On the surface, it's safe to say that April was a pretty good month for stock holders and traders.
The Dow, S&P and NASDAQ are all at multiple-year highs and finished off what may have been one of the most mangled months in stock market history with another day of broad-based gains (with the slight exception of the NASDAQ, weighed down by some lofty valuations).
For the month of April, the Dow gained some 490 points (3.98%) as investors flocked to blue chips. The S&P 500 added 38 points (2.87%), while the NASDAQ moved 92 points to the upside. The NYSE Composite, the broadest measure of market health, grabbed 267 (3.18%) of gains.
Naturally, the assumption is that stocks gained on the back of easy Fed policies, and outpaced inflation, but were trampled by commodities, especially silver and gold, which continued to be among the safest and best-returning investments of the year.
Keeping some perspective, in relation to the weakening US dollar, stocks merely held their own, as the dollar index, which closed today at fresh 3-year lows of 73.12, lost 3.60%. Thus, when measured against an inflation indicator such as the Dollar Index (DXY), most stock traders lost money in real terms. The true measure of value was in the precious metals and other commodities, things that one can actually touch, feel, see, and potentially use for some other purpose.
April being traditionally the final month of the year to make profits in stocks before October, the gains across the swath of the indices are not surprising at all. In fact, had stocks not gone higher, it would have been a shocking event. With the Fed set to end QE2 in June and hinting of higher interest rates, the top may be close at hand for the majors.
However, being that all manner of policy is tied to a strong stock market, since every pension, trust and endowment has money invested in stocks, there's little likelihood of a summer crash, unless the deterioration in the dollar continues apace. The Fed's ending of QE2 will more than likely stop the slide in the dollar, though it's still a gamble that the economy is strong enough to get along without outside help. The Fed stands ready to intervene at any signs of weakness, and there are plenty of them.
Individuals, those sentient beings otherwise known as humans, who eat, sleep, and generally are the driving force behind all economics, are not faring as well as their investments. Personal income was reported to have increased at 0.5% in March and the same may be true for April, but it's hardly keeping pace with inflation, which is running at a rate of between six and nine per cent annually. Food and energy prices have been the biggest contributors to the poverty effect that has overtaken the middle class, and there seems to be no end, though tighter monetary policy may have a calming effect on rising prices.
This is all going to play out over the summer, which appears to be shaping up as something of a spectacle. Along with watching the Fed's every move, the adroit consumer/investor must keep an eye on our nefarious congress and the golf-fanatic president, and how they handle the debt ceiling and the 2012 budget.
There are also the twin monsters of the housing market and unemployment, two stubborn enemies that will not easily be vanquished. while housing is something of a double-edged sword, hurting existing homeowners while helping new ones with lower prices and record low interest rates, unemployment is a stickier issue. Jobs just don't spring up from the ground, though farming may become one of the better ways to lick the whole rat race from an individual standpoint.
Still, there are simply not enough new jobs being created in the US to sustain the population that is able and willing to work for a living and the ones being created are not as good as many just a decade ago.
Dow 12,810.54, +47.23 (0.37%)
NASDAQ 2,873.54, +1.01 (0.04%)
S&P 500 1,363.61, +3.13 (0.23%)
NYSE Composite 8,671.41, +31.68 (0.37%)
On the day, advancing issues outperformed decliners, 4084-2465. On the NASDAQ, there were 200 new highs and just 20 new lows. Over at the NYSE new highs beat new lows, 361-13. Volume was actually elevated, possibly due to window-dressing, or funds squaring positions and closing out EOM books.
NASDAQ Volume 2,486,112,500
NYSE Volume 4,012,242,750
Crude oil continued its relentless climb, adding $1.07, to $113.93 per barrel. Gold was the outright winner of the day, gaining, at the moment, $26.60, to $1562.40. Silver, however, did not follow, as the price-suppression machine kicked into high gear, supposedly to keep it from the $50 threshold and destroying April shorts. Silver is currently down 62 cents, at $47.86. Those calling for an investigation into price-rigging in both the gold and silver markets can use this day as an obvious example.
All of this is merely a dress rehearsal for the month of May however, which will start with non-farm payrolls for April next Friday and at some point include a hot debate of the federal debt ceiling. The old saw, "sell in May and stay away," will be tested.
Friday, April 29, 2011
Thursday, April 28, 2011
Jobless Claims Jump, 1st Q GDP Anemic, Stocks Surge?
We've been officially in a financial twilight zone since about the middle of 2007. It was unofficial until the wheels of George W. Bush's second term as president began to fall off and the evils of crony capitalism began to appear. We all know what happened after that, but today's economic data and stock market reaction defies explanation of any rational kind except that the markets are completely out of whack, fed by the Fed's ZIRP and POMO.
Initial jobless claims printed this morning at 429,000, when the estimate was for 390,000. A miss of 39,000, especially when the economy is supposed to be improving, is pretty wide of the target and normally would cause a sell-off in stocks, since it signals trouble ahead. The last three reports on jobless claims all have come in over the "official" estimates, adding to the worry.
At the same time, the government released the first estimate of first quarter GDP, which has been revised downward over the past three months from 4 1/2% growth, to 3 1/2, to 3, and finally to 2%.
It didn't even make that. Estimated GDP for the first quarter was 1.8%, this on the heels of a 4th quarter 2010 final estimate of 3.1%. Blended, that puts annualized GDP at about 2.5%, which, in any sensible world, is under-achieving in a big way.
Normally, coming out of a recession, the economy grows at a 5% or higher clip for a few quarters and the Fed has to then apply the brakes by increasing the federal funds rate. However, in our current quagmire economy, we're not even hitting 3% annualized and interest rates are as low as they can be, effectively ZERO. This is truly distressing news, and anyone who thinks we're not headed right back into another recession (some believe the first one never actually ended), might be concerned or even downright perturbed.
Let's set the record straight. When a person's unemployment benefits run out - be they after 26 weeks, 60 weeks or the current standard for millions, 99 weeks, they no longer count in the BLS data, so the non-farms payroll report for April, which will be released a week from tomorrow, really does not count all the unemployed when they say the unemployment rate is 8.8% or whatever number they feel is appropriate.
Currently, REAL unemployment, measuring all the current UI recipients, plus those who have exhausted their benefits and are still without a job, is around 16-17%, maybe higher, and it's been at that level for the better part of three years.
Next, GDP growth has completely stalled out (the cynic in me wants to believe this is so we'll get a Republican president in 2012) and may turn negative, and that's will somewhere between $12 and $20 TRILLION in various forms of stimulus. Keep in mind, whenever a politician projects government budgets over any time frame longer than three years, that GDP growth is likely to be 3% or lower for the foreseeable future.
In other words, we are royally screwed and I'm not talking about tomorrow's wedding night of Prince William the Tragic.
The masters of the universe on Wall Street, however, apparently don't see any issues here, as they ramped up stocks after a slightly-declining opening 20 minutes.
Twilight Zone, folks. Rod Serling and the creepy music and all that.
Dow 12,763.31, +72.35 (0.57%)
NASDAQ 2,872.53, +2.65 (0.09%)
S&P 500 1,360.48, +4.82 (0.36%)
NYSE Composite 8,639.73, +30.45 (0.35%)
Gainers outnumbered losers, 3915-2644. 171 new highs and 28 new lows was the order of the day on the NASDAQ. Over on the NYSE, there were 355 new highs and 13 new lows. Volume, oh, why bother?
NASDAQ Volume 1,993,865,125.00
NYSE Volume 4,519,197,000
Crude oil futures were up on 10 cents today, closing at $112.86 on the NYMEX. As of %;40 PM EDT, spot gold was bid up $8.50, at $1535.80, another new record. Silver was up 48 cents, to $48.48, though it traded more than a dollar higher earlier in the day.
The $50 mark for silver may take some time to finally break through, but when it does, it will be an all-time high, and will likely tack on about another $6-8 in short order. Breaking through an all-time high, especially when the forces of central bankers and JP Morgan are shorting it with everything at their disposal will be a seminal event and likely signal the resumption of the gathering second great depression, of which we are already two-and-a-half years into.
When silver breaks loose, all manner of nastiness will be released onto the global economy. Markets are already strained to their limits, but when central banks and large money center banks see their currency finally debased and routed by "poor man's gold" (silver), market disruptions will become continuous events and price discovery mechanisms priced in Dollars, Euros or Yen will be completely lost, forever shattered.
The $50 mark on silver is coming, and soon, so best be prepared for all manner of craziness.
BTW: the Dollar Index fell to 73.118, and was as low as 72.87 today. The dollar index is quickly reaching for the lows of Spring 2008, around 71.58, and it's likely that level will be breached about the same time silver rockets ahead and gas prices in the US exceed $4.00 per gallon nationally. We're almost there!
Initial jobless claims printed this morning at 429,000, when the estimate was for 390,000. A miss of 39,000, especially when the economy is supposed to be improving, is pretty wide of the target and normally would cause a sell-off in stocks, since it signals trouble ahead. The last three reports on jobless claims all have come in over the "official" estimates, adding to the worry.
At the same time, the government released the first estimate of first quarter GDP, which has been revised downward over the past three months from 4 1/2% growth, to 3 1/2, to 3, and finally to 2%.
It didn't even make that. Estimated GDP for the first quarter was 1.8%, this on the heels of a 4th quarter 2010 final estimate of 3.1%. Blended, that puts annualized GDP at about 2.5%, which, in any sensible world, is under-achieving in a big way.
Normally, coming out of a recession, the economy grows at a 5% or higher clip for a few quarters and the Fed has to then apply the brakes by increasing the federal funds rate. However, in our current quagmire economy, we're not even hitting 3% annualized and interest rates are as low as they can be, effectively ZERO. This is truly distressing news, and anyone who thinks we're not headed right back into another recession (some believe the first one never actually ended), might be concerned or even downright perturbed.
Let's set the record straight. When a person's unemployment benefits run out - be they after 26 weeks, 60 weeks or the current standard for millions, 99 weeks, they no longer count in the BLS data, so the non-farms payroll report for April, which will be released a week from tomorrow, really does not count all the unemployed when they say the unemployment rate is 8.8% or whatever number they feel is appropriate.
Currently, REAL unemployment, measuring all the current UI recipients, plus those who have exhausted their benefits and are still without a job, is around 16-17%, maybe higher, and it's been at that level for the better part of three years.
Next, GDP growth has completely stalled out (the cynic in me wants to believe this is so we'll get a Republican president in 2012) and may turn negative, and that's will somewhere between $12 and $20 TRILLION in various forms of stimulus. Keep in mind, whenever a politician projects government budgets over any time frame longer than three years, that GDP growth is likely to be 3% or lower for the foreseeable future.
In other words, we are royally screwed and I'm not talking about tomorrow's wedding night of Prince William the Tragic.
The masters of the universe on Wall Street, however, apparently don't see any issues here, as they ramped up stocks after a slightly-declining opening 20 minutes.
Twilight Zone, folks. Rod Serling and the creepy music and all that.
Dow 12,763.31, +72.35 (0.57%)
NASDAQ 2,872.53, +2.65 (0.09%)
S&P 500 1,360.48, +4.82 (0.36%)
NYSE Composite 8,639.73, +30.45 (0.35%)
Gainers outnumbered losers, 3915-2644. 171 new highs and 28 new lows was the order of the day on the NASDAQ. Over on the NYSE, there were 355 new highs and 13 new lows. Volume, oh, why bother?
NASDAQ Volume 1,993,865,125.00
NYSE Volume 4,519,197,000
Crude oil futures were up on 10 cents today, closing at $112.86 on the NYMEX. As of %;40 PM EDT, spot gold was bid up $8.50, at $1535.80, another new record. Silver was up 48 cents, to $48.48, though it traded more than a dollar higher earlier in the day.
The $50 mark for silver may take some time to finally break through, but when it does, it will be an all-time high, and will likely tack on about another $6-8 in short order. Breaking through an all-time high, especially when the forces of central bankers and JP Morgan are shorting it with everything at their disposal will be a seminal event and likely signal the resumption of the gathering second great depression, of which we are already two-and-a-half years into.
When silver breaks loose, all manner of nastiness will be released onto the global economy. Markets are already strained to their limits, but when central banks and large money center banks see their currency finally debased and routed by "poor man's gold" (silver), market disruptions will become continuous events and price discovery mechanisms priced in Dollars, Euros or Yen will be completely lost, forever shattered.
The $50 mark on silver is coming, and soon, so best be prepared for all manner of craziness.
BTW: the Dollar Index fell to 73.118, and was as low as 72.87 today. The dollar index is quickly reaching for the lows of Spring 2008, around 71.58, and it's likely that level will be breached about the same time silver rockets ahead and gas prices in the US exceed $4.00 per gallon nationally. We're almost there!
Wednesday, April 27, 2011
Everything Is Going Up, Except Your Wages and the US Dollar
On March 28, 2008 - about the time Bears Stearns was blowing up and before just about anyone was predicting a crisis - the Dollar Index bottomed out at 71.585.
Today, after the FOMC re-confirmed (for about the 16th time) that the federal funds rate would remain at "near" zero per cent, that very same index hit a three-year low at 73.26, closing just a touch above that level, at 73.317.
Some not suffering from the all-American malaise of short-term memory loss will recall that 2008 was not a very pretty time to be in stocks. Nor was it particularly good to be working for a Fortune 500 or other large corporation, as, by the end of the year, employees were being shed light so much dead weight off a beached ocean cruiser.
Comparing today to that sorry state of affairs is rather simple. Then, we were just heading into what would turn out to be one of the most devastating recession/depressions of modern times. Today, we are still not recovered from it.
Back in 2008, Ben Bernanke was saying that everything was OK, and soon he would glibly announce that the sub-prime crisis had been contained (insert laugh track here).
Today, the Bernanke delivered the very first of what we hope will be a short-lived experiment - a press conference following the announcement of the FOMC rate policy (no change). Once again, the Bernanke assured us that everything was just peachy, except that the economy was "recovering" a little bit slower than he'd like. We can all join him in that sentiment.
Today, Mr. Bernanke read some prepared remarks, bored us to tears and took questions from the assembled press corps, boring us even more. Today, Mr. Bernanke wants us to believe that core inflation is running at about a 1.6 to 2.2% rate, and while that may be true, core inflation leaves out food and energy, so with those included, real inflation is running at about 6-8%.
The Chairman also assured us that inflation risks were contained, just like he said the sub-prime situation was contained back in 2008. Many of us in the blogosphere didn't believe him then, and we don't believe him now, except this time we have proof.
All one has to do is go shopping, which means getting in a vehicle and driving somewhere and maybe buying some gas, which is more expensive than it was last week, and the week before that and the week before that...
Once one is over the shock of $4.00/gallon gasoline, one can go shopping for some food maybe, and find that prices are higher on fruits, vegetables, canned goods, meats, just about everything.
So, no, Mr. Bernanke, you and your Federal Reserve buddies, whose mandate is to provide price and wage stability and full employment, have failed on all accounts and your pronouncements to the press and the public are falling on deaf ears. Many don't bother to pay any attention to you at all, and even more don't even know who you are (that may come in handy when the pitchforks and torches come out). Another group believes you are lying and that you are ruining the economy and the nation with your mindless inflation-building, dollar-destroying policies.
And don't forget, we have proof. This time, we won't be fooled again.
On this day that the Fed reiterated its Zero Interest Rate Policy (ZIRP), everything went up while the dollar crashed and burned. Stocks were up. Interest rates were up. Gold was up, so too silver, oil, live cattle, cocoa and oil. The few commodities that did go down were already way up, and will likely go up more in the not-too-distant future.
The Fed is killing us, which it why is so refreshing to learn that Ron Paul is running for president. The Texas firebrand, if elected, will run Bernanke and his crew out of town.
Dow 12,690.96, +95.59 (0.76%)
NASDAQ 2,869.88, +22.34 (0.78%)
S&P 500 1,355.66, +8.42 (0.62%)
NYSE Composite 8,609.28, +54.29 (0.63%)
On the major stock indices, advancers pummeled declining issues, 4233-2315. NASDAQ pumped out 148 new highs and 25 new lows. The NYSE produced 290 stocks which hit new highs and 10 which made new lows. Volume was in line with expectations, which is a polite way of saying it was low, again, as usual.
NASDAQ Volume 2,083,155,500
NYSE Volume 4,525,766,000
Crude oil closed up 55 cents, to $112.76. The average price for a gallon of unleaded regular in the USA is now $3.88. Nine states are already averaging over $4/gallon, and West Virginia and Wisconsin are at $3.96 and $3.97, respectively. Soon that number will be 15, then 25 then 45. In time, even those states closest to the Gulf of Mexico - Alabama, Mississippi, South Carolina, Louisiana, Georgia, where prices are among the lowest in the nation, will be hovering near the $4 mark, the point at which the nation surrenders what little is left of its dignity - and money - to the global oil cartel.
