Terrific Turnaround Thursday Presages Friday's Key Jobs Report

Whipsawing the markets today in the US were a variety of cross-currents that send stocks screaming into the red in the morning and elevating to new heights in the afternoon.

Most important of all was probably the US$/Yen carry trade, in which the dollar, weakening over the past few days against the Yen took a very large hit just prior to the noon hour in New York, sending the pair below 97 (it had been as high as 105 recently), shaking investors and proponents of Abenomics, the massive stimulative package that has the imprimatur of Japan's Prime Minister, Shinzo Abe.

The Nikkei had closed modestly lower, keeping intact the downside move that has been in place the past few weeks, but the slide in the dollar was against more than just the Yen. The Euro was especially strong, after comments from ECB head Mario Draghi buoyed European markets. On the dollar dive, stocks also took it on the chin, with the Dow losing 117 points at the bottom of the day's trading range.

Also weighing on the markets were the week-long riots and demonstrations in Turkey, a key player in world markets and something of a hinge between the Middle East and the European Union. Turkey also borders Syria, as dangerous a place as there is in the world today, and tensions in Turkey could signal more widespread discontent of the citizenry from Ireland to Ethiopia, to say nothing of its value as a NATO ally and buffer against Russia, with whom we are still at war in a protracted, proxy kind of way.

Earlier in the morning, figures on initial and continuing unemployment were released, and though they were moderately improved, investors were looking past them, toward tomorrow's non-farms payroll release by the BLS.

That number is supposed to come in at around 165,000 new jobs created in the month of May, and speculators are placing bets on both sides of the coin. If the number comes in below 140,000, it will be viewed as a weak labor market, meaning that the Federal Reserve cannot - or at least should not - begin tapering its massive bond purchases. Any number over 190,000 would register as a strengthening of the employment market, meaning that the Fed could begin considering tapering as soon as their June meeting in less than two weeks (June 18-19).

Thus, a stronger US economy (unlikely) would be bad for stocks, and a weak employment picture would be good. Such is the strained logic permeating Wall Street in these strange days.

From top to bottom, the range on the Dow was nearly 200 points, but even with the rise - set off when the S&P and Dow Industrials almost simultaneously pierced their respective 50-day moving averages - the rally (or was is just a dead cat bounce) failed to erase half the losses from Wednesday's melt-down.

Sentiment appears to be changing slightly, however, as more and more speculators become aware of the inept nature of the Fed and central banks everywhere, unable to stem the tide of deflation and a sluggish global economy.

Tomorrow's jobs reports may be important to some, though it is more than likely to be a non-event, with a wide berth given to gauge the response of the Federal Reserve. Besides, it's going into a weekend and none of those Wall Street hotshots want to head to the Hamptons in a bad mood.

Of course, there's more at stake than just jobs and the economy and whether stocks should be the primary asset in one's portfolio. Bonds, buffeted about by the changing paradigm of currency devaluation and rapidly escalating trade wars have firmed up somewhat, with the ten-year closing just above a two percent yield.

On Tuesday, the EU imposed stiff tariffs on Chinese solar panels, and yesterday, the Chinese retaliated by suggesting levies on imports of French, Italian and Spanish wines, hitting the Europeans where it hurts.

With the late-day rally, the advance-decline line was positive and new lows - new highs were nearly even. Much of today's rally was likely built off of short-covering, as shorts remain gun-shy, stung by the continued beatings they've taken over the past four years, though that condition appears prime to undergo some significant change.

The wheels are beginning to come off, as Fed policies are being seen as largely ineffective and a massive waste of money, while world events should continue to heat up in coming weeks and months. Volatility could not be subdued forever and the risk that the bull market is over continues a distinct possibility.

Volume in equities was strong. Gold and silver had solid showings, especially gold, which breached the key $1400 mark to the upside.

Dow 15,040.62, +80.03 (0.53%)
NASDAQ 3,424.05, +22.58 (0.66%)
S&P 500 1,622.56, +13.66 (0.85%)
NYSE Compos... 9,260.47, +82.05 (0.89%)
NASDAQ Volume 1,732,547,125
NYSE Volume 4,008,892,500
Combined NYSE & NASDAQ Advance - Decline: 4676-1833
Combined NYSE & NASDAQ New highs - New lows: 89=87
WTI crude oil: 94.76, +1.02
Gold: 1,415.80, +17.30
Silver: 22.71, +0.235

Hurrah! Boo! Cyprus is Saved! Cyprus is Doomed!

