Monday, December 31, 2012

Wall Street Jumps the Shark as Washington Sends America Over the Fiscal Cliff

Washington's silliness continued to drive Wall Street's greed instinct, and, on the final day of the year of 2012, Washington called Wall Street's bluff, and the sharpies on the trading exchanges not only blinked, but may have gotten poked in the eye.

According to the most unreliable sources available (CNBC), Mitch McConnell, minority leader in the Senate, and Joe Biden, vice president, struck a deal on Monday and have initiated what appears to be a deal, the most salient parts being a tax increase for earners making over $450,000 per year, extension of unemployment benefits and a hike in the capital gains tax to 20%.

As of the close of markets, no legislation has actually hit either floor of congress, though it certainly seemed good enough for the money merchants in the pits and on the trading floors.

It's an incredible show, befitting a broken political process and an illegitimate market run mostly by computers with algorithms trained to scan headlines.

The House has already said it won't vote on the measure until after the New Year, meaning, technically, there is no deal in place, and, as if there ever was any doubt, Money Daily has been proven correct, maintaining all along that there would be no deal before the stoke of midnight on December 31, 2012.

Without a doubt, the hilarity will continue on January 1st, 2nd, and beyond.

Happy New Year, America. Your political and financial leaders are drunk with money and power, but haven't a single functional wit among them.

Dow 13,104.14, +166.03 (1.28%)
NASDAQ 3,019.51, +59.20 (2.00%)
S&P 500 1,426.19, +23.76 (1.69%)
NYSE Composite 8,443.65, +127.49 (1.53%)
NASDAQ Volume 1,515,324,375
NYSE Volume 3,546,216,500
Combined NYSE & NASDAQ Advance - Decline: 5340-1240
Combined NYSE & NASDAQ New highs - New lows: 163-59
WTI crude oil: 91.82, +1.02
Gold: 1,675.80, +19.90
Silver: 30.23, +0.252

Friday, December 28, 2012

America, Land of the Handout, Home of the Loser, by the Millions

Face it Americans, you've been suckered.

There's not going to be any "grand bargain," that's for sure, and any deal that gets done either over the weekend or on Monday, December 31, at the last possible minute, is going to fall well short of even the most pessimistic possible outcomes.

Money Daily has been saying all along that the deal always was to have no deal. The President, John Boehner, and all the other "leaders" in congress have been acting through this entire sickening tableau.

When and if some kind of resolution is arrived at, there will be very few happy about it. Almost everybody's taxes are going to rise, along with the 2% contribution to Social Security that was conveniently "excused" in 2012.

Washington is a complete clown show. If the American public had any kind of guts, the protests would surround the entirety of the mall, the thieves would be summarily kicked down the steps of the capitol and bankers would be hung from the nearest lampposts.

But that's not going to happen. Americans are too easily bought off (the number of people collecting food stamps, social security and other entitlements are numb and only want the checks and freebies to keep rolling in. Some day, those will stop because the government - at the behest of the international cartel of bankers (central and otherwise) - holds all the cards.

This is a sorry way to end the week. Wall Street has only begun to express their displeasure and discontent, with markets selling off for the fourth consecutive session, today's being the largest, after President Obama met with congressional leaders at the White House and once again did NOTHING.


If this is what you want, you've gotten it, in spades, and deservedly so, especially the baby boomers, some of whom fought the establishment in the 60s, more of whom stood idly by and did nothing, other than joining the status quo as adults.These are the fruits of apathy and "let the other guy do it" mentality.

2013 will be the year of every man, woman and child to fend for oneself.

Dow 12,938.11, -158.20 (1.21%)
NASDAQ 2,960.31, -25.60 (0.86%)
S&P 500 1,402.43, -15.67 (1.10%)
NYSE Composite 8,316.17, -83.66 (1.00%)
NASDAQ Volume 1,120,378,875
NYSE Volume 2,407,416,000
Combined NYSE & NASDAQ Advance - Decline: 1794-3750
Combined NYSE & NASDAQ New highs - New lows: 63-51
WTI crude oil: 90.80, -0.07
Gold: 1,655.90, -7.80
Silver: 29.98, -0.265

Thursday, December 27, 2012

Market Drops, Rallies on Fiscal Cliff Fears, Hopes

OK, now, this is getting interesting.

Stocks sold off severely in the early going, as Wall Street seems to be getting a little bit tired of waiting for the politicians to come to some kind of deal - any kind of deal - on the fiscal cliff issues.

Taking center stage today were Senate majority leader, Harry Reid, and minority leader, Mitch McConnell.

Reid made some noises about the House not even being in session, and, late in the day, McConnell made comments about how the Republicans have been waiting months for the Democrats to meet with them, without success.

During the session, stocks were hit hard to the downside, with the Dow off by as many as 150 points, but, about 2:30 pm ET, when news broke that John Boehner was calling the House back into session on Sunday, stocks miraculously starting gaining ground, with all of the major indices eventually reaching positive territory before giving back a bit to close slightly negative, though the NYSE Composite ended with a gain of four points.

There was other news that may have caught the attention of traders, particularly, the Conference Board's Consumer Confidence reading, which registered a disappointing 65.1, after last month's overly optimistic 73.7 was revised down to 71.5.

The number caught everyone off guard and triggered the initial sell-off.

As for negotiations on the fiscal cliff, there aren't any. Both sides have resorted to name-calling and jawboning precisely at a time both sides should be reaching compromise.

Having the House in session on Sunday, December 30, is a hopeful sign that there is some progress behind the scenes, even though nobody's reporting any.

The saga continues...

Dow 13,096.31, -18.28 (0.14%)
NASDAQ 2,985.91, -4.25 (0.14%)
S&P 500 1,418.09, -1.74 (0.12%)
NYSE Composite 8,399.84, -4.36 (0.05%)
NASDAQ Volume 1,314,243,625
NYSE Volume 2,816,814,750
Combined NYSE & NASDAQ Advance - Decline: 2473-3032
Combined NYSE & NASDAQ New highs - New lows: 74-61
WTI crude oil: 90.87, -0.11
Gold: 1,663.70, +3.00
Silver: 30.24, +0.205

Wednesday, December 26, 2012

Fiscal Cliff: Wall Street Waits While Washington Waffles

Everybody knew that the politicians in the nation's capitol wouldn't get a deal on taxes and spending until the very last possible minute, right?

