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AdirondackFund (< 20)

That should about settle it. If you are not already short...it is probably too late now.

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August 17, 2009 – Comments (15)

With the Hang Seng now down 667 points overnight and the Nikkei down 300, that should about settle the issue of whether we are going up or down in Equity Markets. I had thought that the Bond Market had already made that pretty clear in it's decline of the previous week...but maybe that's just me.

The catalyst for the decline in Asia?  A much better than expected rise in Japanese GDP of 3.5% and Poor Consumer Confidence numbers here in the States were listed as the 'official reasons' for the decline.  But 'fools' should know better.  Prices went too high and this is just a correction, and will likely be a steep one.  We are heading into the Fall and everyone is on Vacation.  Perfect time for a good 'ol fashion NYSE kick in the nuts.  

I just hope Japan can produce an egg once their currency comes into anything closely resembling a level playing field with the USD, but that's an old, old story and a score that has yet to be settled.  Since the GDP numbers were quite good, expect to see the YEN strengthen and drag the dollar up with it, thus allowing for our most bizarre coupling of Dollar/Equity markets to play out and not offend foreign investors here in our own markets. 

If this isn't the most obvious manipulation of both foreign and domestic investors, I don't know what is.  This must be a Goldman Sachs idea.  Their last great idea was to place a Police Report asserting that the theft of their Proprietary Software could cause 'market manipulation' if it fell into the wrong hands ... that one still has me rolling on the floor with laughter.  This was what started the High Frequency Trading Debate in which Goldman has made INCREDIBLE, UNBELIEVEABLE returns in Equity markets matched only perhaps by Bernie Madoff himself.  Some might even remember that just last week the SEC tightened up on the naked short rules and a few other trading details such as re-instating the uptick rule, perhaps knowing that a decline was coming.  How they knew can only be attributed to pure genius or an extremely high score on the Star Cards at Psychics-R-Us.com.  Yeah, the stupidest smartest guys in the room have done it again. 

The problem with all of this is that it is technically correct, so you grin and bare it.  We always live to fight another day.  You want to see the Japanese Yen strengthen, and dragging the dollar with it will only go so far, but still it will work.  GS is patching together whatever it can get it's hands on to make things happen the right way, and you do have to marvel at their willingness to take the heat.  Of course they are stealing from all of us in return for this service, so some will stay quiet for a moment to see how their plan pans out. The moment it fails, GS could be in big trouble and Politicians might move quickly to change the game and put GS in the hotseat since an election is brewing in about 4 months.  Jan. 1, 2010 kicks off the Election season and don't expect Congressional Leaders to be kindly to GS after it has been revealed that they have ripped off the US Taxpayer in a contrived rout of ALL MARKETS.  

If there is a good reason for a stock market decline, this would be it.  The US Taxpayer, it's Government and States have all gone broke because Goldman Sachs wanted to ca-ching some jingle at everyone else's expense.  Touche GS.  But I've got to hand it to you.  To do it in plain sight, in broad daylight and to be caught red handed isn't the usual tactic.  Infiltrating Government at the same time has never been tried before either, so you are way ahead of any previous record holders on this score.  But you have been caught.  That is the fact.  Good thing you got the bonus money.  you'll need it to buy your way out of trouble and the politicians will be only glad to help you out.   

15 Comments – Post Your Own

#1) On August 17, 2009 at 4:57 AM, Lordrobot (91.53) wrote:

I get it Goldman is the center of all the world's economic problems. Whatever. Secondly, I maintain the markets are not over bought. With the amount of liquidity, sellers have no place to put money but right back in the markets. Plus the huge short interest has created what could be an explosing to the upside. Hedges have been trying to knock the markets down only to see the mutual funds buying the bottom. And you better know by now that the market ftutures have become a lousy predictor of market performance. Look at all the speculators eaten alive over the last 4 months predicting the big correction and retesting the march lows. How could that ever happen when the individual investor owns the lows? 

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#2) On August 17, 2009 at 5:28 AM, AdirondackFund (< 20) wrote:

@ Lordrobot

Gee, I don't know of any speculators getting eaten alive over the last 4 months.  I bought GE in March at 6.93, 6.94 and 7.01 and sold them about a month ago at 13.50.  I also shorted the ride down in Rifin from May 7th and caught the exact low.  But that's just me.  Right now I see no reason to own stocks simply because business is lousy.  I'm not particularly concerned about inflation since I know nobody has any money ... except for the millions earned this year by each and every Goldman Sachs employee who wouldn't dare spend a penny of it. lest they get shot or something.  It is NY afterall, and being born and bred there, I know it won't be safe for Goldman employees to go out, shop, or really buy anything.  The merchant class in NY isn't exceptionally stupid, they have known to put their prices up for some clientele and down for another.  But other than that, everyone else's incomes are down, and people are concerned, which explains the Boom in Guns and Ammo.  

Other than that, yeah, I guess everything is fine.  You are what?  From Germany or something? 

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#3) On August 17, 2009 at 6:27 AM, alexxlea (44.74) wrote:

There is no letter g in the word explosion. 

