Category Economic Subjects

Feb 1 2021

Reddit Crowd Boasting too Much?


Armstrong Economics Blog/Basic Concepts Re-Posted Feb 1, 2021 by Martin Armstrong

A number of people have commented that somehow the people on Reddit are taking our forecasts and touting them when to buy as in silver now. It appears that way for  I have been warning for months that the gold/silver ratio will collapse and that silver would gain over gold. The danger that whoever is really behind this Reddit forum is will more likely bring the SEC down on free speech because you cannot tell people to buy stuff and then have a position in the same thing you are touting without full disclosure. That can be 20 years in prison and as long as you are not a New Yorker, you do go to prison.

The ratio made a new historical high exceed that of World War II when silver was cheaper than even nickel 1942 to 1945. It was used to replace the 5 cents “nickel” coins during the war. We put out our forecasts recommending silver over gold and that has been a good trade. However, these people behind Reddit are making it appear that if people follow them they can beat Wall Street.

All they have been doing is picking the trade that is in motion. They are NOT capable of manipulating a market insofar as turning a bear market into a bull market any more than Wall Street can. If the Wall Street crowd was all-powerful, then they would not blow themselves up and run to the government for bailouts. What they have been doing is accelerating the move but the timing remains the same. Only the volatility rises.

A word to the wise! You will lose everything if you think these people are never wrong and can beat Wall Street. Taking out billboard signs bragging about GameStop is not going to prevent a crash.

Jan 30 2021

When, “Robinhood” turns out to be the “Sheriff of Nottingham”


Re-Posted from GrrrGraphics.com JAN 29, 2021 AT 10:02 AM

New Tina Toon

Robinhood was designed to appeal to the millennial generation of stock traders. With its slick design, commission free trades, and trendy catchphrases, (Let the people trade), Robinhood claimed it was all about ‘democratizing finance’ by making it simple.

Unfortunately, when it came to their own customers buying the heavily-shorted company GameStop, Robinhood decided to start stealing from the poor and giving it to the rich.’ The rich hedge funds, that is.

Citadel has a close financial relationship with Robinhood as well as a large stake in Melvin Capital, a hedge fund that massively shorted GameStop, with disastrous results. The millennials didn’t like the thought of their game store being driven out of business by ruthless hedge funds and they fought back by buying GameStop stock. So much so, that the hedge funds began to lose billions of dollars. This could not be tolerated by those who think they control the market and they were backed up by an angry and shrill CNBC, who railed against the young Reddit whippersnappers who upset their money-making applecart.

On Thursday, Robinhood and other brokerages began blocking buys of GameStop, and it plummeted from nearly $500 to nearly $100 in a matter of minutes. This what happens when one can only sell a stock—not buy it.

Citadel denied leaning on Robinhood to skew the playing field in favor of their hurting hedge funds, but it looked mighty suspicious. Many traders on Robinhood were outraged by the blatant market manipulation of the company and many are leaving the platform in droves. Robinhood once bragged about democratizing finance, but when push came to shove, Robinhood chose the hedge funds over its own customers.

Robinhood claims to give a voice to the voiceless, except when they disagree with what those voices say. Then they silence those voices. Robinhood stated they will allow normal trading on Gamestop today, but the damage has been done. Robinhood has been exposed. They serve the interests of the mega-rich, who are not allowed to lose. Hedge funds got to trade GameStop but not Robinhood’s own customers. When that happened we knew there were no free markets. Rules are for the little people, who usually lose. The mega-billionaires get to change the rules as they go along to benefit themselves. They are not afraid of the regulators since they are already interwoven with the corruption at the top.

If they can rig the markets, they can rig the elections, the courts, the state legislatures, the media, the science, and so on.

Every lie is being revealed.

We should all condemn the actions of Robinhood, but more importantly….some of these big shots need to go to prison for the stunt they pulled on Thursday.

—The GrrrTeam

Jan 29 2021

Real Estate Boom – Mass Exodus from Cities


Armstrong Economics Blog/Real Estate Re-Posted Jan 29, 2021 by Martin Armstrong

We are witnessing a phenomenal shift in real estate where everyone is bailing out of urban cities throughout the country. Even property in the Hamptons has been exploding with people fleeing NYC. While many hedge fund managers are moving to Florida and thousands of companies are fleeing California to Austin or Dallas, Texas, many others are just moving to the suburbs. Others have been moving to Texas and Florida just so their kids can play sports. Indeed, many city dwellers from New York have moved to Dallas. As one reader explained:

I loved your blog today on fake news and read your emails usually 1st thing every day. The top picture looks like the NC seal. Who is that in the picture?

