Wednesday, April 21, 2010

Triple Top or More Room to Roam?

Stocks just keep bounding up and down, but mostly up, though the activity since Thursday of last week (April 15) is suggesting that the top may be already set, or set up.

The Dow hit an intra-day high of 11,190.22 on Tuesday, after making stops at 11,189.61 on Thursday (4/15) and 11,186.82 on Friday (4/16). That appears to be the formation of some fairly significant resistance, especially considering today's close of 11,124.92, well below those lofty levels.

It's far too early to tell if that the 11,190 area will actually be the top, though the Transportation Index is signaling somewhat the same signs of waning interest, settling today some 124 points below its own intra-day high from April 15. Of course, more bad news for either Greece or Goldman Sachs will send the stock-pumping moles in the PPT scurrying into action with their billions of dollars of untraceable trades to keep stocks soaring and the public none the wiser.

If one is inclined to listen to financial news via the mainstream media (re: CNBC), the constant howling over "improving conditions", "V-shaped recovery" and similar bombast can be deafening, but make no doubt, dirty little secrets are being kept far from public view.

In that regard, the SC charges against Goldman Sachs are probably more of a decoy than anything else. If something critical were to occur - and break the collusion between the federal government and Wall Street - the Department of Justice would have filed criminal charges. The chances of anything like that actually happening are remote, though those of us who believe that the housing bubble and subsequent crash, bailouts and breakdowns were indeed high crimes remain hopeful.

Beating back the onrushing forces of government and big money at the same time is an uphill fight, one the American people seem ill-inclined to undertake. Tea parties have been largely a ploy of the right wing, do-nothing Republican party, which sees obstruction as a perfectly good alternative to actually legislating on the behalf of the American people.

Those days are long gone, and the folks occupying the high offices in Washington and Wall Street hope they will be soon forgotten as well. Politicians listen only for the sound of crisp bils being peeled off of large wads from well-heeled supporters, like oil companies, pharmas and banking interests. Nobody will go to jail after the banks literally stole billions of dollars in real estate assets through phony documentation, phony appraisals, phony credit reports and phony income statements.

The wizards of Wall Street are truthfully not wizards of high finance at all, but rather, masters of finagling every last dollar out of the pockets of the middle class. To them, working men and women are rabble, peons to be fleeced by their powerful financial acumen and lengthy over-worded documents. The government complies by not regulating and the courts further the fraud by failing to prosecute even when they have good actions with solid arguments in front of them.

Witness Federal Court Judge Virginia Phillips dismissing 8 separate class actions on the same pretext: that the banks and builders weren't responsible for the calamity which has put millions out of their homes, but that the "economy" or the "recession" was to blame. With judges like Phillips front-running litigation for the bank fraudsters, is there really any reason to believe in democratic principles like justice, fairness, or even due process any more?

The obvious answer is no, and that bodes ill for all of us, present and future. Baby boomers should face facts: our parents were probably the most prosperous generation ever in America, but we are less fortunate, with every excess dollar seemingly earmarked for either utility rate hikes, tax increases or supplements to the wildly out-of-control and under-funded entitlement programs. The baby-boomer generation will be lucky to retire with any kind of benefits, as the Social Security fund is already running current-account deficits. The government will have to either borrow or tax to pay the millions who will be retiring in the next decade, and borrow in enormous sums.

In the meantime, Americans mostly continue to work and try to save, though for many, that has become an increasingly difficult task. Unemployment is expected to remain stubbornly high for at least another three years, with 8% now being hailed as a benchmark, though in reality, the current 9.7% rate is actually closer to 18% when all the conditional arguments are removed from the government's calculations.

Wall Street could care less, though their rapacious greed could turn out to be their own worst enemy. Without a spending public, many of the major enterprises will crumble for lack of new suckers (funding). It cannot happen too soon, for only then will there be a reckoning and justice for all.

Dow 11,124.92, +7.86 (0.07%)
NASDAQ 2,504.61, +4.30 (0.17%)
S&P 500 1,205.93, -1.24 (0.10%)
NYSE Composite 7,644.67, -24.44 (0.32%)

Once again, the indices rendered a split decision, with two up and two down, indicating that a turn is approaching. Advancing issues led decliners, 3534-2957. 767 new highs overshadowed the mere 47 new lows. Volume was back up again, though it's likely due more to position trades than anything else, i.e., keeping the markets on an even keel by manipulating a range of stocks.

NYSE Volume 6,301,928,500
NASDAQ Volume 2,644,937,250

Oil was down, gold and silver, up, all three stuck in trading ranges they have occupies for months. Those prices are deliberately being manipulated to keep order in the global economy. Central banks fear gold because their currencies are backed by nothing but empty promises, and the oil sheiks and oligopolies can maintain production without social unrest at abysmally high prices.

Its a sad world condition, in which the rich now control a larger concentration of wealth than at any other time in history, except for maybe the Middle Ages or the Roman Empire.

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