Showing posts with label Plunge Protection Team. Show all posts
Showing posts with label Plunge Protection Team. Show all posts

Monday, January 7, 2019

Volatility Tamped Down By PPT A Probable Cause For Monday's Dullness

Chip stocks (NVDA, ADM) led the big gain on the NASDAQ, but the session overall was lackluster, with a dip at the open and a weak close.

Investors are still unconvinced the volatility of the past few months has abated. Today felt more like a temporary reprieve rather than a new paradigm. There's also the very good possibility that the Plunge Protection Team (PPT) is still active, especially considering the quick turnaround this morning. It was classic insider action, like hitting sellers over the head with a sledgehammer.

The PPT has absolutely no subtlety about it which makes their intrusions somewhat obvious, as has always been the case, even back in the days when people thought they were a myth or some kind of financial urban legend. As it turned out, the PPT was always a real thing, and a threat to fair, unmolested, open markets. Now that they've been out in the open for at least a decade, not much is left to the imagination. US markets - and, likely, almost every other market in the world - have been highly manipulated by central banks and governments working in cahoots and that's unlikely to end soon.

With friends like these in markets and the preponderance of investments in stocks, investing today is riskier than it has ever been. Who wants to play in a casino knowing that the dealer has the ability to cheat at any time? As unsuitable as it is for large money players to intervene at times of crisis, it's even worse when they do so at the drop of a hat, or, as the case may be, a few thousand points on the Dow.

It's not pleasant to witness wild swings in entire indices on a regular basis, which is why so many individual investors are so jaded. They know their money is at extreme risk all the time. There has to be a better way, and there used to be, prior to the financialization era we currently are enduring, before everything from mom's mortgage to pizza stocks are part and parcel of every fund's basic needs.

The trouble with markets today are the real probability that in the case of an extended bear market, the entire global financial system would simply implode. It keeps more than just a few heads at the IMF, BIS, and the Fed from sleeping well at night.

Dow Jones Industrial Average January Scorecard:

Date Close Gain/Loss Cum. G/L
1/2/19 23,346.24 +18.78 +18.78
1/3/19 22,686.22 -660.02 -641.24
1/4/19 23,433.16 +746.94 +105.70
1/7/19 23,531.35 +98.19 +203.89

At the Close, Monday, January 7, 2019:
Dow Jones Industrial Average: 23,531.35, +98.19 (+0.42%)
NASDAQ: 6,823.47, +84.61 (+1.26%)
S&P 500: 2,549.69, +17.75 (+0.70%)
NYSE Composite: 11,605.96, +72.62 (+0.63)

Thursday, December 27, 2018

The Market Giveth, The Market Taketh Away, And Giveth Again

Stocks went on a wild ride Thursday, a phenomenon confounding to novice investors but completely understood by market observers who have been in the game for a few decades or more.

There's little doubt that the Dow's plunge of 600 points and last-hour rally were the work of the Plunge Protection Team, or PPT, or as they are formally known, the President's Working Group on Financial Markets.

Here are a few links for reference:

Mnuchin Calls Plunge Protection Team; Stocks Soar One Day Later

President's Working Group on Financial Markets

Happy Holidays!

You've been played.

Dow Jones Industrial Average December Scorecard:

Date Close Gain/Loss Cum. G/L
12/3/18 25,826.43 +287.97 +287.97
12/4/18 25,027.07 -799.36 -511.39
12/6/18 24,947.67 -79.40 -590.79
12/7/18 24,388.95 -558.72 -1149.51
12/10/18 24,423.26 +34.31 -1115.20
12/11/18 24,370.24 -53.02 -1168.22
12/12/18 24,527.27 +157.03 -1011.19
12/13/18 24,597.38 +70.11 -941.08
12/14/18 24,100.51 -496.87 -1437.95
12/17/18 23,592.98 -507.53 -1945.58
12/18/18 23,675.64 +82.66 -1862.92
12/19/18 23,323.66 -351.98 -2214.90
12/20/18 22,859.60 -464.06 -2678.96
12/21/18 22,445.37 -414.23 -3093.19
12/24/18 21,792.20 -653.17 -3746.36
12/26/18 22,878.45 +1086.25 -2660.11
12/27/18 23,138.82 +260.37 -2399.74

At the Close, Thursday, December 27, 2018:
Dow Jones Industrial Average: 23,138.82, +260.37 (+1.14%)
NASDAQ: 6,579.49, +25.14 (+0.38%)
S&P 500: 2,488.83, +21.13 (+0.86%)
NYSE Composite: 11,285.31, +81.22 (+0.72%)

Wednesday, May 24, 2017

Stocks Rage into the Close; PPT Mentioned on CNBC

Good stuff on Zero Hedge, when Asher Edelman brought up the PPT (Plunge Protection Team) on CNBC's "Fast Money."

People really don't mention the Plunge Protection Team much anymore, ever since the Fed and their central bank cohorts began their financial asset buying spree in 2009. The Fed money-printing machine puts the PPT (otherwise known as the President's Working Group on Financial Markets) to shame.

The Federal Reserve added liquidity to markets by directly intervening through outright asset purchases of mortgage-backed securities and treasury bills and notes. Known as Qualitative Easing (QE), those in the know simply call it "money printing" or "creating money out of thin air." Both are correct, and, despite all the best intents of Keynesian economics, those actions are supposed to create inflation, which has occurred in stocks, housing and elsewhere, but not in the many and varied consumer staples and discretionary items.

Most consumer prices (and incomes) have somewhat stagnated since the Great Financial Crisis of 2008-09, and, with the Fed threatening another rate increase in June, they probably won't be moving soon. The dislocations in the housing market and the massive transfer of wealth from the poor and middle classes to the very rich, however, have been direct results of Fed action.

So, it's somewhat funny that the commentator would single out the PPT, though he's probably spot on in his general assessment. The bigger issue would be the almost total control of the equity markets by key players, notably, central banks and large commercial firms, i.e., Goldman Sachs, Morgan Stanley, et. al.

Whatever method was in play today, it certainly worked wonders as stocks levitated after 2:00 pm ET into the close.

At The Close, 5/24/17:
Dow: 21,012.42, +74.51 (0.36%)
NASDAQ: 6,163.02, +24.31 (0.40%)
S&P 500: 2,404.39, +5.97 (0.25%)
NYSE Composite: 11,621.23, +16.61 (0.14%)

Monday, January 11, 2016

Perception Trumps Reality and Why You Should Not Trade Stocks

A large part of investing consists of paying attention to details. It's not enough to know what a certain company or industry is experiencing over a short-term basis, but to examine the details and to put those details into historic perspective.

It is in this light that today's presentation will advise anyone and everyone to distrust the mainstream media reports of the economy in general, and often, even the specific.

Back in the early portion of this century, word began circulating about a mysterious group called the Plunge Protection Team (PPT for short), which had the extraordinary power of pulling the entire equity market out of a crash, thus restoring confidence to traders and investors.

For a long time, people who believed that the PPT existed at all and was causing the wild fluctuations seen in the summer of 2001 and 2002, were dismissed as conspiracy nuts and tin-foil hat wearers. However, the PPT had been exposed beforehand, and it was indeed real. Its true name was the Working Group on Financial Markets, and it was created via an executive order 12631, signed on March 18, 1988 by US President Ronald Reagan, largely in response to the market turmoil that resulted in a 22% drop on October 19, 1987.

The PPT is real, though current manipulators may not exactly match the same original cast of characters, there is still a shadowy group of government people making sure the equity markets don't crash, or, at the very least, they enter the market to manifest a desired outcome.

Just in case you still don't believe in the power of the PPT, or that the market can be massively manipulated on a short-term (leading to long-term) basis, consider that today from 3:17 to 3:38 pm ET, a span of a mere 21 minutes, the Dow Jones Industrials jumped from 16,261.93 to 16.444.04. That's 182.11 points, a number that would be exceptional (a better than 1% gain) for an entire session.

Thus, the Dow - and along with it, the S&P and NASDAQ - went from near the day's lows to modestly positive, nearing the close of the session. These heady days, as perception exceeds reality by a longshot, that result will be precisely ONLY what the mainstream media reports. Not that markets were in turmoil and extending losses from last week, or, that market conviction suddenly changed dramatically, but ONLY that stocks were up on the day. All is well. Nothing to see here. Move along.

That there are government entities meddling in what used to be fair, honest and open markets should be enough to discourage just about any thinking person to not only abhor the practice of manipulation, but to remove themselves and their money from the fraud that is Wall Street, because, if government operators can make the market go up, they have an equal power to make it go down, or up-then-down or whatever they wish it to be.

