Wall Street’s
“Secret Language”… Annoying Acronyms and Time-Tested Truisms
Think of this column as a Glossary for acronyms and “Wall Street jargon” that causes most investors to say: “HUH?”
We’ll give you the actual translation and then explain it…in Plain English.
Hopefully you’ll laugh along with us.
First, a few acronyms:
Glossary
(in no particular order)
EBITDA =Earnings Before Interest, Tax, Depreciation, and Amortization
Translation: It’s how companies fudge their numbers to allow the guru/analysts to give conflicting opinions about the stock. (i.e. “It’s an exciting time to buy. Or, It’s a piece of crap. Sell now.”
QE = Quantitative Easing
Translation: A fancy term created by the Federal Reserve after the 2008 meltdown. It allowed them to “print money out of thin air.” They then used this money to bail out the bankrupt banks in this country. Footnote: They claim that printing Trillions of new dollars (backed by nothing) saved the economy. The truth is, it was the greatest theft of American middle-class wealth in history…compliments of Wall Street and Washington.
BDQ = Bull***t Detector Quotient
Translation: Having a high BDQ enables you to see through all the crap that Wall Street, Washington, and the Media tries to shove down your throat. Ex: Joe’s high BDQ kept him from buying into overhyped investments…saving himself a fortune.
HFT = High Frequency Traders (or Trading)
Translation: These are the geeks that use state-of-the-art ALGO rhythmic programs to legally steal from other investors. They execute transactions in Nano-seconds (think faster than a blink of your eye) but most of the time they put up fake bids and offers to draw the suckers in. (also, referred to as “spoofing”)
MTM = Mark to Market
Translation: When the markets close each day, the bank/brokerage firm/hedge fund manager, is required to publish a price for any security they have (Stocks, bonds, etc.). They are supposed to “Mark” the price to the “Market” value. But that’s not always the case (See MTF).
MTF = Mark to Fantasy
This is a fund managers wet dream. After the 2008 meltdown most banks were stuck with mortgages (and other bonds) that had fallen to 50% of their original value. (Some worth even less). Their partners incrime regulators allowed them to price them at full value. Yes, you read that right. This is what we call Mark to Fantasy. The banks were allowed to cover-up their losses by pricing these garbage bonds at FULL VALUE giving the impression that they were solvent. (And they’re still lying about them today). It reminds me of the old saying “You can polish a turd all you want, but it’s still a turd.”
MTMM = Mark to My Model This is kinda like Mark to Fantasy. The difference is, a bond manager will justify (to the regulators or his bosses) how he’s pricing his bonds by saying something like: “I know what the standard model of pricing says, BUT, MY MODEL says…” This is obviously larceny but, as you hopefully know by now, the “Club” looks out for its members.
TIME-TESTED TRUISMS
Simple, yet profound wisdom based on experience:
- The trend is your friend…until it isn’t.
- The “market” can remain irrational longer than you can remain solvent.
- “I made my money by selling too soon”—Bernard Baruch.
- “Everyone has a plan…until they get punched in the mouth.”—Mike Tyson.
- “The time to buy is when there’s blood in the streets.”—Baron Rothschild.
ZIRP = Zero Interest Rate Policy.
This was one of the biggest screw-ups in history. It began after the 2008 meltdown and was supposed to have lifted our economy from the pits of hell. Instead, by taking interest rates from the 3% range to 0%, our self-serving leaders destroyed the savings of most senior citizens. In addition, it has accelerated the pension crisis in America. Pensions need between 6-8% on their money to be able to pay their fund their plans. They’re not even close to getting what they need and are teetering on the brink of insolvency. So, when your pension tells you there will be mandatory cuts in your benefits, you can thank ZIRP and the banksters that put it in place.
NIRP = Negative Interest Rate Policy.
Uh! You’re kidding, right?
Nope! In the eyes of the major European banks, ZIRP was so successful that it carried over into NIRP. What NIRP means is YOU pay the bank to hold your money. I know it sounds crazy but there are billions of dollars in European banks earning paying negative interest rates. But that’s Europe and it doesn’t affect us, right? Wrong. We are essentially at Negative Rates if you consider you are earning nothing (or near nothing) on your money and inflation is running around 2 ½ %. Do the math…you’re losing money every year. And the government loves it.
