Showing posts with label CNBC. Show all posts
Showing posts with label CNBC. Show all posts

Thursday, September 13, 2018

Stocks Flatlined In Bifurcated Trading; Can Reform MAGA?

Maybe investing should be a little more like Wednesday's activity: boring. Slow. Uninteresting, aside from the continuance of the Dow-NASDAQ dichotomy.

Back in the mid-90s, with the advent of the internet and the CNBCs of the world, stock trading became more akin to fantasy sports than serious investing. Day-trading became the norm, volatility increased and the natural outcome was to favor professionals who had the tools, skills, and patience to ply the market with the requisite aptitude and attitude.

Today's algo-driven compression chamber that is called a "market" is a far cry from the staid and simple concepts of just a generation ago. Prior to the internet explosion of online brokerages and sophisticated strategies, buy and hold was the norm. Investment advisors - at least the honest ones not tied to commissions or performance - put people's money into solid companies with deep backgrounds, decades of dividend payments and reasonable price-earning ratios.

Investors today throw money at companies such as Tesla (TSLA), which hasn't made a dime in earnings. That nomenclature was also the trademark of the dotcom boom and bust., and other pie-in-the-sky, profitless, promising companies fell to the waysides in 2000 after being hyped non-stop on message boards and from boiler room operations such as those prominently featured in movies like "The Wolf of Wall Street."

Not to say that there aren't new-age companies that deserve the backing of the investing public, but it's a crowded space, and valuations on companies like Google (Alphabet, GOOG), Amazon (AMZN) and others are out in the stratosphere somewhere, reflecting future growth of mammoth proportions which may or may not come to fruition.

That's probably why the aforementioned Dow-NASDAQ see-saw exists. Investors in Dow stocks (30 blue chips) are quite a bit more circumspect and conservative than the punters and speculators on stocks covered by the NASDAQ. They're also more likely to hold - or even add to positions - during downturns rather than sell outright and go looking for the next momentum-chasing darling of the day.

In the past, rules and regulations on banking and investment houses kept speculation at reasonable levels. All of that changed with the internet, 24-hour financial news, and, most importantly, changes to the Glass-Steagall act under President Bill Clinton in 1999. Clinton signed into law the Gramm-Leach-Bliley Act, which repealed SOME of the provisions of the Glass-Steagall Act, most notably, those measures which kept the banking business separate from the investment business.

Certainly, the new requirements struck a blow for free markets as the original Glass-Steagall act of 1933 was a response to wide-open conditions which contributed to the Great Depression. But, Clinton's new liberalness may have been a step too far. Since the enactment of Gramm-Leach-Bliley, the US economy has suffered the dotcom crash, the Great Financial Crisis of 2008-09, and various distortions of Federal Reserve policies like ZIRP (Zero Interest Rate Policy) and QE (Quantitative Easing).

Now that the Fed seeks to unwind its bloated balance sheet and normalize interest rates, perhaps it's time to call out the real culprit of financial repression: widespread advantageous policies for the banking sector which crowd out and frustrate individual efforts. While a democratization of the investing world has occurred to some degree with crowd-sourcing, the regulations surrounding the nascent rise of small offerings continue to throttle companies and potential investors with needless rules and strictures.

In a true free market, there would be 1/10th the number of regulations in place today, and most of them would be foisted upon the high-profile trading houses of Wall Street, not the start-up companies that must wade through SEC regulations and countless pages of blue sky laws.

For America to be great again, maybe boring isn't the way to go, but unfair rules which favor the well-heeled over start-ups might need to be examined and revised.

In the meantime, despite the promise of crowd-sourcing and online trading, small investors will continue to be subject to unfair trading practices which puts the interests of Wall Street far ahead those of Main Street.

At the close, Wednesday, September 12, 2018:
Dow Jones Industrial Average: 25,998.92, +27.86 (+0.11%)
NASDAQ: 7,954.23, -18.25 (-0.23%)
S&P 500: 2,888.92, +1.03 (+0.04%)
NYSE Composite: 12,990.10, +37.80 (+0.29%)

Monday, April 30, 2018

Fearless Rick Called The Bear Market; Contributing To A Fund? You Are A Bag-Holder

There are very few people who ascribe to the discipline of Dow Theory.

I, Fearless Rick, am one of them. I am also the only person I know who has read Adam Smith's "The Wealth of Nations," and I am currently re-reading sections of that lengthy tome because it's important to understand.

I'm making these statements not to blow my own horn, but to point something out that readers of this blog and the millions of non-readers should acknowledge.

When I wrote this post on April 9, I had complete confidence in what I was delivering. There were no caveats, what-ifs, or other murky scenarios by which I could hedge my declaration that the bull market in stocks was over and that the next 18 months to three or four years would be losers for stock holders.

It's nearly a month later - and three months since the Dow Jones Industrial Average topped out at 26,616.71 (sorry, that number has been hard-wired into my brain) on January 26 - and nothing has changed. Stocks are still hovering between their 50 and 200-day moving averages. In fact, since the Dow Transports confirmed the bear market, the Dow Industrials are up - as of today's close - a whopping 184 points, a gain of less than one percent over the past 15 trading days.

Thus, I am here to say that it sure looks like I nailed it, called it, that I'm absolutely right. This is a bear market, and it will be a bear market until the Dow Industrials find some bottom and the Dow Transports confirm the primary trend change back to the bullish side.

And I will tell you when that happens and not a moment sooner.

I'm pointing this out because I've grown a little bit weary of toiling in obscurity while outright frauds like Dennis Gartman get to bloviate on CNBC in stultified language how "we" erred on the bullish side, or how he's "long gold in yen terms," or other such nonsense. He is getting paid to tout garbage. I get nothing, not even faint praise, when I'm absolutely right, 100%.

OK, so maybe I'm having a little hissy fit here, but I'm not going to lower my voice, nor am I going to stop speaking my mind, making my calls and writing this daily blog. My reward is out there somewhere, I just hope I get some of it before I get to heaven.

As for today's action in the markets, it was the same old saw that I've been commenting upon in previous blogs: up at the open, then a long, slow decline into the red, a typical and obvious chart pattern that the mainstream media will not ever acknowledge because they and their Wall Street banker masters want you to continue contributing to their ponzi schemes, at your own peril.

Fund holders will be the eventual bag-holders of this bear market. They'll lose anywhere from 30 to 60% of their portfolio if they don't reallocate their investments out of growth stocks and ETFs and into something more sustainable, whatever that may be. Bonds are probably a good spot as yields are rising. Commodities may not be bad, depending on the asset mix. Cash is more than likely to be king. You can send me some by clicking here.

We are entering a period in which it is more important to preserve capital than risk it and hope for gains. Hope is not an investment strategy. Watching your magic fund sink month after month is not pleasant, and being a bag-holder while the smart money runs for the exits is not what any rational person would do.

As anyone can clearly see, after taking losses in February and March, the Dow Jones Industrial Average finished with a gain of 50.81 points. That's not a gain, that is a rounding error, a pimple, a dot. It didn't even beat inflation. You lost money over time.

Get out, reallocate, or die.

Dow Jones Industrial Average April Scorecard:

Date Close Gain/Loss Cum. G/L
4/2/18 23,644.19 -458.92 -458.92
4/3/18 24,033.36 +389.17 -69.75
4/4/18 24,264.30 +230.94 +161.19
4/5/18 24,505.22 +240.92 +402.11
4/6/18 23,932.76 -572.46 -170.35
4/9/18 23,979.10 +46.34 -134.01
4/10/18 24,407.86 +428.76 +294.66
4/11/18 24,189.45 -218.55 +76.11
4/12/18 24,483.05 +293.60 +369.71
4/13/18 24,360.14 -122.91 +247.80
4/16/18 24,573.04 +212.90 +460.70
4/17/18 24,786.63 +213.59 +674.29
4/18/18 24,748.07 -38.56 +635.73
4/19/18 24,664.89 -83.18 +552.55
4/20/18 24,462.94 -201.95 +350.60
4/23/18 24,448.69 -14.25 +336.35
4/24/18 24,024.13 -424.56 -88.21
4/25/18 24,083.83 +59.70 -28.51
4/26/18 24,322.34 +238.51 +210.00
4/27/18 24,311.19 -11.15 +198.85
4/30/18 24,163.15 -148.04 +50.81

At the Close, Monday, April 30, 2018:
Dow Jones Industrial Average: 24,163.15, -148.04 (-0.61%)
NASDAQ: 7,066.27, -53.53 (-0.75%)
S&P 500: 2,648.05, -21.86 (-0.82%)
NYSE Composite: 12,515.39, -78.64 (-0.62%)

Friday, February 9, 2018

The Gartman File (It's about time this fraud was exposed)

Well, after publicly calling out Dennis Gartman, celebrity investment advisor and frequent guest on CNBC, and trying to sign up for his newsletter (, Money Daily editor Fearless Rick has received no response.

Now, maybe it's because the people at The Gartman Letter are really, really busy, tracking stocks and currencies and ETFs and what not, though that's a serious doubt. It would make more sense to believe that Gartman is indeed lying - to his subscribers, primarily - about his year-to-date (as of March 10) performance of 12.3% and outperforming the S&P by 14%, especially after digging into Mr. Dennis Gartman's history.

On March 29, 2016Gartman "admits" that he's up 8.2%.

