Wednesday, 9 September 2015

Playing it like BF does.

These are some of the things going on in the stock market. 

I have struggled recently with the idea of how 'real' all this sort of abstract stuff is. However, if you break it down, the stock market is 'that which is not', it is a mass of complex information that shouldn't really effect things.

But, even though it is. Probably a large amount of people in finance are off their 'path'. It has gained enough reality. It is too complex to completely rig. The rules can be bent, corruption can happen within the rules, but like the fictional Matrix, the rules themselves cannot be 'broken'.

They cannot be broken simply because these rules were built to oppress others, so they had to be inbued with some sort of power. A power everyone believes in. It is 'that which is not,' and although 'that which is not' is not 'that which is,' neither is a tank or an airplane bomb, and especially if you live in some places in Africa you know how painful 'that which is not' can be. If you live in Greece, or indeed anywhere, you know how painful 'that which is not' as a weird set of financial rules can be.

It is the device of the elite's 'karma'. This is what has been going on from a market perspective.

After the 2008 crash which was partly to do with debt saturation. The establishment filled the market with 'easy money', easy debt. This does not encourage a healthy economy, and as I am about to explain it can create a kind of 'bonfire' mentality.

The main thing they did was they lowered interest rates. They Quantitive Eased as well (printed money).

Flooding the market with all this money has created a bubble. A bubble is when a share starts out at about £3 say. Then rather than added value increasing the customers shares, financial manipulation does so. The shares go up to £300. Until one day someone starts getting rid of their shares at £290. Everyone having had their shares devalued by £10 starts dumping theirs too the price lowers when the next person dumps at £270. Pretty soon you're back down to £3 or lower.

These are some of the financial instruments and problems in the system at the moment:

Problems such as 2008 started when people get loans and then cannot pay back debt so walk away. Leaving a company with a lot of debt that it cannot get rid of (No rigging remember). Eventually through whatever mechanism this can create bankruptcy for the company that holds this debt and they do not have the money to pay back their customers accounts or ... electricity or rent or something. So they convert all their financial instruments to cash and pay off what they can.

So the problem starts with debt that cannot be paid back. 

What 0% interest rates do is create loads of debt. Much of it not being able to be paid back. Some of these loans/ debt has gone to companies who buy back their own stock to keep it from falling. But they still have debt. Some of it goes towards creating predatory loans to people that can't pay it back. the UK is awash with citizens who have taken on too much debt and so is the American auto industry.

(Add on to this that Deutsche bank has $53 Trillion unsecured derivatives. Lehman Bankrupted on $3.9 Billlion debt).

Another thing is Margin debt. Margin loans are backed by assets and when the person can't pay back their debt they have to sell their assets at reduced price. That leads to reduced prices of those assets (i.e. property) and this reduces the price of others assets. That then leads those people to be victims of Margin debt. When this problem unlocks, it is an unavoidable downward spiral, and it will happen as downward pressure continues on the stock market.

Another thing is a financial security called an Exchange Traded Fund or ETF. Generally what has happened is that since interest rates are so low, investors, even simple investors do not get any return on safer financial products (such as... cash) so this leads to them taking on risky assets. This has happened a lot. The problem with ETF's is that they are not as liquid with a lot of people in the market and they are essentially a mass of these corrupted financial instruments. They look good on the tin but are a bit of a death trap, and people will be very desperate to get rid of these that will also crash the market.

Since these problems, no real money has been going into anything safe. SO much of it is going into these corrupted assets. There is little new manufacturing. There is basically no added value to explain the DOW going from it's last high at about 12K to it's recent one of about 18K. There is little that explains what has been motivating the economy to increase in value from it's sudden rise from about 4K in 1995 (In my understanding).

It is also true that the longer a market is rigged like this, the longer it is a 'sure deal' that you will get a return, the more High Frequency Trader's you will get. Which is why the market is so INCREDIBLY volatile. Volatile enough to flash crash 1000 points the other day!

So when it happens it will happen quickly. A lot of small investors will be going crazy because of 'Margin debt'. There were a lot of people that killed themselves in 1929.

So, as the title. Playing it like BF does. What needs to happen obviously is that the arrests need to happen so this uncontrolled carnage is not allowed to distress your regular bozo high frequency trader, or even your regular shmuck with his 401K.

But then perhaps that's the point. To 'wake people up'... I don't see the point of that personally but that's how it has been explained.

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