Thursday, December 31, 2015

Money Daily TacklesThe Best Of Wall Street With 2016 Predictions; The Big Fail: S&P, Dow Finish Lower for 2015

Stocks took it on the chin on the last trading day of 2015, and the S&P and Dow Industrials ended the year with losses. Only the NASDAQ showed a gain for the year.

Closing prices for December 31, 2015:

-19.42 (0.94%)

Chart for ^GSPC

-178.84 (1.02%)

Chart for ^DJI

-58.44 (1.15%)

Chart for ^IXIC
That's a wrap for the year. Read on, because 2016 is going to be even more interesting.

Picks for 2016

Courtesy of Barron's, here are some of Wall Street's top strategists picks to click in 2016:

Note the groupthink among these masters of the universe posers.

Aside from Steven Auth's outrageous call for 2500 (it might be a typo) the target for the S&P 500 ranges from 2100 to 2250. The expected 2016 GDP is all in a range from 1.9% to 2.8%. These are not the brave and the bold, that's for sure.

So, since Wall Street analysts have decided to continue with the false narrative that all is well, Money Daily offers the following set-up for what figures to be a downright fascinating year.

Since it's a presidential election year and the past two which marked the end of an eight-year presidency (Bush replaced Clinton in 2000, Obama replaced Bush in 2008) both were near-disasters for equity traders, 2016 promises to be an explosive twelve months.

Now that you've seen theirs - which, by the way, don't vary much - here is what Money Daily believes will work in the coming year.

First, the equity markets will absolutely tank.

Stocks Take a Beating

While it would be foolhardy to predict where whole indices will be trading at the end of the year 2016, it may be more instructive to offer a timeline. Since the S&P and Dow haven't made new highs since May of 2015 and both ended the year lower than they closed out 2014, the table has been set for an absolute bear-fest in the opening quarter of the year.

As bears emerge from a short hibernation due to climate change (one of the warmest winters on record in the Northeastern US), they will be hungry to take down entire sectors of the market. Hardest hit will be consumer goods, financials, health care, technology and services. No sector will be spared, but the safest havens will be in basic materials and utilities. The best place of all to be will be largely in cash or bonds. The 10-year note is likely to rally strongly as people flee to safety, and, despite the best efforts of Janet Yellen and the Federal Reserve to boost interest rates, the market will set the tone.

The major indices will be looking up at highs which will seem ridiculous by June. Taken on a monthly basis, January will see outright selling, putting the major indices into correction (-10%). February and March may be mild, but could be wild, depending on the direction of most of the well-followed indicators, like industrial production, capacity utilization, the various Fed surveys, factory orders, ISM manufacturing and services, and, of course, non-farm payrolls.

By April or May, the bloom will truly be off the rose, as first quarter GDP comes in below expectations or even shows up negative, the most likely culprit, warmer weather, as opposed to cold weather, which was blamed for the last two Q1 debacles.

Timing the return to a bear market can be tricky, so let it suffice to say that by June at the very latest, stocks will be down more than 20% overall, and the scare will be on.

At the bottom, which will be any time prior to election day, here's where Money Daily expects the major indices to be residing:

S&P 500: 1450
Dow: 12,400
NASDAQ: 3200

Bonds Will Be Wonderful

The 10-year note will trade higher from February through September, with the yield going below the two percent mark and staying there for an extended period, perhaps through the end of the year. Since stocks will offer only losses, lowered guidance and dividend cuts, the flight to bonds will be massive. The short end will be anathema; the 10-year and 30-year will be the bright spots.

GDP May Appear Recessionary

If 2016 results in any growth at all, it will be anemic, in the 1-1.5% range at best. With either the first and second or the second and third quarters putting up negative numbers, the odds for a true recession are high, and the Fed, without any interest rate cuts to counter the slack in the economy, will prove powerless.

The long look will be on currency collapse. After the massive gains in 2015 for the US dollar, that trade will likely reverse. Either that, or a global depression will be the order of the day.

Precious Metals Still Shine

While shunned with near-unaniminity on Wall Street, gold, silver, and platinum will hold their own and probably explode to the upside in the face of outright recession or depression. Gold and platinum could easily see 30-40% gains, while silver, the most-suppressed metal (and most important) could double by year-end, but all the metals will pull back in the early stages of the bear market in stocks.

Once a base is set for the precious metals, it will be off to the races in what will be the resumption of the decades-long bull market that began in 2000. The declines from 2012-2015 will be seen only as a cyclical bear correction amidst a secular bull.

Commodities Useful in Any Environment

So beaten down has been the commodity index, investors may be able to pick and choose from their choice of useful basic materials. Coal, iron, copper, zinc, lumber, oil and other fuels can be a boon in the best or worst of times.

Low prices in crude oil, natural gas and coal should remain in place for the entire year, and beyond. The usefulness of any commodity is, naturally, the selling point, but, in an oversupply environment, end users, rather than producers, will be the main beneficiaries.

An outright deflationary environment should prevail, a boon to cottage industries and small business, which is a welcome change from the repressed conditions of the previous decade. Anyone with the ability to store or make productive use of any manner of commodity should benefit greatly.

Real Estate As Investment Could Be Solid

There are three good reasons to own real estate. Living in a residential home, farming or mining, and renting on a commercial basis.

Since residential real estate is and has been in the stratosphere in many parts of the USA, it's likely to take a serious hit in 2016, with price declines of 10-30% in selected areas, more in others. Speculators and flippers will be fed to the sharks and there will be a slew of defaults in the REIT space.

Farmland, especially anything under 30 acres, which can be handled by a family or small enterprise, could be the best investment of the year. Productive land is usually safe, and besides, you can eat what you grow, which is always a concern.

Commercial real estate will go begging. It's massively overpriced and over-leveraged, due for a massive decline.


The US and global economies have been on a collision course between a massive debt bubble and a large pin. It all comes to a head in 2016, some of it pre-planned, much of it unrehearsed, unwanted and unnecessary.

Stocks will be hated, Wall Street bankers will once again be the object of derision (as they so rightly deserve to be), and politicians will be exposed as mere vassals to the deep state and the banking cartel.

The US will be lucky to avoid a major war, as the Military-Industrial-Congressional-Conplex (MICC) seeks a way out of debt crash and currency debauchery. There isn't one. Only systemic collapse can heal what's wrong in the economies of the world. Watch Japan closely, then Europe. They are the proverbial canaries in the coal mines. China will set its own course, but will continue to emerge as a world power.

The outlook isn't very rosy, admittedly, but, the great oligarchs of the day have made it so. Unmanageable levels of government, business and household debt are screaming for a reset, a break, a jubilee, and it very well could happen.

On the other side of a currency collapse is a bright future, but, if any of the outcomes predicted here actually occur, it will only be the beginning, and there will be more pain for the remainder of the decade. Until Americans and people around the world throw off the shackles of governments, replete with their laws, rules, regulations and onerous taxes, there will be no prosperity.

Donald Trump will win the presidency in November, a sign that the American people have had enough of the status quo.

Happy New Year!

Wednesday, December 30, 2015

Doubtful That Stocks Will Post Gains for 2015

Stocks took a nosedive into the close, with the three major indices closing at the lows of the session.

More than likely, traders are taking whatever they've made and walking away, as there is only one more day left to buy, sell or hold in 2015.

Crude got hit again and should test the December lows once January commences and the realization that global GDP is going to come in at under two percent or thereabouts for the year. As mentioned earlier, US fourth quarter GDP - which will be first estimated nearing the end of January - will have to measure in the range of 2.8%, which will be a real stretch, as holiday sales have not been very robust and housing - as evidenced again by pending home sales in November, came in at -0.9%, well below already tame estimates of a gain of 0.5%.

Crude Oil closed at 36.65, down 3.22%; Gold and silver were ambushed once more by the global cartel and the ten-year note finished just about where it did yesterday,yielding 2.30%, a pretty good jump of 7-8 pips from the close on Monday.

Natural Gas ended at 2.22, off 6.41%, after a big run-up based upon projections of a colder January for the Northeast via a European model. NOAA's three-month forecast for January-March remains unchanged, showing a warmer than normal winter for much of the Northeast and Midwest. So much for the rapid rise off generational lows. Like oil, there's an absolute glut of Nat Gas, a positive boost for consumers. Storage facilities in the Northeast are near record capacities.

If history is any guide, consumers will continue paying down debt if oil, automotive fuel and natural gas continue to trade at lowered levels. Wall Street may like like the idea, but Main Street is relishing the break from a near-decade of high prices.

Outside of the insanity that is the NASDAQ, a loser close on the S&P will send 2015 investors home flat or losers on the annum. The Dow looks to have no chance to finish in the black for the year.

Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05

Wednesday's closing prices:
S&P 500: 2,063.36, -15.00 (0.72%)
Dow, 17,603.87: -117.11 (0.66%)
NASDAQ, 5,065.85: -42.09 (0.82%)

It's not looking very pretty and January appears to be setting up for a dramatic sell-off.

Tomorrow: Money Daily's Forecasts for 2016

Tuesday, December 29, 2015

End-of-Year Santa Rally: Is It Real or the Ultimate Head-Fake?

Stocks took off like proverbial holiday bottle rockets on Tuesday, as 2015 winds down and investors (or HFT algos) scramble for the last bits of profit for the year.

All three of the major US indices were up handsomely with just two more trading days left in the year. Equity and bond markets will be open for business as usual on Thursday, the 31st, and closed for New Year's Day on Friday, January 1.

The boost today came right at the open, with all the indices shooting up roughly one percent promptly at 9:30 am ET. The remainder of the session was somewhat on the dull side with low volume, but the speculators didn't seem to mind booking one-day gains.

What little economic data there was turned out to be positive, the Case-Shiller 20-city Index showing a 5.5% gain for October and the Conference Board's measure of consumer confidence came in at 96.5, well above consensus estimates of 92.9. It seems that consumers were sharing in the holiday spirit. MasterCard yesterday reported robust holiday spending, at a pace 7.9% better than last year. the gains were attributed in part to lower gasoline prices making more income disposable for holiday spending sprees.

With data darting in and out from positive to negative over the past few weeks, the question arises whether the end-of-year rally on Wall Street is the real thing or whether it's a Grinch-y fake-out which will all be taken away come the new year.

That's a tough call, though most analysts will gladly opine that the bull market is here to stay, since the Fed's rate increase has gone off without a hitch, consumer spending (which accounts for as much as 70% of the economy, so it is said) is awesome and roaring, and funds are all in on equities.

The other side of the coin, from Main Street, is seeing heavier use of credit for everyday purchases, a job market that on the surface says full employment but at the core is made up of statistics, lies and low-paying jobs, and a middle class that continues to be eviscerated by taxes and inflation.

The glue to either side of the story is oil, the one commodity upon which the global economy spins, which is as cheap as it has been since the crisis of 08-09, and doesn't seem to be going anywhere, despite the outsize gains today (WTI closed up, at 37.35/barrel). Low oil and gas prices are boons to consumers and to business, driving input costs lower and profits higher. The only people not happy with the price of oil are the producers, especially the frackers, who have had to lay off thousands as the price of crude has declined.

What the low price of oil does beyond the gas pumps is provide margins for business production, and there's little downside to that. So, other than stocks approaching nosebleed levels, the US economy is in a strange spot. GDP may actually begin to ramp up to levels the Fed can feel more comfortable about raising rates though stocks will be hard-pressed to continue much higher. The rally is going on seven years, already the second-longest in market history since WWII and earnings have slowed for many companies, though the price of their stock remains high.

That's an unsustainable condition, one which will be worked out by the markets over time, and the general rule at these levels would be to fade any rallies, even ones which come in holiday wrappings with candy canes and sugar plums.

It's what's inside that counts, and market internals like breath and volume are pointing in the wrong direction.

Stocks are likely to rally for the remainder of the week and the year, but all-time highs are looming, and on the Dow and S&P haven't been overcome since May. It's tough to see how these indices can go much higher without significant improvement in the bottom lines of many companies.

Besides, it's never smart to buy high, and these markets have been at extremes for more than six months. There's been plenty of time to switch out of equities, but seriously, where else can money go?

Monday, December 28, 2015

Santa Takes a Little Off the Top

Stocks fell today, first hard, then made a daylong comeback to close near the unchanged mark.

It was rather a random day in the world of high finance. Ten-year and 30-year treasuries each closed off a pip, 2.21 and 2.93, respectively, while the 2-year note budged upward from 0.97 to 0.98, tightening and flattening the spread. It wasn't a monumental move, but noticeable to anyone paying attention. The market didn't really appreciate the boost in the fed funds rate and the displeasure is being voiced by various, subtle means, like the desperation in high yields, and the shut-off of the banking spigot that funded stock buybacks for most of the last five years.

It's probably better, right now, to keep a close eye on the bond market. It may turn out to be the place for volatility and profit in 2016, especially if the Federal Reserve follows through on their plans for three or four more rate hikes by this time next year. That is an unlikely event, though "normalization" is what the Fed continues to say they are aiming for, though a truly normal economy won't likely materialize for three or four more years, if they're lucky.

To have a 10-year treasury yielding 4-5% would be quite an accomplishment by 2019 or 2020, considering all the damage already done by over a decade of fed fund rates at one percent or lower.

Equity markets were decidedly dull, as there are few trades to be made of any importance this late in the game, though the markets are still well below all-time highs reached in May, especially the broad gauge of the S&P, which cannot seem to get out of its own way.

Today was mostly gibberish, as will likely be the case the remainder of the week, and the year. It's hard to draw any conclusions from the last week's trading in a calendar year. The first week of January will be much more insightful.

WTI crude was slapped back down from last week's euphoric and ridiculous closing level, finishing the day at 36.72/barrel. Anyone calling a bottom around here just hasn't considered the slack in the economy and the production glut facing producers. It's a huge problem, but nobody wants to cut production, even at these lower prices, constituting a possible new normal.

S&P 500, 2,056.50, -4.49 (0.22%)
Dow, 17,528.27, -23.90 (0.14%)
NASDAQ, 5,040.99, -7.51 (0.15%)

Wednesday, December 23, 2015

China Steel Exports To USA Subject To 256% Tariff

Remember, folks, the US Department of Commerce has your backs.

The department is recommending that the United States impose a tariff on steel imports from China of 256%, because they feel China has been dumping steel on the market and causing a severe disruption in the price, negatively affecting US steel producers.

Gee, really? What's next, tariffs on electronics, cars, just about anything you buy at Wal-Mart or nearly anywhere in America?

Where's the great Ben Bernanke when you need him? You know, the former Chairman of the Federal Reserve who is an EXPERT on the Great Depression.

Why do we need the Big Bernank now? Because, his expertise would prevail on our glorious government goofballs that protectionism is exactly what made the Great Depression so (not) great.

You take depressed markets overfull of inventory, tack on tariffs and you get exactly what the Fed wants in order to hide its horrible policies: velocity of money at zero, falling wages, layoffs and now, the kicker, goods too expensive for anybody to buy. Pure genius, these guys looking out for all of us little people.

This is just the beginning. Expect to see more trade protectionism going forward and more countries falling into recession. Add it all up and you have Great Depression 2.0.

It's not going to happen all of a sudden, because the Fed is still fighting deflation. But, when the going gets rough, really rough, like when Wall Street (hell) freezes over and commits suicide in a crash of stocks of companies that have been repurchasing their own shares for the past six years and they lay off millions of workers, that's when the government will move in full force with trade restrictions and tariffs so that Americans can't purchase anything from the evil Chinamen.

Maybe somebody should have thought about this before we sent all of our manufacturing base over to the Red Dragons. Then again, maybe they did.

Meanwhile, the Santa Claus rally continues on Wall Street. The S&P gained enough today to show a small profit for the year and the Dow Jones Industrials are closing in on being black for 2015.

Tuesday, December 22, 2015

Stocks' Santa Rally Based On Nothing In Particular

The word for the day was "oversold," in essence green lighting all the algos on the belief that stocks were still undervalued, despite the S&P 500 average P/E of 22, when the norm is 15.

Whatever sparked the rally du jour must have been a highly-held secret, because nothing much has changed and today's economic news - third GDP revision for the 3rd quarter came in at an even 2%, and existing home sales were down 10.5% month-over-month (the lowest annualized rate since April 2014), and that was before the Fed and the banks hiked interest rates.

As for GDP, the third quarter reading was 0.1% lower than the previous estimate, and down sharply from the second quarter, when the economy supposedly grew at a mind-blowing 3.9%. Adding in the 1st quarter's decline of 0.7%, the fourth quarter will have to have grown by 2.8%, a seemingly reasonable quest, to get the entire year at a 2% growth rate. What a recovery!

Given that retail sales have been sluggish at best and inventories rising, it will be a struggle for the economy to show a gain of that size. However, the brilliant economists at the BLS certainly can massage the numbers enough to wring out nearly 3% growth, somehow.

So, Santa Claus has arrived on Wall Street. There are just two more days of trading this week and six total for the year, and stocks are showing that 2015 will end essentially flat.

Here are closing prices at the end of 2014:
S&P: 2,058.90
Dow: 17,823.07
NASDAQ: 4,736.05

The NAZ looks to have gains in the bag, while the S&P and Dow have some work left to do. Ho, ho, ho.