At one time, Gartman was pegged to manage an ETF for Horizons, a Canadian-based investment firm with various funds and ETFs under management. Specifically, the fund was known as the Horizons AlphaPro Gartman ETF, which was founded in March 2009 (perfect timing, being that was the market bottom), and went out of business four years later, on March 22, 2013.

Gartman, expert trader and analyst he claims to be, managed to lose money for the ETF and its clients while the S&P was up something on the order of 132% (from about 670 to roughly 1550).

Here's an article from the UK's Guardian (note: no mention of this on CNBC or any other US news media), published just before the AlphaPro Gartman ETF closed its doors at 7.90 per share, after opening four years earlier at $10.00.

But the Gartman ETF, named after advisor Dennis Gartman, ubiquitous author of the Gartman Letter, an investment advisory, couldn’t harness the benefits of its fortunate timing. The fund went public at $10 a share. Those same shares now fetch around $7.90.

More astonishing is that this closed-end fund actually saw the equivalent of massive redemptions. That’s unheard of in the closed-end world. With the asset base, and therefore fees, down sharply, it’s no surprise that Horizons Alphapro has decided to shut the fund down next month.

Here's an earlier article on Seeking Alpha, (June 23, 2011) that notes the fund had done OK for some time, but as of the article's writing, was down 7.7%.

Here is a rather humorous note from Peter Grandich, on Gartman's performance with a chart comparing his fund to the price of gold.

Nowhere to be found on any of Mr. Gartman's various postings and appearances are mention of his Hedge Fund, formed in August of 2009, as the River Crescent Fund (apparently named for the street on which he lives and likely does business from, in Suffolk, Virginia). At the time, Gartman was looking to raise the modest sum of $200 million from investors, and, according to his SEC filings, would accept a minimum of $5 million for starters.

Apparently, anybody with five million bucks didn't need Gartman's advice, because since its inception, there's been no news, no investments, no nothing, except for a lonely SEC filing. That's probably a good thing for most investors.

So, what does Gartman manage today, after failing miserably during one of the great bull markets of all time? According to sources, he manages his own retirement fund. And that's the one he claims is up 12.3% on the year, while the stock market was beaten down severely in January and early February, and gyrating in negative territory for the better part of the past month.

Essentially, from March 2009 through March 2013, Gartman should have had worn disclaimers every time he appeared on CNBC. whether he was or not is a question for the way-back machine. Certainly, there are clips from that time period and Money Daily will investigate further. Oddly enough, no mention is made of Gartman's failure with the AlphaPro Gartman EFT on his official CNBC biography.

Here's a particularly bad call, when Gartman said he was getting out of stocks in August of 2012, just prior to the Fed's launch of QE3, a mammoth stimulus, less than a month later.

Also, as far as can be discerned, Mr. Dennis Gartman is neither a registered equity trader, a member of FINRA, nor a futures trader (since 2005). Nor is Mr. Gartman a registered investment advisor.

The only conclusions one can reasonably assume is that Dennis Gartman, being well past his prime, is living off the $50 to $100 per day he makes appearing on CNBC and whatever meager earnings he derives from his newsletter.

Speaking of his newsletter - which I have never seen and doubt ever will as my request on his website has not elicited so much as a response - here are a few reviews. They're generally unflattering, again, begging the question as to why the clownish Gartman is even on CNBC at all.

Updating on April 21, 2016, Gartman says he likes Alcoa (AA) and Gold in Yen or Euro terms. Naturally, as soon as he had finished his on-air mouthings, gold fell $20... in US dollar terms, of course. As for the Alcoa call, it's a pretty safe one, since AA has been as high as 17.75 (November, 2014) and, recently, down to a multi-year low in January of 6.12 (intra-day). Calling it a buy around $10 a share isn't exactly rocket science. Gartman may actually have a winner here, but it won't be much of one.

UPDATE: Gartman has gone from bearish (in light of a face-ripping 200-point rally on the Dow, May 24) to bullish in 24 hours. This is the typical Gartman flip-flop and more evidence that he's a complete buffoon and plays with imaginary money.

What a clod!

Wednesday, March 16, 2016

FOMC Leaves Rates Unchanged, Turns More Dovish; Wedbush: Stocks Crash If Trump Wins

Stock junkies got their fix on Wall Street today, as the FOMC not only kept the federal funds rate unchanged at 1/4 to 1/2%, but reversed course on their planned four rate hikes in 2016, reducing the outlook to two, which, in the nuanced parlance that can only come from crony central bankers, means one more rate hike in 2016, likely not until September, at the earliest.

Talking heads from the various analyst camps spoke of a potential June hike, though, judging from the Fed's past actions, later, rather than sooner, would be the more likely timing. With US general elections coming in November, the Fed - no longer an altruistic entity, but a purely political one - a September rate cut would produce maximum chaos, which is surely the ongoing plan.

Not to put too cynical a spin on it, but the Federal Reserve has become completely politicized under Janet Yellen, with plenty of assistance and guidance by the mother hens which dominate policy from the White House. Employing high-sounding verbiage and the trappings and aura of majesty, the Fed has managed to hypnotize global markets and US citizens with their incredible blend of experimental policy and garbled, mangled language.

What the Fed has accomplished is nothing more than a furtherance of the ongoing wealth transfer from the distressed middle and lower classes to the uber-wealthy, while shutting out innovation, creativity and entrepreneurial spirit.

In essence, they are the ultimate destroyer of the American economy via globalist intentions and actions.

With their latest salvo of lick-spittle jawboning, they perpetuate the counterfeit of the US dollar and the fraud on savers which began in earnest with the financial collapse in 2008-09.

Stock promoters couldn't be happier, sending the major indices to their highest points since early January. With no impediments standing between them and median price-earnings ratios approaching pre-1929 levels, stocks are poised to completely erase the losses incurred through the first six weeks of the year.

With today's close, the Dow and S&P are within one strong day of getting even for the annum; the NASDAQ has a little more work to do.

December 31, 2015 closing prices:
Dow: 17,425.03
S&P: 2,043.94
NASDAQ: 5,007.41

Today's Fed-jacking:
S&P 500: 2,027.22, +11.29 (0.56%)
Dow: 17,325.76, +74.23 (0.43%)
NASDAQ: 4,763.97, +35.30 (0.75%)

Crude Oil 38.49 +5.92% Gold 1,264.00 +2.68% EUR/USD 1.1227 +1.08% 10-Yr Bond 1.9380 -1.07% Corn 368.25 -0.07% Copper 2.25 +0.94% Silver 15.64 +2.48% Natural Gas 1.87 +0.97% Russell 2000 1,074.51 +0.74% VIX 14.99 -10.99% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.79% USD/JPY 112.5475 -0.53%

In what has to be the #1 hit piece on Donald Trump from the Wall Street crony capitalists - via Yahoo! and CNBC, Wedbush's director of equity sales, Ian Winer (shouldn't that be I'm a Whiner?) says stocks will crash 50% if Trump is elected president.

Here's a link to the article and video (and some easy comments), and if you just want the video, go here!

CNBC, the #1 financial bull--it network, doesn't want to mention that stocks should fall 50% anyhow, and the entire economy will be gutted if Hillary Clinton or Bernie Sanders wins the election.

One of the better comments, by commentator takebreathandthink:

It's true, the markets will crash 50%. Also, the seas will turn to blood, meteors will rain down from the heavens, swarms of locusts will kill all of the crops in the world, every volcano will erupt, earthquakes will rip apart the continents, and the first born of everyone in the world will die (thank God I'm the youngest in my family).

Inquiring minds want to know why Mr. Winer didn't call for a 60% or 80% crash. After all, if you're going to trash someone, why go just halfway?

Vote Trump. Wall Street hates him.

Tuesday, March 8, 2016

US Stock Markets Are Massive Frauds, So Are Banks, How About Investment Advisors?

Thanks to frequent articles on Zero Hedge, Money Daily has been entertained by following the investment "wisdom" of one Dennis Gartman, a regular contributor on CNBC, especially on the show, Fast Money.

Now, not everybody has done well this year, but according to his own words, Mr. Gartman claims to be up 12.3% year-to-date. See below (and the original quote on ZH):

For those who wish to follow our progress, we are up 12.3% for the year-to-date, outperforming our International Index rather pleasantly and outperforming the S&P too by 14.4%. We have been quite lucky thus far this year. We are simply hoping that our good fortune thus far obtains through the remainder of the year. If we continue to “Do more of that which is working and less of that which is not”… perhaps our most important Rule of Trading…

So, after the Erin Andrews $55 million verdict set hair on fire yesterday, editor Fearless Rick sent the following request to

I keep reading that Dennis is up 12.3 to 14% year-to-date, and I would like to know how he’s managed to outperform the markets this year.

Mr. Gartman makes bold statements that affect the thinking of many investors and speculators by his frequent appearances on CNBC.

Essentially, I think he’s a fraud and unless you offer bona fide proof that he’s ahead by what he says he is, I will expose him.

Best regards,

Rick Gagliano
Downtown Magazine

Awaiting a response, or a subpoena. Maybe a drone strike. Stay tuned.

Thursday, April 2, 2015

Stock Indices Displaying the New Minimalism

If not for the power of levitating algos, stocks would have ended the week with losses.

As it is, the major indices end the week (markets closed on Good Friday) with minuscule gains on puny volume, except for the NASDAQ, which actually finished negative for the fourth week in the past five.

Here's how the week shook out:

Dow Ind. +50.58 (0.29)
S&P 500 +5.94 (0.29)
NASDAQ -4.28 (0.09)

... and on the day:
Dow 17,763.24. +65.06 (0.37%)
S&P 500 2,066.96, +7.27 (0.35%)
NASDAQ 4,886.94, +6.71 (0.14%)

For this, we need not one (CNBC), not two (Bloomberg TV), but three (Fox Business) cable networks devoted to stocks?

It would be worthwhile, one supposes, if even one of them told the truth about Wall Street half the time.

These public markets and the networks devoted to coverage of them, are epic fails. The world is rapidly moving beyond their facile facades of importance and heft. Most of the world's population does not own stocks and has no use for massive, unfair, unfeeling corporations and their oligarch-like executives.

Indeed, would half of the Fortune 500 companies in the world fail, markets would clear and more entrepreneurs would take up the slack, having the chance to make an honest living.

Corporations, like the governments which support them, are leeches which prey upon the blood of individuals and communities. The sooner people wake up to the fact that they are strip-mining operations of productive capacity, the better.

Peace. Out.

Friday, February 7, 2014

Fake, Fake, Fake Rally After Non-Farm Payroll Jobs Disappointment

With baited breath, the world awaits the January non-farm payroll report, and, when it is released, and it is far worse, far weaker than expected, stocks go straight up.

Yes, that's exactly what happened. Yes, it defies logic. NO, we're not buying it.

Just in case anybody hasn't noticed, banks, brokers and high government officials have variously been accused - and some even admitted (though untried and none convicted) - of manipulating Libor rates, FX markets, precious metals, mortgages, commodities, municipal bonds and probably every other financial asset where a market is made.

So, should it surprise anyone if stocks are manipulated, rigged, fixed, flogged, whipped and played to the whims of the rentier class?

No, it certainly should not.

While the handwriting is plain as day on the Wall Street walls, scrolled in the signature style of the PPT.

When the announcement was made at 8:30 am ET Friday morning, that the US created a mere 113,000 jobs in January - after posting a horrifying 74,000 (upgraded to 75,000 this morning) for December - stock futures headed due south, sending the implied opens for the major indices to morning lows.

However, within minutes, those losses in the futures markets were wiped away, as the futures galloped up, up and away, pointing to a counterintuitive higher open for US markets.

The Dow, together with Thursday's vapor ramp, put in the best two-day performance since October, and US markets still haven't had a 10% correction since August of 2011.

Apparently, one should believe that the lower jobs numbers are somehow good for the economy, in that the Fed may begin to "un-taper" their recent tapering of bond purchases and bring the legendary punch bowl back to the Wall Street jubilee, where the connected truly do get "money for nothing" and the chicks (and coke) for free.

Apparently, one should believe that $100-per-barrel crude oil and $3.50-4.00-a-gallon gas are good for the economy.

We wisened investors should also believe that gold is permanently priced at $1250 per ounce, silver at $20, all mortgage-backed securities are worth 100% of their par value, real estate never goes down, Janet Yellen and the rest of her Fed brethren have the best interests of the US citizenry at heart, pigs fly and flying unicorns that poop rainbows are real and are stabled in the basement of the Mariner-Eccles building.

We should embrace a president who openly lies, a congress which will not impeach, a spy agency who reads this, knows you are reading it, listens in on everything, everywhere, all the time, a steadily-declining median household income even in the face of the top 10% making more than ever, part-time jobs replacing full-time ones, taxes that only go up, regulations on everything and penalties for anything not covered by regulations.

It's all good, all the time, even if you're losing your home, having your kids taken from you and starving to death. At this pace, as the US economy plunges even deeper into depression than it already has, stocks should set all-time highs endlessly, without pause, forever.

For the record, Money Daily will stick to its call made days ago, that the market has turned from bull to bear, be proven wrong, but understand that nothing is really as it seems. As conditions in the real world worsen, they'll only get better on Wall Street, in Washington and on the paper facade that is CNBC and Bloomberg. Buy it, own it, be it.

Good is evil. War is peace. Love is hate. Stay short and get slaughtered. After all, if Wall Street doesn't take your phony paper money, Washington will.

Emerging market economies will always be emerging, and never become "developed" even if their GDP is larger than that of all the developed nations combined. And, besides, they don't matter.

George Orwell would be proud.

We have always been at war with Eastasia... or Eurasia.

DOW 15,794.08, +165.55 (+1.06%)
NASDAQ 4,125.86, +68.74 (+1.69%)
S&P 1,797.02, +23.59 (+1.33%)
10-Yr Note 100.57, +0.44 (+0.44%) Yield: 2.68%
NASDAQ Volume 1.92 Bil
NYSE Volume 3.75 Bil
Combined NYSE & NASDAQ Advance - Decline: 4216-1466
Combined NYSE & NASDAQ New highs - New lows: 141-44
WTI crude oil: 99.88, +2.04
Gold: 1,262.90, +5.70
Silver: 19.94, +0.008
Corn: 444.25, +1.25

Tuesday, December 10, 2013

Another Dismal Day in the Dumps for Stock Owners

Certainly, nobody is going to feel sorry for the Wall Street lemmings, vultures and whales for another losing day on stocks. After all, the major averages are up more than 25% on the year and a good number of individual issues are up much more than that, many having doubled in price over the past 48 weeks.

So, excuse us if we cry crocodile tears for well-heeled investors and speculators.

There is, however, a little bit of a problem in the markets, and it is completely and everlastingly tied to the Federal reserve and their Zero Interest Rate Policy (ZIRP) and continuing quantitative easing (QE), about which there is much debate, constrnation and confusion.

The final meeting of the year for the FOMC is slated for next Tuesday and Wednesday, and, while nobody in their right mind expects this august body to announce any rate policy changes, there is the small matter of decreasing the amount of securities the Fed is buying every month (QE) from the current $85 billion to something less than that, otherwise known as "tapering."

CNBCs Steve Liesman, who has a pipeline directly to and from the Fed, announced today that tapering would be announced at the December meeting. That news, and the final acceptance and future implementation of the Volker Rule, sent stocks backpedaling from the outset. The Volker Rule, in essence, disallows banks from engaging in speculative trading with depositors' money, something the various agencies feel was responsible for at least a part of the financial crisis of the past five years.

The rule puts severe restrictions on what banks can and can't do in terms of proprietary trading (i.e., speculating), but it is dense, long, deep, and riddled with potential loopholes for crafty lawyers and bankers to slither all kinds of nefarious doings through. The Volker Rule document - three years and 585 pages in the making - is, in reality, nothing more than a full-employment bill for litigation attorneys. Bully for them.

QE, and, more specifically, the tapering of QE, is another animal altogether. The Fed has been jawboning about the possibility of scaling back their bond purchases - $45 billion in treasuries and $40 billion in MBS - since May, with varying degrees of success. Wall Street banks, being the main beneficiaries of the program, would like the policy to extend to infinity and beyond, though they know in their dark heart of hearts that it must come to some kind of conclusion. The US economy cannot be force-fed money by the central bank forever.

Besides the program being excessively beneficial to banks and somewhat harmful to small businesses, consumers and emerging market nations, there is another problem that the Fed may never have considered. Due to their monopolizing of the MBS and treasury markets, the available bond issuance is dwindling, so much so, that the Fed may have no choice but to wind down such programs.

The other side of the equation is such that the Fed has so far crowded out potential bidders that there may not be many who actually want to participate. Thus, many in the bond world see even a slight decrease of buying by the Fed as a potential for higher interest rates, including interest on government debt itself, which is already a large portion of the Federal budget but could grow into a behemoth should the federal government have to begin paying back interest at higher and higher rates.

These are the unforeseen, though somewhat predictable, ramifications of the Fed's actions, actions that forestalled an implosion of the financial system and the insolvency of many of the world's largest financial institutions, dating back to the halcyon days of 2008 and $800 billion in TARP money and then-Fed Chairman Hank Paulson holding a gun to the economy's head.

So, Liesman may be bluffing at the behest of the Fed, or he could have just issued the warning shot to the markets that the plundering of assets with free money is about to come to an end.

The signs that the policy has run its course are profligate: record art and collectible car auctions, record high-end real estate prices, record stock prices.

Enough is enough. The party is about to come to a crashing, cataclysmic conclusion, and as cataclysms usually are, this one is not likely to be pretty.

Technically speaking, the advance-decline line deteriorated again today, the gap between new highs and new lows continues to show signs of shrinking and potentially flipping, and outside of Friday's massive vapor-rise, stocks have fallen every day since Thanksgiving.

The good news (for some) is that commodity prices took a lift today, with silver and gold leading the way.

DOW 15,973.13, -52.40 (-0.33%)
NASDAQ 4,060.49, -8.26 (-0.20%)
S&P 1,802.62, -5.75, (-0.32%)
10-Yr Note 99.43, +0.37 (+0.37%), Yield: 2.80%
NASDAQ Volume 1.71 Bil
NYSE Volume 3.07 Bil
Combined NYSE & NASDAQ Advance - Decline: 2115-3553
Combined NYSE & NASDAQ New highs - New lows: 206-113
WTI crude oil: 98.51, +1.17
Gold: 1,261.10, +26.90
Silver: 20.32, +0.614
Corn: 436.00, -2.00

Monday, October 7, 2013

Government Shutdown Day 7: Debt Ceiling Begins to Take Precedence; Silver-Corn Trade Plummets

Remember a few weeks ago, when everybody (including Money Daily) was saying that the government wouldn't shut down? And then, when it did, all the pundits and "important" people saying it would only last a day or two?

