“OZ was never meant to be a “How To Manual” for the Corrupt FED!”
Sunshine proves yet again to be the very best disinfectant against the cockroaches
at the FED … a very instructive article over on ZH today, that throws the necessary
“sunshine” on the heart of the matter affecting the actions of the corrupt faculty
lounge Twits … the link directly below.
Indeed, this has become a problem precisely cuz of their idiotic policy actions over
many decades, and what can’t be sustained, won’t be … guess where we’re at
now? … not only do we have 1) scumbag Wall Street banks eating pre-arranged
treasury debt trades for the FED, that pockets them billions over time for FREE,
2) a public & private pension system that is actuarially completely broke, 3) a
national debt that is now in the trillions every year thanks to feckless POLS, but
as the article above points out these are “minuscule” compared to the almost
“QUADRILLION” dollar problem lurking right below the surface … the complete
collapse of the derivatives clearing houses that keep track of all the derivative
bets between hedge funds and banks … a system of where the “banker’s bank”
the BIS [Bank of International Settlements], says a quadrillion of bets that nets 30
something million in profits … “umm, say wut”? … so who benefits then, from
this system? … why hedge funds of course … and who are the ones leveraged to
the fucking hilt on trillions of interest rate bets, and who’s on the other side?
… well, it ain’t “Ma & Pa” from Des Moines, it’s the scumbag banks!
So when the system tightens up some, and rates start to creep higher, when
you’re leveraged to the hilt it “hurts” … and if it hurts enough, the hedge funds
collapse, causing the banks to collapse, causing the system to collapse, and
what do you suppose happens to the stock market if this happens? … and the
reason is LEVERAGE between futures and cash that the giant “hedgies” are
arbing to gain alpha [yield].
And all of this makes the FED’s balance sheet grow faster than “Jack & the
Beanstalk” … “so, would you rather pump the balance sheet and the asset
bubble higher, OR risk the wrath of a QUADRILLION DOLLARS going down the
drain faster than a toilet flush, and then dealing with those consequences”?
… quite frankly, it’s the financial crisis of 2008 on fucking steroids! … and guess
who enabled this?
Add up the worldwide options & futures positions of all the players, multiply by
10X to 100X leverage, and then sit back and realize it’s the scumbag banks that
are on the other side of the vast majority of all of this shit … right now, between
interest rate & equity index FUTURES OPTIONS at the CME, there are over
55,000,000 contracts in outstanding open interest … just being conservative,
that’s gonna easily total over 55 TRILLION in risk exposure, with the scumbag
banks on one side of it … and this is just the CME … what about all of the OTC
shit being done between banks and hedge funds that doesn’t reach the corrupt
exchange? … throw in leverage, and how can you not see the “nuclear weapon”
here that could go off at any moment via rates, or anything else for that matter, when
it starts to “shake the system up”?
And when SHTF, and margins go up in futures, and “gamma shorts” are squeezed
in options cuz of any increase in VIX, that means the “hedgies” get squeezed cuz
the cash market they own, but the futures margins they leverage, and the
“gamma shorts” go exponential negative … and when faced with these
explosively higher arbitrage costs, they either borrow or go broke! … and when
they start to all go borrow at once, and the 800 lb. “gorilla” in the room, which is
JPM, sees this, Morgan pulls their massive balance sheet of cash away from the
funding markets [repo] cuz they don’t want the risk, which leaves the FED as the
only other viable option … otherwise rates skyrocket and the entire system
collapses in less time than it takes to eat dinner!
And there you have it! … throw in FX risk exposure, and it could well be higher
than 50 - 100 QUADRILLION DOLLARS AT RISK if SHTF in this space … so, given
this cheery news, directly below a chart showing RECORD LOW FX VIX since the
U.S. went off the gold standard in 1971.
click on any chart or table to enlarge
Maybe now you can understand the new paradigm of trading as I’ve described it
… it either doesn’t move [everything], or it’s the “88/6/6”” trading paradigm of the
U.S. stock indices … nothing else can be allowed, or life as you know it is O.V.E.R.
… and while I don’t wish to be the bearer of bad news, the world is in the shape
it’s in cuz of central banks .., that there is gonna be a reckoning at some point,
there can be no doubt … now you know why stocks can never be allowed to go
down more than fractionally, and why interest rates can never be allowed to go
higher … if either or both happen, the “gig” is up, time for the revolution.
Directly below, the 20 Day Range MA’s for our selected markets by group.
FX [Cable & Cable crosses]
All time record lows in FX VIX [see earlier chart ], and when you throw in lower
volumes & liquidity, it makes it very, very difficult to make consistent money from
FX … I think the central bank manipulators are going to keep VIX low indefinitely,
with occasional “brush fires” they will put out quickly, just like they did with
Cable once year end 2019 flows were over.
STOCK INDICES
All of the stock indices 20 Day Range MA’s are “skewed” by the war scare that
didn’t happen … the DOW30 20 Day Range MA is about 25 index points higher cuz
of the skew … we’ll need to see a few weeks go by for this to work off.
PRECIOUS METALS
The same goes with gold & silver as the stock indices, as 20 Day Range MA’s are
skewed higher by one day … about $2 in the case of gold.
Directly below, the ‘VIX MATRIX TABLE” for the current week.
I’ll be bringing back the FX CHOICE PAMM / MAM RESULTS next week … new
fund participants have joined, and might as well start 2020 fresh. I’ll also be
tracking the Turnkey PAMM / MAM … both trade the DOW30 CFD … MLK, Jr.
Holiday tomorrow in the U.S., and it remains to be seen how active things are
… until tomorrow mi amigos … Onward & Upward!!
Have a great rest of your weekend everybody!
-vegas
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