There are so many angles to the story of what happened to Cyprus over the past week or so that it boggles the mind to consider just a few of the long-term ramifications, but, clearly, the deal struck late, late Sunday evening by the ECB, IMF and the European Commission, deferred to by the president of Cyprus - who really didn't have much say and actually threatened to resign (he should have) - was a game changer in more ways than one.

First, the deal.

Instead of making everybody pay, which was the original plan foisted upon the Cypriot parliament and summarily dismissed in a unanimous vote, the brain trust that is the ECB worked out a plan that would fold up one insolvent bank - Laiki - and reorganize another (Bank of Cyprus), impose capital control limiting withdrawals to 100 euros, and force depositors with over 100,000 euros - because there are so few bond holders - to pay down the bank's debt, with a levy of up to 40% on those deposits.

OK? Stay with me here. Because the plan is not a bailout, but a reorganization, the parliament of Cyprus will not have to vote on it. There. All fixed.

Except that mush of the money that's going to be "levied" in the "reorganization" is Russian money, laundered or otherwise, and the Russians are not very happy, even though Angela Merkel is. Hmmm... Russians unhappy, Germans happy. That doesn't sound familiar, does it?

Further, banks in Cyprus are supposed to open tomorrow, but probably won't, and even when they do, the flight of capital will be intense, even at the absurdly tiny levels of 100 euros a day. This story is still very, very fluid and has a multitude of effects on all of Europe and the rest of the world, so, stay tuned.

As far as the markets were concerned, news of a "solution" to the Cyprus problem was greeted with hallelujahs and buying, with the futures of US indices all heading skyward and the Euro ramping up against the dollar.

Stocks in the US (and Europe) opened higher, leveled off until, until, Dutch Finance Minister and recently-appointed head of the ECB, Jeroen Dijsselblom, went on the record to say that the Cyprus solution may well be a "template" for other troubled banks in the Eurozone.

Uh-oh. markets tanked. The Dow, which was up 51 points, went negative by 128. European bourses revered. The EUR/USD FX pair went negative in a big way. Impairment of depositor money (government-sanctioned theft) is not what rich people want to hear. Never mind the poor and not-so-poor with deposits of under 100,000 euros, which are guaranteed by the bankrupt ECB, it's the rich people's money that's going to bail out banks in the future Europe.

Ouchie! But, that's what should happen. Insolvent banks should be wound down first by smacking the junior and then senior bond holders and, if that's not enough to cover the debts, uninsured depositors pony up the balance.

So, that's Cyprus, the future of Europe and the global financial system all rolled up into 12 or 14 neat paragraphs. If you've got over 100,000 euros in any bank these days, you are either as nuts as our Federal Reserve chairman or a big business that needs that amount of capital to meet payroll, expenses, etc. For those, there is no alternative (well, there is, but what business really wants to keep that much cash lying around?).

For people with less than 100,000 euros or the equivalent in dollars (about $129,000 right now), how much do you want to risk in any bank, any bank which could be closed indefinitely in case of a financial crisis or emeeeeeeergency, with no access to your funds until the "officials" deem the situation resolved?

Let's just say that the answer for most people would be, "not much."

Well, that just raises another fearsome looking ugly head in the form of capital controls (you can only take out "so much" today) or, outright loss. The answer is bank runs of the kind not seen since the Great Depression, when, remember, banks were closed for weeks and longer and some never reopened. IT CAN HAPPEN HERE because it already did.

So, where do you put all that extra cash of yours, lucky you? Most Americans have sums of money in "investments" which are just promises and based upon given market levels which change from day to day. Trust. It's a fun term.

Others have money in banks. Best advice is, if you must keep your dough in a bank, spread it around. A better solution would be to invest (you have enough money, right?) in a very heavy safe, a good alarm system, a coule of good firearms and maybe a couple of alert, healthy guard dogs. Yeah. Old school, like medieval days, which is to where the world is headed. Maybe a moat filled with crocodiles, drawbridge and turrets should be the new home design for the 2020s?

