Friday, December 30, 2011

Rush for the Exits as 2011 Ends on Sour Note; Markets Flat for 2011; Predictions for 2012

Stocks traded in their usual tight ranges on the final day of trading for 2011, and just about every trader, investor and pundit seems to be in agreement that they year was a difficult one. At the end of the session, a rash of selling sent the major indices near their lows of the day. Volume was insignificant, but the late-day selling was an eye-opener, though possibly not materially a precursor to January, 2012.

Today's Closing Numbers:

Dow 12,217.56, -69.48 (0.57%)
NASDAQ 2,605.15, -8.59 (0.33%)
S&P 500 1,257.60, -5.42 (0.43%)
NYSE Composite 7,477.03, -8.60 (0.11%)
NASDAQ Volume 1,008,177,750
NYSE Volume 2,225,404,500
Combined NYSE & NASDAQ Advance - Decline: 2647-3004
Combined NYSE & NASDAQ New highs - New lows: 178-47
WTI Crude oil: 98.83, 0.82
Gold: 1,566.80, +25.90
Silver: 27.92, +0.60

Of the four major indices, only two - the Dow and S&P 500 - returned positive results for the year.

Here's how 2011 stacked up:

Index Close 12/31/10 Close 12/30/11 Change
Dow 11577.51 12217.56 +640.05
NASDAQ 2652.87 2605.15 -47.72
S&P 500 1257.64 1,257.60 -0.04
NYSE Comp. 7964.02 7477.03 -486.99

Now, checking back on Money Daily's 2011 predictions, here, here and here, we can summarize the results.

We said the overriding theme would be VALUE. With the emphasis now on dividend-paying stocks, we can give ourselves a half thumbs-up, though the real word for the year, especially the second half, was VOLATILITY.

We mentioned that "US employment situation is not going to get materially better in 2011..." A+ on that call.

Housing: "The expectation is for residential housing prices to drop another 6-10% during the year, with larger decreases in the NorthEast and MidWest." Bingo.

FOREX: "The US dollar will fare well against almost all other competing currencies. Destruction of the world's reserve currency takes time, and a year is just a small part of the breaking tableau." Another spot on analysis.

Eventually, price will meet demand, or lack thereof, and some equilibrium found before riots and starvation become the norm. Your best bets for 2011 are still gold and silver, with the latter being the favored instrument as it seeks to re-establish the 15-1 gold-silver ratio. Both should appreciate well in excess of 15%, so $1500 gold should be an easy target and silver may bust right through $40 per ounce in rapid manner.

As far as oil is concerned, apart from the rigged and artificial aspects of how it is traded, crude prices cannot exceed $100 for very long, if they even reach them. Absolute price inflation will crimp demand, and, thus, set the wheel back to "go" again, so don't expect oil prices to skyrocket or decline much at all. Stable prices would be best for all parties (except those selling the stuff, short term), and that's what we may get. There's about a 30% chance oil prices actually fall on slack demand, back under $75, but not much further, though a price around $60 per barrel would go a long way toward global growth, though the supply/demand numbers simply don't add up well for that to be much more than a wing and many prayers.

Despite a serious decline in the latter months of 2011, gold and silver held up well, despite blatant price manipulation by central banks. The call on oil was pretty much correct.


The following are the predicted trading ranges for the major indices in 2011:
Dow: 9250-12000
NASDAQ: 2100-2750
S&P 500: 875-1300
NYSE Comp: 5650-8100

Not a bad showing, though the predicted lows were never met.

Money Daily also made some comments regarding the bond market, inflation, social trends and politics which were generally in the right direction. They can be found here.

Now, on to predictions for 2012 (very briefly):

Stocks: At the end of 2012, after a protracted decline though to the elections, the markets should get a bounce and end somewhere around:
Dow: 10,700
NASDAQ: 2350
S&P: 1050
NYSE Composite: 6780

Overall, it's going to be another challenging year for stocks, with high unemployment, the collapsing Euro and high tensions in the Middle East among the factors that will keep investor confidence low.

Commodities: Since gold and silver fell off the cliff at the end of 2011, they should rebound smartly and be among the best investments of the year. Oil will continue to fluctuate between $75 and $100, though passage of a bill allowing the Keystone pipeline to be built or a war with Iran (very high probability) could push prices out of that range; lower in the former instance, much higher in the latter.

Bonds are going to remain in their tight ranges, since the Fed has already announced they'd keep the federal funds rate unchanged though 2013.

FOREX: Short the Euro, Long US dollar, Aussie and Canada.

Politics will keep the economy from gaining very much traction until the election. The plan by the schemers behind the candidates is to keep the economy stumbling along in order to usher in a new Republican era. Whether or not they succeed will depend on a vast sea of changing factors, though the most pressing will still be the economy, followed by Iran, Obama-care and voting right. The Republicans can't win with Newt Gingrich or Mitt Romney. A Ron Paul candidacy could make life a little too interesting for the incumbent and Paul would be a great president, exactly what's needed in the US at this time of perpetual crisis. Paul would change the nature of US foreign policy, reform entitlements and get back to the rule of law.

While it's a near certainty that the Republican party chiefs will do everything in their power to keep him from winning the nomination, he could do it. Otherwise, a third party candidacy by Dr. Paul would ensure an Obama landslide.

Unless Ron Paul is in the race, Obama will win a second term.

That's it. See you in 2012. Happy New Year!

Thursday, December 29, 2011

Are Stocks Good? Precious Metals Bad?

If one has been paying attention to both equity and commodity markets the past few days, one would note a dramatic divergence between precious metals commodities - particularly gold and silver - and stocks. Yesterday, all asset classes were attacked to the downside, but today, the precious metals took it on the chin while the stock markets melted up nicely on horrific, dull, low volume. Silver actually finished a bit higher, but was ground down today as low as $26.20, before rocketing up on short covering.

Once again, there was nothing triggering either the rally in stocks nor the sell-off in gold and silver. Sure enough, oil was relatively flat, meaning that what the overlords of finance would like one to believe is that gold and silver are risky and not valued investments, while paper assets such as stocks and crude oil futures are good for one's portfolio.

This is while the Fed is printing money like it actually was backed by something other than the "full faith and credit of the US government" and the nations of Europe cannot continue to carry on the socialist policies that have bankrupted many a nation much longer.

In normal times, selling off gold or silver to buy stocks would be pure speculative folly, and even in these unusual days of collapsing currencies, indecision and wild market swings, it still qualifies as a bad idea, even moreso.

The reason for the disparity between the precious metals is that the big banks, along with central bankers, actually wish to hoard gold and silver, but, as is their normal practice, don't want to pay market rates. Thus, they manipulate the price of the two metals down through the various ETFs, particularly, GLD and SLV. Such manipulation has continued for some time. In the case of gold, there is documentation that the downward manipulation has been in place for 30 or 40 years. It's only in the past decade that demand for gold has outstripped the banking cartel's ability to suppress it, but they're certainly back at it with gusto over the past few months, having the CME (post-MF Global) in their back pocket.

The truth is somewhere in between. Taken from the long-standing perspective that this blog has maintained over the past four years running, the breakdown of asset classes goes something like this: gold, silver, tools of trades, working transportation devices (cars, trucks, bikes), raw land and paid-in-full residences: GOOD. Any paper asset, excepting actual currency to meet regular expenses: NOT SO GOOD.

Tomorrow, being the last trading day of the year, we'll look at how our predictions for 2011 fared and offer a glimpse into the financial future with some quick takes on 2012.

Dow 12,287.04, +135.63 (1.12%)
NASDAQ 2,613.74, +23.76 (0.92%)
S&P 500 1,263.01, +13.37 (1.07%)
NYSE Composite 7,482.42, +85.43 (1.15%)
NASDAQ Volume 995,351,250
NYSE Volume 2,229,853,250
Combined NYSE & NASDAQ Advance - Decline: 4292-1394
Combined NYSE & NASDAQ New highs - New lows: 143-111
WTI crude oil: 99.65, +0.29
Gold: 1,540.90, -23.20
Silver: 27.32, +0.08


Written by Fermin Washington

Since we looked into wireless internet providers Minneapolis and chose a provider with a fast connection, we have been able to access HBO Go. HBO GO is a service that they provide if you subscribe to HBO through your cable service. It is basically like an HBO on Demand. You can watch any episode from any HBO show ever made. It doesn’t matter if the show is current or not. I have recently gotten into watching “The Sopranos”. It is about a modern day crime boss in New Jersey that has a family. It takes the scariness out of the mob and places them in suburbia. It was a hit show on HBO for a long time, but I never got a chance to watch it. Now that I can stream it on television, I am hooked. It is awesome. Last weekend my husband and I ended up watching the whole second season. We had watched the first season over the three previous weekends. We ended up not having a lot to do. It was a great relaxing weekend.

Wednesday, December 28, 2011

Lower Euro, Strong Dollar Sink Risk Assets

Following the lowest volume trading day of the year, stocks headed South as European bourses opened for the first time since last Friday, and, as is the usual case whenever europe becomes a focal point, stocks and commodities fell out of bed right at the open and continued to slide throughout the session.

The Euro hit the low for the year against the US dollar, checking in at an exchange rate of 1 Euro = 1.29416 US Dollar. Put another way, the US dollar was stronger than its been all year against the currency of choice (well, hardly a choice, rather an edict) on the Continent.

With so many hedgies short the dollar - a big mistake in some quarters - stocks looked too rich for most of the few remaining souls still trading in 2011. Being long the Euro is like thinking you'll start a camp fire in the middle of a hurricane. It simply goes against all logic, but that is the prevailing thinking of the investor class. May they lose all of their gains by Friday.