Those adding to their stash of gold and/or silver yesterday on the rare pull-back, received instant gratification as both metals popped on the FOMC and Bernanke's policy announcement. It seems the gold bugs and silver liners also appreciate Bernanke's policies, except that theywish he'd take a break now and again to give them time to buy more precious metals before the prices go absolutely hyperbolic.
Gold hit another all-time record, currently trading at $1527.20, up a whopping $20.10 from Tuesday's close. Silver also regained its mojo, picking up $2.16, to $47.76, closing in on the magical Hunt brothers high of $50.25, achieved in 1980. Silver is expected to go right on past that point as long as Bernanke keeps interest rates at zero and the dollar continues to slide into oblivion.
Therefore, if you're feeling a bit squeezed, thank the Bernanke. He's our guy.
Today, after the FOMC re-confirmed (for about the 16th time) that the federal funds rate would remain at "near" zero per cent, that very same index hit a three-year low at 73.26, closing just a touch above that level, at 73.317.
Some not suffering from the all-American malaise of short-term memory loss will recall that 2008 was not a very pretty time to be in stocks. Nor was it particularly good to be working for a Fortune 500 or other large corporation, as, by the end of the year, employees were being shed light so much dead weight off a beached ocean cruiser.
Comparing today to that sorry state of affairs is rather simple. Then, we were just heading into what would turn out to be one of the most devastating recession/depressions of modern times. Today, we are still not recovered from it.
Back in 2008, Ben Bernanke was saying that everything was OK, and soon he would glibly announce that the sub-prime crisis had been contained (insert laugh track here).
Today, the Bernanke delivered the very first of what we hope will be a short-lived experiment - a press conference following the announcement of the FOMC rate policy (no change). Once again, the Bernanke assured us that everything was just peachy, except that the economy was "recovering" a little bit slower than he'd like. We can all join him in that sentiment.
Today, Mr. Bernanke read some prepared remarks, bored us to tears and took questions from the assembled press corps, boring us even more. Today, Mr. Bernanke wants us to believe that core inflation is running at about a 1.6 to 2.2% rate, and while that may be true, core inflation leaves out food and energy, so with those included, real inflation is running at about 6-8%.
The Chairman also assured us that inflation risks were contained, just like he said the sub-prime situation was contained back in 2008. Many of us in the blogosphere didn't believe him then, and we don't believe him now, except this time we have proof.
All one has to do is go shopping, which means getting in a vehicle and driving somewhere and maybe buying some gas, which is more expensive than it was last week, and the week before that and the week before that...
Once one is over the shock of $4.00/gallon gasoline, one can go shopping for some food maybe, and find that prices are higher on fruits, vegetables, canned goods, meats, just about everything.
So, no, Mr. Bernanke, you and your Federal Reserve buddies, whose mandate is to provide price and wage stability and full employment, have failed on all accounts and your pronouncements to the press and the public are falling on deaf ears. Many don't bother to pay any attention to you at all, and even more don't even know who you are (that may come in handy when the pitchforks and torches come out). Another group believes you are lying and that you are ruining the economy and the nation with your mindless inflation-building, dollar-destroying policies.
And don't forget, we have proof. This time, we won't be fooled again.
On this day that the Fed reiterated its Zero Interest Rate Policy (ZIRP), everything went up while the dollar crashed and burned. Stocks were up. Interest rates were up. Gold was up, so too silver, oil, live cattle, cocoa and oil. The few commodities that did go down were already way up, and will likely go up more in the not-too-distant future.
The Fed is killing us, which it why is so refreshing to learn that Ron Paul is running for president. The Texas firebrand, if elected, will run Bernanke and his crew out of town.
Dow 12,690.96, +95.59 (0.76%)
NASDAQ 2,869.88, +22.34 (0.78%)
S&P 500 1,355.66, +8.42 (0.62%)
NYSE Composite 8,609.28, +54.29 (0.63%)
On the major stock indices, advancers pummeled declining issues, 4233-2315. NASDAQ pumped out 148 new highs and 25 new lows. The NYSE produced 290 stocks which hit new highs and 10 which made new lows. Volume was in line with expectations, which is a polite way of saying it was low, again, as usual.
NASDAQ Volume 2,083,155,500
NYSE Volume 4,525,766,000
Crude oil closed up 55 cents, to $112.76. The average price for a gallon of unleaded regular in the USA is now $3.88. Nine states are already averaging over $4/gallon, and West Virginia and Wisconsin are at $3.96 and $3.97, respectively. Soon that number will be 15, then 25 then 45. In time, even those states closest to the Gulf of Mexico - Alabama, Mississippi, South Carolina, Louisiana, Georgia, where prices are among the lowest in the nation, will be hovering near the $4 mark, the point at which the nation surrenders what little is left of its dignity - and money - to the global oil cartel.
Those adding to their stash of gold and/or silver yesterday on the rare pull-back, received instant gratification as both metals popped on the FOMC and Bernanke's policy announcement. It seems the gold bugs and silver liners also appreciate Bernanke's policies, except that theywish he'd take a break now and again to give them time to buy more precious metals before the prices go absolutely hyperbolic.
Gold hit another all-time record, currently trading at $1527.20, up a whopping $20.10 from Tuesday's close. Silver also regained its mojo, picking up $2.16, to $47.76, closing in on the magical Hunt brothers high of $50.25, achieved in 1980. Silver is expected to go right on past that point as long as Bernanke keeps interest rates at zero and the dollar continues to slide into oblivion.
Therefore, if you're feeling a bit squeezed, thank the Bernanke. He's our guy.
Tuesday, April 26, 2011
After the Ramp, Amazon Pigs Go to Slaughter
There's an old market adage, one oft-repeated by the notorious Jim Cramer of CNBC infamy, and it goes, Bulls make money, Bears make money, Pigs get slaughtered.
Today's top candidates for pig of the day were the anti-silver whore banks who shorted silver with May or June 40 puts (almost a sure slaughter there), the naive investors who purchased any of the momo-stocks - Apple, Netflix, Cipolte Mexican, etc. - and those who held their recently-purchased shares of Amazon (AMZN).
The winner - though all may be declared winners, by losing at a later date - for today has to be the Amazon playas who ignored the warnings of today's market action (from above 186 to a low of 181 against the backdrop of an accelerating market rally) and held on, hoping for another blowout quarter from the world's biggest bookseller.
Oops! Amazon reported just after the closing bell that it missed analyst targets by a pretty wide shot, coming in at 44 cents per share, when the market was looking for 61 cents. Some - most likely the fast talkers on Fast Money - will take solace in the fact that they beat revenue forecasts and were beaten up by increased operating costs, but it's earnings that matter, profits, son.
Amazon got the ramp-up treatment just this past Wednesday, soaring, on no particular news or for any good reason, from 178-and-change to just below 185, before noon. On Thursday and Monday, the stock drifted at the high end of the range until it was absolutely belted today during the regular session.
What changed? Precisely nothing, except that somebody got played, and good, and you can bet your last download on your Kindle that it wasn't anybody working at Goldman Sachs or Merrill Lynch or JP Morgan. Nope, the small investor who thought he/she had it all figured out got creamed and once again is left holding the bag (that bag being of the Firesign Theatre variety, and those who don't understand the 1970s reference, grow up!).
Amazon closed the day at 182.30, a loss of 3.12, and was trading below 180 in the after-hours. It's a pretty good bet that it opens tomorrow gapped lower, and trends South from there.
As for the rest of the market, it proved once again that nobody knows anything (other than Ben Bernanke and Jaime Dimon, that is) about short-term moves in the stock market, because, for all intents and purposes, this is an overbought, frothy market top, but this writer and many others have been calling tops for months. We are all equally fallible and ignorant in the face of SIRP and QE2. We are confident tomorrow, when the Fed announces no change in rate policy and Ben Bernanke makes history with a post-nothing-announcement news conference, will be either up, down or flat.
Dow 12,595.37, +115.49 (0.93%)
NASDAQ 2,847.54, +21.66 (0.77%)
S&P 500 1,347.24, +11.99 (0.90%)
NYSE Composite 8,554.99, +69.74 (0.82%)
Advancing issues, as one might have guess, clobbered decliners, 4561-2055. On the NASDAQ, new highs totaled 158, new lows, 28. There were 318 new highs and just six new lows on the NYSE. Volume was good on the NASDAQ, still depressed on the NYSE.
NASDAQ Volume 2,070,959,125
NYSE Volume 4,391,299,000
Commodities had a storied session, especially the precious metals. After making ferocious moves for months, the expected pull-back has begun. Gold lost $5.60, closing in NY at $1,503.50, but silver took a major hit, down $2.10, to $45.05. Crude oil lost a mere seven cents, to finish the session at $112.21. Food-related commodities were mostly lower.
The math on this is pretty straightforward. Since the global banking cartel can't allow gold and silver to defeat their paper monies, they suppress the precious metals with massive short positions in the fluid, over-leveraged paper market. Since most people don't own gold or silver, they can beat the price down when necessary, though physical holders won't actually care much about day-to-day movement since the trend has been up for the past decade and shows no signs of abatement. Oil stays high, as everybody has to put fuel into vehicles or distributed energy and since dead humans don't drive much, the cost of food must not rise severely.
It's all about oil, has been for many years and isn't going to change soon. That's why wise guys and gals like gold and silver. It's a hedge, it's real money and you can't eat it out of existence.
Tomorrow, the great and glorious Ben Bernanke will quiver and quake through a non-eventful press conference after the "no change" FOMC policy announcement. Maybe Ben will offer some tidbit about how he can stop inflation in 15 minutes or some other rubbish. Most likely, however, it will be snoozing as usual and the market will go... somewhere.
Today's top candidates for pig of the day were the anti-silver whore banks who shorted silver with May or June 40 puts (almost a sure slaughter there), the naive investors who purchased any of the momo-stocks - Apple, Netflix, Cipolte Mexican, etc. - and those who held their recently-purchased shares of Amazon (AMZN).
The winner - though all may be declared winners, by losing at a later date - for today has to be the Amazon playas who ignored the warnings of today's market action (from above 186 to a low of 181 against the backdrop of an accelerating market rally) and held on, hoping for another blowout quarter from the world's biggest bookseller.
Oops! Amazon reported just after the closing bell that it missed analyst targets by a pretty wide shot, coming in at 44 cents per share, when the market was looking for 61 cents. Some - most likely the fast talkers on Fast Money - will take solace in the fact that they beat revenue forecasts and were beaten up by increased operating costs, but it's earnings that matter, profits, son.
Amazon got the ramp-up treatment just this past Wednesday, soaring, on no particular news or for any good reason, from 178-and-change to just below 185, before noon. On Thursday and Monday, the stock drifted at the high end of the range until it was absolutely belted today during the regular session.
What changed? Precisely nothing, except that somebody got played, and good, and you can bet your last download on your Kindle that it wasn't anybody working at Goldman Sachs or Merrill Lynch or JP Morgan. Nope, the small investor who thought he/she had it all figured out got creamed and once again is left holding the bag (that bag being of the Firesign Theatre variety, and those who don't understand the 1970s reference, grow up!).
Amazon closed the day at 182.30, a loss of 3.12, and was trading below 180 in the after-hours. It's a pretty good bet that it opens tomorrow gapped lower, and trends South from there.
As for the rest of the market, it proved once again that nobody knows anything (other than Ben Bernanke and Jaime Dimon, that is) about short-term moves in the stock market, because, for all intents and purposes, this is an overbought, frothy market top, but this writer and many others have been calling tops for months. We are all equally fallible and ignorant in the face of SIRP and QE2. We are confident tomorrow, when the Fed announces no change in rate policy and Ben Bernanke makes history with a post-nothing-announcement news conference, will be either up, down or flat.
Dow 12,595.37, +115.49 (0.93%)
NASDAQ 2,847.54, +21.66 (0.77%)
S&P 500 1,347.24, +11.99 (0.90%)
NYSE Composite 8,554.99, +69.74 (0.82%)
Advancing issues, as one might have guess, clobbered decliners, 4561-2055. On the NASDAQ, new highs totaled 158, new lows, 28. There were 318 new highs and just six new lows on the NYSE. Volume was good on the NASDAQ, still depressed on the NYSE.
NASDAQ Volume 2,070,959,125
NYSE Volume 4,391,299,000
Commodities had a storied session, especially the precious metals. After making ferocious moves for months, the expected pull-back has begun. Gold lost $5.60, closing in NY at $1,503.50, but silver took a major hit, down $2.10, to $45.05. Crude oil lost a mere seven cents, to finish the session at $112.21. Food-related commodities were mostly lower.
The math on this is pretty straightforward. Since the global banking cartel can't allow gold and silver to defeat their paper monies, they suppress the precious metals with massive short positions in the fluid, over-leveraged paper market. Since most people don't own gold or silver, they can beat the price down when necessary, though physical holders won't actually care much about day-to-day movement since the trend has been up for the past decade and shows no signs of abatement. Oil stays high, as everybody has to put fuel into vehicles or distributed energy and since dead humans don't drive much, the cost of food must not rise severely.
It's all about oil, has been for many years and isn't going to change soon. That's why wise guys and gals like gold and silver. It's a hedge, it's real money and you can't eat it out of existence.
Tomorrow, the great and glorious Ben Bernanke will quiver and quake through a non-eventful press conference after the "no change" FOMC policy announcement. Maybe Ben will offer some tidbit about how he can stop inflation in 15 minutes or some other rubbish. Most likely, however, it will be snoozing as usual and the market will go... somewhere.
Monday, April 25, 2011
Slowest Trading Day of 2011 Marks Beginning of End
Just when you thought trading volume could not possibly get any lower, along comes the Easter Bunny, leaving along his trail melted chocolate and some mysterious objects that look like little raisins.
And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.
The NASDAQ was the only index to finish on a positive note, though the gains were negligible.
The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.
With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.
Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)
Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.
NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250
Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.
That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.
We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.
It's coming, and very well-deserved.
And he littered these all over Wall Street, apparently, because on the day after the holy holiday, traders were seemingly not in much of a mood for anything. The range on the Dow was disturbing - a mere 60 points from top to bottom, and the most-widely-watched index in the world registered another loss, breaking a string of four straight session gains.
The NASDAQ was the only index to finish on a positive note, though the gains were negligible.
The stark reality of a dormant US and global economy and the coming end to the Fed's generosity, with QE2 supposedly finished sometime in June, may have marked a final turning point for the markets. Stock values are stretched thin, all of the indices are at or near two-year highs and there's little catalyst besides momentum stocks like Apple and Netflix. It's almost impossible to predict anything other than a sullen summer downturn ahead, driven largely by the fiasco in Washington over raising the debt ceiling and the upcoming 2012 budget battle.
With that, investors and traders left the floor today on the low volume point of 2011. Trading could likely have been handled by three accountants with pencils, abacus and ledgers rather than the monstrous computer banks allocated to handle what used to be "the usual" flow.
Dow 12,479.88, -26.11 (0.21%)
NASDAQ 2,825.88, +5.72 (0.20%)
S&P 500 1,335.25, -2.13 (0.16%)
NYSE Composite 8,485.25, -19.11 (0.22%)
Decliners outweighed advancing issues, 3556-2998. On the NASDAQ, new highs topped new lows, 122-21, while on the NYSE, there were 212 new highs and a mere 20 new lows recorded. As mentioned above, there simply was no volume.
NASDAQ Volume 1,486,734,000.00
NYSE Volume 3,223,292,250
Energy traders shared the disinterest with their equity brethren, pushing the price of crude oil down a whole penny, to $112.28. Precious metals were an entirely different story, though, as gold reached a high of $1519.30, before being smashed down, but still finishing with a win, up $5.30, to $1,509.10 at the close. Silver followed a similar flight path, nearly braking the $50 barrier, at $49.85 before pulling back to close at $47.15, still a gain of $1.09 over Friday's close.
That the metals are about to run away from the rest of the commodity picture should come as no surprise as the current state of affairs in all things concerning fiat money are looking mighty suspect, as they have for the past two years. There will certainly be another blow-up crisis of some kind, though the "experts" in charge of killing the middle class hope against reality that this one will not be as severe as 2008, because the system - and the people - will not contend with it.
We are closing in quickly on what may be the last days of the great nations and their experiments in fiat money not backed by anything, centralized planning and their dual Ponzi schemes of finance and pension funding. The stage has been set by the Fed bingeing at the free money tap; all that's needed to tip the entire global system over is a nudge from some disgruntled citizens in France, the UK, Germany or the US, maybe even China. That nudge may be in the form of gas prices over $4.00 a gallon, though it would seem that $5.00 is the tipping point at which people abandon their vehicles and head for the nearest bastion of government authority, torches and pitchforks in hands.
It's coming, and very well-deserved.
Thursday, April 21, 2011
Stocks at Highs on POMO Momo; Silver Even Better
The melt-up continues in equities as the dollar continues deteriorating, losing another 0.39% on the day, dipping to post-Lehman crash (fall 2008) level at 74.09 after briefly crossing below 74.