You laugh. Don't. Money in banks, as proven by the bizarre and brazen moves of the psychopathic leaders of the ECB, IMF and EU. is not as safe as you'd like to think. Ask anyone who lived through the Great Depression. Most people kept more money stuffed into their mattresses than in their local banks, and, with good reason. The banks failed and their money was gone. Poof!

The choice is yours, dear readers, play the game of chicken with the elites, who have no taste nor mercy for the likes of you and yours, or take action. keep in banks only what you need, because, when you think of it, the FDIC insures deposits of up to $250,000 in the US. That went up from $50,000 prior to the crash in 2008. Why? Because people smart enough to understand what was going on were taking their money out and the government and the banks would really have gone bust in a huge way had there been real banks runs like in the 1930s.

Without looking it up, the FDIC budget is something along the lines of $50 billion. The amount of deposits in US banks is on the order of $14 TRILLION. Do the math.

That's it for today. We're all Cypriots now.

Dow 14,447.75, -64.28 (0.44%)
NASDAQ 3,235.30, -9.70 (0.30%)
S&P 500 1,551.69, -5.20 (0.33%)
NYSE Composite 9,022.95, -42.85 (0.47%)
NASDAQ Volume 1,665,435,625
NYSE Volume 3,539,278,250
Combined NYSE & NASDAQ Advance - Decline: 2714-3624
Combined NYSE & NASDAQ New highs - New lows: 489-49 (straining)
WTI crude oil: 94.81, +1.10
Gold: 1,604.50, -1.60
Silver: 28.82, +0.117

Situation in Cyprus Still Unresolved; European, US Stocks Hit

If Americans could pull themselves away from their TV sets and the NCAA tournament for a few moments, some of them might come to the realization that what's happening in Cyprus might just have huge global implications in the not-so-distant future.

While the story so far consists of a multitude of moving parts, what is known so far is that Cypriot banks - oversized in relation to the nation's GDP - are in deep, deep trouble and that the "troika" (EU, ECB and IMF) has given the tiny island nation until Monday to come up with a viable plan.

Cyprus has been told it must raise 5.8 billion euros ($7.5 billion) if it is to receive 10 billion euros ($12.9 billion) from its fellow eurozone countries and the International Monetary Fund.

In the meantime, the banks remain closed, ostensibly to reopen on Tuesday of next week.

Many ATM machines have already run out of cash and one bank (Laiki) has already imposed capital controls, limiting withdrawals to 260 euros ($340) per person to conserve its dwindling funds. Rumors have it that Laiki will be folded into one or two of the other major banks in the nation, even though reported by CNBC, those reports have not been verified by reliable sources. The situation remains fluid with European officials, Russia (whose residents are responsible for the bulk of deposits in Cyprus' banks) and the Cypriot parliament are busy concocting ideas to rescue the banking system and the government, though nothing seems to be working particularly well at the moment.

Possible outcomes for Cyprus are varied and somewhat indecipherable at present, but what is known is that depositors almost certainly will be forced to surrender some of their funds via a tax, or levy, because there aren't enough bondholders in the banks to make up for the shortfall. Normally, those holders of bank debt would be first on the hook, but this situation is different from what has already occurred in Ireland, Greece, Spain, Portugal and Italy.

Nonetheless, whatever happens in Cyprus will have ramifications across Europe and the world. If the troika's plan to tax deposits becomes reality, it will almost certainly cause some degree of bank runs in the aforementioned countries that are already in trouble. The damage done to confidence in the system will be more severe. Banking and finance, largely based upon trust, cannot withstand wholesale looting of depositor accounts, no matter how small or seemingly trivial the amounts. The expectation is that banks are a safe place to park funds and the potential of either not having access to funds or having money appropriated (read: stolen) in order to bail out the bank itself or the government, is not part of the agreement.

Europeans are now looking at events in Cyprus through jaundiced eyes. The crisis is nigh upon four years old and the peripheral countries are still in recession, as is the whole of Europe. To date, all the plans of the EU, ECB and the IMF have amounted to only playing for time, and time is running short, both on the patience of the populaces and the viability of various governments.