Enough of this crazy negative stuff…let’s move on to:
BIFURCATION = (something your grandma used to give you when you had an upset stomach? At least that’s what I thought it meant.) Dictionary. Com describes Bifurcation as a forking or division into two: the point at which a forking occurs. Wall Street says, Bifurcation is when the client gets screwed, we make money, and the regulators look the other way. “Forking, Indeed!”
BACKWARDATION = A Term used in commodities and futures trading to describe when the price of a futures contract is trading below the expected price at maturity. Confused? Okay, in plain English it means “Don’t sell now!”
CONTANGO = Not quite the opposite of Backwardation. But, for laughs, look at the definition according to Investopedia… “Contango is a situation where the futures price of a commodity is above the expected future spot price. Contango refers to a situation where the future spot price is below the current price, and people are willing to pay more for a commodity at some point in the future than the actual expected price of the commodity.” Huh? Okay, the plain English version, “Sell now and avoid bigger losses.”
PETRO-DOLLAR = All Oil Must Be Sold in US Dollars. This was a global game changer for the U.S. After Nixon took us off the gold standard in 1971 he needed a way to force other countries to build up a huge reserve in “dollars.” Heinz Kissinger was sent to offer the Saudis a four part deal they couldn’t refuse. (It was an extortionists dream)
- America’s military would guarantee protection of Saudi Arabia and their oilfields.
- The U.S. would sell the Saudis any weapons
- The U.S. would also guarantee protection from Israel and the other oil producing nations in the region.
- Finally, the U.S. promised the Saudi family would rule forever in the Middle-East. The Saudi’s part was to make sure that ALL OIL SALES were done only in US dollars. And the Saudis promised to invest their profits in US Treasuries. The deal was signed in 1974 and the rest is history. But wait! 43 years later, the Petro-Dollar is teetering on collapse. (See The World Reserve Currency Belongs to China article in this issue)
TALKING THEIR BOOK = Gurus giving their opinion on certain companies to get you to buy or sell them. (while they do the opposite) Whenever you hear “Warren Buffet said…” or Carl Icahn is recommending…” (or any other guru lavishing praise or slamming a stock) there’s a good chance they:
- Already own the stock (at a much lower price) and want the public to prop it up while they sell.
- Want to buy the stock at a discount and they’re using their trash talk to get the public to sell. Remember one thing. It’s ALL about them. They don’t care about you.
GDP = Gross Domestic Product. It’s supposed to be the monetary measure of the market value of all final goods and services produced in a period
(quarterly or yearly). Economists like to use the following formula: GDP= PI (Personal Income) + BT (Balance of Trade) + GS (Government Spending).
However, their formula is flawed. It doesn’t consider GB (Government Borrowing). The twisted thinking in DC is that debt is considered income.
Let’s do some math: At the end of 2016 our current GDP was $18.57 Trillion. If you subtract Government borrowing (Currently near $21 Trillion…not
including state and local debt, government agency debt and none of our unfunded liabilities like Social Security and Medicare) you easily see how our
GDP is negative.
To put this in perspective, the GDP of the world is around $71 Trillion. Our debt (along with Social Security and Medicare) is above $100 Trillion.
So, when you hear politicians boast about how our current GDP is growing and the economy is robust, remember they don’t want you to know the truth.
ZIRP = Zero Interest Rate Policy.
We covered ZIRP last month but it’s important to review it again mostly because of how it affects GDP. (see above)
Last month we showed how ZIRP was one of the biggest screw-ups in history. It was the perfect cover for the banksters to hide their losses and to borrow money at zero and make a fortune at the taxpayers’ expense. It also kept the weaker banks afloat who, in a normal interest rate environment, would’ve gone belly up.
Not only has it encouraged borrowing (mostly by the banks) it has destroyed savings…savings is pointless when the interest rate is less than inflation. This
has forced savers to find higher yields in the stock market. The economic consequences are nothing short of staggering…especially in the pension arena.
