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                            TigerSoft News Service   5/5/2010     www.tigersoft.com 

          Why is the market falling?

Chartists point to the bearish looking head and shoulders pattern in the DJIA, NASDAQ,
          SPY and QQQQ.  Research we have done shows these patterns are reliably bearish.
          The patterns are widely known.   So, there is a self-fulfilling aspect to them.
SPY Head and Shoulders Patterns: 1983-2010: These Are Reliably Self-Fulfilling
          and Also Authentically Bearish Patterns.  

Peerless Stock Market Timing: 1915-2010 $395 
             Real-Time Track Record since Start of Peerless in 1981

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Environmentalists will point to the Gulf Coast Calamity.  The unexpected Gulf catastrophe
          may just keeping getting worse.   Centering hopes on doming an erupting volcano of oil one
         mile down seems a very long shot!

TigerSoft has a more sinister explanation.

          May 5, 2010   Has The Fed Secretly Funded A Financial War on The EURO without Obama's
          Knowledge?  The US Constitution declares that only Congress can declare war for the US.
          Presidents have long ago usurped this power. Now the Fed may be, too. Since the Fed wants
          to keep its activities secret, we may not know the truth for a long, long time. The Fed has
          far to much power to be allowed to act secretly.

Bankers including Goldman Sachs are now making the Greek and Spanish Budget Crises
          much worse.  The situations there are spiraling downward.  Bankers and Hedge funds have
          made the situation much more dangerous: first, by urging the creation of the Euro,
          which replaced the Greek Drachma or Spanish Paseta and, two,  by using by Credit Default
          Swaps to bet on collapse,   thereby creating much more fear, panic and unemployment in Greece
          and Spain.

         Bankers can now not only deny credit, now they can now drive an economy into the dirt
          by buying unregulated credit default swaps, not for purposes of insurance, but to do harm
          and speculate on disaster. Their unregulated quest for profits exaggerates the market's moves
          both ways. We have seen that they can create a wildly speculative bubble.  Now we
          are seeing that they can make war on a whole country.  

The Dollar's strength this year is not accidental.  I argue below it is happening because
          the Fed has given massive amounts of money to a consortium of the biggest banks, especially
          Goldman Sachs, who are now raiding Greek Government bonds using unregulated
          Credit Default swaps. They are part of a larger consortium that includes George Soros
          and other hedge funds, who believe that they are attacking the weakest link in the EURO.  

          The Dollar is rising steeply now against all the world's floating currencies.
          This helps imports, but hurts American exports.  Big US banks and the Fed love a
          strong dollar.  The banks want the US to be the unchallenged center of world finance
          and the Fed wants the financing of the trillion dollar deficits to run more smoothly.

          There remains a fear that the bear raid on Greece will go too far.   Or that Europe
          may reciprocate.  In these cases, a world financial panic may follow.  Goldman, Soros
          and the other hedge funds and zombie banks may go too far on the downside, just as
          when they create a bubble and prices go too far on the upside.   Another fear, we hope
          paranoid, is that this consortium will become a Frankenstein-like monster that the Fed
          cannot control and it will turn on California, Georgia or Massachusetts bonds and then
          US Treasury bonds. 

          Of course, one hopes to be wrong in laying scenarios like this out.  The best way to
          ensure that credit default swaps are not misused by monopoly-banks turned into
          dangerously out-of-control, mammoth bear-raiding hedge funds, would be for Congress
          to ban CDS altogether, or at least, to make buying credit default swaps legal only if one
          is already long the bond and if all CDS trades reported and traded openly.  Anything
          short of this will be proof that these scenarios are all too real.  Allowing downside speculation
          on entire countries or US governmental entities is insanely dangerous.  Why is no one
          talking openly about this in the US media?
  Apparently, no one wants to be the first to stick up and
          be hammered.  The story of the formation of the gang that want to break Greece has been
          been reported in the Wall Street Journal.  It is the FED's connection with this that has been
          missing in the American press.

             See also the Tiger Blog   

                                           Is The US FED Funding
               An Undeclared Financial War on The Euro?

