Commentator’s Corner
The resurrection of Obamacare was of course a disaster. What is so much worse is that the basic rule of American constitutional law has now been trashed. The last minute approval by Supreme Court Justice John Roberts was a shocker to us all. Now we know that the path of destruction on the road to perdition has been cast in cement. Unless the president is voted out this fall, and a complete Republican congress is elected to renounce and eradicate Obamacare and other newer congressional bills and Executive Order Abominations, America becomes a lawless banana republic. Nations are built on thrift, order, rule of good laws and opportunity. These things are vanishing before our very eyes. Never in our wildest imagination would we have expected this evil.
If you are wondering as to how this can happen, look at the fascist history of Nazi Germany in the 1930s. This is the old frog in the boiling pot story. It happens gradually until there is no escape. We are hearing an escalation of stories from people all over the United States suggesting they are opting to leave this nation for good. We think this is the wrong approach. One of our good friends of many years told us, “I will stay and fight for America. Let those who would destroy her leave or, we will produce a permanent exit for them.”
What many do not realize is that Hitler, with his plans for a dictatorship, was actually good for an economically broken Germany in the aftermath of WWI and the hyperinflation of the early 1920s. He appealed to the folks in the street by righting the ship of state, building the German national expressways and providing work and food for a smashed populace. That was the golden beginning but sadly, was also a prelude for an ugly ending. His evil ran deeper than most can imagine. The “Crowd Effect” (something written about in many books on social mores and psychology) takes on a power far beyond what a thinking, responsible individual would do on their own as to anti-social behavior.
Early news in 1930s Germany includes Nazis deliberately setting one culture against another. They were also busy working international backroom deals with other nations and then stabbing them in the back as turncoats. Further, the speaking skills and superb oratory of Hitler mesmerized folks in the street giving them a new mental strength and purpose to keep going under very bad conditions. And, very importantly, censorship and book burning was commonly used for mind control. Does this sound like a political campaign we saw in 2008 in America and what has transpired since?
We are not suggesting Obama is another Hitler, but their likeness is stunning. Look at how he is imposing social programs and bureaucratic takings far outside of his congressional approval. Further, much of his stuff is put into the hands of his 37 czars and czarinas, giving them carte blanche to run free and saturate Americans in socialism. Nanny State rules and laws (not approved by the people or their representatives) can wreak havoc. Centralized powers in the hands of a few psychopaths will create a lot of danger and damage.
To us, this just replicates the Politburo in Russia or, the side-men, those government henchmen so glaringly obvious in places all over the Middle East, in China and in North Korea. Why, we have a perfect example just 90 miles from Miami in Cuba. Our obvious question is why hasn’t the USA just entered Cuba and freed their people from oppression? The US Marines could do it on a weekend and have lunch in the Cuban palace on Monday. The answer is it is not politically expedient for the US despite the fact we have been busy with more expansive, aggressive activities in Iraq, Afghanistan and now Pakistan.
Based upon the events leading up to the health care announcement, Justice Roberts was the last jurist most would expect to vote the way he did. We are getting questions such as: Was he ill and did his epilepsy medication affect his vote? Or, worse yet: Was he bribed or threatened to vote for Obamacare? Obviously, we do not have a clue on these factors but the very unusual situation that prevailed just before the news announcement on Thursday morning makes one wonder. There are lots of folks left with a very sour taste left in their collective mouths. If you think this one goes away quietly, you do not know the American people.
On the other hand, we have seen an analysis suggesting Justice Roberts voted as he did to toss the mess back into the laps of politicians, avoiding an open clash with the court. Maybe, if it was his idea of a way to have Obamacare repudiated by the congress later on (after November), we would suggest he should not sit on that bench as a judge. Those judges are supposed to stick to the rule of law and not play politics. To say that we and others are very disappointed is an understatement.
This on-going saga, this huge mess, has created a major investment road block for companies desiring to expand and hire new employees. The air of indecision weighs heavily on traders, investors, corporations and others involved in national and international commerce. The current path of indecision (cloaked in the smothering effects of Obamacare) suggests a curtailment of employee’s jobs and renews ideas for international companies to move domestic US operations overseas to safer political and tax havens. We know of few countries offering a better situation, but those having current foreign operations are in the best position to move work and employees out of harm’s way with some speed.
We know of one mammoth world class employer planning to leave Illinois to escape their onerous taxes and state legislation designed to tax, spend and ruin thrift. Illinois is no longer a company-friendly state. They are broke and scrambling for anything they can tax. Like California, Michigan (previously) and some other higher tax states, few would deliberately move to Illinois. Quite frankly, we were very surprised by the Boeing Airplane Company moving their headquarters from Washington to Chicago, Illinois. Texas offers more and they are a larger draw for employers.