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#4) On August 17, 2009 at 6:46 AM, AdirondackFund (< 20) wrote:

The E-Mini S&P 500 is getting crushed this morning.  It is down something like 20.25 at 6:45 AM. 

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#5) On August 17, 2009 at 8:41 AM, drgroup (69.07) wrote:

AdirondackFund

Great article. You are on target about GS. To bad the other critics of your post don't get it. Now you know the logic behind voting for Obama. The truth doesn't matter.... 

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#6) On August 17, 2009 at 9:24 AM, Mark910 (< 20) wrote:

and Poor Consumer Confidence numbers here in the States were listed as the 'official reasons' for the decline.  But 'fools' should know better. 

Look at the consumer confidence number release.....it took that for fools to realize prices were to high

More

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#7) On August 17, 2009 at 10:23 AM, anticitrade (99.66) wrote:

"There is no letter g in the word explosion. "

But maybe their shoulgd be.

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#8) On August 17, 2009 at 10:44 AM, StopLaughing (< 20) wrote:

Fleckman is indicating that SS will be in the red next year due to reduced wage withholdings. Not to mention that medicare will be in more trouble faster.

Those are both very good reasons to wait on health care. We can't even fund the government that we currently have. 

China is concerned about inflation and  a bubble in thier stock market. However, I suspect that they do not want thier market to crash.  They are in a much better position to manipulate the market than GS. Not the GS won't try. However, GS will stay on the right side of the trend and try to nudge things whenever they can. 

A crash does not help Obama and his agenda right now. A correction does not hurt it.

So far the $ is going down with the market, bonds, gold, oil and just about everything. This looks like profit taking to me. Or at worst another bout of deflation anxiety.  Pretty soon they will all stop moving in concert and start a new pattern. 

 

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#9) On August 17, 2009 at 10:57 AM, bigpeach (27.64) wrote:

Did you get fired from Goldman Sachs or something? Everything you post is about how evil Goldman is. I'm going to let you in on a secret. Goldman does not run the world.

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#10) On August 17, 2009 at 11:03 AM, weg915 (< 20) wrote:

Perhaps not.  But GS certainly has a disproportionate influence on it.

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#11) On August 17, 2009 at 9:01 PM, edbbear (< 20) wrote:

I actually disagree with the premise of this post.  It is not too late to short this market.  Obviously, it's pretty risky to short a market already down 2%, but long term there is a lot of money to be made on the downside if the bear premise turns out to be true.   

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#12) On August 17, 2009 at 9:21 PM, prose976 (< 20) wrote:

I believe the move is pretty basic.  "Bulls" can really take advantage of the bears here without handing the ball over.

There is alot of shorting and option action in the markets, but the downside is limited, otherwise investors withdraw completely from the market and we're left with a dry lake.  Too much hunting will frighten the deer away for too long.

Here's the recipe:

1.  Bulls take some money off the table

2.  Shares are put back on the market

3.  Short positions, limits, stops, etc. are triggered

4.  Overall market drops.

5.  Bears get their pullback and make some gains.

6.  Bulls buy back in at a discount. 

7.  Bulls continue to buy at each pullback.

8.  Repeat as often as fiscally possible.

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#13) On August 20, 2009 at 1:56 PM, AdirondackFund (< 20) wrote:

@ bigpeach

Actually, no.  They did buyout the company that I worked for, SLK.  My point about GS is that they are harmful to the Nation's Economy, so naturally we want to make sure they are in charge of our Government at this exact point in time.  

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#14) On August 20, 2009 at 4:24 PM, givmeabreak (28.87) wrote:

Adiron, what is your take on the primary dealers buying the 70 day treasuries and parking all that money at close to 0% interest story that was on denninger's blog yesterday?

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#15) On August 21, 2009 at 12:48 PM, AdirondackFund (< 20) wrote:

@ givmeabreak

Jesse Livermore always commented on the importance of interest rates and their effect on equity markets.  He used to study the 'the the phone bank' on the floor of the NYSE in his day.  There were people running to cover two things; extended margin and new margin orders.  In Jesse's day buying too much on margin was considered dangerous AND THE RUN TO THE PHONES TO COVER MARGIN was deadly to markets.

We are seeing an 'Ol Fashion run to the phones here, except for one salient difference.  Instead of the Individual or 3 Dollar Broker running to the phones to cover, we have the ENTIRE BANKING SYSTEM running to the phone to cover a 0.145% spread. 

This would be a textbook example of what Livermore referred to as 'an overdiscounting of value'.  If money is only worth 0.14% return, we should be looking for what Mark Twain referred to as 'A return OF my money, not a return ON my money'.  Therein lies the lie, this time perpetrated by Government Sachs itself.  

This is very, very dangerous stuff.  I would be selling all longs at this precise moment, except that I personally follow the Kennedy Rule and seek always to leave markets early, which means I am already out and looking to short with a vengence.  There are so many false starts in this one, I am flipping like a short order cook, but that is how it works as the Bears are kept away from the meat right up until the floodgates are released.

Welcome to Wall St.  

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