Worrisome developments

These are written more from the perspective of a financial market observer/participant.

I think that the world is becoming infinitely more complex and challenging to deal with. Almost a month after the Trump election victory, the other side has not reconciled. Recount has commenced in Michigan. Three more States could also head for recount. We do not know what is in store. This story has some update on the recount.

In the meantime, the U.S. House of Representatives has passed two resolutions: One is to control the so-called fake news outlets including Zerohedge and Naked Capitalism. The second resolution is on sanctions in Syria. The resolution on Syria seeks to impose a non-fly zone! It can lead to grave consequences, even if unintended. A lameduck House has passed these two resolutions.

‘Washington Post ‘ has pitchforked itself into the campaign to ban the so-called ‘fake news’ sites. It is both a commercial move and a move to stifle alternate voices. It is unbelievable that it is happening in America, when all the mainstream media channels lined up on one side in the Presidential elections. Yves Smith of ‘Naked Capitalism’ had sent a legal notice to ‘Washington Post’. See here, here and here.

A Republican elector had written an op.-ed. in NYT as to why he won’t be voting for Trump. Jan. 20th is  long way off. It appears that a lot can happen there. The United States is not headed in the right direction.

In Europe, we had a very bizarre reaction to the resounding defeat of the referendum in Italy: Euro and European stocks rallied. The only rational explanation I can think of for this is that policymakers have acted to prevent the market from reacting normally to the news. It is not possible that the referendum was actually bullish for Euro assets and Eurozone stocks.

Gold sold off in the weeks after Trump election because the U.S. dollar rallied. Now, gold has been sold because the U.S. dollar is weakening! What is happening is mind-blowing and deeply worrisome.

This post at ‘Zerohedge’ with numerous charts captures the bizarre market reaction very well.

This reaction is a classic:

…[Apparently] the pattern of fading a potential crisis and then scrambling to cover and get long when everyone takes a breath and realizes that this time is not the apocalypse either still holds more than ever. I can’t justify any of this. The lesson investors and traders are getting is that everything is a buying opportunity and you need to not miss the boat. Brexit? Bullish. Trump winning the election? Bullish. Italy saying no to the referendum and the Prime Minister handing in his resignation? Bullish. Heck, all we need is a coup d’etat in India and the entire Belgian banking system to go kablooey and the S&P 500 will be at 3,000 by Christmas Eve. [Link]

The only possible explanation for the utterly bizarre reaction is massive manipulation. But, the question is what to do about it.

It is all coming unhinged. The apparent signs of extreme madness – manifesting in many areas – are precursors to the deluge that inevitably and invariably follows.

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