An example of coordinated deception

David Tepper runs Appaloosa Management launched in 1993. He is described as reclusive, a jackel, the master - a titan, a "How do you do it?" type of guy. If there is any example of Joe Kernan eclipsing, even just a little bit, his previous career peddling the stocks of ready to implode Biotech securities - this is it. Kernan talks to this Tepper guy like he's god. Moreover, CNBC produces graphics deliberately designed to deceive. They trump up his performance like a pot-roast attracting a meal. The result is pure deceit - and whats more they end up using this guy as a shill to pump up bullish stock scenarios. So, its a double whammy. This is an example of regulated and deliberate fraud and why I do not watch TV.

Clearly, Tepper is not trying to run money well, though he supposedly did get paid 2.5 billion apparently last year - which I do not believe BTW. He, however, clearly is trying to raise assets well and charge his management fee. So lets review:

Below is  a chart of Tepper's AUM as presented by CNBS (kinda looks like they may have been making money right?):

Below is a chart of some undefined method of computing annualized performance (Again as presented by CNBS, it really looks like this guy is on to something now doesn't it):

Below is a chart of what Tepper's performance numbers represented in the charts above actually look like (Now we know why the fund has a ridiculous name like Appaloosa and we can clearly understand why this chart only flashes on the screen without fanfare as opposed to the others):

The guy took nearly a 50% loss on principle in 98 and several drawdowns that were much bigger. Also, keep in mind that if you were unlucky enough to invest in this mismanaged fee generation machine at one of those peaks you lost anywhere from 75% to 95% of your principle on more than a few occasions. The fact that he can sell this piece of crap fund at all is a miracle. Apparently, the guy does not use leverage, yet generates the beautiful PL picture shown above. Just imagine if he really traded or invested actively, or better yet, used a little bit of leverage.

What I would like to understand is: What difference it makes for me to see Assets Under Management (AUM) in a nice smooth curve and annualized performance, again, in a nice smooth curve. These are derivative values without an explanation of methodology and additionally misleading in reference to quantifying returns. Kernan talks about his annualized performance as if its legendary when apparently, these guys have to be using the peak high watermark performance shown in mid 2010 on the PL chart above to generate those false and deceptive numbers. The reality is that Tepper has no idea what he is talking about, runs a crappy fund and is pumping stocks...get ready to see another 100% swing in PL volatility on this chart.

The reason I am posting this is because people are getting all bullish again given Friday's action, especially shills and amateurs like Tepper. My systems covered their shorts on Thursday afternoon and we closed a respectable week. Personally, I was favoring a consolidation up day on friday though the potential for a larger move would not have been surprising. The fact is that this was a much bigger move than I and most people were expecting simply squeezes the shorts further to the wall and pumps idiots like Tepper so that they can raise assets for trash heaps called Titan's of Hedgefunds. The media is obviously in full regalia pumping the Bernake and Obama re-inflation wealth transfer agenda.

I do not change my view that we stand a the precipice of a substantial decline. My trading activity does not use opinion to make decisions but does use it to make allocation decisions. i.e.: how many percent of assets are we allocating long or short. Right now that view is imparting a bias towards assets allocated biased short if the models choose to go short. I believe that this will be another example of a false breakout, despite the deformed bullish inverse head and shoulders breakout that we have on our hands. One of the other reasons that I believe that is the downright parabolic topping behavior in momentum names that have been highly shorted like NFLX, BIDU, AAPL, AMZN, PCLN. The charts of these securities can not match any optimistic expectation of reality no matter how generous and positive a scenario can be painted. Shorts are being taken down in bodybags - these are the signs of a bubble and a top. What's more the shorts will not be there to buy the market when it actually begins its now obligatory implosion.

The results of government sanctioned and regulated fraud...

I do not agree with the assumptions in this video regarding government programs being able to fix what government corruption and fraud has engineered. Nonetheless, it is an interesting video.

The fox will never guard the hen house and the government will never create productive jobs that generate a return on the capital required to make them. That is just a panacea. The only solution is balance...and that does not promise to be an easy trip to get there.