That certainly seems to be the case, as there are now only five days left in 2012, and most of congress is out of town, though President Obama has made arrangements to return to the White House from Hawaii on Thursday.

Whether or not there will be anyone for him to negotiate with in another question. And what exactly will they be discussing? A very, very, short term deal, most likely extending unemployment benefits and maybe keeping the Bush tax cuts intact for those earning under $250,000, for maybe a couple of months.

The real problem which is beginning to emerge is the upcoming vote on raising the debt ceiling (again), and the Tea Party Republicans in the house still seem hell-bent on making that an issue by which they can twist the president's arm.

The debt ceiling will need to be raised before March, at the very latest, or the federal government will shut down, which, at this juncture, seems to be the best option. Just do away with all of it and let chaos reign. Why not? The solutions being bantered about by the half-crazed Republicans and Democrats aren't going to solve anything except to dole out a few more Obama bucks to those already with their hands out and keep marginal rates in pretty much the same range without meaningful changes to spending or structural reform to entitlement programs or defense.

Wall Street has displayed iron nerves throughout this entire fiscal fiasco, with stocks up for the month of December. The bankster criminals on the Street are probably in on what already is looking like the biggest tax increase in American history, so they're likely well-positioned to benefit from a market decline.

If they aren't, they soon will be, if that's how this is going to go down.

It's gotten well past ridiculous, especially in light of the report from Mastercard Advisors Spending Pulse today that saw retail sales up just 0.7% versus 2011. The report tracked sales from October 28 to December 24.

Happy Holidays. Not.

Dow 13,114.59, -24.49 (0.19%)
NASDAQ 2,990.16, -22.44 (0.74%)
S&P 500 1,419.83, -6.83 (0.48%)
NYSE Composite 8,395.49, -25.06 (0.30%)
NASDAQ Volume 1,059,561,875
NYSE Volume 2,273,327,500
Combined NYSE & NASDAQ Advance - Decline: 1959-3537
Combined NYSE & NASDAQ New highs - New lows: 96-40
WTI crude oil: 90.98, +2.37
Gold: 1,660.70, +1.20
Silver: 30.04, +0.138

Friday, December 21, 2012

John Boehner's Political Apocalypse; the Secret of Oz

As far as one can tell, the Mayans were incorrect. With less than eight hours left in this winter solstice 21st day of December in the year 2012 (actually, it's already the 22nd in some parts of the world across the international time line), it's a safe bet that planet earth isn't going to meet up with a death star, tilt over on its axis or flip its poles in a magnetic firestorm.

Incidentally, in numerology, today's date is significant. The digits in 12/21/2012 reduce to 11, both a prime number and a master number in numerology, 11 is representative of great spiritual energy and a linking between mortal and immortal states. The Mayans may have been - according to their calendar supposedly ending on this date - predicting the end of an epoch, and the beginning of a great enlightenment.

Whether or not there's even a shred of believability in all of this Mayan "end of world" hysteria, simply the hope for change - to a more peaceful, spiritual existence -should suffice to empower some to good and better achievements.

For those who decry numerology as mere nonsense, one should be apprised that the most popular and widely-employed system was originated by none other than Pythagoras, who knew a bit about numbers, meaning and their relationship to our known existence.

In any case, life goes on unabated, though one could make a case that the evening of the 20th and the day of the 21st marked a personal political apocalypse for one John Boehner, Republican Speaker of the House, when he could not muster enough support from his caucus to pass his proposed Plan B spending and tax proposal last night in the US House of Representatives.

Around 7:30 pm Thursday night, a raucous meeting of the Republicans in the house adjourned with a lack of consensus on the Speaker's proposal and the measure was shelved, much to the dismay of Mr. Boehner, who has gotten nowhere in either negotiations with the president or within his own party.

The tightrope Mr. Boehner has been treading has developed either a knot or a twang, depending on one's own political outlook. In any case, Boehner's future as Speaker appears to be as much in doubt as his ability to harness his members to an agreement with the president on avoiding the fiscal cliff, the deadline for a solution now a mere ten days away.

So, while the world may not have ended today, in John Boehner's insular little world of Washington politics, it may seem like the end of the political road. That's how apocalypse usually works: bad for some, but not for all.

When the news hit that the Plan B measure would not come up for a vote in the House, along with a telling smirk on the face of Eric Cantor, the Marcus Junius Brutus to Boehner's status as Julius Caesar, futures took a nose-dive, Dow futures plummeting to more than -200 in a matter of minutes.

Cantor, incidentally, the House Majority Leader, has eyes on the Speaker's office, and while modern day politics may be more civilized than what took place in Roman forums, political assassinations can be easily more painful than actual ones. The knife is turned more slowly in the modern world.

Markets were not pleased when they opened this morning, though after the initial selloff, the decline was very limited, with stocks trading in a tight lower range throughout the day. There was little of the expected quadruple-witching volatility after the initial thrust lower, probably something to be expected with the algo-crunching computers in charge of the bulk of trading.

While volume was elevated, it was not outstanding and the end results of the trading day were hardly cognizant of the turmoil on Capitol Hill. Wall Street still appears to be holding out hope for a happy ending to 2012 and a solution to the nation's fiscal issues. Good luck with that.

As this week comes to a melodramatic close, Monday will be a half day, with markets closing at 1:00 pm ET. Money daily will not post on that day, taking some needed time off for the holiday, unless there is some event worthy of memorializing.

One bit of business to attend to is contained in the video posted below, the exceptional, award-winning documentary exposing the secrets of L. Frank Baum's "The Wizard of Oz," which, though a best-selling children's book, years later adapted for the big screen starring July Garland as Dorothy, the story was a scathing riposte of the banking system and a searing critique of the frailty of government.