In essence, stock markets are not fair and open and free anymore, and haven't been for quite some time. Most stocks these days are wildly overvalued, and for good reason. The retirements of millions of Americans are tied to stocks. Not only that, but the entire economy of the planet is tethered, one way or another, to the US equity markets. There are sovereign wealth funds, trust funds, hedge funds, mutual funds and all other manner of funds, ETFs and investment vehicles that are inexorably tied to the success or failure of stocks.

Suppose there is a massive bear market in stocks, like we witnessed in 2000, and again in 2008. People panic. They sell. But that's old news. People don't move markets any more. Computers do, and those are controlled by the barons of Wall Street, the banks and brokerage firms.

Thus, the PPT does not have to exist at all anymore. There only needs to be a mechanism for all the main traders to move at once in the same direction, and that mechanism is probably already in place, has been used in the past, is being used presently and will be used in the future, either to make stocks cheaper (down) or more expensive (up). Either way, the trading firms will have the upper hand, advance notice and the blessing of the federal government.

US markets are not what they appear to be. For instance, they are much more thinly traded than ever, by fewer participants, many of whom are nefarious, criminal and immoral. Individual investors would likely be better off stuffing cash into a mattress, buying gold or silver, or trading comic books, baseball cards, Beanie Babies or other collectibles. Realistically, the collectible market is very robust and smart individuals can actually make a good living on places like eBay or Craigslist. The art market is also very good, especially for rarities.

Leave the stock market to professionals. If you like to gamble, try the lottery, the horses, or fantasy sports betting, because the Dow Jones Industrials, the S&P, the NASDAQ and the NYSE have become nothing more than sophisticated casinos, operating without gaming licenses, and the house always wins.

Always.

Today's closing quotes:
S&P 500: 1,923.67, +1.64 (0.09%)
Dow: 16,398.57, +52.12 (0.32%)
NASDAQ: 4,637.99, -5.64 (0.12%)


Crude Oil 31.31 -5.58% Gold 1,095.60 -0.21% EUR/USD 1.0855 -0.60% 10-Yr Bond 2.1580 +1.31% Corn 351.25 -1.61% Copper 1.97 -2.52% Silver 13.85 -0.49% Natural Gas 2.39 -3.16% Russell 2000 1,041.90 -0.41% VIX 24.30 -10.03% BATS 1000 20,518.11 -0.16% GBP/USD 1.4540 +0.22% USD/JPY 117.7050 +0.79%

Wednesday, March 7, 2012

Who Goosed the Stock Market? The PPT Did, That's Who

The more one endeavors to make sense of the movements of the major equity indices, the more one becomes convinced that there is major manipulation going on behind the scenes and today was just another prime example to throw into the conspiracy hopper.

While the Dow gained 78 points today, all of the gains were produced in roughly a one hour period, from 10:30 am to 11:30 am ET, on extremely light volume. The Dow moved from barely unchanged (12,760) to a gain of nearly eighty points (12,340), which just so happened to be roughly where it closed.

Did Greece's private debt holders agree to a deal at that hour? No.

Did ADP report a gain of 216,000 net private job gains for February. Sorry, that happened at 8:15 am, and the response was pretty muted.

So... let's see. Low volume (if today wasn't the lowest volume of the year, it was certainly close), stocks sliding back near unchanged right after a major selloff the previous session... like the calvary riding to the rescue in a cliche old time Western movie, the PPT - otherwise known as the Plunge Protection Team and officially known as the President's Working Group on Financial Markets has been hard at work ever since 1988, keeping US stock indices safe from free-falling collapses and lately, from even slight declines that might make the markets appear to be as weak as they really are and boosting stock prices when the trading activity all but dries up.

While Joe and Jane Sixpack reads just the headlines and understands nothing except, "honey, our retirement pension fund is up again!" out in the real world its endless money printing and insider stock manipulations that keep the American Dream alive and well.

It's become so blatant and obvious that it is rarely commented upon by even the most suspicious bloggers and underground financial writers. The mainstream press never mentions that the PPT has offices right in New York's financial district - the easier to send orders flying into the fray - or that said offices are owned by the NY Fed.

So, forget everything you just read and move along. You are not supposed to think, analyze or ask any questions. There's nothing to see here, or at least nothing you're supposed to see. In ten seconds your computer will automatically destroy this posting, and your brain will be wiped clean of the heretical commentary presented.

9...8...7...6...

Dow 12,837.33, +78.18 (0.61%)
NASDAQ 2,935.69, +25.37 (0.87%)
S&P 500 1,352.63, +9.27 (0.69%)
NYSE Composite 7,979.83, +59.69 (0.75%)
NASDAQ Volume 1,560,044,000
NYSE Volume 3,515,704,500
Combined NYSE & NASDAQ Advance - Decline: 4287-1316
Combined NYSE & NASDAQ New highs - New lows: 93-43
WTI crude oil: 106.16, +1.46
Gold: 1,683.90, +11.80
Silver: 33.58, +0.80

Monday, September 12, 2011

BUMMER: The Plunge Protection Team Is Back in Action!

The Markets

Let's face it. US equity and commodity markets are completely, irretrievably, unconscionably manipulated beyond any basic sense of fairness.

On the morning of the first trading day of the week, US equity scalpers were met with futures that forecast a dismal Monday. Every index in every foreign country was lower on the day. In Asia, the Hang Seng led the way with a loss of greater than 4%. European bourses, shattered for the better part of the past three months, were all lower, the French CAC-40 taking over from the German DAX in leading the way to oblivion with a 4% decline.

But here in America, we have advantages. We have Ben Bernanke, the brilliant, often uninspiring and always shaking Chairman of the Federal Reserve. We have Timothy Geithner, the diminutive (matching his brain power) Treasury Secretary who keeps a watchful eye over the nation's exploding debt.

And we have printing presses (actually, they've been replaced by computers) spitting out US dollars faster than a 9th Avenue hobo picks up pennies thrown his way.

More than anything else, however, we have the fabled Plunge Protection Team (PPT), aka the President's Working Group on Financial Markets created by President Reagan in the aftermath of the LTCM blowup in 1987.

According to Executive Order 12631, the "Working Group" was established explicitly in response to events in the financial markets surrounding October 19, 1987 ("Black Monday") to give recommendations for legislative and private sector solutions for "enhancing the integrity, efficiency, orderliness, and competitiveness of [United States] financial markets and maintaining investor confidence.

In other words, when the markets are crashing, the Working Group, or PPT, springs, like trained attack Dobermans, into action to rescue witless investors from parting with their increasingly worthless cash.

Today, the PPT got busy early on. Stocks were hammered at the open, in response to the rest of the world in a near panic over Greece potentially defaulting and European credit market spreads blowing out all over the place. Stocks were down huge in the opening minutes of trading, as an extension of Friday's selloff and the continuing global debt implosion. The fact that Greece will eventually default on a large portion of their debt and ungraciously remove itself from the Euro standard (back to the Drachma) is unimportant to the functioning of the PPT. They buy futures. They buy stocks. They buy whatever is falling fastest, which on Monday, was just about anything that had a ticker symbol.

The PPT doesn't always prompt rallies. Their normal function is to keep US indices from falling too far, too fast, like today, like about six times in the past three weeks, like about a thousand times since the dotcom crash of 2000. And today was no different. They kept he markets in a sane neighborhood, down somewhere between a half and one per cent, until, that is, all the lights turned green.

Around 2:30, the Financial Times, another overstuffed relic from the days of ink and newsprint, ran a story that China was interested in buying Italian bonds, many of which will go up for bid this week as the Italian government seeks to finance its long-standing tradition of turning investor dough into pasta salad, along with assorted mafia side dishes and Berlusconi desserts.

Since noodles are noodles, whether they're doused in marinara or lobster sauce, the nitwits on CNBC were led to believe that this was a great idea, and the markets turned from merely moribund to miraculously magnificent in the final hour-and-a-half of trading. The US wins again. All of the US indices ended the day in positive territory.

Now, some may cheer that the US government has investor's backs, but the stark reality is that the PPT is all that's left between regular day-to-day life and a most serious, full-blown market crash of stupefying proportions. The global economy is on its knees due to too much debt, too many goods and too many currencies trying vainly to devalue themselves. The entire affair is deflationary in the most absolute sense as goods and services become more and more worthless, while the relative value of the currencies which buy such goods plummets into an phalanx of money-crunching debt.