I live in Charlotte and it’s growing like crazy. My next door neighbor moved down from the DC area and 3 houses down the people moved from CA. The previous owner of the house sold to CA people moved to TX because NC high school football was shut down. He had 2 sons playing football and he is a former NFL QB, whose last job was a backup with the Eagles.

The private schools here are having a surge of new students because so many are moving here and the public schools have remote learning.

I personally want to move towards the SC/NC  coast and get out of Charlotte as its so liberal. We’re not rich but our house has appreciated to crazy levels and I see property taxes going crazy.  

TP

Talking to friends in Orlando, they have witnessed the same trend. People moved to Orlando just so their kids could play sports.

Meanwhile, more than $1 billion is owed in back rent thanks to the lockdown in New York City. Governor Cuomo is looking at the state’s loss in revenue and hinted that New York can help to dig out by legalizing gambling and marijuana sales. Governor Cuomo seems to be living in a fantasy world. He has actually said NYC will reopen soon and everything will come back. He  also said, “You’re going to see the arts coming back.”

I personally enjoy the theatre. I had season tickets with designated seats for the season. That was a complete waste, and when they asked if I would renew, I declined. The Broadway plays travel around the country. That came to a complete halt. So it is not just the theatre in New York, as they shut it down nationally. Sorry, I would no longer buy a ticket until they are open and the political nonsense is over. But that does not seem likely until we pass 2022.

Jan 29 2021

The Law & Robinhood


Armstrong Economics Blog/Corruption Re-Posted Jan 28, 2021 by Martin Armstrong

QUESTION: If there is anyone who has fought the club it is you. Keeping you on civil contempt for 7 years when the statutory maximum is 18 months and they released you only because the Supreme Court was taking your case as an example of the corruption in New York. HSBC pleads guilty criminally and has to return all the money and you had no restitution but the banks didn’t go to jail. That is nothing that was supposed to be American Justice. So what is your opinion since you have also warned to stay out of the New York courts when this class action lawsuit was just filed?

Thank you for surviving their corruption.

GR

ANSWER: Shutting down the market in GME is outrageous. But this is by no means unique. Back in 1980, the COMEX did not shut down the silver market to force the Hunt brothers out of silver, but they made it much more expensive to be long v short. They aided the investment bankers as always. Even the Chicago Board of Trade raised the margin to trade silver by 10x the very day of the high – January 18th, 1980. History repeats because the corruption never changes.

Jan 29 2021

GameStop – Who Done It?


Armstrong Economics Blog/Basic Concepts Re-Posted Jan 28, 2021 by Martin Armstrong

While many pundits are calling this the “squeeze of a lifetime” and a war of retail against the hedge funds, in reality, it was a PERFECT cyclical move after 13 years down. Of course, they are claiming that a band of retail are waging war against the Hedge Funds and the press is claiming “one big question amid the frenzy has been how much the little guys really matter.”

Even AOC has chimed in saying “Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino.” She then added: “Anyways, Tax the Rich.”

While this is being portrayed as some fluke and others are calling for an investigation that this is just manipulation and a pump and dump, interestingly Socrates picked the low in April 2020 and then entered at first a Breakout Mode in August where the model was calling for a high in many different stocks, and then in September, it entered a Phase Transition mode which is a doubling in price when it closed at 1020. It has now been 8.6 months from the April 2020 low.

When we look at the Timing Array, January was a Target with high volatility coming in February and the next turning point will be in March followed by June. Most interesting is that here too we see a Panic Cycle shaping up for August 2021.

When we look at the monthly chart, the breakout began in January when it punched through the Downtrend Line. It then rallied to the Breakout Line at $200 and moving through that you had the classic Phase Transition.

Monday opened below our Projected Opening Resistance at 99.17 coming in at 96.73. It fell back to fill that gap and closed below the opening print.  What I find really ironic is how a band of retail investors and traders are being blamed for a war on Hedge Funds. Any Hedge Fund that was short this stock was not a professional, to begin with. I would think any basic technical analysis would have screamed “buy” so if they did not listen, they were trying to manipulate the market assuming they had the power. The huge gap up is clearly shorts bailing out who should have been out a long time ago. As noted, this has been in a bullish trend for about 9 months.

My conclusion is that this rally is not a “manipulation” but an attempt to suppress the market and as such the shorts were compelled to bailout. But that is their fault because they were fighting the charts. Hence, the retail participants should not be pounding their chest just yet. The sharp rally is also due to a lack of liquidity. This does not appear to be a pump and dump against the established trend, as the trend was up to start with.