Well worth the viewing time, if you do nothing else at all to educate yourself on the truth about fractional reserve banking and politics, this is must viewing.

Happy Holidays, and Merry Christmas to all, and to all a good night!

Dow 13,190.84, -120.88 (0.91%)
NASDAQ 3,021.01, -29.38 (0.96%)
S&P 500 1,430.15, -13.54 (0.94%)
NYSE Composite 8,443.15, -73.28 (0.86%)
NASDAQ Volume 2,825,451,750
NYSE Volume 4,834,776,000
Combined NYSE & NASDAQ Advance - Decline: 1823-3704
Combined NYSE & NASDAQ New highs - New lows: 118-45
WTI crude oil: 88.66, -1.47
Gold: 1,660.10, +14.20
Silver: 30.20, +0.525

Thursday, December 20, 2012

TEOTWAWKI, but, Stocks Gain on Boehner's Plan B

Since, according to myths and Mayan calendars, the world is supposed to end tomorrow, this will be a short post, because most people have better things to do to prepare for annihilation than read about stocks, bonds and commodities.

Apparently, Wall Street traders aren't buying the hype - but, they still believe the Republicans and Democrats in Washington will work out a deal before January 1, 2013, because they keep buying stock.

The joke will be on them if the world ends tomorrow, because all that trading they've done will not have done them any good. The upside for the world ending on December 21 is that anyone who hasn't done their Christmas shopping until now will have saved a bundle. Also, the end of the world kind of puts the kibosh on the Zombie Apocalypse. No world, no zombies... or maybe this would be the kickoff party.

The biggest event of today was John Boehner pushing ahead with "Plan B" which would keep the Bush tax cuts intact for anyone earning less than $1 million a year. Traders apparently were happy with that prospect, as a little rally ensued after Boehner spoke, never mind that Harry Reid said the House bill was already a dead issue in the Senate.

If there's no tomorrow, then this would be good-bye, but, just in case those crafty Mayans were wrong, we'll be back tomorrow. Darn, everybody will have to go to work on Friday.

Dow 13,311.72, +59.75 (0.45%)
NASDAQ 3,050.39, +6.03 (0.20%)
S&P 500 1,443.69, +7.88 (0.55%)
NYSE Composite 8,516.43, +52.61 (0.62%)
NASDAQ Volume 1,685,494,500.00
NYSE Volume 3,656,370,750
Combined NYSE & NASDAQ Advance - Decline: 3574-1921
Combined NYSE & NASDAQ New highs - New lows: 250-32
WTI crude oil: 90.13, +0.15
Gold: 1,645.90, -21.80
Silver: 29.68, -1.438

Wednesday, December 19, 2012

Tip-toeing Along the Edge of the Fiscal Cliff (a melodrama)

This fiscal cliff nonsense is getting a little thick.

Just yesterday, it appeared that the president and John Boehner were coming together on a deal. Today, Boehner steps up to a mic in the Capitol and blurts out something about the president needing to get serious, which is exactly what he said two weeks ago.

Money Daily continues to cling to its creepy, cynical prediction that there will be no deal, never was going to be one, because the parties had already agreed to raise taxes on everybody (why not?) and blame each other.

At this point, all signals should be indicating that there will be no deal prior to the official deadline of midnight on December 31, and beginning with the first tick of the clock in 2013, we begin to slowly dip over the cliff.

The effect of going over the cliff will not be a sudden, recognizable event, but rather a series of widely distributed government outreaches directed straight at the wallets of American citizens. It's a horrible policy decision, but, seriously, could we have expected less from this particular gang of clowns.

Regular wage earners will be hardest hit, as both regular income tax rates will increase, but the government will put pack the 1/3 of the trust fund deductions (SSI) that they so generously didn't deduct from everyone's paychecks in 2012, which was part of last year.

This inconsistency in tax policy, government bickering and annual changes in rates, deductions, spending cuts and increases, et. al., is not anything any stable nation would entertain, the USA having proven to be anything other than stable the past four or five or twelve years as concerns fiscal and monetary policy, though the FED has been trying (ZIRP and QE1, 2, 3, infinity, 4, and likely, beyond... yessh, good luck).

Congress will be departing for the holidays en masse tomorrow and Friday, so who really among us still believes anybody in the Capitol is serious about making a deal, finding common ground (remember that quaint concept of "common good?") and relieving the American people from so much uncertainty, doubt and outright confusion.

These are questionable times with a questionable cast of characters, something along the line of the soap operas, but without doctors who return from the dead or schmaltzy, scheming middle-aged marionettes living in some alternate universe, even though Washington seems to be spinning in an orbit all its own.

So, if there's no deal by tomorrow, because the individual members in the congress have to read whatever bill is presented, no? And then they have to vote on it, pass it or turn it down. If its passed, the President's signature is a quick finish and on to more misadventures.

Whether the congress and the president agree to anything before New Year's Eve becomes New Year's Day is probably immaterial at this point. If they miss any deadlines, they'll just claim the law to be retroactive and everything will be fine. But a couple of things are virtual slam dunks. Whatever they come up with it will not be enough to revive the economy, which, after all, is the point of this exercise. Also, somebody's - and possibly everybody's - taxes will be going up and some government programs will not be funded or appropriated for as generously as before.

The Dow was off nearly 100 points today, which isn't much, in light of recent moves higher. A deal on the fiscal cliff has been priced into stocks. Today's action was a little bit of recognition that all may not be well in deal-land.

Denial. It's what's for New Year.

Dow 13,251.97, -98.99 (0.74%)
NASDAQ 3,044.36, -10.17 (0.33%)
S&P 500 1,435.81, -10.98 (0.76%)
NYSE Composite 8,463.82, -35.53 (0.42%)
NASDAQ Volume 1,938,485,625
NYSE Volume 3,838,595,000
Combined NYSE & NASDAQ Advance - Decline: 2752-2748
Combined NYSE & NASDAQ New highs - New lows: 278-39
WTI crude oil: 89.51, +1.58
Gold: 1,667.70, -3.00
Silver: 31.12, -0.553

Tuesday, December 18, 2012

Boehner, Obama Closer on Fiscal Cliff Negotiations, Prompting Exultant Wall Street Rally

In a piece of somewhat shocking news, considering the participants are both career politicians of the highest grade, it appeared today that President Obama and House Speaker, John Boehner, were getting much closer to reaching a compromise to end the fears of going over the fiscal cliff on January 1, 2013.

