After yesterday's extraordinary move forward, there was a sense - by the end of the session - that the rally had finally reached a turning point. Early on Thursday, however, not everyone was convinced as employment data seemed to indicate a further strengthening in the economy. But, even though first-time claims were lower, they were still at extreme levels. 631,000 Americans filed for unemployment insurance in the most recent week.
As much as anyone wanted to call that number "improvement," long-time market watchers and economists warned against extended confidence. Additionally, the failure of Chrysler to secure a merger with Fiat without heading to bankruptcy court first, sent shivers through the markets.
Shortly after 11:00 am, the bloom was off the rose. The Dow peaked above 8300 briefly, but sold off for the remainder of the day with the other major indices suffering similar fates. By the end of the day, only the NASDAQ was showing a positive result.
Dow 8,168.12, -17.61 (0.22%)
NASDAQ 1,717.30, +5.36 (0.31%)
S&P 500 872.81, -0.83 (0.10%)
NYSE Composite 5,513.36, -2.78 (0.05%)
While the losses were marginal, the turn in sentiment was noticeable, especially after weeks of gains. Anybody entering the market on the long side today was hoping against reality that the economy would continue to improve and stocks would not slide back to depressed levels.
The Chrysler story topped even the growing concern over the swine flu pandemic, which spread to more states and more countries as the day wore on. With closures of schools in Texas and elsewhere, residents in the heartland are more concerned over the future of their employment. Chrysler's demise and involuntary bankruptcy may cost tens of thousands of auto workers their jobs and ripple throughout the already weakened economy.
By the end of the session, advancing issues - thanks largely to the relative strength of small caps on the NYSE - beat decliners, 3485-3027. New lows once more finished ahead of new highs, 99-50. It was the highest number of new lows in more than a week, and the trend of more new lows than highs on a daily basis continued unabated for what now has become a span of 19 consecutive months, dating back to October, 2007. Trading volume was elevated, though not extreme.
NYSE Volume 1,740,450,000
NASDAQ Volume 2,845,180,000
Commodity markets felt the pain as well. Oil was down 24 cents, to $50.88. Gold fell $9.30, to $891.20, while silver slid 45 cents to $12.33. There was not much to get excited over, either in stocks or commodities. Chrysler's demise has cast a new pallor over the entire economy.
Stocks have been pushing the limits of this rally in recent days and it now appears certain to all but the most optimistic that further deterioration to the economy is dead ahead. Most of the companies which beat street estimates were beating lowered expectations and many of those same companies have slashed dividends or didn't supply them in the first place. Chrysler's condition is almost certain to result in more layoffs, which can only erode the economic landscape further.
After first quarter GDP was reported at a loss of 6.1% on Wednesday, some investors took that as a sign of improvement, since the 4th quarter of '08 checked in with a loss of 6.3%. While the most recent figures are subject to revision, there's every chance that the economy could have retrenched by an even larger amount.
In this kind of economic climate, it has been difficult to watch stocks gain so rapidly, armed with knowledge instead of hope and the cheerleading of the noise-machine at CNBC and Fox Financial Network (FNN). It finally appears that more reasonable expectations are going to have a hearing. In the course of the past two months, stocks have gone from falling off the planet to an overbought condition. With the consideration that this recession could still turn worse, into a full-fledged depression, the rapidity of investors bailing out of stocks could surprise many.
The US economy has suffered severe structural damage. It is still unclear whether the nation's largest banks are insolvent or otherwise incapable of leading the country out of this corrective period. Further, the will of the American people has been sorely tested and they are not in any kind of mood for more bank bailouts while workers are idled and state and municipal budgets are stressed.
We may be facing a real paradigm change in how much faith we will place in institutions going forward.
Thursday, April 30, 2009
Wednesday, April 29, 2009
Preparing For the Next Crash
One would have assumed that if 1st quarter GDP had come in worse than expected this morning - expectations were around -5%, the actual figure was -6.1% - that stocks would sell off.
One would have been wrong - very wrong - as the market merely shrugged off another indication that the recession was worsening and headed off to new heights. This makes trading stocks on fundamentals, or even economic conditions, not only difficult, but impossible. Every day there are new signs that the economy is mired in a negative-growth trench, yet stocks continue to rally, seemingly without end.
Today's activity was probably the most remarkable event of the past two months, noting the considerable obstacles to economic growth standing in the way, huge unemployment numbers, continued weakness in residential housing and now commercial real estate and the continuing saga of the spreading Swine Flu.
It was remarkable in that while stocks were poised to jump start at the open even before the 8:30 am release of 1st quarter GDP figures, but even more remarkable in that stock futures didn't even blink when it was revealed that actual GDP was falling at a faster rate than anticipated. One can only assume that insiders already knew the figures or had already decided the day's direction for stocks and would not be dissuaded regardless of reality. Had the actual NY stock exchange been blown to bits, traders would still have pushed stocks higher, such was the plan for the day.
It's a scam, a complete and total rigging by the controllers of the market and the country. In the end they will bankrupt all of us, but for now, they are in the business of pushing stock prices higher. It will not last. It cannot last. The fundamentals of the economy are entirely too weak to sustain stock valuations bordering on the absurd.
Making matters even more ridiculous, the Fed announced no change in interest rate policy - widely expected - but hinted that there were signs of "recovery" in the US economy. Though the press release announcing that the Federal Funds rate would remain between 0 and 0.25% (read: free money) was among the shortest on record, the following passage provided more insight than any other verbiage in the text:
Reading that sentence carefully, the Committee (FOMC: Federal Open Market Committee) is trying to avoid using the word "deflation," which is occurring across a wide swath of the economic landscape. They are also trying to rectify "inflation" and "price stability." In other words, the Fed isn't really promoting "price stability" as they are so chartered. They are hell-bent on inducing inflation, the very same inflation that has wrecked our economy for so many years, for as long as the Federal Reserve has operated as the nation's central bank there has been unstoppable, rampant inflation which has destroyed the value of the dollar and kept wages at poverty levels for a majority of the working population.
They simply cannot have inflation and price stability at the same time. The two are not polar opposites - inflation and deflation are - but price stability means equilibrium, a condition which spells death for the US economy, built on debt and tied inexorably to inflation and wealth destruction.
So, it is time to prepare for the next crash, which, in light of current economic policies of the Fed, is inevitable. The market's aberrant behavior is sending the strongest sell signal I've ever seen, violating all manner of resistance in charts and basic fundamental trading regimens.
It is time to unload all stocks, at once, because the retracement back to the March lows will commence shortly.
I wrote the above line at 3:03 pm EDT, after the Dow peaked at 8250 and was beginning to retreat. By the end of the day, the sell-off was in full bloom, just before last-minute buying punched stocks ahead right at the close (painting the tape).
Dow 8,185.73, +168.78 (2.11%)
NASDAQ 1,711.94, +38.13 (2.28%)
S&P 500 873.64, +18.48 (2.16%)
NYSE Composite 5,516.14, +146.29 (2.72%)
Just to illuminate my position that the recent advances in stock prices are unsustainable, below are some of the headlines for today, with links to the underlying articles:
CNN Money: Economy falls much more than expected
Associated Press: Jobless rates rise in all US metro areas in March
Reuters: U.S. to pay off mortgage investors
Do any of those headlines encourage you enough to go out and buy stocks? No? I didn't think so. The economy is sinking into a black hole, the United States is becoming even more of a welfare state than it already was and hope for lasting, robust recovery is nothing more than a fantasy. If you don't think so, I encourage you to read this exceptional article: Economic Obsolescence, by Andrew McKillop. Be forewarned. It is quite deep and lengthy, but filled with insights and observations you won't find on CNBC or any other fraudulent financial reporting service.
My message is simple. Wall Street, stocks, retirement plans, 401k plans and the like are a scam. You're better off investing in your own home, planting a garden, cutting your expenses and going back to a simpler lifestyle. However, depending upon where you live, you may need high walls and security devices to keep out intruders, because many of the people in the USA are going to face horrific economic conditions over the next 6-12 years. Six years of pain and no growth are in the cards at a minimum. Higher taxes, higher crime rates, rioting, corruption in government and an overwhelming debt burden on families and the government are inevitable. Bank failures have thus far been avoided only due to manipulation and intervention by the Fed and general obfuscation and outright lying by both the Treasury and the banksters (bank gangsters).
The longer we hand out money to the undeserving - be they banks or welfare recipients - the longer it will take and the harder it will be to restore any semblance of a functioning economy. Right now, the economy is on extended life support, but the patient, for all intents and purposes, is a vegetable, incapable of ever returning to a functional lifestyle. The government bailouts and stimulus plans, plus the heavy debt imposed by the upcoming federal budget, is tantamount to throwing money into a blazing bonfire. It will all go for naught, not for investment, and therefore will result in DEFLATION, not inflation, a point sorely missed by the ignorant morons at the Fed and at the top positions of government. Their actions are making the road to recovery longer and actually exacerbating the depth of the depression.
There is good news. The country formerly known as the land of the free and the home of the brave is now full of people living on government hand-outs, with steady incomes and no clue as to value. And don't believe that just welfare recipients - those with the plasma TVs, all the cable channels and usually a late-model car in the driveway - are alone in their status of money-takers. Add to it anybody on any government payroll anywhere: cops, teachers, mayors, social service workers; and retirees on military pensions, social security, what have you. There has never been a better time to screw people out of their money. The nation is full of dupes, dopes, pigeons and rubes, standing in line to be taken directly to the cleaners. That is the end result of the welfare state, where money is disrespected because it was not earned.
So, if you have an idea and some motivation, crooked or honest, you should do well. People just can't stop spending and the government is actually encouraging waste on a gigantic scale. The money is out there. You just need to go get it.
On the day, internals were mixed, though advancing issues outnumbered declining ones by a wide margin, 5233-1265. New highs came close to overtaking new lows, but failed with 93 new 52-week lows being reported to 55 new highs. Both numbers are elevated from previous readings but have not diverged significantly. They will - one way or the other - soon. A breakout or breakdown is overdue.
NYSE Volume 8,913,934,000
NASDAQ Volume 2,361,983,750
Commodities were mostly higher. Oil gained $1.05, to $50.80. Gold was up $6.90, to $900.50. Silver gained 35 cents, to $12.78. Pork bellies sold off, down $1.93, to $75.88 per pound, though live hog prices stabilized and were actually moderately higher.
Make no doubt about it. Today's late-day sell-off was just the opening salvo. Volume spiked incredibly after 2:30, when the Dow lost more than 100 points into the close. The selling will accelerate soon, maybe tomorrow, maybe Friday, maybe not even until next week, but it will come and it will be swift and severe. Count on it.
Keep an eye on the equally-bogus "swine flu pandemic" which will be blamed for the coming market downturn. More deaths will be caused by trying to prevent the disease - watch how Tamiflu and other medicines will be promoted - and the sure-to-come vaccine, than the disease itself, though the media will not report that fact.
One would have been wrong - very wrong - as the market merely shrugged off another indication that the recession was worsening and headed off to new heights. This makes trading stocks on fundamentals, or even economic conditions, not only difficult, but impossible. Every day there are new signs that the economy is mired in a negative-growth trench, yet stocks continue to rally, seemingly without end.
Today's activity was probably the most remarkable event of the past two months, noting the considerable obstacles to economic growth standing in the way, huge unemployment numbers, continued weakness in residential housing and now commercial real estate and the continuing saga of the spreading Swine Flu.
It was remarkable in that while stocks were poised to jump start at the open even before the 8:30 am release of 1st quarter GDP figures, but even more remarkable in that stock futures didn't even blink when it was revealed that actual GDP was falling at a faster rate than anticipated. One can only assume that insiders already knew the figures or had already decided the day's direction for stocks and would not be dissuaded regardless of reality. Had the actual NY stock exchange been blown to bits, traders would still have pushed stocks higher, such was the plan for the day.
It's a scam, a complete and total rigging by the controllers of the market and the country. In the end they will bankrupt all of us, but for now, they are in the business of pushing stock prices higher. It will not last. It cannot last. The fundamentals of the economy are entirely too weak to sustain stock valuations bordering on the absurd.
Making matters even more ridiculous, the Fed announced no change in interest rate policy - widely expected - but hinted that there were signs of "recovery" in the US economy. Though the press release announcing that the Federal Funds rate would remain between 0 and 0.25% (read: free money) was among the shortest on record, the following passage provided more insight than any other verbiage in the text:
"In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term."
Reading that sentence carefully, the Committee (FOMC: Federal Open Market Committee) is trying to avoid using the word "deflation," which is occurring across a wide swath of the economic landscape. They are also trying to rectify "inflation" and "price stability." In other words, the Fed isn't really promoting "price stability" as they are so chartered. They are hell-bent on inducing inflation, the very same inflation that has wrecked our economy for so many years, for as long as the Federal Reserve has operated as the nation's central bank there has been unstoppable, rampant inflation which has destroyed the value of the dollar and kept wages at poverty levels for a majority of the working population.
They simply cannot have inflation and price stability at the same time. The two are not polar opposites - inflation and deflation are - but price stability means equilibrium, a condition which spells death for the US economy, built on debt and tied inexorably to inflation and wealth destruction.
So, it is time to prepare for the next crash, which, in light of current economic policies of the Fed, is inevitable. The market's aberrant behavior is sending the strongest sell signal I've ever seen, violating all manner of resistance in charts and basic fundamental trading regimens.
It is time to unload all stocks, at once, because the retracement back to the March lows will commence shortly.
I wrote the above line at 3:03 pm EDT, after the Dow peaked at 8250 and was beginning to retreat. By the end of the day, the sell-off was in full bloom, just before last-minute buying punched stocks ahead right at the close (painting the tape).
Dow 8,185.73, +168.78 (2.11%)
NASDAQ 1,711.94, +38.13 (2.28%)
S&P 500 873.64, +18.48 (2.16%)
NYSE Composite 5,516.14, +146.29 (2.72%)
Just to illuminate my position that the recent advances in stock prices are unsustainable, below are some of the headlines for today, with links to the underlying articles:
CNN Money: Economy falls much more than expected
Associated Press: Jobless rates rise in all US metro areas in March
Reuters: U.S. to pay off mortgage investors
Do any of those headlines encourage you enough to go out and buy stocks? No? I didn't think so. The economy is sinking into a black hole, the United States is becoming even more of a welfare state than it already was and hope for lasting, robust recovery is nothing more than a fantasy. If you don't think so, I encourage you to read this exceptional article: Economic Obsolescence, by Andrew McKillop. Be forewarned. It is quite deep and lengthy, but filled with insights and observations you won't find on CNBC or any other fraudulent financial reporting service.
My message is simple. Wall Street, stocks, retirement plans, 401k plans and the like are a scam. You're better off investing in your own home, planting a garden, cutting your expenses and going back to a simpler lifestyle. However, depending upon where you live, you may need high walls and security devices to keep out intruders, because many of the people in the USA are going to face horrific economic conditions over the next 6-12 years. Six years of pain and no growth are in the cards at a minimum. Higher taxes, higher crime rates, rioting, corruption in government and an overwhelming debt burden on families and the government are inevitable. Bank failures have thus far been avoided only due to manipulation and intervention by the Fed and general obfuscation and outright lying by both the Treasury and the banksters (bank gangsters).
The longer we hand out money to the undeserving - be they banks or welfare recipients - the longer it will take and the harder it will be to restore any semblance of a functioning economy. Right now, the economy is on extended life support, but the patient, for all intents and purposes, is a vegetable, incapable of ever returning to a functional lifestyle. The government bailouts and stimulus plans, plus the heavy debt imposed by the upcoming federal budget, is tantamount to throwing money into a blazing bonfire. It will all go for naught, not for investment, and therefore will result in DEFLATION, not inflation, a point sorely missed by the ignorant morons at the Fed and at the top positions of government. Their actions are making the road to recovery longer and actually exacerbating the depth of the depression.
There is good news. The country formerly known as the land of the free and the home of the brave is now full of people living on government hand-outs, with steady incomes and no clue as to value. And don't believe that just welfare recipients - those with the plasma TVs, all the cable channels and usually a late-model car in the driveway - are alone in their status of money-takers. Add to it anybody on any government payroll anywhere: cops, teachers, mayors, social service workers; and retirees on military pensions, social security, what have you. There has never been a better time to screw people out of their money. The nation is full of dupes, dopes, pigeons and rubes, standing in line to be taken directly to the cleaners. That is the end result of the welfare state, where money is disrespected because it was not earned.