The lack of trading volume on Wall Street did not materially detract from the impulse to sell anything and just about everything. Oil, gold and silver all fell along with equities. All 30 Dow components finished the day in negative territory.

Oil eased off quite a bit as threats coming from Iran began sounding more like posturing than actual escalation, the general feeling being that the US military, if need be, would open the Strait of Hormuz in a matter of days if the Iranians eventually do try to shut down oil shipping lanes. Even for a nation as politically polarized as Iran, a general stoppage of oil shipping out of the Persian Gulf would be suicidal, though suicide is not out of the question when it comes to Iran.

Whether the US and its UN allies decide to impose sanctions and embargo Iran's oil shipments, which go primarily to India, China and points East is a matter the leaders have left open until the New Year, after Iran concludes its military exercises in the area.

Dow 12,151.41, -139.94 (1.14%)
NASDAQ 2,589.98, -35.22 (1.34%)
S&P 500 1,249.64, -15.79 (1.25%)
NYSE Composite 7,396.99, -111.38 (1.48%)
NASDAQ Volume 1,063,998,750
NYSE Volume 2,349,797,500
Combined NYSE & NASDAQ Advance - Decline: 1138-4556
Combined NYSE & NASDAQ New highs - New lows: 138-123
WTI crude oil: 99.36, -1.98
Gold: 1,564.10, -31.40
Silver: 27.23, -1.51

Tuesday, December 27, 2011

Nothing Happening on Wall Street as Holidays Wind Down; Sears First Christmas Casualty

The three-day Christamas holiday was a welcome break, but, for the traders, bankers, swindlers and everybody who isn't a teacher or member of the US congress, Tuesday was back-to-work day.

Not that it mattered much on Wall Street. On what looks - at first glance - to be the lowest-volume full session trading day of the year, stocks were essentially flat, trading in a tight range which had the Dow down as much as 24 points and up only about 34 points.

So, advice for this week is to watch as much football as possible, don't eat too many leftovers and forget the rigged, stupid markets. If today's trading is to serve as any indication, they aren't going anywhere until January.

One noteworthy item in today's news is worth mentioning, however, that being the imminent demise of one of America's iconic store brands, Sears Holdings (SHLD), the parent company for over 4,000 US and Canadian Sears and K-Mart stores, announced this morning that it would be closing 100-120 stores due to poor performance during the holdiays season.

This is nothing new for Sears/K-Mart, but if they eventually close only 100-120 stores, that would be something of a surprise. By this time next year, we could all be reminiscing over how the Sears bankruptcy (again) and the closings of 2000 stores was one of the top stories of 2012. Their credit lines are tight and, if there's any hint of a slowdown in the first half of 2012, they could be pulled or frozen, leaving the company very thin indeed.

Shares of Sears Holding were hammered without mercy, the stock losing 27% on the day (33.38, -12.47). SHLD traded as high as 82 and change near the end of October. Obviously, this was something some people knew a bit about.

Yep, the people running Sears and K-Mart into the ground (Target, Macy's, Wal-Mart, among others) is just what the US economy needs right about now: another wave of retail layoffs.

Also making headlines and jacking up the price of oil back over $100 today was more sabre-rattling from Iran, which has been conducting military exercises around the Strait of Hormuz since Christmas Eve, and today said that they would halt the flow of oil if foreign sanctions were imposed on its crude exports because of its nuclear ambitions. Well, we all know what europe and the US thinks of that. Get ready for $5.00 per gallon gas if the morons in Washington and Brussels continue on their failed policy path. Presidential candidate Ron Paul says that US policies are what makes people around the world hate America. He has a very valid point and should be the Republican nominee on his anti-war/foreign policy stance alone.

January is already setting up to be a real loser for stocks. Start shorting selected retailers (GAP comes to mind). The Christmas season is winding down and there's nothing on the horizon to make people want to shop more. At least the weather hasn't been horrible, which is great for humans, but bad for companies which sell coats, hats and winter wear, as well as being brutal on ski resorts.

Al Gore? Paging the promoter of global warming. 2012 could be your best year yet.

Dow 12,291.35, -2.65 (0.02%)
NASDAQ 2,625.20, +6.56 (0.25%)
S&P 500 1,265.43, +0.10 (0.01%)
NYSE Composite 7,508.33, -10.33 (0.14%)
NASDAQ Volume 942,962,875
NYSE Volume 2,034,548,000
Combined NYSE & NASDAQ Advance - Decline: 2829-2797
Combined NYSE & NASDAQ New highs - New lows: 272-78
WTI crude oil: 101.34, +1.66
Gold: 1,595.50, -10.50
Silver: 28.74, -0.34

Friday, December 23, 2011

Merry Christmas Traders, Winners, Losers and Sitters

Stocks extended the Santa Claus Rally on the last trading day before Christmas, as there was light trading and not a peep out of Europe, which seems to have settled down after the ECB generously granted about $639 billion in loans to over 500 banks in the region. Additionally, many European stock exchanges and all US stock exchanges will be closed On Monday, in observance of Christmas (which actually falls on Sunday).

A couple of sets of economic data were released prior to Friday's open. Durable Goods Orders showed a 3.8% gain in November, but the number was drastically reduced when transportation was excluded, knocking the gain down to a disappointing 0.3%. Also troubling was the lowered capital spending by businesses, which was down for the second month in a row.

Personal income and personal spending showed gains of 0.1%, both disappointments.

According to the Commerce Dept. new home sales for November were up 1.6%, to an annualized rate of 315,000, an all-time low, coming after last year's dismal showing of 323,000 new homes sold. The small gain pushed the number of new homes on the market to an all time low as home builders have found few takers and even fewer who could qualify for mortgages.

In conjunction with the existing home sales from the National Association of Realtors (NAR) that came out on Wednesday, the housing market continues to show the damage done by the 2008 financial collapse and the now-five-year-long housing bust. The NAR also revised their existing home sales figures from 2007 to 2010 down 14.3%, citing errors in the collection of data, including double listings, a decline in for sale by owners and house flipping.

November sales rose 4% from the previous month and 12.2% from a year ago, though the figures are now much lower than what was previously expected. With the revisions, the NAR acknowledged that the housing slump has been longer and deeper than previously thought.

And, in Washington, the Republican House backed down and decided ot pass the stupid two-month extension of the social security contribution reduction. Good Grief!

Merry Christmas and good night.

Dow 12,294.00, +124.35 (1.02%)
NASDAQ 2,618.64, +19.19 (0.74%)
S&P 500 1,265.33, +11.33 (0.90%)
NYSE Composite 7,518.66, +57.91 (0.78%)
NASDAQ Volume 970,584,500
NYSE Volume 2,226,056,500
Combined NYSE & NASDAQ Advance - Decline: 3491-2108
Combined NYSE & NASDAQ New highs - New lows: 193-42
WTI crude oil: 99.68, +0.15
Gold: 1,606.00, -4.60
Silver: 29.08, +0.04

Thursday, December 22, 2011

Unemployment Claims Lower, Stocks Higher

Stocks advanced modestly today as news flow was about as light as the volume, which was back to mid-summer levels.

Seasonally adjusted initial unemployment claims came in lower than last week's, at 364K, not much of a big deal, since the figures are heavily massaged and almost certain to be revised higher, though, even on their face, the 364,000 people filing for unemployment, while more than 15 million are already out of work, is a bit of a canard. Consider the fact that the way the Labor Department keeps track of these numbers is merely an estimate, then adjusted to match their perception of reality. What's never mentioned is the lower participation rate in the labor force and the idea that there simply aren't that many jobs remaining from which employees can be disposed.

While Wall Street gobbles up phony, manipulated data without blinking an eye - because it suits their 1% agenda - various parts of the country are still suffering from very high unemployment, stagnant local economies and the general malaise stemming from too few jobs for too many people.

With that in mind, it shouldn't surprise anybody that the third and final estimate of 3rd quarter GDP came in at 1.8%, down from the 2.0% in the previous estimate. The big fall-off was in personal consumption, which economists will glibly label "de-leveraging," when the people actually counting their nickels and dimes refer to it as "broke." And that's what the consumer is this Christmas, broke, busted, in debt, with poor outlooks for the future. Those of you with young children should take particular note that your kids cannot achieve your standard of living if current economic conditions remain the way they've been for the past three years. And your standard of living deteriorates daily, thanks to overspending governments at all levels, a tight credit market (despite record low interest rates) and general theft of wealth via taxation, free reign of private utilities, inflation and globalization, to say nothing of the indentured servitude your kids will enter into when they decide to take out a college loan.

As far as Wall Street and our socialized government apparatus is concerned, that's all well and good. To the rest of us, it certainly is beginning to feel a lot like the Dark Ages and the era of feudalism.

Carry on. Christmas is just a few days off. The economic monstrosity the elitists have built will eventually come tumbling down. Unfortunately, most of the carnage will affect ordinary people, not those at the top of the food chain.

Happy Holidays, in advance. See you tomorrow for the anti-climactic end to the penultimate week of the year.

Dow 12,170.64, +62.90 (0.52%)
NASDAQ 2,599.45, +21.48 (0.83%)
S&P 500 1,254.07, +10.35 (0.83%)
NYSE Composite 7,457.31, +68.79 (0.93%)
NASDAQ Volume 1,474,976,375
NYSE Volume 3,398,761,750
Combined NYSE & NASDAQ Advance - Decline: 4005-1623
Combined NYSE & NASDAQ New highs - New lows: 234-63
WTI crude oil: 99.53, +0.86
Gold: 1,610.60, -3.00
Silver: 29.05, -0.20

Wednesday, December 21, 2011

European Banks Borrow $639 Billion From ECB; Oracle Tanks Techs

Santa Claus came and went. Apparently, his next stop was in Europe, where today, 523 struggling banks on the continent grabbed for $639 billion (489 billion euros) from the ECB's newest lending facility, which offered a sweetheart of a deal: 1% interest over three years. We should all be so lucky.

