11 Nov Bernanke spoke

yes, Bernanke spoke in a townhall of a group of returning Iraqi troops. What is the message ?
He is saying WAR is coming. Nonetheless he is commited to reduce unemployment, etc. There are things that he cannot control.

He said he does not believe in business cycles. So it is a matter of belief, not scientific.

The market is reacting to the cut in Europe growth forecast to 0.5%. It says that the earlier forecast of 1.5% was simply a makeup. The HK Chief Executive when he was in Washington said that HK may enter into recession. So if such a vibrant Economy is going into Recession, that means a lot of other countries would follow. It is a matter of GUT to admit it to the people. Honest man are far and few.

The IAEA report on Iran nuclear is nothing new, it was a report already existant while El Badiri was reluctant to release.

We have 1 more month before Meredith prediction of a Municipal blowup expires. So far we have Jefferson County, and JPM settles with SEC on a fine of 700K. No criminal arrest for bribing, frauds, etc. And Federal Reserve paying the Banks for the penalty. The Occupy-Wall-Street movement should focus on specific Criminal Cases and ask for indictment of the Bank executives, like B(l)anky and Jamy.

We have TEA, OWS, and now spread to University Campus, the Veterans are moving. Why are the Unions so quiet ?

As I told my subscribers, this is not the time to be GANGHO whether you are a BULL or BEAR. As you have seen, numerous forces at at play trying to prop up the market. Just look at the support for the FAS over the past months. 12xx level is pretty good in face of all these uncertainty.

USDJPY is drooping towards 75 again. Somebody is stockpiling Crude.

APEC Update-----------
Geithner is pressing China to rise Currency quicker. And Obama is asked to do the same. Why ?
B'cos USD is now the Carry Trade, sell USD and buy whatever riskier asset. So to ensure that the Carry Trade persists, it is important to have a engine, that is RMB. Raise RMB, USD falls.
However expensive RMB, means exports slows, more job loss, less consumption, more unrest. While US imports would flood China market, providing jobs for the Americans.
It is about JOBS, not CURRENCY.
With a higher RMB, USD depreciates and China holdings of US Treasuries would devalue as well. So Geithner is asking China to do the QE for them.
Hence the effect of Operation Twist has so far supported SPX at 1220. without any further measures, like a quicker pace of RMB appreciation, SPX is not going to hold any longer.

Decades of YEN carry trade unwinds bring us to March 2009 low. So 3 years of USD carry trade unwinding would bring us to ?

Last week of September, there was a sudden surge of RMB, that led to the Oct low. With APEC finishing next week, what do we have for THANXGIVING.

Still in the camp of SPX reaching 13xx before substantial reversal. Question is how is SPX going to reach 13xx, in 9 wavelets or A-B-C or XXX.

Daneric also thinks that a high higher than 1292 is coming, while Caldaro is looking at 1292 being the high, and next retreat to 1187.
Whatever path, the bias is to the upside.

Despite all the Off-Balance-Shit European derivatives than American banks are carrying, the market is still holding up pretty well.