Ah, for the good old days of really free, open markets, like back in the sixties and seventies, when a stock could be worthwhile returning a reasonable four to five per cent dividend along with annualized growth of 15-20%. A quarter point here, a half point there. We were all invested and looking forward to a safe, sensible and sane retirement.

Nostalgia. It's what one gets when one sees the fruits of labor lavished on the already rich.

And by the way, the day should not pass without acknowledging that Jaime Dimon, CEO of JP Morgan Chase, thinks the Basel 3 rules requiring the largest banks, such as his, to hold 9.5% of tier one capital, are "un-American." Right. FU, Jaime. Is JPM the next bank to start selling off assets? Probably should, but probably won't. Hey, the world is an imperfect place, suitable for misfit rich kids like Jaime.

Dow 11,061.12, +68.99 (0.63%)
NASDAQ 2,495.09, +27.10 (1.10%)
S&P 500 1,162.27, +8.04 (0.70%)
NYSE Composite 7,047.12, +2.11 (0.03%)
NASDAQ Volume 1,994,098,375
NYSE Volume 5,034,112,500
Combined NYSE & NASDAQ Advance - Decline: 3178-3364
Combined NYSE & NASDAQ New highs - new lows: 19-514
WTI crude oil futures: 88.19, +0.95
Gold: 1815.80, -42.80
Silver: 40.29, -1.09


Astute readers will understand what it means when all the major indices are up, but the A-D line is negative and especially when the new highs - new lows are tilted so heavily in favor of the lows. For those who still need guidance, it's a con, a complete, total, 100% sham. That oil futures are up while gold and silver suffer heavy losses really cinches it.

Idea: Fresh out, though working hard on "Making a budget and sticking to it," and "Saving 10% of your income." More tomorrow.

Thursday, May 6, 2010

Major Market Madness as EU Faces an Abyss

Greece has exploded into near-anarchy. Most of Southern Europe is about to enter similar circumstances, as Italy, Spain and Portugal face the same kind of debt crisis that is sweeping the globe. Ireland and Iceland have already felt the wrath of economic unwinding and the panic doesn't stop at small-country borders.

The unprecedentedly-swift breakdown which occurred today on US stock markets is a symptom of a wider contagion, a currency, central bank, sovereign confidence crisis.

Around 2:00 pm, with stocks already suffering significant losses and live video of protesters being attacked by riot police in Athens airing worldwide, markets turned even more dire, doubling their losses in a matter of minutes. By 2:15, the wheels were off as the Dow fell from 250 points down to a 990-point loss in the blink of an eye. For about 10 minutes, markets were in freefall. Traders reported a near-complete capitulation, with buyers completely absent from the market in almost all stocks.

Once again, however, the slide was staunched by some heavy-handed trading in futures and the more-than-likely subterfuge of the major investment banks and their allies in crime, the government-approved President's Working Group on Financial Markets (Plunge Protection Team. i.e., the PPT). As quickly as the markets fell, the rebounded. The Dow recovered to a loss of roughly 400 points and seemed to stabilize at that point. After a wild 15 minutes of trading that left everybody stunned and questioning exactly what happened, the markets churned onward toward the close, ending with massive losses, nonetheless.

Dow 10,520.32, -347.80 (3.20%)
NASDAQ 2,319.64, -82.65 (3.44%)
S&P 500 1,128.15, -37.72 (3.24%)
NYSE Composite 7,011.92, -246.10 (3.39%


The substantial declines on the day were more than bourn out by the internal indicators. Declining issues completely overwhelmed advancers, 6015-742, or, by a margin of about 9:1. It was one of the biggest one-day routs in recent years, and there have been a good number of those. The key measure was the number of new highs to new lows, which completely flipped over from a year-long trend. There were 612 new lows to 196 new highs, a complete reversal, which, if history is any kind of guide, is a loud siren that the bears are firmly back in control.

Another screaming indicator was the day's volume, literally off the charts. This is the kind of volume seen only at the extremes, likely one of the 5 or 10 highest-volume days in the history of US stock markets. Since the direction was decidedly to the downside, more selling should be expected in days to come.

NYSE Volume 11,772,131,000.00
NASDAQ Volume 4,292,823,500.00


Concerning the heavy selling that sent stocks into a short-lived abyss, the commentators on CNBC cited such simplistic theories as a computer glitch, false prints and other preposterous theories, all along avoid the obvious truth: the economic crisis did not end in March of 2009, when stocks began a year-long rally. Financial markets are still fragile, one might say, tenuous, and only clandestine moves by insiders kept stocks from recording a record sell-off.

At some point, CNBC or another expert may release a story explaining the sudden downturn on the back of a rogue trade or computer malfunction. Any such story should be viewed with an additional dose of skepticism if only because of the various levels the major indices broke through during the panic. All of them shattered their 50-day moving averages during the session and closed well below them. Markets have been trending lower for the better part of the past two weeks and this kind of momentum-turning-to-panic trading cannot be discounted as a one-off event.

The likelihood of further market declines in the very near term and extending into the longer term is very high. The debt-deflation bomb has not yet run its course. Not until massive amounts of money and companies are liquidated will the disease be purged from the global economy. Expect widespread panic in European markets as countries fall like dominoes with a side-effect around the world. US markets will not be spared, as the US is only the best among peers at this juncture. Major economies will survive, though France, Germany, Great Britain and the USA will be severely crippled by year's end.

Our beloved "recovery" has been a complete fabrication, fueled by the media and the mechanics of commerce in Washington and on Wall Street. Individual investors have largely shunned equities in favor of bonds and tangible assets such as gold, which was an outside winner on the day. Greece and the rest of the Southern European countries are financially on death's door, facing complete default. Soon, one will capitulate and flee the European Union and denounce the Euro. When that occurs, the ten-year experiment at cross-border governance will be essentially over. The EU will disintegrate and the Euro will be completely unwound. The main hope is that troops do not begin excursions into neighboring nations, as has been the centuries-old history of Europe.

Even today, as it has been throughout the life of the EU, the stronger Norther economies have considerable enmity toward their Southern neighbors. The chance of the entire continent devolving into skirmishes over currencies would neither be unexpected nor unprecedented. Wars are usually how nations resolve major financial squeezes and Europe is certainly in one now.

Besides the dire conditions in Europe, the Gulf oil spill remains unchecked and tomorrow's non-farm employment report - to be released to the public at 8:30 am ET - doesn't offer much optimism. Most of the supposed 185,000 jobs created in April will be attributed mostly to government hiring of temporary census workers and the whisper campaign is that not as many were needed due, ironically, of the efficiency of the operation. Should the non-farm number fall significantly below expectations - a real possibility - an immediate continuation of the plunge will probably occur.

The best hope is for the proverbial, "dead cat bounce," which might ease tensions temporarily, until, at best, the next round of crisis selling. So severely strained and wrought with fraud, inter-leveraging and toxicity, financial markets have entered a semi-permanent state of crisis. When this chapter of global finance is finally unwound, the world won't end, but the pain will have spread deeper and wider than anyone could have expected.

For the baby boomer generation, the nightmare may have only begun. Those without high debt may find themselves in better positions than many of their over-leveraged peers.

Some of the numbers emerging from this historic day in finance (and underscoring the idea that this was not a one-off event):

Crude oil futures continued their steady decline, losing another $2.86, to close at $77.11, the lowest print in months. Safe-haven gold improved by $22.30, climbing above the $1200 mark to finally settle at $1,196.90. Silver couldn't keep pace, losing 2 cents, to $17.49.

All of the major indices have suffered huge blows over the past two weeks, and all closed below their 50-day moving averages.

The Dow Jones Industrials are less than 100 points higher for the year. For the year, the NASDAQ is up only 50 points, the S&P ahead by just 13 points, the NYSE Composite - the broadest index - is down 173 points, all of that loss, and more, occurring today.

All of the 30 Dow components closed lower, many of them with 3.5 to 4.5% losses. Citigroup touched a low of 3.90, closing at 4.01, as all financial stocks were pounded lower.

Treasuries and the US dollar were sharply higher. The dollar index hit fresh highs while the Euro broke down to 14-month lows against the greenback. The benchmark 10-year treasury closed at a 3.40% yield, 55 basis points lower than just a month ago.

Friday, February 5, 2010

PPT Fingerprints All Over Late-Day Rally

If you're unfamiliar with the term "PPT," you haven't been reading about economic conditions very deeply. The Plunge protection Team (PPT) stems from a presidential order (Reagan) that gives the Treasury Secretary, Fed Chairman and others extraordinary powers to combat financial firestorms, one of which is direct intervention into capital and equity markets, and, presumably, any other market.

