Monday, August 9, 2010

Topping Out as Devouring the Host

Sure, all of the major indices closed higher today.

They did it on abysmally-low volume, the third such low-volume day in a row.

The industrial machine, the engine of progress, the economic miracle once known as the United states economy is in the toilet.

Stocks should be at a peak, now, or very shortly, simply because the underlying conditions for not only growth, but even the plain maintenance of the basic infrastructure of the US system is unsustainable.

Congress has been rushed back from their "August recess" in order to vote on a $26 billion bailout for states, this, on top of last year's record federal assistance to the states in the stimulus bill. Not only is the private sector still reeling from the worst economic nightmare of all time - commonly known as the sub-prime meltdown - but the public sector also has been unable to escape its mighty grasp.

As I've probably mentioned too many times over the past three years, the USA is bankrupt and failing. That point has never been so obvious as right now, as local governments struggle to survive on a paucity of tax revenue, due to - big surprise - the failure of the unholy fascist union of government and big business to provide even the basic measure of economy to the citizens upon which it preys.

I am unable to put into words precisely how bad the economic condition in America has become. Much worse is the breakdown of social mores and values, which continue to deteriorate, seemingly, by the moment.

About a year ago, I declared the beginning of the post-governmental era, though apparently my inauguration was a bit premature. The government propped up the economy for most of the past 22 months since the breakdown of the financial system in Autumn of 2008. That gambit has ended. The federal government of the United States of America is completely off-the-rails (has been since somewhere in the first term of past president George W. Bush, probably about the time they began to lie us all into a war in Iraq), and cannot control the devastation - financial, social and political - which awaits.

The November elections are already a farcical affair, with people such as Rand Paul, Sharon Angle and Sarah Palin trolling for votes and outrage. Tea party candidates, or, those who espouse to be "endorsed" by the nebulous, imaginary "Tea Party" (there really is no such thing) are nothing more than the modern-day equivalent of Nazi Brown-shirts, thugs, impostors and paid political mercenaries. The upcoming elections are meaningless in terms of survival, the topic most on the minds of the vast majority of the American public (or at least it should be), and more focused on political will from the top down, a sick, twisted folly being played on the American people, complete with bread, circuses, dancing elephants, innuendo impersonating fact, celebrity masquerading as leadership.

As a nation, we are lost, we are doomed, we are dead.

That stocks would post gains in light of the conditions present puts on display positively some of the most-deranged market manipulations of all time. Shares of publicly-held US corporations are likely worth one-half to one-third of their stated market values because their future prospects (Remember that discounting mechanism we all so loved and cherished?) are skeptical, nightmarish, horrific... take your pick.

On Tuesday, the Fed will supposedly make some kind of announcement toward another round of quantitative easing, probably though some mechanism shrouded from view that will no doubt involve purchasing debt, specifically, US Treasury debt, though in reality, the program never actually stopped. What the Fed will announce will only serve to signal the banks and brokerages that the decimation of the dollar will continue and that they can commence with the further gutting of the wealth of America and Americans.

That I would like it to be something other than that goes without saying, but the cloth has been laid, the emperor - in this case, Ben Bernanke - will don the imagined suit and parade, like a clown, in front of the assembled world with nothing better to wear than a Zero interest rate policy which will at once equal both his IQ and his moral character. Tuesday, August 10, 2010, shall be a very sad day for Americans.

Dow 10,698.75, +45.19 (0.42%)
NASDAQ 2,305.69, +17.22 (0.75%)
S&P 500 1,127.79, +6.15 (0.55%)
NYSE Composite 7,188.30, +34.58 (0.48%)

On Monday, advancing issues far outweighed declining ones, 4498-1978. New highs overwhelmed new lows, 443-67. If it wasn't for the absurdly low volume of trading, one might believe we're on the cusp of a new bull market, which is precisely what the Wall Street hucksters wish you to believe, all along ready to hit the sell button and exit profitable positions built up over the past month, six months and since March of 2009. By the time the bear market has finished with what's available, all of those gains will be gone, forgotten, vanished. Valuations are so abnormally outside reality that a crash is nearly inevitable and has been for many months. It will occur, probably prior to the November elections, if only to better serve the interests of the so-called conservative faction, they being the paid lackeys of the ruling Wall Street elite.

NASDAQ Volume 1,642,519,125
NYSE Volume 3,631,964,750

Crude oil for September delivery was up another 78 cents on the day, to $81.48. Its relationship to the declining dollar is well-defined and will follow that same path of least resistance. If the dollar hegemony in oil pricing is ever broken, the world financial system will be in calamity for some period, the United States bearing the worst of it. Oil prices are going to rise for the near term, only because the US dollar is going to continue to fall. That's just the current case.

Gold lost $2.70, to settle neatly at everyone's favored price level, $1,200.70. It's a number not-too-threatening to the central bankers of the fiat-money nations, not too disliked by gold bugs, not subject to speculation nor implications of manipulation. It's about the only stable currency (oops, did I call gold "currency?") there is these days.

Silver continues to drift rudderless, losing 23 cents, to $18.23. It has lagged so far behind gold as to be almost untethered from its metallic counterpart.

The low volume price gains in the major markets are screaming sell signals on low volume. A topping out is underway in equities, but be not surprised if the averages continue a light climb until options expiration on August 20. After that, there is no bottom.

No comments: