The stockmarket is no longer determined by fundamentals nor technicals nor free market forces but by the desperation of governments, central banks and policymakers hell bent to give the impression that they have averted an economic crisis which in the end will be inevitable.

 I wasn’t going to write anything this week. All I wanted was to let you folks enjoy the video. However last night’s Dow market action compelled me to write this rant.
Despite the lack of news the Dow managed to put up a gain of 2.5%. Just because some analyst upgraded GS…the whole banking sector went wild which led the rally in the US stockmarket last night. Its sooooo blatant that the DA BOYZ, PPT are back to their old tricks again of propping up the stockmarket under the direction of Chairman Obama and Premier Emanuel. Maybe DABOYZ have been ordered to keep the Dow above 8,000. I doubt they cut short their vacation in the Hamptons. Never mind that the stimulus package is a complete failure and that real unemployment numbers are at double-digits. Noooo! Lets keep the market up so as to give the illusion the economic policies of the United Socialist States of America are working. As for the analyst upgrade in GS, either she’s stupid or she’s in bed with the DABOYZ. Who doesnt know GS will beat earnings tommorrow? They’ve fleecing the market for the last 3 months with the help of taxpayer money. The fact is the US recovery is non existent. Stimulus is having no effect and the Fed has run out of bullets. Efforts of supporting the stockmarket will only go to line the pockets of DABOYZ.

What the hell happened today? Nothing but a wave of bad news on the horizon for banks and financials, and one bullish comment by an analyst drives GS up and the market with it. It makes no sense. And when it makes no sense, I look for the alternative reason. If the Government knows they can manipulate the market in the short term with Financials, and they need to pass Cap-n-Tax and Obamacare, then drive it up short term till the agenda is in. And this is probably a suck in the last of the suckers to the last breaths of the rally. I am still short on Financials over the next couple of months till reality sets in, and won’t blink.

We were waxing positive on prospects for the Australian market the other day.  We said that even property down under does not look so bad.

I’ve been thinking about who is to blame.  The first answer that comes to mind is my parents, because they are usually to blame for just about everything else, but I am not sure I can pin Madoff or the Credit Crunch on them.

So, the first question is “blame for what?”  That’s easy.  According to the news media and the common man on the street,everything seems to be such a big mess.

To get to the bottom of it all, I went on the G20 protest march on Saturday here in London.  It was called Put People First. People were really upset, and I was determined to figure out why.  But even the name confused me.  Put people first before what?  The consensus answer seemed to be before giant multinational corporations, particularly banks.  But aren’t banks run by people?  It’s like the whole “guns don’t kill people, people kill people” thing.  What are the protestors suggesting, to put people first, except for the people that run banks?  “Yes,” was the answer.  And, unsurprisingly, put some people before other people that own guns. Oh, and use plastic bags at the grocery store.

I still wasn’t making any headway on figuring out who was to blame.  This is where Madoff comes in.  Not because he is to blame for the world’s financial crisis, mind you, but because blame seems to be much easier to assign in this case than in many, at least for me.  Needless to say, Madoff is a criminal and is to blame for behaving as such.  But no investors were forced to invest.  And, let’s face it, the signs were there.

The purpose of due diligence is not to confirm that you have made the right investment decision.  If every single result of due diligence does not clear hurdles of the highest standard, the purpose of due diligence is to allow an investor to say “No.” Investors should always be looking for reasons to say no, not yes, and then be willing to do it.

Does this shed any light on the “big mess?”   Well, to a certain extent.

We know that ratings agencies have perverse incentives, due to the way they are compensated.  We should say “no.”  We know banks were structuring product, stuffing it into unsuspecting client portfolios, only to buy back the underlying in order to free up demand for more product and more fees.  We should have said “no.”  We know the GSE’s had government guarantees and free license to hyper-leverage their portfolios.  We should have said “no.”

The list of those we could blame goes on and on. Who is to blame?  As usual, we have nobody to blame but ourselves.