Today's closing numbers:
S&P 500: 2,038.97, +17.82 (0.88%)
Dow: 17,417.27, +165.65 (0.96%)
NASDAQ: 5,001.11, +32.19 (0.65%)

Monday, December 21, 2015

The Awakening Continues...

I would like to get back to the kind of world that existed when I knew nothing, when I was a kid, in the early 60s, before the MICC (Wilkerson's inclusion of "Congressional" to the standard MIC is essential and poignant) killed JFK.

Yeah, maybe America wasn't innocent and perfect, but it was miles ahead of what we have today. Anecdotally, my neighborhood, suburban Rochester (Irondequoit) was still largely a farming center. There were huge greenhouses just four doors down the street from me. And fruitstands, and kids riding bikes with no helmets, and cars without seatbelts and cops would would "give you a break" instead of "breaking your face."

Gradually, the farms were replaced with apartments, more apartments, stores, new homes, and the local government got bigger, and bigger and bigger. The town today is mostly still middle class, but the folks from the 60s and 70s have moved on. There are many more rentals, the shopping plaza that used to be all white shoppers is now 60-70% minorities, many of them on public assistance. The government is enormous. The school superintendant makes $285,000 a year, with golden pension, super health benefits, etc. The teachers make more money and have better benefits than 80% of the people they "serve."

It's all gone backwards. Our current system must come to an end, either by financial degradation (our best case) or armed conflict of private sector citizens against the "public servants." The government must be reigned in, and we must take our country back, because if we don't, there will be nothing left to salvage. We can start by opposing every school budget proposal and knocking school systems back to 1960s levels.

There will be great pain, so be on the right side. Private industry. Smaller government. Live and act without fear. It is the only way.

Published December 11, 2015, Abby Martin interviews retired U.S. Army Colonel Lawrence Wilkerson, former national security advisor to the Reagan administration, who spent years as an assistant to Secretary of State Colin Powell during both Bush administrations. Today, he is honest about the unfixable corruption inside the establishment and the corporate interests driving foreign policy.

Hear a rare insider's view of what interests are behind U.S. wars, the manipulation of intelligence, the intertwining of the military and corporate world, and why the U.S. Empire is doomed.

Friday, December 18, 2015

The Big Reset Has Begun; Prepare Accordingly; Stocks Skid to 2-Month Lows


Try these events from the past three days:

Kerry meets with Putin, says Assad can stay as ruler of Syria. US policy neutered.

Biden calls off Turkey, tells them to stop violating Iraq's borders. US policy neutered.

Fed raised Fed funds rate, banks raise prime rate.

Putin publicly backs Trump.

Ukraine defaults on Russian debt. While this may appear bad for Russia, it's worse for Ukraine, and even worse for US policy.

Today, the plug will be pulled on over a trillion$ in SPY options. Winners and losers, lots of both.

The world has changed radically in the past week. Trump is now the de facto US President. Obama can go to Hawaii and stay there for all the world leaders care. Kerry had no power; now he has even less, if that's possible.

Just watch: terrorism will be a non-starter for 2016. US intel has been found out (by Putin) and he's putting an end to it all.

Will truth and justice return to America? Just like bankruptcy, gradually, then all of a sudden.

h/t to Ernest Hemingway

Then, there's this cryptic note - citing Jim Willie's Hat Trick Letter - found in the comments section on a Zero Hedge article.


The Voice gives an urgent warning that finally the breakdown is accelerating, the damage profound, the effects unmistakable, the plug pulled. The officials have not undertaken any remedy for several years. His message is clear and stark, the first time such a communication has been given to the Jackass and colleagues. It was given just a few days before the USFed rate hike decision was made. "Guys, the plug has been pulled. Let the show begin. Our organization has been alerted accordingly to that effect this morning at 4am, that the deed is done. The battle trigger code has been chosen. It will get incredibly ugly, as real casualties will result. The annihilation of entire groups of people within the corrupt and criminal systems will be unimaginable to normal humanoids. These systems will be totally dismembered and crushed, never to be resurrected. The cabal is being caught in a grand dragnet, with the outcome certain to be their extermination, along with all their agents and collaborators. [1] The effects of this event driven scenario will become visible to the ordinary people in early 2016 and forward. Once the dust settles, it is clear to me that the human population will be noticeably lower, with fewer people roaming this planet." The Voice is referring to the Satanist Bank Cabal groups. We mere mortals hope that reason prevails, that remedy is agreed upon, that transition is orderly, so that a billion people do not needlessly perish. But the Anglo-Americans have their favorite nuclear and virus toys. We have seen ample evidence of their chemical plant explosions as a warm-up to main events.

Our organization has been alerted accordingly...

At 11:00 am ET, the S&P already dumped 2030 and 2020. Getting closer to the magic mark of 2000.

Don't actually think it matters if it happens today, tomorrow, next week or next year. The crash has been underway since late May, the last time the NAZ, S&P and Dow all set new all time highs.

The trash is being taken to the dumpster. Watch terrorism disappear as a major story. The meme for 2016 will be economic security, and Trump will win easily.

In fact, since Putin's endorsement yesterday, some would wager that in the minds of most world leaders, Trump is already the US de facto president. Obummer is so over. Hillary is a non-starter. Change is good; best to be out in front of it. The elections will be all for show, since Trump is self-financed. The money machine(s) is/are grinding to a halt.

Americans are going to see the fruits of what the Fed and the federal government, state governments, and local governments have sewn: TRASH. Loads of TRASH, piled high, heaped upon more loads of TRASH.

Bankruptcies should absolutely soar in 2016. Corporate failures and bond defaults will accelerate. Pensions will default on payments. The US will slowly, painfully, resort to honest money. GOLD AND SILVER WILL SOAR.


David Stockman really nailed it in his post at Contra Corner Blog.

And, while the economy slowly crumbles, congress (which obviously didn't get the memo that they're fired) conveniently passed a $1.15 trillion omnibus budget bill with the notorious CISA government spying act included.

At the end of the week (the last full week of 2015), the figures for the major averages look pretty stupid.

The Dow was smacked down a whipping 367 points, closing at 17,128.59, the lowest closing price since mid-October. For the week, the DJI was off nearly one percent, down 136.62 points.

The S&P nearly got to the 2000 mark, closing down 36.43, at 2005.46 on the day, but lost just 6.95 for the week. On the NASDAQ, it was a 1.59% loss, down 79.47, at 4973.08. On a weekly basis, it doesn't look bad on the surface, as the NAZ lost a mere 10 points.

However, Monday, Tuesday and Wednesday were all up days for the major indices. Thursday and Friday were down, and down big, erasing all of the early-week gains. From the highs after the FOMC meeting, on Wednesday's close, the losses portend further losses next week. a cleansing of bad assets is well underway, and there are plenty of bad ones in all markets.

Also, the entire treasury curve flattened. The 10-year yield, in particular, dropped 10 basis points from 2:00 pm ET on Wednesday, the moment of the FMOC rate hike announcement, ending the week at 2.20%. If the Fed's master plan was working, shouldn't all bond yields - especially those of shorter durations - have gone up? This is a classic example of the market rejecting the Fed, with more to come, as the Fed thinks it's going to raise rates four more times in 2016, a recipe for economic cataclysm.

Lastly, keep a close eye on the banks (JPM, BAC, C, GS, WFC, MS) as they were all lower by 2-3% on the day.

David Bowie's Changes should suffice as an appropriate song for a truly epic week:

Thursday, December 17, 2015

Yellen's Rate Hike Timing Might Be A Little Off... Like Five, Six Or Seven Years

Now that the Fed has restored its own venerable credibility, the markets seem to think, "well, yeah, the fed is credible, but still wrong." Fed Chairwoman, Janet Yellen, will go down in history as the worst chairperson in the 102-year history of the Federal Reserve, followed closely by her predecessor, Ben Bernanke.

Hiking the federal funds rate even a measly 1/4%, as they did on Wednesday, seems to be anathema to all kinds of markets, except maybe the dollar index, which, unlike just about everything else, rallied today.

Stocks erased all of yesterday's gains and then some, sending the Dow Jones Industrials and S&P 500 into the red for the year. For investors of all stripes (and most importantly, hedge fund managers, who have gotten murdered this year), what's worse is that the year is almost over and there doesn't seem to be a catalyst available to overcome what damage the Fed has done with its unmistakable policy error.

Anybody with brain cells saw this coming well in advance. The global economy is virtually on its knees and the Fed thought it was time for a hike in interest rates. The hike amounted to the political equivalent of a punt. There was nowhere else to go, so they went through the only door open. Bad mistake, especially since that door had been open since 2009.

What were they thinking? Maybe the question should be "what were they not thinking?" because they ignored the obvious signs of slowing, not only in emerging markets, but in commodities, high yield bonds, corporate profits, sales, housing, and a plethora of other indicators that were signaling recession ahead rather than recovery accomplished.