The fear is that once the genie of appropriating depositor funds comes out of the bottle, it will be hard, if not impossible, to put back and will likely spread. No matter the eventual deal struck in Cyprus, capital flight is a certainty, the question being from where and to where the money will flow.

There's a certain unfairness about all of it, and a general sense of fear that hit markets this week with a thud. In the US, the damage has been downplayed thus far, but today's losses were the worst of the week and sent the major average to their lowest closes in nearly two weeks.

With the situation still unresolved, the anxiety on Wall Street and in other money centers around the globe is palpable. Unrestrained money printing, QE, low interest rates and other assorted "emergency" measures will not be able to trump a wholesale loss of confidence in the financial system itself, a condition which is likely long overdue.

Naturally, one cannot expect ordinary citizens and businesspeople around to world to immediately and simultaneously catch onto what's really occurring, but word is spreading, and quickly.

A piece of advice to everyone would be to watch one's finances carefully and keep a stash of cash outside the banking system, just in case. After all, it was one of our founding fathers - Benjamin Franklin - who opined, "an ounce of prevention is worth a pound of cure." And the cure has yet to be found.

Also of note is that traditional "safe havens" - gold and silver - have been appreciating slightly, with today's moves the most significant.

Dow 14,421.49, -90.24 (0.62%)
NASDAQ 3,222.60, -31.59 (0.97%)
S&P 500 1,545.80, -12.91 (0.83%)
NYSE Composite 9,009.66, -71.43 (0.79%)
NASDAQ Volume 1,691,711,000
NYSE Volume 3,571,124,500
Combined NYSE & NASDAQ Advance - Decline: 2138-4254
Combined NYSE & NASDAQ New highs - New lows: 303-28 (stretched)
WTI crude oil: 92.45, -1.05
Gold: 1,613.80, +6.30
Silver: 29.21, +0.395

Cypriot Parliament Rejects Savings Levy; EU, ECB, IMF Relent

Congrats to the Cyprus parliament for calling the bluff on the EU, ECB and the IMF.

Shortly after noon EDT, the Cypriot parliament voted unanimously - in a rare show of anti-Euro solidarity - to reject the bailout plan proposed by the "troika" (EU, ECB, IMF) that would have imposed a tax on savers, a stark violation of the rule of law.

The plan called for a 9.9% tax on savings accounts in banks with holdings of more than 100,000 Euros, and a 6.5% levy on those under the 100,000 Euro threshold.

The vote had been delayed for two days, but, in the end, the parliament stood up for the welfare of the people and the sanctity of personal property rights, or, could it have been a reaction to a very real threat from retaliation from Russian oligarchs and mobsters (recognized as one and the same, in some circles)?

Much of the billions of Euros on deposit in Cypriot banks belong to Russians, a fact not lost on those who had the fate of their country and countrymen in their hands.

Whatever the case, the troika's gambit to impose a tax on savings accounts went up in flames, fabulously, though one has to fear that this was more of a test run for a future raid on the money held by individuals and companies in banks across Europe. So deep was the opposition that the parliament rejected the plan in toto, sending the ECB and IMF back to the drawing board.

The EU quickly issued a statement to the effect that it would use existing means to bailout the banks in Cyprus, and with them, the bankrupt government. Though nothing material was offered right away, all in Europe know that whatever solution the troika devises will be austere toward the general populace and kind to banks.

In the end, it will be the people who suffer most, as it has been in Greece, Portugal, Ireland and, to a lesser extent, Spain and Italy.

At one point during the back-and-forth of memos and media bites, one of the EU finance ministers quipped that Europe was two-thirds of the way through the crisis. Skeptics of the overall viability of the European Union will note that using 2008 as a baseline, the year 2014 would serve as an end to the crisis, otherwise meaning the collapse of the EU and the end of the Euro as a multi-national currency.

It doesn't get any stranger than in Europe, the dystopian nightmare conceived as a method to compete on a global scale which has devolved rapidly into an Orwellian series of meetings, dictums, bailouts, trial runs and sovereign failures.

America took the drama in stride, the markets stumbling through the early part of the session only to rally in the afternoon, though the crisis in Cyprus is still far from over. This was only act one of what will certainly be a three-to-five piece performance.