Essentially, Boehner has agreed to some tax cuts for wealthier individuals while Obama is making headway in spending cuts, bringing the two sides closer to an agreement that would, at the very least, provide a level of certainty about tax and spending policies for the near future.

While the roughly $1 trillion in tax increases and another $1 trillion in spending cuts is phased over 10 years, it represents some easing of the tense gridlock between the two parties that have plagued Washington for years.

Compromise being the key to negotiation on these issues, it appears both sides are ready to give a little as the December 31 deadline approaches.

Cynics might say that the politicians are closing in on a deal only because their party members don't want to stay in Washington or have to return to the capitol between Christmas and New Year to hammer out details of a deal.

Most indications are that the President and the Speaker are within a few hundred billion dollars of each other's targets and a bill could be brought to the House and Senate by Thursday, allowing time for votes, a few minor changes and all escaping back to their districts (and families) in plenty of time for the holidays.

What was for certain was Wall Street's enthusiastic response, sending stocks sharply higher on strong volume. The rally - despite fears stemming from the fiscal debate - over the past four-and-a-half weeks has been nothing short of remarkable with the Dow Jones Industrials advancing more than 800 points since the closing low on November 15 (15,542.38) and the S&P tacking on 94 points over the same time span.

Whether or not the politicians arrive at a compromise deal, shorting this market - coincident with the real potential for a blow-off Santa Claus rally - before year's end would not be a wise move right about now.

The Wall Street crowd can best be compared to college kids on Spring Break, where just about anything is ample cause for a party.

Dow 13,350.96, +115.57(0.87%)
NASDAQ 3,054.53, +43.93(1.46%)
S&P 500 1,446.79, +16.43(1.15%)
NYSE Composite 8,499.35, +92.34(1.10%)
NASDAQ Volume 2,017,737,875
NYSE Volume 4,116,356,750
Combined NYSE & NASDAQ Advance - Decline: 4078-1520
Combined NYSE & NASDAQ New highs - New lows: 284-41
WTI crude oil: 87.93, +0.73
Gold: 1,670.70, -27.50
Silver: 31.67, -0.611

Monday, December 17, 2012

Magic Market Melt-up

Cliff? What cliff?


Oh, that one.

Empire Manufacturing (Dec.) Actual: -8.1; Forecast: 2.0.

Who needs reasons?

Dow 13,235.39, +100.38(0.76%)
NASDAQ 3,010.60, +39.27(1.32%)
S&P 500 1,430.36, +16.78(1.19%)
NYSE Composite 8,407.02, +73.29(0.88%)
NASDAQ Volume 1,873,997,750.00
NYSE Volume 3,415,913,250
Combined NYSE & NASDAQ Advance - Decline: 3776-1782
Combined NYSE & NASDAQ New highs - New lows: 132-61
WTI crude oil: 87.20, +0.47
Gold: 1,698.20, +1.20
Silver: 32.28, -0.019

Friday, December 14, 2012

Up, Down? How About Sideways Equilibrium?

A relatively favorable set of numbers weere released today as Industrial Production for November rose at the robust rate of 1.1% after falling 0.7% in October (revised from -0.4) and Capacity Utilization shot up to a healthy 78.4% (October 77.7%), but what may have spooked markets was the fall in CPI of 0.3%, a deflationary indicator, which is the bogey man that central bankers and governments worldwide like awake at night fearing.

Deflation implies stagnation and decline, anathema for the "growth" economies, though in nature, it's a natural part of the cycle. And that is part - though not all - of the reason that economies (especially ones built on a fiat foundation) are all built to fail. They are unnatural creations and they eventually cannot compete with natural cycles, physics and math.

So, stocks fell today, despite some good news. On the other hand, the "lawmakers" (an obtuse term presently, as the congress-critter and the president haven't done much in the way of actual writing of legislation for about a year and a half) in Washington aren't actually there at the moment, many having already headed home to their respective districts, the regular house session actually having ended yesterday, though it is scheduled to resume on December 19 (five-day weekends... must be nice). Consequently, there was no business concerning the ongoing "fiscal cliff" negotiations.

Stocks have reached a level resembling a sort of equilibrium (just look at the A-D line or new highs-new lows), which is a nice way of saying that it's a bad time to be either a bull or a bear, because nothing's moving, though one might expect some fireworks as the year draws to a close and it becomes more and more apparent that whatever fix is applied to the nation's fiscal woes - if any - it will be a patchwork, quick-fix and probably insufficient.

Nothing could happen, though, with two straight losing sessions, the direction of the market could have subtly changed.

The markets should react, but they don't have to. What happens over the next two weeks is anybody's guess. There are just nine full trading days until year's end. The exchanges are closed on the 25th and the 24th is a half-session, closing at 1:00 pm ET.

Something's got to give, or maybe not. After all, we've been muddling through for four years and most of the sleep-walking sheeple haven't a clue what's going on and the people in charge don't seem to care, and that's not a new phenomenon.

Well, it's Friday, and it's Happy Hour somewhere.

Free houses (and $billion a month from the Fed) for everyone!

Dow 13,135.01, -35.71 (0.27%)
NASDAQ 2,971.33, -20.83 (0.70%)
S&P 500 1,413.58, -5.87 (0.41%)
NYSE Composite 8,333.74, -4.58 (0.05%)
NASDAQ Volume 1,806,388,500
NYSE Volume 3,177,329,750
Combined NYSE & NASDAQ Advance - Decline: 2627-2840
Combined NYSE & NASDAQ New highs - New lows: 88-64
WTI crude oil: 86.73, +0.84
Gold: 1,697.00, +0.20
Silver: 32.30, -0.056

Thursday, December 13, 2012

Stocks Slide on Fiscal Cliff Stalemate, Fed Confusion

As they've done after the occasion of every recent FOMC meeting, traders sold off on the news, though today's slide was exacerbated at least a little by angst over the ongoing stalemate in Washington over fiscal cliff issues.