The Federal Reserve is comprised of some of the worst thinkers on the planet, whose sole interest is in keeping their credibility intact, and they are quickly losing control over that. They've managed, in the short span of seven years - thanks to their dual policies of zero interest rate policy (ZIRP) and quantitative easing (QE) to completely dismantle the fabric of capitalism, enriching only the upper, upper crust of wealthy individuals while dashing the hopes and savings of millions of would-be retirees.

With any luck, the Fed's failed policies will lead to outright rejection of the currency, not just around the world, but right here in the United States as well. These are control freaks, and they've lost control, implying simply that worse decisions are already in the making.

In case anybody's paying attention, the Federal Reserve is busy wrecking what's left of the global economy by bringing the US economy into line with the rest of the world, which, if one would like to take a look at Argentina, Brazil, and Mexico, is already suffering deeply.

Global depression and a debt jubilee are on the plate for 2016. You can have it served directly or order it to go. Zombie banks, which should have gone out of business in 2008, don't deserve to be repaid again, as they've already stolen so much taxpayer money that they've bankrupted the US government.

It's a good thing there's only a few weeks left in the year, because the losses for 2015 will stop suddenly on December 31.

Sadly, those losses will resume promptly, when markets reopen on January 4, 2016.

In advance, Happy New Year (if we make it).

Wednesday, December 16, 2015

Fed's FOMC Announces 0.25% Rate Hike, Stocks Soar On The News, Banks Raise Prime Rate

As expected, the FOMC (Federal Open Markets Committee) raised the interest rate on federal funds (the rate for overnight loans from one financial institution to another from funds held at the Federal Reserve) from a range of 0.00-0.25 to 0.25 to 0.50.

Full release here.

On the surface, this seems much ado about nothing, or, almost nothing, but the Fed's long-awaited rate increase will have ramifications across the investing and business world.

For instance, the first salvo will be to any and all loans tied to the Prime Rate, which include most credit card, revolving debt and home equity loans and lines of credit.

Shortly after the Fed's rate announcement, major banks began announcing that they were raising their prime lending rate from 3.25 percent to 3.50 percent. Wells Fargo was the first bank to announce the rate hike, followed in rapid pace by Chase, Citibank and Bank of America. The increases are effective immediately.

What that means is if you've been paying 4% (not unusual) on a home equity loan, your new rate will be 4.25%. In real terms, on $250,000, that's an additional $37 per month. Not much, one might think, but, considering that the Fed plans on continuing to increase their base FF rate - which will green light the banks to up the prime rate - the cost of borrowing will simply continue to increase.

Many analysts have shied away from calling the Fed's move ill-timed, though an equal number has called it "too late." What it certainly is not is "too little." Insofar as it is the smallest rate hike imaginable, its effects will be far reaching.

In larger, banking terms, try this: A billion dollars borrowed over seven years at 1/4% would cost $12,010,470 per monthly payment. At 1/2%, it's $12,116,790, an increase of $106,000 a month. That same billion, borrowed for just one year at 1/4% interest requires a monthly payment of $83,446,220. At 1/2%, it's 83,559,200, an increase of $112,980 per month.

With numbers like these being thrown around routinely - and daily - by the largest financial institutions, hedge funds, brokerages and their ilk, something is bound to blow up sooner, rather than later. Already we've witnessed carnage in the junk bond markets, which have been pounded in anticipation of today's Fed announcement and there will surely be more to come.

On wall Street, stocks appeared to love the move, with the Dow up 224 points, the S&P gaining 29.66, and the NASDAQ ahead by 75.77. This looks all well and good right out of the box, but there's a quadruple witching day coming up Friday on options, and year end is now within spitting distance.

It might be wise to square up one's positions - if one has any - before the end of 2015 to take advantage of tax breaks for losses and/or long term gains. Precious metals moved rather sharply throughout the day and did not pull back after the Fed announcement, despite the dollar remaining strong, which is the obvious outcome.

For now, the strong dollar will continue to stoke deflation, as imports will become cheaper. To anybody who's been Christmas shopping, the price structure is obviously on the low end this season and will likely be bargain basement after the holiday shopping ends.

Most Americans will find bargains in stores, if they have any money with which to purchase them after paying what are sure to be higher credit card bills.

According to the Federal Reserve, the US economy is supposed to be strong enough now to absorb this rate increase and the associated nuances. At this juncture, it's far too early to tell.

We shall see in coming weeks and months. As Ernest Hemingway so eloquently put it in The Sun Also Rises: "How did you go bankrupt?"

"Two ways. Gradually, then suddenly."

Pre-FED-Hike Notes for the Truly Deranged and/or Excited

As of 12:30 pm ET, amazingly, the Dow, NAZ and S&P are all right at (or pretty damn close) both their 40 and 200-day MAs.

In other words, the entire market will be essentially flat going into the FOMC announcement. No clues for anyone, except that move up in PMs this morning.

Putting on my best guessing hat - which stragely resembles a dunce cap - I'd say the 0.25% rate hike is all but a done deal. The Fed has gone too far and they know it.

This is really a now-or-never condition, and they must go with NOW, because NEVER doesn't really mean never. It means they will have to do this at some point. There will be significant pain ahead, but only for those who are highly leveraged, over-indebted or just plain stupid.

Everyone has had seven years to prepare for this moment. If you haven't gotten a whiff of what's coming, you are not to be pitied. You will be dismembered and disposed of by the gnarly beast of deflation.

That's my take.

Final note: Yesterday, over at ZeroHedge, I reiterated my call from about two years ago that silver would see $12. Another poster said $8.25 was the target, or bottom. I'm fine with that. Will be buying at $12 and buying even more if and when it ever gets to $8.

90 minutes to lift-off. Good luck to all.

Tuesday, December 15, 2015

Last Dance Before Yellen's Rate Hike; Stocks at the High End... with Tom Petty Video

In tribute to today's madcap stock rally in the face of tomorrow's FOMC policy rate decision, we present Tom Petty and the Heartbreakers classic, "Mary Jane's Last Dance."

Picture Mary Jane as Wall Street, High Yield Bonds, the global economy, or all three. Tom Petty is the Federal Reserve. That's all for today. Tomorrow's a big one.

Monday, December 14, 2015

Is a Global Recession Just Ahead, or, A Global Depression?

Gas prices at the pump haven't been this low since 2009, though the prices back then maintained for a very brief time, as oil plummeted during the financial crisis (remember that?), but quickly rebounded as the Fed and other central banks added extreme amounts of liquidity to markets globally and before long, crude oil was back in the $90-100/barrel range.

Last year, the price of a barrel of crude - both Brent and WTI - began a precipitous decline, cutting in half the traded price. As 2014 turned to 2015 and many culprits were blamed (Saudi Arabia, US frackers, Russia(?), the price continued to hover in the $45-65 range. By late summer, all bets were off as the price of a barrel of crude fell into the low-$40 range, and then this month declined into the 30s.

While gas at $2/gallon and lower is a boon for drivers, especially in the US, where commuters and businesses were burdened with gas above $3.00 and sometimes over $4/gallon for years, it's not such a great deal for oil producers, especially the aforementioned frackers, whose marginal profitable price per barrel was estimated at somewhere between $45 and $75 per barrel.

Plenty of rigs have gone idle, but debt has to be serviced, and most of these drillers are on the hook for millions, borrowed from banks when the getting was good, now having to pay back the costs of exploration, drilling and extraction while operating at a loss.

The oil patch is just one element of the global liquidity crunch which may be about to enter a new, more dangerous phase, when, in two days time, the FOMC of the Federal Reserve is supposed to raise the federal funds rate for the first time in more than seven years.

The Fed plans to set the rate at 0.25% for money banks can borrow from the Fed, and, while that may not sound like a big deal to most, it certainly is to banks and corporations, which have been borrowing and spending at record paces since mid-2009.

With the FOMC rate policy decision now less than 48 hours away, there's a growing nervousness on Wall Street over this unprecedented move by the Fed. It's unprecedented because there's a vast amount of evidence that the bubble the Fed has blown is about to be not only pricked, but popped and blown wide open. Simply put, the party is about to end, and the drunks on the dance floor will be looking for a ride home, but nobody will be available for a safe trip, because not just the investment and corporate community, but the Fed itself, is staggering and woozy.

It may be a big, bad boogey man, like the 2000 scare, or the Mayan calendar, or those pesky asteroids which dare to come within 100,000 miles of dear planet earth. Or, it could be the real thing.

Nothing lasts forever, and, from the looks of the bond, commodity, and emerging markets, the long "recovery" and stock market rally seems to have run out of steam. Global trade is down, global GDP keeps being revised lower, US manufacturing is fading, China is becoming a basket case. It all points to reduced growth, or, in proper recession terms, negative growth.