While it may be back to normal (whatever that means) for US and global markets for the next few days, the FOMC meeting of the Fed wraps up tomorrow at 2:00 pm EDT and the budget battle in the US congress continues to gain pace, with the Senate and House bills far from resolution.

As usual, congress will be out of session beginning March 25, though it must pass a continuing resolution by the 27th in order to forestall a government shutdown due to lack of funding. As in Europe, the nefarious machinations of government are never without a dramatic deadline. Thus, the remainder of the week will shift focus from the tiny island nation of Cyprus to the secluded denizens within the halls of congress.

For now...

Dow 14,455.82, +3.76 (0.03%)
NASDAQ 3,229.10, -8.49 (0.26%)
S&P 500 1,548.34, -3.76 (0.24%)
NYSE Composite 9,018.73, -26.71 (0.30%)
NASDAQ Volume 1,648,331,375
NYSE Volume 3,809,744,750
Combined NYSE & NASDAQ Advance - Decline: 2643-3781
Combined NYSE & NASDAQ New highs - New lows: 313-42 (shrinkage)
WTI crude oil: 92.16, -1.58
Gold: 1,611.30, +6.70
Silver: 28.84, -0.031

St. Valentine's Day Mascara

No, that's not a misprint in the headline. The word is "mascara" - the stuff women apply to darken, thicken, lengthen, and/or define their eyelashes. It's a cosmetic, as in rouge, or lipstick, as in lipstick on a pig, which is exactly what the algos and buy-siders did to today's undeniably weak, directionless market.

Face it, Europe is a bona-fide basket case, Japan is devaluing its currency so fast that George Soros made nearly a billion dollars on the trade in just over three months.

The news coming out of Euro-fantasy-land was less than encouraging. Eurozone fourth quarter 2012 GDP fell by 0.6%.

Making matters a little more interesting - and more frightening - were the figures for the zone's three largest economies - Germany, France and Italy - whose own GDP fell by 0.6%, 0.3% and 0.9%, respectively.

The Eurozone, even after all the bank and sovereign bailouts, pledges of doing everything possible to promote growth by the likes of Germany's Angela Merkel and EU President Mario Draghi, has resulted in three consecutive quarters of negative GDP. Europe is already in the throes of an economic collapse, thanks largely to protectionism for banks and excessive liquidity from European central bankers (most of whom are Goldman Sachs alum, BTW).

While the GDP numbers may be bad enough, consider youth unemployment (ages 15-25) in the Eurozone to be spreading like the bubonic plague. Greece reported youth unemployment over 60%; Spain over 50% and Portugal just topped 40%. Thirteen of the 27 EU member states are reporting youth unemployment over 25%. Austerity: it's what's for dinner.

Europe is solid proof that the elite class is making up the rules as they go along, and the general public is viewed as collateral damage only. Here in the good old USA, we have our own concerns with the sequestration schedule to commence March 1, which will result in massive federal budget cuts. The president and congress haven't even begun to discuss how they'll handle that, though they uniformly say that sequestration (it doesn't rhyme with castration for no reason) is something they'd prefer to avoid.

Have they acted? No. Will they? Probably, but, like the fiscal cliff deal this past December, it will be a stop-gap measure and cost taxpayers more. Nobody ever cuts anything in Washington, only the rate of growth of programs, because what's important to them is keeping lobbyists and voters (government employees and beneficiaries of government largesse) dumb and happy.

So, on what does this algo-concocted market focus? Berkshire Hathaway's buyout of Heinz. Poor suckers that Americans are, they put ketchup on their chicken and pork hot dogs on day old buns while Uncle Warren reaps the profits. If ever there was a crony capitalist, Warren Buffet's picture belongs next to the definition.

Sure, unemployment claims were down - from 368K to 341K - but aren't those figures still too high? The new normal means just doing better than expectations, even if those expectations are sub-par. It's akin to taking your kid out for ice cream because he got a C in math instead of a D. As a nation, we've lowered our standards in everything from our political leaders to what passes for entertainment.