The fact is that we do not need more homes. The homes in this video were financed by the FHA, Freddie Mac, Fannie Mae and ultimately the unwilling and unprepared taxpayer in order to benefit the debt money system ponzi scheme and generate huge bonuses, contributions and incentives for special interests. That is NOT the definition of balance. No solution that does not seek a balance will survive. Certainly not one implemented by inept and corrupt leaders like Bernake, Obama and Bush.

Look out below.

Insurance, insurance, insurance...the scam of our age

Many economic realities have been masked by the illusion of safety and protection...we need health insurance, life insurance, portfolio insurance, credit insurance, pet insurance, municipal bond insurance, liability insurance, default insurance, insurance on life insurance, market insurance, derived insurance, money market insurance, FDIC insurance, insurance on insurance (reinsurance), options on securities, options on derivatives of securities and we need it all to somehow lower the cost and risk of anything that we are considering doing or procuring.

The reality of life is that there are no free exchanges and as Warren Buffett demonstrated with his testimony regarding the ratings agencies, ratings insurance is not free either. Moody's is a schlock outfit with the intelligence of a worm or its got motivations of a snake and the ethics of an ant. If Buffett is willing to scam us with ratings and make excuses for it, what about all the other insurances he is involved with? How about all those "put" insurance contracts he wrote on the SP500 and other indexes? Are they a scam or viable? Can he actually deliver on them and does the money exist?

What about all the insurance that banks are promoting? It was just a few years ago that Lehman Brothers and almost every other investment bank was offering risk free portfolios. As it went: 'We will guarantee that you will get "X" return above "Y" and you can't lose more than "Z" on your investment'...funny how they all ended at ZERO! Most of those portfolios collapsed during the crash in 2008 and the covenants were breached. I am aware of quite a few Europeans who wanted 100% sure things who got 100% sure things - losses!

The idea of evading risk while targeting gains is the quintessential reason that people invest in hedge-funds...but isn't this a play on leverage made viable by others forms of insurance? "Why not trade leveraged short and long or better yet trade derivatives and arb anything we can get out hands on". The words "into a disaster" are the conveniently missing from that equation. But that would ruin the marketing wouldn't it.

The problem in this world is that so many people want something to be something that its not. If you are a male looking for a girl, a transvestite or mannequin should not make a viable proxy...but in the current version of reality, we are willing to entertain any proxy as long as its, accepted, popular or "doctrine". 

If we can further obfuscate a situation by insuring against any unwanted side effects, we can get rid of the problem entirely. The issue with this, is that most risk is not realistically insurable, it just transforms into another risk, usually a worse one...and in reality its cheaper not to insure and instead plan and manage appropriately. The funny thing about "risk" is that it becomes contagious in both directions. One more dangerous than the other.

Insurance is scam of both Wall Street and of Washington. Medicare, Obamacare, Social Security, FDIC, FHA, FHLN, FRE, FNM and the Fed are all examples of failed confidence games/insurance scams that end up ripping off investors and taxpayers and similarly the clients of their plans. The fact is, that when we get so sophisticated that we have to insure and we can obfuscate everything...the activity has almost always been the mask of massive fraud for hundreds of years...but these frauds have always ended the same way...the losers who issue the plans get massive bonuses and the people who buy them get ripped off when they blow up...and someone else get the bill.

There is no such thing as free lunch, yet we as a society these days, are always looking for a free one...we try to pretend that there is a way that someone else can be responsible for OUR problems. That argument does not hold water and I am personally tired of it.

Nearly every-time we take on some credit or leverage, we buy, are required to buy or need to rationalize the risk by buying some sort of insurance. So, how this seems to work, is that whenever we commit to pay some interest on something, we need to pay more interest to someone else. That's a lot of interest and its parasitic when all is said and done. Ironically, it has made us more vulnerable rather than secure. That did not work with AIG, MBIA or Ambac and CDO and other structured products without exceptional efforts by government. Will it work with Goldman Tax and JP Morgan now that these companies essentially buying and selling insurance? Don't bet on it. The feeling of being safe, while it may be nice, is artificial and fosters complacency rather than solid/proactive business decisions and does not offer a foundation on which success can be built!