Now that Stockton, California is filing chapter nine bankruptcy, this will provide a shining example of Nanny State results. Governor Moonbeam out there has no clue for a resolution of the state’s credit problems. State and local employee benefits, salaries and other perks, long ago far exceeded California’s ability to tax and cover their bills. Watch Stockton (as a bigger city of 300,000) sink into wretched oblivion, just like Detroit, Highland Park and Flint, Michigan.
The bankruptcy saga of Jefferson County, Alabama, one of the nation’s larger excursions into bankruptcy and misappropriation of funds, continues as two global banks in New York are called on the felony carpet for screwing-up and stealing funds related to a major bond offering. And so it goes, on and on.
Top notch bank analyst, Meredith Whitney, did publicly forecast these failures in municipalities. We did too, and even before Mrs. Whitney had the nerve to say so. They laughed at her and spoofed her predictions. You don’t hear them laughing now. We are a fan of Mrs. Whitney and applaud her statements and forecasts. She is tops and quite frankly scares the Old Boy Banker network. We say, you go girl, and keep on with the truth.
Big Boy Banks in New York Hold Nearly $300 Trillion in Derivatives.
In our newsletter Trader Tracks we have reported numerous times that these bankers shoveled their trading messes that occurred from 2003-2008 into banker back rooms. This paper is pure valueless junk and they know it. With the TARP capital replenishment by Treasury Secretary Paulson, those banks came back from the dead, but could not dump all that crappy paper.
Like the crazy aunt hiding in your closet, this stuff is still a witches’ brew of festering toxicity waiting to explode and ruin the entire credit world as we know it. Oh, what to do? For now, it stays hidden in back rooms as the banks run two sets of books. If others did this, not having such high authoritarian approval to do so, they would be headed for the Cross Bars Hotel. However, they are them and we is us. We have two sets of rules in American finance: one for criminal banker bozos and the other for the hard-working taxpayers, who must support them and are ripped-off by them. We hate to say it, but this is the stuff of revolutions.
Last week on KER Report Radio we predicted gold and silver would have some sharp and quick rallies. We said gold would likely rise $50.00 and last Friday (6-29-2012) it was up $50.20 with a trading range of $56.50. We also expected silver to rise about $.85 from $26.62 and as this report was written on Friday, July silver futures were $27.53 in after-hours trading, and the trading range was $1.65. Please note the daily trading limits for silver futures were $1.50 just a few years ago. Removal of that cap has enabled silver to enjoy more flexibility. The last price Friday afternoon at 12:14 PST was $27.53, just a nickel from our forecast.
Technical analysis is not perfect but it offers a much superior tool for trading in faster markets and even the slow ones over time. Our background in this business began in futures trading first, with stock work coming later. In the futures business, to have half a chance (unless you have a very large account) futures traders live and breathe using charts and technical stuff. As it’s applied to most all markets we follow, it seems to work well most of the time. The tricky part is to use the artistic evaluation in conjunction with pure math. The better outcome is found with practice and experience. Politics can throw a wrench into prices as it did Thursday but prices will normally go where they want to even if derailed for a short period.
Top traders I know use fundamentals first followed by a combination of technical work and apply some artistic ideas. These guys tell me often that women are very good traders and are finding growing employment chances in this industry. One sharp observer told me the ladies are more prone to hold a trade a little longer, squeezing out extra gains. Lots of the guys are too jumpy and anxious to move too quickly on some trades, either on the entry or exit.
Most of our readers on these essays and in our Trader Tracks Newsletter are primarily stock traders and investors. At this juncture they are wondering and worrying as to when markets will return to new rallies, pulling-up their beaten down stock positions. The precious metals stocks (the best of the best) will begin to react almost immediately when gold and silver begin new rallies. However, most of them usually take 2-4 weeks longer in a precious metals reaction before any substantial movement.
Follow monthly charts first and discover the best time of year for your favorite markets. Then, work backwards using weekly charts followed by dailies. For the most part, we have learned that swing trading (a few days to a few weeks) is easier to manage for us. However, some traders enjoy the scalping game doing 150 trades each day, finishing the session and going flat overnight. Find what suits you best and above all, control risk first. The balance will often take care of itself.
–Traderrog
Roger Wiegand is the writer and editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See www.webeatthestreet.com for more information. Listen to TraderRog reports and editorials on the Daily Market Close on the Korelin Economics Report website www.kereport.com.
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