If you're in the market, there's still a day and a half to get out, and probably more, if you can handle small losses. If you're not in the market, but still have to drive, eat, and breath, good news. In recessions and, especially, depressions, everything (except debt) is cheaper.

Hedge, buy, or sell accordingly.


Sunday, December 13, 2015

Climate Change Agreement: The Farce Is Strong in This One

Editor's Note: OK, this is a blog called Money Daily, which means that there should at least be a post every day. That sounds reasonable enough, but, as a writer, editor and publisher for many years (spanning the decades from the 1980s to the present), I'm old enough and wise enough to realize that - unless I'm serially unemployed (not yet, but working on it) or have no other obligations in life (sadly, I do) - writing something coherent and reasonable and, yes, maybe even stimulating and/or thought-provoking every day is a tall order.

Nevertheless, I've taken a long hiatus of about one year due to moving (twice), running another business (badly), managing a five acre property (working) and sawing and chopping lots and lots of wood to burn this winter (working on that too), and that is now at an end, mainly because I have found more free time, a renewed interest in money, economics and politics and because something inside me tells me I can long longer be silent on a growing number of issues.

To that end, I'll endeavor to put something on this blog every weekday (come on, everyone needs a weekend) and sometimes on weekends. I will do my best to write posts that are entertaining, enlightening, interesting and provocative. And, I'll go back to using my most significant and enduring signature. --FR

In Paris, France, recently, two weeks were spent by highly-paid representatives from nearly 200 countries to reach an agreement that is not binding on any of the participants, includes goals and suggestions that individual countries can choose to either accept or reject, and a vast array of proposals that are unenforceable.

This is the cumulation of the global climate change summit just ended in Paris over the weekend. It also marks the beginning of the end of the absurd notions of the "climate change" proponents. No nation would agree to a mandated agreement, particularly the United States of America, because it would have required approval from our congress, which was a dubious outcome at best.

Not to belabor the issue, the climate change agreement - hailed by Secretary of State John Kerry as "significant" on FoxNews Sunday, today - is yet another glowing example of the failed leadership in the global community. Thousands of delegates gather together to plan, prepare, eat, drink, party and come up with an agreement that is null and void from the start.

In other words, the entire exercise was a complete waste of time, energy and (using the term very, very loosely) talent. The delegates, for wasting so much time and TAXPAYER MONEY, should be docked two weeks pay. Further, the people responsible for this latest craziness - a non-binding agreement to not raise the global temperature by another degree by 2050 - should simply resign, if for only the paramount reason that they have no real clue of what they're supposed to be doing, other than possibly enriching themselves and their close business allies.

Climate change is real. The climate is always changing. There's no doubt about that. But, thinking that humans are actually causing the climate to change in any significant way, or, the ultimate hubris of thinking that they can actually do anything to fix it, is just plain stupid.

The climate change agreement is a farce. A total disgrace. Let's just be happy that the issue won't be addressed again for - from what I'm hearing - another eight years - 2023. Well, at least that's good news.


Monday, December 7, 2015

Barack Obama: Gun Salesman of the Year

Just had to link to this article and post the photo.

Thanks Obama: Smith & Wesson And Sturm, Ruger Are Soaring

Wednesday, November 25, 2015

A Message to Honest Ann

Ann, you already have the answers. I know that from previous posts of yours.
As I mentioned earlier, your own survival is paramount. Start there and move forward.
Be guided by history and the wisdom of those who have come before you.
The neocons and banksters are not your immediate concern, until you make them that.
I cannot make my point any more straightforward than to suggest you strengthen your own position and improve your immediate surroundings. You alone, nor even all of the ZH loyalists, do not have the power to dethrone the current power structure.
Aim for your own structure, your own economy. Others are doing so, though not many. Consider yourself the vanguard of a new age, because THAT will set freedom in motion.
I can only ask that you ignore the PTB. We are all ultimately responsible for our own actions.
Act responsibly.
As an aside, I have found great wisdom and guidance from reading the works of people such as John Stuart Mill, Aristotle, and recently Sun Tzu's Art of War. There are copies online of the latter. I'd suggest Adam Smith's The Wealth of Nations, but I'm stuck at page 624. Seriously, nobody should entertain to discuss anything economical unless they've read the whole thing, so there it is. I, like you, are inadequate. There's nothing stopping us, save our own human frailties, from becomeing whole.

Tuesday, July 14, 2015

Wonder: Getting Past Greece, the Euro, Varoufakis, Travie McCoy and My Best Friends (BFFs)


It's a beautiful word. Maybe not as beautiful a word as White or Bird (It's a Wonderful Day... it's all right, go ahead and listen), but one should always be in wonder at the world -- if only because we DO NOT KNOW.

Events of recent weeks have left some - not many, and certainly not all - bewildered, confused, and wondering what is next to come. Life in Greece has become complicated because of their commitment to debt, and that is the only reason. Not politics, not currency, but only debt has enslaved the peoples of the southern European archipelago, and only because they continue to accept it as a constant, as a commitment, a purpose, an underlying principle of existence.

Long ago, in the days of Aristotle, Plato, Pythagoras and Socrates, Greece became the cradle of Western civilization and democracy. Culture flourished with fresh ideas. Freedom of speech, freedom of identity, freedom of thought found roots, grew, and prospered.

The secret of happiness is freedom. The secret of freedom is courage.

-- Thucydides

Today, as the European Central Bank (ECB) and the IMF divvy up the remnants of a once-great culture and country, there is no secret, no happiness, no freedom. The Greeks are slaves to money, to the Euro, to the US dollar, and that condition will not change because the Greeks themselves - and all of Europe - have lost their ways, their wills, their collective courage. The 20th and 21st centuries have been witness to the willful slavery of entire populations, a kind of "Stockholm Syndrome", in which vast swaths of people are overwhelmed by money, power, greed, corruption and debauchery. It has happened before - in Rome, in London, Berlin, Tokyo - but never before has it happened as quietly and easily as today.

Without will, people have nothing. The people of Greece have no will. Even their "courageous" vote to reject the demands of their creditors a week ago was directed, will-less and rhetorical. As we have seen since then, voting meant exactly nothing, as it always has, when the choices are bad, or worse. Greece chose "bad." By decree of the technocrats and debt-holders of the EU, they are to receive "worse."

Greece Matters.

Greece matters because it is our fate, our shared existence, our future. Anyone believing that "it can't happen here," or "Greece is contained" is a dunderhead, a dolt, a fool, or a psychopath bent on escapism. The woes of Greece will visit every shore. First Europe, then South America, Australia and New Zealand, Asia, and eventually, North America. Canadians may be spared the worst of it, especially those in the hinterlands, but come it must, devour assets it must, devalue life it must. Greece is coming home to you, and me, and yours.

Not wanting to sound depressing or disheartening, but only realistic, this prose offers comfort to those who take heed. Not all is evil. There is good in the world. Life in the United States of America, for instance, has neve been more prosperous, full and enjoyable. If not for odious debt, the USA would be paradise on earth. But it is the odious debt, all $18 trillion on the official books and the countless billions in loose, unfunded liabilities such as Social Security and Medicare, that threatens with slavery of the masses. The rich will escape, virtually unharmed, The middle class will be skimmed, as always, without protection. The poor will suffer.

Central banks, which control the capital, have offered solutions. BUY STOCKS. WITH BOTH HANDS. Since March of 2009, Money Daily has been right to some degree, but wrong on a large account, decrying stocks as risky, unsound, unfair, unfulfilling, and dangerous.

Stocks, verily, the riskiest of them all, have never been more wildly valued, but they also have never been more protected than today. An article by John Hussman, here, spells out the current conditions for investment opportunities in lurid detail. While Greece may, and likely, will, get a haircut proportional to that of former Finance Minister Yanis Varoufakis (a complete sellout and traitor to the people of Greece), the remainder of the world does not have to suffer a similar fate.

One only has to play along with the monetary authorities and the central banks for a time, and then... release. Such an investment strategy will require a heavy doses of discipline, and certain timing, which is why most will not even try, and many of those who do will try and fail, and fail, and fail.

The lucky, the daring, the living, and the brave will survive, and prosper, but only if they act boldly, with the conviction in their heart that all is fleeting, money is worthless, and hard assets are still worth having. The single most important asset one can hold, now, and generally, throughout history, is LAND. Real Estate. It's called that because it is REAL and it is an ESTATE asset. The only liability to owning real estate is taxation, which is why the choice of purchase should be well considered, and, beyond living quarters, consist of raw acreage.

Silver and gold one can hold in one's hand, but they cannot produce a single carrot, potato, bean or spinach.