                                                               by William Schmidt, Ph.D.
                                                            (C) 2010 www.tigersoft.com
                                                                       May 5, 2010

        We know Goldman Sachs has nearly unlimited borrowing rights at the US Federal Reserve Discount
        window even though it is not a bank.  It can put up all the unworthy, worthless home mortgage collateral
        it wants and get billions and billions in loans from the Fed at an interest rate of nearly 0 interest.  All this
        the Fed does even though the Goldman is not a commercial bank.

        In the past I have suggested two reasons for the Fed's generosity towards Goldman Sachs:

        1) Goldman is the most "connected" bank on Wall Street.  Its people work everywhere in the US
         government.  Goldman was by far the single biggest contributor to Obama.  Goldman helps sell
         US Treasuries and can help rig that market.

        2) Goldman's famed computerized trading program has also been indispensable to the Fed and the
        Obama Administration this past year  to keep the stock market rally alive, even after the market started to
        look a little ragged, as seen when the heaviest volume days were nearly all down-days. The heavy-volume
        RED down days this year (see below) have far outnumbered the few high volume BLUE up-day days. 
        The proof of how important Goldman's computerized trading has been commented on by earlier Tiger"
        blogs.  Embarrassed by this, the NYSE stopped publishing the data proving this last July.  At the time
        Goldman's trading for its own account constituted more than half of all NYSE and NASDAQ trades.
        More than half!

         Now Goldman's powers to boost US markets may be wearing thin for a while.  As a result, it is looking for a
         new target for its trading.capital.   The thesis of this Blog is that instead of profitably manipulating and
         exaggerating the US stock market bubble, it has shifted to bear raid tactics and is working on
         destroying a whole country, Greece in consort with a collection of huge hedge funds and zombie banks. 
         In this we see again that Goldman is totally amoral.  It is without conscience.  But it knows its limits.
         I believe it has been already ordered by the FED and the Obama Administration, not to sell short US securities. 
         That order against bear raiding does not apply to European countries!

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             Goldman's Attack on Greece Is An Attack on the EURO

           There is mounting evidence that the FED has a new reason to give billions to Goldman at nearly
           zero interest rates and with only toxic debts put up by Goldman as collateral.   Goldman plays a key role in
           their scheme to boost the Dollar by weakening the EURO, the.Dollar's competitor.  Strengthening
           the Dollar may not help American exports much, but it will help the financing of the trillions of dollars of US Debt. 

           The FED seems to have given a green light to an ambitious George Soros backed plan to attack the EURO
           at its weakest, most vulnerable spot, Greece.  The plan initially centers around buying Greek bond credit
           default swaps.  This is a speculative bear raid. The credit default swaps are NOT being bought as insurance
           by Greek bond holders. They are being bought in large numbers to drive down Greek credit ratings,
           make it harder and harder, more and more expensive for the Greek government to borrow the money
           it needs to operate.  If this organized bankers'/hedge fund bear raid against Greece is successful,
           it will be used on other European countries, as needed. 

           The remarkable thing is that the Fed is funding the plan through Goldman and the other zombie banks.
           Now we see why the Fed does not want these banks to loosen their credit to home owners and
           small businesses.  It wants them to fight an undeclared war against the Euro.  The US media totally ignores
           this.  I doubt if Obama even knows of this undeclared war! 

                                  The US Dollar's Strength Started This Year
                                              as The EURO began to decline in earnest.

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                                                                     British Pound
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                                                                    Swiss Franc
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                                   GOLD IS ONE WAY OUT FOR INVESTORS
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                                     The Bankers Hatch Their Plan.
                                     (     Source: http://www.alipac.us/ftopict-190201.html  
                                         http://www.rense.com/general90/euro.htm      )                

    Here is the entirety of a provocative study posted by an anonymous British journalist..

   "It has been evident for some time that the ongoing speculative attack on Greece, along with such other countries
as Spain, Ireland, Portugal, and Italy, was not primarily a reflection of their economic fundamentals, nor yet a
spontaneous movement of "the market," but rather an orchestrated action of economic warfare. The dollar had
been relentlessly falling through the late summer and autumn of 2009. It obviously occurred to various Anglo-American
financiers that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern
European economies, would be an ideal means of relieving pressure on the battered US greenback. Since these
"degenerate elites are incapable of directly solving the problem of the dollar through increased production, full
employment, and economic recovery, one of the few alternatives remaining to them is to create a situation in
which the euro is collapsing faster, leaving the dollar as the beneficiary of some residual flight to quality or safe 
haven reflex.

