Today confirms the theory that international banks will begin to delever and unload positions ahead of a Fed rate hike.
The SEC has been sitting on the GS indictment for nine months. They finally decide to release during market hours on a Friday OPEX–curious. Was this done to mask distribution?
On Thursday GS traded 7M shares and on Friday it was 100M. Compared to GOOG that did 6M and 12M or BAC’s 240M and 590M. C had 1.8B shares traded on Friday. Citigroup and Bank of America stock are looking more and more like war debt service vehicles.
A working theory is major banks are being used to service the U.S. debt. Primarily the war debt created by an expanding corporate empire. In 1720 England used stock in the South Sea Company to offload its war debt on the investing public. It was the first major financial scam to coin the term “bubble.”
International banks (IBs) are now sitting on $1,200T in interest rate swaps. That’s $1.2 quadrillion dollars. It has peeled back $300T from last year. A squeeze on JPM alone could bankrupt the system. There is not enough free credit in the world to deliver on their $70T swap positions. There’s also not enough silver in the world to deliver on the total COMEX silver short position. It represents 100% of the total visible and recorded silver bullion in existence (source). Owners of silver futures alone could squeeze the world’s largest bank by demanding delivery. Think of it. A new Sons of Liberty movement could once again stick it to New York stock jobbers. People could squeeze JPM just by asking for delivery on their silver. That’s a nightmare scenario for them. Why give you something real, with real value, when we can convince you to trade it for worthless paper instead.
Everyone is now learning how JPM illegally manipulates the precious metals market to suppress inflation. How about GS and their monopoly control of the stock market. Goldman Sachs is behind 1 out of every 10 trades on the NYSE. Is it unreasonable to think they would manipulate equities in the same way?
The Fed can’t lend money for free indefinitely. Soon the U.S. will be forced to raise cash. The Fed will have to raise the prime rate and it will stress the system. Unless prime dealers like JPM, GS, MS, UBS, etc. unload their leverage without tanking the market. This is the cornerstone to understand. Much of the recent rally is short covering. Look at the short % of total float on major names. Many stocks are near 20% short. We’ve seen higher highs on very low volume. That’s not new money buying up the market. It’s basically a short squeeze that can be used to cover real distribution by the IBs. They will have to unload somehow before the rates are raised. There’s a strong connection between this concept and silver manipulation. Friday’s selling was a warning that distribution is taking place.
Notice today’s crash happened right after 2:30pm where a halt would not happen. Now active traders need to be aware of upcoming PPT action.
A 6:1 negative day (or greater) has not reversed in the last five years without PPT intervention. In order to bet on something like that, the market has to be making a scary new low. If we revisit January lows start looking for a PPT day that can reverse the most obscenely negative NYSE A/D.
Review of what is required:
- Market at new lows/breaking point
- Relatively high VIX
- High CBOE Put/Call Ratio
- Major pressure on the Financials [banks -20%]
- Negative NYSE Internals [worse than 5:1]
- Political pressure
- Political pressure