Tuesday, November 22, 2011

Zombie Earth: IMF Steps Into Euro Fray; US 3Q Growth Lowered

The day was full of economic news that kept market participants awake and jumping at every byte of information that crossed the trading desks.

Morning began with the Commerce Department's second revision to third quarter GDP, originally quoted at 2.5%, but today lowered to 2.0%. The news sent some jitters across the futures trading complex, but, by the opening bell the effect on the major indices was minimal.

Still, stocks took a bit of a header in early trading, extending almost to the noon hour, when the IMF announced a couple of liquidity lending facilities which boosted stocks for a few hours, until everyone realized that 17% of the money would be coming from the US, in the form of money printed out of thin air and exported to Europe to keep the inflationary ball rolling.

The IMF foray is only a small step forward, another can-kicking exercise to get Europe through the holidays with a minimum of stress. It is in nobody's best interests to mess up the Christmas shopping season, so Christine Legarde and her IMF goon squad set the wheels in motion officially with about $80 billion available immediately, though, as we are all well aware, these numbers usually don't stop growing until the money outstanding has reached the trillions. Give it six months and the IMF will own most of what they don't already in Italy, Spain and Portugal. The Global Zombie Ponzi has reached epic and no-turning-back proportions.

Greece? Nobody really wants it. They'll be printing drachmas in six to eight months time and trading goats for Ouzo and other necessities.

After the market closed the session in the red, again, the Federal Reserve announced that 31 financial institutions, all with assets (that's a joke right?) of more than $50 billion, will undergo stress tests, with the six largest banks - JP Morgan, Bank of America, Citi, Wells-Fargo, Goldman Sachs and Morgan Stanley - having to undertake a more severe test, that of a “hypothetical global market shock,” based upon conditions from the Fall of 2008. Results of the stress tests (which every bank will surely pass with flying colors, as they always do) will be announced on January 9th, 2012. Happy New Year.

With all the macro-news making the rounds, it was no surprise that traders and speculators (the stock markets are now devoid of "investors" except for the suckers stuck with 401k plans or mutual funds) have trimmed their exposure significantly over the past few days. There are just too many headwinds and too much money being thrown at sovereign states for anyone to rationalize in an investment scenario.

The new world order of global kleptocratic Ponzi economics has the IMF (backed significantly by US suckers, i.e., taxpayers) at the top of the chain, filtering down to the oligarch families of Europe with all the people of the world underneath. And we thought Feudalism was dead?

Briefly, Bank of America made a new closing low at 5.37 (they're solvent, right?) and the 5-year note was sold at a record low of 0.937% as the Treasury sold $35 billion at auction today. Demand was 3.15 times the amount offered.

Here's how the chips fell:

Dow 11,493.72, -53.59 (0.46%)
NASDAQ 2,521.28, -1.86 (0.07%)
S&P 500 1,188.04, -4.94 (0.41%)
NYSE Composite 7,094.89, -39.58 (0.55%)
NASDAQ Volume 1,798,916,500
NYSE Volume 3,926,789,750
Combined NYSE & NASDAQ Advance - Decline: 2043-3490
Combined NYSE & NASDAQ New highs - New lows: 60-220
WTI crude oil: 98.01, +1.09
Gold: 1,702.40, +23.80
Silver: 32.95, +1.84

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