No serious and productive person relies on someone else to bail them out when they do not produce, nor should they expect someone else to produce for them... it is an organic process. Living and succeeding are based on balance...not ignorance or obfuscation. Things do not get better when you ignore them...nor do they get better when you pretend they are something else. What we have been doing as a society is pretending that money as, illusion, doctrine or debt is ok. That government lies are ok, insurance as a proxy for solvency is ok and that money is real when someone is willing to insure it.

This is why the financial system is not just a place to win or lose...its a representation of the values of society as a whole. Those values are very compromised. They are unrealistic and inappropriate. They are endorsed by the president and his henchmen, but that will not make them successful...and therein lies the problem. At some point "crap" smells like "crap", looks like "crap" and finally when the secret sauce is gone... it is "crap" and can not be called anything else.

Most massive collpases in history have been related to the idea that somehow we can insure against them and somehow use alchemy to turn something worthless (or worse) into "gold". It has never worked, and now, in my opinion, the insurance parasite and the financial ponzi scheme that is built on it is trying to play its trump card...insunace.

Ironically, insurance is the most expensive ever at a time when it can be least afforded...and this applies to most products...including the ridiculous Obamacare venture. The only products for which insurance is affordable, are the ones the Fed is protecting...(remember  Maiden Lane assets (I mean liabilities)) owned by it or the banks that are on the "favorite list".

The jig is up, derivatives will lose leverage,  insurance will lose relevance, and with the collapse in leverage, the money supply will contract way further than the 40% contraction it has made over the last year. Asset values will have to adjust to real values that are not representations of viability due to insurance backing them or credit available to purchase them.

Its a sad story...but insurance is a parasite and creates huge opportunities for malfeasance while contributing little to negative value to society at best. Ironically, banks as regulated by the fed, and the central banks themselves are not storehouses of our money or value, but they are manipulators of insurance trying to use legal camouflage to sell us something we don't need.

World ending and recovering...which one is it?

The chart affirms my previous statements...the 10 year treasury hit highs in 2008 on sheer panic. It has traded very technically and just broke out over a cycle - this puts it in trend mode if that 121 22/32 holds. But what the market is not reflecting is panic. What we are seeing is de-leveraging. Expect de-leveraging to continue and make market dynamics to continue to be unpredictable. 

Why not rally on terrible jobs data based on clearly fraudulent/optimistically biased government statistics published at the most optimistic values possible and constantly revised downward, GDP, ISM, Jobs, Housing - you name it and the government is publishing the best numbers they can imagine and subsequently revising them down for several months or quarters thereafter. Notice they never understate any numbers and subsequently revise them upwards. The numbers are singularly too optimistic...everytime. This kind of consistent distortion has all the probabilities of 4 major banks not having a single losing trading day in 63 trading days without priority dealings involved.

The distortion is a coordinated effort. Coordinated by whom? By the same guys who think Maiden Lane Holdings portfolio of bankrupt Bear Stearns hotel assets can be marked as worth 67 billion dollars - fully 6 billion higher than the initial overstated number they say it was worth when they took the assets on. JP Morgan would have nothing to do with these assets and many of them are in receivership, yet the regulator is totally fine overstating their values...who is directing the charade? The fed of course...and Obama and congress are all beholden to these guys...

The same authenticity being applied to data is currently being applied to market prices...I mean non-market prices (not to mention OpEd pieces). It is not making things better either.

Green Derivatives...just the thing to "fuel inject" the economic engine of the US

WASHINGTON (MarketWatch) -- Green Exchange got its approval from federal futures regulators this week to launch a trading platform that will list contracts tied to credits and allowances for greenhouses gases. 

