Market Update: Volatility!

Took 600 points per contract out of the S&P mini in ONE DAY.
That's $30,000 per contract!....with only $500 in margin/risk capital at stake....

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"The Number one reason people lose money is the FEAR of losing money." Sir John Templeton

"Committed To The Eradication Of Poverty Among Patriots"

It seems like however the market opens, it closes in the opposite direction.
Open down 400, close up 400. Today it opened down 200 +, now it's up 200+.

The more complex, the easier it is to hide reality from the public. The various derivative contracts such as "credit default swaps" are an example of such complexity. Even more complex is how corporations account for these transactions in their financial statements.

The Financial Accounting Standards Board which sets the rules for accountants on how to account for certain items had issued FASB 157 which has in it what is known as the "mark to market" rule. In financial reports the reporting entity is required to present financial assets it owns at the fair market value, and if necessary to write down the value of these assets to that value if the asset was previously carried at a higher value. This of course would result in a loss if the value was lower at the financial statement date than it had been previously on the books of the reporting entity.

Many of these reporting financial institutions were facing the prospect of huge write-downs so US Representative Barney Frank, as chairman of a House Committee, wrote to the FASB and asked them to change the accounting rules. This was effectively asking them to commit fraud upon the public since Certified Public Accountants around the country rely upon the FASB rules to issue reports on the fairness of financial statements.

On October 2, 2008, Mr. Robert Denham of the FASB responded to Representative Frank stating that the public relied upon financial statements and the rules could not be suspended.

But then on October 10, 2008 the FASB issued FSP FAS 157-3 which "clarified" the rules for determining the fair value of financial assets when the market for that asset is not active. Essentially what FSP FAS 157-3 did was allow accountants and the companies they audit to go through calculations that effectively get around the "mark to market" rules. Instead of writing down these worthless assets on the books when there is no market, they came up with a way to say these worthless assets were really not worthless. Barney Frank got his way, and the financial statements of countless financial institutions will henceforth we unreliable. They will look like the did not lose as much as they did, and the public will be deceived. Certified Public Accountants, like in the Enron fraud, will look the other way and participate, along with the FASB, the SEC, and the companies issuing now fraudulent reports.

When you get into the details, the reality seems to get lost in the complexity of this all. How many people understand these toxic transactions that financial institutions cooked up? How many people understand how to account for these toxic transactions on the financial institutions' books? Out of the complexity, it is so easy to pull the wool over our eyes.

Certainly, you cannot now rely upon what the financial institutions and their "Certified" reports tell us are their earnings. Maybe some state's Attorney General will prosecute Certified Public Accountants licensed in their state for their roles in this fraud, since they are within their jurisdictions, but I doubt it. None the less, I plan to write to the Attorney General in the state where I reside and ask him to do his job.

I fully expect to see investor lawsuits against accounting firms as the fall out from this fraudulent accounting wrecks further havoc upon the public.

If you are inclined to suffer through the details, check out http://www.fasb.org/ to see some of the information they released on this topic.

Here is another link to watch markets around the world.

The little red line is where it closed the prior day.

Make certain you look at the date on the top of the little charts. . .

http://home.netcom.com/~fanclubs/Graphs//WorldMarketsDaily.html

first part of 250 B at work. They know they need to put the Dow back to 10 000 plus if the neocons would have any chance of winning. The 250 B (or 700B) will not last long. Markets bottom often in October also, but there may not be a radical move to the upside from November to March, due to the problems, though there are rallies in times of recession also.

more volatility=more opportunity...

Regardless of what the Dow says, whether it goes up or down, the dollar still has absolutely no real value. We just inflated our economy to the tune of close to $1 trillion, an act that, if we had done to another country, would have been considered an act of war.

While we should be concerned with the Dow we should not take all our cues from it. People like Siegel and the rest of the bailers will appeal to a rising Dow as a sign that the bailout was the right thing and that everything is OK and that our government knows what it is doing. It does not matter if the Dow heads over 10k next week, or if it hit 12k in a few months, ultimately, sooner or later, the dollar will collapse.

Don't give the Dow more credit than it deserves and don't think that a manipulated Dow is a true measure of the health of our economy. When I see it go up, I think, "of course it is going up - that is what they want it to do and they are doing whatever they can to make it go up because most sheep only look at THAT scoreboard and if the sheep are content then the criminals can keep on keepin on."

Until someone can demonstrate that an inflated currency can lead to a healthy economy, then there is no way we can expect things to stay good. If a bar watered down their drinks they would be in big trouble. If a jeweler mixed metals and sold them as silver or gold, they would go to jail. Yet we have no problem with our government diluting our currency.

Isaiah 1.22 - Your silver has become dross, your drink diluted with water.

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is down but that's only in relation to the artificially inflated dollar. When the hoax vanishes and the dollar becomes worthless gold will still be inherently valuable as a bargaining tool.

This "up and down" market is just attempted manipulation and second-guessing other traders. Like I said before... a game of chicken.

Plunge Protection Team saved the day.

Your tax dollars at work.

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about the economy to get the market going in the right direction. LOL

Does anyone have any insight as to what might be going on that it seems to now be trending up?

now. Or is it a temporary movement?

Will the Dow finish above 8000 today??

Everyday I watch this and I think of all those families that are going to lose their jobs, more industry shutting down going bankrupt, people moving into zippered houses, man it's just getting stupid now.
~Mikael / Peace, love, Light and unity ~

It's begun....the (no doubt artificially induced) positive 50+ opening has given way to a downward plunge. It's early in the day, already down over 200 points.

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