It would also be wise to have good friendships, and to nurture them, cherish them, and honor them. Good friendships will outlast all manners of currency or money, bring more joy and happiness than blood relationships, and sponsor more spiritual wealth than all the gold that even King Midas could conjure.

Good friendship is why I write, why I live, why I try to spread some wisdom, if there is any to be spread.

I have three friends. Two are dogs. The other... I leave to the imagination of the reader.

Go now. Buy stocks, and prosper. Even better, play options or bet on horses. Use massive leverage if it is available. If you lose, you can blame me, because I don't actually care. I will only be here a short while. Besides, there are countless methods for recovery. The central bankers have made it as easy as a day at the beach.

I urge everyone to become self-sufficient. Some solar power and a garden are requisite to peace and happiness.

Thursday, June 25, 2015

The Buy More, Pay More Non-Economy of Oversupply

Rampant stupidity.

Cars and trucks are not the only commodity that is in oversupply.

Went to the local grocery the other day and wanted one of those "salad in a bag" deals. Sign said, "Buy 1 get 2 free." Since I am single, and camping for the summer, one bag is all I needed and the other two would likely go bad within days. Price for the "deal" was $3.89. These bags normally go for $1.25-1.50 each, so no big deal.

Went to the manager and complained. Ended up buying one bag for $1.30, but, but, but, I had to sign a non-disclosure statement and produce my driver's license. Additionally, I was banned from ever shopping in the store ever again upon threat of death or incarceration.

OK, everything after the $1.30 in that last sentence is there for pure entertainment value, but I did have to check out at the customer service desk and received an undeniable, disparaging glare from the store manager (owner). The twithead didn't even have the cajones to introduce himself or talk to me; just a mean stare, as if to say, "you're not supposed to be smart or question our pricing policies."

My take is that the new brand of "Shure-fine" salad bags which replaced the "Dole" bags are in severe oversupply and the store is wishing to unload them ASAP because they don't keep longer than a few days before spoiling. Trouble is, we're deep in farm country here and every other house has a garden and probably are producing more than enough of their own lettuce and vegetables.

So, oversupply from the good folks at Monsnto, Cargill, et. al., and "no salad for you" unless you buy lots of it.

Oversupply is "the" problem of the 2010s. We are in year six or eight of a 15-18-year depression and it's likely to get worse before it gets better.

In 2012, I said I'd wait until silver hit $17 to buy more. Acutally waited until it hit $15. My next purchase will be at $12, then maybe $6, when the bottom falls completely out of the oversupplied commodity market.

In Ameri-whoopie-i-o-yah-Ka, at least, we have too much of everything except common sense (h/t to Mencken).

The soon-to-be-rammed-down-our-throats-job-killing TPP will accelerate the process of bringing American wages in line with the rest of the planet. Cops, politicians, bankers and schoolteachers will be wealthy in coming years, but as many begin to retire, the defaults on pensions will also accelerate.

Can't fix stupid and can't beat math. A rigid dichotomy, for sure.

All the best. Eat well, live well, die hard.

Editor's Note: Fearless Rick has been and continues to spend the summer months camping at a secret location (Sodus, NY) and will be posting irregular snippets about life in farm country.

Friday, June 5, 2015

At Belmont, American Pharoah Faces Serious Challenges in Quest for Triple Crown

American Pharoah looks a likely winner in the Belmont Stakes on Saturday, but he’s impossible to bet flat at 3-to-5 odds.

Main challenges come from a trio of horses he has met and defeated in the past. The Baffert trainee will be hard-pressed and jockey Victor Espinosa will have to use all the guile and skills of his exceptional riding career to win the first triple crown of American racing in 37 years.

The eight-horse field consists of six who contended in the Kentucky Derby, won by American Pharoah with a stalking trip and furious stretch run to defeat Firing Line, whose handlers chose to pass on the Belmont after being thoroughly thrashed in the washed-out slop that was the Preakness, finishing half the stretch back, seventh in the eight-horse field.

Of Saturday’s contending field, only Tale of Verve (a deep-closing second in the Preakness, but never a threat to front-running Pharoah) and Madefromlucky were not in the Derby. Tale of Verve’s stunning second was likely doe to the sloppy track and the futile running styles of the other entrants. He should not be close in the Belmont and is not considered a strong contender. Fourth place could be in the cards for him, but no better. Tale of Verve is also the only horse other than American Pharaoh to emerge from the Preakness, suggesting that the connections of the other ponies from that race feel overmatched here.

The other non-Derby entrant, Madefromlucky, has a shot at defeating American Pharoah, though the latter bettered him twice at Oaklawn Park. Pharaoh won the Rebel Stakes and Arkansas Derby in succession. Madefromlucky was a close second in the Rebel, and followed with a fourth-place finish in the Arkansas Derby.

However, Madefromlucky skipped the first two legs of the Triple Crown races, opting for the Peter Pan on May 9th. He won that race in a five-horse field, sitting off the pace and finishing in a gallop to win by a driving length. Incidentally, Madefromlucky earned a Beyer speed figure of 94, the sixth-straight improving Beyer in his racing campaign. The horse needs a good pace scenario, but is maturing gradually, and should be at the top of his game with nearly a month off since his last encounter on the track. Additionally, he owns a win over the surface (the Peter Pan), which suggests that trainer Todd Pletcher has had him pointed for just this upset scenario.

Another horse that should be of concern to American Pharaoh’s quest for the Triple Crown is Frosted, the Kiaran McLaughlin trained stallion that finished fourth in the Derby, but was closing with a flourish. Frosted skipped the Preakness, giving him extra time off to relish the extra distance of the 1 1/2 mile Belmont Stakes. His breeding - by Tapit from Fast Cookie - suggests he will devour the distance and pose a major threat to American Pharoah, himself no slouch in the breeding department, especially with the presence of the grand sire, Pioneer of the Nile on the stud side.

Another possibility arises in Materiality, who will break from the outermost post, often an advantage to an early speed type such as he is. Materiality finished a disappointing sixth in the Derby, skipped the Preakness and shows up here as a main pace threat. Considering that he too is trained by Pletcher, expect jockey John Velazquez to press Pharoah early, setting up a hard stretch rally from Madefromlucky.

Pletcher, who is about as consistent a winner as can be found in the training ranks on the New York circuit. has his two main riders in Velazquez and Javier Castellano, who will be aboard Madeforlucky. Considering that Castellano has been Pletcher’s go-to guy the past few seasons, the tactics are about as obvious as they can get. Press Pharoah early and beat him late with a perfectly-coordinated pair that might as well be racing as an entry. Seeing both of them in the top three would be a fantastic finish, but Madefromlucky finishing a nose, a head, or even a few lengths ahead of American Pharaoh is a distinct possibility.

Of course, man’s best-laid plans after result in surprises from other sources, which is why Frosted looms a large threat here.

The 147th running of the Belmont Stakes should be an exciting event, whether American Pharoah ends the Triple Crown drought (last achieved by the great Affirmed in 1978 - I was there) or another hopeful fails in the ultimate test for three-year-olds.

The play is pretty straightforward, using American Pharoah on all exotic tickets except for radical savers in the unlikely event he is thoroughly trashed by a wicked pace or some other riding misfortune.

Here are the suggestions with running numbers:
Madefromlucky (3)
American Pharoah (5)
Frosted (6)
Materiality (8)

5 over 3, 6, 8
3, 6, 8 over 5
3, 6, 8 boxed.

5 / 3, 6, 8 / 3, 6, 8
3, 6, 8 / 5 / 3, 6, 8
3, 6, 8 / 3, 6, 8 / 5
3, 6, 8

I don’t like to spread it out too far in small fields and a few of those in the field, notably (1) Mubtaahij, (4) Frammento, and (7) Keen Ice appear outclassed by the remainder of the field.

My advice, as always, is, win or lose, live it up. Spend more on booze and fun than you bet on the race. At least that way you’ve got something to remember (or forget… or regret) other than a handful of torn up tickets and a hole indoor wallet.

Monday, May 4, 2015

FOMC (in)Action Does Nothing for Wall Street; 1Q GDP Weak

Apologies again for the brevity of this missive. We are currently under severe time restraints, though the thought of a more regular schedule appears for next week. -Editor

The week can be summed up as "much ado about nothing," as the FOMC again held the federal fund rate at near-zero and stocks were more or less unresponsive over the course of the week.

A preliminary reading of first quarter GDP showed the economy nearly slipping into recession, growing at a rate of just 0.2% for the first three months of 2015. The outlier was a three percent inventory build, without which the number would have been negative. Naturally, naysayers on the economy contend that the recession for the US economy never ended after 2009, and that the United States has been mired in a deep depression since the implosion of the financial system back in the fall of 2008 and that only extreme dosages of liquidity supplied by the central bankers of the world have saves us all from misery.

