It is really pretty simple to understand the global stock market situation. If the markets and investors think the US Federal Reserve will continue to buy up vast amounts of US Treasuries and stocks, the markets will go up. The second the markets think, suspect, or realize Braying Bernie is going to put away his can of lighter fluid, the markets will crash and burn. The global stock markets are drug addicts using fiat money from central banks instead of crack cocaine.
It took Doomer Doug many years to realize this central feature of the modern economy. Pity poor Doomer Doug, who once thought, many years ago in my gold-eagle.com days, that stock markets actually reflected economic reality.
Sheesh, it is hard for Doomer Doug to remember when he was THAT NAIVE!
So gang, we will see a rally in Japan. The reason for the rally is the investment community is convinced that Braying Bernie still has a flamethrower to squirt on the stock barbeque.
Deficit? Don’t worry. Unpayable debt? Don’t worry.
Doomer Doug is not sure at what precise point in time the knowledge there is no more money will sink in. The exact point the fiat dollar collapses, or gold resumes its historical role in protecting value, is unknown to Doomer Doug.
The only thing Doomer Doug knows is the current system is not going to last. The timing is up to the pump monkeys. Speaking of pump monkeys, their standard operating procedure is quite simple. They take the 30 stocks in the Dow Jones Index and they spray vast amounts of lighter fluid at them. See how simple that is. The FED prints worthless fiat money in vast amounts. It then spews them out like confetti at a parade. This is what all the stock market rallies are caused by. Profit? Who cares. Economic growth based on actual production increases? Who cares. Nope, all the FED does is print up fiat money and then throw it around all over the world. Who do you think has bought up all of Obama’s MULTITRILLION DOLLARS IN DEBT THE LAST 4 YEARS?
Well, enjoy things while you can. Even Braying Bernie is starting to realize the game is up.
Well, just wow, gang. All Doomer Doug can say is wow. The Nikkei is now down over 510 points and 3.55 percent with two hours left in trading. The pump monkeys will no doubt make their fiat money known. They may even claw the market close up to near starting levels. But, you know what? It doesn’t really matter at this point. The level of chaos and volatility in the Nikkei in the last 4 trading sessions has done permanent damage to it. No sane investor is going to stay in a stock market that has 1000 point swings in one session. They will not stay in a market that loses 7 percent of its value in one day. Wall Street may even start to notice that things are not well in the land of Fukushima.
At any rate, tens of billions of dollars in market equity have been vaporized into cyberspace this last week.
One final thing, Bank of Japan leader Kuroda issued a statement saying that Japan’s banks are in great shape. The thing is Doomer Doug has come to understand these kind of statements. They are what John Kenneth Galbraith called “organized reassurance” in his book on the 1929 stock market crash. The fact that Mr. Kuroda feels compelled to say this means the opposite. When government officials tell you the banks are sound, the reality is the opposite.
It is clear that the stock market volatility in Japan is damaging the BOJ and all of Japan’s banks. This is the 1200 pound gorilla that nobody wants to talk about.
The level of chaos in Japan’s Nikkei Stock Market is astounding. Today’s session saw a rise of 400 points, from 13,950 to 14,350. It then saw a 300 point drop, from 14,350 to 14,050. It is currently wandering around the 14,150 range.
One trading session had a swing of 1,000 points. Several others have had 300 to 500 point swings in a matter of minutes. Doomer Doug has watched the graph go up or down 50 points a minute. This level of chaos, what the experts call market volatility is not sustainable.
Japan is in trouble. This means the world is in trouble. If Braying Bernie and his plunge protection team weren’t pouring billions in TARP money into the 30 stock Dow Jones Index, the USA markets would be down thousands of points by now.
It will take some time for all this to play out. The FED is now buying virtually all US government debt. This is also not sustainable for much longer. It was Braying Bernies admission of this that lit the fuse that is now burning in Japan.
Doomer Doug spent last night posting at Timebomb2000.com during what can only be called total market chaos in Japan’s Nikkei 225.
The market low on Friday was around 14,000 points. The market high was around 15,000 points. THIS IS A 1000 POINT SWING IN ONE TRADING SESSION!
In the first part of the session the Nikkei went up around 3 percent. In the first two hours of the afternoon session it went down around 3 percent. In the last HOUR of the afternoon session a truly amazing thing happened. If you look at the graph you will see it looks like a drunk using an etch-a-sketch. The graph circles around for one half hour. At precisely one half hour before the 3 pm close it spikes up some 400 points. The eventual close was .89 percent up from the market open.
