It's Friday, it's summer, so this recap of the events of the day and the week will be as brief as possible.
First up, the weekend's required reading is David Stockman's Abolish the FOMC, bring back the green eyeshades, in which the former Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan proposes an elegant yet simple solution to the current and ongoing tyranny of central bank incompetence.
In as few words as possible, Stockman proposes that the market set interest rates, pining for the halcyon days of true price discovery. The post is well worth twenty minutes of reading.
As for stocks, globally, the week was something of a disaster, with massive falls in Asia and Europe, though there was something of a rebound on Thursday. US indices struggled though the opacity of another FOMC policy decision (nothing) and fell into a funk on Thursday morning, with the Dow dipping below the magic 17,000 mark, but magically rallying for a noticeable gain for the day.
Friday was not so euphoric, with options expiration afoot (we suspect most of the big players cashed out on Thursday), though it was somewhat dramatic, as all three majors traded in the red the entire session. The Dow actually touched down just above 17,600, keeping the magical 500-point range (to 18,000 on the upside) intact for a thirteenth consecutive week.
This particular range-bound trading pattern does have a precedent, that being the 23-week span from February to early July of last year, when the blue chip index traded generally between 17,750 to 18,250, making an all-time high in the process (mid-May).
So, despite the two semi-corrections in August of 2015 and January of this year, the Dow has now settled into a regime just 250 points below the previous plateau. Welcome to the world of paper games.
Friday was simply get-away day, aided greatly by the NY Fed, which lowered its second and third quarter estimates for GDP growth to 2.1%, which is still probably too high. With that, unless the fourth quarter is gangbusters, along with the 0.7% rate of growth for GDP in the first quarter, it will be tough for GDP to hit the 2.0% target (that's a joke, right?) for this year.
Maybe the elections will trigger a change for 2017. Maybe not.
In any case, it's too far ahead to look. Brexit vote comes up Thursday, which could trigger fireworks, though some of the smart money is saying the vote will be for the UK to stay in the EU, and it will be rigged.
Happy hunting!
Friday's Fallout:
S&P 500: 2,071.22, -6.77 (0.33%)
Dow: 17,675.16, -57.94 (0.33%)
NASDAQ: 4,800.34, -44.58 (0.92%)
Crude Oil 48.07 +4.03% Gold 1,296.80 -0.12% EUR/USD 1.1279 +0.46% 10-Yr Bond 1.6180 +3.45% Corn 436.25 +2.59% Copper 2.05 +0.29% Silver 17.47 -0.78% Natural Gas 2.89 +1.16% Russell 2000 1,145.11 -0.27% VIX 19.28 -0.46% BATS 1000 20,677.17 0.00% GBP/USD 1.4355 +1.03% USD/JPY 104.2060 -0.10%
For the week:
Dow: -190.31, (-1.07%)
S&P 500: -24.85 (-1.19%)
NASDAQ: -94.21 (-1.92%)
Friday, June 17, 2016
Thursday, June 16, 2016
Intervention By Any Other Name; Fed Agents Clearly Trading Equities, Slamming Gold And Silver
Can there be any further doubt that the Federal Reserve is intervening - i.e., trading - in the equity markets?
Let's ask that again.
Is the Fed buying stocks?
You betcha!
Once again, today, the Dow pierced the 17,500 mark to the downside in early trading, and, has become the normal pattern, stocks took a steady advance off the lows to finish higher, and well away from the bottom of the trading range (17,500-18,000) that has persisted for three months.
Clearly, the Fed has no clue what to do except issue press releases and threaten to raise rates, all in an economic environment that is screaming stagnation and portending a nasty recession.
Also evident is the continuing manipulation of the precious metals markets. Gold and silver were both sharply higher early in the day, but were slaughtered in the afternoon for no apparent reason (other than being competition to all forms of fake fiat money). Silver fell from a high of $17.80 to under $17.20 in the course of six hours, a move of more than four percent. Gold, which had pierced the $1300 mark, was also dispatched, dropping to $1280 from a high of $1315, a $35 move, nearly four percent to the downside.