We're witnessing a rather non-virtuous cycle here which is roughly 200 Dow points for every percentage decline on the DXY, so, if what's intended is the Dow above 13,000, expect another 2.5% decline in the value of the good, old greenback. Also expect a similar rise in the cost of everything you need to buy from outside the US, i.e., imports, which would include almost everything, and especially everything sold in any Wal-Mart store, the nation's largest retailer.
So, good news on Wall Street translates into generally bad news for the public American, except that 5, 10, 20 or 30 years from now, that money you keep pumping into your 401k or retirement plan is just going to be a mountain of cash! Unfortunately, by that time - if the market hasn't already crashed or you haven't already kicked the bucket, everything will cost enormously more than it does today, except, of course, your home, which continues to fall in value.
Stocks got an able assist from both the declining dollar and Uncle Benji, who delivered another $1.5 billion in free cash flow for the Primary Dealers on Wednesday, so there might have been just a little overhang, since settlement was today.
Of course, the markets would normally have been lower considering the economic news. The weekly new unemployment claims came in at 403,000, well above estimates (bad!), and the Philadelphia Fed's monthly Business Outlook Survey took a tumble in April to 18.5, from 43.4 in March (very bad!)
Not to worry, the maestros of our destruction are taking Good Friday off to pray for all of us. HAHAHAHA!
Dow 12,505.99, +52.45 (0.42%)
NASDAQ 2,820.16, +17.65 (0.63%)
S&P 500 1,337.38, +7.02 (0.53%)
NYSE Composite 8,504.36, +46.71 (0.55%)
As expected, advancing issues outnumbered decliners, 4214-2301. NASDAQ new highs: 143; new lows: 20. NYSE new highs: 224; new lows: 10. Volume was an absolute embarrassment, making all other data virtually meaningless. The only traders are computers whirring at the big brokerages and a few hedge funds which are allowed to play. Individual investors have been permanently spooked out of the Ponzi-style, POMO-driven US stock market.
NASDAQ Volume 1,856,856,375
NYSE Volume 3,947,026,500
Crude oil futures gained 84 cents, to $112.29. Yes, if gas isn't $4.00 a gallon where you live, it soon will be, and $5.00 in California, New York, Chicago and Hawaii are soon to come.
Gold finally closed above $1500 on the COMEX, hitting $1,503.80, a gain on the day of $4.80. Silver was up more than 4.5%, gaining $1.60, to close at another 31-year high of $46.06. Unbelievable! Silver is up 145% in just the last year and is likely to double again within two years, if not sooner.
Happy Easter!
We're witnessing a rather non-virtuous cycle here which is roughly 200 Dow points for every percentage decline on the DXY, so, if what's intended is the Dow above 13,000, expect another 2.5% decline in the value of the good, old greenback. Also expect a similar rise in the cost of everything you need to buy from outside the US, i.e., imports, which would include almost everything, and especially everything sold in any Wal-Mart store, the nation's largest retailer.
So, good news on Wall Street translates into generally bad news for the public American, except that 5, 10, 20 or 30 years from now, that money you keep pumping into your 401k or retirement plan is just going to be a mountain of cash! Unfortunately, by that time - if the market hasn't already crashed or you haven't already kicked the bucket, everything will cost enormously more than it does today, except, of course, your home, which continues to fall in value.
Stocks got an able assist from both the declining dollar and Uncle Benji, who delivered another $1.5 billion in free cash flow for the Primary Dealers on Wednesday, so there might have been just a little overhang, since settlement was today.
Of course, the markets would normally have been lower considering the economic news. The weekly new unemployment claims came in at 403,000, well above estimates (bad!), and the Philadelphia Fed's monthly Business Outlook Survey took a tumble in April to 18.5, from 43.4 in March (very bad!)
Not to worry, the maestros of our destruction are taking Good Friday off to pray for all of us. HAHAHAHA!
Dow 12,505.99, +52.45 (0.42%)
NASDAQ 2,820.16, +17.65 (0.63%)
S&P 500 1,337.38, +7.02 (0.53%)
NYSE Composite 8,504.36, +46.71 (0.55%)
As expected, advancing issues outnumbered decliners, 4214-2301. NASDAQ new highs: 143; new lows: 20. NYSE new highs: 224; new lows: 10. Volume was an absolute embarrassment, making all other data virtually meaningless. The only traders are computers whirring at the big brokerages and a few hedge funds which are allowed to play. Individual investors have been permanently spooked out of the Ponzi-style, POMO-driven US stock market.
NASDAQ Volume 1,856,856,375
NYSE Volume 3,947,026,500
Crude oil futures gained 84 cents, to $112.29. Yes, if gas isn't $4.00 a gallon where you live, it soon will be, and $5.00 in California, New York, Chicago and Hawaii are soon to come.
Gold finally closed above $1500 on the COMEX, hitting $1,503.80, a gain on the day of $4.80. Silver was up more than 4.5%, gaining $1.60, to close at another 31-year high of $46.06. Unbelievable! Silver is up 145% in just the last year and is likely to double again within two years, if not sooner.
Happy Easter!
Wednesday, April 20, 2011
Buy More Stocks Because the Dollar is Worthless
If anyone has any kind of notion that today's massive uptick in stocks had anything to do with the strength of the US economy, they'd better go back to economics 101 and check the chapter on currency devaluation.
Oh, there is no chapter on that? Well, allow me to explain how the dollar was absolutely savaged by - of all things - the Euro, and a host of other currencies including, but not limited to: the Aussie dollar, the Canadian looney, the Chinese Yuan and especially, the Swiss Franc.
On the dollar index (not a particularly great way to value US paper money, but sufficient for this discussion), the loss was 74 cents, or nearly one percent, meaning everything you buy that isn't produced in the United States - which is just about everything - costs 1% more today than it did yesterday. The corresponding rise in stocks only helps alleviate the pain for the richy-rich amongst us, but they usually find tax dodges or off-shore accounts for their hordes of cash anyhow.
The rest of you schmucks are just going to have to take it, see? You pay more so the Fed can print more billions, give them to the primary dealers and allow the government to continue overspending until eternity, which is a long, long, time. Next week, it will likely get worse, with gas heading for $5.00 a gallon nationally, and everything else going up accordingly, eventually, the average household will be able to buy food and fuel and little else, all the while watching those who own stocks make fortunes.
While the wizards of Wall Street frolic in the fields of greenbacks, you and I will be left holding the bag, containing manure, and be taxed into oblivion. Don't worry about Medicare and Social Security, most of us will die off before any benefits are actually paid out.
It's an ugly, severely evil set-up by the banks and our hands-out congress to create two distinct classes in the United States: the super, super rich and everyone else. You and I must learn how to raise our own crops and subsist off the land leased by our wealthy masters. Welcome to the golden age of feudalism!
I have nothing more to add except that if you haven't started some plants growing in your back yard and already own some silver or gold or both, you need to do so immediately, as time is running short and planting season is upon us. We are nearing the point of complete collapse of the middle class.
If your kids are planning to go to a big university and go into hock to the tune of $40, $50 or as much as $100,000 to get their degree, it might be time to sit them down and explain that their high school diploma will be sufficient, in their bleak future, to work as a mechanic, a gardener, or a chamber maid. Their dreams of becoming the next great biologist or astronaut will have to be put on indefinite hold.
Dow 12,453.54, +186.79 (1.52%)
NASDAQ 2,802.51, +57.54 (2.10%)
S&P 500 1,330.36, +17.74 (1.35%)
NYSE Composite 8,457.65, +125.62 (1.51%)
Advancing issues pounded decliners, 5245-1347. There were 133 new highs and 29 new lows. On the NYSE, 193 new highs and 16 new lows was the order of the day. Volume was relatively solid on the NASDAQ, where all the momentum stocks reside, but the usual miserable figures were posted on the NYSE. Almost all of the day's gains were made at the open, so the futures players made fortunes; the rest of the session was nothing more than churning.
NASDAQ Volume 2,112,464,250
NYSE Volume 4,657,346,000
Crude oil made a huge move of nearly 3%, gaining $3.17, to $111.45, making that $5.00 gallon of gas that the oil barons dream about that much closer to reality. Gold blasted through the $1500 mark again, but was taken down to $1,498.90, a gain of a mere $3.80. Silver continues to dazzle, gaining another 54 cents on the day, finishing in New York at $44.46.
While some argue that gold and silver are bubbles, if that is the case, then what is to be said of stocks, which have doubled off their March 2009 lows? Gold and silver are only a third to a fifth of the way to where they are eventually going. With every new dollar printed by the Chairman of the Fed, Ben Bernanke, an ounce of precious metals costs a little bit more, and that's about the only good news I can report today.
EDIT: Following the COMEX close in New York, gold bounced to $1502.10, and silver shot up to $45.22 an ounce at 5:18 pm EDT.
Oh, there is no chapter on that? Well, allow me to explain how the dollar was absolutely savaged by - of all things - the Euro, and a host of other currencies including, but not limited to: the Aussie dollar, the Canadian looney, the Chinese Yuan and especially, the Swiss Franc.
On the dollar index (not a particularly great way to value US paper money, but sufficient for this discussion), the loss was 74 cents, or nearly one percent, meaning everything you buy that isn't produced in the United States - which is just about everything - costs 1% more today than it did yesterday. The corresponding rise in stocks only helps alleviate the pain for the richy-rich amongst us, but they usually find tax dodges or off-shore accounts for their hordes of cash anyhow.
The rest of you schmucks are just going to have to take it, see? You pay more so the Fed can print more billions, give them to the primary dealers and allow the government to continue overspending until eternity, which is a long, long, time. Next week, it will likely get worse, with gas heading for $5.00 a gallon nationally, and everything else going up accordingly, eventually, the average household will be able to buy food and fuel and little else, all the while watching those who own stocks make fortunes.
While the wizards of Wall Street frolic in the fields of greenbacks, you and I will be left holding the bag, containing manure, and be taxed into oblivion. Don't worry about Medicare and Social Security, most of us will die off before any benefits are actually paid out.
It's an ugly, severely evil set-up by the banks and our hands-out congress to create two distinct classes in the United States: the super, super rich and everyone else. You and I must learn how to raise our own crops and subsist off the land leased by our wealthy masters. Welcome to the golden age of feudalism!
I have nothing more to add except that if you haven't started some plants growing in your back yard and already own some silver or gold or both, you need to do so immediately, as time is running short and planting season is upon us. We are nearing the point of complete collapse of the middle class.
If your kids are planning to go to a big university and go into hock to the tune of $40, $50 or as much as $100,000 to get their degree, it might be time to sit them down and explain that their high school diploma will be sufficient, in their bleak future, to work as a mechanic, a gardener, or a chamber maid. Their dreams of becoming the next great biologist or astronaut will have to be put on indefinite hold.
Dow 12,453.54, +186.79 (1.52%)
NASDAQ 2,802.51, +57.54 (2.10%)
S&P 500 1,330.36, +17.74 (1.35%)
NYSE Composite 8,457.65, +125.62 (1.51%)
Advancing issues pounded decliners, 5245-1347. There were 133 new highs and 29 new lows. On the NYSE, 193 new highs and 16 new lows was the order of the day. Volume was relatively solid on the NASDAQ, where all the momentum stocks reside, but the usual miserable figures were posted on the NYSE. Almost all of the day's gains were made at the open, so the futures players made fortunes; the rest of the session was nothing more than churning.
NASDAQ Volume 2,112,464,250
NYSE Volume 4,657,346,000
Crude oil made a huge move of nearly 3%, gaining $3.17, to $111.45, making that $5.00 gallon of gas that the oil barons dream about that much closer to reality. Gold blasted through the $1500 mark again, but was taken down to $1,498.90, a gain of a mere $3.80. Silver continues to dazzle, gaining another 54 cents on the day, finishing in New York at $44.46.
While some argue that gold and silver are bubbles, if that is the case, then what is to be said of stocks, which have doubled off their March 2009 lows? Gold and silver are only a third to a fifth of the way to where they are eventually going. With every new dollar printed by the Chairman of the Fed, Ben Bernanke, an ounce of precious metals costs a little bit more, and that's about the only good news I can report today.
EDIT: Following the COMEX close in New York, gold bounced to $1502.10, and silver shot up to $45.22 an ounce at 5:18 pm EDT.
Tuesday, April 19, 2011
Market Up on Goldman Beat, POMO Momo
Remember that little bit about S&P downgrading their US outlook to negative?
Oh, that was so yesterday!
Tim Geithner, the US Secretary of the Treasury, went on CNBC to convince (or try to) th public that all is well, S&P doesn't know jack and the future will be bright.
Just before that Goldman Sachs announced their 1st quarter results, beat the street and it was off to the races at 9:30 am when the bell rang.
Well, not quite. Stocks really didn't start moving higher until a little after noon. As usual, there was no reason, and no volume, so it didn't really matter that Goldman Sachs was selling off.
The Fed came in with a $6 billion POMO to invest, so away went the market. Up, up and away. Forget about those ratings agencies. What do they know?
Dow 12,266.75, +65.16 (0.53%)
NASDAQ 2,744.97, +9.59 (0.35%)
S&P 500 1,312.62, +7.48 (0.57%)
NYSE Composite 8,332.03, +54.92 (0.66%)
Winners beat losers, 3977-2526, NASDAQ new highs were 66, new lows, 32. On the NYSE, there were 58 new highs; 25 new lows. Volume? No. Dismal, horrible, Wall Street's dirty little secret.
NASDAQ Volume 1,723,697,750
NYSE Volume 4,228,962,500
WTI crude futures were up another $1.03, to $108.15. The corresponding rise in retail gas prices from $100+ per barrel oil is almost certain to derail any kind of growth for the second quarter.
Gold briefly topped $1500 for the first time ever, but pulled back from that and closed $2.10 higher, at $1,495.10. Silver (thank God you own some) continued to soar, up another 97 cents, to $43.91. Again, gold set another all-time high, silver a 31-year high, and is rapidly approaching the all-time high of $50, which it will surpass, almost for certain, within the next three months time.
It was a Tuesday. Nothing much happened in the larger scheme of things. Next Thursday, we'll see some fireworks when the government announces its first estimate of first quarter GDP, which, if you've been paying attention, was supposed to be 4%, then 3.5%, but has recently been revised down to 2%. It will likely come in below even that.
Tomorrow, existing home sales data for March, another reminder that a house is not an investment, it is a place to live, at 10:00 am EDT.
Oh, that was so yesterday!
Tim Geithner, the US Secretary of the Treasury, went on CNBC to convince (or try to) th public that all is well, S&P doesn't know jack and the future will be bright.
Just before that Goldman Sachs announced their 1st quarter results, beat the street and it was off to the races at 9:30 am when the bell rang.
Well, not quite. Stocks really didn't start moving higher until a little after noon. As usual, there was no reason, and no volume, so it didn't really matter that Goldman Sachs was selling off.
The Fed came in with a $6 billion POMO to invest, so away went the market. Up, up and away. Forget about those ratings agencies. What do they know?
Dow 12,266.75, +65.16 (0.53%)
NASDAQ 2,744.97, +9.59 (0.35%)
S&P 500 1,312.62, +7.48 (0.57%)
NYSE Composite 8,332.03, +54.92 (0.66%)
Winners beat losers, 3977-2526, NASDAQ new highs were 66, new lows, 32. On the NYSE, there were 58 new highs; 25 new lows. Volume? No. Dismal, horrible, Wall Street's dirty little secret.
NASDAQ Volume 1,723,697,750
NYSE Volume 4,228,962,500
WTI crude futures were up another $1.03, to $108.15. The corresponding rise in retail gas prices from $100+ per barrel oil is almost certain to derail any kind of growth for the second quarter.
Gold briefly topped $1500 for the first time ever, but pulled back from that and closed $2.10 higher, at $1,495.10. Silver (thank God you own some) continued to soar, up another 97 cents, to $43.91. Again, gold set another all-time high, silver a 31-year high, and is rapidly approaching the all-time high of $50, which it will surpass, almost for certain, within the next three months time.
It was a Tuesday. Nothing much happened in the larger scheme of things. Next Thursday, we'll see some fireworks when the government announces its first estimate of first quarter GDP, which, if you've been paying attention, was supposed to be 4%, then 3.5%, but has recently been revised down to 2%. It will likely come in below even that.
Tomorrow, existing home sales data for March, another reminder that a house is not an investment, it is a place to live, at 10:00 am EDT.
Monday, April 18, 2011
S&P Shocks Markets, Downgrades US Outlook to Negative
Us markets barely shrugged when Japan's nuclear reactors exploded, Egypt's government was overthrown, Ireland and Portugal needed bailouts and the entire nation of Libya was turned upside down in a violent civil war.
But it was something not destructive, threatening or otherwise physically damaging - a downgrade of the economic outlook from neutral to negative for the United States from ratings agency Standard & Poors (S&P) - that caught everyone's attention on Wall Street and in Washington.
The agency - the very same one which rated hundreds of mortgage-backed securities (MBS) as AAA when they clearly were not - verified what practically everyone on the planet already knew: that the USA was spending well beyond its means and that the federal government needs to fix its financial affairs in short order.