So, if you have an idea and some motivation, crooked or honest, you should do well. People just can't stop spending and the government is actually encouraging waste on a gigantic scale. The money is out there. You just need to go get it.
On the day, internals were mixed, though advancing issues outnumbered declining ones by a wide margin, 5233-1265. New highs came close to overtaking new lows, but failed with 93 new 52-week lows being reported to 55 new highs. Both numbers are elevated from previous readings but have not diverged significantly. They will - one way or the other - soon. A breakout or breakdown is overdue.
NYSE Volume 8,913,934,000
NASDAQ Volume 2,361,983,750
Commodities were mostly higher. Oil gained $1.05, to $50.80. Gold was up $6.90, to $900.50. Silver gained 35 cents, to $12.78. Pork bellies sold off, down $1.93, to $75.88 per pound, though live hog prices stabilized and were actually moderately higher.
Make no doubt about it. Today's late-day sell-off was just the opening salvo. Volume spiked incredibly after 2:30, when the Dow lost more than 100 points into the close. The selling will accelerate soon, maybe tomorrow, maybe Friday, maybe not even until next week, but it will come and it will be swift and severe. Count on it.
Keep an eye on the equally-bogus "swine flu pandemic" which will be blamed for the coming market downturn. More deaths will be caused by trying to prevent the disease - watch how Tamiflu and other medicines will be promoted - and the sure-to-come vaccine, than the disease itself, though the media will not report that fact.
Tuesday, April 28, 2009
Live Hogs, Pork Bellies Down on Swine Flu Paranoia
Maybe I could just re-post yesterday's scribble about "trading sideways... or down", but that would be redundant. Still, just what was that market doing today? Where was the volatility, the movement, the fear factor, the monumental moves attributed to the "recovery" or earnings reports?
Today may have been the dullest day for trading stocks in many years, though it wasn't that much different than the past two. After an initial dip to 7950 - a loss of 70 points on the Dow - it quickly recovered and spent the rest of the day vacillating over and under the break even line and in between 8005 and 8090. It was a big, fat yawning festival.
While investors await either first quarter GDP (tomorrow) or more insight into the spread of swine flu (spreading fast: by this time next week, expect it to be a full blown pandemic with outbreaks in no less than 30 countries and deaths in 12), investors were pretty much stuck with what they'd bid up over the past 7 weeks, so, good luck to them. Meanwhile, there's no indication that the US and global economies are in any better condition than they were 6 months ago despite trillions of dollars n stimulus and bailouts and assorted programs.
Dow 8,016.95, -8.05 (0.10%)
NASDAQ 1,673.81, -5.60 (0.33%)
S&P 500 855.16, -2.35 (0.27%)
NYSE Composite 5,369.85, -19.98 (0.37%)
On the day, advancing issues beat out decliners, 3449-2949, and new lows surpassed new highs, 69-32. Most importantly, today was the second straight session in which volume was subdued, well below levels seen over the past few weeks of furious buying activity. We are now poised for a sell-off of major proportions. The trickle of selling the past two days will quickly turn to a raging torrent on any bad news. Investors are seeking reasons to take profits and disbelieve the "recovery" claptrap.
NYSE Volume 1,251,073,000
NASDAQ Volume 2,103,607,000
The somnambulant nature of the equity markets did not translate into commodities, where there were wild and wide price swings. Crude oil fell 22 cents, to $49.58, but bigger hits were taken in gold, down $14.60, to $893.60, silver, off 56 cents, to $12.43, lean hogs, down $2.35, to $66.30, and pork bellies, which fell $3.00, to $77.80. The falls in hogs and bellies were almost exclusively tied to swine flu paranoia, though there is absolutely no evidence that consumption of pork can lead to obtaining the flu virus.
Since markets are emotional by nature, expect what happened to pork bellies and the price of pork to occur in various other investment strata, including equities of all kinds. The argument that travel restrictions to some countries may hamper the earnings of some airlines, hotels and cruise lines may be plausible, but extending the argument - that overall swine flu fear might keep more people in their homes and away from large gatherings - takes a leap of faith.
Of course, one could blame the swine flu for further deterioration in the economy instead of admitting that the government's plans so far have failed. That's an easy one, and likely to be coming to a headline near you soon.
By 8:30 am tomorrow, when the Commerce Department releases its advance estimate on 1st quarter GDP, we should have a relatively good understanding of where we sit and how far stocks will need to be sold off. As corporate earnings dissipate from the scene, the market will be looking for other signals.
Deaths from swine flu will become a leading indicator of worldwide distress. You heard it here first.
Today may have been the dullest day for trading stocks in many years, though it wasn't that much different than the past two. After an initial dip to 7950 - a loss of 70 points on the Dow - it quickly recovered and spent the rest of the day vacillating over and under the break even line and in between 8005 and 8090. It was a big, fat yawning festival.
While investors await either first quarter GDP (tomorrow) or more insight into the spread of swine flu (spreading fast: by this time next week, expect it to be a full blown pandemic with outbreaks in no less than 30 countries and deaths in 12), investors were pretty much stuck with what they'd bid up over the past 7 weeks, so, good luck to them. Meanwhile, there's no indication that the US and global economies are in any better condition than they were 6 months ago despite trillions of dollars n stimulus and bailouts and assorted programs.
Dow 8,016.95, -8.05 (0.10%)
NASDAQ 1,673.81, -5.60 (0.33%)
S&P 500 855.16, -2.35 (0.27%)
NYSE Composite 5,369.85, -19.98 (0.37%)
On the day, advancing issues beat out decliners, 3449-2949, and new lows surpassed new highs, 69-32. Most importantly, today was the second straight session in which volume was subdued, well below levels seen over the past few weeks of furious buying activity. We are now poised for a sell-off of major proportions. The trickle of selling the past two days will quickly turn to a raging torrent on any bad news. Investors are seeking reasons to take profits and disbelieve the "recovery" claptrap.
NYSE Volume 1,251,073,000
NASDAQ Volume 2,103,607,000
The somnambulant nature of the equity markets did not translate into commodities, where there were wild and wide price swings. Crude oil fell 22 cents, to $49.58, but bigger hits were taken in gold, down $14.60, to $893.60, silver, off 56 cents, to $12.43, lean hogs, down $2.35, to $66.30, and pork bellies, which fell $3.00, to $77.80. The falls in hogs and bellies were almost exclusively tied to swine flu paranoia, though there is absolutely no evidence that consumption of pork can lead to obtaining the flu virus.
Since markets are emotional by nature, expect what happened to pork bellies and the price of pork to occur in various other investment strata, including equities of all kinds. The argument that travel restrictions to some countries may hamper the earnings of some airlines, hotels and cruise lines may be plausible, but extending the argument - that overall swine flu fear might keep more people in their homes and away from large gatherings - takes a leap of faith.
Of course, one could blame the swine flu for further deterioration in the economy instead of admitting that the government's plans so far have failed. That's an easy one, and likely to be coming to a headline near you soon.
By 8:30 am tomorrow, when the Commerce Department releases its advance estimate on 1st quarter GDP, we should have a relatively good understanding of where we sit and how far stocks will need to be sold off. As corporate earnings dissipate from the scene, the market will be looking for other signals.
Deaths from swine flu will become a leading indicator of worldwide distress. You heard it here first.
Monday, April 27, 2009
Nowhere to Go But Sideways... or Down
Since April 3, the first time the Dow closed above 8000 since February 9, the Dow has traded in a range - using closing prices - of 342, from a low of 7789 (April 9) to 8131 (April 17). This is a span of 15 trading sessions, most of which occurred during the height of earnings season.
More than 3/5ths of companies having already reported, the decision is out on the first quarter. It wasn't horrible, but it wasn't very good either. Later this week - Wednesday, to be exact - the government will issue forth their proclamation of how much the economy downsized in the first quarter of 2009 with the release of an initial GDP estimate. Estimates run mostly in the 4.2 to 4.8% range, following a 6.3% decline in the 4th quarter of 2008.
If these guesses are accurate, some will call the first quarter the bottoming of the recession, while others, like yours truly, will point out that the second consecutive quarterly decline in GDP merely affirms that we are in a real recession, and it's a deep one with no real end in sight.
Unemployment figures are still extraordinarily high, housing prices continue to fall and the credit contraction is as bad, if not worse, than it was in the September-November period of last year. The banking stress tests, like most of what else the government has mismanaged, are a complete fraud for estimating economic conditions much rosier than what may actually occur. The US and global economies face more strong headwinds in the months and years ahead.
There are, however, some bargains in the stock market. You just have to know where to look. And you have to have some faith in the system and hope that there are others out there like you. It's a lot for which to hope.
On the other hand, now might not be the best time to be seeking bargain stocks. Many of today's cheapies were even cheaper a month or two ago. Stocks are stuck in a range; further upside may be - will be - difficult to accomplish.
Dow 8,025.00, -51.29 (0.64%)
NASDAQ 1,679.41, -14.88 (0.88%)
S&P 500 857.50, -8.73 (1.01%)
NYSE Composite 5,389.82, -78.59 (1.44%)
On the day, the mood was negative, with advancing issues beaten down by decliners, 4339-2145. New lows led new highs, 68-29. Volume, which was lower by a wide margin from last week, is sending mixed signals, but mostly that there is a lack of buying interest at this time. All of this leaves stocks with little to do except wait and wallow, or head lower. Were stocks to go any higher, they would only become even more overbought that they have been for at least three weeks. It is a condition which cannot persist.
NYSE Volume 1,402,328,000
NASDAQ Volume 2,225,050,000
Commodities were all lower, returning to the deflation scenario, which hasn't actually been played out and has years in which to run, instead of months, as the government and financial pundits would have you believe. Some people are actually talking about inflation's quick return in the form of higher prices. That's an appearance I would not count on for at least another 9-12 months, but more properly, prices will be under pressure for at least the next two years and probably longer.
Oil for June delivery was down $1.41, to $50.13. Gold dipped $5.90, to $908.20. Silver notched a 4 cent gain to close at $12.99 in New York. The rest of the popularly-traded commodities were down, including foodstuffs.
As for the swine flu hysteria, that's strictly a sideshow to the real story. It's all about your money, and how the government and/or banking/insurance/investment complex screws you out of yours.
There are other options, like physical gold, silver, other commodities, actual saving, smart budgeting, and owning your own business, just for openers.
More than 3/5ths of companies having already reported, the decision is out on the first quarter. It wasn't horrible, but it wasn't very good either. Later this week - Wednesday, to be exact - the government will issue forth their proclamation of how much the economy downsized in the first quarter of 2009 with the release of an initial GDP estimate. Estimates run mostly in the 4.2 to 4.8% range, following a 6.3% decline in the 4th quarter of 2008.
If these guesses are accurate, some will call the first quarter the bottoming of the recession, while others, like yours truly, will point out that the second consecutive quarterly decline in GDP merely affirms that we are in a real recession, and it's a deep one with no real end in sight.
Unemployment figures are still extraordinarily high, housing prices continue to fall and the credit contraction is as bad, if not worse, than it was in the September-November period of last year. The banking stress tests, like most of what else the government has mismanaged, are a complete fraud for estimating economic conditions much rosier than what may actually occur. The US and global economies face more strong headwinds in the months and years ahead.
There are, however, some bargains in the stock market. You just have to know where to look. And you have to have some faith in the system and hope that there are others out there like you. It's a lot for which to hope.
On the other hand, now might not be the best time to be seeking bargain stocks. Many of today's cheapies were even cheaper a month or two ago. Stocks are stuck in a range; further upside may be - will be - difficult to accomplish.
Dow 8,025.00, -51.29 (0.64%)
NASDAQ 1,679.41, -14.88 (0.88%)
S&P 500 857.50, -8.73 (1.01%)
NYSE Composite 5,389.82, -78.59 (1.44%)
On the day, the mood was negative, with advancing issues beaten down by decliners, 4339-2145. New lows led new highs, 68-29. Volume, which was lower by a wide margin from last week, is sending mixed signals, but mostly that there is a lack of buying interest at this time. All of this leaves stocks with little to do except wait and wallow, or head lower. Were stocks to go any higher, they would only become even more overbought that they have been for at least three weeks. It is a condition which cannot persist.
NYSE Volume 1,402,328,000
NASDAQ Volume 2,225,050,000
Commodities were all lower, returning to the deflation scenario, which hasn't actually been played out and has years in which to run, instead of months, as the government and financial pundits would have you believe. Some people are actually talking about inflation's quick return in the form of higher prices. That's an appearance I would not count on for at least another 9-12 months, but more properly, prices will be under pressure for at least the next two years and probably longer.
Oil for June delivery was down $1.41, to $50.13. Gold dipped $5.90, to $908.20. Silver notched a 4 cent gain to close at $12.99 in New York. The rest of the popularly-traded commodities were down, including foodstuffs.
As for the swine flu hysteria, that's strictly a sideshow to the real story. It's all about your money, and how the government and/or banking/insurance/investment complex screws you out of yours.
There are other options, like physical gold, silver, other commodities, actual saving, smart budgeting, and owning your own business, just for openers.
Friday, April 24, 2009
NASDAQ Ends Week With Overall Gain, Dow, S&P End Streak
The markets roared into positive ground again on Friday, with all major indices finishing off the week on a positive note. However, only the NASDAQ continued the string of weekly gains, as the S&P and the Dow both could not overcome severe losses from Monday.
Dow 8,076.29, +119.23 (1.50%)
NASDAQ 1,694.29, +42.08 (2.55%)
S&P 500 866.23, +14.31 (1.68%)
NYSE Composite 5,468.41, +96.31 (1.79%)
Overlaying the entire trading complex was the release of a government report which outlined the methodology of the banks' "stress tests." While the government will keep everybody on the edge of their seats until May 4, when the results of the tests on 19 of the nation's largest banks are released, today's report did little to tip their hand.
For the most part, nobody has a clue as to which banks will pass or fail, though various sources keep suggesting that none of the banks will actually fail.
With that lack of information in hand, investors continued bidding share prices higher, giving somewhat of an indication that the stress tests will probably amount to much ado about nothing. May 4 will come and go, and the government will continue to maintain that banks like Citigroup, Bank of America and JP Morgan Chase are "sufficiently capitalized" to weather any financial storm. In general, waiting for the stress test results is like watching paint dry - boring and anticlimactic.
On the day, advancing issues pummeled decliners, 4814-1652. New lows outnumbered new highs, 85-24. Volume was strong, as it has been all week, though Monday's was by far the highest volume of the week.
NYSE Volume 1,733,499,000
NASDAQ Volume 2,592,196,000
Oil gained $2.69 to $51.54. Gold was up $7.50, to $914.10. Silver finished up 17 cents, to $12.95 per ounce. Foodstuffs were mostly down, and natural gas has bottomed out at $3.40 per 1000 btu.
Aside from Monday's post-option expiration scare, the markets enjoyed another solid week. The NASDAQ stretched its winning streak to 7 straight, though the Dow and S&P are at or approaching solid resistance points.
Dow 8,076.29, +119.23 (1.50%)
NASDAQ 1,694.29, +42.08 (2.55%)
S&P 500 866.23, +14.31 (1.68%)
NYSE Composite 5,468.41, +96.31 (1.79%)
Overlaying the entire trading complex was the release of a government report which outlined the methodology of the banks' "stress tests." While the government will keep everybody on the edge of their seats until May 4, when the results of the tests on 19 of the nation's largest banks are released, today's report did little to tip their hand.
For the most part, nobody has a clue as to which banks will pass or fail, though various sources keep suggesting that none of the banks will actually fail.
With that lack of information in hand, investors continued bidding share prices higher, giving somewhat of an indication that the stress tests will probably amount to much ado about nothing. May 4 will come and go, and the government will continue to maintain that banks like Citigroup, Bank of America and JP Morgan Chase are "sufficiently capitalized" to weather any financial storm. In general, waiting for the stress test results is like watching paint dry - boring and anticlimactic.
On the day, advancing issues pummeled decliners, 4814-1652. New lows outnumbered new highs, 85-24. Volume was strong, as it has been all week, though Monday's was by far the highest volume of the week.
NYSE Volume 1,733,499,000
NASDAQ Volume 2,592,196,000
Oil gained $2.69 to $51.54. Gold was up $7.50, to $914.10. Silver finished up 17 cents, to $12.95 per ounce. Foodstuffs were mostly down, and natural gas has bottomed out at $3.40 per 1000 btu.