Stocks began the day trying to overcome the lingering effects of Thursday's drubbing, and, after January Non-farms payroll data turned out to be more confusing than anything else, began to sell off, until, by 2:00 pm, the Dow had sunk another 167 points, pounding resistance. The S&P, already shattered, was being likewise battered.

That, however, proved to be the bottom for the day, and the week. Stocks quickly re-gathered and regained momentum without any catalyst, a tell-tale sign of intervention, something the PPT has been doing with regularity since 2000. From 3:00 to 3:15 pm, the Dow gained 100 points, putting the index near unchanged. The rest of the session was spent by the underpinning PPT and their henchmen making sure the Dow finished above 10,000 (it did) and all fears would be soothed over the weekend.

Their work is a fool's gambit, always has been and always will be. The problem is that they can play it because nobody is auditing them or their activities. The banks and the superstructure above it are irresponsible because they've been allowed to be and they will continue to be irresponsible until they destroy the economic system (almost did) or are destroyed themselves. But don't start holding your breath. The powers that be are incredible entrenched. Prepare for the worst four years of your economic life.

Dow 10,012.23, +10.05 (0.10%)
NASDAQ 2,141.12, +15.69 (0.74%)
S&P 500 1,066.19, +3.08 (0.29%)
NYSE Composite 6,782.75, -5.11 (0.08%)


As more evidence of the manipulative element in today's trading, consider that decliners beat advancers handily, 3476-3039. 149 new lows beat 96 new highs. Both of those indicators are contrary to the headline numbers. Volume was magnificent, owing both the the depth of selling and to the amount of financial heft necessary to keep the market from collapsing. But make no mistake about it. The decline will continue. The markets put in new lows which must be tested before any meaningful advance can occur. Chances are, today's lows will be surpassed to the downside within short order. Todays' reprieve was only necessary to avert a panic and to give insiders more opportunity to profit from the next leg down.

NYSE Volume 7,762,321,000
NASDAQ Volume 2,836,146,250


Oil closed at $71.19, down $2.98, at its lowest price since mid-December. Gold finished down $9.50, at $1,053.50 and silver finished down 47 cents, at $14.88. The commodities were only benefitted after their New York closes, not quite as fortunate as the equity markets.

Friday, July 11, 2008

The Fannie and Freddie Show

Anyone who still believes that US equity markets are either safe, fair or honest, needs to take a look at today's charts. All of the major indices were down massively at 2:30 pm. The Dow was down 250, the NASDAQ, down 55, the S&P down 32. Just before 3:00 pm all of them turned positive.

Somehow, that kind of move does not make any sense. There are nefarious forces at work, and they are likely those of the government, in the form of the Plunge Protection Team (PPT), or the President's Working Group on Financial Markets.

Only they have the power to make markets move massive in one direction over very short periods of time. And by the way, they're the same group of people who are likely behind the current mess we're in, having stolen most of Freddie Mac and Fannie Mae's assets years ago.

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Speaking of those two near-insolvent GSEs (Government Sponsored Entities), stocks were lower largely because most of the people who know a little about this stuff think they're going to go under, meaning that $5 Trillion worth of real estate loans will no longer be guaranteed by our wise and beneficent federal government. (It's probably for the best. They can't pay their bills as it is, so why not just default on everything?)

What will happen is a sharp rise in interest rates and a further deterioration of already seized up credit markets. The US economy is on the verge of complete catastrophic collapse, and those at the top of the heap - politicians, CEOs and mainstream news media - don't want us to panic. That's why the stock indices were only don their piddling amounts today, and not double or triple that.

But those losses are coming.

Sooner or later all manipulation schemes fail, and this one has run its course. Look for 10,000 on the Dow within 60 days and 8,500 or lower by year's end. There isn't enough good news around to save us. Even capturing Osama bin Laden (a good bet by November if the markets are down and the Republicans are down in the polls) will only boost stocks a little bit. Maybe 1000 points on the Dow, and even that won't last long.

Dow 11,100.54 -128.48; NASDAQ 2,239.08 -18.77; S&P 500 1,239.49 -13.90; NYSE Composite 8,347.24 -88.70

This is all about debt. Our banks are deeply in debt, to the point at which they have been selling off assets to raise capital. So are brokerages, investment banks, the Federal Reserve and the US government, and nobody has figured out a way out of debt.

Try reducing military spending by $500 billion a year, ending the war in Iraq and getting out of Afghanistan for starters. Too tough? Too bad, then. You lose all your assets.

Declining issues overwhelmed advancers again, 3793-2514. New lows beat new highs, 1210-77. Nearly 1 in 5 stocks on the NASDAQ and NYSE hit new lows today. No two ways about it, that's just plain ugly.

Oil finished up $3.33 at $145.66. Gold was up $18.60, to $960.60. Silver added 50 cents to $18.82. All of those prices are close to record - and unsustainable - highs.

Soon enough, everything is going to crash in price. Houses already have, and commercial real estate is beginning to crack. Stocks are down more than 20% from their year-ago highs. Commodities will be the last to go, but when they do, the losses on Wall Street will be enormous.

Remember Gordon Gecko, from the film Wall Street? He said, greed is good.. Well, allow me to paraphrase, as our so-called leaders try to avoid you and I panicking over our economic conditions. Panic is good.

Have a nice weekend. Enjoy it as best you can, because next week earnings reports begin flowing to market in earnest and they're going to be bad, very, very bad.

NYSE Volume 1,734,346,000
NASDAQ Volume 2,386,000,000

Tuesday, June 24, 2008

The Most Corrupted Markets in History

There are always shenanigans and manipulations involved in any kind of market, be it a food store, commodities exchange or those with which we are most familiar, equities.

The equity markets in the United States have to be some of the most corrupted places on the planet, far worse than those in so-called less-developed nations, mostly because both the regulation and the corruption is done by the very same entity - the government.

Not that the crude oil futures markets aren't any less subject to manipulation and distortion by a consortium of big-money players, but the trading today on the major US indices gives a small window into which we can see the depths and depravity of government-inspired and controlled manipulation.

Tuesday's markets opened with a spate of bad news.

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First a pre-earnings announcement by UPS that the high cost of gas had soured their second quarter expectations, then the Conference Board reported Consumer Confidence hitting another low, down to a June reading of 50.4, from 58.1, in May. It was the fifth-lowest reading ever.

Shortly after the announcement, stocks on the Dow Jones Industrials fell off by more than 100 points.

But, at 10:40, stocks began a miraculous recovery, and, by 11:20, the Dow had reached positive territory, with the other indices tagging along.

This was, without a doubt, the handiwork of the Plunge Protection Team (PPT), a/k/a, the President's Working Group on Financial Markets, by far the most powerful market intermediaries ever invented, blessed with the unbridled power of the presidency, the US Treasury, the Federal Reserve and heads of various other official and regulatory commissions, with its stated sole purpose to provide stability to financial markets.

The function of the PWGOFM is primarily to shore up flagging stock markets, to prevent panic, or, as is usually the case, to solidify the administration's case that the economy is sound - thus, the nickname, Plunge Protection Team.

What made today's activity so obvious was that the PPT swing into action as soon as the Dow reached 11,750, exactly the low point from March's swoon. It was evident that the powers-that-be (in this case the most corrupt politicians on earth) could not stomach a decline below that level, for that would have indeed confirmed the bear market with all its attendant consequences. Bouncing off it, as it did so obediently, makes the case for a re-test of the lows and a confirmation that we are "out of the woods," when, in fact, investors are totally lost in them.

Stocks have been heading lower for weeks and the sudden turn-about at precisely the closing low which every chartist worth his/her salt is watching, smacks of outright fraud at the highest levels of government.

As it is, even the powerful Plunge Protection Team, backed with monies from the Federal Reserve, cannot prevent the eventual bottoming out of US financial markets. They can only delay the process somewhat, in hopes that their fraud candidate - the flip-flopping John McCain - can make some phony case that all is well in America.

What a total and complete scam!

Dow 11,807.43 -34.93; NASDAQ 2,368.28 -17.46; S&P 500 1,314.29 -3.71; NYSE Composite 8,803.34 -38.55

Despite the best efforts of the PPT, stocks still took it on the chin again, though not quite as badly as they should have. That will come another day, as sure as the sun rises in the East.