Wall Street continues to hum along with record amounts of stock buybacks buoying share prices for many firms, with growth and capital expenditures now becoming things of the past.

The first three days of trading were somewhat lackluster, followed by a huge downdraft on Thursday and a dead-cat monster bounce-back on Friday, which kept the major indices from outright implosion. Analysts are keeping a keen eye on the German DAX, which is coming close to correction territory.

The NASDAQ was the worst-performer, dropping nearly two percent as biotechs imploded and speculative money was coming off the table at a rapid rate.

For the week ending May 1:

Dow: 18.024.06, -56.08 (-0.31)
S&P 500: 2,108.29, -9.40 (-0.44)
NASDAQ: 5,005.39, -86.69 (-1.70)

Monday, April 27, 2015

NASDAQ Breaks Out in w/e April 24, 2015

Not much to report in terms of market activity, except that all the major averages were higher for the week, though remaining in a very tight range that has persisted since the first week of February.

The Dow Jones Industrials have vacillated between roughly 17,600 and the high of 18,288 (about a 700-point spread) for 11 weeks running, generating plenty of noise, but nothing substantial upon which to base future market-turning events.

Thus, the ongoing view is rather cool and contained, the bulls mostly winning the war, what with the Fed's continued blabbering over interest rates. Current outlook is for the Fed to keep rates at the zero-bound for as far as the eye can see, which would be until next year, maybe.

Sustained weakness in the US and global economies has kept a lid on any proposed rate hikes. Meanwhile, most of the stronger economies of Europe (an oxymoron if ever there was one) have fallen prey to negative rates and renewed fears of either a Greek exit from the EU (Grexit) and/or fears and outright signs of deflation.

Oil prices ramped back up to their highest levels in four months, dragging fuel prices at the gas pump higher, all occurring amid a record growth of reserves. The oil market is not - like most markets around the world - free from price-fixing and mauling by major manipulators.

For the week, the Dow gained 253.84 (1.42%); the S&P added 36.51 (1.75%); and, the NASDAQ popped 160.27 points (3.25%), breaking through to new closing highs not seen in 15 years (5092.08). Clearly, the real money is being made in momentum plays and the NAZ is where they are.

Irrational? We give you exuberance and euphoria.

Sunday, April 19, 2015

Financial Recap for w/e 4/17/15: Friday's China Fears Stun Markets

The week can be summarized succinctly as four normal days followed by a bummer of a Friday, which took back all of the week's gains and then some when it became obvious to anyone and everyone that China might not be the raging dynamo of capitalism once thought.

With a drop on the Dow of nearly 300 points, Friday's whiplash took the DJIA back to break-even for the year and ended the week with the Industrials off 231.35 (1.28%). The remainder of the week was mostly mundane, with the average down Monday, up Tuesday and finally into positive territory on Wednesday. Thursday was flat.

Following a pattern similar to that of the Dow, the S&P 500 also lost steam, down 20.88 (0.99) for the week, a loss not nearly as dramatic as the Blue Chips. However, the S&P ended up less than one percent on the year, a condition which central planners and fund managers are finding unpleasant and unprofitable.

Nearly four full months into the new year, investors are still searching for a catalyst beyond the usual dramatics from the Federal Reserve to move markets higher. Considering the poor performance out of China and the rest of the EM, the catastrophic condition that is the European Union, and the general negative tone of US macro data, in deference to the usual "recovery" noise, a very good argument for profit-taking has appeared.

The NASDAQ suffered a similar fate, gapping lower on Friday to post a massive 76-point decline for the day. On the week, the NASDAQ was lower by 64.25 points (1.28%), equaling the DJIA as the worst percentage performer.

Beyond the aforementioned wall of worries, what has markets particularly off-balance are comments from a variety of Federal Reserve officials, some which are for a rate increase ASAP, while others seem to have reversed course and favor the wait-and-see approach, which is wearing thin on all fronts. Clarity does not serve the Federal Reserve well at this juncture - indeed, maybe not at any time - as market reaction is exceedingly swift to judge.

The constant din of jawboning from current and former Fed officials has provided market participants with a kind of backstop mechanism, one which has successfully prevented an outright bubble in stocks (a debatable point) and, at the same time, limiting any downside action to less-than-correction levels.

As stocks have not seen a significant retreat since the summer of 2011 - and even that was mild and short-lived - the argument for a correction of ten percent or more has its followers, though bearish thoughts have been effectively eviscerated by the Fed and its hyperactive role in the market.

With a June rate increase now seen as nearly off the table, the view is that September will be the most opportune time for the Fed to act to raise the federal fund rate off the zero bound, though many voices are already saying that 2016 or beyond will be the date at which the "renormalization" process takes flight.

With central banks and, especially, the Fed, so deeply ingrained in equity and bond markets, it has become difficult, if not entirely impossible, to accurately predict future market movements.

Perhaps this is a condition with which markets should be desirous. Complacency and indecision might turn out to be the best weapons against deflation and outright recession. Lessons learned from past experience are no longer helpful as the global economy has never been so utterly and consistently commanded, contrived and controlled. Eventually, one would suspect a shakeout. As usual, getting the timing right is a paramount consideration, though the recent activities of markets and central banks has left all participants scratching for solutions.

Friday, April 10, 2015

Weekly Recap for W/E April 10, 2015: Economy Weak, Stocks Leap

Stocks and bonds have gotten to a point which indicate there won't be a rate increase to the Federal Reserve's most basic federal funds rate until at least September of this year and quite probably, beyond that.

Dependent upon data flows to determine whether the economy (or more specifically, the stock market and the 1% of the population that owns them) is strong and durable enough to withstand raising rates from the zero-bound to something higher, say, 0.25 percent or, as some have cynically put forth, 0.125 percent.

Data has been daunting to the Fed. Industrial production, durable goods and advance figures on first quarter GDP have all been short of expectations, adding to the pain which last week's March non-farm payroll figures presented. Of course, stocks, which have become the only game in town, loved the weak numbers, because it puts any thought of a rate increase on a semi-permanent hold, meaning free-or-nearly-free money and credit, with which it is an easy task to invest and make money.

So, we have the twisted dynamic of bad news on the economy being nothing but champagne and rose for players of stocks, and that was well reflected in this week's trading, with all the indices heading back toward all-time highs. This followed a brief respite in March, as speculators nervously sold out of equities, thinking that the Fed might increase rates in June.

The NFP data crushed that line of thinking, and sent stocks off like rockets this week, concluding with Friday's nifty rise, sending the Dow back over 18,000 once again and the NASDAQ within shouting distance of the magical 5,000 mark. The final day of trading for the week was bolstered by an announcement from General Electric (GE), stating that the company would sell nearly all of its GE Capital financing unit and real estate holdings (about $23 billion) to Blackstone and Wells-Fargo, two companies, which over the past seven years since the housing bust, have become the nation's new landlords. GE put forward a plan to repurchase some $50 billion worth of its own shares over the next three years.

Timing of the deal isn't very curious at all. GE has been stock in a range for the past fifteen years, and, with interest rates such a challenge by which to make profits, CEO Jeff Imelt and his executive team probably felt it was due time to return to its industrial roots. It does set precedent, however, by selling such a large chunk of real estate and real estate financing assets to companies that are already heavily entrenched in the sector, putting an exclamation point at the end of the boom-gone-bust that is damning to capitalism and competition.

GE's buyback provisions will not be put to scrutiny. Wall Street loves dilution, making shares more valuable to the fewer who hold them. With a market cap of nearly $298 billion, GE had room to maneuver, but the key question remains, by lopping off more than a quarter of its asset base, is the company going to generate better returns?

It's already at nosebleed levels, with a P/E of 19 and an annual divided of 0.92, meaning it will take the plunger who invests in the stock today nearly 31 years to double his/her money on the dividend alone. That's a long time, and, with arduous risk implanted.

Nonetheless, stock junkies loved the deal, boosting shares of GE by nearly 11% on the day and making the Dow the percentage winner among major indices.

For the week the Dow Industrials jumped 294.41 points (1.66%); the S&P added 35.10 (1.70%) and the NASDAQ was the big winner for the week, gaining 109.04 points (2.23%).

On the day:
Dow 18,057.65, +98.92 (0.55%)
S&P 500 2,102.06, +10.88 (0.52%)
NASDAQ 4,995.98, +21.41 (0.43%)

Editor's note: Due to unforeseen circumstances and largely, common sense, Money Daily will soon be converting to a weekly format - with the occasional daily post thrown in on major news developments - to present a more robust and well-reasoned approach to our readers. The daily noise and rigid schedule has made it difficult to offer a cogent, thought-provoking view, which is our purpose. In coming weeks, readers should be advised to seek out the weekly recaps, published on Friday evenings, or, more likely, Saturday afternoons.