Along with everything else, we've lowered our standards for rational markets. Today's split decision is just another shining example of the truth hiding in plain sight. Sooner or later, even the talking heads on CNBC are going to come to the realization that making new all-time highs with a -0.1% GDP and unemployment at eight percent doesn't really pass the smell test. Someday. Maybe. Note the video below with Rick Santelli, everyone's favorite financial ranter, extrapolating out on what we've been saying nearly every day on this blog: that being a trader is nearly impossible under current conditions.

And, just as a side note, New York Mayor Bloomberg, who first banned drink containers larger than 16 ounces, has proposed a ban on styrofoam containers, and... it's likely to pass his rubber stamp city council.

Let's see, smokes are $10-12 a pack in NY, you can't smoke in any of the bars, night clubs or public buildings; you must drink from small containers and those soon cannot be made of styrofoam. All this makes one pine for the good old days of the seventies. Ed Koch was mayor. Son of Sam was shooting kids in parking lots. Reggie Jackson was blasting balls out of the original Yankee Stadium and you could buy just about any kind of drug - from weed to cocaine - on just about any street corner. Bloomberg. He's just not a fun guy.

Dow 13,973.39, -9.52 (0.07%)
NASDAQ 3,198.66, +1.78 (0.06%)
S&P 500 1,521.38, +1.05 (0.07%)
NYSE Composite 8,951.33, -4.27 (0.05%)
NASDAQ Volume 1,884,832,750
NYSE Volume 3,867,864,500
Combined NYSE & NASDAQ Advance - Decline: 3259-3130
Combined NYSE & NASDAQ New highs - New lows: 505-39
WTI crude oil: 97.31, +0.30
Gold: 1,635.50, -9.60
Silver: 30.35, -0.516

Another Euro Deal, Another Knock Your Socks Off Rally

Being Friday, European leaders ended their two-day summit on a positive note - to wit: European leaders agreed to create a single supervisory body to oversee the eurozone's banks which could use the single currency area's rescue funds, the European Financial Stability Facility or European Stability Mechanism, to aid banks directly without adding to governments' debt.

Well, that nugget, around which the narrative goes something like, "this is a step closer to a fiscal union," but which in essence only makes it easier to shift money from one bailout fund to another and to respective countries' broken banking systems and still solves nothing in terms of the real debt crisis faced by the EU, was enough to send markets higher around the globe.

Beginning in the Far East, where stock indices rose in unison by 1.11% to 2.59% (except Malaysia, which was up only 0.31%), equity markets had one of their cheeriest sessions in weeks.

Once trading began in Europe, the noise was amplified, with stock indices up hugely. At the low end was the Swiss market, which gained 1.33% on the day, though Germany's DAX and France's CAC 40 were ahead by 4.33% and 4.75%, respectively, at the close. All of the markets were topped by Greece, which saw the Athex Composite bubble up by 5.88%.

By the time US markets were gearing up for their open, index futures were nearly limit up, with Dow futures pointing to a 200-point gain at the outset. Following Thursday's late day ramp-up, a systems pointed to a serious end-of-month short squeeze combined with the usual end-of-quarter window dressing, and the markets surely did not disappoint.

Stocks roared out of the gate and held their strong gains throughout the session, one of the best of 2012, ending a week of turmoil and apprehension with a powerful rally to take investors into the third quarter with a full head of steam.

The "new deal" in Europe, coming in the 19th summit since the financial crisis began, is set to be ratified by the participating countries and ready for implementation by July 9, which should come as welcome relief to Spain and its banking sector, which is in need of between 62 and 100 billion Euros in order to continue functioning and funding government debt.

While the suckers in stock markets around the world had themselves a field day, many know that this is only a day-trading profit environment and that within weeks, there will be more turmoil to roil markets, be it from US shores or the favored European flavor, which has become expert at sending markets lower on fear before propping them up with a summit, statement that all is well and a swift kick further down the road to the economic fiat money ponzi can.

Austerity being too much to handle for most Europeans, and growth a figment of supply-side thinkers' collective imaginations, the only solutiona the Euro-genii have come up with are more bailout funds lending to and from another within a framework of constantly-changing rules and procedures. Naturally, the effect of piling more debt upon already unpayable debt will eventually end in tears and currencies in tatters, but that result is seemingly being pushed as far out into the future as possible, all the while suspending the tenets of traditional economic thinking.