Well, those predictions were all wrong. Now, what we're hearing is that the shutdown (which isn't really a shutdown, because 83% of the federal government is up and running) will meld into the debt ceiling deadline, which is October 17, but, but, but, some of the same predictors from before are now saying that there's no chance the politicians won't have a deal on the debt ceiling, or that the government won't go into default.

Wrong, wrong, wrong. The two sides are as far apart, ideologically, as they were a week ago, two weeks ago, two months ago, plus they have the added kicker of ObamaCare, the federal heath insurance program this is largely a fiasco of proportions only the federal government could accomplish, the main website for signing up only partially-functional, replete with glitches, shutdowns, "waiting rooms," and other assorted disasters. It is undeniably the worst rollout of any federal program in living memory (*some of our editors are pretty old, but don't predate WWII).

Imagine if this government were in charge of planning and executing D-Day, the invasion of Normandy which eventually resulted in ending World War II? Hitler would have won, after having laughed his tail off at our incompetence.

So, think that the US government won't violate its citizens again by exceeding the deadline for raising the debt limit? Think again. They've already done so. Treasury Secretary Jack Lew has been employing "extraordinary measures" - that's Wahington-speak for raiding the pension funds of federal employees - since mid-August and those funds are running out fast.

If the government doesn't raise the debt limit by October 17, nobody will notice at first, except maybe some of those future federal pensioners, whose trust funds would remain empty and funded only at the behest of congressional appropriation prioritization. In other words, federal employees might end up without pensions - or with greatly reduced pensions - should the US decide that their funding is not a top priority. Suppose there's a war, a natural disaster, or other unforeseen event that would require quick funding by the government? What might happen to those unfunded pensions?

Of course, most people see that condition as far-fetched, but, in reality, it is closer than one would want to believe. The various federal employee trust funds have already been drained, just like Social Security and Medicare, each of which poses an even more serious, existential problem than the current government funding issues.

So, eventually, all of this will be resolved, either by wise political will or abject bungling and failure, which is what we have now. Anyone even remotely believing that our current crop of grade B politicians will do anything more than apply remedial, short-term fixes to long-term problems is kidding themselves and not approaching the situation with the required seriousness.

The US government, because of 100 years of debt servitude to the Federal Reserve, willful neglect of fiscal prudence and outright incompetence has been pushed to the brink of disaster, a disaster which took decades to create, but which can come crashing down in a matter of days, and those days are numbered.

Despite the various voices in the media - especially on CNBC - who publicly appear to be not at all concerned about the government shutdown and debt ceiling issues, are privately fearful that the politicians are either inept and incapable of fixing the mess they've created or have planed the entire charade all along.

We will find out soon enough.

As for the public markets of the financial world, a state of semi-paralysis has taken hold. The usual buy-on-the-dip screamers have been silenced, now merely whispering about possibly buying a few selected stocks, as volume - already at lowered levels - has cratered, the result of relentless stock buybacks over the past four years and a market juiced by the funny money of QE and ZIRP from the Federal Reserve. There's less stock available to purchase, and most of it is overpriced, with average P/E ratios in the 16-17 range, a touch high for an economy embroiled in a severe recession or possible depression.

Since the government shutdown began officially on Tuesday, October 1, the Dow is down 194 points, most of that accounted for just today, and, bear in mind that the Dow kicked out three losing companies and replaced them with high-fliers Goldman Sachs, Nike and Visa just two weeks ago. The usually-ebullient NASDAQ is off by just 1.10 points and the S&P has shed a little more than 15 points, again, most of that being gnawed off today.

What's more worrying for stock junkies is that the A-D line took a severe downturn today, with losers outpacing gainers by a 7-2 margin and the gap between stocks making new 52-week highs and lows was the slightest since mid-August.

Market internals are indicating a degree of concern, but the mouthpieces for financial firms aren't openly expressing of it, yet.

For those taking a more esoteric view, consider the relationship of silver to corn. According to no less an authority as Adam Smith (yes, the one who wrote The Wealth of Nations in 1776), a decline in the real price of corn, expressed in silver (i.e., one could buy more corn for the same amount of silver or could buy the same amount of corn for less silver), is a certain sign of deflation, and that particular metric has been bleeding all summer, as the price of corn has declined while silver - even though its price is substantially manipulated to the downside - has remained stuck in a range of $21-23/ounce.

The reality is that without central banks and their agents stomping down on the price of silver and gold, the deflationists would have an irrefutable argument that the economy of the United States is close to, if not already in, a severe depression.

Dow 14,936.24, -136.34 (0.90%)
Nasdaq 3,770.38, -37.38 (0.98%)
S&P 500 1,676.12, -14.38 (0.85%)
10-Yr Bond 2.63%, -0.02
NYSE Volume 2,676,265,500
Nasdaq Volume 1,452,687,750
Combined NYSE & NASDAQ Advance - Decline: 1321-4288
Combined NYSE & NASDAQ New highs - New lows: 135-67
WTI crude oil: 103.03, -0.81
Gold: 1,325.10, +15.20
Silver: 22.39, +0.634
Corn: 449.25, +6.00

Wednesday, April 17, 2013

Wall Street is Becoming a Falling Stock Zone

Is anyone other than the Fed governors and CNBC hosts convinced that ZIRP and QE aren't exactly working?

For the second day out of the past three, stocks suffered severe, across-the-board losses, extending the pullback that began on Friday.

The worst performing index has been the NASDAQ, which has dropped nearly 100 points since the close on Thursday (1300.18).

Dow stocks, predominated by high-yielding, dividend-producing income companies - the creme de la creme - have fared better, though the index is still down 247 points and there are still two days remaining in the trading week.

While the recent moves may be described as a precursor of the time-honored tradition of "sell in May and stay away," the directionality is troubling, because the US is supposed to be in a recovery.

Not helping matters much are the oddities coming out of Boston in the aftermath of Monday's bomb strikes, and Washington, where packages containing ricin have been showing up with increasing frequency.

Larger issues loom in Europe, where data continues to deteriorate, even in Germany, thought to be the bastion of strength.

Corporate earnings have been less-than-encouraging as well. Today's numbers from Bank of America (BAC) were notably weak, spurring the drop at the opening bell.

Still, the losses have not reached even three percent, so it may well be too early to make a call that direction has changed, though, as has been pointed out repeatedly here and elsewhere, bull markets do not last forever, and this one is heading into its 50th month.

Key data this week has included a wicked drop in the Empire State manufacturing index, from 9.2 to 3.1, a negative reading (-0.2) on CPI for March and a drop-off in building permits, suggesting that the housing sector may not be quite as healthy as the pundits have been preaching.

Volume on the day was particularly heavy, a signal not lost on both bulls and bears; decliners outpaced advancing issues four-to-one; new lows, for the first time this year, superseded new highs, and by a rather large amount, another key metric.

After the bell, both American Express (AXP) and eBay (EBAY) missed gross revenue targets and just barely beat (each by a penny) the per share earnings forecasts.

Commodities continue to be beaten down as deflationary forces appear to be winning at the present time. Depending upon which side you butter your bread, that may be good or bad news.

There is good news in oil, which hit a multi-month low. If prices for crude continue to depress and remain so, it won't be long before driving Americans finally get a break at the gas pump.

Gold and silver continue to be on sale, though shortages in physical metal are widespread and premiums over spot prices are ranging anywhere from 16 to 35 percent. If that condition persists, forget the gold and silver ETFs, they will eventually break down as the backers are unable to deliver physical metal on contracts.

LATE BREAKING: Senate votes down gun control "compromise" measure. Long live the 2nd amendment!
Europe's leading parliamentarian, Nigel Farage:

Dow 14,618.59, -138.19 (0.94%)
NASDAQ 3,204.67, -59.96 (1.84%)
S&P 500 1,552.01, -22.56 (1.43%)
NYSE Composite 8,955.47, -130.96 (1.44%)
NASDAQ Volume 1,889,783,125
NYSE Volume 4,579,846,000
Combined NYSE & NASDAQ Advance - Decline: 1382-5083
Combined NYSE & NASDAQ New highs - New lows: 87-178 (this could be huge!)
WTI crude oil: 86.68, -2.04
Gold: 1,373.10, -14.30
Silver: 23.24, -0.383

Tuesday, March 5, 2013

INEVITABLE: Dow Sets New All-Time Closing High

Without a doubt, this headline news story is about the least anticipated - because it was such a sure thing - of this or any recent year.

With unemployment at 7.9%, 47 million Americans on food stamps and after millions of foreclosures, bank bailouts, company bailouts (GM, Chrysler, AIG, others), a downgrade of the US from AAA to AA+, Wall Street has its new record high.

Big whoop.

That's the good news.

Keeping a level head and household, as prices rise and wages stagnate, that's the tough part. Not everyone in America has participated in this miraculous four year rally off the March, 2009 lows. The main beneficiaries have been the big Wall Street brokerages, which, thanks to the magnanimity of the Federal Reserve - whose balance sheet has more than triple in that time period - were able to at least partially repair their broken balance sheets and claim victory over the evil financial crash.