Along the same lines, a series of unconfirmed reports from anonymous sources sent shares of Yahoo back up, after hitting multi-month lows. The so-called "rumors" that the company is back in talks with Microsoft, turned a 3/4-point loss into a more than 1/2-point gain. It was nothing more than continued manipulation by people with big money to lose or gain, notably "wildcat investor" Carl Icahn, who is heavily invested in Yahoo and faces a potential no-win situation without Microsoft.

On the day, declining issues held sway over advancers, 4412-1863, and new lows once again finished ahead of new highs, 768-90, a trend dating back to October 31, 2007. Since then, there have been more new highs than new lows on only a handful (less than 8) of days.

Crude oil for August delivery finished 26 cents higher, at $137.00. Gold was up $4.40, to $891.60 and silver declined 16 cents to $16.74. Once more, signs that the commodities boom is over are being telegraphed by the sluggish trade in precious metals.

Additionally, congress moved today to regulate oil futures trading more stringently than ever before, a move that many say could lead to prices of less than $89 per barrel and gas at $2.00 to $2.50 per gallon. Wishful thinking, indeed, but also well-timed, politically.

Tomorrow, the Fed issues a policy statement at 2:15. investors will collectively hold their breath in anticipation of the Fed leaving the federal funds rate unchanged at 2%.

How horribly stupid, and how easily fooled, investors are!

NYSE Volume 1,328,610,000
NASDAQ Volume 2,191,484,000

Thursday, June 12, 2008

Early Rally Fizzles, PPT Steps in to Save Markets

We knew (didn't we?) that after the deep declines Wednesday and last Friday, there would be plenty of bottom-fishing, and this morning, stocks were up sharply. The Dow was higher by nearly 200 points between 11:00 am and noon, but the realities of the market brought fresh waves of selling throughout the afternoon.

Shortly after 3:00 pm, the Dow had sunk back to break-even, with all other indices showing in the red. It was at that point, with markets apparently breaking down badly, that stocks began moving forward again, a sure sign that the Plunge Protection Team (PPT) was back at work, salvaging what little is left of the formerly free and fair equity markets.

Dow 12,141.58 +57.81; NASDAQ 2,404.35 +10.34; S&P 500 1,339.87 +4.38; NYSE Composite 8,947.72 +6.45

As usual, on days such as this, the internals offer a better view of what's really going on. Advancing issues actually fared better than decliners on the day, though by a very slim margin, 3208-2833. New lows continued to dominate new highs, 367-73. These numbers continue to confirm that stocks are stuck in a near-term down trend that isn't likely to end until recent lows (March) are retested.

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That the PPT (correctly known as the President's Working Group on Financial Markets) would enter into the fray is completely expected. As a matter of conjecture, they've probably been plying their trade with due diligence over the past few months, attempting to stabilize some truly upsetting conditions which persist in US markets.

Markets received a bit of good news in terms of retail sales figures this morning, but those were quickly dismissed as a natural outgrowth of the millions of government stimulus checks which were finding taxpayers. The fundamentals of a weak economy, with inflation, low job creation and a crumbling currency, are still in place and have not improved.

Oil was up again, gaining 40 cents, after being lower most of the day, settling at the unsettling price of $137.38. Metals were once more under pressure, with gold losing $10.90, to $872.00, and silver dropping 37 cents to $16.49 an ounce.

Traders are largely running scared at this juncture and until there is clear evidence of some positive changes in the economy, or a new president with the full backing of congress, or both, markets should remain under selling pressure.

NYSE Volume 1,332,073,000
NASDAQ Volume 2,246,544,000

Monday, June 9, 2008

PPT Rallies Market

Since there's no other salient explanation for today's rise on the Dow, I will be the first to indict the President's Working Group on Financial Markets (a/k/a The Plunge Protection Team or PPT) for boosting stocks after Friday's shock waves sent investors scurrying for cover.

The Bush administration has a vested interest in keeping the illusion of a healthy economy alive. Their buddy, John McCain, is going to have to have something upon which to hang his hat, and most Americans respond well to positive economic conditions.

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Of course, anybody with at least half a brain knows that the US economy is in dire straits. Today's laggards - as they have been through much of the past 10 months of declines - were the financials, and, we have a new leader. JP Morgan Chase (JPM), on no discernible news, took a major dive this afternoon, dipping as much as 3 1/2 points (9%) before recovering about a point into the close (-2.58, 37.51).

I would be reticent if I did not mention that this was one of the three strong sells (via puts) I recommended on June 4 to subscribers to the Fearless Stocks & Options Advisory Newsletter. The other two recommendations are also doing just fine, but you'll have to pony up $49.95 for that information (a steal if you're serious about options).

Were I an investor in JPM, I would be bailing right now, if not sooner. Of course, since I'm not so stupid as to invest in the work of bankers - a clueless lot of overstuffed shirts if ever there was one - I own no shares of any bank, brokerage or financial institution, and probably never will.

But JPM is worth watching over the next few months. Something is definitely not right there, and considering the recent performance of banking interests, there could be another round of imploding assets involving financial issues. Morgan has not been hard hit until today, and they may be next in line with their hands out to the various sovereign funds like those in Saudi Arabia, the UAE, Kuwait and Taiwan.

On the question of whether the PPT was actively pumping futures and indices today, I would say the evidence is clearly there. The Dow was up sharply at the open, as a stabilizing influence, but stumbled to break-even by 3:00 pm. All of today's gain was made within the final hour of trade. I rest my case.

Dow 12,280.32 +70.51; NASDAQ 2,459.46 -15.10; S&P 500 1,361.76 +1.08; NYSE Composite 9,149.09 -3.42

To get an idea of just how misleading the headline number (Dow up 70!) is, take a look at the internals. Declining issues hammered advancers by a nearly 2-1 margin, 4121-2114. New lows expanded their edge over new highs, 371-114. That's the widest margin in about a month, if not more.

The markets could rally for the next few days or the balance of the week, though I don't think that's in the cards. This market is marked for declines, and steep ones, with the Dow currently hovering less than 500 points above the January and March lows and off nearly 2000 points from the October '07 highs.

Only the concerted will of market insiders and the PPT can save the stock market from incessant mark-downs over the next 2-4 months. They will do everything they can, short of imposing price controls on gasoline, to keep markets from melting down prior to November. Naturally, a summertime collapse with a snap-back weeks-long rally leading up to the elections would suit the slimy Republican propaganda machine just fine, and that's what is staring us dead in the face.

Oil actually eased a bit on Monday, losing $4.19, to $134.35. Gold eased 90 cents to $898.10. Silver lost 22 cents to close at $17.21 the ounce.

Volume on the equity markets was moderate.

NYSE Volume 1,349,556,000
NASDAQ Volume 2,116,800,000

Wednesday, February 20, 2008

CPI Shows Inflation, Fed Lowers Growth Forecast, PPT Pumps Stocks

A somewhat expected rise in the Consumer Price Index (CPI) roiled investors prior to the opening bell and stocks drifted in negative ranges in early trading. The reading of a rise of 0.4% in January (4.8% annualized) spooked even the most ardent supporters of Fed and administration policies.

By noon, the Plunge Protection Team had seen enough selling to convince them to pump stocks higher and in a 20 minute span, the Dow Jones Industrials gained 120 points and the other indices followed into positive territory.

As the day wore on, the market meddlers of the PPT goosed stocks even more, pushing them to the highs of the day, up more than 125 points, shortly before 3:00 pm.

The obvious manipulation by the PPT (aka President's Working Group on Financial Markets) were in response to more somber news via the January FOMC meeting minutes in which the Fed lowered its 2008 growth forecast from a range of 1.8-2.5% in November to 1.3-2% in January.

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The Fed and their agents in the PPT are fooling nobody. The economy is clearly headed for - if not already in - a recession, and stocks remain grossly overvalued relative to aggregate earnings. But, it is an important election year, and the purveyors of power simply cannot stomach the idea that their reign of terror over the American public is at an end.

Nothing short of miracles (Mike Huckabee, anyone?) will salvage the US economy and the Fed is in desperate straits. The pure futility of lowering interest rates to an unsustainable 3% or lower is beginning to manifest itself in higher prices for everything from gas to bread to appliances.

Under its current framework, the Fed is on a path of destruction of the US dollar and with it will go any last vestige of respect and confidence in equity markets. Of course, the Fed continues a tradition of hampering real growth by denying that excesses need to be liquidated, instead relying on market massages and wrong-headed rate cuts.

The real culprit is the absolute seizure of credit markets, especially at money center banks. Merger and acquisition activity is going in reverse, with many deals having been canceled, and until the Fed and the banks take responsibility for their follies over the past seven years by liquidating themselves, the economy will slowly and surely continue to deteriorate.