Well, at least the leaders in Europe are looking out for the "little people" by giving them a morale boost on a Friday afternoon... before taxing them into servitude by which to pay off the gigantic debt bubble being created. The people, primarily taxpayers - except in Greece, where tax avoidance is a national pastime - seem to be content with having more time to enjoy their little lives or prepare for the ultimate end of the fiat money regime, which must come, sooner, if not later.

One of the downsides of all this "feel good" economics being parlayed from the Fed to the Europeans and back again is that it is all inherently inflationary, and commodities didn't miss a step in joining into the all-asset-classes-ramp-up-free-for-all. Oil had one of the biggest one day jumps in history, and even the precious metals could not be contained in the short-squeezing euphoria.

But for now, it's all good. As the 1969 Peggy Lee hit, Is That All There Is, penned by the songwriting duo of Jerry Leiber and Mike Stoller, so solemnly intoned, "...let's keep dancing, let's break out the booze and have a ball, if that's all there is..."

Here's Peggy:



Free houses for everybody, eventually.

Dow 12,880.09, +277.83 (2.20%)
NASDAQ 2,935.05, +85.56 (3.00%)
S&P 500 1,362.16, +33.12 (2.49%)
NYSE Composite 7,792.53, +195.02 (2.57%)
NASDAQ Volume 1,780,693,750
NYSE Volume 4,426,005,000
Combined NYSE & NASDAQ Advance - Decline: 4898-809
Combined NYSE & NASDAQ New highs - New lows: 378-35 (WOW!)
WTI crude oil: 84.96, +7.27
Gold: 1,604.20, +53.80
Silver: 27.58, +1.33

Europe's Pain Keeps World Markets in Red as Week Begins Badly

Back in the headlines again, Europe's continuing woes took front and center position in Monday's investment landscape.

Spain kicked off the festivities with a formal request for aid of up to 100 billion euros for their busted banking sector as they await a ratings cut from Moody's on all Spanish banks, expected to be delivered after the close of US equity markets.

The reality of another bank bailout by the EU and the rumors of the Moody's downgrade was enough to send all European indices lower, lead by the Athens Index Composite, which fell 6.84%. The Swiss Market was harmed the least, down on 0.75%, while the French and German bourses fell by more than two percent.

Greece added to the downside momentum as newly-appointed Finance Minister Vassilis Rapanos resigned his post due to ill health. The tiny island nation of Cyprus became the latest victim, telling the EU that it needs a bailout for its banks - heavily exposed to Greece - and its public sector economy. Estimates call for immediate funds of between 5-10 billion Euros to keep the nation banks and government operating.

US markets fell out of bed like a drunk with a bad hangover, down right from the opening bell through to the close, with the NASDAQ leading the way lower, followed closely by the S&P 500.

Stocks staged a small, uninspired rally near the end of the day, but there was little support to the buying. The evidence that the world is on the brink of a catastrophic global depression are simply too obvious to mask further. Investors are running scared money into the meat-grinder that is otherwise known as the capital markets in hopes that the European leaders will offer some kind of plan to end the crisis, one which has already spread across the nations on the southern periphery.

Internals suggested that today's moves could be a turing point for US markets as losers led gainers by a more than 3:1 margin and new lows outnumbered new highs by nearly 2:1.

The new highs to new lows reading, which has been consistent over the years as an early indicator of bullish and bearish trends has recently vacillated between positive and negative, so a sustained period in which new lows exceed new highs would point toward a more severe downturn and a return to bear market conditions.

As of today's close, the Dow is resting at 6% below the May 1 highs, so a move below 11,000 would have to be reached before true bear market conditions (-20%) would prevail. With the situation in Europe continuing to unravel and conditions in the US not gathering any momentum and actually, according to the latest data, already showing signs of stress and weakness, a downturn of that severity cannot be ruled out through the summer months, which are traditionally a slow period for stocks.

Whether the pain comes in the form of a sudden event or as a slow, painful, prolonged ordeal depends greatly upon how panicked investors become. With news and events so highly unpredictable, but bordering on crisis levels, a major happenstance could come from any quarter, be it Syria's upheavals, Germany contentious position or the collapse of Greece or Spain or even the unthinkable, Italy or France.