Most pension funds need 7-8% return on their investments to be able to meet the commitments to their pensioners. ZIRP has made that mathematically
impossible.
The net result?
- Cutbacks in pensions are inevitable.
- People will have less to retire on and will reduce their spending.
- Less spending means GDP declines.
- Falling GDP indicates looming recessions.
So, how’s that ZIRP thing working out so far?
FRN = Federal Reserve Note
Remember when our dollars had the words “Silver Certificate” written across the top of them? Back then it meant that your dollar was backed by silver.Today, your dollar is backed by the “Full Faith and Credit of The Federal Reserve.”
Which links us to several other Annoying Acronyms:
FED = Federal Reserve.
First, the Federal Reserve is NOT a government agency. The Federal Reserve System (aka The Federal Reserve or The Fed) was officially created by congress on 12/23/1913 as the Central Bank of the United States.In reality, it was created by a handful of bankers (led by John Pierpont Morgan) who secretly met on Jekyll Island in November 1910. The idea of having a central bank was the first step in surrendering our nations freedom to a handful of powerful men. (Read “The Creature from Jekyll Island”) Again, the FED is NOT federally insured. Its officers are appointed by the standing president of the US and are known as the Board of Governors or Federal Reserve Board (FRB). The money policies you read about (such as ZIRP) are established by the Federal Open Market Committee or FOMC. They research and publish economic data through the FRED (Federal Reserve Economic Data)So, when you read about the FED, FRB, FOMC, and FRED, you’re basically dealing with a small group of very powerful people whose actions affect your FRN’s. (see above) Currently the FED is carrying over $4.5 Trillion of debt in FRN’s…and they can’t pay it back without collapsing the markets. How’s that for the “Full Faith and Credit” of the Federal Reserve?
BANKSTERS =The criminals who run most of the major Wall Street banks.Bankers today are a modern-day version of a highly polished mafia. Their tentacles stretch across the globe and are wrapped around anything that generates a profit.And just like the old school mafia, their most profitable division is narcotics.The main difference between the mafia and todays bankers is that the many of the mafia boys went to jail. Banksters simply pay a license fee (Multiple Billions) to the government andare never even brought up on charges.
PRESSTITUTES = The media whores owned by the Banksters (Which includes most major media outlets…including Hollywood)They provide cover for the banksters with endless distractions in your face 24/7. Their purpose is to keep you from knowing the truth while the Wall Street “Club” commits fraud and theft on the average investor.The primary perpetrators include: CNN, CNBC, The Wall Street Journal, The New York Times, The Washington Post, Fox News, NBC, ABC, andCBS. (The list is long, but hopefully you get the point.)
TPTB = The Powers That Be. The 1% Elite “Club” including the FED.
ICO = Initial Coin Offering.
Translation: This is a cheap rip-off from an oldie IPO which stands for Initial Public Offering. (It’s when a company starts trading publicly and
offers their shares for the first time.) Recently we’ve see a swarm of ICO’s due to the rising popularity of cryptocurrencies line “Bitcoin.” It seems that movie stars, rappers and other celebrity wannabe’s are getting in on the action by putting their name behind it. (That in itself, should be your biggest warning to stay away from them). Even Elon Musk, CEO of Tesla electric cars, is jumping on the ICO bandwagon. Only his version is for an Initial Car Offering. It’s amazing
what some people will do for attention.
VUCA (or “the VUCA)= (Volatile Uncertain Complex and Ambiguous) environment.
Translation: LOL…You can’t make this stuff up. Many pundits today claim we are in a VUCA environment and it’s “Unpredictable how the markets are going to react.” Again, LOL. It’s just an excuse the “Club” wannabe’s use when they can’t justify how they’ve missed out on one of the biggest bull markets in history.
They use other acronym’s like GFC to justify their shortcomings.
GFC = Global Financial Crisis.
Translation: The Meltdown of the financial system in 2008 that brought most of the planet to its knees. Gurus around the world constantly refer to the GFC as one of the greatest lessons learned in financial history. The problem with that is NOTHING WAS EVER FIXED from that crisis. It was covered with paper money and banks were bailed out by you and me.