At this level the Dow Jones Industrials are up a stunning 117% off the lows, as good a period for stocks as ever has been, though one might argue that it was bought on the backs of homeowners, many of whom are still trapped in their domiciles, with prices well below what they owe or what they paid back in the heady days of the early to mid-2000s.

It would be a different story were the US economy growing at a pace of better than two percent - where it's been stuck for these past four to five years, but, realistically, there aren't many Americans who can camly state that they've doubled their net investment value over the past four years. Most of the gains were made on Wall Street or close to it, by the traders, players and hedge funds who expressed their blind faith that the system would not - could not - fail, and dove headlong into stocks.

Bully for them, and may they enjoy their profits. There's absolutely nothing wrong with making money. But, the evidence that the majority of Americans are not participating is clear. Average daily volumes are less than half what they were in 2007, the last time the Dow posted a record close.

There's also the fear that keeps people out of markets. It's no coincidence that after making new highs, stocks have lately had the nasty habit of recoiling and falling back, as was the case in both 2000 and 2007.

So, this may be short-lived if recent history is a guide, or, are we on the path to a new and glorious epoc of American exceptionalism?

One would be hard-pressed to find anyone of that undiluted opinion... except maybe on CNBC or Bloomberg TV, where "guests" are paid handsomely to talk their book.

Buy, buy, buy at the new all-time high?

You're kidding, right?

And, not to rain on anybody's parade, here are the changes to the makeup of the Dow Industrials since 2007.

On February 19, 2008, Chevron (CV) and Bank of America (BAC) replaced Altria Group (MO) and Honeywell (HON).

On September 22, 2008, Kraft Foods (KRFT) replaced American International Group (AIG).

On June 8, 2009, General Motors (GM) and Citigroup (C) were replaced by The Travelers Companies (TRV) and Cisco Systems (CSCO).

On September 24, 2012, UnitedHealth Group (UNH) replaced Kraft Foods (KRFT).

It seems, especially in that September 22, 2008 swap, that some bad was replaced with good. GM was restructured and salvaged by the US government. Citigroup went through a 1:10 reverse split in 2010. Where would the Dow be today, without these changes? Travelers alone is up over 100% since joining the Dow.

And, lest we forget that little thing called inflation, which, experts tell us, has been running at about 2.5% for the past five years, today's record for the Dow is a nominal one, not a real one, and, just to throw some more fuel on the fire, measured in gold instead of dollars, it's not even close. In fact, measured against gold, the Dow has barely budged off the bottom.

It's all a matter of which metrics you want to use.

No matter what, though, let's see how high it goes from here. With the Fed backing it at the rate of $85 billion a month, it should rip right through 15,000 before even breaking a sweat.

Dow 14,253.77, +125.95 (0.89%)
NASDAQ 3,224.13, +42.10 (1.32%)
S&P 500 1,539.79, +14.59 (0.96%)
NYSE Composite 8,978.12, +77.07 (0.87%)
NASDAQ Volume 1,849,814,250
NYSE Volume 3,686,912,250
Combined NYSE & NASDAQ Advance - Decline: 4532-1728
Combined NYSE & NASDAQ New highs - New lows: 688-50
WTI crude oil: 90.82, +0.70
Gold: 1,574.90, +2.50
Silver: 28.60, +0.108

Friday, October 19, 2012

Reality Catching Up to Wall Street on Earnings Misses, Fears

Around June, this author told a particularly self-absorbed, furtive individual that there would be a market "event" shortly before the presidential election, designed to offer the impression that the economy, under president Obama, was failing in multitudinous ways, designed to usher in Mitt Romney as the next occupant of the White House.

Until today, that prediction seemed somewhat unreasonable, as stocks have risen sharply during the summer months, but, as third quarter earnings - in addition to various warnings from the likes of the IMF and World Bank - are proving, the US and global economies are far from what anyone would consider healthy.

Today's sharp sell-off was the product of many misses and warnings by huge multi-national companies that either missed earnings and/or revenue estimates or issued warnings for the months ahead.

Among those companies that fell short of Wall Street's lowered estimates after Thursday's close and prior to Friday's open were McDonald's (MCD), Microsoft (MSFT), Google (GOOG), high-flying Chipolte Mexican Grill (CMG), and General Electric (GE). The misses came behind similar poor showings from Intel (hit a 52-week low today) and IBM, earlier in the week and proved quite a few sell-side analysts correct in predicting that this quarter would be very rough from an earnings perspective.

Truth be told, even those companies beating earnings estimates are not beating by much, with some exceptions, and are generally hitting targets that are lower than the previous years numbers, which, as the market is a continuous-discounting mechanism, means stocks are going in reverse, with earnings falling, not growing.

That alone should explain today's deep, across-the-board, declines, but also brings into question the entire philosophy behind central bank easing and money printing on a global scale. Sure enough, easy money has propped up banks and companies and a multitude of stocks and indices, but the end result of funny fiat money always reverts to a point at which currencies become worthless and derivative instruments, such as stocks, and, further out, bonds, lose value and we could be nearing the conclusion of the failed stimulative experiment that's fixed nothing since the crash of 2008.

Speaking of crashes, today's drop pales by comparison to what occurred 25 years ago to the day, the well-known stock market crash of 1987, when the Dow Jones Industrial Average fell by 23%. It was a seminal market event that will probably (hopefully) never be repeated, as there are supposedly more safeguards and triggers - to say nothing of the PPT - to prevent such a disastrous one-day event.

That is not to say that markets, stocks and indices cannot fall hard over periods of time, though it is far too soon to call today's action the beginning of such a a downward spiral. However, with tech stocks and industrials feeling the heat from investors in an earnings season that has been short on enthusiasm and long on fear, the coming weeks, especially with the November elections as a backdrop, could produce some calamities such as have already been seen in individual stocks, many of which were grossly overvalued and highly speculative, Chipolte and Apple come immediately to mind.

Checking the charts, it's useful to point out that the Dow and S&P broke through their 50-day moving averages and closed just about right on them, a position last seen a week ago, before Monday and Tuesday's "savior" rallies pushed equities back to something of a triple top, which has now broken down in a dramatic reversal. Today's declines on the two indices were the worst since mid-June. Shortly thereafter, both indices progressed above their 50-day MA, but have now returned to the roost, setting up a very unsettling weekend and a potential breakdown on Monday or further on during the week.

As for the NASDAQ, today's worst percentage loser, that index has been screaming red for a month, having busted through its 50-day MA eight sessions ago. Any further deterioration in the beloved NAZ could trigger a serious correction, as it is already down 7% in the past month.

Looking ahead to next week, earnings reports are due out on some big names, such as Cattepillar (CAT), Las Vegas Sands (LVS), Yahoo (YHOO) and Texas Instruments (TXN) on Monday; 3M (MMM), Coach (COH), Facebook (FB) and United Parcel Service (UPS) on Tuesday; and, on Wednesday, Boeing (BA), Eli Lilly (LLY), General Dynamics (GD), Lockheed Martin (LMT) and O'Reilly Automotive (ORLY).

Those mentioned above are but a smattering of companies reporting, in what will be the busiest week of earnings season. CNBC and Bloomberg will be looking for rays of hope, while investors may have a more wary eye toward more companies missing on earnings and revenue.

One economic data point worth noting was existing home sales for September, falling 1.7% to an annual run rate of 4.75 million, well below most estimates.

Until then, the long weekend waiting game, and, on Monday night, the final presidential debate, followed on Wednesday another FOMC rate policy decision, which will probably be nothing more than a formality.

Naturally, there will be the usual can-kicking and posturing from Europe, which still cannot come up with plans for either Greece or Spain, which may or may not be part of the plan to hold off the bad news until after our elections. One can hardly wait.

That is all... for now.

Dow 13,343.51, -205.43 (1.52%)
NASDAQ 3,005.62, -67.25 (2.19%)
S&P 500 1,433.19, -24.15 (1.66%)
NYSE Composite 8,324.14, -118.68 (1.41%)
NASDAQ Volume 2,194,602,500.00
NYSE Volume 3,851,036,250
Combined NYSE & NASDAQ Advance - Decline: 1168-4339
Combined NYSE & NASDAQ New highs - New lows: 166-117
WTI crude oil: 90.05, -2.05
Gold: 1,724.00, -20.70
Silver: 32.10, -0.771

Monday, June 18, 2012

Grexit or Spanplosion, Markets in Flux; Dan Dorfman Dead at 80

This post is dedicated to Dan Dorfman, one of the pioneers and true legends of financial journalism, who passed away Saturday in New York.

The world of journalism should deeply mourn his departure, because Dan was one of the very best and brightest of all time. From his early work at the Wall Street Journal and USA Today through a TV career with CNN and CNBC to his final days with the New York Sun and Huffington Post, Dan Dorfman was always keen to break a story first, never skimping on relevance and factuality.

Throughout his carer, Dan Dorfman was as engaged as he was engaging and entertaining, no small feat, considering the dryness of his main subjects, business and finance.

By comparison, what passes for financial reporting today falls incredibly short of his standards, which he not only set, but owned, in as complete a manner as any writer or reporter could ever be expected. Words cannot fully express the magnitude of this humble man in the craft of journalism, though this brief insight by Joan E. Lappin, CFA, of Gramercy Capital Mgt. is a nice touch.