Aside from Monday's post-option expiration scare, the markets enjoyed another solid week. The NASDAQ stretched its winning streak to 7 straight, though the Dow and S&P are at or approaching solid resistance points.
Thursday, April 23, 2009
Stocks Head Higher on Earnings News, Banking
It's a truly magical time to be trading in this market if you are one of the blissfully ignorant who merrily parade into stocks without regard to the past, present or future. Truth be told, I wish I were one of them, able to ignore unemployment claims which continue to rise unabated, blind to the tortuous machinations of the capital markets and with a positive, "can do" attitude about the American 21st century.
Had I been able to overlook the obvious strains on the national economy, I might have participated in this current rally. Instead, I have been either wrong or out of the market for the better part of the last two months, as, after plummeting by more than 50% in the past 18 months, stocks have rebounded positively and with no end in sight.
I suppose the minute I decide to go long, is when the markets will reverse course, thus I am staying on the sidelines for the time being.
Stocks were up moderately on all major indices, though the Dow seems stuck in place while the S&P and NASDAQ continue to lead the way. Apple (AAPL) and eBay (EBAY) led advances on the NASDAQ, though Microsoft reported after the bell the first quarterly decline in sales on a year-over-year basis in the company's 34-year history. Still, the company earned 39 cents per share after charges, which met analyst estimates and the stock traded 3% higher in the after-hours.
Dow 7,957.06, +70.49 (0.89%)
NASDAQ 1,652.21, +6.09 (0.37%)
S&P 500 851.92, +8.37 (0.99%)
NYSE Composite 5,372.10, +81.49 (1.54%)
As stocks continued their ascent, market internals did not conform to the headline numbers. Overall, advancing issues barely nudged past decliners, 3267-3143, with the bulk of the losers on the NASDAQ. Once again, there were more new lows than new highs, 62-20, continuing the long-standing bias in that indicator. Volume was solid, in line with recent days.
NYSE Volume 1,566,731,000
NASDAQ Volume 2,485,417,000
The session was somewhat volatile, though in a narrow range. All of the indices spent some time in the red, and most of the day's gains were posted in the final half-hour. It's a day-trader's market, and all of the money is being made on the buy side.
Over in commodities, oil gained 65 cents, to $49.50, while other energy components - such as natural gas - finished with losses. Foodstuffs were moderately lower overall, while the precious metals continued to advance. Gold finished the day up $14.10, to $906.60 and silver was even more sought-after, gaining 45 cents, to $12.76.
The unabated market advance has now lasted 32 sessions, of which 14 have been to the downside, though a good number of them - 8 - have been minor, five of those being marginal losses of less than 50 points on the Dow. The 18 sessions which showed gains were far more robust, though many of those occurred in the early stages of the rally, in mid-March, when the Dow galloped ahead 1350 points in a span of ten sessions. The past 22 sessions have seen a top (just 290 points higher) and retreat on the Dow, putting the widely-watched index, as of today, just 182 points above the high-water mark of 7775 reached on March 23.
Noting the slowdown in the advance, a breakout to the upside is about as plausible now as a downturn. About 10 days ago, I mentioned that stocks would trade in a sideways manner, which is essentially what's going on, though there have been notable gains in technology, banking and other sectors during recent days.
All of the major indices are actually exhibiting the same pattern, although the NASDAQ has outperformed them all. The NASDAQ charts are somewhat troubling, however, as the appearance of multiple trading gaps have been a feature. The index has been boosted both higher and lower off previous day's closes, but gaps are significant signs of volatility and uncertainty, and sooner or later, all of them get filled. Just how long that process will take depends to a large extent on economic conditions, and reaction to them. Some say investors making money today are in denial of reality, while bulls - ever positive - point to various "signs" of improvement, and the notion that the banking crisis is not as severe as some believe.
Who is eventually proven right will likely take some time, though it certainly appears that there are good arguments on both the bullish and bearish side. One feature that's been particularly interesting - I'm afraid to call it anything other than that - is how many stocks are reporting lower overall revenues and declining growth but still meeting lowered expectations and being bid higher. Is the confidence in these companies misplaced, or are buyers stepping in at lowered valuations, seeing real bargains? It's probably a little bit of each, taken on a case-by-case basis.
Tomorrow's trade is likely to be indecisive, but the last week of April and the first one of May should produce some idea of direction. Chrysler's deadline is less than a week away, GM's future continues to be cloudy, the results of the bank stress tests are due May 4, April employment figures will provide more insight and the government's initial estimate of first quarter GDP are all on the table over the coming fortnight. It figures to be quite the wild ride.
Had I been able to overlook the obvious strains on the national economy, I might have participated in this current rally. Instead, I have been either wrong or out of the market for the better part of the last two months, as, after plummeting by more than 50% in the past 18 months, stocks have rebounded positively and with no end in sight.
I suppose the minute I decide to go long, is when the markets will reverse course, thus I am staying on the sidelines for the time being.
Stocks were up moderately on all major indices, though the Dow seems stuck in place while the S&P and NASDAQ continue to lead the way. Apple (AAPL) and eBay (EBAY) led advances on the NASDAQ, though Microsoft reported after the bell the first quarterly decline in sales on a year-over-year basis in the company's 34-year history. Still, the company earned 39 cents per share after charges, which met analyst estimates and the stock traded 3% higher in the after-hours.
Dow 7,957.06, +70.49 (0.89%)
NASDAQ 1,652.21, +6.09 (0.37%)
S&P 500 851.92, +8.37 (0.99%)
NYSE Composite 5,372.10, +81.49 (1.54%)
As stocks continued their ascent, market internals did not conform to the headline numbers. Overall, advancing issues barely nudged past decliners, 3267-3143, with the bulk of the losers on the NASDAQ. Once again, there were more new lows than new highs, 62-20, continuing the long-standing bias in that indicator. Volume was solid, in line with recent days.
NYSE Volume 1,566,731,000
NASDAQ Volume 2,485,417,000
The session was somewhat volatile, though in a narrow range. All of the indices spent some time in the red, and most of the day's gains were posted in the final half-hour. It's a day-trader's market, and all of the money is being made on the buy side.
Over in commodities, oil gained 65 cents, to $49.50, while other energy components - such as natural gas - finished with losses. Foodstuffs were moderately lower overall, while the precious metals continued to advance. Gold finished the day up $14.10, to $906.60 and silver was even more sought-after, gaining 45 cents, to $12.76.
The unabated market advance has now lasted 32 sessions, of which 14 have been to the downside, though a good number of them - 8 - have been minor, five of those being marginal losses of less than 50 points on the Dow. The 18 sessions which showed gains were far more robust, though many of those occurred in the early stages of the rally, in mid-March, when the Dow galloped ahead 1350 points in a span of ten sessions. The past 22 sessions have seen a top (just 290 points higher) and retreat on the Dow, putting the widely-watched index, as of today, just 182 points above the high-water mark of 7775 reached on March 23.
Noting the slowdown in the advance, a breakout to the upside is about as plausible now as a downturn. About 10 days ago, I mentioned that stocks would trade in a sideways manner, which is essentially what's going on, though there have been notable gains in technology, banking and other sectors during recent days.
All of the major indices are actually exhibiting the same pattern, although the NASDAQ has outperformed them all. The NASDAQ charts are somewhat troubling, however, as the appearance of multiple trading gaps have been a feature. The index has been boosted both higher and lower off previous day's closes, but gaps are significant signs of volatility and uncertainty, and sooner or later, all of them get filled. Just how long that process will take depends to a large extent on economic conditions, and reaction to them. Some say investors making money today are in denial of reality, while bulls - ever positive - point to various "signs" of improvement, and the notion that the banking crisis is not as severe as some believe.
Who is eventually proven right will likely take some time, though it certainly appears that there are good arguments on both the bullish and bearish side. One feature that's been particularly interesting - I'm afraid to call it anything other than that - is how many stocks are reporting lower overall revenues and declining growth but still meeting lowered expectations and being bid higher. Is the confidence in these companies misplaced, or are buyers stepping in at lowered valuations, seeing real bargains? It's probably a little bit of each, taken on a case-by-case basis.
Tomorrow's trade is likely to be indecisive, but the last week of April and the first one of May should produce some idea of direction. Chrysler's deadline is less than a week away, GM's future continues to be cloudy, the results of the bank stress tests are due May 4, April employment figures will provide more insight and the government's initial estimate of first quarter GDP are all on the table over the coming fortnight. It figures to be quite the wild ride.
Wednesday, April 22, 2009
Economic Realities Ignored by Propagandist Media
The media is doing a very nice job of covering up the real issues involving the US economy, the banks, TARP and Treasury's role in the massive fraud being foisted on the nation's public.
Yesterday, Tim Geithner's comments that the "vast majority" of US banks had sufficient capital were largely credited for pumping an afternoon market rally led by the financial sector. That tidbit was so widely reported that it brought back memories of Republican "talking points" to media outlets, all of which parroted the party line during the Bush years.
It now seems apparent that the press corps is still being led by nose rings pulled by the PR machine of the federal government. Much of the news that the government doesn't want the public to know about is widely dispensed by newspapers - which nobody reads anymore - and online, increasingly becoming the true fourth estate. Case in point is that at the very same time Treasury Secretary Tim Geithner was testifying that government programs were working, TARP Inspector General Neil Barofsky issued a scorching 250-page report detailing "staggering" fraud and waste inherent in the program, citing the more than 20 separate criminal investigations involving TARP, while criticizing the program's size as unwieldy and prone to abuse.
The controlled propaganda from D.C., the major TV networks and cable outlets is probably not going to be able to stem the tide of negatives which eventually will flood the secondary news media, on the internet, radio, financial newsletters and magazines. There is simply too much bad news for the mainstream media to blunt all of it. Just this morning, prior to the markets' opening, more bad news from the banking complex overwhelmed the investing community as Morgan Stanley (MS) reported a 1st quarter loss far in excess of analyst expectations. The company posted a loss of 57 cents a share ($177 million), swinging completely around from the profit of $1.41 billion, or $1.26 a share, generated in the first three months of 2008.
Analysts were looking for a loss of 8 cents a share in the quarter. This was a massive miss that everyone should notice, not just the investment community.
As it was, the Dow opened with a loss of just 75 points, with other indices responding in similar ho-hum fashion, no doubt due to excess upside pressure being exerted by the brokerages which control most of the trading. By 10:00 am, the Dow, S&P and NASDAQ had already turned positive and headed higher, begging the question of just how much bad news will it take to make the markets respond in anything close to realism?
While control issues of the media and the markets become more apparent, maybe the Machiavellian nature of this episode in American history will become more apparent with today's apparent suicide of acting chief financial officer of troubled mortgage giant Freddie Mac.
According to reports, 41-year-old David Kellerman was a lifer at Freddie, having worked his way up from his analyst position in 1992 all the way to the executive suite. His death brings into play many questions, because he - of all people - was a man who may have known too much. Did Kellerman kill himself because he was being set up for a fall, or was the suicide another "black op" designed to silence him from going public on matters that might expose key politicians or people on their staffs?
Either case is damning to the government, as they attempt to plug every leak in their quickly-sinking ship of state. Fannie Mae and Freddie Mac are linchpins in the entire financial meltdown that have yet to be adequately exposed. They are both severely undercapitalized and without enormous injections of government money, would be insolvent. Even with the massive funding from the government, they are already deeply underwater.
Also being represented on the national airwaves, Chrysler and GM's dire straits. Both companies continue to inch closer to bankruptcy. In Chrysler's case, such a scenario would mean liquidation. GM might be able to restructure in an orderly proceeding, though tens of thousands of jobs would be lost. Chrysler faces a May 1 deadline to reach a merger agreement with Italian automaker Fiat, itself under severe strain from declining auto sales.
Separately, General Motors announced late Wednesday that they may close some plants for up to 9 weeks this summer to save money. The automaker, once the pride of US industrial might, faces a government-imposed June 1 deadline to craft a workable plan to receive more federal aid. The alternative is bankruptcy, though even those closest to negotiations are unclear as to how such a plan would be structured.
Meanwhile, on Wall Street Wednesday, stocks were up early and down late, as the drumbeat of bad economic news is offset by a smattering of reasonable earnings reports from major firms.
Dow 7,886.57, -82.99 (1.04%)
NASDAQ 1,646.12, +2.27 (0.14%)
S&P 500 843.55, -6.53 (0.77%)
NYSE Composite 5,290.61, -48.98 (0.92%)
Despite the negative slant to the markets on the day, advancers actually outperformed declining issues, 3440-3006. There were 83 reported new lows to 34 new highs. Volume was again on the high side.
NYSE Volume 1,770,590,000
NASDAQ Volume 2,662,538,000
Commodities continued to limp along, dealing with slack demand in many industries. Crude oil for June delivery (new contract) gained just 30 cents, closing at $48.85. Foodstuffs were marginally lower. Precious metals continued to show some strength, with gold higher by $9.80, to $892.50. Silver finished the day in New York up 25 cents, at $12.31.
First time unemployment claims will greet market players on Thursday morning before the open. Experts are hoping for a continuation of last week's slight surprise of lower claims, though overall, unemployment remains abnormally high an a chief concern for millions of Americans and their families. More corporate reports will flow to market, though expectations are now so low that a good number may beat the Street but still be seen as vulnerable investments.
Sooner or later, the bad news catches up to everyone. While the government and media outlets try to paint a brighter picture than that which exists, issues such as trust and confidence are being severely tested.
Yesterday, Tim Geithner's comments that the "vast majority" of US banks had sufficient capital were largely credited for pumping an afternoon market rally led by the financial sector. That tidbit was so widely reported that it brought back memories of Republican "talking points" to media outlets, all of which parroted the party line during the Bush years.
It now seems apparent that the press corps is still being led by nose rings pulled by the PR machine of the federal government. Much of the news that the government doesn't want the public to know about is widely dispensed by newspapers - which nobody reads anymore - and online, increasingly becoming the true fourth estate. Case in point is that at the very same time Treasury Secretary Tim Geithner was testifying that government programs were working, TARP Inspector General Neil Barofsky issued a scorching 250-page report detailing "staggering" fraud and waste inherent in the program, citing the more than 20 separate criminal investigations involving TARP, while criticizing the program's size as unwieldy and prone to abuse.
The controlled propaganda from D.C., the major TV networks and cable outlets is probably not going to be able to stem the tide of negatives which eventually will flood the secondary news media, on the internet, radio, financial newsletters and magazines. There is simply too much bad news for the mainstream media to blunt all of it. Just this morning, prior to the markets' opening, more bad news from the banking complex overwhelmed the investing community as Morgan Stanley (MS) reported a 1st quarter loss far in excess of analyst expectations. The company posted a loss of 57 cents a share ($177 million), swinging completely around from the profit of $1.41 billion, or $1.26 a share, generated in the first three months of 2008.
Analysts were looking for a loss of 8 cents a share in the quarter. This was a massive miss that everyone should notice, not just the investment community.
As it was, the Dow opened with a loss of just 75 points, with other indices responding in similar ho-hum fashion, no doubt due to excess upside pressure being exerted by the brokerages which control most of the trading. By 10:00 am, the Dow, S&P and NASDAQ had already turned positive and headed higher, begging the question of just how much bad news will it take to make the markets respond in anything close to realism?
While control issues of the media and the markets become more apparent, maybe the Machiavellian nature of this episode in American history will become more apparent with today's apparent suicide of acting chief financial officer of troubled mortgage giant Freddie Mac.
According to reports, 41-year-old David Kellerman was a lifer at Freddie, having worked his way up from his analyst position in 1992 all the way to the executive suite. His death brings into play many questions, because he - of all people - was a man who may have known too much. Did Kellerman kill himself because he was being set up for a fall, or was the suicide another "black op" designed to silence him from going public on matters that might expose key politicians or people on their staffs?
Either case is damning to the government, as they attempt to plug every leak in their quickly-sinking ship of state. Fannie Mae and Freddie Mac are linchpins in the entire financial meltdown that have yet to be adequately exposed. They are both severely undercapitalized and without enormous injections of government money, would be insolvent. Even with the massive funding from the government, they are already deeply underwater.
Also being represented on the national airwaves, Chrysler and GM's dire straits. Both companies continue to inch closer to bankruptcy. In Chrysler's case, such a scenario would mean liquidation. GM might be able to restructure in an orderly proceeding, though tens of thousands of jobs would be lost. Chrysler faces a May 1 deadline to reach a merger agreement with Italian automaker Fiat, itself under severe strain from declining auto sales.