The huge amount of borrowing was frowned upon in the US. As the news hit America's shores, futures went into the tank on the perception that the amount borrowed was much higher than originally forecast and the sneaking suspicion that although the European banking system was obviously weak, it actually was in much worse shape than originally thought.

Stocks sent almost the entire day underwater, as poor results from Oracle last night after the close sent shock waves through the tech sector. Though the Dow, which was down as many as 104 points, and the S&P finished marginally positive, the NASDAQ ended the day with a serious loss, though it too cut its losses roughly in half by day's end.

In Washington, there was still no progress on the bill which would keep the current social security payroll deduction at current levels and also extend unemployment benefits to about two million people, as the House of Representatives announced their work for the week completed.

The bill was soundly passed in the Senate, and rejected by the House, mostly along party lines.

Also in Washington today, the Justice Department announced a $335 million settlement with Bank of America (BAC), stemming from a DofJ claim that Countrywide - since acquired by Bank of America - discriminated against over 200,000 black and Hispanic mortgage borrowers by charging them higher rates and fees than white homeowners.

While the settlement was the largest of its kind ever, the amount is a mere pittance in comparison to the economic damage wrought by Countrywide and other lenders during the mortgage and housing bust. BofA will pay the money directly to the government and the DofJ will supposedly dole out the proceeds to individuals and families affected by the discriminatory practices.

Attorney General Eric Holder, who seems to only show up after his department settles a case, said, "With today’s settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation.”

It should be amusing to track exactly where that money goes.

There are just two more trading sessions before Christmas, three shopping days and a total of seven trading sessions remaining in 2011. Most investors can't wait for the year to end, as stocks have flat-lined for the most part and actually are well off the highs set in late April.

Dow 12,107.74, +4.16 (0.03%)
NASDAQ 2,577.97, -25.76 (0.99%)
S&P 500 1,243.72, +2.42 (0.19%)
NYSE Composite 7,388.52, +27.55 (0.37%)
NASDAQ Volume 1,866,553,125
NYSE Volume 3,574,281,500
Combined NYSE & NASDAQ Advance - Decline: 3153-2488
Combined NYSE & NASDAQ New highs - New lows: 194-95
WTI crude oil: 98.67, +1.43
Gold: 1,613.60, -4.00
Silver: 29.25, -0.29

Tuesday, December 20, 2011

Santa Claus Comes to Wall Street

We all knew this was coming.

Good news or bad, there was going to be a Santa Claus Rally, and today was the day.

Any attempt to quantify or qualify this massive uplift on slightly positive news (really, there was nothing earth-shattering) would be foolhardy. Suffice it to say that the powers that be got the HFT computers cranked up at the open and didn't change the algorithms all day long.

It wasn't as though Europe was fixed for good, or that seven million people went back to work today, or that retail sales have been robust (anecdotally, the malls and the post office aren't especially busy). The top news - and it's suspect, at best - was that housing starts rose 9.3 percent to a 685,000 annual rate, though most of the gains were in multi-family units (rental apartments), which were up 25%, while new construction of single-family houses rose just 2.3 percent from the prior month, so, apparently, the fact that most people in America can't qualify for a mortgage and thus, must rent, qualifies as blockbuster good news.

Today's moves were somewhat misleading, as Santa Claus rallies often are. The closing prices on the major indices got them back to where they were about a week ago.

Merry Christmas. It was the feel-good rally for the season. By the time we hit January, this will be all but forgotten, so don't make a big thing out of it, OK?

Meanwhile, the markets actually should be a little bit uneasy over what's happening (or not happening, as the case may be) on Capitol Hill, where House Republicans refuse to pass the two-month social security payroll contribution reduction that was overwhelmingly passed by the Senate over the weekend.

Majority leader John Boehner took the extraordinary step of calling the Senate's bluff, saying they should come back to Washington to work out a better, longer deal. Most Senators have already exited the capitol, en route to a two-week vacation, while the nation stumbles on, without a comprehensive package.

Boehner, in calling out the Senate and President Obama, said, "President Obama needs to call on Senate Democrats to go back into session ... and resolve this bill as soon as possible."

Failure to pass a bill in the House will also curtail unemployment benefits to about two million Americans and Medicare payments to doctors will also be cut short.

The House did pass a bill, 229-193, that sends the legislation back to the Senate. However, with the Senate already out of town for the holidays, House Republicans have set up a perfect stalemate, just in time for the holidays.

Of course, none of this drama means anything to Wall Street, which had donned blinders for the session. Stocks closed at or ear their highs of the day on extremely light volume. All sectors and nearly all asset classes gained on the day, including gold, oil and silver, which had been beaten down mercilessly over the past two weeks.

Not to throw cold water on the festivities, but after the bell, Oracle (ORCL) missed on their quarterly numbers, coming in at 54 cents per share on expectations of 57 cents and missing revenue estimates of $9.2 billion by a mile, at $8.8 billion.

Also, the National Association of Realtors (NAR) will announce tomorrow that they are revising, downward, existing home sales from the past five years, dating back to 2007, when the housing boom went bust. It may not mean a thing to the 1%ers on Wall Street, though the data will show that housing was - and is - in worse shape than previously reported.

Dow 12,103.43, +337.17 (2.87%)
NASDAQ 2,603.73, +80.59 (3.19%)
S&P 500 1,241.30, +35.95 (2.98%)
NYSE Composite 7,357.14, +214.69 (3.01%)
NASDAQ Volume 1,751,316,750
NYSE Volume 4,002,632,750
Combined NYSE & NASDAQ Advance - Decline: 4943-862
Combined NYSE & NASDAQ New highs - New lows: 183-106
WTI crude oil: 97.22, +3.34
Gold: 1,617.60, +20.90
Silver: 29.54, +0.66

Innovate Your Way to Success

In today's uncertain business climate, risk taking is reserved for the truly entrepreneurial at heart. Those with an idea, a concept for change and an appetite for the unusual might find their niche in unusual places while those more intent on riding out the storm of economic crisis before committing to a fresh start may be left behind.

Business isn't just dollars and cents, it's dynamic, changeable and it often pays more to have a unique concept rather than be in a product or service area that "usually" makes money.

Innovative ideas are ones which change or challenge the status quo, and like Apple's iPod, iPhone and iPad, are often met with enthusiastic acceptance from the marketplace.

One example of how innovation was the key to success is how Blue Sky Scrubs ( continues to change the look and custom of hospital garb around the world.

Founded by Shelby Marquardt, an anesthesiology resident at Hermann Hospital in Houston, Texas, she was inspired to create an operating room hat that fit her long hair, rather than settle for unattractive, ill-fitting scrub hats that were the norm.

Ms. Marquardt created the Pony Scrub Hat, and soon after, the Pixie Scrub Hat, patented both designs and her fledgling business was born. After having success with her hats, she decided to try her hand at other hospital wear, and soon, Blue Sky Scrubs was producing scrub tops, bottoms and lab coats that turned drab into unique and dull into a fashion statement with more color and variety.

Today, Blue Sky Scrubs sells a vast array of hospital and medical personnel wear to customers around the world, with orders streaming into the website.

Innovation isn't magic and it's not genetic. Anyone can innovate in any field of endeavor. Turning innovation into a successful business enterprise takes determination, desire and a bit of daring. In the case of Blue Sky Scrubs, Shelby Marquardt took on long-established hospital traditions and turned her designs into a compelling brand.

Monday, December 19, 2011

The Instant Market: Draghi and Bank of America Take It Down Two Notches

Once again, we are treated to the new reality of the "instant market" wherein news, or rumor, directs the flow of funds into or out of select equities, and today's catalysts were, as usual, from Europe (must have some news from Europe to move markets: it's the law) and oddly enough, from our old friends at Bank of America (BAC).

First, Europe. US markets opened with some hope and small gains across the indices. That was, until shortly after 10:00 New York time, when ECB President Mario Draghi commented that the ECB would not step up it's bond purchases, noting that monetary financing of states was not part of the treaty upon which the EU was formed. (Imagine, a world political leader actually sticking to what was agreed upon. A novel approach.)

That took the markets down a big notch, with the Dow, after hitting its highs of the day earlier - up 60 points - falling a full 120 points - to down 60 - in about an hour's time after Draghi's comments.

Draghi also said that any talk of the Euro-zone breaking apart were "morbid" and that the Euro was going to remain intact as a viable currency. He punted this gem:
I have no doubts whatsoever about the strength of the euro, about its permanence, about its irreversibility. But you have a lot of people, especially outside the euro area, who spend a lot of time in what I call morbid speculation.

While Draghi may be right about the morbidity part, the thought that the Euro is irreplaceable or inviolate is nothing more than CYA job protection. He's paid to oversee the ECB, and talking up the currency is part of his job. Somebody ought to hand Draghi a history book. Greece fell, Rome fell, Germany rose and fell a couple of times, at least. Nothing lasts forever, and, with only 11 years of history under its belt, the Euro is experiencing something of a severe confidence crisis, if not a complete failure by some of its constituents.

Most of those "morbid" speculators give the Euro another six to eighteen months, tops. And while it may indeed survive, and prove Draghi correct in the near term, it's another bad idea stemming from too many government bureaucrats attempting to furnish a centrally-planned socialist solution where none was needed. In many ways, the Euro resembles the Medicare/Medicade mess in the US, wherein the government stepped all over the established free market to create a system that is out of control and benefits mostly large medical insurance companies instead of real people with health care needs. The Euro was supposed to affect the entire continent in magical, positive ways. It has, thus far, produced a great deal of pain, financial inequities and sparked a world-wide crisis, even though that crisis was well underway, being all about fiat money anyway.