     This is what emerged during the first week of December with a speculative assault or bear raid against
Greek and Spanish government bonds as well as the euro itself, accompanied by a scurrilous press campaign
targeting the "PIIGS," an acronym for the countries just named, coming from inside the bowels of Goldman Sachs.
I have discussed this phenomenon several times over the last two to three weeks on my radio program on GCN.

     Now comes concrete proof of this conspiracy in t the form of a Feb. 8 "idea dinner," held at the
     Manhattan townhouse of Monness, Crespi, Hardt & Co, a boutique investment bank. Among those present
           SAC Capital Advisors,
           David Einhorn of Greenlight Capital (a veteran of the fatal assault on Lehman Brothers in the late summer of 2008),
           Donald Morgan of Brigade Capital, and,
           most tellingly, Soros Fund Management.

     The consensus that emerged that night over the filet mignon was that Greek government bonds were the weak flank
of the euro, and that once a Greek debt crisis had been detonated, all outcomes would be bad for the euro.
The assembled predators agreed that Greece was the first domino in Europe. Donald Morgan was adamant that the
Greek contagion could soon infect all sovereign debt in the world, including national, state, municipal and all other forms
of government debt. This would mean California, the UK, and the US itself, among many others. The details of this
at dinner were revealed in the headline story of the Wall Street Journal on Friday, February 26, 2010. (See article at

      Nor was this the only cabal in town intent on attacking the euro through the week Greek flank. The article cited
suggests that GlobeOp Financial Services and Paulson & Co. are also piling on. The zombie banks were
|also heavily engaged. The article reported that Goldman Sachs, Bank of America-Merrill Lynch, and
Barclays Bank of London were also assisting speculators in placing highly leveraged bearish bets against the euro.
Note that these zombie banks are alive today because of US taxpayer money, in Barclay's case through AIG.

It amounted to a deliberate attempt to create a large-scale world monetary crisis which would certainly bring |
with it the dreaded second wave of the current world economic depression. The creation of monetary chaos
in Europe through the convulsive destruction of the euro under speculative attack would cripple commodity
production in western Europe, severely undermining one of the dwindling areas of the world economy which
are still functioning. The genocidal implications for humanity ought to be obvious, but the assembled hedge fund
hyenas were not concerned with these consequences.

George Soros has been telling every media outlet that will listen that the euro is doomed to fall apart and break up
over the short run. Soros even has a theory to deploy as part of his speculative attack. Soros argues that the
fatal flaw or original Sin of the euro is that it was based on a common central bank among the participating
countries, but lacked a common treasury and tax policy.
This means that a country like Greece can no longer
defend itself from a speculative attack on its bonds by the simple expedient of currency devaluation, since
there is no more drachma, and the euro is controlled from Frankfurt, not Athens
. British spokesmen are quick
to point out that, even though the financial situation of London is far worse than that of Athens, the British government
is already devaluing the pound through a downward dirty float.

Given Soros's infamous track record, he must be taken seriously. In 1992, Soros became world famous
through his attack on the European Rate Mechanism, which he executed by a highly leveraged speculative assault
on the British pound, at the time one of the weaker members of the ERM. Soros' speculative attack led to a pound
devaluation and the ragged breakup of the ERM, and netted Soros 1 billion in profits. It was as if Soros had
personally stolen a 20 note from every man, woman, and child in Britain. The speculative gains were no doubt
gratifying, but the overriding political purpose of the assault was to sabotage that phase of European monetary policy.