YES – GameStop is a covered market on Socrates Platform

If you aren’t already signed up for Socrates, you can view the different membership options here. To access Reversals and Arrays (as referenced above), you’ll need to sign up for the Pro Membership.

If you are already a Pro Member and are looking to expand the time horizon of the models and have access to a few additional features, consider upgrading to the business version of Socrates.

Jan 29 2021

Wow, Big Tech Colludes With Wall Street to Protect Elites and Hedgefunds Against Ordinary Investors


Posted originally on the conservative tree house on January 28, 2021 by Sundance

It started with a bunch of smart ordinary Wall Street market watchers assembling on Reddit and noticing that hedgefunds were making millions destroying the stock value of GameStop (GME) -and others-  by short selling the stock and trading the position.

[Short Lesson to Understand Short-Selling Here]

The hedgefunds were so greedy the short-sellers borrowed more than 140% of the total number of shares of stock of GME (GameStop) in order to destroy it.  The stock value dropped from $20 to $4 as the sharks made millions in the short-sells.  That’s when the Reddit investment community,Wall Street Bets, noticed an opportunity.

One of the issues with short-selling is that short-sellers must always eventually purchase the stocks they borrowed.  That means if the stock value increases you are committed to buying it, you will lose money, and you cannot get away from the loss in your short-sell position so long as the stock value is high.

Knowing the borrowed shares were more than the total number of outstanding shares of the entire GME stock, the rebellious alliance knew the short-sellers (hedgefunds) would have to eventually buy them.  So the independent group, mass numbers of individual investors, started purchasing shares and driving up the GameStop stock value.

The GME stock skyrocketed and the short-sellers (hedgefunds on Wall Street) were freaking out.  The higher the stock went, the more it was going to cost the hedgefunds to get out of their short position.  Billions were being wiped out as the pesky rebel alliance kept purchasing shares and driving up the value.  [Go Deep] That’s when the biggest eye-opening series of events in financial history took place….

♦ First Big Tech jumped-in to protect the hedgefunds.  The servers that handled Reddit’s investor discussion “WallStreetBets” were shut down, essentially trying to break down the communication of the rebel alliance.  They used the oft-familiar “hate speech” justification, but that was really a ruse… Big Tech was supporting Wall Street.

♦ Then the New York Stock exchange stepped-in to protect the hedgefunds by blocking trades of GameStop and other Reddit targeted stocks (Nokia, Blackberry, AMC theaters).  Ameritrade also blocked any trades.  The NYSE was essentially trying to protect the institutional investors, billionaires, from the citizens, independent investors.   Wall Street went to war against day-traders, ordinary Americans.

♦ Then the stock trading App “Robinhood” which was used by the citizens to make their trades, actually stepped-in to stop users from purchasing GameStop shares.  The Robinhood app will now only allow sales of GME and the other stocks because the app is protecting the billionaire class from their short position.

Wall Street, the New York Stock Exchange, the entire financial trading system is trying to protect the short-sellers by driving down the shares of stocks so that the short-sellers can get out of their positions.   Never has there been such blatant market manipulation by the organized efforts of the elite financial class.

Big Tech and Wall Street are working together to keep a rigged system tilted in their favor and their aligned efforts are spotlighting just how rigged that system is.

The elites don’t care what happens to the ordinary citizens in the stock market… they are protecting their own status.  All of this is brutally illegal market manipulation and collusion by the financial sector.   [Story Here and Story Here]

Keep watching….

Masks are dropping at an alarming rate as more people are witnessing in real time just how this market is rigged against the interests of ordinary Americans.

.

.

Don’t forget who owns the NYSE !!  {Go Deep}….  Things make sense now?

“It’s a big club, and we ain’t in it!”…

Jan 28 2021

Federal Reserve Warns Joe Biden Policies are Weakening US Economy


Posted originally on the conservative tree house on January 27, 2021 by Sundance

The Federal Reserve panel sent a warning about the U.S. economy starting to suffer as the JoeBama administration starts to institute “America Last” policies.  The financial media will not directly point to the Biden policy agenda as the primary source of the issue, but the background context of a new administration is exactly the difference.

Even during the worst aspects of the 2020 COVID-19 impact during the Donald Trump administration, the underpinning of the U.S. economy remained strong.  However, now that JoeBama has taken office the 2021 COVID-19 impact is being used as an excuse.

WASHINGTON DC – The Federal Reserve on Wednesday struck a more somber tone about the U.S. economy, saying the recovery is weakening as the country waits for widespread vaccinations against the coronavirus.

“The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” the Fed’s rate-setting committee said in its post-meeting statement. That contrasts with its observation last month that the economy had “continued to recover.”  (read more)

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