Stocks drifted along until about 3:00 pm ET when the PPT or whomever was hitting the bid - for hours - on Bank of America at 5.00 - 5.03, stopped, failed and rolled over. The bank that many equate with the financial collapse of 2008, hit a fresh, 33-month low, hitting 4.92 prior to closing at 4.99, an important figure, since many funds, by charter, cannot trade in stocks priced under 5.00, or must severely limit the size of their investment in such low-priced equities.

With banks under pressure the entire session, the demise of BAC took the whole market down the second notch, into the close. So much for recovery, at least by the "well-capitalized" US banks, whose ledgers are an indecipherable miasma of imaginary valuations, off-balance-sheet assets and liabilities and mark-to-model fantasies. With books so complex and confusing most CPAs don't understand them and after relentless support from the federal government (much of it in secret), is there any doubt that most stock pickers have shied away from US financial stocks as a whole?

Bank of America, along with Citigroup and JP Morgan Chase, to name just a few, should have been broken up in 2008-09, when they were insolvent (and still are, largely), though that would have ended the near-total dominance of the Federal Reserve and its constituents over all transactions in the US economy and beyond, and the rich bankers and their supporters simply could not stand for that. Instead, it was easier for them to socialize the losses on the backs of the US taxpayers.

Bank of America's recent swoon is only a small chapter in the ongoing saga that will bring down the oligarchical nature of our corrupt political and financial system. 99%ers are celebrating.

A couple of items of note:

Ron Paul, the Republican presidential candidate that the establishment loves to hate, has taken the lead in Iowa accordind to the most recent polling by Public Policy Polling (PPP), one of a handful of organizations tracking the rise and fall of candidates in the upcoming (January 3) caucuses.

The results have Paul at 23%, leading Mitt Romney (20%) and a rapidly declining Newt Gingrich (14%), even though Romney recently picked up the endorsement of the the Des Moines Register, Iowa's leading newspaper. Paul is also reported to have taken in more than $4 million over the past weekend, and now is in second place, behind Romney, in New Hampshire.

Also, a searing report on where we're headed in 2012, called the Thunder Road Report, leading with the cryptic warning, "Dear Portfolio Manager, you are leaving the capitalist sector and heading into a full-spectrum crisis."

The entire report is available at the end of this post.

Anybody seen Santa?

Dow 11,766.26, -100.13 (0.84%)
NASDAQ 2,523.14, -32.19 (1.26%)
S&P 500 1,205.35, -14.31 (1.17%)
NYSE Composite 7,142.45, -95.21 (1.32%)
NASDAQ Volume 1,591,603,125
NYSE Volume 3,659,820,750
Combined NYSE & NASDAQ Advance - Decline: 1230-4469
Combined NYSE & NASDAQ New highs - New lows: 110-290 (blowing out)
WTI crude oil: 93.88, +0.35
Gold: 1,596.70, -1.20
Silver: 28.87, -0.80


Friday, December 16, 2011

Odd Flat Finish on Quadruple Witching Day

Four times a year, the markets encounter what are known as quadruple witching days, in which all four varieties of futures and options expire on a single day, normally the third Friday of the month, as today.

On those usually-volatile sessions, there's usually a good chance that stocks will finish strongly to the positive or the negative, so it was a bit of keeping with the current theme that stocks finished the week flat, though on higher volume than has been seen lately.

It's on these quiet days that, somewhat counter-intuitively, investors can find real diamonds in the rough, but, since many hedge funds have already closed their books for the year, and, taking into account the continuing crisis in Europe and the slow pace in the US, traders were focused more on catching the quickest train out of town for the weekend rather than researching or taking positions in fresh equities.

News flow was also quite on the light side, though Fitch Ratings did its best to unnerve already-skittish investors by lowering France's AAA credit outlook from stable to negative and placing six European nations - Belgium, Spain, Slovenia, Italy, Ireland and Cyprus - on ratings watch negative, putting the six on a heightened probability of downgrade once the company completes its review by the end of January 2012.

The economic data on Friday was also not inspiring to either bulls nor bears, as CPI for November was flat with the core CPI - excluding food and energy - was up 0.2%. More than likely, if one is to believe the government bean-counters, this is indicative of a slow economy leaving companies without much pricing power, and, intuitively, a harbinger of another small wave of deflation in the near term.

Thus, stocks ended the week with their first loss in the last three, though the vast majority of the damage was done on Tuesday, the other sessions more or less range-bound.

With just ten trading days remaining in the year, traders are keeping a sharp eye out for Santa Calus and his rally hat, though there have been no sightings of the jolly fat man nor of any catalyst to spark a significant year-end rally.

In the immortal words of George W. Bush, "go shopping."

Dow 11,866.39, -2.42 (0.02%)
NASDAQ 2,555.33, +14.32 (0.56%)
S&P 500 1,219.66, +3.91 (0.32%)
NYSE Compos 7,237.65, +20.55 (0.28%)
NASDAQ Volume 2,453,577,500
NYSE Volume 4,921,504,500
Combined NYSE & NASDAQ Advance - Decline: 3315-2258
Combined NYSE & NASDAQ New highs - New lows: 109-164
WTI crude oil: 93.53, -0.34
Gold: 1,597.90, +20.70
Silver: 29.67, +0.40

Low Mortgage Rates and Returning Vets Could Boost Real Estate

Yesterday, it was mentioned here that mortgage rates hit an all-time low, with a 30-year fixed mortgage going for the ultra-affordable rate of 3.94%, which, if you've got the down payment and can find a home in a price range you can live with, puts home ownership well within your grasp.

While residential real estate is still in a deep downturn, some markets could get a boost from the thousands of returning veterans from Iraq, now that the conflict has officially ended. Soldiers coming home will qualify for a Military VA Loan which carries the unique feature of requiring no down payment, a benefit for the danger these veterans endured.

Along with low, low rates on conventional mortgages, refinance mortgage rates are also at ridiculously low levels. Anyone paying anything North of 4.5% can probably save a bundle by refinancing and stretching out the term of the loan.

While having no mortgage is ideal, few people are in such a sweet spot. Foreclosure and short sales are still making up an unhealthy share of the residential market, but, for buyers, there are deals on good, quality homes in solid neighborhoods in almost all parts of the country.

Scanning the internet for deals on one's local craigslist might be a good start, but with home sales mostly down, there are likely plenty of professionals who will gladly show you a selection of suitable properties in your area because they will earn a commission if and when you buy. A competent Realtor can guide you to the right home at the right price and usually lead you to a lender that can handle all of the mortgage and paperwork details.

It's also prudent to hire a competent attorney with expertise in real estate to handle the closing. Clouded title issues are still predominant in areas hit hard by foreclosures and recession, so get an expert to make sure what you're buying will remain yours.

Competence and Industry Experience Essential in Business Expansion

Whatever the business climate, successful business people are always on the lookout for new opportunities, but today's sluggish economic environment makes this an excellent time to seek out a possible merger or take-over target to expand one's enterprise because some businesses have been hurt more than others and may be available for prices far lower than they were before the onset of the financial crisis.

Naturally, the desire to expand one's business carries risk, but lending costs for large and medium enterprises are new record lows and likely to remain there for some time.

Entering into negotiations to purchase a business or merge with a larger or smaller rival is a complicated process that requires levels of skill and expertise in investment banking, negotiations and it's always important to have somebody on your team that understands the business from hands-on experience.

For instance, you wouldn't want a banker who has done only retail business if you're in chemicals. In that instance, the expertise of an executive with experience in chemical investment banking - a very specialized, technical field, would be appropriate to your needs.

Additionally, somebody with chemical mergers and acquisitions would be ideal to handle negotiations and set up contracts because the technical jargon and specialized aspects of the chemical business would likely swamp even the best M&A expert without the requisite experience in the field.

Growing a business takes plenty of time, experience and savvy, but buying or merging a business is an area in which most entrepreneurs are not well-equipped. That's why it's important to do research and find a company that specializes not only in M&A, but also is experienced in your particular line of endeavor.

Getting the wrong advice on a merger or company acquisition could be a costly mistake that could end up putting your own business on the block, at a drastically reduced price. Find a company that has a solid, proven track record of success, without glitches in the process and your expansion plans should proceed without a hitch.

Thursday, December 15, 2011

Despite Positive Data, Market Rally Fizzles; Something About Ties Is Untrustworthy

You might as well call this a down day for the US markets.

Stocks were up at the open on some positive economic data, but, thanks to Christine Legarde, head of the IMF, the fear of Europe sent traders scurrying for the sell buttons.

Hop-scotching the Headlines (trust, this will all tie together):

Initial unemployment claims reached a level not seen in 3 1/2 years, falling to 366,000, though, as expressed in a post a few days back, government numbers may not be the most trustworthy. Unadjusted figures totaled 433,287 in the week ending December 10, a decrease of 95,506 from the previous week, which implies that last week's numbers may have been abnormally LOW. Some people are paying attention to the unadjusted, non-politicized data.

PPI for November was up 0.3%. Core PPI was up 0.1%. No surprises there.

The NYS Manufacturing Index came in at 9.53 for December, a dramatic rise from November's reading of 0.61. Similarly, the Philadelphia Fed's index read at 10.3, a majestic rise from November's 3.60. Those were somewhat of a surprise, though the data is supplied by the Federal Reserve. Trust them? Maybe. Maybe not.

Industrial Production: -0.2%; Capacity Utilization was 77.8%. Both of those figures were fairly static.