John Boehner, Speaker of the House, went before the microphones this morning, followed by Senate leader Harry Reid, and the two of them managed to give Wall Street a dose of temporary depression, sending stocks lower throughout the session.

The major indices slid into the final hour, but rebounded off their lows of the day when news leaked that President Obama and Boehner were to meet at the White House late this afternoon. While it will probably amount to nothing, as have their previous talks, the markets viewed it as slightly positive.

Traders are still mulling over yesterday's FOMC announcement, in which Chairman Bernanke tied raising interest rates to the unemployment rate and inflation. It's something of a crude cobbling of numbers that may or may not make sense, but, in the best counterintuitive spirit, lower unemployment and a recovering economy wiht low inflation (all good) would probably send stocks screeching into the abyss because interest rates would be on the rise.

Whatever the case and however it eventually plays out, it's a scenario unlikely to arrive any time soon, probably not for at least another 12 months, but it still has investors somewhat spooked.

Some good news for the economy came in the form of lower initial unemployment claims dropped to 343K in the most recent reporting period, on expectations of 375K. Retial sales, however, were a little disappointing, up just 0.3% in November, though that was better than the -0.3% from October.

The PPI was downright deflationary, posting a decline of 0.8% in November. Tomorrow's CPI reading will give an indication of price pressure or the lack thereof at the consumer level.

Dow 13,170.72, -74.73 (0.56%)
NASDAQ 2,992.16, -21.65 (0.72%)
S&P 500 1,419.45, -9.03 (0.63%)
NYSE Composite 8,338.62, -42.26 (0.50%)
NASDAQ Volume 1,800,313,250
NYSE Volume 3,299,683,250
Combined NYSE & NASDAQ Advance - Decline: 1847-3671
Combined NYSE & NASDAQ New highs - New lows: 85-58
WTI crude oil: 85.89, -0.88
Gold: 1,696.80, -21.10
Silver: 32.36, -1.427

Wednesday, December 12, 2012

Bernanke Drops Unemployment Bomb; Markets Get Cranky

After John Boehner chastised President Obama again from the floor of the House of Representatives in the morning, the markets got what they were so eagerly anticipating and pricing in for the last two weeks: Ben Bernanke's unveiling of QE4, the promise by the Federal Reserve to purchase an additional $45 billion in long-dated treasuries each month, commencing with the wind-down of a similar program known as "Operation Twist."

This new monetizing of government debt is in addition to the fed's commitment to continued purchasing agency mortgage-backed securities at a pace of $40 billion per month for the foreseeable future, which translates roughly into "forever, or until the fiat monetary system collapses."

What the market didn't expect was the Fed's statement tying interest rates to the unemployment rate. In the FOMC statement issued shortly after noon and prior to Bernanke's 2:00 pm ET press conference, the Fed announced, "the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored."

With inflation fairly tame and trending toward dis-inflation on the retail level, the Fed has finally embarked upon a robotic-like exit strategy, though with existential caveats and various loopholes and escape clauses.

After digesting the news, stocks were initially bought up, but, during the press conference, began to slip, finally ending the day with no gains.

While on the one hand the Fed is keeping the monetary floodgates wide open, they are anticipating economic recovery, though even the most ardent bulls don't see the official unemployment rate (U3) falling below 6.5% for at least another year. It currently stands at 7.7%, though that figure is largely due to the decline in the labor participation rate.

With baby boomers retiring at an estimated rate of 10,000 per day - many taking the offer of smaller benefits at age 62 - the labor market is in a state of generational flux unlike any seen in modern times, so there's literally no telling when unemployment might fall below the Fed's threshold level, if at all.

One thing's for certain: if the economy suddenly finds its legs and springs into a real recovery with job creation and rising GDP, Wall Street will be offended because the free money spigots will be turned off or borrowing costs will be significantly increased.

It's a double-edged sword of competitiveness vs. financial repression being played by Wall Street bankers against the population at large. Higher interest rates would tamp down rampant speculation and reverse the galloping higher market trends. In fact, the mere hint from the Fed that interest rates might rise already has seen some effect.

Withe the final Fed meeting of the year out of the way, all eyes will be on the Speaker and the President as they race against time to find a solution to their wide differences to solving the fiscal mess they've created (with ample assistance from Wall Street and the 2008 crash).

Time is running short on the politicians and Wall Street may not be so easily amused over the next few weeks.

Dow 13,245.45, -2.99 (0.02%)
NASDAQ 3,013.81, -8.49 (0.28%)
S&P 500 1,428.48, +0.64 (0.04%)
NYSE Composite 8,380.88, +14.40 (0.17%)
NASDAQ Volume 1,755,775,625
NYSE Volume 3,678,721,000
Combined NYSE & NASDAQ Advance - Decline: 2467-3083
Combined NYSE & NASDAQ New highs - New lows: 204-45
WTI crude oil: 86.77, +0.98
Gold: 1,717.90, +8.30
Silver: 33.78, +0.765

Tuesday, December 11, 2012

HSBC Pays $1.9 Billion Fine for Money Laundering; Stocks Soar

If there ever was any doubt that our financial and political systems are as crooked as they ever have been, today's news that London-based HSBC agreed to pay a $1.9 billion fine in a deal with the US Justice Department to settle money laundering charges AND NOBODY WAS CHARGED WITH A CRIME, should dispel any remaining doubt.

Wall Street's reaction to the news was a giddy rally, celebrating the idea that banks and corporations can commit any crimes they like and suffer no criminal consequences.

And people think their investments are safe. And the government is working really hard to come to an agreement to avoid sending the economy over the fiscal cliff and raising everybody's taxes.