Godspeed, Dan Dorfman. Rest in peace.

As for US financial markets following the highly-anticipated elections in Greece over the weekend, which solved nothing, they are a shambles. Stocks traded in a dull, narrow range and defied the gravity of the situation in Europe to no small degree.

Bank stocks in Euopean bourses - where it's getting very real - did a seven percent turnabout to the downside, as those on the continent have perception correct: the condition of the Eurozone and the finances of its member states and their banks are in a truly horrific place. Whether Greece departs the Euro (Grexit) or Spain comes completely unglued (Spanplosion), the endgame is mostly at hand, and it's likely too late to save from complete annihilation, which, of course, would constitute a repudiation of trillions of dollars, euros and yen of personal, bank and sovereign debt. A complete reset is in the cards, only a matter of time before the world is thrust into utter chaos, which some say is pre-planned.

Whether the world's central bankers continue to print at full speed around the clock or allow deflation to take full control, the result will be the same, though most people will be barely affected, since everything is relative. $100,000 today could be worth only $15,000 tomorrow, but a new car would cost $3000 instead of $30000.

The world will survive, though the financial system of fiat money, digitized out of thin air, will eventually end, as have all such regimes, schemes and plots.

Until then, we wait and watch as little makes sense and debt piles up higher and higher around the world. There's really nothing to it all, other than to be a good Boy Scout, always prepared.

Dow 12,741.82, -25.35 (0.20%)
NASDAQ 2,895.33, +22.53 (0.78%)
S&P 500 1,344.78, +1.94 (0.14%)
NYSE Composite 7,662.29, -1.98 (0.03%)
NASDAQ Volume 1,583,473,625
NYSE Volume 3,204,991,000
Combined NYSE & NASDAQ Advance - Decline: 3083-2534
Combined NYSE & NASDAQ New highs - New lows: 176-84
WTI crude oil: 83.27, -0.76
Gold: 1,627.00, -1.10
Silver: 28.67, -0.07

Wednesday, March 28, 2012

Are Americans Waking up to Gold?

It's a rare day indeed when Money Daily sources information from CNBC, because the on-air talent are generally stock-pumping cheerleaders for equities, but today's information presented by Steve Liesman, who offered up the results of CNBC's All-American Economic Survey in various spots on the network throughout the day, had heads spinning and eyes and ears popping when he revealed that of the 836 respondents in the survey, 37% found gold to be their preferred investment, followed by real estate at 24% and stocks a distant third, at 19%.

What this says about the stock market and American attitudes towards it partially explains the low volumes that have been a dominant feature for many months, implying (and there are numerous studies to back this up) that individual investors have nearly completely soured on stocks as stable investments due to a variety of factors, including, but surely not limited to, the financial collapse of 2008-09, the flash crash of May 6, 2010, a general distrust of Wall Street and the Federal Reserve and various other market events, such as the recent IPO failure of BATS.

What did not come out of the CNBC segment below, led off by Liesman's comment that he was "floored" by this finding, is that gold (and silver and platinum) are not only tradable investment vehicles that can be instantly redeemed for cash or bartered for other goods and services, but that the precious metals are tangible assets that not only appreciate, especially in light of dollar debasement, but are a store of value and wealth at a time in which there's an oversupply of skepticism pertaining to the management of currencies worldwide and yields on "safe" investments, such as money market funds or Treasuries are returning less than the rate of inflation.

(Note on this video: the first 6:15 covers the gold story; the remainder is on other topics.)

These stunning survey results are indicative of Americans' growing displeasure of a system which they rightly assume is unfairly slanted in favor of Wall Street fat cats and DC politicians, who engage in insider trading and other market-rigging activities with nearly universal disdain for the average American and small investor. It also destroys the notion that Americans are stupid when it comes to investing, as the "muppets," as some Goldman Sachs executives refer to their clients, appear to be more concerned about lasting value rather than quick, day-trading profits.

It was truly a pleasure to watch and listen to the various and mostly wrong CNBC commentators as they scrambled for explanations to somehow blunt the contrarian thrust of the message. Americans are not stupid and they don't like being cheated; there are two good reasons right there why more and more Americans are keeping a safe distance from stocks and Wall Street and putting their investment dollars into tangible assets, like gold.

As for the markets, todays was definitely a "risk off" event, with stocks and commodities both feeling the heat. Of course, in a yo-yo economy such as we have, one day does not make anything even closely resembling a trend, though the losses today and on Tuesday took a lot of the punch out of Monday's rally.

With just two more trading days left in the month and the first quarter, some shaving of profits should be expected prior to what are traditionally strong market up-moving days: the end of quarter "window dressing" by te fund managers expected on Friday and the first trading day of the new quarter, come Monday, April 2nd.

Dow 13,126.21, -71.52 (0.54%)
NASDAQ 3,104.96, -15.39 (0.49%)
S&P 500 1,405.54, -6.98 (0.49%)
NYSE Composite 8,188.34, -51.03 (0.62%)
NASDAQ Volume 1,764,716,250
NYSE Volume 3,854,093,750
Combined NYSE & NASDAQ Advance - Decline: 2033-3584
Combined NYSE & NASDAQ New highs - New lows: 144-46
WTI crude oil: 105.41, -1.92
Gold: 1,657.90, -27.00
Silver: 31.83, -0.78

Friday, January 20, 2012

Nice Day for Dow Industrials, Thanks to IBM; Housing Fix Not In

Stocks continued their happy saunter through the cold of January, with the Dow Jones Industrials posting another nearly-100-point gain, thanks in large part to IBM (up 7.98 to 188.50 (+4.42%) on solid 4th quarter earnings reported after the bell Thursday), which accounted for half of the Dow's gain all by itself.

The other indices lagged far behind the Blue Chips, courtesy of Google's (GOOG) worst earnings miss in six years, reporting a profit of $2.7 billion on revenue of $10.6 billion, well below Wall Street non-GAAP estimates of $9.50 per share versus an estimate of $10.46. Whoops! Shares of the internet behemoth were down 53.58 points, a loss of better-than eight percent.

Two other tech titans - Microsoft (MSFT) and Intel (INTC) - reported excellent quarters, helping to keep the montl-long rally going. The Dow, S&P and NYSE Composite were up each of the four trading days this week; the NASDAQ fell just short, losing 1.63, despite a valiant, last-half-hour rally.

Despite the outstanding gains from the last half of December through today, there are signs of trouble, and the fact that today marked options expiry, may lead to declines next week as more companies report. With just about 20% of the S&P 500 having reported, only 55% have beaten expectations, a ten year low. The average for the past ten years has been that 62% of companies beat street estimates. Considering that the big banks have all reported already - and all of them matched or beat - this does not bode well for the bulk of reporting companies which are set to report over the next two weeks.

Meanwhile, the Dow is back at levels last seen in mid-July, today's close just missing (four points) making a six-month high. It will be interesting to see if the Dow can crack through next week and continue onward toward exceeding the 2011 high of 12810.54 made on April 29. Yes, it's getting a bit frothy. The word for next week is likely to be "overbought," as in "we're market pumping day-traders who don't give a hoot about fundamentals, just making a profit."

So far, the advance-decline and new highs-new lows indicators are showing no sign of an impending correction, but, with the Dow up nearly 1000 points in just the past four weeks, a short correction would be something a healthy market would fully appreciate.

One other item that may be a canary in the coal mine is the nice rise in gold over the past few weeks, including a healthy advance today, and, finally, silver caught a bid over the past few sessions, finally breaking and holding over the artificial resistance at $30/ounce.

On CNBC today, the network featured a series of reports on housing, calling it, somewhat inappropriately, "The Big Fix." Hottest among the topics was the government plan to sell off Fannie Mae and Freddie Mac's inventory of foreclosed homes (REO) to investor groups which will turn these single-family homes scattered across the country into rental units.

As is usual with government's half-baked plans, there are a rash of questions and arguments against, primarily centered around the whole fairness issue of kicking families out and then reselling - at what should be huge discounts - to well-heeled investors more concerned with turning profits than restoring blighted neighborhoods. The plan is still in the formative stages, but there are indications that the government will allow the investors to rent to whomsoever they please, which would include welfare and other social program recipients, meaning that homeowners ought to be on guard for the ghetto-ization and balkanization of their McMansion neighborhoods, such as is the case in other socialized nations, notably France, where the ghettos are in the suburbs, far from the uber-rich in the well-maintained cites.

One other problem is that the banks - if they actually do the right thing and write down these loans - will be facing far larger write-downs on bulk sales than anticipated. Since the US economy has been predicated for the past six years on keeping the banks free from losses, the government plan looks like a classic election-year crash and burn before it even gets going.

Dow 12,720.48, +96.50 (0.76%)
NASDAQ 2,786.70, -1.63 (0.06%)
S&P 500 1,315.38, +0.88 (0.07%)
NYSE Compos 7,829.34, +9.97 (0.13%)
NASDAQ Volume 1,979,837,250
NYSE Volume 3,911,913,250
Combined NYSE & NASDAQ Advance - Decline: 3289-2274
Combined NYSE & NASDAQ New highs - New lows: 182-26
WTI crude oil: 98.46, -1.93
Gold: 1,664.00, +9.50
Silver: 31.68, +1.17

Monday, October 24, 2011

Euro Rising Amid Escalating Debt Crisis; Gold Worth $11,000/Ounce?