So, the markets opened with healthy gains until Lagarde, on her megaphone from Europe, said that no country was immune from Europe's crisis and that the outlook for the world economy was "quite gloomy." Her words. She's not very funny, which, being French, partially explains why French people think Jerry Lewis is a comic genius.

(In a conversation with a postal employee today, I joked that maybe I was getting so many orders from Europe lately because they want to spend their Euros before they become worthless. I may be on to something.)

No matter what, Lagarde's comments put the markets into a tailspin, from which they did not recover. Stocks ended the day down about 60% from their highs. It was not pretty, nor exciting. Volume was, using CNBC's Bob Pisani's word, "anemic."

Morgan Stanley plans on cutting 1600 jobs, which is about 3% of their workforce. That's limited in comparison to other cuts in the finance business. Globally, more than 200,000 wheeler-dealers are going to be slashed, downsized and dumped.

Freddie Mac (the firm which paid Newt Gingrich over a million dollar in consulting fees) says that mortgage rates have hit all-time lows, with 30-year fixed loans at 3.94 and 15-year fixed at 3.21, but, nobody's buying.

Really, nobody. The National Association of Realtors is going to revise existing home sales for the past five years, dating back to 2007 (incidentally, when the real estate boom went bust) on Hanukkah, which is December 21. If that's just bad timing on their part, well, Happy Hanukkah! But, but, but, maybe we can't trust numbers supplied by realtors, either. Add them to bankers, accountants, government officials, meteorologists (yes, the National Hurricane Center said recently that their last 20 years of forecasting seasonal hurricanes was rubbish. Look it up. ON BING.), judges and lawyers. Oddly enough, all of these types wear ties when they're working. As far as can be told, none of them sleep naked, either. Very strange.

In a grossly under-reported story, OPEC ministers set a production ceiling of 30 million barrels a day, which begs the question about oil prices in the $90+ per barrel range. There's enough and demand is slack. It should be cheaper and it got cheaper today.

And just in case anyone hasn't noticed, tomorrow is December options expiry, which usually implies a massive ramp up in prices for stocks leading into it, but, but, but, stocks have been getting beaten down mercilessly for the past week. Is that bullish? Probably not.

Oh, and the CME group wants to know where that missing money from MF Global (Does the MF really stand for that vulgar ghetto slang term? Probably.) is. Top executives of the firm are suing Jon Corzine and other top executives of MF Global for undisclosed amounts and damages. They are seeking class action status. According to Business Insider, the brainchild of former Wall Street analyst Henry Blodget (who wears a tie, but can probably be trusted since he is barred from all Wall Street trading and "official" analysis and probably sleeps naked on occasion) the suit was filed a week ago, on December 8, and nobody noticed until today.

So, that's what moved US markets today, except that the level of fear on Wall Street is probably at a point so high that Charlie Sheen, even on his finest cocaine-and-liquor float, couldn't get up there.

Psst, wanna buy some stocks?

Dow 11,868.81, +45.33 (0.38%)
NASDAQ 2,541.01, +1.70 (0.07%)
S&P 500 1,215.75, +3.93 (0.32%)
NYSE Composite 7,217.12, +32.37 (0.45%)
NASDAQ Volume 1,750,499,375
NYSE Volume 3,767,349,000
Combined NYSE & NASDAQ Advance - Decline: 3399-2200
Combined NYSE & NASDAQ New highs - New lows: 72-179
WTI crude oil: 93.87, -1.08
Gold: 1,577.20, -9.70
Silver: 29.27, +0.34

Wednesday, December 14, 2011

LIQUIDATION DAY: Stocks, Oil, Gold, Silver All Whacked

If one is expert at reading the market's tea leaves, today was an opportunity to test your skills on just what the massive, liquidation-style selling in commodities was foretelling.

Since there wasn't any news from Europe upon which to trade, perhaps it had something to do with yesterday's non-eventful Fed policy announcement. Many of the larger market participants were hoping the Fed would announce some new iteration of QE, and, since there was none, decided - as of yesterday at about 2:30 pm - to begin liquidating assets in as orderly a manner possible without spooking the markets.

If that was the case - and it's probably not - the markets got a bit spooky in today's trading, though the real action was in commodities, especially oil, gold and silver, which were pounded down so hard it seemed that some of the world's most valuable assets were quickly becoming worthless.

The reality of the matter is probably much simpler, though unseen to most casual observers. Since last week, when the ECB and EU met on the last two days of the week, stocks have been rending lower, and today came the margin calls for anybody long equities and stretched out. There's also the much larger matter of imminent danger in Europe, either in the form of a complete and final Greek default, a bailout of Germany's CommerzBank or perhaps the ultimate collapse of the Euro as a currency of any value, the continent's plaything falling below the critical 1.30 level against the US Dollar today.

Libor rates have been on the rise recently and spreads are also widening, exacerbating the already tense liquidity condition for Europe-based banks. China and India are seeing growth stall out, mostly due to the dire conditions in Europe, but also due to internal stresses.

Perhaps it's the combination of all these bad things happening at once, which is not coincidental in today's globally-connected financial universe. When tough times come to one of the major developed countries or regions, like the Euro-zone, the ripples are felt around the world, and surely, judging by the weight and depth of today's commodity rout, something very fundamentally wrong is about to commence, because massive outflows from gold, especially, usually signal a liquidation event. And liquidation events usually precede solvency events, which, for most of the Southern European nations, is at the heart of the matter.

Gold was down massively, but was easily outdone on a percentage basis by its fellow PM cousin, silver, which broke through support levels and finished in New York down nearly 7.5 percent. So much for safe harbors! Crude oil, about which just about anyone who drives a car wishes it were at $65 per barrel instead of $100, took a deep slide as put contracts at a $65 strike in latter 2012 continue to pile up, potentially pushing the commodity futures into backwardation as the world supply has quickly become a glut on soft demand.

As far as stocks are concerned, the sense is that a lot of traders are closing their books for the year, locking in whatever profits they might have and selling off losers, as the trend in new highs vs. new lows would indicate.

US indices are just about at break even for the year, which is quickly coming to an end, with just 12 trading sessions remaining in 2011. The Dow Jones Industrials, the most resilient of the US indices, is up less than 3% on the year, or 246 points. The S&P and NASDAQ are already in the red to the tune of a 3-4% decline on the year and NYSE Composite takes the cake, down 780 points since last December 31, a nearly 10% decline.

Sure enough, something very disturbing to financial markets is primed for implosion. It's probably Europe, and it's probably going to be very bad and not fixable. Meanwhile, back on Wall Street, the masters of the universe are searching the skies for a jolly fat man on a sleigh pulled by reindeer in hopes that the highly-anticipated and nearly-annual event of a Christmas rally will get them back somewhere close to even by year's end. As for the highs reached back in April, forget them. Those levels may not be seen again for another 10 to 20 years.

Special shout-out to DanK, who turns a youthful 59 today. Hey, another 1/2 year and Dan can start liquidating his IRA without penalty. There is a silver lining, even though silver ain't exactly what it used to be, say, eight months ago.

Dow 11,823.48, -131.46 (1.10%)
NASDAQ 2,539.31, -39.96 (1.55%)
S&P 500 1,211.82, -13.91 (1.13%)
NYSE Composite 7,184.75, -92.87 (1.28%)
NASDAQ Volume 1,794,074,500
NYSE Volume 4,233,398,500
Combined NYSE & NASDAQ Advance - Decline: 1784-3900
Combined NYSE & NASDAQ New highs - New lows: 72-256 (three straight days in the red, and widening)
WTI crude oil: 94.95, -5.19
Gold: 1,586.90, -76.20
Silver: 28.94, -2.33

Tuesday, December 13, 2011

Stocks Ripped Lower Again; More Questions than Answers

Since US stock markets are so delightfully linked t the fates of Europe, the same old story keeps repeating itself over and over, such as today, as the Euro fell sharply (1.00 EUR = 1.30348 USD) against major currencies and the Dollar Index closed at an eleven-month high (DXY:IND 80.273 0.708 0.89%).

While those dual developments are intertwined, the parties involved - from European, US and Chinese exporters to American and European consumers - will feel the effects in dramatically different manners.

Naturally, for most of Europe, a collapsing Euro is bad for consumers, making everything imported more expensive, but great for exporters, whose goods are cheaper by comparison in importing nations.

The opposite is true for the US, which is why stocks are usually down when the Euro dips and the dollar strengthens. Americans should welcome a stronger dollar, especially at this time of year, because all those trinkets and holiday goodies - mostly from China - will be cheaper, though probably not right away.

As has been a repeatedly-held view in this space, the Euro is headed for catastrophe, and it's going to occur sooner than anyone thinks, probably before the middle of 2012. German people are sick and tired of bailing out the Southern countries, Greece has already defaulted on some debt, Italy, Spain, Portugal, Ireland and Belgium are holding on for dear life and the ECB is going to be quickly as tapped out of funds as its leaders are of ideas.

The idea of printing more money, as has been the case in the US, with dubious effect, will only make matters worse when inflation rages and dissatisfied citizens stop paying taxes in deference to feeding their families. The trouble is that sovereign debt, ridiculously rated at AAA or beyond, is about to be downgraded across the Euro-zone and beyond.

For those unfamiliar, sovereign debt is the money governments borrow to fund everything from pensions to schools to war machines (like here in the US). Most of Europe should be rated no better than A or A+, a move that is coming soon from either S&P, Moody's or Fitch, because nations have shown over time that while they may always repay on time, they are profligate spenders and tax revenues are dropping, not expanding. Balance sheets (those things nobody likes to look at) of most governments are ridiculous when compared to that of an average American or European family, who don't get the benefit of positive credit ratings, pay higher interest rates than silly governments, yet most manage to pay bills on time and keep their households in relative sanity.

