06 May 2013

SP 500 and NDX Futures Daily Charts - War? What Us Worry?

Here are two news items worth remembering when the next financial crisis hits:

Hedge Fund Leverage Hits All Time High

Algorithms Driving Over Half of London Metals Trading

I believe the Fed still controls the margin requirements for stock as the Big Daddy of US financial regulators, teaching all by its example.

The Bloomberg trotted out Jeremy Siegel who spotted a bubble in bonds, a bear market in commodities, and a stock market that is going to keep going higher, finishing the year on the Dow between 16,000 and 17,000.

The stock market is in a bubble driven by the Fed's peculiar approach to expanding the money supply, the general laxity of financial regulations, and an invasive kleptocracy that has distorted the money side of the real economy almost without exception.

There is another financial crisis coming, and this one is going to be even more impressive than the last. And like the last heroes who 'saved the world,' Messrs. Greenspan, Rubin, and Summers, the current hero Bernanke will be remembered as a banker of the last age, in much the same manner as the hopelessly out of touch French Generals who commanded the Maginot Line.