There are now differing views over the ongoing European debt crisis, which made Monday a banner day for the pair trade of short US dollar/long US stocks.

The view widely held by Wall Street influencers is the one promoted by the well-compromised "news" organization, Reuters, a proxy for the Wall Street/Washington oligarchy currently under attack by the Occupy Wall Street and other, spawned protest movements. Reuters reports that there is growing confidence that the EU leaders will forge a broad agreement with which to deal with the Euro-zone's debt issues by Wednesday of this week. Such wishful thinking pushed the Euro to a six-week high against the dollar, sparking the rally in US equities on the cheaper - for now - US dollar.

Alternately, NPR, in the embedded radio clip below, headlined its story Agreement On Debt Crisis Eludes EU Leaders, citing differences in approach by the various leaders amid calls for austere cutbacks in Italy to stem its own set of problems.

Realistically, nobody has a very good handle on where this is all headed, though widespread agreement seems a long shot. Greece has needed two rounds of bailout money already, and the country has been forced to suffer through doubt, derision, protests, strikes and riots in recent days as the government agreed to severe austerity measures, cutbacks in services and layoffs to help the government avoid running out of money.

Some kind of European plan is supposed to be released to the public by Wednesday, so there's probably no reason for stocks or the Euro/Dollar trade to deviate much until then. Details of the plan have been hashed about, though nothing is for certain except that it will include bailout money for some of Europe's largest banks (called: recapitalization) and some funding and dispersal mechanisms for the EFSF, the newly-created sovereign debt fund that is supposed to provide much-needed liquidity to the Euro system. Of course, the Euro money machine is beginning to look a lot like another global Ponzi scheme, with indebted countries providing funding through various channels to even-worse indebted nations like Greece, Ireland, Italy, Spain and Portugal.

Anyone with a view of history longer than his or her current lifespan might have a better idea of where the Greek crisis is headed and it is most certainly not a happy place. Usually, when governments spend or steal too much of their citizens' money, overtaxing and under-delivering on promises and services, it means the end of the reigning regime, either trough violent overthrow or peaceful negotiation, though the former, albeit it's bloody features, has been more successful through the pantheon of history in securing the absolute rights of individuals while removing parasitic forces of government from the inflicted nation.

In Greece, it appears that the rowdy protesters have slowly but steadily been gaining ground and, with the emergence of Occupy Wall Street and other such groups, populist movements seem to be spreading faster than government efforts to defame or derail the groups. One interesting development was Michael Moore's appearance on CNBC this morning.

While the interview was not a first for Moore on CNBC, the filmmaker and champion of the "little guy" was allowed on air for over 11 minutes, and made some strong points on the inequitable economic situation facing all but America's wealthiest people. The piece is well worth the viewing time, as Moore made his case to Carl Quintanilla, a reporter and anchor who might just have something of a conscience.

One other story of note on the day is James Turk's elegant arithmetic in making his case why gold should be $11,000 an ounce. (PS: at a 16:1 gold:silver ratio - the traditional ratio - that would make the current silver price of around $31 per ounce, seem even more ridiculous. Something along the lines of $687/ounce would be appropriate.

Dow 11,913.62, +104.83 (0.89%)
NASDAQ 2,699.44, +61.98 (2.35%)
S&P 500 1,254.19, +15.94 (1.29%)
NYSE Composite 7,547.63, +116.53 (1.57%)
NASDAQ Volume 1,988,391,000
NYSE Volume 4,291,371,500
Combined NYSE & NASDAQ Advance - Decline: 4660-1018
Combined NYSE & NASDAQ New highs - New lows: 125-24
WTI crude oil: 91.27, +3.87
Gold: 1,652.30, +16.20
Silver: 31.64, +0.45

Friday, October 29, 2010

More Non-Stop Nonsense in No-Move Market

What a way to end the week. First the government announces 3rd quarter GDP coming in at 2.0%, above estimates of 1.7%. Then they have this phony terrorist package from Yemen BS and that's all anybody can talk about on CNBC.

The whole mess is just so much baloney, it's truly dispiriting. So much so, that I am just going to copy and paste a comment I left on another blog:

That dipshit CNBC bitch Trish Regan keeps droning on and on about how packages are never inspected. Get ready for major price increases on cross border small packages, already ridiculously high. Just another crack on the back of small business in the name of "security."

This government sucks. Best to just ignore them.

Please don't ever vote again. It does only encourage the ass-holes.

Watch what happens next. More security inside the US, allowing Postal Service to inspect all parcels. I never use UPS - too expensive - but I think you have to bring packages to their offices open so they can inspect them. At least that's how it was in the immediate aftermath of 9-11.

My best guess is that about 15 banks are going under later today and this is their way of hiding the fact that America is Land of the Glee and Home of the Knave, and that your bank will be closed on Monday.

Maybe, if we get really lucky, they'll use this ruse to cancel the elections. Ah, crap, that means we'll have at least another two weeks of those damn political ads.

Crap, crap, crap. Give me Liberty or give me shit. Guess we all are getting it now.

The markets were their usual moribund selves on Friday. Nothing seems to move them any more. For the week, here are the moves on the main indices:

DJIA: HIGH: 11266.30,LOW: 11033.87, TOTAL POINT MOVE (from 10/22 close): -14.07
S&P 500: HIGH: 1196.14, LOW: 1171.70, TOTAL POINT MOVE (from 10/22 close): +0.18
NASDAQ: HIGH: 2516.20, LOW: 2470.12, TOTAL POINT MOVE (from 10/22 close): +28.02 WINNER!
NYSE: HIGH: 7615.23, LOW: 7417.42, TOTAL POINT MOVE (from 10/22 close): -9.56

Obviously, this wasn't much of a week for anyone. If diversified correctly, you may have even lost a couple of dollars. How's that retirement thing working out for you?

If the stock market - once the wonder of the world for its efficiency and ability to fund companies and create wealth - gets any more boring, I may have to take up knitting over blogging. If it were not so sad, I'd laugh. I used to love the stock market when I was a kid. Big companies were the stuff of dreams, of American success and exceptionalism. And now... now the stock market only represents greed, manipulation and the rise of the globalist agenda.

Dow 11,118.49, +4.54 (0.04%)
NASDAQ 2,507.41, +0.04 (0.00%)
S&P 500 1,183.26, -0.52 (0.04%)
NYSE Composite 7,513.35, +8.50 (0.11%)

Despite the squeamish headline numbers, advancers were all over decliners, 3868-2608. New highs bettered new lows, 400-59. Volume remains stuck at disturbingly-low levels.

NASDAQ Volume 2,010,327,375
NYSE Volume 4,128,324,750

Oil dipped 75 cents, to $81.43, but the precious metals were the stars of the day. Gold gained $15.10, to $1,357.60, closing in on record highs. Silver continued its massive build, up 69 cents, to $24.56.

There's usually something behind the phony terrorist "alarm" that has now preoccupied the airwaves. Apparently, the mainstream news media hasn't picked up on the fact the the bulk of Americans don't care or aren't scared any more, unless, of course, new coverage interrupts a sporting event or - God forbid - American Idol.

On that note, go scare some kids this weekend. They deserve it. Boo!

Tuesday, March 9, 2010

Premature Celebration

Yesterday, all anyone could talk about was the one-year anniversary of the market bottom. This was all the fashion on America's financial network, CNBC, where the usual suspect hosts were gushing with numbers and statistics about the "rally" off the bottom from March 9, 2009. Jim Cramer, the Mad Money host and serial bull%*( artist, even adorned his set with a cake replete with candles.

Sad to say, but the celebratory theme was a day early, as today, by most calendars, is March 9, not yesterday, and the market was responsive, at least in the early going, as investors kept shoveling money into stocks, pushing the Dow up 60 points at its zenith.

However, right around 2:30 in the afternoon, some people were apparently having second thoughts, and the rally was truncated, eventually sending all of the major indices briefly into the red shortly after 3:00 pm. Cooler heads, we suppose, prevailed in the end, with stocks finishing with small gains on low volume.

One wonders where markets are headed now that the "recovery" is underway. Or is it? The stock market rally of the past 12 months was built on bailout money, cheap credit and arguably depressed prices. We stand today at something approaching fair value, yet bulls abound. It seems to be something approaching heresy to suggest that stocks should correct, take a breather or cool off in some fashion. That would not please investors, understandably, but these markets have been so hot for so long, values have become distorted and bubbles - those things that caused the '08 collapse - could be developing once again.

We don't have Alan Greenspan around to suggest that markets are experiencing "irrational exuberance." He's been replaced by the scholarly Mr. Bernanke, who's been forced into a no-win condition at the Fed with the federal funds rate at zero and the balance sheet bloated with toxic mortgage-backed securities (MBS) that still nobody wants to own at face value. It's likely that Mr. Bernanke would like to raise interest rates a little bit, but he is so bound to keeping them low and keeping the fledgling recovery going that he dare not make a move, at least not presently. Eventually, however, he must raise rates, and when he does, the chorus of booing and hissing from Wall Street will probably be heard on the Santa Monica Pier.

Of course, now that the double-dip argument has been roundly discredited, nothing could be better for stocks and the economy than a nice, relaxing hiatus. Profits could be taken and reinvested in other companies at lower prices, but that idea is still anathema to those who only know one way for stocks to go... up, up, and away.

