Replaces 3249 Excuse me for mistyping Mr Buffetts' name; so I've corrected the mistake and reposted.
I took this part of the notes from Mr. Buffett's Annual shareholder letter, that are being widely published on many threads this weekend;
On sovereign wealth funds:
There's been much talk recently of sovereign wealth funds and how they are buying large pieces of American businesses. This is our doing, not some nefarious plot by foreign governments. Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here. Why should we complain when they choose stocks over bonds?
Comments my own
As one of the few places left, who has working understanding of Supply and Demand, we are forced to acknowledge that Mr. Buffett is acknowledging this process is underway.
On another sight, Seeking Alpha, this report just appeared. It talks about the scale of assets now competing for what
Mr. Buffett acknowledges as a preference for stock.
seekingalpha.com
Combined these bits of disparate information serve to illustrate the systemic nature of our current markets.
We've known by our work that since July 07 when Market values peaked, there has been what we call a sideways negative trending market. That trend is occurring against what can only be characterized as Accumulation..........and yet, investors are seeing none of the price appreciation they should be seeing under a regime of relentless accumulation.
This disconnect between buying activity and portfolio net values, points to the corruption of the market complex.
Investors are being hosed systemically, to facilitate the transfer of shares to the large foreign investor complex.
The broker dealers are but the facilitators of the gross order flow between investors who own stock and those who want to own it. Acting as distributors, for mega funds, seeking supply for those who do not yet, own it they suppress the current price with a combination of tools including many varieties of short sales and options grants that seem to have taken on a Share creation metric not authorized but appropriated to purpose.
Bottom line The broker dealers are operating a churn operation to facilitate the transfer of shares, to entities who have already given the broker dealers orders to accumulate.
Trade arms of broker dealers; are waging a private war on stock prices using a steady stream of systemic output by media mouthpieces, to facilitate the systemic action we see every day.
By never abandoning Supply and demand, we have always remained connected to the data as its generated. Within that context, it is clear that the enemy of all investors at this time are the actions of the broker dealers and traders engaged to purpose share transfer, at a time when market scarcity has not been so dear, in over a decade, price cant respond to one of the largest buying operations ever..
Price is the artifact of prevailing systems intent.
Investor ownership is the target for the trade activity day to day.
In the absence of market prices, the broker dealers / trade complex are using multi ledger accounting, to move price in the direction which facilitates hierarchal order fullfilment...........its primary goal being; accumulation for mega clients, against the interests of current shareholders..
And yet......those who own the securities can't get a market price..........
Several solutions can emerge to turn the tables on this systemic trend.
We'll be writing about some soon. |