Dow 12,427.26 +90.04; NASDAQ 2,327.10 +20.90; S&P 500 1,360.03 +11.25; NYSE Composite 9,073.96 +50.92

Advancing issues outpaced decliners, 3752-2614, though new lows continued to overwhelm new highs, 257-99. With the exception of two days in December 2007, new lows have had the edge over new highs since October 31, approaching four months.

If there is any indicator that the economy is in trouble, it is the continuing readings of new lows over new highs. The stock market is clearly struggling for every gain, and most of them have been helped along by the PPT. Sooner or later, these phony gains will be eviscerated and stocks will plunge to more sensible, sustainable, reasonable levels. It's widely assumed that without meddling from the PPT, the Dow would already have touched down at the 11,000 mark or lower.

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The more nudging by the Fed and the PPT, the more disastrous will be the inevitable crash. It's coming, and it won't be pretty, though anyone who has been paying attention won't be at all surprised.

As for the rest of the clueless sheeple out there... keep watching and listening to the perma-bulls like Larry Kudlow and flag-wavers like Rush Limbaugh and Sean Hannity and see what good that does you.

The price of crude oil closed at another record high on Wednesday, gaining 73 cents to $100.74. Yes, my friends, George Bush and his Republican administration has succeeded in making $100/barrel oil a reality. (sick bastards)

Gold was up $8.00 to a new record, $937.80. Silver was higher by 25 cents, to $17.76.

NYSE Volume 3,835,300,000
NASDAQ Volume 2,293,634,250

Thursday, February 14, 2008

Bernanke, Paulson Speak, Markets Sink

One would suppose, with three-quarters of the Plunge Protection Team (PPT) busy testifying before congress, that there would be nobody at the controls to prevent a market sell-off.

That's precisely what happened - be it coincidence or otherwise - on Thursday, as Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson and SEC Chairman Christopher Cox delivered testimony on the economy to Senate Banking Committee members.

In their remarks, both Bernanke and Paulson both indicated they felt the economy was in a somewhat delicate condition, owing mostly to a continuing credit crisis in which bankers have had difficulty lending to any but the most credit-worthy applicants.

What their remarks did not reveal, though hinted at, was that the bankers themselves were the cause of the precarious credit conditions, by participating in the massive fraud and deception that is now the subprime mortgage and related derivative investment mess.

And what a mess it is. Bank of America report released today suggested that the losses related to subprime mortgages was more than $7.7 trillion globally.

Another money center was hit with unfortunate fallout on Thursday, adding to the market's woes. Swiss financial giant UBS revealed a net loss of 4.4 billion Swiss francs ($4.0 billion dollars, $2.7 billion euros) in 2007, including an $18 billion writedown in damaged securities.

Dow 12,376.98 -175.26; NASDAQ 2,332.54 -41.39; S&P 500 1,348.86 -18.35; NYSE Composite 8,968.41 -105.07

Today's losses nearly matched yesterday's outsized gains, and even though the markets are higher for the week, momentum has clearly swung back to the bears. Declining issues outpaced advancers, 4720-1530, while new lows expanded the gap over new highs, 203-97.

Friday's economic reports include the NY Empire State Index and capacity utilization, though neither will likely weigh more on investors than today's dire and apprehensive assertions by Paulson, Cox and Bernanke.

Volume continues to be on the tepid side, as money largely sits, awaiting a safe entry point or going elsewhere.

Oil gained another $2.19 today, closing at $95.46. For the second day in a row, precious metals barely budged. Gold was up 80 cents to $911.00; silver lost 10 cents to $17,26.

Here's a tip. Buy sugar futures and sell corn futures. It's seven times more efficient to produce ethanol from sugar than from corn. On top of that, Tata Motors (TTM) is financing in a company which has tested and is producing a car that runs on air. That should serve as quite a blow to the oil barons.

NYSE Volume 3,630,146,750
NASDAQ Volume 2,270,238,000

Friday, February 8, 2008

Swimming Upstream with the Plunge Protection Team

Editor's Note: I wrote the following piece on the morning of Friday, Feb. 8, watching with considerable frustration a number of usual, obvious, upward spikes of 70, 50 and 40 points on the Dow, which I usually assign as the work of the Plunge Protection Team. Considering that very few investors and even fewer members of the general public even know of the existence of this group (officially, the President's Working Group on Financial Markets), it is my duty as a proponent of free markets and the Austrian school of economics, to expose them and explain how their interference caused more harm than good.

I have written about them before, and readers can check the tags or labels on this blog for PPT or Plunge Protection Team. It is also advisable to search the same and acquaint oneself with the workings of this group. They are not fictional, but sadly, oh, so real and a better understanding of their role and intentions may bring about some needed changes in our financial markets.

Being neither a zealot nor a fool, I understand that my proposal to the heads of the Federal Reserve, Treasury and other members of the PPT may lead nowhere, but I am hopeful that a robust, open discussion of their actions may lead us all to a better tomorrow.

Coincidentally, shortly after writing this piece, the Dow began an earnest descent. Maybe there is power in thought and force in words. In the end, all we have are faith, hopeful dreams, our good natures and desires.



As I watch the US equity markets gyrate in their long, slow-motion decline to some eventual oblivion, I cannot escape the intransigent maneuverings of the Plunge Protection Team (PPT) in their daily attempts to rescue the markets from their certain swoon.

Their actions are more and more transparent every day. As stocks decline in the somewhat orderly, time-honored tradition of bear markets, the PPT is at odds with the natural forces at work. In effect, they are swimming upstream against a logical, sensible tide of selling. Like salmon returning to their roots, the PPT believes the markets should return to glory days of all-time highs.

They are wrong. They are foolish. They will fail. Their actions speak of desperation, unlike the glorious salmon, which are guided by instinct and propagation, the PPT is swimming blindly into waters neither friendly nor where they are welcome.

A complete, final flushing of the markets is inevitable and preferable to the constant tinkering of these fondlers, who seek to govern what is known and what will be. While they think it right and good to prevent markets from tumbling - lest they incite an already angry public - they do more harm by the day. Their meddling reduces confidence in the fairness of the markets, to say nothing of the massive distortions created by their utterly false intentions.

No good or honest trader is accepting of sharp vertical ascents in the markets. They know what evil hands are at play, goosing the futures, bidding up the blue chips and pampering the investment community with talk of soft landings, strength in the economy and sustainable growth.

Poppycock. Rubbish. Nonsense.

It is time for the PPT, the Fed and Treasury to step back and cease open market operations. Allow the markets to function as they were intended - free and open, without interference - which, in the current environment more than likely means a crash, or at least a long, sustained recession and diminution of equity assets.

It is time for the Fed and their lackey PPTers to stop trying to fix what they themselves have broken, admit defeat and stabilize the situation. Set the federal funds rate at an acceptable 4 1/2-5%, allow the banks that have gorged on risky investments to pay their dues and liquidate their assets and let the American public breathe the clean air of a bottomed-out business cycle.

It would be a refreshing change from the eternal dithering and blathering to which we have become so accustomed. Let those which should fail, fail. Let the market decide. Let the indices fall to where they may, so that companies once again can be accountable and that investments actually start behaving like the fickle instruments of wealth that they are.

Surely, this would be a painful lesson for all, but no less painful than having to endure the uncertainty and unease associated with contrived markets and the grubby molestation of the PPT.

Tuesday, January 22, 2008

Bernanke Blinks; Big One Forestalled

With markets tanking worldwide on Monday, the calls came in from central banks and economists around the world to Ben Bernanke to rush his rate cuts to the market to avoid a catastrophe.

By Monday night, the Federal Reserve Chairman had made up his mind and folded like a cheap suit, but the markets wouldn't know until around 8:30 am ET. Prior to that, here's what was flashing on trading screens:

06:47 am : S&P futures vs fair value: -57.3. NASDAQ futures vs fair value: -70.8.

06:47 am : FTSE...5586.70...+8.50...+0.2%. DAX...6729.26...-60.73...-0.9%.

06:47 am : Nikkei...12573.05...-752.89...-5.7%. Hang Seng...21757.63...-2061.23...-8.7%.

With the announcement of an emergency cut to the federal funds rate of 75 basis points (0.75%), the markets refused to go along. At the opening bell, the NASDAQ was down 114 points, the Dow fell 450 minutes after the open and at 9:33, the S&P was down 31 points.

