Same Old Same Old.

This weeks economic summit in Jackson Hole Wyoming will yield more predictable results in the announcement of an additional round of quantitative easing coined QE3. Any investor that has watched the market in the last 14-months has seen a more market friendly pattern opposed to a dollar friendly pattern. Our government has always sided with the elite 1% at the expense of the poor, and when i say poor i am referring to anyone with net assets of less than 50 million dollars. Those in the higher end tend to have extremely diversified portfolios that technically hedge themselves against the ever present decline in value of paper asset classes. The inflation and the pain it brings to the lower end take a definite back seat to the unprecedented wealth generator that the market has presented and the wealthy have capitalized on. If you don't believe that it is all about the corporate and financial titans, petro dictators, and powerful politicians you are a fool my friend. What they seem to forget or be in denial of, is that this incompetent belief system is fostering a resentful and destabilizing element at a very fast rate. Simple math shows us all that a healthy economy needs more contributors than those that simply absorb valuable economic resources and this economy is desperate for a consistent revenue stream in the form of taxpayers, when most of the baby-boomer generation has chosen to simply fade into the sunset and let their children and grandchildren take the hit.

Vortex

The U.S. stock market is now in jeopardy of moving into double dip territory, 400 point swings are now the new normal and we seem to be in some sort of bear market vortex. The shear volume of transactions can be attributed to the process of high frequency trading which accounts for 50-65% of volume daily. These individuals start and end the day with no real ownership of stocks, they simply leverage and sell, skimming off profits as they go. This phenomena started about four years ago when some of the most talented mathematical geniuses of our time were hired fresh out of MIT and were labeled as quants, after the term quantitative trading. Given massive amounts of capitol by mostly hedge funds they sought out prime headquarters situated as close to wall street servers as possible. In addition ultra low latency software was implemented to increase transaction speeds, and what you are left with is market volatility and economic damage. In my opinion it will not be long before such stopgap measures will be re-installed such as a ban on short selling altogether or via up-tick regulations or both. If you believe this cannot occur I remind you that it has occurred recently in the E.U. and if my memory serves me right we recently sold the NYSE, to a European entity called Deutsche Borse. Only time will tell how this calamity plays out now.

Smart Mob

A new trend in mobilizing angry, and sometimes hostile protesters is expanding worldwide via cloud and smart phone technologies. These individuals have a common theme in voicing their dissent, subjects such as unemployment, Austerity, elimination of health care and retirement benefits, inflation on fuel and food and rising Educational costs are inciting a mob mentality and resulting in violence. A Google employee implemented this process through social networks and Face book, and the result was the overthrow of Egyptian leader Hosni Mubarak. Multiple events have occurred across the globe with the most recent in London. The middle class is being squeezed out and the rich are getting richer. A new breed of class warfare is inevitable under these conditions, and we will probably see the overthrow and prosecution of several leaders for crimes against the people. Globalization is a good thing if it is tempered properly but can also be manipulated and abused by the corrupt and greedy, as we have seen in this devastating economic downturn. Debt contagion is probably our greatest threat to the future health of economy's worldwide and we are in need of comprehensive and sustainable solutions NOW not later.

Mega Shock

With approximately 2.8 Trillion dollars in wealth vaporizing recently worldwide, and the market continuing to act like a Yo-Yo, I believe we are about to enter into a area of shocking market losses. As fear driven swings continue, so does incompetent fiscal decision making and partisan politics. The unsustainable pattern of borrow and spend has finally come to a point where the negative ramifications outweigh any bubble creation upside. We have lost vital credibility as a financial world leader and other countries beckon at the chance to replace us on the globalized world stage. Our dollar is declining in raw purchasing power and could soon be replaced as the worlds reserve currency, as other heavily vested countries realize they need to minimize massive exposure rates in a strategic hedge movement. This dire situation can only be blamed on the sheer greed of those political leaders in both parties as they have pandered to not only corporate but private interests as well. Hopefully the miracle of common sense takes hold within our leadership and we can move in a direction that will heal this economy for future generations of Americans.

Cheap Shot

Russian Prime Minister Vladimir Putin recently called the United States parasites on the world economy. Wow you know its getting tough when the communists take a cheap shot at you and not only are they right, but they are dead on. He also went on to say that we have no actual wealth because it is all leveraged and we still don't live within our means. In addition we have other countries fight our illegal wars and they also end up financing them. He said that countries like China, Russia, and Japan will take big hits financially as they are heavily vested in U.S. Treasuries, that eventually will become worthless investments. I personally find it hard to build a case for calling Vladimir a nationalist disgruntled idiot, making fabricated comments about the U.S. how about you?. Maybe we can step back and take a good objective look at ourselves as we all have bought into the borrow, and then borrow some more American dream program. It looks like the sun is now setting on this unsustainable belief system and we will all pay rich or poor. It hurts when others tell the truth about your weaknesses whether their intentions are negative or positive. It will not be easy for this Nation to give up its addiction for cheap easy money, but nothing worth while ever is.

Credibility Lost

The recent news that a vote to raise the debt ceiling has passed should be viewed as a temporary band-aid fix at best, to a problem that will plague this nation for years if not decades. In delaying a default on U.S. debt by lopping another round of borrowing into the equation, we are increasing the odds of a double dip economy and delaying the solution of growth, innovation, and job creation. The polarized environment in Washington will undoubtedly spread worldwide as other Nations lose respect, and credibility is lost for the United States. Our own press labeled news story after story as an aura of immaturity when striving towards compromise. As we all know credibility comes hard earned like anything of substance in life, and this could take quite a while to undo. We continue to take a back seat to other Nations that have waited in the wings to emerge as world leaders. They continue to out work us, out invent us, and are on a path to supplanting the very core of our past successes, a dominant educational process followed by young innovators creating products to be sold to the countries that hunger for them. This path will not change until we have leaders on both sides putting this countries needs before their own.