The London Economist has gone out of its way to mock Spanish Prime Minister Zapatero's remark that Spain
was under international speculative attack. Press organs of the city of London and Wall Street have ridiculed the Greeks
as a nation of paranoid conspiracy theorists. And yet, the revelations made so far are strong circumstantial
evidence of pre-concert, as Lincoln would say. Even the US Department of Justice has been forced to send letters
to the participants in the infamous "idea dinner," warning them not to destroy any of their records and thus putting them
on notice that they are under investigation. While we should not have any illusions about the prosecutorial zeal of
Attorney General Eric Holder, who once represented the international financial bandit Marc Rich, this is at least a
beginning. Spanish and Italian judges are noted for their independence, and one of or more them may wish to
examine the activities of Soros, Goldman Sachs, and their hedge fund allies.

Greece does not need an austerity program, as the Greek labor movement has eloquently argued in the course
of their successful and admirable general strike last week. Greece does not need a bailout from Germany, the
sinister International Monetary Fund, or from anyone else. Least of all does Greece need to accept the advice of
Austrian school or Chicago schools charlatans who recommend the catharsis of a deflationary crash that would destroy
an entire generation through unemployment, poverty, and despair. Greece needs to defend itself with a 1% Tobin
tax on all derivatives and other financial transactions. Greece should take the lead in outlawing credit default swaps,
which amount to issuing insurance without meeting the capital requirements of being an insurance company. Greece
needs to enforce EU and national antitrust laws. If Soros and his gang succeed in breaking up the euro, Greece
should make the best of it by immediately imposing heavy-duty exchange controls and capital controls to
protect the new drachma, on the model of Malaysia a dozen years ago. Greece should shut down domestic
zombie banks and seize its central bank and use it to issue 0% credit for industrial and agricultural hard commodity
production. If the Greeks made plain what they intend to do if they are forced to fall back on the drachma, the
financiers who fear such an example would have another reason to relent.

Another obvious expedient is that of a bear squeeze or short squeeze. Soros, Goldman Sachs, and their gang of
hedge fund allies have now used derivatives to establish short positions against Greek bonds and the euro, betting
that these latter will go down. Political pressure is now being brought to bear on the European Central Bank and the
Greek central bank to undertake an unannounced large-scale purchase of Greek bonds and euros in the forward market,
causing the Wall Street predators to lose their bets, thus punishing them severely with extravagant losses. This is
normal central bank practice, and it will be astounding if the Greeks do not execute such a maneuver very soon.
The world now faces a stark choice between two alternatives, with Wall Street forcing the issue. The first is that
the zombie banks and hedge funds, having been saved and bailed out by national states and their taxpayers, will repay
the favor by driving the national states and all forms of state, provincial, and local government into bankruptcy. This
will be synonymous with the destruction of modern civilization itself. The second and preferred alternative is that the
national states summon the political will to use the inherent powers of government to place the zombie banks, hedge
funds, and related purveyors of derivatives into bankruptcy receivership and shut them down once and for all, relying
in the future on nationalized central banks for the provision of credit. The second alternative would allow the
preservation of modern civilization as we have known it. But in the meantime, the derivatives-based speculative attack
on the southern flank of the euro has accelerated the arrival of the second wave of depression, which now appears
likely to strike the world before the end of 2010.


By Sean O'Grady
Thursday, 4 March 2010

Fears of a hedge fund "conspiracy" to destroy the euro gathered pace yesterday when the American authorities
ordered some funds not to destroy records of their trading in the single currency. The move comes after the
US Federal Reserve promised to probe claims that the use of credit derivatives by Goldman Sachs had, ironically,
helped Greece enter the eurozone a decade ago. Although the latest Greek austerity plan helped to calm markets
and nudged the euro higher against the dollar, traders warned that the euro's traumas were far from over. Indeed,
it seems that the EU and the hedge funds are about to intensify their economic warfare, with the opening of a new
front in America.

The US Department of Justice has asked a number of the hedge funds whose executives attended a dinner hosted
by New York-based research and brokerage firm Monness, Crespi, Hardt & Co on 8 February, to preserve
their trading histories. According to an agenda obtained by Bloomberg, those present discussed a number of "themes",
including the chances of the euro falling against the dollar. Aaron Cowen, an executive at SAC Capital Advisors, David
Einhorn, head of Greenlight Capital, and Don Morgan, who runs Brigade Capital Management LLC went to the dinner,
as did a representative from Soros Fund Management.