Separately, General Motors announced late Wednesday that they may close some plants for up to 9 weeks this summer to save money. The automaker, once the pride of US industrial might, faces a government-imposed June 1 deadline to craft a workable plan to receive more federal aid. The alternative is bankruptcy, though even those closest to negotiations are unclear as to how such a plan would be structured.
Meanwhile, on Wall Street Wednesday, stocks were up early and down late, as the drumbeat of bad economic news is offset by a smattering of reasonable earnings reports from major firms.
Dow 7,886.57, -82.99 (1.04%)
NASDAQ 1,646.12, +2.27 (0.14%)
S&P 500 843.55, -6.53 (0.77%)
NYSE Composite 5,290.61, -48.98 (0.92%)
Despite the negative slant to the markets on the day, advancers actually outperformed declining issues, 3440-3006. There were 83 reported new lows to 34 new highs. Volume was again on the high side.
NYSE Volume 1,770,590,000
NASDAQ Volume 2,662,538,000
Commodities continued to limp along, dealing with slack demand in many industries. Crude oil for June delivery (new contract) gained just 30 cents, closing at $48.85. Foodstuffs were marginally lower. Precious metals continued to show some strength, with gold higher by $9.80, to $892.50. Silver finished the day in New York up 25 cents, at $12.31.
First time unemployment claims will greet market players on Thursday morning before the open. Experts are hoping for a continuation of last week's slight surprise of lower claims, though overall, unemployment remains abnormally high an a chief concern for millions of Americans and their families. More corporate reports will flow to market, though expectations are now so low that a good number may beat the Street but still be seen as vulnerable investments.
Sooner or later, the bad news catches up to everyone. While the government and media outlets try to paint a brighter picture than that which exists, issues such as trust and confidence are being severely tested.
Tuesday, April 21, 2009
Bank Oligarchs, the Fiddler President and Congressional Circus Clowns
There were no major economic data releases today, though there were a number of companies reporting 1st quarter earnings, including Bank of New York Mellon Corp., Northern Trust and State Street, all of which showed declines in earnings, though the latter beat analyst estimates.
Disappointing results from banking interests - reported eithe before the open or during the session - didn't deter investors from sparking a rally in financials, however, pushing the major indices to recoup some of Monday's dramatic decline.
After the close, CapitalOne (COF), once the nation's largest stand-alone credit card issuer, reported a net loss for the first quarter of 2009 of $111.9 million, or $0.45 per common share, which was far better than last quarter - a $1.4 billion loss, or -$3.74 per share - but far worse than the same period last year, in which the company reported a profit of $548.5 million, or $1.47 per share. during the session, shares of CapitalOne were higher by 1.67 (12.50%), but were seen lower in after-hours trading, down more than a point shortly after the earnings release.
On the Dow, 25 of 30 component stocks finished with gains. Leading the way were the three bank stocks - JP Morgan Chase (JPM), Bank of America (BAC) and Citigroup (C) - all of which ended the day at least 9.5% to the good. How the very same banks which are controlling the economy are manipulating the markets is a grand shame and these oligarchies need to be dismantled, as explained below.
Caterpillar (CAT) reported its first quarterly loss since 1992 and drug maker Merck (MRK) reported a profit but missed earnings estimates.
As for the rest of the market, suffice it to say that the market is mostly comprised of day-trading Wall Streeters and hedge fund managers who follow the leaders, which is why stocks were broadly higher today, despite the absence of any positive news.
Dow 7,969.56, +127.83 (1.63%)
Nasdaq 1,643.85, +35.64 (2.22%)
S&P 500 850.08, +17.69 (2.13%)
NYSE Composite 5,339.59, +119.47 (2.29%)
Advancing issues turned the table on decliners, beating them 4846-1627, though new lows continued the spread over new highs, by a count of 69-18. Volume was solid, though unspectacular.
NYSE Volume 1,671,525,000
Nasdaq Volume 2,435,768,000
In the commodity markets, a slight bounce from Monday's drubbing, with crude futures up 63 cents, to $46.51. Gold lost $4.60, to $882.70, with silver off a nickel, to $12.06. Futures for various foodstuffs were mostly higher.
Appearing before the Joint Economic Committee of Congress today were, among others, Federal Reserve Bank of Kansas City President Thomas Hoenig, Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson, each of whom expressed skepticism over whether current government actions were effective in relieving the economic distress in the banking sector.
Will the government listen, and even more to the point, do the congressional member and senators who convened these hearings, actually understand what they're saying? Probably not. Politicians are a breed of people who understand power and politics and little more. What they do know is that their allegiance is to the Wall Street bankers, because that group, by and large, financed the campaigns that put them or keeps them in positions of power.
As usual, it will be politics first, constituents (the actual ones they're supposed to represent), last, and so, the sad saga of our nation being run into the ground by a coalition of Wall Street financiers and political puppets in Washington will continue unabated. Today's hearings are just more window dressing, designed to keep the public from rising up, rioting and throwing the whole bunch into the East and Potomac Rivers, which is precisely what should happen and very well may happen if this fiasco of keeping insolvent banks operating under clouds of secrecy and mountains of non-negotiable debt is allowed to continue much longer.
Below, Yahoo's Tech Ticker talks with former IMF chief economist and current MIT economics professor Simon Johnson about the big banks and how they stand in the way of a meaningful economic recovery.
Here is Johnson's breathtaking article, The Quiet Coup in this month's Atlantic.
Near the end of his reveling writing, Johnson finally comes to speak the unspeakable:
There you have it. A respected economist - not me, a generally disrespected populist pundit blogger - says this current condition could devolve into something worse than the Great Depression. I've held that view all along, since early in 2007, and if you check my archives at Downtown Magazine, probably as early as 2002 or 2003, when I reported on the then-emerging pension crisis which now continues beneath the surface.
Like Johnson, I hold out slim hopes that the elite in Washington and the ruling oligarchs on Wall Street will yield power without a fight of monstrous proportions, against the citizenry of the United States, and to a larger extent, the populations and governments of their trading partners globally.
Mr. Johnson and I are not alone. The chorus for concentrated government action to close down the insolvent banks and replace their inept and likely corrupt management, is growing at a very rapid pace. The longer the government dithers, the closer the nation comes to the precipice of economic, political and social destruction.
Finally, below, here's the second part of Henry Blogett's interview with Simon Johnson, in which he extolls the virtue of quick, decisive action in cleaning up and breaking up the major bank's stranglehold on the country's finances:
It's become clear to just about everyone in the world, except the pols in Washington and the banksters themselves, that breaking up the nation's biggest banks and dismantling their management and interlocking boards of directors would provide the quickest, cleanest and least costly resolution to the global financial condition. Instead, President Barack Obama, like Nero in ancient Rome, fiddles while the empire burns to the ground and the congress can only be compared to circus clowns for all the good they've done over the past six months.
Disappointing results from banking interests - reported eithe before the open or during the session - didn't deter investors from sparking a rally in financials, however, pushing the major indices to recoup some of Monday's dramatic decline.
After the close, CapitalOne (COF), once the nation's largest stand-alone credit card issuer, reported a net loss for the first quarter of 2009 of $111.9 million, or $0.45 per common share, which was far better than last quarter - a $1.4 billion loss, or -$3.74 per share - but far worse than the same period last year, in which the company reported a profit of $548.5 million, or $1.47 per share. during the session, shares of CapitalOne were higher by 1.67 (12.50%), but were seen lower in after-hours trading, down more than a point shortly after the earnings release.
On the Dow, 25 of 30 component stocks finished with gains. Leading the way were the three bank stocks - JP Morgan Chase (JPM), Bank of America (BAC) and Citigroup (C) - all of which ended the day at least 9.5% to the good. How the very same banks which are controlling the economy are manipulating the markets is a grand shame and these oligarchies need to be dismantled, as explained below.
Caterpillar (CAT) reported its first quarterly loss since 1992 and drug maker Merck (MRK) reported a profit but missed earnings estimates.
As for the rest of the market, suffice it to say that the market is mostly comprised of day-trading Wall Streeters and hedge fund managers who follow the leaders, which is why stocks were broadly higher today, despite the absence of any positive news.
Dow 7,969.56, +127.83 (1.63%)
Nasdaq 1,643.85, +35.64 (2.22%)
S&P 500 850.08, +17.69 (2.13%)
NYSE Composite 5,339.59, +119.47 (2.29%)
Advancing issues turned the table on decliners, beating them 4846-1627, though new lows continued the spread over new highs, by a count of 69-18. Volume was solid, though unspectacular.
NYSE Volume 1,671,525,000
Nasdaq Volume 2,435,768,000
In the commodity markets, a slight bounce from Monday's drubbing, with crude futures up 63 cents, to $46.51. Gold lost $4.60, to $882.70, with silver off a nickel, to $12.06. Futures for various foodstuffs were mostly higher.
Appearing before the Joint Economic Committee of Congress today were, among others, Federal Reserve Bank of Kansas City President Thomas Hoenig, Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson, each of whom expressed skepticism over whether current government actions were effective in relieving the economic distress in the banking sector.
Will the government listen, and even more to the point, do the congressional member and senators who convened these hearings, actually understand what they're saying? Probably not. Politicians are a breed of people who understand power and politics and little more. What they do know is that their allegiance is to the Wall Street bankers, because that group, by and large, financed the campaigns that put them or keeps them in positions of power.
As usual, it will be politics first, constituents (the actual ones they're supposed to represent), last, and so, the sad saga of our nation being run into the ground by a coalition of Wall Street financiers and political puppets in Washington will continue unabated. Today's hearings are just more window dressing, designed to keep the public from rising up, rioting and throwing the whole bunch into the East and Potomac Rivers, which is precisely what should happen and very well may happen if this fiasco of keeping insolvent banks operating under clouds of secrecy and mountains of non-negotiable debt is allowed to continue much longer.
Below, Yahoo's Tech Ticker talks with former IMF chief economist and current MIT economics professor Simon Johnson about the big banks and how they stand in the way of a meaningful economic recovery.
Here is Johnson's breathtaking article, The Quiet Coup in this month's Atlantic.
Near the end of his reveling writing, Johnson finally comes to speak the unspeakable:
The conventional wisdom among the elite is still that the current slump “cannot be as bad as the Great Depression.” This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances.
There you have it. A respected economist - not me, a generally disrespected populist pundit blogger - says this current condition could devolve into something worse than the Great Depression. I've held that view all along, since early in 2007, and if you check my archives at Downtown Magazine, probably as early as 2002 or 2003, when I reported on the then-emerging pension crisis which now continues beneath the surface.
Like Johnson, I hold out slim hopes that the elite in Washington and the ruling oligarchs on Wall Street will yield power without a fight of monstrous proportions, against the citizenry of the United States, and to a larger extent, the populations and governments of their trading partners globally.
Mr. Johnson and I are not alone. The chorus for concentrated government action to close down the insolvent banks and replace their inept and likely corrupt management, is growing at a very rapid pace. The longer the government dithers, the closer the nation comes to the precipice of economic, political and social destruction.
Finally, below, here's the second part of Henry Blogett's interview with Simon Johnson, in which he extolls the virtue of quick, decisive action in cleaning up and breaking up the major bank's stranglehold on the country's finances:
It's become clear to just about everyone in the world, except the pols in Washington and the banksters themselves, that breaking up the nation's biggest banks and dismantling their management and interlocking boards of directors would provide the quickest, cleanest and least costly resolution to the global financial condition. Instead, President Barack Obama, like Nero in ancient Rome, fiddles while the empire burns to the ground and the congress can only be compared to circus clowns for all the good they've done over the past six months.
Monday, April 20, 2009
The Road To Hell: Nothing's Changed Except Options
On Monday, stocks fell in dramatic fashion right from the opening bell until the close of trading, without interruption or even a hint of a rally. Odd, isn't it, that after 6 consecutive weeks of gains, stocks would take their worst beating in well over a month?
Not at all, if one considers the power of the major players on Wall Street to influence the direction of stocks to their liking. The only thing that's changed since Friday is that there are no options close to expiration, no easy profits to be made on the backs of trusting investors, so the big money did on Monday what they always do when there's no "easy" money to be had, they sold off en masse.
My own family and friends often ridicule me for my extreme views on market manipulation, but I don't complain. Over the weekend, while at a family gathering, the "geniuses" of finance were all gloating over the recent rally, claiming that the economy was all well and good, and that my "gloom and doom" was once again proven wrong. I replied that there was 100% certitude that the rally was over and stocks would end their 6-week streak beginning this week, precisely for the aforementioned reasons.
Unfortunately for me, I didn't make any bets with the naysayers on my prediction, as I'd be cashing them later this week. Stocks have become overbought to the extreme and the big money knows it's time to take money off the table before the deluge of disappointing earnings commences.
The action on the street was one-way, broad-based and heavy. No surprise there. Where it goes from here is probably going to be a little more difficult to predict on a daily basis as the markets will gyrate through earnings season. Some stocks will do well while others will crack new 52-week lows. Overall, however, the action will be to the downside, as the media hypes unemployment, commercial real estate blowup, continuing housing crisis, banks that don't lend, consumers that don't spend and an economy that refuses to mend. (amazingly, gloom and doomers can rhyme pessimistically)
For some perspective, Monday's loss n the Dow was the largest since March 2nd, and the fifth largest of 2009. There have been some very bad days on Wall Street this year, and today's decline provides an argument that they are far from over. Investors refused to capitulate after the collapse from September to November of 2008, and the subsequent fall-over from January through mid-March, so logic dictates that the final leg of this great bear market has yet to occur. There is every reason to believe that stocks will retest and even surpass the March 9 lows, just as they have crushed September and October, 2008 lows and the November, 2008 lows. Brace for impact.
Dow 7,841.73, -289.60 (3.56%)
NASDAQ 1,608.21, -64.86 (3.88%)
S&P 500 832.39, -37.21 (4.28%)
NYSE Composite 5,220.12, -260.48 (4.75%)
To illustrate the depth of today's sell-off, consider that declining issues beat back advancing ones by a large ratio - 6 to 1 - 5548-918. The most persistent indicator - new highs vs. new lows - maintained its bias throughout the recent rally toward new lows as it has for the past 18 months running and expanded the gap on Monday with 68 new lows to just 8 new highs. Expect that margin to increase dramatically over the coming weeks.
And if there was any one indicator pointing directly to the false aspects of this six-week rally it was trading volume, which was literally at the highest level of the year.
NYSE Volume 1,761,254,000
NASDAQ Volume 3,246,035,000
The rally of the past six weeks was built entirely on hype, lies and manipulation, the catalyst being those billions of dollars passed out from the government to the banks, which also double as brokerages. Want to know where the TARP money went? Take a look at that massive rally. It went into stocks and is now going to disappear, just like the money thrown into phony structured mortgage securities and credit default swaps.
Let the arguments for inflation begin and end right here. All of the stimulus and excess spending will not result in inflation and a lower dollar. The dollar has been rising against other currencies throughout the recent spending spree, and for good reason, the money created was phony, just like the prices of stocks. Nobody except the most expert of traders actually made money during this rise, and many of them are in the process of giving that back and then some. As much as the Federal Reserve would like to re-ignite the flames of inflation, they cannot do it by simply creating more money. As much as they create, Lord Keynes' "invisible hand" of the market will seek it out and destroy it with greater purpose and efficiency.
The basic structure of the economy is unbalanced. Labor, capital and resources have nowhere to go. Jobs continue to be lost, capital wasted and resources idled. Unless money, labor and resources are put to productive use - not into the stock market for paper gains - recovery and balance is impossible. Inflating the amount of money "in circulation" when it is actually being hoarded and squandered by the banks will not produce prosperity. Only a real, true accounting of the malinvestments and an orderly disposition of the liabilities produced can produce a resumption of prosperity. Anything less than that will produce only what we've already seen: false market rallies, continued deflation and ultimately - unless we change our ways - the complete breakdown of all contracts - economic, political and social.
In brief, the government, by tinkering with money supply and public relations trickery instead of doing the hard, necessary work of admitting that certain large banks are insolvent, threatens the very existence of not just the economy, but of the political process by which they were elected and the social fabric the keeps the nation a functional democracy. It's likely that the government has less than a year left to mend its ways or the United States of America runs the very real risk of devolving into chaos and anarchy, complete with threats of state secession, gangs, riots, homelessness, starvation and death.