Today's brief selling might be a clue for investors as to what lies ahead, not immediately, but maybe four to six months from now. If the economy isn't absolutely humming along by then, there will surely be a sell-off, so, let's make sure the pom-pom waving gets more furious and animated over the coming weeks.

Dow 10,564.38, +11.86 (0.11%)
NASDAQ 2,340.68, +8.47 (0.36%)
S&P 500 1,140.44, +1.94 (0.17%)
NYSE Composite 7,294.02, +1.49 (0.02%)

On the session, advancing issues held sway over decliners, 3631-2870. There were fewer new highs than expected, and fewer than yesterday, though their level remains elevated at 740. There were just 59 new lows, though these numbers may begin to fall into more normal patterns as comparisons will increasingly become less stark. Low volume remains a major issue, today being no exception, though it was better than most recent efforts. There simply is not the same level of participation or enthusiasm as there was prior to the collapse.

NYSE Volume 5,802,183,500
NASDAQ Volume 2,558,147,000

Commodity market did actually act somewhat rationally today. Oil lost half a buck, to $81.37, still overpriced by almost any metric. Gold lost $2.20, to $1,121.80, but silver gained 6 cents, to $17.33.

The paucity of economic data leaves investors with little to trade upon, making major moves in either direction difficult, though the bulls remain firmly in control.

Friday, February 12, 2010

Your Money Is Being Yanked by Insiders

When CNBC's Maria Bartiroma blurts out, "It's four o'clock on Wall Street; do you know where your money is?" the resounding chorus from average Americans (people who work and make between $12,000 and $75,000 a year - about 65% of the population) should be "NO!" because, in reality, you don't.

Think about it. Your money, or what you believe to be your money, is all over the place. You've got some in your pocket, wallet or purse, in a drawer, a piggy bank, maybe buried in the ground in your back yard or stuffed inside a wall in your house. Some of it may be in a coin or stamp collection, or any other kind of collection. some of it is in the bank, some of it is reflected as credit on credit cards, or a home equity loan. Then there's investments, individual stocks, mutual funds, 401ks, Keogh funds, college funds, retirement funds, and so on.

Add to that the promised or held money, as in pension plans, social security, medicare, payroll withholding taxes, money in health care plans, etc., and you can easily understand that most Americans have no idea where their money really is, and, what's worse, who's using it, for what purposes and when. This is what makes investing absolutely the greatest gamble of your life. Playing roulette with real money you depend upon for anything other than fun is simply foolish. If you're a winning investor (about 12% of individual investors over the past 10 years), you may scoff at the tone of this post, but you have to admit that you sometimes have had doubts.

Watching the foolery on Wall Street this week was a real eye-opener. After Monday's sharp sell-off, there were two major gaps of more than 100 points apiece - on Tuesday's open and today's open - Tuesday up and today down, and six separate "pumping" events (three today) which managed to keep stocks in a fairly tight range and close slightly positive for the week. The scorecard still reads: 2 up weeks and 4 down for the year so far, a discouraging sign.

The various gaps and pumps (typified by large advances over a period of usually less than an hour) were all insider-driven, indicating quite clearly that the individual investor was at the mercy of the insiders and professionals. Anybody who made a dime trading this week who isn't wired directly into the Wall Street elite or a broker or trader, is either a genius or extremely lucky. The deck was so severely stacked against the little guy, he didn't stand a chance. while that's usually the case, this week was particularly volatile, a friendly partner of the pros, forcing more trades and more brokerage commissions while the investor is left holding a bag, suitably deflated.

Dow 10,099.14, -45.05 (0.44%)
NASDAQ 2,183.53, +6.12 (0.28%)
S&P 500 1,075.51, -2.96 (0.27%)
NYSE Composite 6,875.18, -23.54 (0.34%)

As if to throw cold water in the face of the market, advancers managed to finish ahead of decliners, 3398-2998, in opposition to the headline numbers and following an early-session trade which saw declining issues beating gainers by a 6-1 ratio. Truly, on the low volume reading, the market was yanked around by inside elements and manipulators. There is absolutely no doubt about it. There were 154 new highs to 59 new lows. Even though the gap continued to expand this week, the high-low indicator is becoming less and less meaningful as the calendar draws closer to March 9, the one year anniversary of the bottom. Stocks making new lows in comparison to last year have to be real stinkers. The high-low indicator may not make much sense as a trend indicator until maybe June or July.

NYSE Volume 5,202,259,500
NASDAQ Volume 2,168,768,250

Commodities did not participate in the rigged equity rally, and suffered nearly across-the-board losses. Crude oil dipped $1.08, to $74.20. Gold slipped $4.50, to $1,090.20. Silver fell 18 cents, to $15.41.

Besides commodities being stuck in a range, stocks, outside stellar performers and outright losers, haven't budged in 4-5 months. The top was really around Dow 10,300, back in early December. The rest of it on the high side was froth, or waste. The key numbers now are 10,050 and 9900 on the Dow, both of which should be tested within days. With all the turmoil in world markets - Greece, China, Dubai, elsewhere - the major indices are being held together by raw nerve. The inside game is still playing the "recovery" card until they're good and ready to dump out of all positions in a radical race lower.

They may all exit at once or continue the slow, Chinese water torture treatment of two days up and three days down for weeks and weeks, but, unless there's clear resolution on jobs (there aren't any new ones being created) and foreclosures (they continue to rise, year over year), the trend remains down. That's the bad news.

The good news is that there are only 36 days until Spring, baseball players report to Spring training next week and there are exceptional bargains in arable land, tools of trade and certain transportation devices (bicycles are cheap and riding them is very health-promoting). Seeds are - pardon the pun - dirt cheap.

Stop investing and start growing.

Wednesday, October 21, 2009

Where the Volatility Came From

Stocks did a complete about-face in a late-day sell-off that had investors scratching their heads for explanation. From a high of 10,119 on the Dow, that index closed near the low of 9945, for a full-day swing of nearly 175 points. It was the most dramatic turnaround to the downside since, well, last October.

At issue is how the actual decline came about. Stocks had been drifting lower since making what would be the highs of the day around 10:45. But, at 3:15, things really got interesting, as the Dow quickly erased a 35 point gain and turned negative, extending those losses into the close with no escape mini-rally.

Some said that a sell recommendation by analyst Dick Bove on Wells Fargo, which had reported before the opening bell, caused it and all of the bank stocks to sell off. Others cited the Obama administration's directive to cut executive pay for financial firms which had accepted TARP funds - Bank of America, Citigroup, Wells Fargo, Morgan Stanley, JP Morgan Chase, others - by as much as 90%, as the culprit. The most succinct explanation came from CNBC's Fast Money contributor Tim Seymour, founder and Managing Partner at Seygem Asset Management, who opined that program trading moved the market in such spectacular fashion. Calling them "the machines," Seymour reiterated his position that the move was technical and that the S&P would be on the rise on the morrow.

While it's plausible that the move was "machine-made," because the move was so sudden and on such high initial volume, it's not easy to accept Seymour's recipe for tomorrow's trade. We'll all know whether he was prescient within 16 hours. In any case, it was an ugly end to a few days of trading that has produced a mid-week loss overall. Today's full-trip stock move produced a double engulfing day, taking out the highs and lows of the previous two sessions, and was close to being a triple or quadruple engulfing move, as it nearly took out the lows of Friday and definitely engulfed all of Thursday's move from last week as well. That is not an encouraging sign for anyone who is long, which is just about everyone. The technicals are screaming sell, as the market also hit a double top today as well on both the Dow and the S&P, when it failed at S&P 1100.

Dow 9,949.36, -92.12 (0.92%)
NASDAQ 2,150.73, -12.74 (0.59%)
S&P 500 1,081.40, -9.66 (0.89%)
NYSE Composite 7,107.21, -51.06 (0.71%)

Simple indicators, all of which were positive most of the day, turned ugly in the final hour. Declining issues battered advancers, 4257-2207, and all sectors (not just the financials), except utilities were down. New highs beat new lows, 608-84, though mostly because of easy comparisons, so these figures have become nearly meaningless, except when taken in the proper context. If new lows expand considerably over the next few sessions, we'll have something then on which to chew. Until then, best ignore the highs-lows.

Volume was considerably higher than most recent sessions, another omen for the downside.

NYSE Volume 6,514,343,500
NASDAQ Volume 2,600,789,500

Another cause give for the decline was the high price of oil, now into the December contract, which gained $2.25, to $81.37 on the day, which many complain may be a price too high. Gold added $5.90, to $1,064.50, and silver gained 27 cents, to $17.83, very close to a 15-month high.

Markets are getting very jittery and investors appear to be losing patience with companies, as earnings reports are being scrutinized and tossed into the trash heap on the way to the sell button. Investors are also not very happy with the government's plans for everything from the general economy, to bank executive's salaries to health care reform. The discontent on Wall Street is nothing compared to the rabble-rousing in the streets, which is reaching fever pitch. Stocks may have to come down if only to appease the working man and woman in the US that Wall Street isn't running ahead of the pack and leaving Americans behind (it is).

Whatever the cause of today's collapse, it should not be taken lightly, if only for the reason that it is a technically-reversing pattern. If stocks suffer mildly tomorrow and Friday, it could be time to head for the exits for at least a few weeks. When the dust settles, stocks will be cheaper.