BTFD = Buy The F***ing Dip
Translation: Buy heavily when the market sells off. Since early 2009, every time the market dipped, all you had to do to make a fortune was to Buy. It’s an incredibly simple strategy that still works today.
CIK = Cash Is King.
Translation: When everybody is losing a fortune, holding cash gives you the upper hand. Having cash on hand when a crisis hits is great…but it’s more about fighting personal greed. It’s hard to get out when you’re making money hand over fist in the market. That’s why you need to be reminded about CIK. Legendary investor Bernard Baruch is well known for saying “I made my money by selling too soon.”
PPT = Plunge Protection Team
Translation: NEED THIS
FANG or FAANG stocks = Facebook, Apple, Amazon, Netflix,
and Google. These are the leading stocks that currently seem to have the most influence on the markets. They are everyone’s darlings…especially the talking heads who constantly pump them up. They’ve also had huge moves in the last year. At their current prices, let the buyer beware.
TPTB = The Powers That Be. The guys behind the scenes who pulls everyone’s strings. They’re also “Club” members with close political ties to DC.
NPL = Non-Performing Loans. These are loans (mostly mortgages) that the banks aren’t getting paid on. Every major bank in the world holds a fortune of these on their balance sheet. They don’t want to tell you about them for fear of contagion spreading. The big Italian banks lead the way in number of NPL’s.
BEAR TRAP = A Bear Trap is when investors get suckered into thinking that a rising market is going to crash. Traders panic sell, anticipating a bigger decline, but instead the trend reverses inflicting a lot of pain. There’s a lot of wailing and gnashing of teeth. Not unlike getting caught in one of those gnarly steel traps with extremely sharp teeth.
10 BAGGER = A stock going up ten times in value over relatively short period. (Similar to the action on Bitcoin this year.)
BLACK SWAN EVENT = An unforeseen event that has a devastating effect on certain markets inflicting a lot of pain and suffering. The mortgage melt-down of 2008 was called a Black Swan Event. And the culprits that caused it were the first ones to cry: “Who could have foreseen this happening?” A real Black Swan Event would be more like someone (Like Fat Lil’ Kim) dropping a nuclear bomb on another country.
A PIKER = A piker is somebody who pretends to know everything about the Street but doesn’t actually know anything and makes very little money
working for a bottom tier firm. This term comes from the late 19th century slang verb “pike” meaning “withdraw from an agreement because of over cautiousness.”
“I’M DOING MARKET RESEARCH” = Watching You Tube.
“JUNKED UP” = This can be in reference to any security, and it means you’re super bullish.
FOMO = Fear Of Missing Out. This is what happens during the latter phase of a Bull Market run. (Otherwise known as a blow-off top.) Prices are going through the roof and everyone is making money…except for the latecomers. Uncle Joe, Aunt Betty and cousin Eddie will brag about how they’re making sooooo much money in the market. Whoever is not “in” will feel the FOMO pressure, throw caution to the wind and jump in at the market highs. Don’t be fooled. When FOMO strikes, you want to be as far away from the market as possible.
FSA = Free Sh*t Army. This is a vast and growing blob segment of the economy making up more than 47% of the population. They pay nothing in federal taxes and actually believe they’re entitled to our fruits and labors. Some refer to them as a large slug segment of the Democrat party who rely on our tax dollars to provide necessities such as food stamps, subsidized housing and every government entitlement program you can think of. The FSA can be recognized by their expensive Nike tennis shoes, Apple/Google smartphones and 65-inch HD flat screen TV’s.
DOOM PORN = Addictive news coverage (mostly by the Lame Stream Media) that appeals to the darker side of our personalities. It begins innocently with headlines like: “Guess Who’s About to Go Bankrupt Next?” or “Rocket-man Kim has Nukes that can Destroy America” or “Is Donald Trump the Anti-Christ?” The constant barrage of this sensationalism eventually draws you in to the point that you’re hooked and need a regular dose.