Sounds like fun, huh?
Government's answers so far have been confined to bank bailouts (handouts), extensions of unemployment insurance (more handouts), increases in welfare payments (even more handouts) all with borrowed money. The spigot is about to run dry as foreign investors refuse to buy our new toxic investments, US Treasury bills, notes and bonds. Meanwhile, the tax burden on individuals grows.
There is no way to spend ourselves out of this mess. Fiscal discipline is a necessity which, thus far, has not even warranted a mention in the congress and various state-houses. Taxes have to be lowered dramatically, along with the requisite cuts in government spending. Those policies - exactly the reverse of what's being tried - are a major part of the solution. The rest of the formula is for investment in actual working industries, in technology, agriculture and manufacturing, not education, public works and education, which produce nothing.
Another proxy for the health of the global economy could be seen on the commodity markets. Crude oil for May delivery lost $4.45, to $45.88, a massive pull-back off recent highs. The precious metals suddenly reversed course, with gold gaining $19.60, to $887.50 and silver adding 32 cents to $12.11 (still a bargain).
There is no pricing power anywhere in anything priced in dollars. From foodstuffs to consumable energy, i-pods to pianos, prices are plummeting as consumers retrench, just as out government entities should. For a change, government should take heed of what the public is doing - hunkering down, avoiding waste, saving - and do likewise.
I've got $1000 that says they won't until it's too late to save themselves from themselves. In the immortal words of the great comic strip Pogo, "we have met the enemy and it is us."
Not at all, if one considers the power of the major players on Wall Street to influence the direction of stocks to their liking. The only thing that's changed since Friday is that there are no options close to expiration, no easy profits to be made on the backs of trusting investors, so the big money did on Monday what they always do when there's no "easy" money to be had, they sold off en masse.
My own family and friends often ridicule me for my extreme views on market manipulation, but I don't complain. Over the weekend, while at a family gathering, the "geniuses" of finance were all gloating over the recent rally, claiming that the economy was all well and good, and that my "gloom and doom" was once again proven wrong. I replied that there was 100% certitude that the rally was over and stocks would end their 6-week streak beginning this week, precisely for the aforementioned reasons.
Unfortunately for me, I didn't make any bets with the naysayers on my prediction, as I'd be cashing them later this week. Stocks have become overbought to the extreme and the big money knows it's time to take money off the table before the deluge of disappointing earnings commences.
The action on the street was one-way, broad-based and heavy. No surprise there. Where it goes from here is probably going to be a little more difficult to predict on a daily basis as the markets will gyrate through earnings season. Some stocks will do well while others will crack new 52-week lows. Overall, however, the action will be to the downside, as the media hypes unemployment, commercial real estate blowup, continuing housing crisis, banks that don't lend, consumers that don't spend and an economy that refuses to mend. (amazingly, gloom and doomers can rhyme pessimistically)
For some perspective, Monday's loss n the Dow was the largest since March 2nd, and the fifth largest of 2009. There have been some very bad days on Wall Street this year, and today's decline provides an argument that they are far from over. Investors refused to capitulate after the collapse from September to November of 2008, and the subsequent fall-over from January through mid-March, so logic dictates that the final leg of this great bear market has yet to occur. There is every reason to believe that stocks will retest and even surpass the March 9 lows, just as they have crushed September and October, 2008 lows and the November, 2008 lows. Brace for impact.
Dow 7,841.73, -289.60 (3.56%)
NASDAQ 1,608.21, -64.86 (3.88%)
S&P 500 832.39, -37.21 (4.28%)
NYSE Composite 5,220.12, -260.48 (4.75%)
To illustrate the depth of today's sell-off, consider that declining issues beat back advancing ones by a large ratio - 6 to 1 - 5548-918. The most persistent indicator - new highs vs. new lows - maintained its bias throughout the recent rally toward new lows as it has for the past 18 months running and expanded the gap on Monday with 68 new lows to just 8 new highs. Expect that margin to increase dramatically over the coming weeks.
And if there was any one indicator pointing directly to the false aspects of this six-week rally it was trading volume, which was literally at the highest level of the year.
NYSE Volume 1,761,254,000
NASDAQ Volume 3,246,035,000
The rally of the past six weeks was built entirely on hype, lies and manipulation, the catalyst being those billions of dollars passed out from the government to the banks, which also double as brokerages. Want to know where the TARP money went? Take a look at that massive rally. It went into stocks and is now going to disappear, just like the money thrown into phony structured mortgage securities and credit default swaps.
Let the arguments for inflation begin and end right here. All of the stimulus and excess spending will not result in inflation and a lower dollar. The dollar has been rising against other currencies throughout the recent spending spree, and for good reason, the money created was phony, just like the prices of stocks. Nobody except the most expert of traders actually made money during this rise, and many of them are in the process of giving that back and then some. As much as the Federal Reserve would like to re-ignite the flames of inflation, they cannot do it by simply creating more money. As much as they create, Lord Keynes' "invisible hand" of the market will seek it out and destroy it with greater purpose and efficiency.
The basic structure of the economy is unbalanced. Labor, capital and resources have nowhere to go. Jobs continue to be lost, capital wasted and resources idled. Unless money, labor and resources are put to productive use - not into the stock market for paper gains - recovery and balance is impossible. Inflating the amount of money "in circulation" when it is actually being hoarded and squandered by the banks will not produce prosperity. Only a real, true accounting of the malinvestments and an orderly disposition of the liabilities produced can produce a resumption of prosperity. Anything less than that will produce only what we've already seen: false market rallies, continued deflation and ultimately - unless we change our ways - the complete breakdown of all contracts - economic, political and social.
In brief, the government, by tinkering with money supply and public relations trickery instead of doing the hard, necessary work of admitting that certain large banks are insolvent, threatens the very existence of not just the economy, but of the political process by which they were elected and the social fabric the keeps the nation a functional democracy. It's likely that the government has less than a year left to mend its ways or the United States of America runs the very real risk of devolving into chaos and anarchy, complete with threats of state secession, gangs, riots, homelessness, starvation and death.
Sounds like fun, huh?
Government's answers so far have been confined to bank bailouts (handouts), extensions of unemployment insurance (more handouts), increases in welfare payments (even more handouts) all with borrowed money. The spigot is about to run dry as foreign investors refuse to buy our new toxic investments, US Treasury bills, notes and bonds. Meanwhile, the tax burden on individuals grows.
There is no way to spend ourselves out of this mess. Fiscal discipline is a necessity which, thus far, has not even warranted a mention in the congress and various state-houses. Taxes have to be lowered dramatically, along with the requisite cuts in government spending. Those policies - exactly the reverse of what's being tried - are a major part of the solution. The rest of the formula is for investment in actual working industries, in technology, agriculture and manufacturing, not education, public works and education, which produce nothing.
Another proxy for the health of the global economy could be seen on the commodity markets. Crude oil for May delivery lost $4.45, to $45.88, a massive pull-back off recent highs. The precious metals suddenly reversed course, with gold gaining $19.60, to $887.50 and silver adding 32 cents to $12.11 (still a bargain).
There is no pricing power anywhere in anything priced in dollars. From foodstuffs to consumable energy, i-pods to pianos, prices are plummeting as consumers retrench, just as out government entities should. For a change, government should take heed of what the public is doing - hunkering down, avoiding waste, saving - and do likewise.
I've got $1000 that says they won't until it's too late to save themselves from themselves. In the immortal words of the great comic strip Pogo, "we have met the enemy and it is us."
Friday, April 17, 2009
Stocks Chalk Up 6th Straight Winning Week
While the current rally may be nothing more than a bear market variety, it sure has packed a punch, registering 6 consecutive weeks of gains since bottoming out on March 9.
For the record, here are the numbers with the close of March 9 as a baseline:
The Dow Jones Industrials is up 1584 points, from 6547 to 8131, a gain of 24.2%.
The NASDAQ is up 405 points, from 1268 to 1673 (32%).
The S&P 500 is up 193 points, from 676 to 869 (28.6%).
The NYSE Composite is up 1254 points, from 4226 to 5480 (29.7%).
The overall gains this week were not spectacular, something on the order of 2%.
There were no important economic reports, and the corporate earnings releases came from Citigroup (C), General Electric (GE) and after-hours yesterday Google (GOOG). All of the companies beat lowered expectations, but while GE and Google showed profits, their stocks registered a gain of about 1% on the day, Citigroup, which posted a narrower loss than estimated, suffered a 9% decline on the day.
One gets the distinct impression that the gains may be coming to an end as volatility was completely wrung out of the market over the past few sessions, and stocks had already been bid up prior to earnings. The expectation is that investors will take flight - and profits - at the first sign of weakness, since, by and large, earnings have beaten lowered expectations, but overall are down anywhere from 20-90% (as was the case with Nokia) from year-ago figures.
Essentially, the stock gains, when compared to actual earnings, may be a bit overdone, though there seems to be a level of risk appetite not usually seen after deep market bottoms. This is suggestive of investors not having fully capitulated, which, if that is the case, the worst is still to come. To believe that 30 years of excessive credit and spending would be cured with some government hokus pokus is pure folly. Mortgage delinquencies are still churning in at a record pace, and now the commercial market is about to roll over. Unemployment has shown no slowdown whatsoever. Real estate and unemployment will continue to be the main drivers of the downward economy and they are nowhere near bottoms.
Dow 8,131.33, +5.90 (0.07%)
NASDAQ 1,673.07, +2.63 (0.16%)
S&P 500 869.60, +4.30 (0.50%)
NYSE Composite 5,480.60, +26.33 (0.48%)
On the day, advancers dominated decliners, 4150-2345, but new lows continued ahead of new highs, 76-37. Volume was very high, owing to options expiration. However, one could assume, with all of the action options-related activity that the tight range of the past three sessions was indicative of a well-played hand by Wall Street insiders. Otherwise, there would have been more of a radical trading pattern.
NYSE Volume 1,953,123,000
NASDAQ Volume 2,416,468,000
Commodities continued along the same pattern that has persisted over the past few weeks. Oil inched higher, up 35 cents, to $50.33. Crude has bounced above and below $50/barrel but has not escaped the range. While some supposed experts in crude keep calling for $65-75/barrel near term, the massive oversupply currently on the market, juxtaposed with continuing slumping demand should produce oil in the range of $35-40. Since the oil market is tiny and prone to manipulation, it is likely that price is being kept constant by some of the larger players. Eventually, their gambit will fail; the most obvious factor being that oil usually moves in reverse ratio to the dollar. As the dollar has strengthened, oil has not declined accordingly. There is a day of reckoning coming as reality meets markets.
The same could be said of the precious metals, which have been in a protracted decline for weeks. Gold tumbled again today, losing $11.90, to $867.90. Silver was also downgraded, dropping 47 cents to $11.79.
Gold and silver are presenting incredibly good buying opportunities. As soon as the markets begin to retrace their recent gains, the metals should reverse course, though the rise may not be rapid, due to deflationary pressures.
As weeks go, this one was one of a duller variety. Next week, when many more companies will be reporting first quarter earnings, should be more exciting.
For the record, here are the numbers with the close of March 9 as a baseline:
The Dow Jones Industrials is up 1584 points, from 6547 to 8131, a gain of 24.2%.
The NASDAQ is up 405 points, from 1268 to 1673 (32%).
The S&P 500 is up 193 points, from 676 to 869 (28.6%).
The NYSE Composite is up 1254 points, from 4226 to 5480 (29.7%).
The overall gains this week were not spectacular, something on the order of 2%.
There were no important economic reports, and the corporate earnings releases came from Citigroup (C), General Electric (GE) and after-hours yesterday Google (GOOG). All of the companies beat lowered expectations, but while GE and Google showed profits, their stocks registered a gain of about 1% on the day, Citigroup, which posted a narrower loss than estimated, suffered a 9% decline on the day.
One gets the distinct impression that the gains may be coming to an end as volatility was completely wrung out of the market over the past few sessions, and stocks had already been bid up prior to earnings. The expectation is that investors will take flight - and profits - at the first sign of weakness, since, by and large, earnings have beaten lowered expectations, but overall are down anywhere from 20-90% (as was the case with Nokia) from year-ago figures.
Essentially, the stock gains, when compared to actual earnings, may be a bit overdone, though there seems to be a level of risk appetite not usually seen after deep market bottoms. This is suggestive of investors not having fully capitulated, which, if that is the case, the worst is still to come. To believe that 30 years of excessive credit and spending would be cured with some government hokus pokus is pure folly. Mortgage delinquencies are still churning in at a record pace, and now the commercial market is about to roll over. Unemployment has shown no slowdown whatsoever. Real estate and unemployment will continue to be the main drivers of the downward economy and they are nowhere near bottoms.
Dow 8,131.33, +5.90 (0.07%)
NASDAQ 1,673.07, +2.63 (0.16%)
S&P 500 869.60, +4.30 (0.50%)
NYSE Composite 5,480.60, +26.33 (0.48%)
On the day, advancers dominated decliners, 4150-2345, but new lows continued ahead of new highs, 76-37. Volume was very high, owing to options expiration. However, one could assume, with all of the action options-related activity that the tight range of the past three sessions was indicative of a well-played hand by Wall Street insiders. Otherwise, there would have been more of a radical trading pattern.
NYSE Volume 1,953,123,000
NASDAQ Volume 2,416,468,000
Commodities continued along the same pattern that has persisted over the past few weeks. Oil inched higher, up 35 cents, to $50.33. Crude has bounced above and below $50/barrel but has not escaped the range. While some supposed experts in crude keep calling for $65-75/barrel near term, the massive oversupply currently on the market, juxtaposed with continuing slumping demand should produce oil in the range of $35-40. Since the oil market is tiny and prone to manipulation, it is likely that price is being kept constant by some of the larger players. Eventually, their gambit will fail; the most obvious factor being that oil usually moves in reverse ratio to the dollar. As the dollar has strengthened, oil has not declined accordingly. There is a day of reckoning coming as reality meets markets.
The same could be said of the precious metals, which have been in a protracted decline for weeks. Gold tumbled again today, losing $11.90, to $867.90. Silver was also downgraded, dropping 47 cents to $11.79.
Gold and silver are presenting incredibly good buying opportunities. As soon as the markets begin to retrace their recent gains, the metals should reverse course, though the rise may not be rapid, due to deflationary pressures.
As weeks go, this one was one of a duller variety. Next week, when many more companies will be reporting first quarter earnings, should be more exciting.
Thursday, April 16, 2009
NASDAQ Leads Broad Rally
Excuse me for being blunt, but this rally - now stretching through its sixth straight week without a break - is built on the same thing as the election of Barack Obama: hope.
And so far, the election has turned out to be nothing but a disgrace. Yesterday, hundreds of thousands of ordinary Americans made their way to 500-800 "tea parties" across the country to express their dislike for government policies which will almost surely destroy the country. Today, stocks took a little while to get started, but eventually put on a demonstration of purely idiodic exuberant behavior, not seen since the heady days of 1999, in the middle of the dotcom boom (which months later went bust).
Recent trading activity gives credence to the words of the great showman, P.T. Barnum, who correctly stated that there was a sucker born every minute. Mr. Barmun would no doubt revel in the hijinks of the current market, as investors buy in at stocks' highs, hoping to catch the wave. The reality is that these froth-finders will end up as abject bag-holders. And who can fault anyone who sees fit to remain on the sidelines in this overheated environment? Just a month ago, stocks hit 12-year lows. Today, the major averages have rebounded more than 30%. To consider the stock market unsafe in the near term is to miss the "rally", but getting in now would actually be the height of foolishness.
What we are witnessing is tantamount to making excuses for murder and allowing the criminals to not only walk away free men, but to have full use of their guns as well. Stocks are reporting horrible numbers, like Gannett, which reported a 60% decline in quarterly profit from a year ago, yet was traded higher on the day.
Ditto JP Morgan (JPM), Nokia (NOK) - profits off nearly 90%, yet the stock was up 10% today - and various smaller companies which recorded steep profit declines which miraculously beat lowered expectations and were glibly bought up by overzealous investors seeking to recoup losses from the second half of 2008 and the first quarter of 2009. Good luck to them.
The close on the NASDAQ today was the highest since November 5, 2008. It is not a significant number. The NASDAQ could still go higher without signaling a true bull market. The bear persists. despite that, this rally not only has legs, it has, as of today, sprouted wings and taken flight.