The presence of a Soros employee has set alarm bells ringing, as George Soros' formidable reputation as an
investor – as well as a maker and breaker of currencies – goes before him. So far-reaching is his influence that
any hint from him of negative sentiment towards an asset or currency can turn into a self- fulfilling prophecy.

While the meeting may have been no more than an exchange of ideas, with no commitments on any side,
the presence of so many powerful American financial interests in one room discussing the euro will no doubt fuel
the conspiracy theories currently swirling around the foreign exchange markets and in political circles.

The Greek prime minister, George Papandreou, has condemned speculators with "ulterior motives" for making
his country's difficulties worse and destabilising the euro. If the dinner meeting in New York was part of a
concerted effort to move markets it might well break US anti-trust laws. Conversely, other hedge funds have
said they have avoided euro denominated sovereign debt for fear of regulatory retaliation.

The forces are massing. The value of the "bets" made by hedge funds and others against the European currency
has reached more than $12bn – almost double the amount of a few weeks ago, suggesting that the pressure will
persist. The number of credit default swap (CDS) contracts made to the same effect has also soared.

Many CDSs – in effect a means of insuring against the risk of default – have been taken out by those with no
ownership of the underlying asset, such as Greek government bonds, in so called "naked" CDS trading. Very
low interest rates provided by central banks have also made such bold currency plays more viable, as they reduce
the cost of funding or "covering" them.

For the moment though, the euro seems set to survive its Greek calamity. A swingeing programme of VAT rises
and public sector wage cuts were widely rumoured to be the price Greece will have to pay for the long-mooted
EU bailout of around €25bn. It should also clear the way for a successful €5bn bond issue at the end of the week.
As was widely anticipated, Athens yesterday announced a further €4.8bn in fiscal consolidation, about 2 per cent
of GDP, in the third package in three months. There will be a rise in VAT, further tax hikes on fuel, alcohol and
tobacco, and more reductions in the public-sector wage bill.

This is in line with the demands European finance ministers have been making on their Greek counterpart.
Yesterday's plan also had a positive effect on the cost of insuring Greek government debt, which fell back again.
However, a further €20bn will need to be raised by Greece over April and May, and more explicit assurances
that the other eurozone states will stand by Greece financially may be needed.

The anticipation of a deal between Athens, Brussels and the two nations liable for much of the bill – France and
Germany – was also heightened by the announcement that Mr Papandreou will meet Chancellor Merkel this
Friday before seeing President Sarkozy on Sunday. By the time Mr Papandreou faces all his fellow EU leaders
in Brussels on 16 March he should be able to demonstrate concrete progress towards his stated ambition of getting
Greece's near 13 per cent of GDP budget deficit down to 9 per cent next year and back below the Lisbon Treaty
limit of 3 per cent by 2012.

However, mutual suspicion and name-calling between the hedge funds and regulators on both sides of the Atlantic
still threatens to escalate into something more serious.

The EU's new Internal Market Commissioner, Michel Barnier, said this week that he would investigate short sales
of the euro and the abuse of the credit default swaps market. He is currently supervising the Commission's latest
directive to regulate the hedge fund industry, the alternative investment fund managers (AIFM) directive.
This measure has the potential to kill the EU hedge fund business, which is 80 per cent concentrated in London.

Clauses in the draft AIFM directive that require regulatory equivalence in territories where hedge funds usually
domicile their money, such as the Cayman Islands or Jersey, would effectively end many hedge funds' life in the
EU. And it is a substantial business. European hedge funds, predominantly in the UK, grew by 9.1 per cent in
the second half of last year to reach $382bn, according to Hedge Fund Intelligence, part of a global wave of
almost $2trillion, more than enough to move certain assets or currencies, especially if leveraged with cheap
central bank money.

Lord Turner, the chairman of the Financial Services Authority said on Tuesday he backed an investigation into
short speculative positions. He said: "It may be that even if you banned it, it wouldn't make a big difference,
but there are questions as to whether you should be allowed to take out an insurance contract where you don't
have an insurable interest."

The French Finance Minister, Christine Lagarde, has said she wants the EU to take a united approach against
"speculators" betting on CDSs, and the German Finance Ministry has also called for review of "over-the-counter"
products such as CDSs, which are not traded on any central exchange and, arguably, lack transparency.

