Wednesday, April 1, 2009

The Real April's Fools

Investors. Those people who study charts, read reports, follow the economy, buy and sell stocks are the truest of fools because - in America at least - they are playing poker with a bunch of cheats who can reshuffle the deck, hide cards and pull inside straights whenever they please. It also helps when they - the dealers, the cheats, the cons on Wall Street - have government officials all the way up to the Treasury Secretary, Chairman of the Federal Reserve, various high-powered members of congress and probably even the President himself, in their collective back pockets.

Today's trade was an object lesson of why it isn't wise to play cards with people who carry stacked decks.

At 8:15 this morning, the ADP Employment Survey, the most reliable set of numbers regarding private sector employment in the country, ticked off the details of our sad and seriously declining economic condition with the release of their March report, which showed that the private sector had shed another 742,000 jobs during the month. Predictably, at 9:30 am, the stock markets opened with broad losses, but the remorse for nearly a quarter of a million more Americans going jobless in one month's time lasted merely a half hour.

At 10:00, three more economic reports became public. Construction spending slipped 0.9% in February, the Institute of Supply Manager's (ISM) index of manufacturing activity rose to 36.3 in March, from 35.8 in February; and, Pending Home Sales for February grew by 2.1% in February after hitting rock bottom with a decline of 7.7% in January.

Apparently, these minor blips of improvement were enough to reverse a 125-point loss on the Dow (with all other indices trading lower in similar fashion) into a 152-point gain for the day. Those people out of work be damned. All the other indicators showed improvement.

As the day progressed, the news improved (satire). Ford posted a 41% decline in sales over year-ago figures. General Motors were only down 45%. Chrysler's March sales were down only39%. All of the figures proved to be better than "expert's expectations." So, the auto makers are still scraping the bottom, but it wasn't as bad as expected, so let's go buy some worthless stocks from the hucksters on Wall Street. Fools. Morons. Imbeciles. Investors. All share the same definition of mindless sheep being led to slaughter.

All of this is like saying that your basketball team, which lost by 45 points the week earlier, only lost by 41 today. Hip-hip, Horray! Let's break out the cake and party hats! Bring on the champagne!

Considering today's and yesterday's economic reports and news items, how is it that the dow Jones Industrilas overcome the massive 254-point drop Monday and gain back 240 points? It really is April Fool's Day, and the joke is on all of us suckers who continue to play this market as though it's a fair game. It's not. It's rigged by the nation's largest banks and brokerages, all of which are effectively insolvent.

Take a gander at this insightful article by Justice Litle, entitled Turbo Tommy's Sneaky Scam (Part 1 & 2), which details how Treasury Secretary Tim Geithner's Public Private Partnership Investment Plan (to remove toxic assets from bank balance sheets) can only work if it's rigged. This is not mainstream reading, but Litle seems to have it nailed down pretty well. I'd surely trust his judgement more than the thieves and criminals running our country and controlling the media.

While Wall Street was rollicking, Obama the Great was across the pond, trying to quiet down the full blown revolution of our trading partners at the meeting of the G20. Forget what the mainstream media tries to tell you, that Obama is being counted on to come up with concensus, that he alone can organize the world's leaders to follow our lead of debasing our currency, expanding our deficits to ungodly levels and doling out dollars to anybody with a hand out.

For a better insight into what's really happening in London, check out "China: Partner, Adversary, Rebel" by Jim Willie CB. It's an incredible insight which I am overjoyed to be able to share.

Dow 7,761.60, +152.68 (2.01%)
NASDAQ 1,551.60, +23.01 (1.51%)
S&P 500 811.08, +13.21 (1.66%)
NYSE Composite 5,085.76, +106.78 (2.14%)

On the day, advancers led decliners, 4585-1883. New lows continued to outpace new highs, 85-19. Volume, due to the high number of phantom trades being place by Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley, was elevated.

NYSE Volume 1,502,768,000
NASDAQ Volume 2,287,061,000

Commodities were mixed, but mostly lower. Oil lost $1.51, to 48.39. Gold gained $2.70, to $927.70, while silver lost a penny to $12.98.

Normally, I'd be happy about a stock market gain, especially in this environment, but, when the truth of just how corrupt the system has become smacks you on the forehead, you sit up, take notice and get angry. And I've been angry for a long time. I'm just about over the edge now.

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