While shying away from actually downgrading the rating, the outlook downgrade comes as a kind of warning to politicians on both sides of the aisle. S&P is concerned that long-term high deficits could lead to dire consequences if not reined in soon. Concerned that Democrats and Republicans will be unable to come to terms with glaring deficits and reach a spending and revenue compromise, S&P said, "The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years."
An actual ratings cut could impact the government spending and borrowing programs in a nyriad of ways, making new and old debt alike more expensive to service due to higher interest rates.
Of course, the United States is not just any country. It still enjoys the best rating possible AAA on long term debt and A-1+ on short term borrowings. Nonetheless, Wall Street stood up and took notice, with across-the-board selling right from the opening bell.
The Dow was down as much as 247 points early on, but managed to pull itself higher in the afternoon, shaving off 2/5ths of the decline.
Dow 12,201.59, -140.24 (1.14%)
NASDAQ 2,735.38, -29.27 (1.06%)
S&P 500 1,305.14, -14.54 (1.10%)
NYSE Composite 8,277.11, -123.20 (1.47%)
Declining issues soared over gainers, 5219-1370. New lows exceeded new highs on the NASDAQ, 50-42, and rolled over on the NYSE as well, with 30 new lows and just 22 new highs. Volume was not impressive, though overall breadth was somewhat stunning, with all sectors ending in the red, led by energy, capital goods, basic materials and financials.
The lack of volume is more ominous than it may appear at first glance, significant in that not all investors took this warning seriously and continue to not only hold stocks, but were buying in the afternoon. With the Fed's QE2 program drawing to a close in just two months time, a tough fight for certain in Washington over raising the debt ceiling and the 2012 budget and an economy still not flourishing a full two years after the banking crisis, there are more than enough potential causes for a rapid - and lasting - decline in stocks.
NASDAQ Volume 1,817,444,625
NYSE Volume 5,013,312,500
Besides the potential S&P downgrade, corporate earnings thus far have been short on results. Bank of America's miss on Friday was widely overlooked, but today after the bell, Texas Instruments (TI) also missed, and revised 2nd quarter estimates. Before the bell tomorrow, Goldman Sachs (GS) is due to announce their results for the first quarter, which, if all goes according to plan for the company that supposes to be doing "God's work," then this downdraft will be quickly forgotten and a new era of prosperity proclaimed.
That's another bet on which we're not taking sides.
Once again, commodities and the consumer were the winners of the day as crude oil slipped $2.54, to $107.12 at the NYMEX close, while gold flirted with the $1500 mark, closing the day at $1,492.90, a gain of $6.90. Silver continued to set new 31-year highs, finishing at 42.96, on a gain of 39 cents, though it was well above the $43 mark through most of the day.
In what had to be the least-appreciated news item of the day, Saudi Arabia cut its oil production by 800,000 barrels a day due to - get this - oversupply.
Now, if only somebody can explain to the millions of drivers worldwide just how that supply-demand dynamic works again maybe we can eliminate some of the obvious gouging that's gone on over the past two months. If the Saudis are cutting production due to oversupply, then oil should be more like $40 a barrel, not over $100, and gas should be a heck of a lot closer to $2.00 a gallon than it is to $4.00.
Trust nobody. It's obvious that our own government could care less about the general welfare of its own people. And for those who paid their income taxes today, too bad, because you just threw your money right down the memory hole.
What's in store from here is anybody's guess, but you can count on a number of things: the politicians will continue to bicker and fight like little girls and accomplish next to nothing; the bankers will continue to evade prosecution for their frauds and receive bigger bonuses; and the American people - sheep that they are - will not protest but will still want their iPads, food stamps and football.
But it was something not destructive, threatening or otherwise physically damaging - a downgrade of the economic outlook from neutral to negative for the United States from ratings agency Standard & Poors (S&P) - that caught everyone's attention on Wall Street and in Washington.
The agency - the very same one which rated hundreds of mortgage-backed securities (MBS) as AAA when they clearly were not - verified what practically everyone on the planet already knew: that the USA was spending well beyond its means and that the federal government needs to fix its financial affairs in short order.
While shying away from actually downgrading the rating, the outlook downgrade comes as a kind of warning to politicians on both sides of the aisle. S&P is concerned that long-term high deficits could lead to dire consequences if not reined in soon. Concerned that Democrats and Republicans will be unable to come to terms with glaring deficits and reach a spending and revenue compromise, S&P said, "The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years."
An actual ratings cut could impact the government spending and borrowing programs in a nyriad of ways, making new and old debt alike more expensive to service due to higher interest rates.
Of course, the United States is not just any country. It still enjoys the best rating possible AAA on long term debt and A-1+ on short term borrowings. Nonetheless, Wall Street stood up and took notice, with across-the-board selling right from the opening bell.
The Dow was down as much as 247 points early on, but managed to pull itself higher in the afternoon, shaving off 2/5ths of the decline.
Dow 12,201.59, -140.24 (1.14%)
NASDAQ 2,735.38, -29.27 (1.06%)
S&P 500 1,305.14, -14.54 (1.10%)
NYSE Composite 8,277.11, -123.20 (1.47%)
Declining issues soared over gainers, 5219-1370. New lows exceeded new highs on the NASDAQ, 50-42, and rolled over on the NYSE as well, with 30 new lows and just 22 new highs. Volume was not impressive, though overall breadth was somewhat stunning, with all sectors ending in the red, led by energy, capital goods, basic materials and financials.
The lack of volume is more ominous than it may appear at first glance, significant in that not all investors took this warning seriously and continue to not only hold stocks, but were buying in the afternoon. With the Fed's QE2 program drawing to a close in just two months time, a tough fight for certain in Washington over raising the debt ceiling and the 2012 budget and an economy still not flourishing a full two years after the banking crisis, there are more than enough potential causes for a rapid - and lasting - decline in stocks.
NASDAQ Volume 1,817,444,625
NYSE Volume 5,013,312,500
Besides the potential S&P downgrade, corporate earnings thus far have been short on results. Bank of America's miss on Friday was widely overlooked, but today after the bell, Texas Instruments (TI) also missed, and revised 2nd quarter estimates. Before the bell tomorrow, Goldman Sachs (GS) is due to announce their results for the first quarter, which, if all goes according to plan for the company that supposes to be doing "God's work," then this downdraft will be quickly forgotten and a new era of prosperity proclaimed.
That's another bet on which we're not taking sides.
Once again, commodities and the consumer were the winners of the day as crude oil slipped $2.54, to $107.12 at the NYMEX close, while gold flirted with the $1500 mark, closing the day at $1,492.90, a gain of $6.90. Silver continued to set new 31-year highs, finishing at 42.96, on a gain of 39 cents, though it was well above the $43 mark through most of the day.
In what had to be the least-appreciated news item of the day, Saudi Arabia cut its oil production by 800,000 barrels a day due to - get this - oversupply.
Now, if only somebody can explain to the millions of drivers worldwide just how that supply-demand dynamic works again maybe we can eliminate some of the obvious gouging that's gone on over the past two months. If the Saudis are cutting production due to oversupply, then oil should be more like $40 a barrel, not over $100, and gas should be a heck of a lot closer to $2.00 a gallon than it is to $4.00.
Trust nobody. It's obvious that our own government could care less about the general welfare of its own people. And for those who paid their income taxes today, too bad, because you just threw your money right down the memory hole.
What's in store from here is anybody's guess, but you can count on a number of things: the politicians will continue to bicker and fight like little girls and accomplish next to nothing; the bankers will continue to evade prosecution for their frauds and receive bigger bonuses; and the American people - sheep that they are - will not protest but will still want their iPads, food stamps and football.
Friday, April 15, 2011
Uppers and Downers
It's official. This stock market is a yo-yo without anyone pulling the string. It goes whatever direction it (or somebody) pleases, mostly up when it's supposed to be down and vice versa.
Though stocks finished with gains for the day, they were down for the week, but that doesn't really matter in the grand scheme. One would assume, with Google getting smacked down 47.81 points (8.24%) and Bank of America (BAC, 12.82, -0.31, -2.36%) missing EPS estimates by 11 cents, all of the indices would have gotten the clue and headed toward the exits.
But, though it looked like that might be the case early in the day, by the closing bell the major exchanges were showing broad gains, despite obvious signs of a weakening, or at least, stumbling, economy.
The best play has been to not fight the Fed, which continues to mint money and send it out through its proxies, the Primary Dealers, into the market, and that's probably what's driven the last eight months of gains. Advice might include steering clear of equities until the end of QE2, some time in June.
Dow 12,341.83, +56.68 (0.46%)
NASDAQ 2,764.65, +4.43 (0.16%)
S&P 500 1,319.68, +5.16 (0.39%)
NYSE Composite 8,400.31, +26.15 (0.31%)
Gainers outpaced losers, 4353-2152. On the NASDAQ, new highs took over the top spot with 84 new highs and 33 new lows. On the NYSE, there were 108 new highs and 14 new lows. Volume? No, none, non-existent.
NASDAQ Volume 1,794,544,375
NYSE Volume 4,331,161,000
Oil was up again, gaining $1.55, to $109.66. Gold surged $13.60, to $1,486.00, and silver continued its monumental climb, up 91 cents, to $42.57. Gold is at all-time highs and silver at 31-year highs, fast approaching the all-time high of $50/ounce back in the heady days of the Hunt Brothers, circa 1980.
A normal market would not have oil, gold and silver all up and equities rising as well, so the only conclusion to draw is that this is no ordinary market. It's very unusual, to say the least, though stocks still can't seem to do anything more than a Texas two-step, one forward, two back.
Commodity traders, however, have had a field day of late, and for gold and silver bugs and bugettes, they've had a great run for over a decade. In 2000, gold was under $300 and silver traded for $5 or $6 per ounce. The PMs have been the best investments, eleven years running, with no end in sight.
Though stocks finished with gains for the day, they were down for the week, but that doesn't really matter in the grand scheme. One would assume, with Google getting smacked down 47.81 points (8.24%) and Bank of America (BAC, 12.82, -0.31, -2.36%) missing EPS estimates by 11 cents, all of the indices would have gotten the clue and headed toward the exits.
But, though it looked like that might be the case early in the day, by the closing bell the major exchanges were showing broad gains, despite obvious signs of a weakening, or at least, stumbling, economy.
The best play has been to not fight the Fed, which continues to mint money and send it out through its proxies, the Primary Dealers, into the market, and that's probably what's driven the last eight months of gains. Advice might include steering clear of equities until the end of QE2, some time in June.
Dow 12,341.83, +56.68 (0.46%)
NASDAQ 2,764.65, +4.43 (0.16%)
S&P 500 1,319.68, +5.16 (0.39%)
NYSE Composite 8,400.31, +26.15 (0.31%)
Gainers outpaced losers, 4353-2152. On the NASDAQ, new highs took over the top spot with 84 new highs and 33 new lows. On the NYSE, there were 108 new highs and 14 new lows. Volume? No, none, non-existent.
NASDAQ Volume 1,794,544,375
NYSE Volume 4,331,161,000
Oil was up again, gaining $1.55, to $109.66. Gold surged $13.60, to $1,486.00, and silver continued its monumental climb, up 91 cents, to $42.57. Gold is at all-time highs and silver at 31-year highs, fast approaching the all-time high of $50/ounce back in the heady days of the Hunt Brothers, circa 1980.
A normal market would not have oil, gold and silver all up and equities rising as well, so the only conclusion to draw is that this is no ordinary market. It's very unusual, to say the least, though stocks still can't seem to do anything more than a Texas two-step, one forward, two back.
Commodity traders, however, have had a field day of late, and for gold and silver bugs and bugettes, they've had a great run for over a decade. In 2000, gold was under $300 and silver traded for $5 or $6 per ounce. The PMs have been the best investments, eleven years running, with no end in sight.
Thursday, April 14, 2011
Fade the Banks: BofA, JP Morgan, Citi, Goldman Sachs Under Scrutiny
We found significant deficiencies that represent not only unsafe and unsound practices, but a breakdown in way customers are treated...
That was the statement made by acting Comptroller of the Currency John Walsh in regards to the Consent Order directed at the nation's sixteen largest banks, issued by his and other regulatory agencies yesterday.
Initial reaction was that the ruling was more a wrist-slapping by the regulators, but Walsh came out in its defense, as did others, such as FDIC's Sheila Bair.
The order includes provisions for the banks to undertake a complete review of their foreclosure practices and rectify any errors that may have affected consumers negatively. Additionally, the banks are instructed to pursue a “comprehensive, independent review” of their foreclosures from 2009 and 2010, institute a system for a single contact person for each foreclosure or mortgage modification action. The agencies - which include the Federal Reserve and the Office of Thrift Supervision - will closely monitor the banks' progress, look more closely at their practices and determine appropriate fines for each firm.
These actions, apart from the voluminous litigation already begun and sure to follow, plus the conclusion of 50 state attorneys general is likely to cost the banks a good deal of time, effort and money. When all is said and done, revealing their openly fraudulent practices and procedures will have two major effects: 1) they will not be so prone to play fast and loose with mortgage money, and 2) housing loans will become even more difficult to get.
On the surface these outcomes may be more of a detriment to recovery in the housing market, but homes will at least become more affordable. Making it difficult to qualify for a loan, the cost of residential housing will fall accordingly until some balance is achieved in the market. After that, homeowners can begin going after tax assessments and "fair value" assessments which are now likely more than 40% too high in many hard-impacted communities.
While the process will be riddled with starts and stops, the long-range outcome should be more affordable housing for lower and middle class people, without onerous tax implications. we may be turning a corner after all.
One other note of interest in terms of bank-hating worldwide was Senator Carl Levin's well-directed attack on Goldman Sachs today:
The Senator says he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought collateralized debt obligations without knowing the firm was betting they would fall in value.
Levin believes that not only did Goldman Sachs' executives delude their clients and break their fiduciary trust, but also lied to congress when brought in front of the Financial Inquiry panel.
Heck, as our link confirms, even FoxNews is pushing this agenda forward, but it remains to be seen if Attorney General Eric Holder will come out of hiding and actually pursue prosecution. If not, maybe it's time to indict the AG himself, because Levin and other members of congress have rightly identified Goldman Sachs and their brethren in the "big banking" world as the criminals who caused the financial meltdown of 2008 and sank the economy.
Watch Senator Levin tear into Goldman Sachs' Daniel Sparks:
Wall Street's reaction to this background noise was all-too-typical behavior by the very same banks that have grown in size over the past 2 1/2 years: they turned a perfectly plausible market downturn into marginal gains. The Dow was down 107 points before the pimps and pumpers jacked it up to a 14 point gain by the closing bell.
As expected, in the face of bad news, the financial gamblers could only cover their tracks, put on happy faces and say "all is well." Perhaps these thieves will be singing another tune when a few of them are perp-walked from their ivory towers in full view of the public which has grown to hate them and all they stand for.
All we've seen from the likes of the biggest banks in America is denial of wrongdoing, obfuscation, outright lying, and complete, unabashed manipulation of all markets they touch - bonds, equities and commodities - not to mention the under-the-table mortgage securitization, CDO and debt swap markets.
They are the most ruthless criminals on the planet, completely without conscience, and hopefully, lawmakers are beginning to catch on to their evil ways. Corners must be turned; equity and law must prevail.
Dow 12,285.15, +14.16 (0.12%)
NASDAQ 2,760.22, -1.30 (0.05%)
S&P 500 1,314.52, +0.11 (0.01%)
NYSE Composite 8,374.16, +6.85 (0.08%)
Not to belabor the obviously-fragile nature of the markets, advancing issues outdid decliners oddly enough, 3611-2838. However, new lows overtook new highs on the NASDAQ, 50-49, but new highs remained stubbornly ahead of new lows on the NYSE, 53-23, though the margin has shrunk considerably over the past few session. Volume remained purely a function of lack of interest.
NASDAQ Volume 1,728,764,375
NYSE Volume 4,249,863,500
Perhaps in response to the continuing turmoil, or maybe because the "Sultans of Swap" were too busy shedding documents to keep a handle on them, commodities took another robust turn positive. Crude oil gained another $1.00 during the NYMEX session, to close at $108.11, but gold and silver took home the trophies. Gold rocketed to another in a series of all-time highs, gaining $16.80, to $1,472.40 and silver exploded up $1.43, to $41.66, though both were higher in foreign markets, with gold at $1475.70 and silver romping higher at $42.14 per ounce.
Perhaps, more than turning corners, financial markets are meeting their eventual end, with paper currencies under attack from the growing howls of the general public worldwide, unhappy with rising prices and stagnant wages, governments with too much power and not enough nerve, honesty or will to do right.
These explosive moves in the precious metals are not to be taken lightly. The global Ponzi scheme of fiat money is being put to a severe test and is failing badly, today's activity just another warm-up for the real fireworks coming when the US congress considers whether or not to raise the debt ceiling, something they've done 174 times before.
From the ominous sounds emanating from the Tea Party wing in the House of Representatives, these could be the final days not only for the dollar as a reserve currency, but for every form of money not backed by some tangible asset, of which gold and silver are the obvious choices.