WMFD =Weapons of Mass Financial Destruction AKA DERIVATIVES. They’re a Ticking Time-Bomb for the financial markets. The current size of which is over $1.6 QUADRILLION. Wait! What? Yep. Do the math. That’s waaayyyy bigger (nearly TEN TIMES) than the size of the entire World Economy. The derivative market was the main culprit for the 2008 global meltdown. (*Note, everyone is still in denial and blames the real estate market). Very few people understand how derivatives work nor can they explain them to you in plain English. In simple terms they are contracts (or bets) on an asset that a counter – party (someone else) is supposedly backing. Question: If the WMFD are bigger than the world’s economy, who then has enough money to cover the bets? We’ll find out soon enough. How’s that for some serious DOOM PORN?
BINARY = It’s probably one of the most annoying words currently being abused in the English language. What used to be a term for computer codes (binary codes) has devolved into a popular format of explaining two different trains of thoughts. Ex: G.W. Bush: “You’re either with us, or you’re with the terrorists.” I know, it doesn’t sound very smart, but consider the source. Watch for lot’s of “Binary” references in 2018 from the Fake Stream Media.
Time-Tested Truisms
“Stability leads to instability. The more stable things are and the longer things are stable, the more unstable they will be when the crisis hits.”
-Hyman Minsky
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies…The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
-Thomas Jefferson in 1802 letter to Albert Gallatin
“I made my money by selling too soon”
-Bernard Baruch-
FF = Fat Finger. Whenever a large institution makes a major boo-boo in trading (creating losses sometimes in the Billions) they blame it on the trader having a “Fat Finger.” Somehow his finger got stuck and he couldn’t take it off the order button. The original “flash crash” was blamed on a Fat Finger. It happened on May 6, 2010. Not only was it a Trilliondollar market crash, it took place in approximately 32 minutes. (Seriously, 32 minutes.) Five years later, the farce known as the CFTC (see below acronym) arrested Navinder Singh Sarao of London. (Who allegedly caused the crash trading on his desktop computer in his parent’s basement.) LOL! You Can’t Make This Stuff Up. As volatility picks up in 2018, you can expect FAT FINGERS to take the blame for increasing “Flash
Crashes.”
DCB = Dead Cat Bounce. We’ve written about this in a few articles but it’s worth repeating. (Traders like to use cryptic sayings to add a
little humor to an otherwise morbid event). The saying compares a cat to a severe market crash and what are their chances for survival. The expression goes: “If you throw a cat from the top of a high-rise building, when it hits the ground, it will bounce. But it’s still dead.” In other words, a bounce up in a crashing market may be deadly for your portfolio.
BRI = Belt Road Initiative otherwise known as China’s Multi-Trillion Dollar New Silk Road. It’s the total of Eurasia coming together with a giant F’You to the US. China’s resurrection of the ancient silk road will be one of the final nails in the coffin of the US dollar as the world reserve currency. We wrote about it in our archives and will be updating its progress in the coming months. (You need to pay close attention to anything having to do with the BRI).
DCT = Dollar Carry Trade. It’s how banks borrow Billions of dollars at 0% and, instead of making loans, they buy long bonds (30-year
Treasury bonds). They’re collecting income from bonds (billions in interest) and not having to pay a penny in interest from their borrowing.
At the same time our Treasury, who’s issuing these bonds, keeps its life-support system running while adding to the massive debt load that’s already unsustainable. It’s the biggest Ponzi scheme in history that’s essentially bankrupt the US. It won’t end well for US citizens when the dollar carry trade stops.
THE SQUID = Otherwise known as “The Vampire Squid”/Goldman Sachs. Try to imagine a beast with enormous blood sucking tentacles, stretching across the globe, in almost every financial arena available, with an insatiable appetite for money. If you can see that image, you’ll now know what the real Goldman Sachs looks like. Other than that, they’re a swell bunch of guys.
BLOW-OFF TOPS = This is when the boyz in the “Club” start running for the exits. And while they’re selling everything (including the kitchen
sink) they use their media whores to convince you to buy more stocks with phrases like “back up the truck.” To the average investor, a blow-off top seems like a win/win situation. The markets are euphoric and it seems everyone is making money hand over fist. You put money in the stock market and you win…What’s
not to like about that? We don’t believe a blow-off top will occur in 2018…and the reason is simple. Answer this question: Which word best describes the majority of investors today? Nervous or euphoric? See? That was easy.
