A Lesson in Political History, by My Account; Followed by A Description of the CGTS Stock Selection Process
Yesterday a fresh wave of selling hit the markets. This did not surprise us. We are overwhelmingly short this market.
I read on the second day of the selloff a story on the web: “Capitulation Already?” The gist of the article was that after two days of selling ‘reason’ had returned to the markets; the bull rally would continue. I truly believe that today REASON IS SELLING THIS MARKET.
I don’t wish to re-hash all the reasons this market should not be appreciating. Earnings are being fixed, staged. First you dumb down earnings expectations as much as you can. Then when you beat expectations, it is taken as a positive. This is unreason (I was going to say insane, but that word is misused too often).
The Fed has spent $4 trillion dollars to keep this so-called Bull Market going. The Fed has spent more than $4 trillion, its balance sheet, because it has also fixed interest rates at zero for four years, essentially donating to Wall Street free money to buy back shares and to refinance debt. At the same time the Fed has been buying all the bad loans the banks have wanted to sell (this is where the original $4 trillion comes in), which includes US Treasuries, in order to steer people into stocks and housing. It’s a giant ponzi scheme.
An audit of the Fed would also show the Fed as having given billions of Americans’ money to banks and bankers all over the world. This would be justified in many noble intentions, I’m sure — we are all one world; saving the global economy is saving America too. The truth of the matter seems to be that a global elite wants to transfer sovereignty away from individual countries to international banking. True, individual counties do not have such a great record of trusteeship of the Earth, having chosen war, genocide, cruelty, theft, slavery and many other forms of tyranny in the name of national sovereignty. I remember the movie ‘Network’ from the 1970’s – and the message was, essentially, if the corporations are in charge there will be no more war because war will not be good for business and business (making more money) is ALL that corporations care about.
The transfer of national sovereignty from individual nations to international banks has been happening under all parties, communist and capitalist, Islamic and Christian, democrat and republican. Why? Well, banks pay terrific bribes to gain power. It’s all about bribery. And our banks better stewards of world health than individual nations? We remember similar political structures during the heyday of feudalism. Feudalism wasn’t so great for the peasant class. We read about the rich .1% and the poor 99.99%. That is feudalism.
The Democratic Party in America was always, during my life, since 1950, at least, the party of the poor. The Democrats always defended to have-nots, the weak, the broken, the unfortunate. But that all changed after Ronald Reagan’s election. Suddenly the American Dream was re-phrased into a picture of entrepreneurial heroism. The conservative businessman (capitalist) was the hero, the agent of God; the liberal ‘thinker’ (communist, labor unionist) was not only weak, a weakness bordering on treason, but they were also failures under the terms of ‘the American Dream’ contract. If one was noble, heroic, conservative, worked hard, believed in the dream, one would succeed – it was really a matter of positive thinking. The loser as a negative thinker; and he, as a failure, a shadow of the Day-Light figure, deserved no help from the society. God helps those who help themselves. Sinners do not deserve help until they become winners; convert to conservative entrepreneurialism. Capitalism and Christianity were somehow linked.
This, however, suggested that getting rich, the American Dream, and the contract with God were all the same. This created an equation where Greed was equivalent to both America and to religion. This suggested that getting rich was the end; and the American Dream was the means. Ethics turned a shade of gray. Cheating to get rich was suddenly a more practical expression of ‘how things work’ on the Earth. If you were rich, God was blessing you. We remember Lloyd Blankfein’s claim that “Goldman Sachs was doing God’s work.”
Apparently Jamie Dimon at JP Morgan was not doing God’s work. Here is a list of crimes that Dimon and Morgan essentially admitted committing in order to general billions of dollars of profits, through cheating and stealing, including fines in the billions of dollars to make these charges (and crimes) go away:
Dec. 4, 2013 – $110 million (€80 million) – As part of a settlement between the EU and six banks, J.P. Morgan agreed to settle for its alleged role in the manipulation of the Japanese yen version of Libor in 2007.
Nov. 19, 2013 – $13 billion – J.P. Morgan settled civil claims with federal and state agencies over its underwriting practices and its sale of mortgages before the financial crisis, as well as what was sold by Bear Stearns and Washington Mutual. $4 billion of the settlement was set aside for distressed homeowners. The bank admitted to deceiving investors about the quality of its mortgage underwriting.
Nov. 15, 2013 – $4.5 billion – The bank paid $4.5 billion to a group of 21 institutional investors including BlackRock and Allianz SE to settle losses from mortgage-backed securities that J.P. Morgan sold them before the crisis.
October 16, 2013 – $100 million – The bank paid the Commodity Futures Trading Commission to settle charges related to its so-called London Whale trades.
Sept. 19, 2013 – $920 million – In settlements with the OCC, the SEC, the Fed and the U.K. Financial Conduct Authority, J.P. Morgan agreed to pay a total of $920 million to settle all claims about its management and oversight of traders involved in the London Whale debacle. The bank also admitted wrongdoing in the matter, a trade that cost the bank more than $6 billion.
Sept. 19, 2013 – $389 million – The bank paid $80 million in fines and refunded $309 million to credit-card customers to settle regulators’ charges that it harmed consumers by allegedly making errors in hundreds of thousands of debt-collection lawsuits and leading more than two million credit-card customers to buy services they didn’t want.
July 2013 – $410 million – FERC alleged J.P. Morgan Ventures Energy Corp. traders gamed rules that help set the cost of electricity in California and the Midwest with 12 manipulative trading schemes starting in 2010. The DOJ is now investigating the claims. The $410 million included a $285 million fine and the bank agreed to give back $125 million in profits.
January 2013 – $1.8 billion – In two separate agreements, the bank contributed $1.8 billion to the nationwide bank settlement on allegations the banks improperly carried out foreclosures during the housing crisis, including employing so-called robo-signers. The bank also agreed to contribute $3.7 billion in aid to troubled homeowners and nearly $540 million in refinancing. The first part was reached in a nationwide settlement in February 2012.
November 2012 – $269.9 million – The bank settled with the SEC over the creation and underwriting of mortgage-backed securities.
August 2012 – $1.2 billion – The bank disclosed in a filing its share of a broad settlement over interchange allegations against the banks and Visa and Mastercard.