Think about it.

Dow 13,248.44, +78.56(0.60%)
NASDAQ 3,022.30, +35.34(1.18%)
S&P 500 1,427.84, +9.29(0.65%)
NYSE Composite 8,366.47, +43.79(0.53%)
NASDAQ Volume 1,933,253,500
NYSE Volume 3,650,410.250
Combined NYSE & NASDAQ Advance - Decline: 3847-1695
Combined NYSE & NASDAQ New highs - New lows: 215-48
WTI crude oil: 85.79, +0.23
Gold: 1,709.60, -4.80
Silver: 33.02, -0.36

Monday, December 10, 2012

Over the Cliff We Go, but Where Is the Fear?

America has finally been dumbed down enough so that the ruling elite can run roughshod over the nation unfettered by neither rule of law or unfortunate facts.

About a month ago, (first person singular here, so pay attention) I made a point (don't know whether or not I made the point in any blog posting or not) that my belief was that a deal on the Bush tax cuts' expiration and other "fiscal cliff" issues had already been cut. Today, I still hold to that belief and even more strongly than before.

Take, for instance, the measured pace of both the Washington politicians and the Wal Street traders. The politicians have done nothing, are no closer to a deal than they were a month ago and don't seem to be in a big hurry to resolve these "pressing" issues.

Wall Street, after a hissy fit bout of selling over "their man" Romney losing the election, have recouped most of the decline and keep gradually pushing stocks higher and higher, apparently oblivious to the threat of the entire nation falling (or being pushed) over said fiscal cliff come January 1, 2013.

The simple reason for believing that the politicians won't make a deal before January 1, 2013, are so obvious as to not even be worth mentioning and that is the exploding federal government deficit and ever-expanding national debt, due to surpass its limits within another month or so.

The government needs money. Let me say that again, with emphasis:

OK, maybe that was a little harsh on the eyes, but there's no doubting the veracity of that statement. And, since the government needs money, and, since the politicians express this nagging sentiment that they are two parties poles apart on ideology and methodology, when in fact they are one and the same party when it comes to self-survival, the best way to get more money is to raise taxes on everybody and blame each other, which, in the long run, means nobody gets blamed, nobody has to worry about torches, pitchforks and being run out of town on a rail, and everybody gets re-elected, eventually.

For Wall Street, it means more money for corporations, which can and do break every law imaginable in pursuit of profit, and largely get away with it. Or, the traders are just ramping up stocks on the backs of their muppet clients, while quietly cashing out and putting their money into tangible assets like gold, silver, real estate, or stashing it away in the Cayman Islands or some other off-shore tax haven.

Think, for a moment. According to recently released statistics, and demonstrated by this article, in August and September, over three times as many foodstamp recipients (over one million) were added to the economy as jobs (324,000). So, where's the recovery? For everybody who gets a low-wage, no-benefit, glorified part-time job, three people apply for and receive food stamps and become a burden on the working class.

Like so many other concepts and programs in these United States, this is unsustainable, yet the media keeps rminding us that all is well, and that we sould go out and buy the latest iWidget or iGadget for Christmas to keep the economy humming along. Really?

Take a look at the S&P Retail Index (^RLX), which, after a double bottom in late October and early November, has headed south again in the first six days of December.

This, my friends, is the Christmas season, the buying season, the make-or-break season for retailers. If everything is so honkey-dorey, then why is this index rolling over, right at the height of what should be its strongest season.

Maybe the market is just being counter-intuitive, but, more likely, the retailers are being slaughtered. Holiday buying is down, as some luxury retailers have recently expressed, like Tiffany and Nordstrom's, and Kohl's, a mainstream retailer, reported horrifying same-store sales last week. Cannibalization. Zombification. Call it what you will, but, if everybody - not just the rich, but, everybody - is going to pay more in taxes next year, because THE GOVERNMENT NEEDS MONEY, how then does the economy look going forward.

Happy Holidays my sweet, firm buns. We're heading over the fiscal cliff by design and the aftermath of crashing billions of dollars below is not going to be very pretty.

I may be completely wrong, but, believe what you like. By all appearances, the deal has already been struck, the politicians are just play-acting, and the deal is that there is no deal. Welcome to the next fork on the road to serfdom.

Am I the only one seeing this for what it is? Where's the fear of the economy rolling over into a recession in the first half of 2013, which the OMB has already expressed would happen were the Bush tax cuts to expire, unemployment benefits be allowed to expire, the reduced take out of Social Security be allowed to expire, and cuts in defense and other programs (the so-called "sequestration") occur all at once?

The congress is set to recess for the holidays on Friday, December 14, four days from now. There simply isn't time enough to craft a substantive deal before then, since nothing at all has been done.

Obama and the Democrats will blame House leader John Boehner and the Republicans, who will blame Obama and the Democrats, and the American people will be left holding the bag, once again, with less in it than before. Tax the rich, tax the poor, tax everybody in between and blame each other. What a plan! Absolutely brilliant!

Market Update at 4:50 pm ET...

Stuck on stupid is about the only way to describe today's market (non)activity. Narrow range (seriously, the Dow was between up 20 and 30 points for almost the entire session) on low volume with the full range of just 55 points was ugly. Totally dead money.

Dow 13,169.88, +14.75 (0.11%)
Nasdaq 2,986.96, +8.92 (0.30%)
S&P 500 1,418.55, +0.48 (0.03%)
NYSE Composite 8,322.68, +8.39(0.10%)
NYSE Volume 2,975,303,000
Nasdaq Volume 1,528,722,750
Combined NYSE & NASDAQ Advance - Decline: 3095-2408
Combined NYSE & NASDAQ New highs - New lows: 139-61
WTI crude oil: 85.56, -0.37
Gold: 1,714.40, +8.90
Silver: 33.38, +0.246

Friday, December 7, 2012

Dow Gets Big Bump from BLS Jobs Data

Stocks got a boost from better-than-expected non-farm payroll data from the BLS, though the labor participation rate continued to slide. There were 146,000 net new jobs created in November, so no reason to blame Hurricane Sandy for anything. October's number was revised drastically lower, from 171K to 138K.