With all of the monstrous debt of Europe and the US overshadowing just about all other economic realities, there are more questions than answers these days, a few of them being:

  • Where's the money (over $1 billion) that MF Global took from investors?
  • How soon will the ratings agencies lower the credit ratings of Italy, Spain, Portugal, France and the rest of the Euro-zone nations, and, how far down will they go?
  • If US banks are borrowing at 0-0.25% from the Fed, why are credit card rates 8, 10, 15 and even 28% for US consumers who have solid track records of on-time payments?
  • Can government statistics be trusted at all?
  • Why would anyone under the age of 40 contribute to Social Security if not that it's automatically deducted from their paychecks?
  • If the world is headed for global depression, won't all asset classes, including gold and silver, devalue?
  • Why are government employees in the US paid 30-40% more than their private-industry counterparts and receive gold-plated health care and pensions, when the US population - who pays them - work for less, have fewer benefits and many have no guaranteed retirement plans?
  • Why is the world's greatest criminal, Hank Paulson, still a free man?
  • Where is Eric Holder, the Attorney General, and why hasn't he even investigated any of the banks or the prior administration?
  • Why must Americans choose between Mitt Romney or Newt Gingrich as the Republican presidential nominee when Ron Paul and Michelle Bachmann have better positions and more consistent voting records?
  • Why is President Obama opposed to the Keystone pipeline that would bring oil from Canada (our largest trading partner and a friendly one) and thousands of high-paying jobs?
  • Why is 20% supposed to be a "fair" percentage one should pay in federal taxes when most people outside the middle class pay little to nothing?

Those are just teaser questions, without good answers from politicians, regulators, academics or economists. The tough ones await in the new year.

And, to those kids waiting for Santa Claus, you've got 11 days left to try being good. For the scoundrels on Wall Street, awaiting the famous, year-end Santa Claus Rally, you've been bad, so just coal (clean coal, for sure) for you, and, even if there is a rally, it will only get the indices back to where they were a week or a day or two ago, and 2011 will go down in the books as a year of near-zero (or less) returns. So much for owning stocks.

A couple of quick points on economic data. November retail sales figures were up 0.2%. There's one word to describe all the hoopla over Black Friday and the whole retail consumerism mantra. BULL---T.

The FOMC of the Fed had its last policy meeting of 2011 and did nothing. Thanks, for nothing.

Dow 11,954.94, -66.45 (0.55%)
NASDAQ 2,579.27, -32.99 (1.26%)
S&P 500 1,225.73, -10.74 (0.87%)
NYSE Composite 7,276.65, -86.84 (1.18%)
NASDAQ Volume 1,732,941,625
NYSE Volume 4,080,177,000
Combined NYSE & NASDAQ Advance - Decline: 1462-4165
Combined NYSE & NASDAQ New highs - New lows: 107-146 (more red)
WTI crude oil: 100.14, +2.37 (higher due to fears over Iran)
Gold: 1,663.10, -5.10
Silver: 31.26, +0.26

Monday, December 12, 2011

So Much for Europe Being Fixed; US Stocks Dashed over Persistent Fear of Euro Collapse

Let's face it. There's no easy way for europe to fix the mess they've created without a lot of pain, including bank failures, a massive, long-term deflationary depression, government overthrows and the near disintegration of the Euro-zone, those countries which exclusively use the Euro as currency.

After last week's up-and-down Thursday and Friday sessions, marked by trepidation over the ECB's interest rate cut and a demure stance on monetary policy by new ECB head, Mario Draghi, and Friday's euphoric rally on the umpteenth outline of a Euro solution, Monday turned just plain ugly for European bourses and US indices.

Anybody who understands the enormity of debt that's been built up by Europe and the US - not only in the government, but by the banks, financial institutions and households as well - sees no end to the crisis in Europe, and the distinct probability that their problems - being partly those of our own banks and our Federal Reserve - will become ours. The massive overhang of public debt, much of it owing to national pension funds like Social Security, has always been an albatross around the necks of European leaders and now it is quickly becoming one for whoever leads the US (Take your pick from Obama, the banks or the congress. None of them are doing a good job.).

And while Social Security is set to run in the red for another year (this being the first), what are congress and the president fighting over? Whether to cut the Social Security contribution paid by employees and/or add a tax on the wealthy. The fact that the latest boondoggle is being branded as "payroll tax" - a wholly incorrect moniker - tells exactly how deep and severe the US fiscal condition has become.

If the government big-wigs actually came clean on the issue and said they want to cut Social Security contributions so people can afford to buy food, gas and maybe the occasional iPad or plasma TV, the cat would be out of the bag, permanently.

As it stands today, Social Security is DOA. Current beneficiaries can expect payments though the next five years, maybe, but, eventually, there's not enough money going into the system to support the huge numbers of upcoming recipients from the Baby Boom generation, most of whom have less than $40,000 saved for retirement (Hint: that's not enough), and cutting contributions is going in exactly the wrong direction.

On Capitol Hill, most senior congress-people know that Social Security will have to be substantially changed in order to survive and the changes will have to be dramatic measures, like raising the retirement age to 70 or 72, means testing, so that people who don't need it won't get it, and raising the limit of contributions from the current first $106,800 of income to something more realistic, like the first $200,000 of income.

Making high-earners pay more would add more money to the SS coffers at the same time the government is cutting the percentage take from employees. Still, most of the measures even considered by congress and the White House are nothing more than stop-gap measures designed to satiate the masses until the next big election, in November, 2012.

In the meantime, the economy continues to struggle along, unless one is inclined to take their lead from the ruthless bankers on Wall Street and cheat like crazy, paying people off the books, under-reporting income and generally skirting the IRS at every turn. Hey, the big corporations do it, so why not everyone else.

At the bottom of all the financial malaise is the collapse of government, as we've witnessed in the Middle east and North Africa, is now spreading to Europe and Russia, and thanks to people actually taking change of their own lives and their own finances, is quickly gaining ground here in the USA.

There is one way to stem the crisis in the United States. Elect Ron Paul president. The mainstream media is currently dancing around Dr. Paul, whose positions have been consistent and poisonous to the status quo, but there's no doubt mainstream America is listening to the 76-year-old Texan, as he continue to gain ground in Iowa and elsewhere.

Compared to the current leaders, Newt Gingrich and Mitt Romney, a Ron Paul - Michelle Bachmann ticket is sure beginning to look like a winner.

When Americans ask themselves, "which of the Republican candidates are most like us?" the answer becomes obvious.

BTW: Volume was so low today that the markets could have closed at noon and hardly anyone would have noticed. Even fewer would have cared. That's what happens when trust flees markets. People, and money, follow out the door.

The Euro hit a two-month low against the US Dollar, below 1.32. The end of the Euro is coming, and sooner than anyone dares think.

Dow 12,021.39, -162.87 (1.34%)
NASDAQ 2,612.26, -34.59 (1.31%)
S&P 500 1,236.47, -18.72 (1.49%)
NYSE Composite 7,363.49, -139.39 (1.86%)
NASDAQ Volume 1,523,045,375
NYSE Volume 3,421,469,750
Combined NYSE & NASDAQ Advance - Decline: 1272-4386
Combined NYSE & NASDAQ New highs - New lows: 79-120 (flipped to red)
WTI crude oil: 97.77 -1.64 (head back to 80-85 range)
Gold: 1,668.20 -48.60 (deflation signal)
Silver: 31.00, -1.25

Friday, December 9, 2011

European Crisis Summit Outlines Plans, Markets Reverse Course

After lengthy deliberations which reportedly lasted well into the evening, European leaders emerged with the outline of a fiscal union designed to maintain the current structure of the EU and the Euro-zone nations which use the Euro as currency.

Left out of the plan was Great Britain, which said it would not succumb to another layer of regulations from the Eu, especially since it still has the British Pound as its sovereign currency.

One highlight was the decision to cap the new permanent rescue fund at 500 billion euros.

Additionally, European central banks will lend 150 billion euros to the International Monetary Fund’s (IMF) general resources. Non-euro EU states will offer around 50 billion euros to the IMF. Having the central banks on board is a new development that was widely cheered by market participants as it should encourage sovereigns outside of europe to pitch in to an IMF fund as well.

Details of the complex plan and new treaty language are expected to be finalized by March, leaving plenty of time for intrigue and dissent in the interim.

Stocks in Europe were higher, with the French, German and UK markets scoring the largest gains. In the US, the effect of the summit was a reversal of the previous day's losses, resulting in a negligible net gain or loss over the two days market players had been anticipating with some anxiety.

So, after all the drama over Thursday's ECB policy meeting and the Friday's EU summit, the end result after two days of nail-biting was a 12-point loss for the Dow Industrials, about two points down on the NASDAQ and a six point loss on the S&P. Indeed, it was all much ado about nothing with the major averages ending the week with marginal gains.

Everyone on and off Wall Street can now get back to doing whatever they do until the next European crisis event, which, if recent history is any guide, should be some time next week.

Dow 12,184.26 186.56 (1.55%)
NASDAQ 2,646.85 50.47 (1.94%)
S&P 500 1,255.19 20.84 (1.69%)
NYSE Compos 7,502.88 133.36 (1.81%)
NASDAQ Volume 1,651,333,125.00
NYSE Volume 3,698,613,000
Combined NYSE & NASDAQ Advance - Decline: 4746-907
Combined NYSE & NASDAQ New highs - New lows: 141-67
WTI crude oil: 99.41, +1.07
Gold: 1,716.80, +3.40
Silver: 32.25, +0.72

Thursday, December 8, 2011

European Mess Smashes Stocks; How Treasury Secretary Hank Paulson Screwed America

Yesterday in this space, an ancient Wall Street adage was invoked: "Never short a dull market."