After the bell, Google announced its results for the first quarter of 2011, and from the looks of how it was trading after hours, investors were none too pleased that they missed their earnings per share estimate by three cents.
Even though Google topped revenue expectations, the stock was down nearly 30 points in the after-hours, a decline of more than five per cent.
That does not bode well for tomorrow's opening, which of course will have as an added bonus, the earnings release of the bank everyone loves to hate, Bank of America. Friday ought to be a doozy of a day.
Wednesday, April 13, 2011
Obama Speaks, JP Morgan Pops, Stops, Feds Love Banks
Sometimes you just have to sit back and take it all in, which is precisely what marketeers did today after JP Morgan put out a bogus earnings report prior to the open, and President Obama put down a line in the sand for Republicans over upcoming budgets.
Market futures pointed higher prior to the open after JP Morgan Chase (JPM) announced 1st quarter results, saying they beat wall Street expectations of $1.15 per share with a resounding $1.28 in the quarter. This sent the major indices off to the races at the open, but as soon as discoveries were made that Morgan's earnings figure was boosted by a 0.29 per share reduction in credit loan loss reserves, things began to turn ugly, and in a hurry.
After opening up 62 points to the good, the Dow Jones Industrials were seeing red by noon. Likewise, JP Morgan's 62 cent gain turned into a 76 cent loss (45.88) at the low of the day, just after 2:00 pm EDT. By the close, Morgan and the Dow had regained some ground, though JPM still finished down 39 cents and was quoted lower in the after-hours.
Around 2:00 pm, President Obama offered a retort to Republican Paul Ryan's proposed 2012 budget plan in a speech at George Washington University. The President outlined plans for cuts in defense spending and saving in Medicare and reiterated his 2008 campaign pledge to scale back the Bush tax cuts, saying he went along with Republican plans to extend them last year only so he could save middle class taxes from rising.
Obama's plan, in simple terms plans to cut the budget deficit by $4 trillion over the next 12 years, keeping intact the two largest entitlement programs, Medicare and Social Security, which was not mentioned for any revisions.
While the president was speaking, markets gyrated in both directions, finally heading into the positive, though only slightly, by the close. At the very least, the president did a good job of setting the parameters for a budget fight that figures to be a battle royale on Capitol Hill through the summer and into the fall.
Even though the markets broke a four-day losing streak, gains were minimal, the up early, lower later signature of trading was straight out of the bear market playbook.
Dow 12,270.99, +7.41 (0.06%)
NASDAQ 2,761.52, +16.73 (0.61%)
S&P 500 1,314.41, +0.25 (0.02%)
NYSE Composite 8,367.31, +6.85 (0.08%)
Advancers took back the edge over decliners, 3493-2976, but new highs and new lows were split, with a 46-46 tie on the NASDAQ and new highs bettering new lows, 50-15 on the NYSE. Volume was, as usual, uninspired.
NASDAQ Volume 1,766,435,000
NYSE Volume 4,275,430,000
Commodities snapped back to life with WTI crude futures gaining 86 cents, up to $107.11 on the NYMEX, snapping two-days of delightful declines. Gold picked up a gain of $2.00, to $1,455.60, while silver added 17 cents to $40.24.
The budget deal worked out last Friday now appears to be ready to pass both houses without much dissent, though some members of both parties have signaled that they would vote against the measure due to ideological values. A vote is scheduled for the House on Thursday.
In other news affecting JP Morgan and its cohorts (the 14 largest US banks), federal regulators slapped the collective wrists of the banks, but imposed no sanctions, fines or plausible remedies to foreclosure and mortgage servicing problems which surfaced last fall during the "robo-signing" scandal.
The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. issued the settlement after markets had closed.
This "agreement" leaves conditions almost as they were, with the banks still holding all the cards and homeowners getting no relief. It is expected that foreclosures will proceed through the courts as they have, with judges scrutinizing individual cases for flawed paperwork and other transgressions routine to the practice of the banking cartel.
Without a workable framework, the process will likely bog down the real estate market for the next five to ten years, as title defects, lost notes, fraudulent assignments and other illegal practices are given a green light by the nation's regulators. Obviously, some things in Washington remain just the same, as regulators look the other way when it comes to their favorites sons and campaign contributors.
Market futures pointed higher prior to the open after JP Morgan Chase (JPM) announced 1st quarter results, saying they beat wall Street expectations of $1.15 per share with a resounding $1.28 in the quarter. This sent the major indices off to the races at the open, but as soon as discoveries were made that Morgan's earnings figure was boosted by a 0.29 per share reduction in credit loan loss reserves, things began to turn ugly, and in a hurry.
After opening up 62 points to the good, the Dow Jones Industrials were seeing red by noon. Likewise, JP Morgan's 62 cent gain turned into a 76 cent loss (45.88) at the low of the day, just after 2:00 pm EDT. By the close, Morgan and the Dow had regained some ground, though JPM still finished down 39 cents and was quoted lower in the after-hours.
Around 2:00 pm, President Obama offered a retort to Republican Paul Ryan's proposed 2012 budget plan in a speech at George Washington University. The President outlined plans for cuts in defense spending and saving in Medicare and reiterated his 2008 campaign pledge to scale back the Bush tax cuts, saying he went along with Republican plans to extend them last year only so he could save middle class taxes from rising.
Obama's plan, in simple terms plans to cut the budget deficit by $4 trillion over the next 12 years, keeping intact the two largest entitlement programs, Medicare and Social Security, which was not mentioned for any revisions.
While the president was speaking, markets gyrated in both directions, finally heading into the positive, though only slightly, by the close. At the very least, the president did a good job of setting the parameters for a budget fight that figures to be a battle royale on Capitol Hill through the summer and into the fall.
Even though the markets broke a four-day losing streak, gains were minimal, the up early, lower later signature of trading was straight out of the bear market playbook.
Dow 12,270.99, +7.41 (0.06%)
NASDAQ 2,761.52, +16.73 (0.61%)
S&P 500 1,314.41, +0.25 (0.02%)
NYSE Composite 8,367.31, +6.85 (0.08%)
Advancers took back the edge over decliners, 3493-2976, but new highs and new lows were split, with a 46-46 tie on the NASDAQ and new highs bettering new lows, 50-15 on the NYSE. Volume was, as usual, uninspired.
NASDAQ Volume 1,766,435,000
NYSE Volume 4,275,430,000
Commodities snapped back to life with WTI crude futures gaining 86 cents, up to $107.11 on the NYMEX, snapping two-days of delightful declines. Gold picked up a gain of $2.00, to $1,455.60, while silver added 17 cents to $40.24.
The budget deal worked out last Friday now appears to be ready to pass both houses without much dissent, though some members of both parties have signaled that they would vote against the measure due to ideological values. A vote is scheduled for the House on Thursday.
In other news affecting JP Morgan and its cohorts (the 14 largest US banks), federal regulators slapped the collective wrists of the banks, but imposed no sanctions, fines or plausible remedies to foreclosure and mortgage servicing problems which surfaced last fall during the "robo-signing" scandal.
The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. issued the settlement after markets had closed.
"The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy," the OTS said in a statement.That qualifies as the understatement of the decade. Not a single banker or functionary has been indicted, nor have any of the banks in question been subject to any serious scrutiny over their abuses that likely deprived many homeowners of due process.
This "agreement" leaves conditions almost as they were, with the banks still holding all the cards and homeowners getting no relief. It is expected that foreclosures will proceed through the courts as they have, with judges scrutinizing individual cases for flawed paperwork and other transgressions routine to the practice of the banking cartel.
Without a workable framework, the process will likely bog down the real estate market for the next five to ten years, as title defects, lost notes, fraudulent assignments and other illegal practices are given a green light by the nation's regulators. Obviously, some things in Washington remain just the same, as regulators look the other way when it comes to their favorites sons and campaign contributors.
Tuesday, April 12, 2011
Stocks Take Another Hit, But, Why?
Major US indices fell for a fourth consecutive session - with the exception of the Dow, which eked out a 1-point gain on Monday - and there are likely several reasons why this downtrend has continued and actually accelerated, with the biggest drop coming today.
After all, it is the beginning of earnings season, and first quarter results are expected to be pretty good. But is the market looking down the road, or could investors be wary of margin squeezes caused by runaway commodity prices, or consumer depression caused by over-the-top gas prices?
One thing's for sure: the winter was a long and cold one, and nobody got a break from high heating bills in a majority of the heating states of the Northeast and Midwest. That certainly couldn't have helped household budgets much and a Gallup poll released today suggests that Americans are as displeased with current and future conditions as they were this time in 2009 and through the middle of 2010.
The poll showed that only 33% of respondents in March think the economy is "getting better." That's a drop from 36% in February and 41% in January.
Another possibility is that the now-month-old tragedy in Japan is also worsening, as officials raised the level of the Fukushima Daiichi nuclear plant accident to 7, on a par with the disaster at Chernobyl, 25 years ago.
Perhaps the stock market wasn't really sold on the late-night budget deal reached on Friday night (We had expected this was only a continuing resolution and were right) and the potential that the deal could fall apart. Details are just beginning to trickle out that the cuts amount to much less than the $38.5 billion reported and that members of both parties, in bouth houses of congress, are displeased.
At Business Insider, Joe Weisenthal reports that the government might still shut down, this Friday. The AP has details from just where the phantom cuts are coming.
So, here we go again? The 2011 fiscal year ends September 30 (about 5 1/2 months from now), and the budget is still being trimmed, debated and flayed? This is no way to run a country, especially one as on the financial ropes as the USA. Get ready for more drama from the queens on Capitol Hill and at the White House.
The Hill has more detail on the cuts, which will go to a House floor vote on Thursday. The legislation is known as H.R. 1473, for those wishing to keep score at home.
Notwithstanding the aforementioned possibilities and potentialities, the Fed's ending of thier policy of handing over free money to Primary Dealers in June, via QE2, might be on the minds of many in the investment world. When that nearly $100 billion a month stops, so might Wall Street's 2-year-long party. In a related note, the Fed released it's schedule of banker handouts (POMO) for the remainder of April through May 12.
All of this news added up to some big drops in the equity markets, centered around just about 1% overall. Commodities were hit even harder (see below).
Dow 12,263.58, -117.53 (0.95%)
NASDAQ 2,744.79, -26.72 (0.96%)
S&P 500 1,314.16, -10.30 (0.78%)
NYSE Composite 8,360.46, -85.31 (1.01%)
Declining issues clobbered advancers again, 4883-1663, a nearly 3:1 ratio, the largest of the past four sessions. On the NASDAQ, new lows overtook new highs, 56-39, but it was the other way around on the stubborn NYSE, with new highs holding a slim edge over new lows, 41-20. A similar pattern was witnessed in March, with the new lows overtaking new highs on both indices for 4-6 days, but the supposed correction was cut short by a surprise rally that now seems to have run up against resistance and is failing fast. Volume was not spectacular, and would most accurately be described as moribund. Another few days of this, and another row over continuing funding to the federal government could put the kibosh on 2011 gains, short and long term.
NASDAQ Volume 1,798,176,500
NYSE Volume 4,735,433,500
Oil took another massive hit in price on Tuesday, with WTI crude futures falling $3.67, to $106.25, and even lower after NYMEX trading closed. That's a two-day drop of $6.52 per barrel and motorists can only hope the trend continues. There are a lot of speculators in the market, and estimates range from them making up anywhere from 10-40% of the oil price.
Of course, in a real world, with real world consequences coming from an actually-functioning Justice Department, that would otherwise be known as price-fixing. Since the Attorney General hasn't been seen in six or eight months, and is generally regarded as the worst ever, don't expect anything like even an investigation to commence any time soon. We hear the name of the AG is Eric Holder, but nobody's been able to confirm that.
Along with oil, a good number of food and grain commodities are coming off their highs. Corn, soybeans and wheat were down the most, with lean hogs and live cattle following the trend. Gold slipped $14.50, to $1,453.60. Silver fell 55 cents, to settle in at $40.07 per ounce.
It has been said that one day does not make a trend, and there's truth in that, but maybe four straight declines in major indices are significant enough for somebody to take notice. It's no secret that the US system is largely bankrupt and operating on fumes and smoke, so it might be just a matter of time for the markets to correct. Naturally, the meddling Fed has kept the rally going with oodles of cash, and just to be sure, they gave some to the wives of some already-rich bankers, as Matt Taibbi reports for Rolling Stone.
Fair warning: reading Taibbi's latest story might lead to vomiting or breaking of inanimate objects. Strap in securely, as this story reveals just how corrupt and unbalanced the entire bailout process has been and continues to be.
Paging Ron Paul, paging Ron Paul. The country is calling on you to run for president.
After all, it is the beginning of earnings season, and first quarter results are expected to be pretty good. But is the market looking down the road, or could investors be wary of margin squeezes caused by runaway commodity prices, or consumer depression caused by over-the-top gas prices?
One thing's for sure: the winter was a long and cold one, and nobody got a break from high heating bills in a majority of the heating states of the Northeast and Midwest. That certainly couldn't have helped household budgets much and a Gallup poll released today suggests that Americans are as displeased with current and future conditions as they were this time in 2009 and through the middle of 2010.
The poll showed that only 33% of respondents in March think the economy is "getting better." That's a drop from 36% in February and 41% in January.
Another possibility is that the now-month-old tragedy in Japan is also worsening, as officials raised the level of the Fukushima Daiichi nuclear plant accident to 7, on a par with the disaster at Chernobyl, 25 years ago.
Perhaps the stock market wasn't really sold on the late-night budget deal reached on Friday night (We had expected this was only a continuing resolution and were right) and the potential that the deal could fall apart. Details are just beginning to trickle out that the cuts amount to much less than the $38.5 billion reported and that members of both parties, in bouth houses of congress, are displeased.
At Business Insider, Joe Weisenthal reports that the government might still shut down, this Friday. The AP has details from just where the phantom cuts are coming.
So, here we go again? The 2011 fiscal year ends September 30 (about 5 1/2 months from now), and the budget is still being trimmed, debated and flayed? This is no way to run a country, especially one as on the financial ropes as the USA. Get ready for more drama from the queens on Capitol Hill and at the White House.
The Hill has more detail on the cuts, which will go to a House floor vote on Thursday. The legislation is known as H.R. 1473, for those wishing to keep score at home.
Notwithstanding the aforementioned possibilities and potentialities, the Fed's ending of thier policy of handing over free money to Primary Dealers in June, via QE2, might be on the minds of many in the investment world. When that nearly $100 billion a month stops, so might Wall Street's 2-year-long party. In a related note, the Fed released it's schedule of banker handouts (POMO) for the remainder of April through May 12.
All of this news added up to some big drops in the equity markets, centered around just about 1% overall. Commodities were hit even harder (see below).
Dow 12,263.58, -117.53 (0.95%)
NASDAQ 2,744.79, -26.72 (0.96%)
S&P 500 1,314.16, -10.30 (0.78%)
NYSE Composite 8,360.46, -85.31 (1.01%)
Declining issues clobbered advancers again, 4883-1663, a nearly 3:1 ratio, the largest of the past four sessions. On the NASDAQ, new lows overtook new highs, 56-39, but it was the other way around on the stubborn NYSE, with new highs holding a slim edge over new lows, 41-20. A similar pattern was witnessed in March, with the new lows overtaking new highs on both indices for 4-6 days, but the supposed correction was cut short by a surprise rally that now seems to have run up against resistance and is failing fast. Volume was not spectacular, and would most accurately be described as moribund. Another few days of this, and another row over continuing funding to the federal government could put the kibosh on 2011 gains, short and long term.
NASDAQ Volume 1,798,176,500
NYSE Volume 4,735,433,500
Oil took another massive hit in price on Tuesday, with WTI crude futures falling $3.67, to $106.25, and even lower after NYMEX trading closed. That's a two-day drop of $6.52 per barrel and motorists can only hope the trend continues. There are a lot of speculators in the market, and estimates range from them making up anywhere from 10-40% of the oil price.
Of course, in a real world, with real world consequences coming from an actually-functioning Justice Department, that would otherwise be known as price-fixing. Since the Attorney General hasn't been seen in six or eight months, and is generally regarded as the worst ever, don't expect anything like even an investigation to commence any time soon. We hear the name of the AG is Eric Holder, but nobody's been able to confirm that.
Along with oil, a good number of food and grain commodities are coming off their highs. Corn, soybeans and wheat were down the most, with lean hogs and live cattle following the trend. Gold slipped $14.50, to $1,453.60. Silver fell 55 cents, to settle in at $40.07 per ounce.
It has been said that one day does not make a trend, and there's truth in that, but maybe four straight declines in major indices are significant enough for somebody to take notice. It's no secret that the US system is largely bankrupt and operating on fumes and smoke, so it might be just a matter of time for the markets to correct. Naturally, the meddling Fed has kept the rally going with oodles of cash, and just to be sure, they gave some to the wives of some already-rich bankers, as Matt Taibbi reports for Rolling Stone.
