Shenandoah

by John Galt

August 19, 2008

So I’m crude, and your point is?

The recent thirty days plus of our so-called non-government interfered with equity markets can basically be summed up by the title of this rant:

It is a masturbation market.

The various members of the PPT are essentially playing with themselves. Look at the volume on the S&P chart above for the past month. Look at the .VIX or NASDAQ volume charts. No one is participating  because the God of the Holy 19 said “don’t you dare short my children” and of course those who made large volume bets, that would be the Holy 19 and their sect of perverted multi-billionaire followers, called a truce in the war of “Who bends over last?” and the associated financial derivatives and computerized trading programs that followed.

Welcome to a market driven by:

FEAR

That’s right, the almighty and powerful bubblevision followers, their advertisers and the people who think they constitute the “market” are all freaking terrified. How does a blogger with a radio audience smaller than Rush Limbaugh’s but larger than Alan Colmes determine this? Well, maybe not always larger than Alan’s but if three of you tune in, we’re at least tied, but I digress.

Look at the trading activity. It is all black box and hedge fund trading. It is market makers trading with market makers. It is pension plans trading anything profitable with the latter. There is no sudden surge of money from foreigners to cheer the markets forward. There is nothing to inspire suddenly large influxes of cash into our equity markets because guess what? The game is up.

So who is trading the paltry sums of shares we are seeing lately?

They are playing with themselves.

And that is a pathetic statement to our allegedly “free” markets as  any influences by some trading houses (Just put some I.C.E. on that baby) can cause radical and rapid moves which destroy legitimate long term investments or create wealth for Cayman Island based subsidiaries that create tax free alternatives for those Boys in the Hood who have the blessings of Hanky Panky and Benron to keep the game going and prevent a total collapse of the system by going oops on one black box trade too many and crashing a pension fund for a small state like South Dakota.

How long will this self pleasuring incestuous trading pattern last? Not much longer. The third quarter will come to an end. Reality will set back in. The realization that commodities are still in command for the long term as long as 400 million Indian citizens and 400 million Chinese citizens do not suddenly die overnight will set in again and cause a flight to real safety, be it nickel, iron ore or pork bellies. The dollar is still a worthless piece of crap posing as a real currency backed by the full faith and credit of a government that lies to its own people about the efficacy of our system and the long term future of our economy based on real numbers and not the hedonic bull crap they post.

Keep all of this in mind. When  you see the volume start to ramp up after the Olympics, when the commodity trade turns around based on serious oversold conditions, you’ll know that the beginning of the end which began two endings ago has begun. The fraud known as the Wall Street Circle Jerk which trails all the way to the District of Columbia and only pauses in the United States Bankruptcy Court in the District of Delaware just so the Enron’s of the world can wash that investor right out of their hair will eventually implode. Markets are made of honest trades, actual trades, and non-governmental tampering.

When markets are made of fraud, lies and deceit they crash. And once Whang ho Wak determines his ChiCom hedge fund is not worth what he thought it was in our markets and that he was being treated like a Chinese toy manufacturing eight year old, he will liquidate his position.

Don’t stand in the doorway of this coming rush to the exits. There will not be room for you, your family and your “investment adviser” to fit through the exits. Take the advice of old Hank in the darkened Pee-Wee Herman theater:

“Pass me a Kleenex please and  let’s just sneak out before the ending.”

It’s one mess you don’t want to be in, near or touch. Run before you see the credits.