CFTC = Commodity Futures Trading Commission It’s better known by veterans in the industry as the Criminals For Trading Clubs. These creeps openly commit fraud by manipulating most markets around the world. And they protect the boyz in the “Club” on a “quid pro quo” basis. A classic example of their actions is the Flash Crash The CFTC originally blamed the crash on Waddell and Reed (a large institutional trading house) who claimed to have a faulty algorithm/program that went haywire. When they couldn’t prove WR was at fault, they waited another FIVE YEARS to hang the blame on the poor schlepp in London who was trading from his mom’s basement. (see above FF acronym) Once again, you can’t make this stuff up.
BEAR TRAP = It’s what happens before the boyz in the “Club” crank up the Blow-Off Top” (see above). From Investopedia: A bear trap is a false signal that the rising trend of a stock or index has reversed when it has not. A bear trap prompts traders to place shorts on the stock or index, since they expect the underlying to decline in value. However, instead of declining further, the investment stays flat, or slightly recovers. What this means in Plain English is, you get suckered into believing the markets are crashing and you sell into it. (Usually at the worst time like the week of Feb 5th 2018).
SSDD = Same S**t Different Decade. Veterans in the financial business know that nothing ever changes. And SSDD shows how corruption between Wall Street and Politicians repeats itself. Our “so-called leaders” in DC allow Wall Street to stick it to the tax payer in the form of bail-outs. When the financial markets get in trouble they cry, “If we don’t get bailed out the world will come to an end.” Or, in the infamous words of Henry “Hank” Paulson, “There will be Tanks in the Street, Mr. President.” (see the Squid article, above) Front Running= Supposedly a prohibited action, practiced by market makers, of jumping ahead of the crowd before certain important information is released giving them an unfair advantage of price movement. The regulatory bodies that supposedly monitor this often “look the other way” and are handsomely rewarded. (Unless, of course, someone steps on the toes of a “Club” member…Cough!…The Squid…Cough!) Buy the Dip, Sell the Rip= The battle cry for traders since 2008. Buying when the market has dipped has been the most profitable strategy you could have employed in the last decade. Especially if you combined it with selling the rip (unexplained explosive rip to the upside). It mostly has to do with the “Fed Put” (see below) that intervened and would not let the market crash. With the assistance of the Plunge Protection Team PPT (see November 2017 newsletter) and an endless
supply of money printed by the Fed, how could you lose?
Catch a Falling Knife = A visual description of what it’s like to buy stocks in an unstable market. It’s hard to catch the knife without bleeding and the
same applies to stocks that are finding new lows.
Cup and Handle = A chart formation showing long-term upside movement. Okay, for all you chart junkies, just look below at the near perfect formation of a long-term cup and handle based on the price of silver. (from 1972 to present…compliments of Kimblechartingsolutions.com). Once the handle gets above the former high (in 2011) it will unleash the Kraaken. If this doesn’t convince you to buy silver than nothing will.
The Fed “Put”= Formerly known as the “Greenspan Put” (Named after former Fed Reserve Chairman Alan Greenspan). The Fed Put is a legend in the industry. And it’s mostly because it was always a “perceived attempt” to prop the markets up by lowering interest rates to help money flow into the market. Unfortunately, this led to the lowest interest rates in 5,000 years and punished most senior citizens who live off the interest from CD’s. It also created the largest bubble in history in the bond market. Thanks, Alan. History will eventually show how you (and your successor, Ben Bernanke) were the major cause of the eventual bond market collapse. As they say…Karma is a bitch.
MOPE = Management Of Perspective Economics. This is how the public gets conditioned by the Elite 1% that nothing bad will
EVER happen. Regardless of what happens (good or bad), the presstitutes, Wall Street and the US government constantly spins things (especially economic events) so that you’ll see a favorable perspective. They believe that by managing your perspective you’ll remain a good citizen who takes what the government gives you. How’s that MOPE been workin’ in Venezuela lately?
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