Fair warning: reading Taibbi's latest story might lead to vomiting or breaking of inanimate objects. Strap in securely, as this story reveals just how corrupt and unbalanced the entire bailout process has been and continues to be.
Paging Ron Paul, paging Ron Paul. The country is calling on you to run for president.
Monday, April 11, 2011
No Euphoria Over Budget Deal, Earnings
One might have expected some kind of reaction from the stock market after Friday night's final hour deal to keep the government running, or even from advance interest in the deluge of upcoming corporate earnings reports, but, despite an early session push higher, stocks drifted lower and lower throughout the session.
The Dow jumped out of the gate to an early high, up 62 points, but gave all expect one paltry point back as the day progressed.
While the theory may be that the government was supposed to remain open and in business, so no, the stock market would not react, the reality is that since the major indices bumped headlong into resistance on Wednesday, there's been nothing but retreat and even a robust earnings season (which is unlikely) may not be able to shake the markets from their sideways-down direction.
On the day, the Dow Jones Industrials, the smallest index by numbers (30 stocks), though the largest by measure, was the only one to post a gain in any of the past three sessions, and even that was somewhat of an aberration caused by heavy buying of Alcoa at the close.
As it was, Alcoa (AA), the world's largest aluminum manufacturer, and traditionally the first company in the Dow to report, was off 15 cents at the close (17.77) and was trading marginally higher (+0.06) in after-hours trading. The company reported earnings of 28 cents per share, a penny above estimates, but revenue short of expectations by almost two per cent.
Dow 12,381.11, +1.06 (0.01%)
NASDAQ 2,771.51, -8.91 (0.32%)
S&P 500 1,324.46, -3.71 (0.28%)
NYSE Composite 8,445.77, -38.17 (0.45%)
Even though stocks finished with small movement, declining issues danced all over advancers, 4471-2165, a ratio of more than 2:1. New highs on the NASDAQ totaled a mere 59, with 32hitting new lows. On the NYSE, new highs led the way, 108-16, over new lows. Volume, on the first day of the week, was encouraging, as it was not horrible, though still just barely with a pulse.
NASDAQ Volume 2,039,947,625
NYSE Volume 3,841,427,750
Thanks to some large positions being taken off, notably by Goldman Sachs, the oil rally came to an abrupt halt on Monday. WTI crude futures fell $2.85, to $109.92 and were down even more after the NYMEX close. Gold dropped $6.00, to $1,468.10, while silver managed to remain flat, at $40.61.
With the budget deal due to be singed and passed sometime this week, investors will be focusing squarely on quarterly reports over the next few weeks, and prospects are said to be good, with the vast majority of companies meeting or beating Wall Street expectations.
The Dow jumped out of the gate to an early high, up 62 points, but gave all expect one paltry point back as the day progressed.
While the theory may be that the government was supposed to remain open and in business, so no, the stock market would not react, the reality is that since the major indices bumped headlong into resistance on Wednesday, there's been nothing but retreat and even a robust earnings season (which is unlikely) may not be able to shake the markets from their sideways-down direction.
On the day, the Dow Jones Industrials, the smallest index by numbers (30 stocks), though the largest by measure, was the only one to post a gain in any of the past three sessions, and even that was somewhat of an aberration caused by heavy buying of Alcoa at the close.
As it was, Alcoa (AA), the world's largest aluminum manufacturer, and traditionally the first company in the Dow to report, was off 15 cents at the close (17.77) and was trading marginally higher (+0.06) in after-hours trading. The company reported earnings of 28 cents per share, a penny above estimates, but revenue short of expectations by almost two per cent.
Dow 12,381.11, +1.06 (0.01%)
NASDAQ 2,771.51, -8.91 (0.32%)
S&P 500 1,324.46, -3.71 (0.28%)
NYSE Composite 8,445.77, -38.17 (0.45%)
Even though stocks finished with small movement, declining issues danced all over advancers, 4471-2165, a ratio of more than 2:1. New highs on the NASDAQ totaled a mere 59, with 32hitting new lows. On the NYSE, new highs led the way, 108-16, over new lows. Volume, on the first day of the week, was encouraging, as it was not horrible, though still just barely with a pulse.
NASDAQ Volume 2,039,947,625
NYSE Volume 3,841,427,750
Thanks to some large positions being taken off, notably by Goldman Sachs, the oil rally came to an abrupt halt on Monday. WTI crude futures fell $2.85, to $109.92 and were down even more after the NYMEX close. Gold dropped $6.00, to $1,468.10, while silver managed to remain flat, at $40.61.
With the budget deal due to be singed and passed sometime this week, investors will be focusing squarely on quarterly reports over the next few weeks, and prospects are said to be good, with the vast majority of companies meeting or beating Wall Street expectations.
Saturday, April 9, 2011
The Morning After: Budget Battle Bad Drama
With apologies to anyone with an IQ over 40, the entire week-long, all-enveloping budget fight and threatened government shutdown was nothing more than a well-orchestrated test run on the American psyche.
There was never any chance of the government shutting down over the slim array of ideological and money issues which faced congress and the president, and in the end, what actually emerged from the "eleventh hour" save of face was not a deal to end the budget debate, but a deal to extend it a week further, with new conditions, including a rider to limit abortions in the District of Columbia and another that promises studies to be conducted on the financial regulation measures passed last year, known as Dodd-Frank.
In the end, the congress and the president only agreed to extend the process another week, so there's still a possibility that negotiations could drag into another government shutdown scenario, though that seems unlikely.
The more plausible case is that lawmakers finally close the books on the 2011 budget, the Republicans get roughly $38.5 billion in cuts, funding for NPR and Planned Parenthood is retained, and the fight resumes over raising the debt ceiling in the next few weeks.
That fight may be even more precarious, as Tea Party Republicans will once again threaten to shut down the government instead of approving more borrowing and spending.
What has become clear from the recent budget spates is that the key actors - Senator Harry Reid, House leader Boehner and president Obama, have demonstrated a willingness to put drama before rational governance and to use the American public as pawns in their inside game of chicken.
If a deal is struck - finally - by Thursday or Friday (still unclear as to the exact next shutdown clock), then the 2011 budget can finally be put to rest.
Through this entire process, though especially at the end, the politicians were roundly criticized for their bickering and theatrics. A government shutdown - which still may occur - was widely hailed as unacceptable by Americans across a broad spectrum and the lawmakers took heed, rushed back to their conferences and passed a bill to avert a shutdown at the last minute.
It's pretty clear that had public support favored a shutdown, congress would have gone home and taken a few days off. Expect the next threatened shutdown to include paying active military service members but not much else. The plan is still on the tables of both parties to furlough up to 800,000 non-essential federal employees, with the goal being a permanent reduction in the federal workforce.
This most recent ploy was just a warm-up act. The real deal or no deal will come later this year, possibly this month.
There was never any chance of the government shutting down over the slim array of ideological and money issues which faced congress and the president, and in the end, what actually emerged from the "eleventh hour" save of face was not a deal to end the budget debate, but a deal to extend it a week further, with new conditions, including a rider to limit abortions in the District of Columbia and another that promises studies to be conducted on the financial regulation measures passed last year, known as Dodd-Frank.
In the end, the congress and the president only agreed to extend the process another week, so there's still a possibility that negotiations could drag into another government shutdown scenario, though that seems unlikely.
The more plausible case is that lawmakers finally close the books on the 2011 budget, the Republicans get roughly $38.5 billion in cuts, funding for NPR and Planned Parenthood is retained, and the fight resumes over raising the debt ceiling in the next few weeks.
That fight may be even more precarious, as Tea Party Republicans will once again threaten to shut down the government instead of approving more borrowing and spending.
What has become clear from the recent budget spates is that the key actors - Senator Harry Reid, House leader Boehner and president Obama, have demonstrated a willingness to put drama before rational governance and to use the American public as pawns in their inside game of chicken.
If a deal is struck - finally - by Thursday or Friday (still unclear as to the exact next shutdown clock), then the 2011 budget can finally be put to rest.
Through this entire process, though especially at the end, the politicians were roundly criticized for their bickering and theatrics. A government shutdown - which still may occur - was widely hailed as unacceptable by Americans across a broad spectrum and the lawmakers took heed, rushed back to their conferences and passed a bill to avert a shutdown at the last minute.
It's pretty clear that had public support favored a shutdown, congress would have gone home and taken a few days off. Expect the next threatened shutdown to include paying active military service members but not much else. The plan is still on the tables of both parties to furlough up to 800,000 non-essential federal employees, with the goal being a permanent reduction in the federal workforce.
This most recent ploy was just a warm-up act. The real deal or no deal will come later this year, possibly this month.
Friday, April 8, 2011
Deal on Budget Announced, Not Final, Government Remains in Business... for now
Within the past few moments, House Speaker John Boehner made a brief appearance and announced that a deal for funding the remainder of the 2011 budget has been reached.
Since the hour is so late, the House and Senate must vote on what turns out to be the seventh continuing resolution to keep the government functioning. Said resolution will fund the government for the next four or five days (Boehner did not go into specifics) until the final bill is written, approved and delivered to both houses, voted upon and eventually submitted to the president.
The final budget agreement should be completed and passed in law by mid-week, according to Boehner and other sources close to the negotiations, though neither Senator Reid, majority leader in the Senate, nor President Obama has yet to comment.
In the final analysis - and, it should be noted that this is by no means final - this entire exercise has been a prime example of the abject failure that is our federal government. The suspected cuts come to about $39 billion, but do not include any cuts to the defense department and are mostly directed at programs that affect primarily lower and middle class citizens.
The lawmakers missed the deadline. They will not vote on the continuing resolution until after midnight. A small technicality, but sometimes, detail matters, a fact completely lost on the current crop of poseur politicians in our nation's capitol.
The rape of our nation and much of the planet will continue. We remain the laughing stock of the world, our position in first place remains unchallenged in any way.
Added, 11:15 pm EDT: President Obama and Senator Reid have just spoken, both confirm that a deal has been struck. Reid confirms that the continuing resolution will last through Thursday (six full days for it to all fall apart, again).
Senator Mitch McConnell, the senate minority leader, could not resist the temptation to flap his gums a bit. Said little of importance, as usual. Everybody takes victory laps, even though nobody won.
Next up are showdowns on raising the debt ceiling and the fiscal year 2012 budget. This is not over, not by a long shot. This is only the beginning of more and more politics, all leading up to the general elections in 2012, should we all not die of boredom or disgust before then.
Since the hour is so late, the House and Senate must vote on what turns out to be the seventh continuing resolution to keep the government functioning. Said resolution will fund the government for the next four or five days (Boehner did not go into specifics) until the final bill is written, approved and delivered to both houses, voted upon and eventually submitted to the president.
The final budget agreement should be completed and passed in law by mid-week, according to Boehner and other sources close to the negotiations, though neither Senator Reid, majority leader in the Senate, nor President Obama has yet to comment.
In the final analysis - and, it should be noted that this is by no means final - this entire exercise has been a prime example of the abject failure that is our federal government. The suspected cuts come to about $39 billion, but do not include any cuts to the defense department and are mostly directed at programs that affect primarily lower and middle class citizens.
The lawmakers missed the deadline. They will not vote on the continuing resolution until after midnight. A small technicality, but sometimes, detail matters, a fact completely lost on the current crop of poseur politicians in our nation's capitol.
The rape of our nation and much of the planet will continue. We remain the laughing stock of the world, our position in first place remains unchallenged in any way.
Added, 11:15 pm EDT: President Obama and Senator Reid have just spoken, both confirm that a deal has been struck. Reid confirms that the continuing resolution will last through Thursday (six full days for it to all fall apart, again).
Senator Mitch McConnell, the senate minority leader, could not resist the temptation to flap his gums a bit. Said little of importance, as usual. Everybody takes victory laps, even though nobody won.
Next up are showdowns on raising the debt ceiling and the fiscal year 2012 budget. This is not over, not by a long shot. This is only the beginning of more and more politics, all leading up to the general elections in 2012, should we all not die of boredom or disgust before then.
Three Hours Remain for Congress to Settle Budget Differences
Despite the glaring obviousness of the headline, there seems to be renewed energy that a deal will be struck before the stroke of midnight, as though that specific time would matter.
Knowing how this entire fiasco of a pubic relations event has thus far unfolded, one could assume that the squabbling and posturing (because that's all it is) will continue until after midnight before any kind of resolution can be found. Word has it that another in a series of continuing resolutions could keep negotiations ongoing over the weekend and keep the government from an "official" shutdown.
The alternative view is that the House Republicans will be seen as villains for slamming the doors over a paltry $350 million earmarked for Planned Parenthood, and, despite the innuendo, none of which money would be used for abortions.
A complete canard is what this Republican gambit is, in reality. It has nothing to do with cutting spending and is only a ploy with a dual intent, to have the government shut down and to make Democrats look bad in so doing. Thus far, it's a huge failure for the party of Lincoln.
If an agreement is to come about before the midnight deadline, it certainly will not be substantive, and it certainly will not address any of the real concerns foremost on the minds of most Americans. Taking the hubris further, expect, if no agreement is reached, for an extended period of unease and disruption, which is probably what at least one of the parties would like.
Another possible development is that in the case of a shutdown, and a prolonged one, watch for arguments to emerge based upon permanently cutting some of the 800,000 federal workers who would be furloughed without pay. By making some of the cuts permanent, the government could save billions. For instance, cutting the government workforce by 200,000 (one quarter of those being forced to stay home) could save $15 billion, using a figure of $75,000 as the average annual pay. Might be a good start.
If they're going to do anything, and I've held that neither side actually wants to pass this particular budget, they'd better get a move on. Just getting everyone back to the assembly when they're all out playing cards or having cocktails will take an hour or more alone.
This is political theater at its very worst. Two little schoolgirls could put on a better drama in their living room. The sad part is that it's only going to get worse from here. This congress is completely off the rails and out of touch with the American people. Shutting down government would be a good start if only we could begin by sending the congress critters home first.
Of course, this would soon shift these
Knowing how this entire fiasco of a pubic relations event has thus far unfolded, one could assume that the squabbling and posturing (because that's all it is) will continue until after midnight before any kind of resolution can be found. Word has it that another in a series of continuing resolutions could keep negotiations ongoing over the weekend and keep the government from an "official" shutdown.
The alternative view is that the House Republicans will be seen as villains for slamming the doors over a paltry $350 million earmarked for Planned Parenthood, and, despite the innuendo, none of which money would be used for abortions.
A complete canard is what this Republican gambit is, in reality. It has nothing to do with cutting spending and is only a ploy with a dual intent, to have the government shut down and to make Democrats look bad in so doing. Thus far, it's a huge failure for the party of Lincoln.
If an agreement is to come about before the midnight deadline, it certainly will not be substantive, and it certainly will not address any of the real concerns foremost on the minds of most Americans. Taking the hubris further, expect, if no agreement is reached, for an extended period of unease and disruption, which is probably what at least one of the parties would like.
Another possible development is that in the case of a shutdown, and a prolonged one, watch for arguments to emerge based upon permanently cutting some of the 800,000 federal workers who would be furloughed without pay. By making some of the cuts permanent, the government could save billions. For instance, cutting the government workforce by 200,000 (one quarter of those being forced to stay home) could save $15 billion, using a figure of $75,000 as the average annual pay. Might be a good start.
If they're going to do anything, and I've held that neither side actually wants to pass this particular budget, they'd better get a move on. Just getting everyone back to the assembly when they're all out playing cards or having cocktails will take an hour or more alone.
This is political theater at its very worst. Two little schoolgirls could put on a better drama in their living room. The sad part is that it's only going to get worse from here. This congress is completely off the rails and out of touch with the American people. Shutting down government would be a good start if only we could begin by sending the congress critters home first.
Of course, this would soon shift these
Ahead of Government Failure, Markets Shaky, Silver Sizzles
As the clock wends its way toward midnight and a shutdown of non-essential government functions, stock players were still hedging their bets, generally showing a preference for playing the waiting game until Monday when word will be official.
That's probably a pretty stupid position, given that Republicans and Democrats are ideologically miles apart and the best time to avert a crisis would have been weeks, if not months, ago. While there still remains a slight chance that the federal government will go into full-blown shutdown, as of this writing - shortly after 4:00 pm EDT - the odds are heavily in favor of the morons in Washington putting politics ahead of principles and allowing the government to shut down.
This they do at their own peril, though the geniuses who call themselves senators and representatives would be hard-pressed to believe that the American people will have lost all faith in their ability to lead and/or govern and/or legislate. By and large, with the notable exception of Tea Partiers and anarchists everywhere, are stridently against the government closing down, be it for a week, a month, or longer.
And, strangely enough, the things most people would like to see halted, will continue. Our troops will still be fighting worthless, nothing-to-gain wars in various countries, TSA agents will continue pat-downs on ordinary citizens, and the worst of it, elected officials will continue to be paid, while some 800,000 regular federal employees will have to fend for themselves without the benefit of a regular paycheck. In fact, even our fighting men and women, half a world away, will not receive their paychecks.