Dow 8,125.43, +95.81 (1.19%)
NASDAQ 1,670.44, +43.64 (2.68%)
S&P 500 865.30, +13.24 (1.55%)
NYSE Composite 5,454.27, +69.30 (1.29%)
Advancers trounced decliners, 4907-1639, however, the key metric which has held true throughout the decline from October 2007, new highs-lows, retained its bias toward new lows, 90-42. While the gap has narrowed significantly and the number of daily new highs continues to improve, the bias is still negative. When and if this rolls over is the big question. We are reaching points at which many stocks had hit 52-week lows a year ago, so some of the new highs are more than likely nothing more than bounces off the bottoms. Still, this persistent indicator remains the strongest evidence that the markets are in a false recovery which will eventually roll over and die.
Volume was very high, owing to the expiration of options on Friday.
NYSE Volume 1,604,455,000
NASDAQ Volume 2,376,984,000
Commodities were mixed. Oil for May delivery - a new contract - gained 73 cents, closing at $49.98. Gold continued its slow deterioration, dropping another $13.70, to $879.80. Silver also was hammered lower, losing 55 cents, to $12.26. The metals are exhibiting tell-tale deflation, while oil also struggles to gain ground. Usually, as spring commences, oil shows more pricing power, though the signs of slack demand and oversupply are everywhere and the price of crude could easily see mid-40s or lower as the global recession continues.
Naturally, there is a good deal of euphoria about the rebound in stocks, seen as a leading indicator that the bottom has been found and the recession will soon be over. Not that I am routinely pessimistic, I just read the tea leaves differently and consider the entire public sector to be horribly corrupt, taking its cue from the unapologetic banking firms of Wall Street, with the mainstream media in tow. There's been an overabundance of hype about banks suddenly being solvent and prosperous, while just six months ago these same outfits were facing destruction and bankruptcy and the global economy on the verge of implosion.
Color me skeptical, but I just don't see how one can have it both ways. Either the banks were badly damaged, especially the largest ones, or the entire episode in which the government threw trillions of dollars of taxpayer money at the problem was a complete scam. More than likely, banks are now "solvent" due to the recent easing of accounting rules, which did away with mark-to-market and adopted mark-to-model, which is allowing the banks to mark toxic assets at 98 cents on the dollar rather the the 30 to 40 cents (mark to market) they are worth in the real world.
After the close, Google (GOOG) beat analyst estimates, and the stock took off in after hours trading, up more than 20 points (5.35%). With that as a backstop, expect stocks to soar again on Friday. They have exploded to near-term highs with little resistance ahead.
On the other hand, Foreclosure filings jumped 24%, new home construction fell 11%, jobless claims were down in the most recent week (though analysts failed to report that last week included Good Friday, a half day or holiday for many), and the nation's second-largest mall operator - General Growth Properties - filed for bankruptcy protection, as the firm was unable to roll over debt.
All's well... well, maybe.
And so far, the election has turned out to be nothing but a disgrace. Yesterday, hundreds of thousands of ordinary Americans made their way to 500-800 "tea parties" across the country to express their dislike for government policies which will almost surely destroy the country. Today, stocks took a little while to get started, but eventually put on a demonstration of purely idiodic exuberant behavior, not seen since the heady days of 1999, in the middle of the dotcom boom (which months later went bust).
Recent trading activity gives credence to the words of the great showman, P.T. Barnum, who correctly stated that there was a sucker born every minute. Mr. Barmun would no doubt revel in the hijinks of the current market, as investors buy in at stocks' highs, hoping to catch the wave. The reality is that these froth-finders will end up as abject bag-holders. And who can fault anyone who sees fit to remain on the sidelines in this overheated environment? Just a month ago, stocks hit 12-year lows. Today, the major averages have rebounded more than 30%. To consider the stock market unsafe in the near term is to miss the "rally", but getting in now would actually be the height of foolishness.
What we are witnessing is tantamount to making excuses for murder and allowing the criminals to not only walk away free men, but to have full use of their guns as well. Stocks are reporting horrible numbers, like Gannett, which reported a 60% decline in quarterly profit from a year ago, yet was traded higher on the day.
Ditto JP Morgan (JPM), Nokia (NOK) - profits off nearly 90%, yet the stock was up 10% today - and various smaller companies which recorded steep profit declines which miraculously beat lowered expectations and were glibly bought up by overzealous investors seeking to recoup losses from the second half of 2008 and the first quarter of 2009. Good luck to them.
The close on the NASDAQ today was the highest since November 5, 2008. It is not a significant number. The NASDAQ could still go higher without signaling a true bull market. The bear persists. despite that, this rally not only has legs, it has, as of today, sprouted wings and taken flight.
Dow 8,125.43, +95.81 (1.19%)
NASDAQ 1,670.44, +43.64 (2.68%)
S&P 500 865.30, +13.24 (1.55%)
NYSE Composite 5,454.27, +69.30 (1.29%)
Advancers trounced decliners, 4907-1639, however, the key metric which has held true throughout the decline from October 2007, new highs-lows, retained its bias toward new lows, 90-42. While the gap has narrowed significantly and the number of daily new highs continues to improve, the bias is still negative. When and if this rolls over is the big question. We are reaching points at which many stocks had hit 52-week lows a year ago, so some of the new highs are more than likely nothing more than bounces off the bottoms. Still, this persistent indicator remains the strongest evidence that the markets are in a false recovery which will eventually roll over and die.
Volume was very high, owing to the expiration of options on Friday.
NYSE Volume 1,604,455,000
NASDAQ Volume 2,376,984,000
Commodities were mixed. Oil for May delivery - a new contract - gained 73 cents, closing at $49.98. Gold continued its slow deterioration, dropping another $13.70, to $879.80. Silver also was hammered lower, losing 55 cents, to $12.26. The metals are exhibiting tell-tale deflation, while oil also struggles to gain ground. Usually, as spring commences, oil shows more pricing power, though the signs of slack demand and oversupply are everywhere and the price of crude could easily see mid-40s or lower as the global recession continues.
Naturally, there is a good deal of euphoria about the rebound in stocks, seen as a leading indicator that the bottom has been found and the recession will soon be over. Not that I am routinely pessimistic, I just read the tea leaves differently and consider the entire public sector to be horribly corrupt, taking its cue from the unapologetic banking firms of Wall Street, with the mainstream media in tow. There's been an overabundance of hype about banks suddenly being solvent and prosperous, while just six months ago these same outfits were facing destruction and bankruptcy and the global economy on the verge of implosion.
Color me skeptical, but I just don't see how one can have it both ways. Either the banks were badly damaged, especially the largest ones, or the entire episode in which the government threw trillions of dollars of taxpayer money at the problem was a complete scam. More than likely, banks are now "solvent" due to the recent easing of accounting rules, which did away with mark-to-market and adopted mark-to-model, which is allowing the banks to mark toxic assets at 98 cents on the dollar rather the the 30 to 40 cents (mark to market) they are worth in the real world.
After the close, Google (GOOG) beat analyst estimates, and the stock took off in after hours trading, up more than 20 points (5.35%). With that as a backstop, expect stocks to soar again on Friday. They have exploded to near-term highs with little resistance ahead.
On the other hand, Foreclosure filings jumped 24%, new home construction fell 11%, jobless claims were down in the most recent week (though analysts failed to report that last week included Good Friday, a half day or holiday for many), and the nation's second-largest mall operator - General Growth Properties - filed for bankruptcy protection, as the firm was unable to roll over debt.
All's well... well, maybe.
Wednesday, April 15, 2009
Tax Day Slowdown
Yesterday, I posited that stocks would trade sideways for the foreseeable future. What I failed to point out is that they have been doing so for the past two weeks.
Over the last nine trading sessions, the Dow has vacillated between 7800 and 8100, a fairly tight range. Today's trading took place between 7870 and 8000, excepting the final 10 minutes of trading. In fact, all of the gains on the Dow were accounted for in the final hour.
Dow 8,029.62, +109.44 (1.38%)
NASDAQ 1,626.80, +1.08 (0.07%)
S&P 500 852.06, +10.56 (1.25%)
NYSE Composite 5,384.97, +83.47 (1.57%)
It was an uneventful session, as advancing issues outnumbered decliners, 4305-2131. New lows outpaced new highs, 69-18. Volume was moderate, with a surge of trading into the close.
NYSE Volume 1,480,115,000
NASDAQ Volume 2,067,344,000
Commodity trading was equally sluggish, with oil falling 16 cents, to $49.25; gold higher by $1.50, to $893.50; and silver up 4 cents to $12.80.
As Americans officially met the deadline for filing taxes from 2008, the markets took a needed breather.
Capacity Utilization for March fell to 69.3%, from 70.3% in February. Likewise, Industrial Production was off 1.5% in March, rebuking the numerous predictions and proclamations that the worst of the recession was behind us. It appears that the economy is still sinking, as the Fed's Beige Book - released at 2:00 pm today - also suggested.
Over the last nine trading sessions, the Dow has vacillated between 7800 and 8100, a fairly tight range. Today's trading took place between 7870 and 8000, excepting the final 10 minutes of trading. In fact, all of the gains on the Dow were accounted for in the final hour.
Dow 8,029.62, +109.44 (1.38%)
NASDAQ 1,626.80, +1.08 (0.07%)
S&P 500 852.06, +10.56 (1.25%)
NYSE Composite 5,384.97, +83.47 (1.57%)
It was an uneventful session, as advancing issues outnumbered decliners, 4305-2131. New lows outpaced new highs, 69-18. Volume was moderate, with a surge of trading into the close.
NYSE Volume 1,480,115,000
NASDAQ Volume 2,067,344,000
Commodity trading was equally sluggish, with oil falling 16 cents, to $49.25; gold higher by $1.50, to $893.50; and silver up 4 cents to $12.80.
As Americans officially met the deadline for filing taxes from 2008, the markets took a needed breather.
Capacity Utilization for March fell to 69.3%, from 70.3% in February. Likewise, Industrial Production was off 1.5% in March, rebuking the numerous predictions and proclamations that the worst of the recession was behind us. It appears that the economy is still sinking, as the Fed's Beige Book - released at 2:00 pm today - also suggested.
Tuesday, April 14, 2009
Earnings Season: Churn, Churn, Churn
Speaking to a fellow trader earlier today, I mentioned that I thought the overriding tone of trading during this earnings season would be that of selling upon announcement of earnings. To clarify, most stocks with any kind of momentum will gain prior to their earnings release date, and upon the announcement, traders would quickly scoop up profits, causing most stocks to fall.
In response, my friend said, "then you expect stocks to go down over the next few weeks."
I replied, "no, because while some stocks will be going down, others will be bid up in advance of earnings. I expect the market to go sideways."
Therein lies the rub. This is the classic trader's market, wherein quick reflexes and astute chart-monitoring will result in healthy gains for those who are eager to lock in profits. In a general sense, stocks are already somewhat overbought, though there could still be more to this rally, even though it may take weeks for it to make another forward move. The most likely outcome is that stocks will end up generally right where they are now, somewhere between (on the Dow) 7700 and 8100. The 8100 level has yet to be cracked, but there is plenty of room on the upside - all the way to 9000 - before violating the primary bearish trend.
Less seasoned investors will see any rally past 8200-8300 as signs of a new bull, but they will be sadly mistaken. The Dow in particular has plenty of room to roam before breaking into bullish ground, and the chances of that are, at this time, slim to none. Most analysts of any quality are now calling for recovery in the year 2010, so even a presaging move by the markets before July would be premature and likely to be killed off by a combination of profit-taking and outright selling.
There's almost surely to be another round of terror in the markets, caused by anything from a large company reporting truly ugly results, another nightmare from the banking sector, bad housing (or commercial property) news, more unemployment, and so on. There is truly no limit to the scenarios within which the Dow and associated markets could take another dive below 7000, the S&P back into the 750 range and so forth. Getting through April will look like a picnic in retrospect by the time June rolls around. There is still widespread uncertainty concerning everything from the government's budget deficits to bank solvency to a GM bankruptcy. Anything can happen, and it probably will.
The case today was cynical, on the whole. After Goldman Sachs (GS) announced their "outstanding" earnings a day early, the company came back with a stock offering at 123, sending shares lower at the open. It was something of an outlier and partially designed to cover the great deceit which GS played on investors. Their 1st quarter earnings covered the period of January through March, but since GS ad changed their accounting periods when they changed their designation from an investment bank to a commercial bank, they managed to leave out their $1 billion loss from December, 2008.
Seriously, it was just never reported, which is something of a first, and an evil ploy to hoodwink not only investors, but the financial media as well, who did little to uncover the fact.
In any case, Goldman set the tone out of the gate, sending the major indices out in the red, a place in which they remain until the closing bell.
Dow 7,920.18, -137.63 (1.71%)
NASDAQ 1,625.72, -27.59 (1.67%)
S&P 500 841.50, -17.23 (2.01%)
NYSE Composite 5,301.50, -108.78 (2.01%)
On the day, declining issues ran well ahead of advancing ones, 4403-2102. New lows remained in the dominant position over new highs, 76-19. Volume was better than it has been in days, owing to options expiration on Friday and a willingness, seemingly, to take profits in all quarters.
NYSE Volume 1,749,256,000
NASDAQ Volume 2,267,111,000
Over in the commodities arena, oil drooped 64 cents, hitting $49.41 at the close, the first close below $50 in over a week. Gold fell $3.80, to $892.00. Silver finished unchanged, at $12.77.
For all the excitement in the markets, it was a fairly quiet session, as stocks, once they bottomed out around the noon hour, traded in a fairly tight regimen the rest of the day. also weighing on investors were lower retail sales figures for March (-1.1%), and a sharp decline in the PPI, off 1.2% in March. Both readings were said - by the supine financial press - to be surprising, though one wonders just who was surprised that spending and prices were both dropping. It seemed to be not so much of a shock, but merely more evidence that the recession is deeper and longer than most people would like.
Speaking on the economy, both President Obama and Fed Chair Ben Bernanke, voiced concerns that while there have been signs of hope, the economic forces at work were nowhere near done doing their dirty work on the US economy. As per usual, both politicians spoke from both sides of their mouths simultaneously. One could take the entire volume of their words and just chuck it all in a waste bin, as all they do is mouth the same garbage all the time. Their speeches, and those of Treasury's Tim Geithner, are about as meaningful as seeing flowers bloom in Spring. Nothing new comes from anybody involved in the various government bailouts, rescues and assorted alphabet soup plots and plans, as they are mostly designed to cover up the most obvious bank insolvencies (B of A, Citigroup, JP Morgan Chase) and will more than likely do more harm than good.
Of the few bright spots was Dow component, Johnson & Johnson (JNJ), which reported earnings which were 0.04 ahead of Street expectations, at $1.26 per share. Other than that, of the 30 Dow components, only Citigroup (C), Intel (INTC) and General Motors (GM) finished the day with gains.
Don't look for any loud corporate noises on Wednesday, as there are no influential companies reporting. On Thursday, Biogen Idec Inc. (BIIB), Google (GOOG), JPMorgan Chase & Co. (JPM) and Nokia (NOK) will add a degree of interest as they report 1st quarter results.
In response, my friend said, "then you expect stocks to go down over the next few weeks."
I replied, "no, because while some stocks will be going down, others will be bid up in advance of earnings. I expect the market to go sideways."
Therein lies the rub. This is the classic trader's market, wherein quick reflexes and astute chart-monitoring will result in healthy gains for those who are eager to lock in profits. In a general sense, stocks are already somewhat overbought, though there could still be more to this rally, even though it may take weeks for it to make another forward move. The most likely outcome is that stocks will end up generally right where they are now, somewhere between (on the Dow) 7700 and 8100. The 8100 level has yet to be cracked, but there is plenty of room on the upside - all the way to 9000 - before violating the primary bearish trend.
Less seasoned investors will see any rally past 8200-8300 as signs of a new bull, but they will be sadly mistaken. The Dow in particular has plenty of room to roam before breaking into bullish ground, and the chances of that are, at this time, slim to none. Most analysts of any quality are now calling for recovery in the year 2010, so even a presaging move by the markets before July would be premature and likely to be killed off by a combination of profit-taking and outright selling.
There's almost surely to be another round of terror in the markets, caused by anything from a large company reporting truly ugly results, another nightmare from the banking sector, bad housing (or commercial property) news, more unemployment, and so on. There is truly no limit to the scenarios within which the Dow and associated markets could take another dive below 7000, the S&P back into the 750 range and so forth. Getting through April will look like a picnic in retrospect by the time June rolls around. There is still widespread uncertainty concerning everything from the government's budget deficits to bank solvency to a GM bankruptcy. Anything can happen, and it probably will.
