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Wednesday, February 21, 2024

Which Way Wednesday – Finally Fed Up?

It's a Fed day today!

That, of course, means MORE FREE MONEY and the markets are giddy with anticipation ahead of the meeting – especially since we had more poor housing data yesterday and that's exactly the kind of bad news that is good news as it keeps the Fed in easy-money mode a little longer.  

As you may have guessed, we shorted oil this morning.  The July contract (/CLN4) expires on Friday and, as you can see from the chart, we continue to find great profits in the sell-off that we predicted would come last week.  We went over some Futures Trading Tips in yesterday's live Webinar as well as the new, bullish positions we've added to our Long-Term Portfolio.  Much as we rail against what we firmly believe will ultimately be a disastrous policy – you simply can't fight the Fed and we're not trying to – it's much more profitable to go with the flow. 

Going with the flow is exactly what we're doing with our oil trades as they STILL have 103M barrels worth of FAKE orders open for July delivery (actually, about 20M will actually be delivered so "only" 80M are fake at the moment) and that is down from the 172M FAKE orders that were open on Friday morning (see chart on Friday's post).  

Click for
Chart
Current Session Prior Day Opt's
Open High Low Last Time Set Chg Vol Set Op Int
Jul'14 106.60 106.97 106.40 106.68 08:11
Jun 18

 



0.32 17840 106.36 103739 Call Put
Aug'14 106.06 106.47 105.87 106.17 08:11
Jun 18

 



0.30 20559 105.87 290190 Call Put
Sep'14 105.20 105.56 105.03 105.33 08:11
Jun 18

 



0.31 5338 105.02 180387 Call Put
Oct'14 104.14 104.42 103.93 104.25 08:11
Jun 18

 



0.34 2232 103.91 117243 Call Put

The total open interest (745,000 contracts) has not changed much since since Friday (712,000 contracts) – all they are doing is rolling the July Fake Orders to August, Sept and Oct Fake Orders to keep up the illusion of demand.  This despite the fact that US Commercial Crude Supplies are at an ALL TIME HIGH 399.4Mb and, if you think Iraq supply concerns are to blame – you are wrong there too as a report released YESTERDAY shows 2.8Mb of oil being exported in July – that's UP 11% from this year's average.  

It's a scam and we know it's a scam and we can make money playing off the fact that we know it's a scam becase we know all their tricks.  As I noted last week, we prefer the Robin Hood side of the trade – taking advantage of the greed of the manipulators rather than the foolish retail traders who stand in their way but we're not completely disinclined to play the upside, when the play is obvious.  

Today we're more focused on the Ponzi Scheme the Fed is running but, as we noted yesterday (and the day before), they are only one of dozens of Central Banks pumping up the Global Economy and enriching the top 0.001%.

 Yesterday we added ABX ($17) to our Long-Term Portfolio as we're seeing the gathering storm of Global Infation begin to take hold – even while the Central Banksters tell you they must fight DEflation as an excuse to flood the economy with even more money.  Well, not the econonomy – just the top 0.001%.

Despite adding $29Tn of freshly printed money, the Gobal Economy is still on life-support and even in Japan, the stimulator-in-chief, Exports fell 2.7% in May due to poor demand in Asia (that place we usually count on for growth).  While this stunned economorons, it was a long time coming for those of us who follow the Baltic Dry Index, which has been in free-fall since the beginning of the year.  

Of course, the BDI is just one of dozens of negative economic indicators traders (not investors) are ignoring in this rally.  In Japan alone, we have a 4.3% decline in car sales and shipments to Asia in particular were off 3.4% (and we sell a lot of stuff to Asia as well).  

Nuclear power plants are still shut down in Japan and this now makes the 23rd consecutive month of trade deficits as their energy costs skyrocket – the curren pop in oil is simply killing them.  

Meanwhile, state-owned Citic Resource Holdings in China is missing $49M worth of alumina that it uses as collateral for bank loans.  “Citic Resources’ loss is just the tip of the iceberg,” said Helen Lau, a Hong Kong-based analyst with UOB Kay Hian Ltd.. “There will be many more companies found to be victims as the investigation over multi-counting of metals evolves.”  Foreign and local banks are examining lending linked to metals at Qingdao amid concern that risks are more widespread in China, where traders use commodities from iron ore to rubber to get funding.

The US hit a milestone this month as we are now almost $60,000,000,000,000 in debt, according to the latest Fed notes.  That's the total of our government debt, business debt, mortgage debt and consumer debt which, as you can see, is up 15% in the last 4 years alone.  

This is the Trickle Down Theory in action, folks, the debt has been trickling down to the US Taxpayers since Ronnie Horror Show in the 80s kicked it into high gear and we've been debt junkies ever since.  Fortunately, we have very low FAKE interest rates thanks to the Fed because a 1% rise in rates on $60Tn worth of debt is $600Bn more Dollars a year that someone has to come up with.  If rates went back to "normal" and rose 3% – we'd have to find another $1.8Tn for interest payments alone!  

So let us all pray that the Fed can continue to baffle us with BS for another month – it would be a shame to ruin the holidays…

 

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