Naturally, the IRS will continue to process electronic returns, though refunds will more than likely be delayed. Social Security checks will still go out on time - for now. An extended absence of the federal government might turn out to be just what the country needs, though judging by the average intelligence of the hands-out American sheeple, there will be plenty of hand-wringing, despair and repercussions not as yet unveiled to either the politicians or the general populace.
As for the markets, they will continue in denial until it becomes evident that shuttering various branches of government and putting almost a million people out of work without pay (when do these federal employees become eligible for unemployment compensation?) indefinitely is going to cause the wheels of commerce to slow to a crawl.
We are under eight hours and counting down...
Dow 12,380.05, -29.44 (0.24%)
NASDAQ 2,780.41, -15.73 (0.56%)
S&P 500 1,328.17, -5.34 (0.40%)
NYSE Composite 8,483.94, -5.39 (0.06%)
Stocks held up pretty well considering the overhanging circumstances. The Dow was down more than 80 points at its afternoon lows, but the markets spent much of the session merely marking time. Declining issues overwhelmed advancers, 4205-2275, nearly a 2:1 ratio. The NASDAQ produced only 66 new highs and 29 new lows, while on the NYSE, there were 164 new highs and only 11 new lows. Obviously, there is less appetite for high beta NASDAQ stocks for the moment, though it should also be noted that volume was dismal once again.
NASDAQ Volume 1,632,480,125
NYSE Volume 3,950,118,750
The big winners on the day were commodities, the losers anybody who eats or drives. West Texas Intermediate crude oil futures hit another 32-month high, gaining $2.49, to close out the week at $112.79. By Sunday, gas prices in the US will average close to $3.80 per gallon, though this number could be a high, if federal employees are furloughed, not having to drive to work.
The real stars were the precious metals. At 4:30 pm EDT, gold was sitting at a new all-time high of $1474.50, up $16.10 on the day. Silver continued its very own moon shot, gaining $1.27, to $40.91, another 31-year high mark, with no stopping in sight. Gold and silver will continue to rise against all currencies until structural changes in central bank policy occur, which, with the Fed continuing to print money at a non-stop clip, appears to be roughly, never.
What the real impact of a federal government shutdown will be is still residing in the realm of the unknown, though one should expect the unexpected. As black swans go, this one could be darker and larger than most.
Money Daily will update as events warrant.
That's probably a pretty stupid position, given that Republicans and Democrats are ideologically miles apart and the best time to avert a crisis would have been weeks, if not months, ago. While there still remains a slight chance that the federal government will go into full-blown shutdown, as of this writing - shortly after 4:00 pm EDT - the odds are heavily in favor of the morons in Washington putting politics ahead of principles and allowing the government to shut down.
This they do at their own peril, though the geniuses who call themselves senators and representatives would be hard-pressed to believe that the American people will have lost all faith in their ability to lead and/or govern and/or legislate. By and large, with the notable exception of Tea Partiers and anarchists everywhere, are stridently against the government closing down, be it for a week, a month, or longer.
And, strangely enough, the things most people would like to see halted, will continue. Our troops will still be fighting worthless, nothing-to-gain wars in various countries, TSA agents will continue pat-downs on ordinary citizens, and the worst of it, elected officials will continue to be paid, while some 800,000 regular federal employees will have to fend for themselves without the benefit of a regular paycheck. In fact, even our fighting men and women, half a world away, will not receive their paychecks.
Naturally, the IRS will continue to process electronic returns, though refunds will more than likely be delayed. Social Security checks will still go out on time - for now. An extended absence of the federal government might turn out to be just what the country needs, though judging by the average intelligence of the hands-out American sheeple, there will be plenty of hand-wringing, despair and repercussions not as yet unveiled to either the politicians or the general populace.
As for the markets, they will continue in denial until it becomes evident that shuttering various branches of government and putting almost a million people out of work without pay (when do these federal employees become eligible for unemployment compensation?) indefinitely is going to cause the wheels of commerce to slow to a crawl.
We are under eight hours and counting down...
Dow 12,380.05, -29.44 (0.24%)
NASDAQ 2,780.41, -15.73 (0.56%)
S&P 500 1,328.17, -5.34 (0.40%)
NYSE Composite 8,483.94, -5.39 (0.06%)
Stocks held up pretty well considering the overhanging circumstances. The Dow was down more than 80 points at its afternoon lows, but the markets spent much of the session merely marking time. Declining issues overwhelmed advancers, 4205-2275, nearly a 2:1 ratio. The NASDAQ produced only 66 new highs and 29 new lows, while on the NYSE, there were 164 new highs and only 11 new lows. Obviously, there is less appetite for high beta NASDAQ stocks for the moment, though it should also be noted that volume was dismal once again.
NASDAQ Volume 1,632,480,125
NYSE Volume 3,950,118,750
The big winners on the day were commodities, the losers anybody who eats or drives. West Texas Intermediate crude oil futures hit another 32-month high, gaining $2.49, to close out the week at $112.79. By Sunday, gas prices in the US will average close to $3.80 per gallon, though this number could be a high, if federal employees are furloughed, not having to drive to work.
The real stars were the precious metals. At 4:30 pm EDT, gold was sitting at a new all-time high of $1474.50, up $16.10 on the day. Silver continued its very own moon shot, gaining $1.27, to $40.91, another 31-year high mark, with no stopping in sight. Gold and silver will continue to rise against all currencies until structural changes in central bank policy occur, which, with the Fed continuing to print money at a non-stop clip, appears to be roughly, never.
What the real impact of a federal government shutdown will be is still residing in the realm of the unknown, though one should expect the unexpected. As black swans go, this one could be darker and larger than most.
Money Daily will update as events warrant.
Thursday, April 7, 2011
Rattled Market Recovers in Late-Session Trade
Investors, worried over an imminent government shutdown, got another jolt of reality when it was reported that a 7.4 earthquake struck Japan just after 10:00 am EDT.
The quake struck in pretty much the same region as last month's 9.0 earthquake, but geologists quickly downgraded the temblor to 7.1 and eased fears over another tsunami, measuring this one at a mere one meter (roughly three feet). This most recent quake hit in what was the middle of the night in Japan, so reports were rather sketchy, though it appeared that damage had been minimal.
With the waning of that alarm, investors quickly got back to work buying stocks, bringing the major indices back to nearly break-even at the close.
Word out of Washington was still dire, suggesting that Republicans would force Democrats into a no-win situation without resolution of their differences and cause a government shutdown on Friday night, April 8, at midnight. While most Republicans and Democrats alike would prefer to work out the narrow $7 billion worth of difference on the current budget, the House Republicans, led by first-term Tea Partiers, seem intent on standing fast to ridiculous ideological riders that would defund Planned Parenthood and public support for PBS and NPR, and it appears that these freshman legislators are going to get what they cheered yesterday, an indefinite shutdown of non-essential government services, since the Obama administration and the Senate Democrats say they have negotiated in good faith and enough is enough.
Just a little more than a day is left to work out a compromise, though a meeting today between House leader John Boehner, senate leader Harry Reid and President Obama produced nothing other than a promise that the same leaders would meet again at 7:00 pm tonight.
In another grandstanding move, House Republicans pushed through a one-week funding bill that would provide paychecks for the military, though President Obama has promised a veto should the measure reach his desk. This is how the Republicans are holding the process captive, by using American servicemen and women as props in their political debate. This level of audacity and below-the-belt maneuvering is reserved to the worst politicians on the planet, though the House newcomers seem perfectly content to drive the country to the brink of insolvency.
Wall Street took it in stride, but the eventual fallout from shutting the government down for an extended period could have long-lasting consequences the newbie Republicans can hardly imagine.
Dow 12,409.49, -17.26 (0.14%)
NASDAQ 2,796.14, -3.68 (0.13%)
S&P 500 1,333.51, -2.03 (0.15%)
NYSE Composite 8,489.33, -18.90 (0.22%)
Even though the major indices finished in the red, there was a pronounced number of losers over winners, with declining issues beating back advancing ones, 4092-2427. The NASDAQ finished with 115 new highs and 24 new lows, while the NYSE saw 154 new highs and just 4 new lows. Volume, despite the drop and rally in the morning, was still very much on the light side.
NASDAQ Volume 1,811,538,125.00
NYSE Volume 4,322,927,000
The day's events did nothing to slow the rise in the price of oil, however, as WTI crude futures rose to $110.30, up another $1.47 on the day, as word that Libyan rebels were being pushed back by forces loyal to embattled leader Moammar Gadhafi.
Gold made another new closing high, but only by an 80 cent gain, to $1,459.30. Silver tacked on 17 cents, to $39.55, another 31-year high.
With a looming government shutdown less than 36 hours away, markets are more than likely to remain somewhat stable, though a prolonged battle by the political leadership might be more than the fragile economy can handle. Sadly, the amount in question is tiny compared to the intellectual vacuity of the Tea Party Republicans.
The quake struck in pretty much the same region as last month's 9.0 earthquake, but geologists quickly downgraded the temblor to 7.1 and eased fears over another tsunami, measuring this one at a mere one meter (roughly three feet). This most recent quake hit in what was the middle of the night in Japan, so reports were rather sketchy, though it appeared that damage had been minimal.
With the waning of that alarm, investors quickly got back to work buying stocks, bringing the major indices back to nearly break-even at the close.
Word out of Washington was still dire, suggesting that Republicans would force Democrats into a no-win situation without resolution of their differences and cause a government shutdown on Friday night, April 8, at midnight. While most Republicans and Democrats alike would prefer to work out the narrow $7 billion worth of difference on the current budget, the House Republicans, led by first-term Tea Partiers, seem intent on standing fast to ridiculous ideological riders that would defund Planned Parenthood and public support for PBS and NPR, and it appears that these freshman legislators are going to get what they cheered yesterday, an indefinite shutdown of non-essential government services, since the Obama administration and the Senate Democrats say they have negotiated in good faith and enough is enough.
Just a little more than a day is left to work out a compromise, though a meeting today between House leader John Boehner, senate leader Harry Reid and President Obama produced nothing other than a promise that the same leaders would meet again at 7:00 pm tonight.
In another grandstanding move, House Republicans pushed through a one-week funding bill that would provide paychecks for the military, though President Obama has promised a veto should the measure reach his desk. This is how the Republicans are holding the process captive, by using American servicemen and women as props in their political debate. This level of audacity and below-the-belt maneuvering is reserved to the worst politicians on the planet, though the House newcomers seem perfectly content to drive the country to the brink of insolvency.
Wall Street took it in stride, but the eventual fallout from shutting the government down for an extended period could have long-lasting consequences the newbie Republicans can hardly imagine.
Dow 12,409.49, -17.26 (0.14%)
NASDAQ 2,796.14, -3.68 (0.13%)
S&P 500 1,333.51, -2.03 (0.15%)
NYSE Composite 8,489.33, -18.90 (0.22%)
Even though the major indices finished in the red, there was a pronounced number of losers over winners, with declining issues beating back advancing ones, 4092-2427. The NASDAQ finished with 115 new highs and 24 new lows, while the NYSE saw 154 new highs and just 4 new lows. Volume, despite the drop and rally in the morning, was still very much on the light side.
NASDAQ Volume 1,811,538,125.00
NYSE Volume 4,322,927,000
The day's events did nothing to slow the rise in the price of oil, however, as WTI crude futures rose to $110.30, up another $1.47 on the day, as word that Libyan rebels were being pushed back by forces loyal to embattled leader Moammar Gadhafi.
Gold made another new closing high, but only by an 80 cent gain, to $1,459.30. Silver tacked on 17 cents, to $39.55, another 31-year high.
With a looming government shutdown less than 36 hours away, markets are more than likely to remain somewhat stable, though a prolonged battle by the political leadership might be more than the fragile economy can handle. Sadly, the amount in question is tiny compared to the intellectual vacuity of the Tea Party Republicans.
Wednesday, April 6, 2011
Government About to Shut Down; Somebody Turn Out the Lights
Even in advance of what looks like an almost sure government shutdown, the greed of Wall Street shines through. Stocks must go up. I have no words to properly express the absolute lunacy into which the entire world has been thrust by the banking/political elite.
Dow 12,426.75, +32.85 (0.27%)
NASDAQ 2,799.82, +8.63 (0.31%)
S&P 500 1,335.54, +2.91 (0.22%)
NYSE Composite 8,508.23, +19.84 (0.23%)
Advancers finished well ahead of declining issues, 3778-2714. On the NASDAQ, there were 211 new highs and 21 new lows, a ratio of 10:1. On the NYSE, that ratio was 33:1, with 301 new highs and 9 (nine) new lows. These are extremes, and, like all extremes, unsustainable under normal circumstances, which currently are not. Also normally unsustainable is a rising stock market on abysmally-low volume, as has been the case for well over two years.
NASDAQ Volume 1,982,290,875
NYSE Volume 4,404,181,000
If there's a breaking point, oil will find it. WTI crude lifted today another 49 cents, to another new 2 1/2 year high, at $108.83. The average cost of a gallon of gas in the United States is now $3.71. Alaska, Hawaii and California are already averaging over $4.00 per gallon for unleaded regular.
The precious metals became even more precious. Gold gained another $6.00, to reach another record high of $1,458.50. Silver was up 20 cents, to $39.39. Both metals were qouted considerably higher during the day before some profit-taking. In the event of a government shut-down, expect the metals to rocket even higher. A prolonged shutdown, of two weeks or longer, should produce fireworks the likes of which financial markets have never seen. Gold would likely gain $200-300, and silver would easily surpass $45 in short order.
On the flip side, the stock market might crash, making the implausible, reality, plus the added benefit of having the politicians as convenient scapegoats.
Nothing could be more predictable from the scum of Wall Street and Washington.
Dow 12,426.75, +32.85 (0.27%)
NASDAQ 2,799.82, +8.63 (0.31%)
S&P 500 1,335.54, +2.91 (0.22%)
NYSE Composite 8,508.23, +19.84 (0.23%)
Advancers finished well ahead of declining issues, 3778-2714. On the NASDAQ, there were 211 new highs and 21 new lows, a ratio of 10:1. On the NYSE, that ratio was 33:1, with 301 new highs and 9 (nine) new lows. These are extremes, and, like all extremes, unsustainable under normal circumstances, which currently are not. Also normally unsustainable is a rising stock market on abysmally-low volume, as has been the case for well over two years.
NASDAQ Volume 1,982,290,875
NYSE Volume 4,404,181,000
If there's a breaking point, oil will find it. WTI crude lifted today another 49 cents, to another new 2 1/2 year high, at $108.83. The average cost of a gallon of gas in the United States is now $3.71. Alaska, Hawaii and California are already averaging over $4.00 per gallon for unleaded regular.
The precious metals became even more precious. Gold gained another $6.00, to reach another record high of $1,458.50. Silver was up 20 cents, to $39.39. Both metals were qouted considerably higher during the day before some profit-taking. In the event of a government shut-down, expect the metals to rocket even higher. A prolonged shutdown, of two weeks or longer, should produce fireworks the likes of which financial markets have never seen. Gold would likely gain $200-300, and silver would easily surpass $45 in short order.
On the flip side, the stock market might crash, making the implausible, reality, plus the added benefit of having the politicians as convenient scapegoats.
Nothing could be more predictable from the scum of Wall Street and Washington.
Tuesday, April 5, 2011
Markets Struggle Through Late-Session Sell-Off; Metals Soar
Disappointed that government leaders met and failed to reach agreement on a compromise plan that would keep the government from shutting down later this week, investors mostly headed for the hills late in the day.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
Monday, April 4, 2011
No Volume, No Follow-through After Jobs Data
With the markets closing Friday in a state of ebullience and optimism, the Monday morning hangover was worse than expected.
Stocks got out of the gate well, with the averages hitting their highs of the day early on, but there was no catalyst and thus, no enthusiasm for either buying or selling, though tech stocks suffered more than most.
Stocks drifted in listless fashion on what will almost certainly turn out to be one of the five lowest trading volume sessions of the year thus far. Appetite for risk has been muted by world events, the least of which being the continuing saga of the nuclear reactors melting down at Fukushima Daiichi facility in Japan.
High levels of radiation have been found hither and fro, even in the United States, where air and water readings were above safe levels in communities from the West coast all the way east to Pennsylvania.
As for Japan itself, the situation appears even more out of control, as both the government and TEPCO, the utility company responsible for the failures, have run out of viable options for containment. If not for the "fear factor" the mainstream media would be full of horror stories, but the prevailing wisdom is not to alarm the populace over what looks to be already as bad as or worse than the disaster of Chernobyl, 25 years ago, a man-made calamity now estimated to have caused over a million deaths and multiple times that number in birth defects, miscarriages, and diseases.
With Japan's nuclear woes - where the "dead zone" is expected to eventually be 30 to 40 miles in all directions from the plant - the general mood of the people is a thinly-disguised panic and a heightened level of distrust of authorities. Said distrust is with good cause. The officials handling the situation are either incompetent, stupid, afraid or a combination of all three, and have yet to reassure the Japanese people of anything, other than the situation remains a catastrophe with potential to become even worse.
