Friday, February 25, 2011

Short Attention Span Investing

These days, investors have extremely short memories. The Ponzi system that is running - and ruining - Wall Street likes it that way because they can profit from excess trading and wild swings in prices.

Just four days ago, the world seemed to be about to end. Lybia was exploding and the oil we get from the Middle East was about to be cut off. Panic was rampant. Too bad it was all a lie and the big move in oil prices due more to speculation than the madness of kings and monarchs.

The US gets the vast majority of its oil from Canada, Mexico, Nigeria and Venezuela, though Saudi Arabia is third on the list. Lybia isn't even in the Top 15 and Algeria's contribution amounts to more of a rounding error than a vital statistic.

Like the manufactured gasoline shortages of the 70s, the recent oil scare was purely for the entertainment and profit of the privileged class of investors who rig the game and they did just fine, thank you, now having sold their shares at the top and repurchased at a better price, which, of course, they will pimp and pump to the half dozen retail investors remaining solvent until the next "disaster du jour."

Stocks remain overvalued since the few days of decline did little to deflate the current bubble. There's really no good reason to own any equities at all unless you have a vested stake in a certain company's fortunes or can derive a substantial dividend without any risk (impossible).

Gold and silver have sold off a bit as the week dragged on from panic to placidity, though they remain the best investments and nothing that happens between now and the end of time (2012?) will change that. In fact, one need not even tie up money in precious metals. Cash is still useful, as are some of the things it buys, like hard capital goods, machinery, tools, select art and rarities, for which there will always be a market.

In any case, Wall Street saw fit to end the week on a high note, though they didn't exactly make much of a dent in the big declines from Tuesday and Wednesday. Thank goodness it was a short week or it would have likely ended at new highs.

Dow 12,130.45, +61.95 (0.51%)
NASDAQ 2,781.05, +43.15 (1.58%)
S&P 500 1,319.88, +13.78 (1.06%)
NYSE Composite 8,378.04, +101.75 (1.23%)

Winners led losers by an outrageous margin, 5291-1272, confirming the belief that insiders executed a perfect pump-dump and buy on the unsuspecting, foolish public once again. That kind of disparity is usually reserved for days led by stunning positive news, though nowadays any good POMO from the Fed will suffice, apparently. Volume was once again in the sewer, as has been the norm. There is always higher relative volume on sell-offs than on purely positive sessions.

On the NASDAQ, there were 88 new highs and 22 new lows. There were 135 new highs and 12 new lows on the NYSE. Thank you Chairman Comrade Bernanke!

NASDAQ Volume 1,894,895,125
NYSE Volume 4,380,597,000

Crude oil gained 60 cents, to close at $97.88, but was up 9% for the week. Get ready to start pushing your car to work. Gold lost $6.50 in value, to $1,409.30, and silver was down 27 cents, though the recent run has put the price near or at 30-year-highs.

And just in case you don't actually believe the CPI measures inflation properly, here's one man's figures on how much prices are actually rising.

Ah, well, enjoy the weekend. Spring Training is well underway. In fact the World Champion Giants played the Arizona Diamondbacks in the first game today. No results yet, probably because they play in Arizona, where news travels slowly.

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