We fairly dismissed the idea that, since the US market was basically on hold until the Europeans meet, greet and decide the economic fate of the continent, US stocks would wallow in hopeless delusion, because the Europeans, somewhat like our very own beloved congress, seem incapable of walking and chewing gum at the same time.

Most of them could not get arrested at a bong party, either, but the various inabilities of the ruling elite are not a primary concern. What they're doing to your money, your economic present and future, are.

And they're making a god-awful mess of it.

Just before US markets opened, the ECB announced a rate cut of 25 basis points (0.25%) to one percent, which was annoying to the majority of traders, who, as always, wanted more. A 50 bip reduction would have satiated their appetite for freer money for the while, but the ECB also announced that they would be extending loans of up to 36 months (that's three years for the mathematically-inept) to banks on the continent.

That was met with some enthusiasm, but within minutes, newly-appointed ECB president Mario Draghi dashed hopes at the press conference, claiming that the rate cut vote was not unanimous, signaling a lack of conviction on the part of ECB participants.

Stocks plummeted at the open in the US and only partially recovered late in the day as news leaks from the EU summit meeting beginning tomorrow indicated that a fiscal pact would be pursued by EU member nations, but even that news was short-lived as the major indices closed near the lows of the day.

Europe has become the focal point of global equity and commodity trading as it grapples with the potential for debt contagion among sovereign states and bank failures across the European Union. While difficulties in Europe may not directly affect the economy of the United States and other countries, it will have a pass-through effect, as pain anywhere in the global financial system is felt - to varying degrees - everywhere else.

Hope is now high that the crisis summit - a macabre circus in its own right - will produce some lasting, positive resolution, but the more one looks at the condition of Europe, the less one believes that there will be a positive conclusion short of destroying the Euro as a currency, an outcome that may have more benefits than downsides.

Until tomorrow, at least, stocks took a beating, as once again, the bulk of traders were hoping for positive results from another gang that can't shoot straight.

While on the topic of governments and their follies and foibles, an article by John Crudele in the NY Post should be at the top of the discussion of just how corrupt and obnoxious Wall Street has been and continues to be.

Crudele has been saying for two years that Paulson and other elements of the government were corrupt. In today's story, he finally gets confirmation from Bloomberg Markets that then-Secretary of the Treasury Hank Paulson was passing along insider tips to his buddies at Goldman Sachs (where he had served as CEO prior to being named to head Treasury by President Bush) and others.

Crudele says:
Under former Treasury Secretary Hank Paulson, confidential government information was regularly leaked to select people on Wall Street.

That's all one needs to know about how tightly intertwined Wall Street and top officials of the federal government are intertwined, but it brings up an essential question, or questions: Where are NBC, CBS, CNBC, ABC, FOX on this story, and why hasn't Attorney General Eric Holder announced an investigation?

The answers are simple. Bit players like Martha Stewart and Rob Blogojeich go to jail. Fat-ass scum-bags like Hank Paulson, the architect of TARP and god-knows how many other deceitful financial scams sail off into retirement sunset.

No wonder there is an ugly undercurrent of dissatisfaction and distrust in America. The people at the top have been screwing the public for years, yet not a single one is even investigated. Instead, we are subjected to daily wild market swings and the spectacle of former congressman, former New Jersey governor Jon Corzine explaining to a congressional panel how he didn't know what was going on while his firm, MF Global, raided the coffers of client money to the tune of $1.2 billion.

Corzine won't see the inside of a prison; that you can count on. Neither will Hank Paulson. But some ghetto kid who sells a bag of weed because it's the only way he can make a buck, will receive the full extent of what now humorously is called "justice" in America.

Face it, people, with the thieves and connivers we have in government, we're all royally screwed and the wake-up call is probably a few decades too late.

Thanks to John Crudele and the NY Post for his ground-breaking and tireless reporting efforts. It's amazing he hasn't been fired yet.

And seriously, isn't Ron Paul the only Republican presidential candidate that is electable? The others are either pandering flip-floppers (Gingrich, Romney) or wing-nuts (Santorum, Cain, Bachman, Perry). That leaves only Mr. Paul nd Jon Huntsman as viable candidates. But the mainstream media, which relies upon access to the corrupt political machines running the country, will have no part of either of them.

The best advice is to ignore all of them and fend - as best one can - for oneself and one's family, but, eventually, unless the liars, cheaters and thieves of Wall Street and Washington are rooted out and made to pay for their crimes, America is doomed.

Dow 11,997.70, -198.67 (1.63%)
NASDAQ 2,596.38, -52.83 (1.99%)
S&P 500 1,234.35, -26.66 (2.11%)
NYSE Composite 7,369.52, -190.19 (2.52%)
NASDAQ Volume 1,843,290,125
NYSE Volume 4,222,942,000
Combined NYSE & NASDAQ Advance - Decline: 774-4842
Combined NYSE & NASDAQ New highs - New lows: 100-89
WTI crude oil: 98.34, -2.15
Gold: 1,713.40, -31.40
Silver: 31.54, -1.09

Wednesday, December 7, 2011

US Markets Stalled Out, Waiting for Europe's Next Gambit

There's an old Wall Street adage that goes something like, "don't short a dull market," but, if this market goes any higher and gets any duller, the adage might as well be thrown out along with most long positions in stocks.

After Tuesday's snooze-fest, Wednesday's market was even sleepier, with participation at low ebb. Volume has nearly completely dried up, but the thin trading has reduced volatility somewhat. In fact, the VIX, which measures implied volatility in the S&P 500, hasn't pitched above 30 (an abnormally high level to begin with) since November 30, or one week ago.

What traders are most concerned with is once again Europe, but more specifically, the two days of meetings scheduled in Europe, one by the ECB, tomorrow, and the other a crisis summit of leaders of the Euro-zone nations on Friday that is hoped to pave the way toward an end of the two-year-old debt crisis that has gripped European markets and locked down US markets for the past two days.

As is the usual case with relying on Europe to fix our own stock market, it's probably a bad idea. Some leading economists of the region, particularly those from Germany, who have the best view of the situation, are saying that whatever solutions come out of this week's crisis summit, Europe's problems are likely to remain contentious for another eighteen months to two years.

Noting that, and understanding that debt issues which took decades to produce are not going to be solved at one meeting (it has been promised before and not been delivered), so one has to question both the positioning in US stocks, which have been essentially flat since the middle of August, and the reliability of ancient words of wisdom in an era that has been marked by unusual actions from the Fed and other central banks in developed countries.

If everybody's waiting on Europe, just what do they expect? A grand plan which all 17 countries that use the Euro as currency can agree to? Good luck with that. European leaders are now calling for majority consensus rather than unanimity. Meanwhile the ratings agencies, specifically Standard & Poor's, are scaring the daylights out of each and every one of them, threatening credit rating downgrades across the continent if there's no substantial progress come Friday.

What this telegraphed sucker punch from S&P is saying is more political than economic, essentially telling all of Europe to stop playing around the periphery and get to the core of the matter, which would entail some countries (think Spain, Portugal, Italy and Greece) having to give up some degree of sovereignty in order to remain in the good graces of the European Union and the ECB. And while fiscal unity, or, at least some semblance of fiscal responsibility would be a step in the right direction, the citizenry of those countries might not take lightly to having new masters above their own elected leaders somewhere in Germany, Brussels or France.

Since the crisis meeting isn't until Friday, that's probably when US markets might perk up, but, if the game plan remains the same in Europe - promise much, deliver little - they will be sending a message to markets around the world that the issues present are too large, too diverse and too complex for all 17 Euro-zone nations to reach agreement on any unifying principles laid down.

In that scenario, we may just get another two days of slumber on the street as even more participants make a premature exit from stocks in 2011, fleeing to cash or bonds until the dust settles after the holidays.

And what about that Santa Claus rally that usually commences over the final two weeks of the year? There may be one, but it won't have much gusto on low volume and it's not likely to last long. Stocks are already creeping back toward their late July - early August levels and there's just not enough economic "juice" in the system for which a rally can be sustained. The major US indices have flirted recently with the flat line for the year and that's probably where they're going to remain.

Meanwhile, all one can do is hold one's breath waiting for Europe's next move. Everyone is waiting to exhale.

Dow 12,196.37, +46.24 (0.38%)
NASDAQ 2,649.21, -0.35 (0.01%)
S&P 500 1,261.01, +2.54 (0.20%)
NYSE Composite 7,559.71, +20.39 (0.27%)
NASDAQ Volume 1,654,001,000
NYSE Volume 4,158,213,000
Combined NYSE & NASDAQ Advance - Decline: 2804-2747
Combined NYSE & NASDAQ New highs - New lows: 119-63
WTI crude oil: 100.49, -0.79
Gold: 1,744.80, +13.00
Silver: 32.63, -0.12

Tuesday, December 6, 2011

Equities Drift, Then Rally on More False Hope from Europe

Following events in Europe's ongoing credit crisis is becoming counter-productive and in many ways, simply stupid.

Today's duller-than-usual session (and that's saying a lot, because it's been pretty dull the past few days) caught a bit of fire mid-afternoon when the Financial Times reported that European leaders were considering a permanent fund with which to deal with sovereign debt issues in addition to the "temporary" EFSF. The new, European Stability Mechanism (ESM) is proposed to come on line mid-2012 and roughly double the firepower Euro financiers will have to deal with any exploding budgets in Euro-zone countries.

