It's once again the end of the great American work week at least for those of you doing the 9-5 thing in a cubicle or hopefully an office where you can close your door and enjoy the unique repartee Turdville has to offer. Some of the guest writers are on a well deserved vacation so you get me one more time providing the Friday morning quarterbacking. It's kind of like being a kid and peaking in the class room to see who the substitute will be. Lantern again? Spitball throwing contest day!
ALL SYSTEMS DOWN
You are spending a quiet evening at home scrolling through the latest comments on Turdville when all of a sudden your computer screen turns blue, and lines of white text start scrolling past including the words beginning dump of physical memory, fatal error. You scratch your head and say to yourself, "now that can't be good!" Yesterday, the NASDAQ experienced a collective Blue Screen of Death when trading of stocks and options came to a complete stop for over three hours because of a technical malfunction.
It was serious enough that both the President and Treasury Secretary were briefed on the situation shortly after the lights went out. Earlier this week, Goldman Sachs experienced a serious problem with their computer trading system that resulted in a flood of erroneous orders being sent to U.S. equity options markets. Bloomberg is reporting the glitch may have affected about 400,000 contracts for companies including JPMorgan. They are still investigating but I heard Rick Ackerman say yesterday that there could be losses up to 9 digits.
Folks this is serious stuff. I suppose computers do malfunction but when it happens twice in a week to the most sophisticated financial computers in the world, red flags should be popping up all over the place. As you might remember, in 2010 the DOW experienced a Flash Crash where the market lost 1000 points in 9 seconds and the technical glitch which occurred during the IPO of Facebook. These are only the more notable ones but the US exchanges have been experiencing other technical failures that it's time to ask, what is REALLY going on here?
Now consider this article printed by the WSJ back in 2009 regarding the computer system that run the US electrical grids being the target of foreign sabatoge.
"The spies came from China, Russia and other countries, these officials said, and were believed to be on a mission to navigate the U.S. electrical system and its controls"
So you see where I'm with going with this? With all the revelation of the sophistication of the world network of the NSA, and all the stories of hacking over the last couple of years, it's not too much of a leap of faith to suggest that something stinks here. I guess I'm not the only one to think so as yesterday Jim Rickards tweeted on the situation including the following,
Jim Rickards. Am I the only one who believes #Goldman & #NASDAQ trading glitches back-to-back may be #Iran cyber warfare, hitting us where it hurts: $$ ?
to which one "Victor the Cleaner" replied yes. Boy that guy gets around.
Sorry Victor but there is at least two of us now that think that this rash of technical glitches is something more than the result of an incompetent PC support staff. Earlier in the month, Catherine Austin Fitts was talking on a similar subject on how the US spying network is quite suitable for tapping into our financial system for purposes of manipulating the trade. One doesn't have to be Tom Clancy to imagine the possibilities of sabotaging either our transportation system, electrical grid or financial markets. Of course, if there was some foul play involved, you better believe that you would be the last to know.
Let's move on to some very brief market news.
In case you missed it, here is a full synopsis of the fed minutes. The bottom line was that there was no change in the Fed's stance on bond buying.
Yesterday as I was reading the analysis in both the alternative and MSM, it was clear that EVERYONE is certain on what the outcome will be. Zerohedge represented the alternative media by suggesting that anybody who believes that they will taper QE is delusional. And the MSM media suggested that something like 60% of economists were certain that the QE would be tapered in some form.
I thought to myself with all this certainty in what the Fed will do in September, it must be that all the people writing aren't the same people who invest in the markets. Clearly, the markets don't seem to know up from down and gold had a momentary lift and then sputtered again. Maybe those who are invested in the market don't really believe anything they read?
As you know, I am in the camp of entertaining all the various scenarios and then sitting back and watching the game unfold. Not to belabor the subject, but I did mention a 4th storyline which the Fed could opt for that would save face for the Fed while continuing to print piles of fiat. Nobody ventured a guess so let me spill the beans.
The Fed could begin shaving off some of the sterilized QE, keep the banks well buffered, bond buying at a healthy level while starting to put some of that gelt into the real economy vs a sterilized QE. There are many ways the Fed could do this save a true Bernanke style helicopter drop. If you have been paying close attention, Elizabeth Warrens' proposal of buying up $1 trillion dollars worth of student loans instead of $85 billion a month of government bonds. However, that would likely produce the kind of real inflation that gold bugs would really like and would be the impetus for the next strong leg up in the gold market. There are the obvious dangers of trying such a thing.
One last point, I wanted to make was the one that our friend Argentus wrote two weeks ago " A pulse of inflation now, is probably not THE gold bull market that the gold bugs hope for, seeing as government structural reforms are not yet in place." There is that BIS buzz word again, "structural reforms" If you feel so inclined you might want to go back and reread AM's post. http://www.tfmetalsreport.com/blog/4934/coping-stagflation-gold-traders-point-view.
Finally, this was posted over at Jesse's Cafe last night around the Witching' Hour on the steeply falling Comex inventories. .
By now, you have all considered Turd's short list of unusual things that are happening. And all I have to say on the subject is There is More!
In the spirit of Turd Friday's, the thread is an open one. Feel free to comment on any thing dear to your heart.
Enjoy your weekend!