Bond Buying Rumor Is Nothing More Than 3-Card Monte

When it's serious, you have to lie.

-Jean-Claude Juncker

European Central Bank leader Mario Draghi is truly playing a game of three-card Monte. It must be in the genes as he and others are prone to float ideas centered around 1) taking more money from Germany, and 2) calling for aggressive unsterilized bond-buying programs. The headline-seeking algos don't have enough artificial intelligence to tell when three-card Monte lies and bluffs. Here is Draghi's comment, does this have substance?

The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.

Does this guy believe his own talk? Apparently, the markets thought so, and as a result the markets staged a big-three day, 4% rally. Now, not at all surprisingly, this weekend Germany's Finance Minister Schaube has stated clearly that the bond buying rumor is untrue. Adding to the reality mix, Michael Fuchs, deputy leader of the parliamentary group of Merkel's Christian Democrats this weekend said, "Greece cannot be saved, that is simple mathematics."

In the U.S. there are also key three-card Montes. One that stands out is John Hilsenrath of the Wall Street Journal, who is supposedly the Fed's mouthpiece. He turned the markets this week in the last hour of a 1.5% down day, by speculatingthe Fed would offer up some type of bond-buying program. Hilsenrath did this before the last meeting, too, and nothing transpired. One would think three-card Hilsenrath, too, would be getting a cry-wolf reputation, but I guess the algos lack that intuitive intelligence as well. People wouldn't lie to computers. Hell no. That wouldn't be fair. Personally, I think Hilsenrath is a tool of some banksters and kleptocrats who plant this stuff and play him.

Even separate from the belief in three card Monte and the Tooth Fairy, it's beyond me how some coordinated global money printing operation could be construed as bullish. There is already a worldwide drought firmly in place (with Greenland devoid of snow cover) that has threatened to send food prices sky high. Brent Sea oil which was contained a bit below $90 in June, has experienced a $20 spike, and that's mostly just from front running and reacting to the three-card Montes. This is destructive capital that is moving "hot money" around for no apparent purpose, or hoards it where it benefits no one and harms many.

source: David Fry

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The AAR has a waste carload indicator that is closely correlated to U.S. economic activity. This is now indicating the economy is in the midst of a severe 2008-like rout. The three-card Monte is completely out of bullets (that never hit in the first place) and is in panic mode. Should the markets swoon next week, I'll be very interested to see if Treasuries recover from the Thursday and Friday sell off. If not, we have a game changer.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.