High gas prices have also put a damper on the proceedings worldwide, with both Brent crude and West Texas Intermediate (WTI) hitting 33-month highs on the day. Continued unrest in the oil-rich Middle East and North African countries - Libya, Bahrain, Kuwait, Yemen and now Ivory Coast - haven't helped slow down the oil rally and the onset of $4/gallon gas in the US.
So, little surprise that nothing is moving in the world of high finance.
Dow 12,400.03, +23.31 (0.19%)
NASDAQ 2,789.19, -0.41 (0.01%)
S&P 500 1,332.87, +0.46 (0.03%)
NYSE Composite 8,482.41, +13.07 (0.15%)
The level of disdain could be clearly seen in market internals. Advancing issues narrowly bettered decliners on the day, 3006-2630, though NASDAQ new highs soared against new lows, 222-30, while on the NYSE, the bias was the same, with new highs beating new lows, 259-15. As mentioned earlier, volume was extremely light.
NASDAQ Volume 1,679,897,000
NYSE Volume 3,273,874,500
WTI crude futures hit $108.47, a gain of 53 cents, the highest level since June of 2008. Prices above $4.00 per gallon for regular unleaded have been reported in New York, Chicago and various California locales.
Gold inched closer to all-time highs, gaining $4.10, to $1,433.00, while silver exploded to 31-year highs, ending the NY session on the COMEX at $38.49, on a gain of 76 cents (2%).
The stark comparisons between the economic climate today and that of 2008 could not be clearer. High oil and gas prices, a stagnating stock market close to multi-year highs nearing the end of a long bull run, ramping foreclosures and falling real estate values, and political uncertainty carry all the trademarks which eventually led to the great unwinding in Fall 2008.
Three years hence, after trillions of dollars in stimulus, the very same banks that caused the calamity before are still leveraged to the hilt, hiding liabilities off the books and still in denial over their true, illiquid conditions.
For mood to change so impressively from good to bad over the weekend is stunning. Americans and the world at large should be prepared for another round of asset-crushing deflation once the Fed decides to stop printing dollars into existence come June.
Stocks got out of the gate well, with the averages hitting their highs of the day early on, but there was no catalyst and thus, no enthusiasm for either buying or selling, though tech stocks suffered more than most.
Stocks drifted in listless fashion on what will almost certainly turn out to be one of the five lowest trading volume sessions of the year thus far. Appetite for risk has been muted by world events, the least of which being the continuing saga of the nuclear reactors melting down at Fukushima Daiichi facility in Japan.
High levels of radiation have been found hither and fro, even in the United States, where air and water readings were above safe levels in communities from the West coast all the way east to Pennsylvania.
As for Japan itself, the situation appears even more out of control, as both the government and TEPCO, the utility company responsible for the failures, have run out of viable options for containment. If not for the "fear factor" the mainstream media would be full of horror stories, but the prevailing wisdom is not to alarm the populace over what looks to be already as bad as or worse than the disaster of Chernobyl, 25 years ago, a man-made calamity now estimated to have caused over a million deaths and multiple times that number in birth defects, miscarriages, and diseases.
With Japan's nuclear woes - where the "dead zone" is expected to eventually be 30 to 40 miles in all directions from the plant - the general mood of the people is a thinly-disguised panic and a heightened level of distrust of authorities. Said distrust is with good cause. The officials handling the situation are either incompetent, stupid, afraid or a combination of all three, and have yet to reassure the Japanese people of anything, other than the situation remains a catastrophe with potential to become even worse.
High gas prices have also put a damper on the proceedings worldwide, with both Brent crude and West Texas Intermediate (WTI) hitting 33-month highs on the day. Continued unrest in the oil-rich Middle East and North African countries - Libya, Bahrain, Kuwait, Yemen and now Ivory Coast - haven't helped slow down the oil rally and the onset of $4/gallon gas in the US.
So, little surprise that nothing is moving in the world of high finance.
Dow 12,400.03, +23.31 (0.19%)
NASDAQ 2,789.19, -0.41 (0.01%)
S&P 500 1,332.87, +0.46 (0.03%)
NYSE Composite 8,482.41, +13.07 (0.15%)
The level of disdain could be clearly seen in market internals. Advancing issues narrowly bettered decliners on the day, 3006-2630, though NASDAQ new highs soared against new lows, 222-30, while on the NYSE, the bias was the same, with new highs beating new lows, 259-15. As mentioned earlier, volume was extremely light.
NASDAQ Volume 1,679,897,000
NYSE Volume 3,273,874,500
WTI crude futures hit $108.47, a gain of 53 cents, the highest level since June of 2008. Prices above $4.00 per gallon for regular unleaded have been reported in New York, Chicago and various California locales.
Gold inched closer to all-time highs, gaining $4.10, to $1,433.00, while silver exploded to 31-year highs, ending the NY session on the COMEX at $38.49, on a gain of 76 cents (2%).
The stark comparisons between the economic climate today and that of 2008 could not be clearer. High oil and gas prices, a stagnating stock market close to multi-year highs nearing the end of a long bull run, ramping foreclosures and falling real estate values, and political uncertainty carry all the trademarks which eventually led to the great unwinding in Fall 2008.
Three years hence, after trillions of dollars in stimulus, the very same banks that caused the calamity before are still leveraged to the hilt, hiding liabilities off the books and still in denial over their true, illiquid conditions.
For mood to change so impressively from good to bad over the weekend is stunning. Americans and the world at large should be prepared for another round of asset-crushing deflation once the Fed decides to stop printing dollars into existence come June.
Friday, April 1, 2011
Perception Trumps Reality: Stocks Buoyed by Jobs Data
Like it or not, most of the people who watch these kinds of numbers generally accept what the BLS calls "data" as being somewhere close to the truth. Regardless of opinions on the birth-death metric, various seasonal adjustments and the entire methodology which leaves out discouraged workers, March non-farm payroll provided a boost to markets prior to the bell, posting a monthly jobs gain of 216,000.
Broken down, the private sector showed a gain of 230,000 jobs, while the public sector - government - shed 14,000 in March. That ticked the unemployment rate down to 8.8% and marked the first time in five years that private employers added more than 200,000 net new jobs.
In the widest general terms possible, it was rousing good news for the US economy and the stock market, whether the robust numbers are true or not. Stocks galloped out of the gate, gave much of their gains back in the afternoon and finished on an uptick.
Dow 12,376.72, +56.99 (0.46%)
NASDAQ 2,789.60, +8.53 (0.31%)
S&P 500 1,332.41, +6.58 (0.50%)
NYSE Composite 8,469.34, +64.36 (0.77%)
Advancing issues led decliners by a solid margin, 4204-2339. NASDAQ showed 249 new highs and 29 new lows. The same spread was in effect on the NYSE, with 382 new highs and 12 new lows, even more an extreme spread than yesterday's already overbought situation. Volume was slightly better than the low, low numbers posted all week.
NASDAQ Volume 2,057,080,375
NYSE Volume 4,220,516,000
The bad news of the day came from the commodity space, where crude oil hit another 2 1/2 year high, closing at $107.94, up $1.22 on the day. With equities soaring and the outlook for extending the Fed's QE program past June dying on the vine, precious metals took an untimely hit, with gold dropping $11.00, to $1,428.90, and silver falling in tandem, down 16 cents, at $37.73.
As the second quarter starts out on a positive note, investors appear pleased with recent gains, unemployment actually appears to be on the wane and the governors of Federal Reserve are taking bows and praise for how they've handled the as-yet-unresolved financial crisis.
With the caveat that the financial media might be spinning everything a bit more positively than most would dare, America seems not ready to fall into the ocean of debt below it, nor does the congress have gained much in the way of fiscal restraint, though signs of progress have been noted, especially in the House of Representatives.
There's still enormous problems which have yet to be sorted out, but only the robustness of the American economy can be credited with having withstood shocks equally from the financial, natural and political spheres.
While this space has been generally devoted to the darker sides of the economic debate for quite some time, Mr. and Mrs. Average American don't read Fed minutes, track commodity prices or even understand what a credit default swap is. Rather, the bulwark of American enterprise wants only to go to work, receive a fair pay rate and raise their families.
It is a fact that Americans still maintain the highest standard of living on the planet and despite its detractors, maintains a safe, livable environment for even the poorest of its citizens. The world revolves around the US dollar, love it, hate it or loathe it, and it probably will for some time. There are many problems still needing correction, but for today at least, the dark clouds of the past few years seem to be parting and the sunshine of economic freedom is shining through.
Maybe the words of Peter Benenson, the English lawyer and founder of Amnesty International, are appropriate for today: "It is better to light a candle than curse the darkness."
Broken down, the private sector showed a gain of 230,000 jobs, while the public sector - government - shed 14,000 in March. That ticked the unemployment rate down to 8.8% and marked the first time in five years that private employers added more than 200,000 net new jobs.
In the widest general terms possible, it was rousing good news for the US economy and the stock market, whether the robust numbers are true or not. Stocks galloped out of the gate, gave much of their gains back in the afternoon and finished on an uptick.
Dow 12,376.72, +56.99 (0.46%)
NASDAQ 2,789.60, +8.53 (0.31%)
S&P 500 1,332.41, +6.58 (0.50%)
NYSE Composite 8,469.34, +64.36 (0.77%)
Advancing issues led decliners by a solid margin, 4204-2339. NASDAQ showed 249 new highs and 29 new lows. The same spread was in effect on the NYSE, with 382 new highs and 12 new lows, even more an extreme spread than yesterday's already overbought situation. Volume was slightly better than the low, low numbers posted all week.
NASDAQ Volume 2,057,080,375
NYSE Volume 4,220,516,000
The bad news of the day came from the commodity space, where crude oil hit another 2 1/2 year high, closing at $107.94, up $1.22 on the day. With equities soaring and the outlook for extending the Fed's QE program past June dying on the vine, precious metals took an untimely hit, with gold dropping $11.00, to $1,428.90, and silver falling in tandem, down 16 cents, at $37.73.
As the second quarter starts out on a positive note, investors appear pleased with recent gains, unemployment actually appears to be on the wane and the governors of Federal Reserve are taking bows and praise for how they've handled the as-yet-unresolved financial crisis.
With the caveat that the financial media might be spinning everything a bit more positively than most would dare, America seems not ready to fall into the ocean of debt below it, nor does the congress have gained much in the way of fiscal restraint, though signs of progress have been noted, especially in the House of Representatives.
There's still enormous problems which have yet to be sorted out, but only the robustness of the American economy can be credited with having withstood shocks equally from the financial, natural and political spheres.
While this space has been generally devoted to the darker sides of the economic debate for quite some time, Mr. and Mrs. Average American don't read Fed minutes, track commodity prices or even understand what a credit default swap is. Rather, the bulwark of American enterprise wants only to go to work, receive a fair pay rate and raise their families.
It is a fact that Americans still maintain the highest standard of living on the planet and despite its detractors, maintains a safe, livable environment for even the poorest of its citizens. The world revolves around the US dollar, love it, hate it or loathe it, and it probably will for some time. There are many problems still needing correction, but for today at least, the dark clouds of the past few years seem to be parting and the sunshine of economic freedom is shining through.
Maybe the words of Peter Benenson, the English lawyer and founder of Amnesty International, are appropriate for today: "It is better to light a candle than curse the darkness."
Kicked Off Zero Hedge for Interposing Perception with Reality
Following the release of today's non-farm payroll for March (+216,000), the level of insanity at the usually-nutty-anyways Zero Hedge blog went over the edge as the site's operators simply could not stomach the idea that maybe the government can fudge statistics enough to "match the policy" (a term made popular during the Iraq War) with seven posts covering all angles on the NFP data.
Naturally, being that Zero Hedge is a hangout of gold bugs, canned food hoarders, survivalists, anarchists and iconoclasts of every stripe, the perception that 216,000 new jobs were created in March could not go unchallenged, so every attempt was made to discredit the government figures.
I applaud the efforts of Zero Hedge. They usually are pretty good at picking up on the daily failures and fabrications of the military industrial complex, and no doubt, CNBC and the shills for limitless stock buying (Perma-bulls) offer up an endless stream of material for their usual antiestablishment agenda.
But, I was surprised that upon posting some comments that drifted from the company line (government evil, bankers evil, Fed evil, gold and silver good), trying to rile up the assembled loonies, that my posting privileges had been summarily denied, my username deleted. When trying to post comments, I was met, not with a login prompt, but with this:
Now, I've been booted from message boards before, most notably on eBay, for disagreeing with policy, but getting kicked off Zero Hedge is another story altogether, because of what they are supposed to represent: an alternative view, a departure from the norm, a counterbalance to the mainstream media.
I normally like the site, generally get good ideas from their articles (mostly reprints or excerpts of stories posted elsewhere on the web) and post my own comments often. Being banned from posting there really gave me pause, though.
A couple of comments by me not in the general spirit... here's two:
and
That little bit of taunting was, I suppose, too much criticism to accept by the mongolian editorial board at Zero Hedge. One must not bite the hand that handles the daily propaganda feed. The politburo cannot be criticized and in no way can their secrets be exposed. One must drink the Kool-aid, no matter how distasteful the flavor.
I broke the unwritten rules. C'est la vie. Que sera, sera. I was banned.
The episode gave me pause to reflect upon exactly what Zero Hedge - modeled after the fictional movie Fight Club - actually represents. Capitalism would be a good start. After all, the site actively solicits donations in addition to running the maximum allotment of Google AdSense ads on their page(s).
They are no more anti-capitalist than the Wall Street Journal or the United Way in that regard. They need money to operate, just like the rest of us.
But banning from comment those who disagree or at times are critical - like me - effectively negates all of their very own Fight Club creed and substantially reduces their level of credibility to that of outright hypocrisy.
Maybe I missed something in the movie, something about the need to follow orders and obey, obey, OBEY! I'll have to watch Fight Club again, I guess, and search for more hidden meaning.
Or maybe Tyler Durden can enlighten me.
Somehow, I doubt that, because prosperity, whether imagined or real, is anathema to the Zero Hedge business model.
Fight Club should rename itself Punk Club.
Naturally, being that Zero Hedge is a hangout of gold bugs, canned food hoarders, survivalists, anarchists and iconoclasts of every stripe, the perception that 216,000 new jobs were created in March could not go unchallenged, so every attempt was made to discredit the government figures.
I applaud the efforts of Zero Hedge. They usually are pretty good at picking up on the daily failures and fabrications of the military industrial complex, and no doubt, CNBC and the shills for limitless stock buying (Perma-bulls) offer up an endless stream of material for their usual antiestablishment agenda.
But, I was surprised that upon posting some comments that drifted from the company line (government evil, bankers evil, Fed evil, gold and silver good), trying to rile up the assembled loonies, that my posting privileges had been summarily denied, my username deleted. When trying to post comments, I was met, not with a login prompt, but with this:
The username Fearless Rick has not been activated or is blocked.
Now, I've been booted from message boards before, most notably on eBay, for disagreeing with policy, but getting kicked off Zero Hedge is another story altogether, because of what they are supposed to represent: an alternative view, a departure from the norm, a counterbalance to the mainstream media.
I normally like the site, generally get good ideas from their articles (mostly reprints or excerpts of stories posted elsewhere on the web) and post my own comments often. Being banned from posting there really gave me pause, though.
A couple of comments by me not in the general spirit... here's two:
Where's Harry Wanger! He's kicked the crap out of most of our resident geniuses by picking stocks using the tried-and-true "throw darts" method.
Wall Street is laughing its ass off at ZH. Time to get back to work, serfs!
and
Over: 7 articles related to NFP. Number of typos in headlines: 2. TD needs to add +1 to the NFP data by hiring a proofreader.
Now, where's that CogDis guy? Zero Hedge readers are suffering from CD by not believing that government can create statistics to "match the policy." Now where did we hear that term before?
That little bit of taunting was, I suppose, too much criticism to accept by the mongolian editorial board at Zero Hedge. One must not bite the hand that handles the daily propaganda feed. The politburo cannot be criticized and in no way can their secrets be exposed. One must drink the Kool-aid, no matter how distasteful the flavor.
I broke the unwritten rules. C'est la vie. Que sera, sera. I was banned.
The episode gave me pause to reflect upon exactly what Zero Hedge - modeled after the fictional movie Fight Club - actually represents. Capitalism would be a good start. After all, the site actively solicits donations in addition to running the maximum allotment of Google AdSense ads on their page(s).
They are no more anti-capitalist than the Wall Street Journal or the United Way in that regard. They need money to operate, just like the rest of us.
But banning from comment those who disagree or at times are critical - like me - effectively negates all of their very own Fight Club creed and substantially reduces their level of credibility to that of outright hypocrisy.
Maybe I missed something in the movie, something about the need to follow orders and obey, obey, OBEY! I'll have to watch Fight Club again, I guess, and search for more hidden meaning.
Or maybe Tyler Durden can enlighten me.
Somehow, I doubt that, because prosperity, whether imagined or real, is anathema to the Zero Hedge business model.
Fight Club should rename itself Punk Club.
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