Such sabre rattling is yielding results. Some hedge funds, including Brevan Howard and Moore Capital, have
avoided euro-denominated sovereign debt because of the threat of a "regulatory squeeze", though they may
continue to take a position against the euro itself.

Brevan Howard, Europe's largest hedge fund, with $27bn of assets under management, has said the short
trade in eurozone government bonds was "extended, crowded, fully pricing the fundamentals", and indeed
the CDS spreads for Greek paper have been narrowing markedly in recent weeks. The firm added that the
hedge funds were facing the same sort of pressure over short-selling activity that they did at the peak of the
crisis on 2008, when they were banned temporarily in some places from going short on bank shares,
something that had little long-term effect on the fate of the banks.

In the war between the hedgies and the authorities, many observers believe that Spain, rather than Greece,
will prove the decisive battle ground. As Spain's economy is so much larger than that of Greece, a bailout
would be far more difficult to fund even for the zones largest economy Germany, where political resistance
to further rescues may be insurmountable.

In the long term, the resolution of this struggle may be political rather than economic. Mr Papandreou has
suggested speculation against individual nations would be rendered impossible if sovereign debt was issued
by a European Treasury on behalf of all states, just as the US Treasury does. President Sarkozy has also
spoken enthusiastically and often about the need for "European economic governance".

But a pooling of budget and Treasury functions across the zone would remove the last defences of German
fiscal prudence: the others have gone. The Maastricht criteria, transferred to the Lisbon Treaty, limited budget
deficits, national debt levels and outlawed cross-border bailouts; All have been, or may shortly be, swept away
by the financial storm. The hedge funds are, in part, betting that the German government, or its people, will prefer
to preserve their treasured economic security rather than the cherished political project of European unity.

As so often during momentous episodes in European history, it all depends on Berlin.

George Soros: The man that governments fear

The involvement of George Soros in the euro crisis has revived uncomfortable memories of the success –
and profits – he enjoyed by betting against the pound during the ERM crisis of 1992. "The man who broke
the Bank of England", he was soon dubbed, and he reputedly made $1bn from his activities then; the concern
is that he will now break the euro. The influence of the Hungarian-American currency speculator, stock investor
and philanthropist is such that he attracts many followers, and his bets can thus become self-fulfilling through
"momentum trading". Even if he does not actually destroy the eurozone, he will leave it badly mauled.

The auguries are not good. At the Davos World Economic Forum in January, Mr Soros declared that he
thought the euro "may not survive". And if there is one theme in his long career it is that he enjoys making
one way bets on economic inevitabilities; often the certainty that a fundamentally weak currency will have
to leave a fixed exchange rate system (as with the pound in 1992). By the spring of 1992, it was becoming
clear that Britain was a part of the European Exchange Rate Mechanism at the wrong rate. It was overvalued
compared to the German currency, and we were increasingly uncompetitive. The only way it could be sustained
was for British interest rates to be kept far too high for UK domestic conditions (though that did hammer inflation
out of the system). The pain the ERM was causing, unnecessarily, to the British economy, was becoming unbearable.
Soros spotted his chance.

In retrospect, he followed what was an obvious strategy. In this case, he borrowed around 6bn and
converted it to German marks at the fixed rate, shorting his sterling position. It was almost a one way bet.
If sterling collapsed he would hit the jackpot. He hit the jackpot. A 350m side bet on equities rising after the
devaluation was a bonus.

The Tory government led by John Major was humiliated for its economic incompetence, and was left out of
contention for two decades. The political advisor to the then chancellor, Norman Lamont, was a certain
David Cameron. One can guess the lessons he learned from the experience.

Almost 80 now, Mr Soros has been a pantomime villain ever since, but he perhaps did the UK a favour.
"Black Wednesday", 16 September 1992, heralded a savage depreciation of sterling followed by a long period
of sustained low inflation and export-led growth. The Greeks could do a lot worse.


                  Watch the SPY's and QQQQ's Closing Powers.
                                   A break in its down-trend will be a Buy after a test of support.
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