Tuesday, April 7, 2015

Turnaround Tuesday Displays Classic Bear Market Pattern

Up strong at the open and down on the day was how all the major indices took in Tuesday, a massive reversal beginning around 2:45 sent the Dow, NASDAQ and S&P into negative territory, calling into play one of the more obvious chart patterns, based mostly on rumors and fear.

The idea that WTI crude can continue to levitate above $50 per barrel for long is a rigger's pipe-dream and the kind of speculative plays that have been in play on the crude front seem ill-advised and doomed for failure.

In the dim afterglow of Friday's non-farm payroll disaster and the general under-performance of macro data for most of the year so far, stocks aren't looking exactly like the sure bet they've been the past six years running. The pattern, seen today, of a high rise at the open only to be finished off with unbridled selling pressure into the close would lead even the most bullish players searching for answers.

If the US economy is really on its knees - a view taking on more and more supporters - there is no turning back for most of the gamblers and speculators who have driven equities close to all-time highs. What may be even more puzzling, or troubling, is the fact that the major indices have fallen and flat-lined since their record closes in late February, and April hasn't provided any catalysts to send stocks back to those lofty levels.

That there is a creeping sentiment of FUD (fear, uncertainty, doubt) in the market should not come as a surprise. Most of the S&P 500 has been treading water in terms of real earnings, their EPS growth fueled by massive buybacks instead of capital investments, growth and taking market share, except in exceptional circumstances.

Today's action could be nothing more than advanced day-trading by pure speculators. Then again, we've been saying something is seriously wrong for months now, and yet, the markets have maintained an aura of invincibility.

Monday, April 6, 2015

Exceedingly Poor Jobs Data Sends Stocks Soaring (the new normal)

Sometimes, it's just all too predictable.

When I saw the March jobs number on Friday, and the futures plunging, because, you know, 135,000 net new jobs in the US was about half of what was expected from the goal-seeking BLS.

Revisions to January and February cast an even more dismal pallor over the market, which, gratefully, was closed on Friday.

By Monday morning, stock futures were still in the doldrums and the Dow opened to an immediate loss of over 100 points, but the decline was soon to be erased by the "bad news is good news" crowd and voices from the Fed singing in united, dovish tones, to the tune of ZIRP 4 EVA.

Yep, like I had thought on Friday, a winning day for stocks. Meanwhile the US economy collapses like a house of cards in a wind storm.

Is there no end to this nightmare of a centrally-planned global economy? (Please, don't answer that.)

Dow 17,880.85, +117.61 (0.66%)
S&P 500 2,080.62, +13.66 (0.66%)
NASDAQ 4,917.32, +30.38 (0.62%)

Thursday, April 2, 2015

Stock Indices Displaying the New Minimalism

If not for the power of levitating algos, stocks would have ended the week with losses.

As it is, the major indices end the week (markets closed on Good Friday) with minuscule gains on puny volume, except for the NASDAQ, which actually finished negative for the fourth week in the past five.

Here's how the week shook out:

Dow Ind. +50.58 (0.29)
S&P 500 +5.94 (0.29)
NASDAQ -4.28 (0.09)

... and on the day:
Dow 17,763.24. +65.06 (0.37%)
S&P 500 2,066.96, +7.27 (0.35%)
NASDAQ 4,886.94, +6.71 (0.14%)

For this, we need not one (CNBC), not two (Bloomberg TV), but three (Fox Business) cable networks devoted to stocks?

It would be worthwhile, one supposes, if even one of them told the truth about Wall Street half the time.

These public markets and the networks devoted to coverage of them, are epic fails. The world is rapidly moving beyond their facile facades of importance and heft. Most of the world's population does not own stocks and has no use for massive, unfair, unfeeling corporations and their oligarch-like executives.

Indeed, would half of the Fortune 500 companies in the world fail, markets would clear and more entrepreneurs would take up the slack, having the chance to make an honest living.

Corporations, like the governments which support them, are leeches which prey upon the blood of individuals and communities. The sooner people wake up to the fact that they are strip-mining operations of productive capacity, the better.

Peace. Out.

Wednesday, April 1, 2015

April's Fools: Stocks Continue Slide

As noted yesterday, something is not quite right about the US equity markets, and, whatever it is, it's starting to get the attention of the investor class, or, at least the computer algos that make the trades for the investor class.

Stocks continued the slide begun on Tuesday, which already sent the Dow Industrials to negative on the year and is threateneing to do the same for the NASDAQ and S&P 500.

Main among culprits leading to displeasure with stocks is the disconnect between the real economy and the Wall Street economy. In the real economy, people have to make choices, every day, hour by hour, minute by minute, and those choices, magnified by the 300+ million Americans become what are known as statistics. These statistics are not, and have not, jibed with the "recovery" mantra so popular with the government and Wall Street crowd, the one which claims everybody is working and nobody is hurting, when in fact, major segments of the population are suffering from the strains of a controlled and contrived economy that favors only a small slice of very wealthy individuals.

By age group, it goes something like this: teens and college-age individuals can't find decent jobs in many places, and, while college students, generally, as a group, are not working, teens and those in their early 20s are finding the pickings pretty slim and opportunity for advancement a challenge. Wages are low, the work is monotonous or dreary, the bosses are boot-licking jack-asses and the fringe benefits are - in general terms - nil, as in, NONE.

College students, once they graduate, if they are fortunate enough to find gainful employment, are often up to their ears in student loan debt, the average being $27,000 for a four-year degree. Many are not finding work that pays well enough to pay off the loans, rent an apartment and live like a normal human, so many of these twenty-somethings are habitating in parents' basements, smoking herb and playing video games in between their postings on insta-chat or twitter-face or whatever the app du jour happens to be.

Then there are those who used to be known as middle class, the folks in their 30s, 40s and early 50s, with or without kids at home or away or actually grown, drowned in debt from auto loans, living in underwater homes they cannot sell, and denied any upward mobility because they are linked to the national ball-and-chain known as a credit score. Some are doing OK, but the hours are long, the taxes never stop and keep going higher, and maintaining an outward appearance of peace and civility is becoming harder and harder.

Following after them are the soon-to-be-retired baby boomers, who hope that the stock market doesn't crash, who long to be soon done with working seemingly forever for less then they're worth, who are told to spend rather than save, and who don't see the point of saving since interest rates are so low, it's simply not worth the effort. Every day, something else annoys them a little bit. A higher price for a staple item, or, what's even more common, less of the same item for the same price. Or a new tax, a new law, some absurd thing like "freedom of religion" or "anti-this-or-that" legislation.

Seniors, those above and beyond the age of 65, are trying to hang on, if at all, with social security and a medical plan they neither appreciate nor understand. Co-pays keep rising, the quality of care declines. Their savings are stuck in neutral, thanks to the Fed's wisdom of keeping interest rates at zero for the past seven years. They're slowly bleeding to death from places they didn't know they had.

Amidst all of the age groups are sub-groups, like small business owners, buried under government paperwork and besiged by regulations and onerous taxes, and, what's become known as the FSA (Free S--t Army), the legions of welfare and disability sufferers who live beneath the general strata of society, seeking nothing more than a monthly rent check, food stamps, an Obamaphone and free health care. Those, and a flat-screen TV covers the extent of their pretty-much worthless lives.

Of course, we have the useful idiots who work for government and its myriad levels: teachers, police, paper-shufflers or all kinds, getting fat on the public expense account, oblivious to the plight of their fellow citizens in the real world economy. These types retire after 20 or 30 years of wasteful spending of taxpayer money, just to waste even more with their lavish pensions.

Striding atop all of these folks are the politicians and financiers of Washington and Wall Street, and state capitols and in municipal government positions.

And they're no longer laughing. At least some of them aren't. They know, that but for the grace of these hordes of individuals suffering under tax slavery and monetary repression, they and their ilk would be hung, burned or somehow disenfranchised. They can only hope to keep the game going another day, another week, another year, another election, because when it ends, they have no skills by which they could fend for themselves. They would be set adrift into a seas of unhappiness and misery, like the rest of the population.

If they're not worried, they should be, because this system is ripping and tearing at the seams, because it is unsustainable. There's only so much fraud and so much money out of thin air that can cover up the obvious defects.

But, give the oligarchs, politicians and financial whiz-kids their due. They've kept the system alive longer than anyone could have expected them to, all the time since March of 2009. Six years is not a long time, but 10 is, and 15 is longer, and there's little doubt there will be changes - for which we all are mutually unprepared - to come.

Dow 17,698.18, -77.94 (-0.44%)
S&P 500 2,059.69, -8.20 (-0.40%)
NASDAQ 4,880.23, -20.66 (-0.42%)