The Commodity Futures Trading Commission said Friday it had approved the exchange's application Thursday. The announcement of its approval comes just one day after U.S. Senate Democrats decided to table a climate-change bill. That bill would have helped spur a much larger derivatives market to help companies offset their carbon emissions. 

Green Exchange was introduced in 2007 under the New York Mercantile Exchange and a group of banks and brokerages. Its products have been listed at Nymex, which is now owned by CME Group (CME 286.56, +4.84, +1.72%) . The CFTC said those products will now be listed on Green Exchange, which will become a stand-alone entity. 

A spokesman for Green Exchange couldn't be immediately reached for comment.
"We think the Green Exchange has all the right elements to really compete in the marketplace, and achieving the milestone of this approval one of those elements," said Evan Ard, managing director of Evolution Markets, a founding member of the venture. "But there's still a lot of work to be done to effectively compete in the marketplace." 

The CFTC's approval of the Green Exchange now sets the stage for competition between CME and its major rival IntercontinentalExchange Inc. (ICE 108.36, +1.84, +1.73%) , which this year acquired the Climate Exchange PLC (CLE.LN) in a $597 million deal. 

ICE's acquisition will make it a dominant force in Europe's estimated EUR100 billion carbon market. The U.S. market is still quite small, although it has great potential to grow. Point Carbon, a consulting firm, expects the global carbon market to grow $170 billion this year. 

Both CME and ICE are targeting European and U.S. markets with their ventures. But Point Carbon estimated in March that 63% of the trading in the U.S. carbon market was done off-exchange. 

Without a climate-change bill, it could be challenging for both exchanges in the U.S. to build emissions-trading businesses. 

CFTC Commissioner Bart Chilton, who has been advocating for a climate-change bill that will help create a large carbon futures market, said Friday he hadn't lost hope despite the Senate's inaction. 

"There has been and will be green trading," Chilton said. "The question now is when we will get it together and do what needs to be done for our planet. The added benefit to doing the right thing environmentally is that it will fuel-inject the economic engine of our democracy--something last I checked, we sorely need."

 Well, http://jessescrossroadcafe.blogspot.com posted this CFTC's Bart Chilton On Financial Reform, Position Limits, and Curbing 'Disruptive Practices' post. I have to tell you I gave Bart the benefit of the doubt in his statements and to make his case on the video...my feeling was that he was pontificating horse manure. If there was one thing this Financial reform bill was not it is "Heroic". Nor is it particularly patriotic. There are some things that are certainly constructive in it, but not things that big players will not be able to bypass if they really want to - and I am sure they do and will!

However, Chilton sounded like a government lobbyist to the US public not an official protecting them. I do not discount that he may actually mean some or all of what he says...but he lost all credibility with this BS in the article above. The absolute last thing we need are super leveraged derivatives on more products that only exist in the minds of a few computers owned by Goldman and JPM and a few other inside players.

If we trade carbon offsets or derivatives based on them we are really amplifying the problem that exists in many of the commodity markets regarding physical commodity fraud. For example, Gold and Silver vehicles - ETF's and futures. The Gold and Silver backing them, either does not exist in amounts required or does not exist at all. But the elements Gold and Silver actually do exist as physically identifiable objects with which it is possible to validate collateral or discover fabrication.

Green products, however, are quite a different story.  Carbon offsets and carbon trading have NO practical accountability and do not physically exist in an easily verifiable way that is enforceable or manageable.  Therefore, they have no verifiable price. That does not make for a quality market and will further undermine the futures markets in general. Why else do you think Al Gore went to Goldman Tax with the idea? Fraud is a great business. These products are fraudulent from the outset. Is that what will really drive "...fuel injection in the US economic engine"? Why not trade Mel Gibson derivatives via ICE...ohh, I forgot, we already very nearly do that!

Chilton is just one of the crew, in my book and simply adds more evidence to the pool that usurps integrity in the, so called, "Financial Reform Bill".

"Its a very serious test"...really it is...

“It is a very serious test,” Franz-Christoph Zeitler, a member of the executive board of the Bundesbank, Germany’s central bank, said at a news conference in Frankfurt. “All this criticism was absolutely premature.”

