading platforms where trillions are traded. As in the 1920’s the shadow banking of non economic market created or market engineered speculations now is larger than the stake holder trading or real economy of acquiring an asset and trading the asset.

As in the run up to the world depression:

  1. The dog pre depression years, of buying and trading and asset was regulated.
  2. The speculation market rose without regulation in which trading to buy a side bet on which way an asset class may rise or fall at a future date began to influence the market.
  3. By the 1929 SUPER CRASH YEAR the volume of capital trading in the speculation market was many many times the volume of the real economy and absolutely was controlling and manipulating prices in the real economy. The market had become a casino. Casino capitalism. Self corrected by tragic predictable rebalancing of accounts.
  4. Regulations cam in to play in 1933 and were adopted world wide to outlaw “bucket shops” and make speculation trading or side bets a felony.
  5. In 1999 in the last THREE HOURS of the lame duck Bill Clinton Administration just before Dec Christmas break we have the last unanimous vote of congress. The Commodity Modernization Act ( which had nothing to do with commodities – see 60 Minute Special on this item ) passed. This law tore apart all regulations of the 1933 period laws, and returned the ability of any bank to invest your grandmother’s deposit in asset classes that are side bets on which way something may price itself in the future, versus buying an asset and trading the asset. Today in 2017 the casino market for side bet trading is as it was in 1929 many many times larger than then REAL ECONOMY of buying and selling asset classes without speculation. Casino capitalism market manipulations must rebalance against a real economic at a future date. The largest RE THINK of global regulations over a digital age market space is now required.

In a coupled decades we have witnessed as we did in the 1929 run up – first too big to fail consolidations of wealth versus circulations desired for real economic growth in all nations – and – too big to jail by manipulators who now control legislation world wide. Debt fueling such economies as the EU, China, the USA and others is not sustainable economics.

Asset owners require a future in which they can realize a predictable real economic return greater than inflation ( versus say speculations and side bets that wiped out Norway Ice Land and countless institutions in the speculation bubbles of dot.bomb of 2000 and the crash of 2008 globally. Precursors to rebalancing of SUPER CRASH that restores economic’s versus market driven manipulations in casino capitalism.

Enter the GREAT LIE. That managed investing hemorrhaging into SOFTWARE CONTROLLED INVESTING or passive investing is the future. ETF passive investing as with manipulations in sub prime, creates risk-less risk. Only there is no risk-less risk.

The theory creates asset diversification pools of real assets and higher return speculation assets ( side bet contracts as to which way a future asset class may or may not go – speculation ). These pools are merged into consolidated pools or Super Pools. These risk-less risk pools are consolidated into SUPER DUPER Global Pools along the same format as the Sub Prime modeling.

There is zero regulation in this casino class of non assets. The non asset side bet investment market is now the largest consolidation of capital on earth. All the banks are fully in. Black-rock with 4.9 trillion under management is 50% invested into passive casino bets without offset to the risk. Because the theory is the bet is risk-less risk based upon software moderations.

Until we have SUPER CRASH as a rebalancing where’s

  1. There is zero liquidity.
  2. There is only collapsing deflation asset classes across the board.
  3. Speculation casino side bets wipe out all wealth at 100% loss.
  4. Regulators come in and say HOW COULD THIS HAVE HAPPENED.
  5. New Laws are passed GLOBALLY to change the model back to economics where the laws are GLOBAL and there is no safe haven for speculations which are once again a crime, as they were post 1933 and where in 1998.

The barn was opened to lay the ground work for a global economic collapse as it was in 1901, 1929, and now in 2017. Why? Because in the past twenty years for the first time paper trading and local regulations failed, and DIGITAL TRADING moved outside laws and regulations and what was a crime was made legal. Congress was so aware of what it voted on in the COMMODITY MODERNIZATION ACT it specifically federalized the speculation such that clauses in the law superseded state laws that defined such speculation into non asset trading or side bets was a felony, and the new COMMODITY MODERNIZATION ACT precluded state prosecution of such speculations. This opened the door to the global casino where financial institutions consolidating capital flows could position side bets for highest yield and over time ( two decades ) forget the risk of such Ponzi markets.

In the early stage the trading in such markets the volume of new buyers entering the casino is much greater than the money the casino ( nations ) can place on the table. The house wins. Everyone wins. As time goes buy the trading on the table exceeds call the capital of the casino hotel and the hotel begins to loose big time. The market then returns to economics and risk less risk is seen as a pure Ponzi and the price of market based investing calls to zero and real asset classes bid to hideous multiples and high’s deflate for decades as rebalancing occurs.

