"Tremendous Ripple Effects" - Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade

This could be the black swan that causes commerce to collapse, earnings to nose dive, and markets to plummet.  At the very least, it will be painted as a disaster, justifying an imminent bursting of the bubble.

http://www.zerohedge.com/news/2016-09-02/ripple-effect-could-be-tremendous-retailers-demand-government-bailout-after-hanjin-c

Erdogan Threatens To Abandon US Dollar In Trade With Russia

I predict US mainstream media and the CIA will now label Erdogan a terrorist who must be taken out.  Any sovereign government leader looking for alternatives to the USDollar for cross-border trade is considered an enemy of the US State.  See Hussein and Gaddafi, former US allies before their untimely demise.  Were they evil dictators?  Absolutely.  But they were originally put into power by the US and the CIA, until they started entertaining alternatives to the petrodollar as payment for crude oil.

Also see Russia and China.  Removing their government from power is another proposition.  However, the neocon warmongers are beating the drums of war.

http://www.zerohedge.com/news/2016-08-11/erdogan-threatens-abandon-us-dollar-trade-russia

The "War On Inequality" Is Coming To The Stock Market: Three Ways How To Trade It

http://www.zerohedge.com/news/2016-07-15/war-inequality-coming-stock-market-three-ways-how-trade-it

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/07/03/3%20trades.jpg

One-sided Trade

The long USDollar trade is getting long in the tooth.

It's Settled: Central Banks Trade S&P500 Futures

It's official:  central banks do manipulate markets by artificially goosing up certain asset classes (equities and bonds), while suppressing others (precious metals).  "Conspiracy theorists" have been accurate all along, while the apologist deniers once again have egg on their faces.

This isn't just about "I told ya so."  When central banks distort markets, they are attempting to alter the laws of nature.  Eventually, mother nature wins, and this will end badly for all players.  Market manipulation can work short-term, but market gravity will eventually win out.  One can throw a ball in the air, and catch it, temporarily suspending the forces of gravity.  But once released, the gravitational force will eventually cause the ball to drop back down to earth.

Similarly, artificial demand for collateralized mortgage bonds was propped up by favorable credit ratings and institutional fraud, with the underlying premise that US home buyers would not default on their mortgages, irrespective of their creditworthiness--as long as home prices appreciate into perpetuity.  When those assumptions were proven wrong--horribly wrong--the subprime mortgage market cratered and cascaded into a systemic banking crisis.  In turn, the real estate collapse triggered a financial meltdown as credit markets seized up, destroying liquidity.

Despite rhetoric proclaiming debt monetization stimulates the economy, QE was intended to save bank balance sheets, and the Fed stepping up as the buyer of last resort of Treasuries and MBS as investor demand collapsed.  For the same preventative reasons, central banks are buying up SP500 futures to prop up the stock market as investors (both retail and institutions) flee the rigged casino, due to loss of investor trust.  Without central bank buying, markets would have collapsed due to the dearth of buyers.

Stock and bond markets are truly Potemkin villages standing on their last legs.  Removing the artificial props would collapse the foundations, prompting more central bank intervention.  The unprecedented level of interventions will not end well and astonishingly reveal the desperation of the central planners.

http://www.zerohedge.com/news/2014-08-30/its-settled-central-banks-trade-sp500-futures

Thousands Of Firms Trade Confidential Data With The US Government In Exchange For Classified Intelligence

http://www.zerohedge.com/news/2013-06-14/thousands-firms-trade-confidential-data-us-government-exchange-classified-intelligen

Sorry, Mates, Strictly Business: Australia Wants To Cut Out US Dollar In Trade With China

Not only are US unfriendlies moving away from the USDollar, but so are America's allies.  They see what is going on with Fed monetary policies.  So should the American public.

http://www.ibtimes.com/sorry-mates-strictly-business-australia-wants-cut-out-us-dollar-trade-china-1161287

China, Brazil sign trade, currency deal ahead of BRICS summit

This is more evidence that the reserve currency status of the USDollar is dissipating.

http://in.reuters.com/article/2013/03/26/brics-summit-china-brazil-currencies-idINDEE92P08O20130326

BRIC Leaders Pledge to Boost Trade in Local Currency

This signals the continuation of a disturbing trend (as least for Americans' standard of living):  sovereign nations, specifically in emerging markets, are diversifying away from the USDollar as a transactional currency--despite its still tenuous status as the global reserve currency.

http://www.bloomberg.com/news/2010-04-16/bric-leaders-pledge-to-boost-trade-in-local-currency-as-meeting-shortened.html

Translation: with trading nations abandoning the USDollar as the currency of choice, expect further dollar debasement, higher inflation, and a reduced standard of living for Americans.

Crude Passes $91, As $100 Billion In US GDP Is Wiped Out In Minutes

http://www.zerohedge.com/article/crude-passes-91-100-billion-us-gdp-wiped-out-minutes

I've read every $1 price increase in a barrel of oil causes a 0.3% reduction in trade.  With the US economy hovering around $14 trillion, GDP is reduced $84 billion with every $1 increase in a barrel of oil, which is in the ball park of $100 billion, as stated in this article.

The take-away message is that quantitative easing (or printing money out of thin air) induces price inflation, which is counterproductive for economic stimulation.

Oversold

Even tho I think financials have terrible fundamentals (too much toxic debt), I flipped Citigroup today for a one-day round trip profit of 20%. Regional banks should do okay, as they didn't leverage up on sub-prime mortgage-backed securities, like the big money center banks. But the landscape has changed for partially nationalized banks like JPMorgan Chase, B of A, Citi, and Goldman Sachs. So even tho I went against my investment principles, I repeated my flip of Morgan Stanley last quarter, doubling my money on that trade. The panic selling of Citi shares created an oversold condition, so I pounced. Probably not smart, but I'd rather be lucky than good.

I also nibbled at oil at $34/barrel with the ETF DXO, which leverages crude oil moves. No one is bullish on oil, so my contrarian instincts compelled me to dive in. This is a short-term trade for me, and if oil moves to my favor, I'll take profits. If oil keeps declining, I'll again go against my principles, sitting on it for however many months or years it takes for oil to rebound--I won't put in any stop losses. Oil is still in a secular bull market, so time is on my side.