There was no movement on the fiscal cliff non-negotiations, which was supposed to be what Wall Street feared, though, as we've seen throughout the past 4+ years, anything pertaining to the economics of ordinary people or what happens on Main Street, simply gets brushed aside by Wall Street.

The NASDAQ was dragged down and the S&P weighted down by the continuing slide in shares of Apple (AAPL), a stock that is just plain broken after huge speculative plays over the past two years.

Whistling past the grave, indeed.

Dow 13,155.13, +81.09 (0.62%)
Nasdaq 2,978.04, -11.23 (0.38%)
S&P 500 1,418.07, +4.13 (0.29%)
10-Yr Bond 1.63% +0.05
NYSE Volume 3,086,974,000
Nasdaq Volume 1,612,160,125
Combined NYSE & NASDAQ Advance - Decline: 2797-2656
Combined NYSE & NASDAQ New highs - New lows: 123-50
WTI crude oil: 85.93, -0.33
Gold: 1,705.50, +3.70
Silver: 33.13, +0.017

Thursday, December 6, 2012

Bear Trap? Or Can the Markets Move Higher?

For all the sound and fury over the "fiscal cliff" this is a very orderly market, but that's what you get when there's no other asset classes worth owning (supposedly) and everything is neatly controlled and contrived by a select group of insider traders.

Perhaps this is just a well-conceived bear trap, set up perfectly (the Dow is up 522 points since the interim closing bottom on November 15) to ensnare the unsuspecting prey either with the release of tomorrow's non farm payroll figures for November (blame it on Sandy) or the congressional recess on December 14.

Bears can be very cagy. They may be lying patiently in wait. Tomorrow's number should be important, though this market - the levitational beast that it is - may not give a hoot. (OK, too many animal references for one day... good bye)

Dow 13,074.04, +39.55 (0.30%)
NASDAQ 2,989.27, +15.57 (0.52%)
S&P 500 1,413.94, +4.66 (0.33%)
NYSE Composite 8,280.96, +16.16 (0.20%)
NASDAQ Volume 1,680,487,250
NYSE Volume 3,176,728,500
Combined NYSE & NASDAQ Advance - Decline: 2814-2665
Combined NYSE & NASDAQ New highs - New lows: 99-56
WTI crude oil: 86.26, -1.62
Gold: 1,701.80, +8.00
Silver: 33.11, +0.157

Wednesday, December 5, 2012

Wall Street and Washington's Theater of the Absurd

To say that the market is comical might be a bit of an understatement, as, under the current regime of endless QE, ZIRP, no-loss corporate interests and unlimited cash funding for all manner of speculation the entity that used to be known as the "stock market" is a sad comedy with wickedly tragic undertones.

Amidst the furor over "fiscal cliff" issues, Wall Street has managed to keep a straight face, as have most commentators and analysts, but today's activity was right out of the old PPT handbook.

Despite early morning futures pump-priming, actually solid economic data and no progress in Washington, stocks found themselves slumped into negative territory at 11:00 am ET.

However, this being a market typified by HFT and wing-and-a-prayer whimsical day-trading, that point in time marked low tide for the day.

Without warning and on absolutely no relevant news (we searched and searched and could not find a suitable catalytic argument), the Dow Industrials surged a massive 150 points in the next hour, making a v-bottom u-turn that was dazzling if for only its rapidity.

The news wires were touting the move as inspired by Bank of America, and, to a lesser extent, Citigroup, which today announced layoffs of 11,000, sending that stock up 2.17 (6.33%). It's a counter-intuitive world when slashing jobs causes such a huge run-up, but this is, after all, the bizarre world of Wall Street, where profits supersede humanity. BofA, for its part, surged 56 cents, to 10.46, a new 52-week high. The only caveat for the TBTF banks might be that they are in the midst of another round of stress tests, and, apparently, are set to receive passing grades despite having a multitude of unresolved bad debts residing both on and off their balance sheets.

Finally marking its zenith with a 137-point advance, the Dow meandered along through the afternoon, finally giving up the charade late in the session by cutting its gains nearly in half. The other laughable part was Apple (AAPL) which was hammered once again by profit-takers, taking down the NASDAQ - which remained in the red all session long - with it.

It's fairly common knowledge that over the past four years, rallies led by banks hae a kind of phantom character to them. Since banking's books are so opaque, only the select circle of insiders really know how to value them, and said values may or may not be realistic. Time only will tell.

Belying the rally, the advance-decline line was negative and the margin of new highs over new lows continued to tighten.

Meanwhile, Washington did its part to keep the comical nature of events going strong. Congressional members largely departed the Capitol at noon today, apparently having nothing to do and opting for a long weekend. Yes, a long weekend, just prior to what's planned to be a three-week holiday holiday beginning December 14.

Tis strange – but true; for truth is always strange; stranger than fiction.
-- Lord Byron

Dow 13,034.49, +82.71 (0.64%)
NASDAQ 2,973.70, -22.99 (0.77%)
S&P 500 1,409.28, +2.23 (0.16%)
NYSE Composite 8,270.43, +46.56 (0.57%)
NASDAQ Volume 1,747,690,750
NYSE Volume 4,086,650,000
Combined NYSE & NASDAQ Advance - Decline: 2641-2821
Combined NYSE & NASDAQ New highs - New lows: 121-65
WTI crude oil: 87.88, -0.62
Gold: 1,693.80, -2.00
Silver: 32.96, +0.149

Tuesday, December 4, 2012

Markets Stall as Fiscal Cliff Negotiations Are a Nullity

Talk about tight trading ranges, the major averages barely budged off the flat line today, and, considering the backdrop of the fiscal cliff non-negotiating stances of the warring parties, it's actually quite remarkable.

The NASDAQ was the most volatile of the majors, trading in negative territory the entire session, trading in a narrow band of 22 points. The S&P, top to bottom, moved an entire nine points and change, finishing ever-so-slightly in the red.