The case today was cynical, on the whole. After Goldman Sachs (GS) announced their "outstanding" earnings a day early, the company came back with a stock offering at 123, sending shares lower at the open. It was something of an outlier and partially designed to cover the great deceit which GS played on investors. Their 1st quarter earnings covered the period of January through March, but since GS ad changed their accounting periods when they changed their designation from an investment bank to a commercial bank, they managed to leave out their $1 billion loss from December, 2008.
Seriously, it was just never reported, which is something of a first, and an evil ploy to hoodwink not only investors, but the financial media as well, who did little to uncover the fact.
In any case, Goldman set the tone out of the gate, sending the major indices out in the red, a place in which they remain until the closing bell.
Dow 7,920.18, -137.63 (1.71%)
NASDAQ 1,625.72, -27.59 (1.67%)
S&P 500 841.50, -17.23 (2.01%)
NYSE Composite 5,301.50, -108.78 (2.01%)
On the day, declining issues ran well ahead of advancing ones, 4403-2102. New lows remained in the dominant position over new highs, 76-19. Volume was better than it has been in days, owing to options expiration on Friday and a willingness, seemingly, to take profits in all quarters.
NYSE Volume 1,749,256,000
NASDAQ Volume 2,267,111,000
Over in the commodities arena, oil drooped 64 cents, hitting $49.41 at the close, the first close below $50 in over a week. Gold fell $3.80, to $892.00. Silver finished unchanged, at $12.77.
For all the excitement in the markets, it was a fairly quiet session, as stocks, once they bottomed out around the noon hour, traded in a fairly tight regimen the rest of the day. also weighing on investors were lower retail sales figures for March (-1.1%), and a sharp decline in the PPI, off 1.2% in March. Both readings were said - by the supine financial press - to be surprising, though one wonders just who was surprised that spending and prices were both dropping. It seemed to be not so much of a shock, but merely more evidence that the recession is deeper and longer than most people would like.
Speaking on the economy, both President Obama and Fed Chair Ben Bernanke, voiced concerns that while there have been signs of hope, the economic forces at work were nowhere near done doing their dirty work on the US economy. As per usual, both politicians spoke from both sides of their mouths simultaneously. One could take the entire volume of their words and just chuck it all in a waste bin, as all they do is mouth the same garbage all the time. Their speeches, and those of Treasury's Tim Geithner, are about as meaningful as seeing flowers bloom in Spring. Nothing new comes from anybody involved in the various government bailouts, rescues and assorted alphabet soup plots and plans, as they are mostly designed to cover up the most obvious bank insolvencies (B of A, Citigroup, JP Morgan Chase) and will more than likely do more harm than good.
Of the few bright spots was Dow component, Johnson & Johnson (JNJ), which reported earnings which were 0.04 ahead of Street expectations, at $1.26 per share. Other than that, of the 30 Dow components, only Citigroup (C), Intel (INTC) and General Motors (GM) finished the day with gains.
Don't look for any loud corporate noises on Wednesday, as there are no influential companies reporting. On Thursday, Biogen Idec Inc. (BIIB), Google (GOOG), JPMorgan Chase & Co. (JPM) and Nokia (NOK) will add a degree of interest as they report 1st quarter results.
Monday, April 13, 2009
Investors Play Waiting Game in Advance of Earnings
On the heels of a long holiday weekend, investors were met with a troubling scenario on Monday, as there was hardly a headline upon which to base trading. As such, stocks took an immediate dive to the negative at the opening bell and stayed down until momentum traders brought the major indices back to positive bearings after the noon hour. The Dow lagged the S&P and NYSE Composite, with the NASDAQ making a sharp turn at midday and closing close to unchanged.
Overall, there was little movement in anticipation of major earnings announcements which begin this week and will be the focus of trading through the end of the month. Of course, following the key Wells Fargo pre-announcement from Thursday, there's a good deal of excitement and anxiety building over first quarter earnings from major banks. The schedule for bank earnings goes as follows: Goldman Sachs (GS) on April 14, JP Morgan Chase (JPM) on April 16, Citigroup (C) on April 17, Bank of America (BAC) on April 20 and Wells Fargo (WFC) on April 22.
It is notable that Wells Fargo is the last to report, as their actual announcement will more than likely result in a sell-off, the company already having jumped the shark by leaking out their earnings news. The balance of this week, however, will be dominated by the three big banks reporting and it should be quite a show.
Dow 8,057.81, -25.57 (0.32%)
NASDAQ 1,653.31, +0.77 (0.05%)
S&P 500 858.73, +2.17 (0.25%)
NYSE Composite 5,410.28, +33.84 (0.63%)
As for today, it was just a low-volume grind in a fairly tight range. For the time being, volatility has been wrung out of the markets if only because stocks have once again topped out. The next move, whether to the upside or down, will be decisive though earnings reports from various companies over time could contribute to wide swings.
Advancing issues were 4644, to 2855 declining. New lows beat down new highs, 93-31, with the margin increasing again. Volume was on the low side.
NYSE Volume 1,481,100,000
NASDAQ Volume 1,832,720,000
What the market was waiting all day for - Talbot's earnings for the 4th quarter and full year of 2008 - finally appeared online after the close. If the market is seeking direction, take note: The company, trading under the symbol TLB, reported a 4th quarter adjusted net loss (period ended January 31, 2009) of $128.4 million or $2.40 per share compared to last year’s adjusted net loss of $7.1 million or $0.13 per share.
Talbot's operates more than 1000 retail apparel stores in the US, UK and Canada, so all this does is re-confirm that the retail sector is in deep trouble. Shares were down nearly 20% in after-hours trading.
Well, that's what we thought the market was awaiting. Instead, Goldman Sachs decided to report a day earlier, posting earnings of $3.39 per share, beating forecasts of $1.64 per share. Expect stocks to gap up at the open tomorrow on that surprise.
What is troubling about Goldman Sachs' earnings is that since changing their designation from an investment bank to a commercial bank, they also changed their reporting periods, which can be seen plainly in this report. [PDF]
The problem is that the company seems to have completely eviscerated the month of December, 2008, in which - according to unpublished reports - the company lost $1 billion, or $2.15 per share, which would have dramatically changed their results. Goldman's actual results - including the December loss - should have been $1.24 per share, well below the expectations. This is all just spin, and possibly accounting fraud, which, of course, will not be investigated. Shares of Goldman Sachs were lower in after-hours trading.
Oil closed down $2.19, at $50.05. Gold gained $12.50, to $895.80, while silver edged higher by 44 cents, to close at $12.77.
With companies - notably banks - jumping the gun on earnings announcements, the trading environment has gone from nearly impossible to "forget it" status. Nothing makes sense any more. Banks which needed billions of dollars just months ago are now reporting healthy profits. Is it all a sham, a grand design to raid the US treasury? We may never know, but all indications sure seem to be pointing that way.
Overall, there was little movement in anticipation of major earnings announcements which begin this week and will be the focus of trading through the end of the month. Of course, following the key Wells Fargo pre-announcement from Thursday, there's a good deal of excitement and anxiety building over first quarter earnings from major banks. The schedule for bank earnings goes as follows: Goldman Sachs (GS) on April 14, JP Morgan Chase (JPM) on April 16, Citigroup (C) on April 17, Bank of America (BAC) on April 20 and Wells Fargo (WFC) on April 22.
It is notable that Wells Fargo is the last to report, as their actual announcement will more than likely result in a sell-off, the company already having jumped the shark by leaking out their earnings news. The balance of this week, however, will be dominated by the three big banks reporting and it should be quite a show.
Dow 8,057.81, -25.57 (0.32%)
NASDAQ 1,653.31, +0.77 (0.05%)
S&P 500 858.73, +2.17 (0.25%)
NYSE Composite 5,410.28, +33.84 (0.63%)
As for today, it was just a low-volume grind in a fairly tight range. For the time being, volatility has been wrung out of the markets if only because stocks have once again topped out. The next move, whether to the upside or down, will be decisive though earnings reports from various companies over time could contribute to wide swings.
Advancing issues were 4644, to 2855 declining. New lows beat down new highs, 93-31, with the margin increasing again. Volume was on the low side.
NYSE Volume 1,481,100,000
NASDAQ Volume 1,832,720,000
What the market was waiting all day for - Talbot's earnings for the 4th quarter and full year of 2008 - finally appeared online after the close. If the market is seeking direction, take note: The company, trading under the symbol TLB, reported a 4th quarter adjusted net loss (period ended January 31, 2009) of $128.4 million or $2.40 per share compared to last year’s adjusted net loss of $7.1 million or $0.13 per share.
Talbot's operates more than 1000 retail apparel stores in the US, UK and Canada, so all this does is re-confirm that the retail sector is in deep trouble. Shares were down nearly 20% in after-hours trading.
Well, that's what we thought the market was awaiting. Instead, Goldman Sachs decided to report a day earlier, posting earnings of $3.39 per share, beating forecasts of $1.64 per share. Expect stocks to gap up at the open tomorrow on that surprise.
What is troubling about Goldman Sachs' earnings is that since changing their designation from an investment bank to a commercial bank, they also changed their reporting periods, which can be seen plainly in this report. [PDF]
The problem is that the company seems to have completely eviscerated the month of December, 2008, in which - according to unpublished reports - the company lost $1 billion, or $2.15 per share, which would have dramatically changed their results. Goldman's actual results - including the December loss - should have been $1.24 per share, well below the expectations. This is all just spin, and possibly accounting fraud, which, of course, will not be investigated. Shares of Goldman Sachs were lower in after-hours trading.
Oil closed down $2.19, at $50.05. Gold gained $12.50, to $895.80, while silver edged higher by 44 cents, to close at $12.77.
With companies - notably banks - jumping the gun on earnings announcements, the trading environment has gone from nearly impossible to "forget it" status. Nothing makes sense any more. Banks which needed billions of dollars just months ago are now reporting healthy profits. Is it all a sham, a grand design to raid the US treasury? We may never know, but all indications sure seem to be pointing that way.
Thursday, April 9, 2009
The Fantasy Economy of US Banking
I am not going to rant and rave about how the corrupt, insolvent banksters who are in control of our economy goosed the market today by having Wells Fargo (WFC) jump the gun and pre-announce their outstanding earnings - some $3 billion worth - less than 2 weeks before their actual earnings date.
The bank announced prior to the market opening, which jump-started the futures and set the tone for the trading, with all of the major indices gapping up more than 2$ at the open.
No, I'm not going to rant about how utterly without integrity are the leaders of our country and the business community. I'm just going to tell you that I closed all of my positions today and will be out of this market for the foreseeable future.
Dow 8,083.38, +246.27 (3.14%)
NASDAQ 1,652.54, +61.88 (3.89%)
S&P 500 856.56, +31.40 (3.81%)
NYSE Composite 5,376.44, +200.03 (3.86%)
It should be noted that while Wells Fargo was up 31%, they were outdone by Bank of America, which posted a 35% gain on the day. Other Dow components in the financial sector with outsize gains were American Express (AXP), up 20%, JP Morgan Chase, up 19%, and Citigroup, up a mere 12%. Bear in mind that all of these companies were the beneficiaries of taxpayer bailout money and other favorable loan terms from the Federal Reserve and Treasury. Ben Bernanke and Tim Geithner are smiling with riches tonight. Welcome to the fantasy economy.
On the day, the spill-over from the banking boom sent advancers solidly ahead of declining issues, 5586-1033. However, new lows remained ahead of new highs, 80-38. Trading volume was quiet strong.
NYSE Volume 1,835,800,000
NASDAQ Volume 2,179,931,000
Over in the commodity pits, oil was up $2.86, to $52.24. Gold continued to stall, losing $2.60, to $883.30. Silver also fell, but only by a penny, to $12.33.
Tomorrow being Good Friday, the markets are taking the day off. While the government runs not only record deficits, but enormous ones, unemployment continues to rise unabated and the real estate market continues to struggle, all's well on Wall Street, where criminals run the banks and brokerages with money supplied by you and me.
Happy Easter. I hope you find some gold inside your eggs.
The bank announced prior to the market opening, which jump-started the futures and set the tone for the trading, with all of the major indices gapping up more than 2$ at the open.
No, I'm not going to rant about how utterly without integrity are the leaders of our country and the business community. I'm just going to tell you that I closed all of my positions today and will be out of this market for the foreseeable future.
Dow 8,083.38, +246.27 (3.14%)
NASDAQ 1,652.54, +61.88 (3.89%)
S&P 500 856.56, +31.40 (3.81%)
NYSE Composite 5,376.44, +200.03 (3.86%)
It should be noted that while Wells Fargo was up 31%, they were outdone by Bank of America, which posted a 35% gain on the day. Other Dow components in the financial sector with outsize gains were American Express (AXP), up 20%, JP Morgan Chase, up 19%, and Citigroup, up a mere 12%. Bear in mind that all of these companies were the beneficiaries of taxpayer bailout money and other favorable loan terms from the Federal Reserve and Treasury. Ben Bernanke and Tim Geithner are smiling with riches tonight. Welcome to the fantasy economy.
On the day, the spill-over from the banking boom sent advancers solidly ahead of declining issues, 5586-1033. However, new lows remained ahead of new highs, 80-38. Trading volume was quiet strong.
NYSE Volume 1,835,800,000
NASDAQ Volume 2,179,931,000
Over in the commodity pits, oil was up $2.86, to $52.24. Gold continued to stall, losing $2.60, to $883.30. Silver also fell, but only by a penny, to $12.33.
Tomorrow being Good Friday, the markets are taking the day off. While the government runs not only record deficits, but enormous ones, unemployment continues to rise unabated and the real estate market continues to struggle, all's well on Wall Street, where criminals run the banks and brokerages with money supplied by you and me.
Happy Easter. I hope you find some gold inside your eggs.
Wednesday, April 8, 2009
Stocks Are Cheap, I Guess
According to the expert headline writers at Yahoo! Finance, "Insurance Companies and Homebuilders Sparked Wednesday's Rally."
Really! They said that, which doesn't adequately explain why the NASDAQ was sporting an 85-15% up to down volume bias, and probably wasn't the reason for any rally at all. Why stocks rallied today may have been hope for more crookedness, in the form of a relaxation of shorting rules proposed by the SEC, or maybe they were right in part, at least as far as concerns insurance companies, because the Treasury is rumored to be planning to include some life insurance companies under the bailout umbrella of TARP.
As for homebuilders, Pulte Homes (PHM) agreed to purchase Centex (CTX) for $1.3 billion in stock, which is amazing in that its hard to believe any homebuilder could even be worth $1.3 billion, let alone have that amount of stock available for the purchase of another homebuilder. Maybe they've been getting secret TARP funds from Tim Geithner.
In any case, the rally was not all that large as to get uptight about it, considering that it is occurring in the middle of the worst financial meltdown in the history of the world. Yes, you read that right. The worst EVER. Beating the tulip bust, the fall of Rome and even our very own Great Depression. Additionally, the rally fell apart precisely at 2:00 pm. So much for homebuilders and failed insurance providers.
Why is this the worst financial meltdown ever, you ask? Simple, because during the Great Depression the USA was a net exporter and routinely ran budget surpluses rather than deficits. We were on the gold standard then, as compared to the "thin air" standard we've been on since 1971, when the great (satire), late Richard Nixon repudiated our debts by refusing to honor the Bretton Woods agreements, thus taking our currency from one being backed by gold to one being backed by "the full faith and credit" of the United States of America, which is a very bad joke today because nobody has any faith in America anymore and we are a nation strung out on credit. The burgeoning national debt, now surging past $12 trillion, will never be repaid, ever, so, yes, this is the worst economic crisis and collapse in the history of the planet.
There are other reasons, such as the fact that we no longer have an industrial base, having shipped all of that to foreign countries, and the social safety net, which includes social security, welfare, and unemployment benefit recipients, were not even around during the Great Depression, though now they act only as an increase on GDP and a net productivity loss. Those people are freeloaders, producing nothing. So, those of you who believe the official government figure of 8.5% unemployment, start including retirees, welfare loafers and people supposedly seeking work, and you can just jump that number up to about 20-25% of the population, the same unemployment that we had during the 30s, but now we simply don't count those people as it might scare some other people.
