Terror Futures

Grannyinsanity points to a realization by the cunning realist that ...temporary liquidity hit a multi-year high on July 5th, which was Tuesday, and it remained highly elevated on Wednesday and Thursday. And the second chart indicates that "securities lending"---another way for the Fed to create liquidity in the financial system---saw a huge spike on June 30th.

It is important to understand that the Federal Reserve does not make these charts available. It only provides the raw data on its operations, and leaves it to the public to calculate the actual amount of continuing liquidity from day to day. Financial professionals generally consider this "man behind the curtain" stuff. Those who are aware of it don't like to discuss it, because it implies that stocks rise and fall based on something other than fundamentals and their own acumen. You will almost never see this discussed in the mainstream financial media, for example. And that's just fine with the Fed.

I watch these charts every day as a function of my job, and have for many years. What appears above is extraordinary activity---particularly the size of the "temporary" pool, which the Fed almost doubled to $40 billion in just a few days leading up to last Tuesday, despite the fact that oil was trading over $60. And since all that money provided by the Fed can be leveraged, the effect on the financial markets is magnified.

Why the need for all that easy money all of a sudden? The Fed doesn't take this sort of action for no reason, particularly when the price of oil is already at an all-time high. It does so in response to circumstances it predicts will create a need for liquidity, or when it specifically wants to support the stock market as it did after 9/11.

The terrorist attacks in London took place on Thursday. The Fed dramatically increased the pool of liquidity available for stocks to a multi-year high 48 hours before that---an ideal amount of time for that liquidity to filter into the market---and kept it elevated for the next few days. And indeed, it worked. The stock market saw heavy buying right at the opening bell on Thursday and has shot straight up since then.

Why did the Fed do this? Was it just another coincidence in our financial markets that somehow managed to immediately precede a major geopolitical event?

One person can give us some answers easily and quickly: Alan Greenspan. Doesn't it behoove him to do so before he rides off into the sunset a few months from now?

The Cunning Realist is a conservative, finance oriented blogger, not a fringe element. There were big movements of capital before the London bombing, and there were bigger movements just before 9/11/2001. Somebody knew something was up.

Of course, they picked up on this immediately at Rigorous Intuition, where they've never met a conspiracy theory they didn't like. Including the ones where Dick Cheney is a puppet of occult Powers. No wonder kos wants to distance himself from the tinfoil hat crowd. No wonder Bu$hCo tries to equate them with UFOlogy, they're easy targets.

The thing is, sometimes the blips on the conspiracy theory radar really aren't airplanes. But they aren't flying saucers either. They're storms and turbulence caused by real weather that you should be on the lookout for.