INVESTMENT BANKER ECONOMIST’S READ DIFFERENT TEA LEAVES
In casino capitalism, all markets are working this way:
- Outside any regulatory control. Laws are blue sky to nations and trades are outside nations in the cloud.
- Software controls all trading all unregulated and without historic precedent.
- Leverage is fantastic with margin accounts the world has never seen before in leverage.
- Trading records are led by a small number of stocks versus the wider number in markets – so the fraction of rare performing stocks lead the entire market place?
- The base of participants in the market is historically at an all time low and the volume of trades is high due to leverage and software to software high volume trading.
- Sofware speculates and manipulates market prices using forward side bets on which way a price may go – betting both sides of the rope to the software construct riskless risk to trading volatility making CASINO INSTANT PROFITS daily in trading accounts. Software seeks riskless risk no matter which way the market goes. Insane.
- The risk remains pure economic fundamentals, super bubbles asset prices bursting, debt bubbles bursting and liquidity disappearing which software has no solution for and managers will not know what hit them when the debt calls rebalance. The system freezes. Liquidity stops in the casino in 72 hours and no plays anymore at all.
- Let us look at the base of participation in the market now at a 1930’s low level of total market players in. Yet the velocity and volume are so high. Why? Well, take 2 of over 18,000 shadow banking hedge funds and private equity firms and related financial institutions. Blackrock at 5.1 trillion in cash under management and Carlye at 4.7 trillion under management. These two entities manage over 10 TRILLION DOLLARS OF CASH. That is TWO FOLKS. High volume trading daily with half their bucks in ETF software trading accounts. China has 2.9 trillion in total cash reserves these two entities have THREE TIMES THE RESERVES OF THE NATION OF CHINA and more than the USA and the FED. TWO. There are 18,000 more in the casino.
So with less participation, THE MARKET using SUPER LEVERAGE ( say you leverage 10 trillion at 50 to 1 what does that trade globally ) all becomes an upside down pyramid. Most of the money is in private small folk savings and cash and is not playing in the market sittng on side lines at the top of the pyramid. The point of the upside down pyramid is leveraging and speculating ( side betting to manipulate volatility to profit daily in high volume software trading inside the casino market ). None of this market has anything to do with economics.Casno Capitalism has to do with casino side bets to make greedy mindless profits at all costs. It does not reinvent in growth or long term anything. This lack of regulatory ovesight and ramp up of out of control speculation since 1999 laws changed under President Bill Clinton, is important, because this is the CAUSE OF THE GREAT DEPRESSION of 1902 and 1929. Both depressions. It uses the money for a stock by backs and further price manipulations across all asset classes as pure software manipulations across asset classes. It uses profits to consolidate where the elite fantastically wealthy 1% class get even more fantastically wealthy by the hour as the world middle class goes down bubble in the ocean of failed casino capitalism. Consolidation of wealth has reached a point of economic NON SUSTAINABILITY – an inconvient economic truth the IMF and WORLD BANK fail to present with sufficent full clarity to G 100 law makers.
So let’s look at the first quarter:
- The Fed will release the vital GNP number tomorrow for the first quarter of 2017. We told you it would be near zero growth. This means the growth anticipation of last year and the New Year was a lie and did not take place. We suggest the GNP will be under 05%. Or virtually zero which means we are entering a recession. As the Fed cuts back stimulus under a failed policy that DID NOT WORK AT ALL – inflation is not here -0 deflation is here – and they are now at FED and Gov cutting back spending and selling assets which will raise price costs to grow a business.
- Automotive output crashed in the first quarter – pure down graph.
- Manufacturing – pure down graph in first quarter.
- Consumer buying down first quarter March second month of falling consumer buying.
- Consumer confidence down this month.
So the GNP is declining in America. The main buyer for the world. The main trading partner. The money pool. That market in 2017 is going down and shrinking and stocks are flying UP. Do you see how strange that all is? During this period of the grand picture declining into a recession market, the market itself driven by the forces of casino capitalism and side bet high-velocity money pool software speculations – has SOARED IN VALUE. But only the smallest fraction of stocks have realistic price earnings ratio’s as the market is so hideous over priced today. Now the market is in waves of volatility. The ideal market for the casino to profit all the way up and all the way down each wave of volatility. Software speculation causes the waves keeps the waves moving and profits from all of the waves. Little folks get wiped out. As the waves get steeper and they come closer together eventually the declining GNP effects to world trade itself, will create a super bubble burst in asset classes. This will trigger a debt bubble bursting given the fantastic borrowing and debt the system is carrying from individuals to companies to nations. When the DEBT BUBBLE BURSTS system liquidity will freeze up. The FREEZE will take less than a week – 72 hours maybe. The result will be SUPER CRASH. The world system will be on lock down. The software folks will be loosing so much money and regulators will be in panic having caused this issue, by failure to REFRAME REGULATIONS In a digital market space they lost control over world wide.
The When is the unknown. A year. Two more. Five? How governments cooperate is the issue here. If they compete in trade war spirals as they are today, the end is closer. No one can predict the precise date. We have said the two windows we are watching are – OCTOBER of this year and Spring of Next Year.
Also the SELL IN MAY AND GO AWAY Mantra – is rising. Take profits out now and move during the slower summer trading season to your villas’ while super money coasts during the summer with virtually no good returns in 30 summer charts – underpinning the SELL IN MAY AND GO AWAY. Some of that is going to begin soon so watch for that effect.
So why does the market soar when there is no real news outside a less than 5% of companies reporting the earnings price share ratio to drive those across the board market rises? The answer is SUPER POOLS OF MONEY speculating in a new CASINO CAPITALISM driven by software fully outside any G 100 regulatory framework – and driving the largest speculative SUPER BUBBLE worldwide in the HISTORY OF HUMAN record keeping, across every asset class from your home and real estate to stocks and bonds and all side bet speculations.
The risk to the system itself is soaring.
I am far from alone in seeing all this. The IMF and World Bank see it and warn us. But the problem is collective solution dynamics. If you rant over and and over on the problem the market can not fix and correct itself. The leadership of the IMF and WORLD BANK need to unite and present consistently a MASTER PLAN SOLUTION. This solution framework has to include these elements:
COOPERATIVE CAPITALISM REFORM: STRESS THE SOLUTIOIN NOT THE PROBLEM
- The largest global G 100 nation rethink of the regulatory framework since the 1920/s, accommodating the new digital market place.
- A three-year ECONOMIC CONSTITUTIONAL CONGRESS to create the first GLOBAL ECONOMIC CONSTITUTION adapted by G 100 nations – with a uniform regulatory framework, tax accommodation and enforcement model, and trade and full partnership and access model between signing nations.
- The framework installs COOPERATIVE CAPITALISM which is fully accountable, fully transparent, fully reporting, and has no systemic secrets all real time.
- Speculation and side bets are made crimes as they were from 1932 to 1999. Moving unwanted software speculations out of the marketplace returns economics to the market and self-grows world economies.
- A level playing field where the SYSTEM RULES self-correct to cooperation and competition ( cheating between partners ) is not tolerated within an INTEGRITY RICH AND RULE SET framework – as the crises are IN INTEGRITY by a failed system model.
It is time to REFRAME the core regulatory system for the world financial markets with all G 100 nations participating in establishing a set of global regulatory and trade rules that is fully inclusive of all. If we cooperate into COOPERATIVE CAPITALISM we all prosper. If we compete into deflation and trade war spirals as we are doing now we all PERISH.
I call upon the WORLD BANK and IMF to think about it.
Berny Dohrmann – SELL IN MAY AND GO AWAY – IS MY SUMMER RANT TO YOU