From there, stocks took a u-turn, thanks to underhanded funding from the Plunge Protection Team (PPT) which immediately knocked 200 points off the Dow's losses. As the day progressed, the "invisible hand" of the PPT continued to pump money into stocks, nearly erasing the losses entirely.

Trading was highly suspect throughout the session. Volume was explosive in the first hour, then dawdled and dwindled, even though the totals were on the high end. In general terms, the Fed and Treasury pulled off one of the more dramatic and obvious frauds in stock market history.

Dow 11,971.19 -128.11; NASDAQ 2,292.27 -47.75; S&P 500 1,310.50 -14.69; NYSE Composite 8,661.18 -133.68

Even the press was involved in the fraud. In this story from Reuters, headlined on Yahoo Finance at 10:56 am as Wall St. cuts losses in half on bargain hunting, though the Reuters headline actually read, Market falls on recession worries.

From the article:
But by midmorning, major indexes had halved their losses, as investors snapped up beaten-down retailers, home builders and financial services companies after the Federal Reserve cut interest rates by 75 basis points in a surprise intermeeting decision.


That statement is almost certainly untrue and Reuters would be unable to provide proof if required. The story was later pulled from the list of available headlines. Nobody was buying stocks except agents of the Federal Reserve and the Treasury through their proxies at Goldman Sachs, Bear Stearns, Lehman Brothers and Merrill Lynch. This was typical Plunge Protection Team work, stopping the markets from a total washout, which was almost certain to occur, despite the Fed's desperate emergency rate cut of 75 basis points prior to the opening bell.

Stock manipulation was evident throughout the session, with the Dow closing to within 7 points of break-even just after 3:30 before selling off with gusto, losing over 120 points in the final 30 minutes.

While the Fed pumped $10 billion into the markets through their typical open market repurchasing (repo) activity, there was probably another $30-50 billion in secret, "underground" funds through the PPT, which is kept off-the-books and will likely never be revealed except to the inside players who manipulate the market with magic liquidity, flooding the world with fake capital and doing irreversible damage to the US dollar.

The point is that the markets are being falsely pumped to the upside and have been for years. There's likely an overhang of more than a trillion dollars worth of bogus liquidity that's been priced into stocks over the past 8-10 years. The number might actually be larger, and I am using a trillion as a conservative estimate.

Real damage is done to markets when manipulated by secretive bodies such as the PPT. Since equity prices are primarily perceived value, investors are subjected to stock prices that are an illusion. US stocks on average are probably worth 20-30% less than present values due to these distortions.

While the newspapers and internet reports will praise the Fed's "quick thinking" the truth is that stocks will continue to decline. Truly wise investors know that this market - and most other world markets - is teetering on the brink of collapse, and only clandestine operations saved it from total destruction.

The internals were telling. Declining issues pummeled advancers by 4064-2385, but the reading of new lows was literally the highest number I have ever seen. There were 2070 new lows to only 69 new highs. Nearly one in three stocks hit 52-week lows on Tuesday. Clearly, the market averted meltdown... for now.

Oil traded 72 cents lower, closing at $89.85. Gold was up $7.90 to close at $889.80. Silver gained just 2 cents to $16.04.

The view from this outpost is that investors should expect more severe losses over the next 3-6 months. The Fed's magic won't work indefinitely on a global financial system that's essentially broken.

NYSE Volume 6,256,598,000
Nasdaq Volume 3,109,516,000

Thursday, August 16, 2007

Who caught the falling knife?

The burning question on my mind - and that of many astute investors, brokers and analysts, I'm sure - is who stepped in to the morass today and actually bought stocks when the Dow was down as much as 340 points at mid-day and off 300 points as late in the day as 3:15 pm.?

It would have to have been a magnificent leap of faith for so many investors to begin snapping up bargains at the same time. Maybe there was a case of mass psychosis on Wall and Broad that sent brokers,trancelike, to their trading machines to begin punching in buy orders.

No, readers, there can be no doubt that this spectacular rally was nothing more than the work of the mysterious Plunge Protection Team, better known as the PPT or the President's Working Group on Financial Markets, established by executive order by Ronald Reagan following the crash of 1987, and in operation - in some form or another - ever since.

The modus operandi is unmistakable. Once the PPT gears into action, stocks climb at dizzying speed and generally in non-stop fashion, just like today. It is also usually the case - as today - that the US markets will run counter to the trends set in the rest of the world's equity index. Today, markets in Europe were roiled, in their worst day in four years while the US markets staged a "miraculous recovery."

Dow 12,845.78 -15.69; NASDAQ 2,451.07 -7.76; S&P 500 1,411.27 +4.57; NYSE Composite 9,087.10 -1.94

Are US stocks so special, or our traders so astute, that they saw such tremendous buying opportunities that they would erase 300 points in losses on the Dow in a matter of 45 minutes? No. Never. The entire afternoon was a charade, designed to keep the public in the dark and avoid an all-out panic.

And they probably accomplished their mission. Americans are so gullible and, may I say, ignorant, as a group. We'll swallow any cockamamie story that is fed to us. We believe that FOX News is actually a news network, or that the Bush administration knew nothing about the 9/11 attacks until they actually took place.

The vast glut of American investors will certainly swallow this miracle rally story. Most of them are too concerned with making sure the tires on their Escalade are shiny or that their Blackberry is the newest model with the most gadgets to care much about the value of their retirement portfolio.

Seriously, what other people, as a group, would allow nameless people to manage an account which will be responsible for their financial well-being years from now? Americans will buy the phony story f today's markets.

You shouldn't. I don't. The global financial system has been brought to its knees and there is no easy way out. A stock market crash is inevitable, or, at best, with a helping hand of the PPT, a long, slow, tortuous decline. You don't have a choice in the matter. The powers that be, behind closed doors, will decide how it's going to play out.

Personally, if I'm going to lose a limb, I'd rather it be cut off with a single blow rather than a thousand small cuts and gnaws over a long period of time. The PPT obviously are fans of Chinese water torture.

Regardless of the intrigue by the PPT, the markets still took a pretty good beating and a lot of people lost more money today. Declining issues held sway over advancers by a 9-5 margin and new lows swamped new highs by a shocking 1475 to 47. To put that number in perspective, nearly one out of every four stocks listed on the NYSE and NASDAQ combined made a 52-week low TODAY!

Rally my arse! Stocks do not just turn corner and head the other way in the midst of a total collapse. Said collapse is still on track. Don't buy the hype.

To get an idea of how seriously close we are to witnessing the total collapse of world economies, check the oil futures today, which sold off as low as $70.10, settling with a loss of $2.33 to end the day at $71.00, on concerns that current and future economic conditions would foment a decline in demand for petroleum products such as gasoline, automotive fuel, petrol, call it what you will. These intrepid plungers don't scare easily, but judging by today's futures prices, they're more than just a little shaken up.

Quite possibly the strangest trading of the day - and the past few weeks, for that matter - has to be in gold. The shiny stuff fell by $21.70 to $658.00. Silver played along, dropping $1.06 to $11.50. For silver, it was a 9% decline in one day. The metals markets are supposed to be somewhat less volatile than that, besides the fact that they should be going up as stocks go down. They surely didn't today and haven't been of late.

The answer to why gold and silver sold off is simple. Everything that isn't cash is being sold to raise liquid funds, metals not excluded.

"Gold's slide into negative territory took an a new and decidedly ominous dimension on Thursday, as price support after price support gave way in the wake of mounting massive liquidations from all quarters," said Jon Nadler, an analyst at Kitco Bullion Dealers, in emailed comments.

"A wide range of commodities were being badly sideswiped in the frenzied quest to raise cash in order to mitigate stock losses by individual and institutional investors alike," Nadler said. "This was a very ugly day across the board."

We'll take his word for it.

Thursday, August 9, 2007

CRASH

Let's call a spade a spade.

This market is all but wiped out, as is the US economy. We'll be lucky if we're not invaded by a foreign power.

We've had a president in office for the past 6 1/2 years - and for the most part, a compliant Congress of his party - who's done everything in his power to dismantle the social fabric and the constitution and spend and borrow every last dime of our nation's wealth.

The policies of George W. Bush and the lack of regulation and oversight of the administration and congress have put the nation on the precipice of capitulation. Our financial system is about to implode under the weight of bad loans made right under the eyes of our elected and non-elected officials. The former and current Secretaries of the Treasury and Chairmen of the Fed, Alan Greenspan and Bernanke, are the main delinquents. The current holders of those offices should be immediately relieved of their duties and the president should be impeached. They have failed us miserably and probably engaged in criminal activity. At least in the President, Vice President and Attorney General's case, we are sure that they did.

