Dow Hits Five-Year High; Why Isn't Anyone Celebrating?

Money has to go somewhere, and today it went straight into equities, pushing the Dow to a five-year high.

Whether or not this euphoric advance was based on anything more than the Fed's continuing POMO operations remains to be seen.

Housing starts and building permits for December were figuratively "through the roof," though on Main Street America, people are wondering just who it is that is buying all these new homes.

In the real economy - the one that functions on dollars and cents, not swaps, repos, debt financing and accounting fantasies - it still feels like a recession. Stores are largely empty, incomes are still declining overall and the bulk of the US consumer class has just been hit with a 2% tax increase, thanks to the assembled dunces in congress and at the White House.

Unemployment claims today came in at a multi-month low of 335,000, though continuing claims increased from 3127K to 3214K in one week, so, something at the BLS isn't quite adding up, though that's largely been the case since 2006 or before.

The Philadelphia Fed index of economic activity printed a -5.8 for the current month, following a positive 4.6 in December. This reading comes on the heels of Empire Manufacturing (NY state) showing a -7.8 after a -7.3.

If none of this makes any sense to you, consider that Boeing (BA), after having all of their 787 "Dreamliners" (make that "Nightmare Flight") grounded by the FAA (note: this is after years and years of delays and missed deadlines), shares of the nation's top plane builder finished up 92 cents (1.24%).

Beyond that, ZeroHedge notes that if you strip out the gains made by Bank of America - the top performing Dow stock of 2012 - for releasing loan loss reserves (an accounting trick), the bank actually lost something on the order of $2.5 billion last year.

Regular readers (or at least those who check the stats at the bottom of each post) will take note that new highs - new lows has today reached the pinnacle of absurdity.

Even in the very, very, very best of times there were always more than eight stocks hitting new 52-week lows, it's only natural in a normal, competitive environment. The number of new lows since the first of the year has been hovering in the teems for the most part. The money gushing from the Federal Reserve to the primary dealers to the stock market is causing the most unbalanced market ever witnessed.

And the debt ceiling increase that needs to be approved, but just seems to sit there, like a 300000000-ton weight over the US economy, ah, don't worry about that. Our "leaders" will find a way to ix that, certainly, positively, without a doubt.

We live in Wonderland. Sadly, only those who pad their wallets on Wall Street get to be either the Cheshire Cat, Mad Hatter or Alice.

Dow 13,596.02, +84.79 (0.63%)
NASDAQ 3,136.00, +18.46 (0.59%)
S&P 500 1,480.98, +8.31 (0.56%)
NYSE Composite 8,766.54, +55.98 (0.64%)
NASDAQ Volume 1,734,349,250
NYSE Volume 3,966,953,250
Combined NYSE & NASDAQ Advance - Decline: 4628-1787
Combined NYSE & NASDAQ New highs - New lows: 525-8
WTI crude oil: 95.49, +1.25
Gold: 1,690.80, +7.60
Silver: 31.81, +0.268