Everything is completely fake and markets (and maybe people) will only withstand the onslaught of intervention and manipulation for only so long.
How long?
When everything has gone to hell in a hand basket.
Fake, Fake, Fake, Fake!
S&P 500: 2,078.00, +6.50 (0.31%)
Dow: 17,733.10, +92.93 (0.53%)
NASDAQ: 4,844.92, +9.98 (0.21%)
Crude Oil 45.96 -4.27% Gold 1,283.70 -0.36% EUR/USD 1.1238 -0.20% 10-Yr Bond 1.56 -2.01% Corn 424.75 -0.99% Copper 2.05 -1.75% Silver 17.21 -1.67% Natural Gas 2.86 -0.63% Russell 2000 1,147.08 -0.19% VIX 19.24 -4.47% BATS 1000 20,677.17 0.00% GBP/USD 1.4213 +0.12% USD/JPY 104.3545 -1.54%
Let's ask that again.
Is the Fed buying stocks?
You betcha!
Once again, today, the Dow pierced the 17,500 mark to the downside in early trading, and, has become the normal pattern, stocks took a steady advance off the lows to finish higher, and well away from the bottom of the trading range (17,500-18,000) that has persisted for three months.
Clearly, the Fed has no clue what to do except issue press releases and threaten to raise rates, all in an economic environment that is screaming stagnation and portending a nasty recession.
Also evident is the continuing manipulation of the precious metals markets. Gold and silver were both sharply higher early in the day, but were slaughtered in the afternoon for no apparent reason (other than being competition to all forms of fake fiat money). Silver fell from a high of $17.80 to under $17.20 in the course of six hours, a move of more than four percent. Gold, which had pierced the $1300 mark, was also dispatched, dropping to $1280 from a high of $1315, a $35 move, nearly four percent to the downside.
Everything is completely fake and markets (and maybe people) will only withstand the onslaught of intervention and manipulation for only so long.
How long?
When everything has gone to hell in a hand basket.
Fake, Fake, Fake, Fake!
S&P 500: 2,078.00, +6.50 (0.31%)
Dow: 17,733.10, +92.93 (0.53%)
NASDAQ: 4,844.92, +9.98 (0.21%)
Crude Oil 45.96 -4.27% Gold 1,283.70 -0.36% EUR/USD 1.1238 -0.20% 10-Yr Bond 1.56 -2.01% Corn 424.75 -0.99% Copper 2.05 -1.75% Silver 17.21 -1.67% Natural Gas 2.86 -0.63% Russell 2000 1,147.08 -0.19% VIX 19.24 -4.47% BATS 1000 20,677.17 0.00% GBP/USD 1.4213 +0.12% USD/JPY 104.3545 -1.54%
Wednesday, June 15, 2016
Fed Does Not Hike Rates, As Expected; Markets Dull
Not only has the Fed run out of inflation-and-recession-fighting tools and rhetoric, but the US central bank seems to be running out of mental acuity and moral purpose.
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
Tuesday, June 14, 2016
Slump Continues For Stocks; Oil Lower As Discontent Grows
While the world awaits an edict from the high halls of the Federal Reserve on Wednesday, when the FOMC concludes their two day meeting and announces no change in the federal funds rate, investors appear increasingly nervous, not over the expected nothingness dictum from the Fed, but from the overall malaise that has captured markets, otherwise known as stagnation.
What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.
Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.
Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).
Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."
The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.
Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.
The policies and practices of the past 20 or 30 years cannot continue indefinitely.
The time is coming for major change.
Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)
Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%
What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.
Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.
Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).
Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."
The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.
Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.
The policies and practices of the past 20 or 30 years cannot continue indefinitely.
The time is coming for major change.
Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)
Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%
Monday, June 13, 2016
Markets Lower On Brexit And Rate Hike Fears
Of the various events that might cause investors to give pause to buying stocks, or, worse, start selling en masse, the two most terrifying are probably the threat of the UK leaving the European Union (aka, Brexit) and the ongoing dialogue from the Federal Reserve concerning raising the federal funds rate.
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
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