Those who do not agree should take account. Our bridges and roads are crumbling, we spend billions a month in a war effort that has produced no tangible result except death and destruction, and now our financial institutions are under siege.

If that's not enough, maybe you'd prefer to wait until some of the banks fail or we go to war with Iran or the president declares martial law. Maybe then you'll wake up from your stupidity-induced stupor and see what liberals and progressives have been screaming about.

Or maybe you're content watching and believing in whatever lies they tell you on FOX News. In that case, go ahead and stick your head in the sand. The real intellectual forces of this country have no use for you and your kind.

Dow 13,270.68 -387.18; NASDAQ 2,556.49 -56.49; S&P 500 1,453.09 -44.40; NYSE Composite 9,449.31 -296.89

The Dow Jones Industrial Average lost 380 points today. That's one hefty loss. The other indices followed and it's very likely that the losses would have been larger had not the PPT (Plunge Protection Team, aka the President's Working Group on Financial Markets) been stepping in to stem losses.

Meanwhile, Mr. Bush is heading out of town for a 3 week vacation, but he made sure to mention, before he left, that taxes on corporations should be lowered. After all, Bush made the tax system safe for millionaires and billionaires, why not multi-national corporations who have little to no allegiance to the United States of America?

More ill-advised policy. Just what we need.

Market internals were not as bad as one would expect. Declining issues outpaced advancers by a 15-6 margin. There were 197 new highs, but 606 new lows.

Oil futures closed down 56 cents, to $71.59. Gold and silver were absolutely shattered, with gold off $13.50 and silver down 47 cents. A buying opportunity.

By the way, if you think today was bad, it was only the 2nd worst day of the year, and there's more downside ahead - a lot more.

The Dow, S&P and NASDAQ are all still positive for the year, but one gets the felling that it's a temporary condition. The Dow closed 2006 at 12,463. We're getting closer.

Wednesday, August 1, 2007

Dow Funny Business

Realistically, a 152-point rise on the Dow will divert most people's attention away from the systemic economic problems faced by the US economy and the cynical pumping of selected stocks by the PPT (Plunge Protection Team, Working Group on Financial Markets).

Anyone paying a little closer attention (like me) would notice that the Dow outperformed the NASDAQ and NYSE Composite by nearly a full percentage point on the day and dragged the S&P 500 up 0.72% due to the overlap between the indices.

Dow 13,362.37 +150.38 (1.14%); NASDAQ 2,553.87 +7.60 (0.30%); S&P 500 1,465.81 +10.54 (0.72%); NYSE Composite 9,572.87 +18.37 (0.19%)

Also, only two of the 30 Dow stocks finished in the red. Contrast that to the broader market, where declining issues led the way over advancers, 3748-2602, or roughly 3-2. Hmmm... a 28-2 upside trouncing by Dow stocks, but a 3-2 downside whipping for the overall market? Somebody's toying with us.

Surely. Absolutely. Without a doubt.

There were 861 new lows to just 95 new highs. So, where's the happy pill? The US equity market is about as phony as a Tennessee 3-dollar-bill. Maybe worse. A quick study of the Dow chart for Wednesday, August 1, tells the real story.

The Dow zig-zagged across the flatline until about 3:30, when the Dow was down about 50 points. Since the manipulators could not stomach another down day (make that 5 up and 6 down since the most recent record-high close), they pumped it a full 200 points in the final 35 minutes of trading. Nice! But not really. There are serious problems, as evidenced by the numbers just presented and the late day rally was designed to keep the stock market and our failing economy off the evening news and front pages of newspapers.

Speaking of newspapers, one should begin to be vary wary of anything emanating from the Dow Jones newswire, now that mogul Murdoch has his claws firmly entrenched. The deal was supposedly struck yesterday - or the day before - and it's just another knife into the already-exposed hide of American journalistic integrity. Forget that. You now simply cannot believe anything you read, anywhere. It's all subject to spin and headline writers, wrappers and margin noters. US media is a near-total sham. (Trust me. I at least try to give your the truth.)

While the markets were toying with our psyches, pressure on oil prices eased, losing $1.68 on the day, to close at $76.53. Thank goodness. And you can call off the gold rush. It was down $3.40 to $675.90. Silver dipped 6 cents to $12.96. Those minimal drops may be just small enough to pique some buying interest. Considering the coming banking fiasco, I'd be buying the metals here. A year from now, it could look like a very prudent move. Besides, there really isn't much downside risk in either gold or silver at these levels. You may not make a killing, but you shouldn't lose any value to inflation either.

Thursday, July 26, 2007

Dark Thursday, Black Friday?

Anyone who was surprised by today's dramatic sell-off simply has not been paying attention. The signs were everywhere: weak second quarter corporate earnings, an outright implosion in the US housing market, sub-prime defaults beginning to leak over into mainstream mortgage loans and corporate lending, a market soaring (the Dow was up 30% in just the past year) over and beyond 50 and 200-day moving averages.

Everything was in place for a selling spree of monumental proportions and on Thursday, it all came to fruition.

Dow 13,473.57 -311.50; NASDAQ 2,599.34 -48.83; S&P 500 1,482.66 -35.43; NYSE Composite 9,654.43 -275.93

The day began badly with ExxonMobil (XOM) announcing - prior to the open - that it had fallen short of analyst expectations for the 2nd quarter. Boo hoo, the largest corporation in the world and the company held widely responsible for causing people so much pain for US motorists only booked $10.26 billion, or $1.83 a share, from $10.36 billion, or $1.72 a share, a year earlier. Analysts were hoping for $1.96 per share. They were sorely disappointed and the stock lost more than 6 % on the day.

At 10:00, with the Dow already down more than 100 points, the Commerce Department provided more proof that the US housing collapse was getting even worse than anticipated. New home sales were down 6.6% to 834,000 units, the biggest percentage drop in 6 months. Sales are 22.3% lower than they were a year ago. Additionally, the median price dropped to $237,900, down 2.2% from a year ago.

As the day progressed, the selling intensified. From noon through 2:30 p.m. the Dow fell by more than 200 points as volume reached historic levels.

So powerful was the downdraft, that even oil traders were scared. Crude, up to $77 earlier, fell through the afternoon, eventually closing down 73 cents at $75.15. Gold dropped another $11, with silver closing 20 cents lower.

The Dow bottomed at 13,335.30, a loss of nearly 450 points. Then, something strange happened, just like yesterday. The Dow jumped nearly 90 points in a matter of minutes. It was either the invisible hand of Maynard Keynes, but more likely the clandestine hand of the Plunge Protection Team (PPT), otherwise known as the working group on financial markets, created by Ronald Reagan to prevent a repeat of the Wall Street meltdown in October 1987.

As usual, the foreign press - in this case the London Telegraph - had the story more than a year ago.

Nevertheless, not even Treasury Secretary Henry Paulson and his able team of financial commandos could stem the tide. By days end, the markets were in tatters, with advancers swamped by declining issues by a ratio of 7-1. New lows hit a number I have heretofore never witnessed - 1110 - to only 104 new highs.

And whatever the interlopers did to spike the market, it broke the feeds to Yahoo Finance and CNN Money. The volume figures on Yahoo Finance were totally knocked out (see the chart at right).

Judging by the late figures, the volume was the highest of the year, surpassing the mark of 4.283 billion shares, set yesterday. The overall Dow drop of 311 points was second only to the China rot on February 27 of this year.

There were over 400 stocks reporting on the day, but the biggest stories belonged to ExxonMobil (XOM), Apple (AAPL, beat estimates, +8.74), 3M (MMM, beat estimates), Black & Decker (BDK, beat estimates on lower profit, lowered guidance, -6.88), Office Depot (ODP, met on lower profits, -1.79) and Dow Chemical (DOW, beat, -2.22).

There will be more tomorrow, as investors digest earnings after hearing the government's preliminary figures for 2nd quarter GDP prior to the market open. The so-called "experts" - who haven't been remotely close lately - are predicting 3.2% growth. After Q1's horrific 0.7% gain, anything short of that number will likely precipitate even more selling.

Make no doubt about it, without the interference from government insiders, today's loss could have easily been 500 or 600 points. This slide certainly isn't over. In fact, it's probably only the beginning of a long, painful unwinding of an equally-long credit binge.

The fear is not in the second quarter results, but in the future, with an interest rate drop now becoming more and more of a distinct possibility as the US lags behind other countries - developed and emerging alike.