Said another way ACTIVE TRADING with real humans watching your money may return less in the short term that passive trading of software in the risk pools of premium speculation into the SUPER DUPER POOLS return more but maximize your risk to its most outstanding level in history.

Asset owners over time have become complacent. They have bought into the casino market based versus economic based investment mantra of RISK-LESS RISK set up by software versus human moderations.

ACTIVE MANAGEMENT tends to invest outside the no longer safe model of the past 30 years of 40% bonds and 60% equities. ACTIVE MANAGERS weight investment into real asset acquisition ( economics ) and avoid the premium returns of SUPER SPECULATIONS or side bet investing. Those chasing higher returns and wearing blind folds for RISK are proceeding at their own destruction. As liquidity will evaporate as it all does in rebalancing returns from casino speculations to real economics the end is near.

However the degree of DIGITAL SPECULATION draw’s all debt and speculations of any past market since ROME. The degree of RISK for world collapse of the entire system and a following world war ( which always occurs in such rebalancing ) is ENORMOUS and PREDICTABLE.

We have been blogging to the WORLD BANK to the IMF to politicians to the money pool leaders ( who all read my blog as they did in the dot.bomb forecast and the SUPER CRASH prediction of SUB PRIME I made in 2001 to 2007. THAT.

A GLOBAL “ECONOMIC” CONSTITUTION FOR WORLD TRADE RULES AND REGULATION TO OUTLAW AND CRIMINALIZE ALL INVESTING OUTSIDE BUYING AND SELLING A REAL ASSET IS NOW REQUIRED TO CLOSE CASINO CAPITALISM – RETURN ECONOMICS GLOBALLY – AND PRESERVE AND SAVE THE SYSTEM FROM REGULATED REBALANCING.

The debt is rising to trigger SUPER CRASH.

The speculation in the casino in various asset classes is rising to an ungodly level outside all economics to trigger SUPER CRASH.

The ETF markets will utterly collapse the system when SUPER CRASH rumbles through its contagion. The ETF markets will become illiquid in 72 hours and the counter party agreements will destroy banks and countless financial institutions who will also become illiquid. The notion this CAN NOT HAPPEN falls under a math equation of madness based on economic history.

Why?

Greed. The market is a stamped of euphoric greed. What goes up must continue and always go up.

Warren Buffet suggests never BET AGAINST AMERICA. STOCKS WILL ALWAYS BE HIGHER IN 20 years. Tell that to a 1927 investor at the peak. Tell that to the 100’s of millions who perished in WORLD WAR II.

These markets paper traded. The speculation was paper traded.

Today trillions trade in minutes digitally. The leverage and risk is unmatched in time and is more fully global than any prior speculation SUPER BUBBLE.

So the great experiment of DIGITAL TRADING without global regulation is on. The only hedge is ACTIVE TRADING VERSUS PASSIVE TRADING. I strongly encourage those who moved to PASSIVE TRADING for gain to move BACK for risk avoidance. I strongly encourage those considering ACTIVE TRADING to avoid making that move to PASSIVE TRADING and elevated insane risk.

In fact SHORING ETF’s is now the SUPER BIG SHORT for wealth creation if you see SUPER CRASH as the only outcome to greed festival.

So consider these givens when you make choice. I believe the active bet of 40% bonds and 60% equities is inside a casino economic needing a RE THINK. My money is on:

20% equity 20% bonds and 60% insurance index investing and better diversified insurance investing – the one pay out in the depression when banks were closed that kept on paying. Best money managers world wide and ACTIVE not PASSIVE.

But hey – I stopped believing in Santa Clause, in RISK-LESS RISK and in casino capitalism after 911.

But I’m an investment banker economist having run one of the faster growing public global brokerage firms for years. What do “I” know?

Berny Dohrmann  CHAIRMAN CEO SPACE Forbes and Inc # 1 Ranked Business Conference in the world – 2017 – next March 12th Orlando.  But what do “I” Know ?

 

PS: leave me a comment if this information helped you and share this blog for me as this one folks on Trump day – this one IS important.

— January 20, 2017

One thought on “The end of Active Investing? Humbug

  1. Having read this I thought it was very informative. I appreciate you taking the time and effort to put this article together. I once again find myself spending way to much time both reading and commenting. But so what, it was still worth it!

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