By comparison, the Dow's movement was phenomenal, covering an entire 82 points throughout the day. However, after giving up an initial thrust higher of some 53 points, the Dow's trading range from 11:00 am ET until the close was a mere 46 points. Just in case anybody is keeping tack, the Dow crossed over the unchanged line 27 times.

There was no economic data released, but the president did take to the airwaves in his first one-on-one interview since the election, exclusively on Bloomberg (take THAT CNBC!).

Basically reiterating that he would not budge from his position the the Bush tax breaks for the highest two percent earners (making over $250,000 per annum) must be allowed to expire before he and his democratic counterparts would seriously consider any proposal.

That did not inspire any reaction in either direction from the markets. It could be early onset of "cliff fatigue," since the two sides have engaged mostly in verbal sparring and little else. Wall Streeters may be getting a bit worn out, playing the waiting game for the past four weeks.

Without any movement in negotiations, the investment community will look to a crush of economic data releases beginning with the ADP Employment Change index for November, at 8:15 tomorrow, followed in close order by Q3 productivity revision and unit labor costs, factory orders, ISM services and crude oil inventories.

At the least, the ADP figure will give the non-farm payroll junkies a little to chew on until Friday when the BLS makes its monthly estimate of job growth in the nation.

Between now and then, don't look for a quick resolution to the fiscal cliff issues, as both sides appear to take the fight to the very last minute, if not beyond. Most of the politicians are planning on heading home for the holidays on the 14th of December, but, staying in the nation's capitol to iron out an agreement might be preferable to dealing with angry constituents back home, so the chance that congress might delay their holiday by a week is a distinct possibility.

While there are many voices expressing that the politicians will prevent the economy from going "over the cliff" more and more analysts are predicting that neither side sees any gain from negotiating a settlement and appearing weak in the eyes of constituents, especially from the Republican point of view, which is, has been and likely will be, completely intractable.

Things could get interesting at any time, though it appears more and more likely that the politicians will stall, posture and delay, to the ultimate detriment of everyone.

One can hardly blame the president for sticking to his guns on wanting to raise taxes on the rich. It's a no-brainer and long overdue. Besides, he did win re-election largely on the idea that the rich should pay more. How much more is the most cogent question, though the Republicans continue to appear myopic and standing in defense of their campaign contributors, not the people of America.

If the politicians don't come to agreement, blame will fall squarely on the shoulders of the Republican party, primarily the out-of-touch tea partiers in the House.

Dow 12,951.78, -13.82 (0.11%)
NASDAQ 2,996.69, -5.51 (0.18%)
S&P 500 1,407.05, -2.41 (0.17%)
NYSE Composite 8,223.87, +0.33 (0.00%)
NASDAQ Volume 1,746,404,375
NYSE Volume 3,218,542,500
Combined NYSE & NASDAQ Advance - Decline: 2638-2837
Combined NYSE & NASDAQ New highs - New lows: 94-55
WTI crude oil: 88.50, -0.59
Gold: 1,695.80, -25.30
Silver: 32.81, -0.951

Monday, December 3, 2012

"Cliff" Negotiations Going Nowhere; Wall Street Begins to Get the Message

Anybody who took the time to watch any of the Sunday morning comedy shows, otherwise known as "Meet the Press", "This Week" or "face the Nation could come to no other conclusion than the Democrats and Republicans were still miles apart on solutions to fixing issues pertaining to the "fiscal cliff" that has become the cause celebre in Washington, on Wall Street and just about everywhere else in America.

Alternating between Treasury Secretary Timothy Geithner, House majority leader, John Boehner and a parade of politicians, pundits and philosophers (notably, Grover Norquist), there was widespread agreement on one thing: that there was no middle ground upon which anybody was seen standing. The Democrats and Republicans are so far apart that the idea that there might not be a deal in time for all the Bush tax cuts to expire, sequestration of mandatory budget cuts would take place and the US economy - and with it the world - would fall into recession early in 2013.

It took Wall Street most of the day to figure out that a deal might not be forthcoming by the clowns they purchased in the last election cycle, a thought so pregnant with dire consequences that many in the (cough, cough) investment community might just be in denial on the topic.

By late afternoon, President Obama took his case to the Twitter-world, answering questions from his point of view. A little later, there was a counter-offer from Boehner's office, though it was much like the president's original proposal: having no chance of acceptance and merely a bargaining salvo, testing the waters, so to speak.

By the end of the day, there was some damage done, though it was nothing like what may occur should Wall Street types begin embracing the idea of actually plunging over the "cliff."

Incidentally, the Dow pooped out right at its 200-day moving average, especially in light of the somewhat stunning November ISM index, which drooped into contraction territory with a 49.5 reading, on expectations of 51.2. Naturally, hurricane Sandy was blamed for the bad read, though a number of analysts did not agree with that assessment, believing that Sandy might be responsible for 0.3 to 0.5 of the shortfall, which would still render a reading of 50, at best.

Spain requested a 39.5 billion euro bailout for its ailing banks, but fell short of making an official request for a sovereign bailout. In the best counterintuitive fashion, European stocks rallied and bond yields fell. Talk about denial! The Euros have that market cornered.

As the cliff diving enters a critical phase this week - because the politicians plan on making their escape from DC on the 14th of December, naturally, taking an extra week off on the taxpayer's dime - expect markets to get ever more jittery. Adding to the unusual noise, Friday's non-farm payroll report for November might rattle a few cages as well.

Dow 12,965.60, -59.98 (0.46%)
NASDAQ 3,002.20, -8.04 (0.27%)
S&P 500 1,409.46, -6.72 (0.47%)
NYSE Composite 8,223.54, -36.90 (0.45%)
NASDAQ Volume 1,666,248,500
NYSE Volume 3,060,504,000
Combined NYSE & NASDAQ Advance - Decline: 2307-3205
Combined NYSE & NASDAQ New highs - New lows: 213-44
WTI crude oil: 89.09, +0.18
Gold: 1,721.10, +8.40
Silver: 33.76, +0.48