While that's all well and good, it's yet another proposal - not anything concrete - from the foot-draggers across the pond who have neither the wherewithal, the money, nor the will to effectively deal with their generational debt issues. Still, Wall Streeters wait with baited breath on every syllable from European leaders as though they are all that matters here in the United States.

The truth is that Europe's problems are large, but America's may prove to be much larger. Besides, stocks moving up and down on the whims of our friends on the continent has little to do with fundamental strength or weakness of individual stocks traded on US markets. While it's almost a certainty that Europe will enter a recession early in 2012, companies doing business over there will adjust, but the situation is not getting materially better.

To think that just throwing more money at their problems, or, the mention of throwing said money, raises stocks in the US on a correlation trade of a stronger Euro and a weaker US dollar is simplistic as well as not rooted in reality. If Europe is headed for a recession, their currency should weaken and US officials should welcome the relative strengthening of the US dollar, though it's become quite clear that Mr. Bernanke and Mr. Geithner see things differently than the rest of US. Their future and the future of the US economy has been and continues to be predicated on a continually weakening US dollar, a condition that eventually is ruinous to our economy and probably that of many other developed nations.

The Europe-watching-and-waiting needs to come to a head, an end, a conclusion, though it's probably not in the cards any time soon.

The farce of 21st century economics continues, it should be noted, on extremely low volume.

Dow 12,150.13, +52.30 (0.43%)
NASDAQ 2,649.56, -6.20 (0.23%)
S&P 500 1,258.47, +1.39 (0.11%)
NYSE Composite 7,539.32, +8.31 (0.11%)
NASDAQ Volume 1,495,232,875
NYSE Volume 3,732,697,000
Combined NYSE & NASDAQ Advance - Decline: 2659-2918
Combined NYSE & NASDAQ New highs - New lows: 111-58
WTI crude oil: 101.28, +0.29
Gold: 1,731.80, -2.70
Silver: 32.74, +0.37

Monday, December 5, 2011

Mad Hatter Market; Euro Nations Threatened with Downgrades

Perhaps Lewis Carroll, whimsical author of Alice's Adventures in Wonderland and its sequel, Through the Looking-Glass might be a great stock picker and market analyst today were he to be revived from the dead and paid a handsome fee for his words of wisdom.

He certainly would find today's whirring trading machines and digitized billions of dollars quite the flight of fancy and he might conjure up one of his more famous characters - the Mad Hatter - to explain what's worth watching and what is mere perception and imagination.

Carroll might be as good at picking stocks as, say, Dick Bove, who keeps recommending Bank of America (BAC) at 7, no, 6, no, 5 and change and he'd be sure to have a more sanguine world view than the liar ex-presidential candidate, Herman (no, no sex, never) Cain, because the world is a weird and dangerous place and investing is an art that might lend itself more to psychedelics and naked speculation than to fundamental analysis and prudent timing.

A bit of amusement Carroll might find in the continuing saga of sick Europe, with it's fanciful money, the Euro and the equally absurd idea that 17 nations might work together for a common good without finding considerable argument and dispute.

And that's where we leave Carroll, laughing all the way to the bank, and digest what weirdness the world's leaders and financial firms played on markets today.

First, German Chancellor Angela Merkel and French President Nicolas Sarkozy (now there's an odd couple) brought the markets some hope with a Monday morning (US time) statement, the latest in a series of promises, hints and innuendo that essentially said nothing except that they are hopeful to have an agreement sometime soon, but definitely by March (we should all live so long).

The most humorous part of the statement is that all parties should agree to mandatory limits on budget deficits that eurozone members must adhere to, or risk possible sanctions. Budget deficit limits were part of the original plan, and we are well aware of just how well that worked out.

US markets responded favorably to the latest promise of stability as all the major indices broke sharply to the upside on the open and continued in rally mode into the afternoon.

Then, the cruel, evil and ruthless Standard and Poors came along and spoiled the festive tea party on Wall Street, saying that France, Germany, the Netherlands, Finland, Austria and Luxembourg have been placed on credit watch negative and that they all may lose their current AAA rating within 90 days if the European debt crisis (or circus) isn't resolved.

Moments later, the Wall Street Journal reported that European officials were awaiting word that all 17 Euro zone members might be downgraded, and that's when the Chesire Cat tripped over and fell onto the stock markets, taking them down many points, though leaving them with some hope and dreaming in positive territory for the day.

(Mad hatters love this stuff. People whose money is tied into the stock market through retirement accounts or other investment vehicles are not so easily amused.)

That's where our story leaves off for today. We're hoping that Sarkozy, who looks a bit mad himself, might make mention of the IMF or SDRs tomorrow, making for even more hilarity and wide-eyed, crazed speculation.

Take the red pill, Alice.

Dow 12,097.83, +78.41 (0.65%)
NASDAQ 2,655.76, +28.83 (1.10%)
S&P 500 1,257.08, +12.80 (1.03%)
NYSE Composite 7,531.01, +77.46 (1.04%)
NASDAQ Volume 1,678,879,250
NYSE Volume 4,154,232,000
Combined NYSE & NASDAQ Advance - Decline: 4177-1469
Combined NYSE & NASDAQ New highs - New lows: 183-42
WTI crude oil: 100.99, +0.03
Gold: 1,734.50, -16.80
Silver: 32.37, -0.31

For today's musical finale, we happily go through the looking glass back to Grace Slick and Jefferson Airplane performing White Rabbit on the Smothers Brothers Comedy Hour in 1967, when things were just a bit different... the Smothers Brothers were funny and offbeat, Grace Slick was young and pretty and Jefferson Airplane was, well, a little bit weird, though musically, quite talented.

At least there were no terrorist-check lines at airports, public buildings and courthouses, banks paid five percent interest on savings and the stock market was mostly for rich people. The rest of us bought savings bonds or baseball cards and hoped for the best.

Friday, December 2, 2011

Stocks Finish Flat After Suspect Non-Farm Payroll Data; Super Week for Stocks

By now, the "official" BLS non-farm payroll figures for November have been digested, sliced, diced and regurgitated by radio talk shows, blogs and financial news outlets.

While the headline numbers of 8.6% unemployment - a big drop from last month's 9.0 - and a gain of 120,000 net new jobs created (140,000 in the private sector) looked good on the surface, a peek under the hood revealed that the unemployment rate did not drop due to new jobs, but rather on the scurrilous assertion that 315,000 people dropped out of the civilian labor force.

These 315,000 are often described as "discouraged" workers, who have fallen off the unemployment roles and are no longer seeking employment. Of course, this assumption that just because your unemployment benefits have run out you're no longer seeking employment is nearly a complete fantasy. The truth of the matter is that many of these people will be filling up the welfare and food stamp roles in a New York minute, while others will take menial day jobs, work off the books, move in with friends or relatives or join the swelling ranks of the homeless.

Additionally, the BLS reported that the participation rate (the percentage of adults in the labor force) fell from 64.2% to 64.0%, with those not in the labor force growing by 487,000. That number includes retirees (a number that will only continue to grow as Baby Boomers begin to retire), long term disabled and, supposedly, lottery winners who no longer have to toil for a wage.

So, while the White House does a victory lap, claiming unemployment at its lowest rate in more than 2 1/2 years, the reality of working in America is vastly different from what the media would have one believe.

More than eight million fewer people are employed than before the last recession began in the 4th quarter of 2007. Employment is at levels last seen in 2000. Long-term unemployment remains a persistent problem. The average time out of work is now over 40 weeks, the highest in history.

That's why Wall Street was not wowed with the report. The statistically-misleading headline 8.6% unemployment was achieved primarily due to a faltering workforce and over 300,000 falling off the roles. Stocks began the day with healthy gains, but after a week full of encouraging and cheerleading, profit-taking was the order of the day and volume was a mere dribble.

Still, the week as a whole was impressive for equity investors. The Dow rang up a gain of 788 points, one of the best weeks ever. The S&P 500 gained 85 points and the NASDAQ was up a whopping 187 points.

Wall Street can cheer for now, as the economy seems to be limping steadily along, but longer term problems remain, especially in the middle class, where the general result of a layoff or firing and subsequent successful job search results in working for less and a lower standard of living.

Politicians may crow about the continued "job creation," but the hard truth is that America is not creating enough jobs to satisfy the needs of what used to be a robust, mobile labor force. Adjustments are being made, as unreported income and cash transactions in the so-called "underground economy" are on the rise. What's keeping America going is, as usual, not the jury-rigging of the political class, but the ingenuity of the American populace and their will to live free and unfettered by the rigors of an oppressive federal government.

The long and short of it is that for all the official numbers and statistics the government produces, they don't add up to a strong economy. It is what lies underneath that is really making a difference. At some point, government must admit that they cannot create jobs or centrally plan the economy and the size and scope of the governments at all levels must be reduced. The US economy is too big, too diverse and too dynamic for it to be controlled from Washington, DC or even state capitols. People work, get paid and maybe, pay taxes, though how they go about those various processes is of too much complexity and granularity for government statisticians to capture.

There's a lot of untapped wealth and resource in the United States, mostly in the hands and minds of American workers. Government needs only to get out of the way and allow Americans to live and earn honestly and with hope for the future.

Dow 12,019.42, -0.61 (0.01%)
NASDAQ 2,626.93, +0.73 (0.03%)
S&P 500 1,244.28, -0.30 (0.02%)
NYSE Composite 7,453.55, +3.12 (0.04%)
NASDAQ Volume 1,656,224,750
NYSE Volume 4,137,980,750
Combined NYSE & NASDAQ Advance - Decline: 3407-2204
Combined NYSE & NASDAQ New highs - New lows: 158-56
WTI crude oil: 100.96, +0.76
Gold: 1,751.30, +11.50
Silver: 32.69, +0.07