Japan’s Nikkei Stock Market is not designed for this level of near total chaos. No stock market in the world is designed for this level of market volatility.
It will be interesting to see what happens when the market opens next week.
Japan is really taking it on the chin. First, they are dealing with the ongoing, multi-generational toxic radiation release from Fukushima. This will redefine life in Japan for the next several decades at a minimum.
Japan’s economy is also being crushed by debt. The “flash crash” of the Nikkei is a case in point. Japan’s Nikkei stock market is currently at the 15,000 point level, even after losing over 1000 points. The Greek philosopher Socrates said a person needed to “define their terms.” Context is EVERYTHING in figuring out what is really happening. The context is the Nikkei peaked at nearly 40,000 points in late 1989. Since then, it has lost 25,000 points in the last 20 plus years. This is a 60 percent loss of the total value it had in late 1989. This loss has been permanent and shows no sign of getting back to 40,000 any time soon.
By the way, the American NASDAQ peaked at 5200 and change in March of 2000. It has also permanently lost roughly one half of that value. The media shills ranting about Nasdaq rallies have no idea of what they are talking about. When the Nasdaq “increases from 2000 to 2500 it means nothing. The Nasdaq has been trading at 50 percent less for the last 13 years. How is that for long term investment? People should understand that the DOW took until 1954 to recover from the 1933 lows.
At any rate, Japan is on target to repeat the 1989 crash cycle. They have a 85 percent increase over the last six months or so. They have just had a massive crash that roughly equals 9 percent. The key issue is what happens now. Doomer Doug will only say that a massively indebted country like Japan can’t stimulate its way out of this. Japan is pretty much finished as a modern country due to Fukushima. After all, if you get radiation exposure by living in Tokyo then the stock market really doesn’t matter much.
The news is now reporting there are cases of possible Middle Eastern flu in a New York City hospital. There are also reports of an unknown disease in Alabama killing two people. Chinese authorities continue to insist there have been NO new cases for the last week. The warm weather in China may have delayed the spread of flu, but it is more likely Chinese authorities have stopped testing for the flu virus.
At any rate, we now have several diseases showing up all over the world. We have the ongoing mutant SARS virus in the Mid East. We have the same virus in Europe. We have several cases of an unknown virus in Texas, the upper Mid West, and now presumably in Alabama. The disease in New York City is presumed to the be same one from Saudi Arabia. If that is really the case, then the disease spread is just beginning.
The disease news from the Middle East keeps getting worse. China has quieted down due to the ongoing data suppression effort by the Chinese government. If you don’t test for the mutant bird flu, then you don’t have a problem. The vector for China’s flu may very well be rats. If this is the case, it will continue to spread unchecked all through China.
The news from the Middle East continues to show ongoing disease spread. Tunisia has now reported the first fatal case of the mutant SARS virus that began in Jordan 14 months ago. The other thing is the cases in England, France, Germany, and now Tunisia confirm human to human transmission from being in an airplane with an infected person. The majority of cases have been in Saudi Arabia, primarily eastern Saudi Arabia. The disease is likely to be in the Gulf States. Dubai, United Arab Emirates, and Quatar also. Saudi Arabia is doing most of the testing which is why they are confirming the disease. Several of the Saudi Arabian, as well as the German case were of people living in the Gulf States. They ended up in either German or Saudi Arabia which is where they actually died. They were infected in the Gulf States. One Egyptian citizen also died after returning from Egypt to Saudi Arabia for treatment. Saudi Arabia makes the point that several of the cases are linked to Egypt, Quatar, Dubai and the UAE even if those countries are not reporting any cases. This lack of cases is due to the lack of testing besides the infected people being treated elsewhere.
The disease spread during March and April until on May 2nd Saudi Arabia reported 7 cases. 5 of the 7 cases were already dead which meant they got infected in April at the latest. Again, the level of transparency leaves a lot to be desired.
The status as of today is there have been dozens of cases, as well as many fatalities. Obviously, the SARS Middle Eastern mutant strain is gathering steam, spreading widely and shows no sign of slowing down at this point. It has also shown the ability to spread human to human. We know this from not only the airline passenger cases, but the family clusters and the hospital employees getting infected.
At any rate, we now have confirmed human to human transmission. We now have family clusters and infected hospital workers. Finally, we have people getting infected from being exposed to infected people during airline travel. The incubation period for the Corona Virus is between 7 to 10 days. Flu takes between 2 and 4 days to show symptoms. There have been cases of infected people being discharged and then showing symptoms several days later. This is not good.