The stress tests, similar to an exercise conducted in the United States last year, were intended to rebuild confidence in European financial institutions that has been shaken by the sovereign debt crisis. Uncertainty about which banks may be sitting on piles of Greek debt and other potentially toxic assets has made institutions reluctant to lend to each other as well as to businesses, and acted as a drag on economic growth. - nytimes

What I find interesting is that a stress test designed to rebuild confidence can accomplish that rather duplicitous task and surreptitious goal. I am rather confident that this is not a stress test but rather another piece in the charade to paint numbers with different colors in the hope that people don't recognize them for what they are and continue believing that the debt based fractional reserve money creation mechanics can create enough principle to pay the interest on the new principle they create. Thankfully, anyone who thinks that sentence sounds a little conflicted probably understands that the results of more charades and lies will suffer a similarly conflicted state. The difference is that by that time all the rich banks and bankers will have transfered any remaining assets into their books and the bills onto ours.

What is interesting is that the one thing you would expect on a stress test is what would happen if a EURO nation defaulted...or if a large bank imploded because of it. Naahhh, that type of analysis does not belong on a serious stress test. So, the people most likely to come up with this fairy tale have got to be the same people who told us the there was no subprime crisis or recession and unemployment was not a problem...speaking of which I think they just said it again:

"The White House said it expects unemployment will stay at or above 9% until 2012, and that the 2010 deficit will come in at $1.47 trillion" - cnn money

"But again, you are seeing a recovery," says Geithner in an interview to be shown on NBC's "Meet the Press" on Sunday morning. "You're seeing private investment expand again, job growth starting to come back. And that's very encouraging."

• Also, you may think FDIC insurance is $250,000 per account...right? Wrong! They tumpet the ponzi scheme when they need to and then conveniently sweep the reversion back to $100,000 per account under the rug...did you hear this get any press early in the year when it was rolled back? (Note 7/26/10: The new finance reform bill permanently sets the FDIC insurance level at $250,000.)

• FDIC bank seizures are tracking well above last year same time (70 vs 102), but that doesn't matter does it...Ever wonder how many of those passed the FED's stress tests?

lets see how this plays out...most likely not like the propagandists are saying, in my opinion.

For anyone who think there is even a possibility that the government or BP is telling the truth

The spill is no where near over...please listen to this interview of Matt Simmons. click here

About time for another Madoff style ponzi scheme blowup...

• Goldman made just $2.3 billion in 2008 but paid $4.8 billion in bonuses. Citigroup and Merrill Lynch, Bank of America  combined lost $54 billion in 2008, but paid out $9 billion in bonuses.

• Morgan Stanley earned $1.7 billion in 2008 with bailout money, and paid out $4.475 billion in bounses JPMorgan earned $5.6 billion in 2008 and paid bonuses of $8.69 billion.

• Wall Street if asked for a claw back, the funds would likely come from current profits. 

The above is, to the letter, a description of a ponzi scheme. The participants in the scheme are (and have been for years) taking money which is not rightfully theirs and distributing it as they see fit so that they can have their $100,000 a month Hampton's house and lover at the Jersey shore. The reality is that you can not run a business at a deficit where you create NO value for 20, 30, 40 or even 50 years and expect anything more than a ponzi scheme. And ladies and gentlemen that's what we have before us above - a legally regulated and enforced ponzi scheme courtesy of the Fed, past and current presidents and congress.

Who will it be this time?

Goldman Tax - No Truth, Just More Lies

That's why we get to pay their bills. I am quite sure that the SEC fine was paid with profits generated by an off balance-sheet vehicle that is unaudited, masquerades as an an airline and somehow ended up with a bunch of GS call options prior to this deal as another so called "hedge". In fact, I would reason that Goldman made 2 to 3 times the cost of this settlement, at least, due to their extensive skills in financial chicanery, regulation circumvention and general manipulation, prior to the settlement announcement. And what would prevent them from doing that? ohhh, silly things called regulators and laws. But as you can see it is more profitable to circumvent social, implied or legal responsibility because when you can decide to take the system down at your will, you are the army, government and police - so anything is possible. Even the little pawns like the SEC and CFTC are scared of you when you are Goldman Tax.