America is collapsing quickly, so one naturally wonders why stocks are going up when all indications are that they should be going down. Maybe not you, but that's how I spend my idle hours, which are growing by the day due to my outstanding investment (make that trading) skills, thank you.
Apparently, today's little rally was short-circuited precisely at 2:00 pm because that's when the Fed minutes from the last FOMC meeting were released, and, of course, the Fed said that conditions sucked (they use bigger words) and the geniuses on Wall Street - who apparently were unaware of the horrible economic conditions - decided they should sell.
This market sucks, though. It has no direction except down. The rally of the last 4 weeks was a mirage, a total fraud. The economy sucks, your stocks suck, this country is headed straight into a black hole, and the worst part of it is that because of our corrupt politicians, bankers, CEOs and news media, the American public is largely unaware of the condition. That, however, is expected, as the majority of Americans have college degrees but are dumber than nails about anything that really matters, like the economy, the constitution, the rule of law, etc.
Dow 7,837.11, +47.55 (0.61%)
NASDAQ 1,590.66, +29.05 (1.86%)
S&P 500 825.15, +9.60 (1.18%)
NYSE Composite 5,176.48, +55.81 (1.09%)
On the day, advancing issues actually outdid decliners, 4628-1772, but the one true gauge which has remained constant throughout this episode, stretching back to October of 2007, new lows exceeded new highs, 69-10. Volume was weak, well off levels of just a week ago, another signal that nobody is buying except insiders with positions to protect.
NYSE Volume 1,314,803,000
NASDAQ Volume 1,851,850,000
Commodities also spent most of the day yo-yoing up and down, like there was something to decide as concerns the direction of prices. Oil was down, then up, then finished with a minuscule gain of 23 cents, at $49.38. Whoop-de-do! Gold gained $2.26, but remains at depressed levels, closing at $885.90. Silver also was up 13 cents, to $12.34.
Our fabulous Treasury Secretary, Timothy Geithner, said that results of the bank stress tests will not be released until after earnings for the guilty parties are announced, a sure signal that all the books have been fully cooked. Geithner is an obvious obfuscator and a complete, incompetent liar.
The nation has been led by elite crooks and criminals and the American people are paying a huge price for allowing it. In the end, one can only hope that the politicians and bankers will receive the treatment they so richly deserve. While today's tidy gains may look positive to some, they were merely a means for the banksters to steal again from both sides, buyers and sellers.
Stocks were completely out of kilter. The NASDAQ gapped up and stayed up, the Dow underperformed, all manner of technical levels were violated, including the most important support at 7775 on the Dow, but none of that matters since fundamentals don't matter, nor does sentiment, economic reports, earnings or any other measure. The big money makes the markets dance and they are playing all the wrong tunes right now.
The move engulfed yesterday completely, marking the 4th straight day of lower highs and lower lows, leaving investors scratching their heads in search of direction. Don't be fooled. The fundamentals are horrid and the markets will continue to decline. It's just a matter of when and by how much. Dow 5500 is looking pretty good, but 4000 is certainly not out of the question.
Stocks really aren't cheap, considering that in the near future, say six to nine months, most of them will be bankrupt or close to it. Some already are.
Really! They said that, which doesn't adequately explain why the NASDAQ was sporting an 85-15% up to down volume bias, and probably wasn't the reason for any rally at all. Why stocks rallied today may have been hope for more crookedness, in the form of a relaxation of shorting rules proposed by the SEC, or maybe they were right in part, at least as far as concerns insurance companies, because the Treasury is rumored to be planning to include some life insurance companies under the bailout umbrella of TARP.
As for homebuilders, Pulte Homes (PHM) agreed to purchase Centex (CTX) for $1.3 billion in stock, which is amazing in that its hard to believe any homebuilder could even be worth $1.3 billion, let alone have that amount of stock available for the purchase of another homebuilder. Maybe they've been getting secret TARP funds from Tim Geithner.
In any case, the rally was not all that large as to get uptight about it, considering that it is occurring in the middle of the worst financial meltdown in the history of the world. Yes, you read that right. The worst EVER. Beating the tulip bust, the fall of Rome and even our very own Great Depression. Additionally, the rally fell apart precisely at 2:00 pm. So much for homebuilders and failed insurance providers.
Why is this the worst financial meltdown ever, you ask? Simple, because during the Great Depression the USA was a net exporter and routinely ran budget surpluses rather than deficits. We were on the gold standard then, as compared to the "thin air" standard we've been on since 1971, when the great (satire), late Richard Nixon repudiated our debts by refusing to honor the Bretton Woods agreements, thus taking our currency from one being backed by gold to one being backed by "the full faith and credit" of the United States of America, which is a very bad joke today because nobody has any faith in America anymore and we are a nation strung out on credit. The burgeoning national debt, now surging past $12 trillion, will never be repaid, ever, so, yes, this is the worst economic crisis and collapse in the history of the planet.
There are other reasons, such as the fact that we no longer have an industrial base, having shipped all of that to foreign countries, and the social safety net, which includes social security, welfare, and unemployment benefit recipients, were not even around during the Great Depression, though now they act only as an increase on GDP and a net productivity loss. Those people are freeloaders, producing nothing. So, those of you who believe the official government figure of 8.5% unemployment, start including retirees, welfare loafers and people supposedly seeking work, and you can just jump that number up to about 20-25% of the population, the same unemployment that we had during the 30s, but now we simply don't count those people as it might scare some other people.
America is collapsing quickly, so one naturally wonders why stocks are going up when all indications are that they should be going down. Maybe not you, but that's how I spend my idle hours, which are growing by the day due to my outstanding investment (make that trading) skills, thank you.
Apparently, today's little rally was short-circuited precisely at 2:00 pm because that's when the Fed minutes from the last FOMC meeting were released, and, of course, the Fed said that conditions sucked (they use bigger words) and the geniuses on Wall Street - who apparently were unaware of the horrible economic conditions - decided they should sell.
This market sucks, though. It has no direction except down. The rally of the last 4 weeks was a mirage, a total fraud. The economy sucks, your stocks suck, this country is headed straight into a black hole, and the worst part of it is that because of our corrupt politicians, bankers, CEOs and news media, the American public is largely unaware of the condition. That, however, is expected, as the majority of Americans have college degrees but are dumber than nails about anything that really matters, like the economy, the constitution, the rule of law, etc.
Dow 7,837.11, +47.55 (0.61%)
NASDAQ 1,590.66, +29.05 (1.86%)
S&P 500 825.15, +9.60 (1.18%)
NYSE Composite 5,176.48, +55.81 (1.09%)
On the day, advancing issues actually outdid decliners, 4628-1772, but the one true gauge which has remained constant throughout this episode, stretching back to October of 2007, new lows exceeded new highs, 69-10. Volume was weak, well off levels of just a week ago, another signal that nobody is buying except insiders with positions to protect.
NYSE Volume 1,314,803,000
NASDAQ Volume 1,851,850,000
Commodities also spent most of the day yo-yoing up and down, like there was something to decide as concerns the direction of prices. Oil was down, then up, then finished with a minuscule gain of 23 cents, at $49.38. Whoop-de-do! Gold gained $2.26, but remains at depressed levels, closing at $885.90. Silver also was up 13 cents, to $12.34.
Our fabulous Treasury Secretary, Timothy Geithner, said that results of the bank stress tests will not be released until after earnings for the guilty parties are announced, a sure signal that all the books have been fully cooked. Geithner is an obvious obfuscator and a complete, incompetent liar.
The nation has been led by elite crooks and criminals and the American people are paying a huge price for allowing it. In the end, one can only hope that the politicians and bankers will receive the treatment they so richly deserve. While today's tidy gains may look positive to some, they were merely a means for the banksters to steal again from both sides, buyers and sellers.
Stocks were completely out of kilter. The NASDAQ gapped up and stayed up, the Dow underperformed, all manner of technical levels were violated, including the most important support at 7775 on the Dow, but none of that matters since fundamentals don't matter, nor does sentiment, economic reports, earnings or any other measure. The big money makes the markets dance and they are playing all the wrong tunes right now.
The move engulfed yesterday completely, marking the 4th straight day of lower highs and lower lows, leaving investors scratching their heads in search of direction. Don't be fooled. The fundamentals are horrid and the markets will continue to decline. It's just a matter of when and by how much. Dow 5500 is looking pretty good, but 4000 is certainly not out of the question.
Stocks really aren't cheap, considering that in the near future, say six to nine months, most of them will be bankrupt or close to it. Some already are.
Tuesday, April 7, 2009
Bear Market Rally Built on Fraud
Every day, day after day after day, the sharks on Wall Street do the same thing, over and over and over again. According to the new rules of the game, stocks are suddenly much more attractive at 2:30, or 3:00, or 3:15, or 3:30, without any news, without any economic reports, without any technical rationale, than they were earlier in the day.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
Monday, April 6, 2009
Wall Street Crooks Steal from Both Sides
Upon which side of the debate do you fall? Do you believe this is a bear market rally or the beginning of a new bull?
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Friday, April 3, 2009
Wall Street Smoking Crack
The crack dealers working the area of lower Manhattan must be flush with cash because it appears certain that the brokers, dealers, wheeler-dealers, scam artists, cheats liars, high muckety-muck, junkies, flunkies, lunkheads, losers and lowlives of all stripes are consuming copious amounts of the stuff.
After a multi-week stock market run of between 20 and 25%, depending on your index of choice, a week chock-full of eyebrow-raising economic reports, a failed attempt at worldwide order and financial diplomacy at the G20, and the worst unemployment in 25 years, the masters of the financial universe decided to keep pushing prices higher, despite the aforementioned data and news, and the imminent revelations from corporate quarterly reports beginning next week.
No matter how anyone tries to justify the numbers, a loss of more than 2 million jobs just in the first quarter of this year is not good news. Stocks should have been headed lower, not higher. Watching the indices crawl forward, it seems that the charts must be from some foreign planet, not ours, which is mired amid the throes of a deepening - not improving - financial breakdown.
Apparently, the wizards of Wall Street see things differently. A slowing economy is a fine one to made ludicrous bets into according to their actions. Stimulus, bailouts, Ponzi schemes, a deteriorating housing market and job losses creates the perfect investing climate according to these geniuses. They are smoking some very powerful dope down there.
Stocks traded in tight ranges throughout the session. Today's action could have been due to indecision, consolidation or manipulation, but it was probably a little bit of each. In any case, nothing moved enough to raise anyone's blood pressure much. It was an all-around tough day for day-traders and short timers.
Dow 8,017.59, +39.51 (0.50%)
NASDAQ 1,621.87, +19.24 (1.20%)
S&P 500 842.50 8.12 (0.97%)
NYSE Composite 5,318.75, +51.65 (0.98%)
Stocks finished with their 4th straight week to the upside. That's a pretty nifty record in the middle of economic calamity and hardly believable. Wall Street insiders realize that another precipitous decline in stock values could lead to some very ugly consequences including widespread firings of top banking professionals, prosecutions and jailings of same, social unrest, and a near-complete breakdown of the social contract and economic death. Thus, the rally must continue, or, at least appear to be solid. It's just another sham being played by the monied interests of Wall Street and Washington and being dribbled along by the feigning financial press.
On the day, advancers beat decliners, 4091-2378, though new lows continued their advantage over new highs, 77-16. Volume was moderate.
NYSE Volume 1,484,215,000
NASDAQ Volume 2,140,955,000
To amplify Wall Street's insanity, read on. This hardly warranted mention on the airwaves, unbelievably.
Self-dealing made simple: The same banks which packaged the "toxic" mortgage loans - for which they received government bailout money - are now looking into buying the same assets under Treasury's Private-Public Partnership Investment Plan.
Yes, you read that right. Citigroup, Morgan Stanley, JP Morgan Chase and Goldman Sachs want to be buyers of each other's near-worthless paper, taking advantage of the government's largesse in the form of 14-1 leverage. These same banks would like to buy up each other's bad loans with roughly 15% down, the balance financed by the government, or, read correctly, the badly duped and without recourse US taxpayer.
Not only is this the worst self-dealing ever witnessed on the planet, but it also reeks of the kind of scheme Bernie Madoff recently re-popularized: PONZI. All of this will likely be swept neatly under the rug with help of the duplicitous Treasury Secretary, Fed Chairman Ben Bernanke and the Liar-King, President Barack Obama.
I know I predicted this would happen when I first heard of the proposal, so why should I - or anyone - be shocked? Our government has one purpose now, simply to serve the wishes of their puppet-masters on Wall Street. The whole bunch of them - from the President and congress to the bank CEOs - should be tried on charges of grand larceny and treason, because stealing from the very people you swore to protect and defend is nothing less.
Commodities dithered throughout the day. Oil closed 13 cents lower, at $52.51. Gold fell another $11.60, to $897.30. Silver shed 29 cents to finish the week at $12.74.
And here's a dose of honesty:
Have a nice weekend.
After a multi-week stock market run of between 20 and 25%, depending on your index of choice, a week chock-full of eyebrow-raising economic reports, a failed attempt at worldwide order and financial diplomacy at the G20, and the worst unemployment in 25 years, the masters of the financial universe decided to keep pushing prices higher, despite the aforementioned data and news, and the imminent revelations from corporate quarterly reports beginning next week.
No matter how anyone tries to justify the numbers, a loss of more than 2 million jobs just in the first quarter of this year is not good news. Stocks should have been headed lower, not higher. Watching the indices crawl forward, it seems that the charts must be from some foreign planet, not ours, which is mired amid the throes of a deepening - not improving - financial breakdown.
Apparently, the wizards of Wall Street see things differently. A slowing economy is a fine one to made ludicrous bets into according to their actions. Stimulus, bailouts, Ponzi schemes, a deteriorating housing market and job losses creates the perfect investing climate according to these geniuses. They are smoking some very powerful dope down there.
Stocks traded in tight ranges throughout the session. Today's action could have been due to indecision, consolidation or manipulation, but it was probably a little bit of each. In any case, nothing moved enough to raise anyone's blood pressure much. It was an all-around tough day for day-traders and short timers.
Dow 8,017.59, +39.51 (0.50%)
NASDAQ 1,621.87, +19.24 (1.20%)
S&P 500 842.50 8.12 (0.97%)
NYSE Composite 5,318.75, +51.65 (0.98%)
Stocks finished with their 4th straight week to the upside. That's a pretty nifty record in the middle of economic calamity and hardly believable. Wall Street insiders realize that another precipitous decline in stock values could lead to some very ugly consequences including widespread firings of top banking professionals, prosecutions and jailings of same, social unrest, and a near-complete breakdown of the social contract and economic death. Thus, the rally must continue, or, at least appear to be solid. It's just another sham being played by the monied interests of Wall Street and Washington and being dribbled along by the feigning financial press.
On the day, advancers beat decliners, 4091-2378, though new lows continued their advantage over new highs, 77-16. Volume was moderate.
NYSE Volume 1,484,215,000
NASDAQ Volume 2,140,955,000
To amplify Wall Street's insanity, read on. This hardly warranted mention on the airwaves, unbelievably.
Self-dealing made simple: The same banks which packaged the "toxic" mortgage loans - for which they received government bailout money - are now looking into buying the same assets under Treasury's Private-Public Partnership Investment Plan.
Yes, you read that right. Citigroup, Morgan Stanley, JP Morgan Chase and Goldman Sachs want to be buyers of each other's near-worthless paper, taking advantage of the government's largesse in the form of 14-1 leverage. These same banks would like to buy up each other's bad loans with roughly 15% down, the balance financed by the government, or, read correctly, the badly duped and without recourse US taxpayer.
Not only is this the worst self-dealing ever witnessed on the planet, but it also reeks of the kind of scheme Bernie Madoff recently re-popularized: PONZI. All of this will likely be swept neatly under the rug with help of the duplicitous Treasury Secretary, Fed Chairman Ben Bernanke and the Liar-King, President Barack Obama.
I know I predicted this would happen when I first heard of the proposal, so why should I - or anyone - be shocked? Our government has one purpose now, simply to serve the wishes of their puppet-masters on Wall Street. The whole bunch of them - from the President and congress to the bank CEOs - should be tried on charges of grand larceny and treason, because stealing from the very people you swore to protect and defend is nothing less.
Commodities dithered throughout the day. Oil closed 13 cents lower, at $52.51. Gold fell another $11.60, to $897.30. Silver shed 29 cents to finish the week at $12.74.
And here's a dose of honesty:
Have a nice weekend.
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