Begin forwarded message: > From: Bill Totten <[email protected]> > Date: August 29, 2015 at 4:05:22 AM EDT > To: Freshink <[email protected]>, Ugly New World > <[email protected]>, a-list <[email protected]> > Subject: [a-list] What if the "Crash"... > Reply-To: [email protected] > > Is as Rigged as Everything Else? > > by Charles Hugh Smith > > Of Two Minds (August 25 2015) > > Take your pick - here's three good reasons to engineer a "crash" that > benefits the few at the expense of the many. > > There is an almost touching faith that markets are rigged when they loft > higher, but unrigged when they crash. Who's to say this crash isn't rigged? A > few things about this "crash" (eleven percent decline from all time highs now > qualifies as a "crash") don't pass the sniff test. > > Exhibit 1: VIX volatility Index soars to "the world is ending" levels when > the S&P 500 drops a relatively modest eleven percent. The VIX above fifty is > historically associated with declines of twenty percent or more - double the > current drop. > When the VIX spiked above fifty in 2008, the market ended up down 57%. Now > that's a crash. > > http://www.oftwominds.com/photos2015/SPX8-25-15.gif > > Exhibit 2: The VIX soared and the market cratered at the end of options > expiration week (OEX), maximizing pain for the majority of punters. Generally > speaking, OEX weeks are up. The exceptions are out of the blue lightning > bolts such as the collapse of a major investment bank. > > Was a modest devaluation in China's yuan really that unexpected, given the > yuan's peg to the US dollar which has risen twenty percent in the past year? > Sorry, that doesn't pass the sniff test. > > http://www.oftwominds.com/photos2015/vix8-25-15.png > > Exhibit 3: When the VIX spiked above thirty in October 2014, signaling panic, > the Federal Reserve unleashed the Bullard Put, that is, the Fed's willingness > to unleash stimulus in the form of QE 4. Markets reversed sharply and the VIX > collapsed. > > Now the VIX tops fifty and the Federal Reserve issues an absurd statement > that it doesn't respond to equity markets. Well then what was the Bullard Put > in October 2014? Mere coincidence? Sorry, that doesn't pass the sniff test. > > Why would "somebody" engineer a mini-crash and send volatility to "the world > is ending" levels? There are a couple of possibilities. > > 1. The Shock Doctrine. Naomi Klein's landmark study of how manufactured > crises are used to justify further consolidation of power, The Shock > Doctrine: The Rise of Disaster Capitalism (2007), provides a blueprint for > how financial crises set the stage for policies that extend the power of > central and private banks and various state-private sector players. > > A soaring VIX and sudden crash certainly softens up the system for the next > policy squeeze. > > 2. A "crash" engineered to set up a buying opportunity for insiders. When > easy gains get scarce, what better way to skim a quick ten percent than > engineer a "crash", scoop up shares dumped by panicked punters and > momo-following HFT bots spooked by "the world is ending" VIX spike, and then > reverse the "crash" with another round of happy talk? > > 3. Settling conflicts within the Deep State. I have covered the Deep State > for years, in a variety of contexts - for example: > > http://www.oftwominds.com/blogmar14/disunity-deep-state3-14.html > > http://www.oftwominds.com/blogfeb14/dollar-deep-state2-14.html > > http://www.oftwominds.com/blogmay15/surplus-repression5-15.html > > Without going into details that deserve a separate essay, we can speculate > that key power centers with the Deep State have profoundly different views > about Imperial priorities. > > One nexus of power engineers a trumped-up financial crisis (that is, a > convenient "crash") to force the hand of opposing power centers. As I have > speculated here before, the rising US dollar is anathema to Wall Street and > its apparatchiks, while a rising US dollar is the cat's meow to those with a > longer and more strategic view of dollar hegemony. > > Take your pick - here's three good reasons to engineer a "crash" that > benefits the few at the expense of the many. > > NOTE: Contributions/subscriptions are acknowledged in the order received. > Your name and email remain confidential and will not be given to any other > individual, company or agency. > > Thank you, Charles B ($50), for your exceedingly generous contribution to > this site - I am greatly honored by your steadfast support and readership. > > http://charleshughsmith.blogspot.jp/2015/08/what-if-crash-is-as-rigged-as.html > > https://billtotten.wordpress.com/ > http://www.ashisuto.co.jp
_______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