One thing is for sure, you and I will get the bill. So, now that they got someone else to pay their fine, what's next for Goldman Tax? I guess we will have to ask Obama and his boss Bernake. We must be able to get an authoritative answer there. And here it is...the quote of the week: "There will be NO MORE tax payer funded bailouts. PERIOD!" - Assistant Chief Executive of the Fed, Barack Obama.

I have heard a lot BS from Obama about one fact or another or change or another that will turn out this way or that, most of them have been outright deceptions and this statement will bear out to be aswell.

There will be bigger and bigger tax payer funded bailouts because Obama and Bernake (and as a whole the political system as it is constructed now) have the power and ethics to lie to us all and objectives to empower and enrich their special interests. Please don't forget that Goldman Tax is one of the priority interests. So is JP Morgan.

Florida senator: Obama told me we can’t deploy oil skimmers because they might be needed elsewhere

Oil Spill Mess = Cap and Trade "Yes"
Oil Spill Cleaned up = Cap and Trade "No"

Way to go Obama!

JP Morgan - Earnings Fraud Once Again, Again...

Ok, this is getting to be like a habit. The last time they reported great earnings they used accounting gimmicks and loan reserves for most of their profits...even with all the free money and fake accounting given to them thanks to the Fed, they made most of their money by reducing loan reserves because everything was getting "better and better and better". Interesting, this time they make a point to say profits were reduced in the consumer lending division and performance was unacceptable in that division. Ohh, so  commercial and wholesale loans require 1.5 billion less in reserve requirements therefore we made 1.5 billion this quarter on bad loans?! If Dimon and company can't make money the old fashioned way when they still get money and credit given to them free and when they still mark assets a mystery prices - what's going to happen when things get really bad.

Jamie, is succession planning still priority #1? We really believe you in zombieland! Time for the market to go up on this solid news...we believe you Jamie and we believe you Benakejing. NOT!

Market Marking or Book Making?

If the Finance Reform Bill was written by finance industry...

...how would it look? Try this on for size...

JP Morgan then and now

If anyone is intersted to understand the reason that JP Morgan Chase keeps getting the gravy deals from the government and the Fed...there is quite a lot of precedence...fake accounting and all. Also, please read: More dollar what-if discussion this is a post I wrote last year and paints a clean picture if the lengths to which central and fractional reserve banking goes to short currency into existence.

Iceland could solve all its problems...

...if it followed Trichet's advice and became eligible for loans it can not possibly repay. How in the world could that seem like a reasonable plan? Even Obama's finance team might hesitate for a half a second on that one. But, what's amazing is that the ECB seems to think it was reasonable and they are in charge of the current fiasco - this certainly reinforces my lack of confidence in their confidence game. All Iceland really needed was to join the G-20 and then they could have setup a police state to forcibly take money from people without their cooperation.

The master coverup plan by the Federal Reserve and the US banking system was to implement a massive accounting fraud via derivative's based liquidity generation - please read Derivatives...what the heck were they for? which I wrote regarding the use of derivatives to create the illusion that there is enough money to cover the fractional reserve debt money obligations.

Audit the Fed - dead...till the next time

Corruption is alive and well in Washington.

G20 and the depression

What the main stream press and the government say and what happens or happened are often two totally different things? I wonder whether that applies to the plans regarding market intervention, Afghanistan, the oil spill or financial reform? Somehow, I don't think we have to wonder too long to figure out the answer.

Value Added Tax and the bailout of US unfunded liabilities

...a brutal theft from all american's except the guys who stole the money in the first place.

This is not funny.

Fake Jobs numbers...what else is new?

The Fed and PPT is F**Ked

Obama loves the Fed and Benake...as I said before government in general has been bought and paid by the Fed and their cronies. Please see my previous post on the subject: Votes for sale