Once again, it cannot be stressed too much that events may be politically manipulated to coincide with the US presidential election in November, so great caution is urged, especially into the latter stages of the election cycle, late September into October.

Of course, media control being practically omnipresent, the outbreak of war or economic apocalypse could be spun into a positive, though that kind of propagandizing would only satisfy the controllers wishing to make a quick killing as it would likely be unsustainable in light of the true picture.

Following Friday's phony fermentation to the upside on global banks' repudiation of Moody's massive, across-the-board downgrades, it's a very good possibility that the manufactured rally was nothing more than another scam on the public to the profit of the banking cartel, who went long and then short, winning on both sides of the trade.

With that kind of perfidious behavior prevailing in nearly all capital markets, day-to-day movements should be greatly discounted and longer term trends the focus of greater scrutiny.

Dow 12,502.66, -138.12 (1.09%)
Nasdaq 2,836.16, -56.26 (1.95%)
S&P 500 1,313.72, -21.30 (1.60%)
NYSE Composite 7,491.90, -124.69 (1.64%)
NYSE Volume 3,433,923,250
Nasdaq Volume 1,432,183,125
Combined NYSE & NASDAQ Advance - Decline: 1362-4261
Combined NYSE & NASDAQ New highs - New lows: 87-163
WTI crude oil: 79.21, -0.55
Gold: 1,588.40, +21.50
Silver: 27.52, +0.86

Positive Rumors Drive Speculative Bets Higher

While world leaders at the G20 conference in Los Cabos, Mexico, dithered over Syria and mostly glad-handed each other over a draft outline for a closer European Union (isn't it already a "union?" How much closer can these failing countries and their failing economies get?), both European and US stock markets looked to the rumor mills for reasons to buy more stocks.

They found them in the usual places: various reports suggesting that the Federal Reserve would commence another round of QE with their announcement of ZIRP - for the umpteenth time - Wednesday, just after noon; ideas being floated around that Greece is close to forming a government that would agree to austere terms dictated by Germany and stay in the Eurozone; and, more elitist propaganda that Spain's banks would somehow be saved, thus keeping the Spanish government in power and that Germany would find a way to soften its stance on that awful austerity in Greece.

Some of the nonsense being thrown around world financial news desks may actually come to fruition, most likely among them the Fed's unwillingness to stop printing worthless US dollars non-stop and the European impulse to keep Spain's insolvent banking system from imploding - at least for a few more weeks or months.

With rumors running rampant on a day that was largely devoid of real news, speculators took the signals (make that, "the HFT algos were tuned up to high volume risk on frequencies") and bid up stocks to a five-week high on the Dow, with the other major indices following along for the ride, before fading late in the session and into the close.

It appears that the markets and their insider specialists are trading on some faint hope that the global financial system will not be melting down over the long, hot summer, and the first signs should be available as early as non-ish on Wdnesday, when the Fed makes a policy statement.

We shall stay tuned.

Dow 12,837.33, +95.51 (0.75%)
NASDAQ 2,929.76, +34.43 (1.19%)
S&P 500 1,357.98, +13.20 (0.98%)
NYSE Composite 7,766.25, +103.97 (1.36%)
NASDAQ Volume 1,828,591,375
NYSE Volume 3,784,083,500
Combined NYSE & NASDAQ Advance - Decline: 4529-1105
Combined NYSE & NASDAQ New highs - New lows: 250-29
WTI crude oil: 84.03, +0.76
Gold: 1,623.20, -3.80
Silver: 28.37, -0.30

Dark Day for Wall Street as Financial System Stressed to Limit

Compared to the preceding twelve days of market meltdown, today's finish qualified as the worst on a number of different levels.

The paucity of buyers produced something of a free-fall right from the opening bell, which accelerated in the final hour of trading. There were a couple of attempts at rallies - at 10:00 am and again just after noon - but both failed horribly as there was no support and traders, many of whom have been in the "buy the dip" camp until recently, sold into the brief upticks.

Volume was also noticeably higher, an indication that the selling has more room to run over the next days and weeks. The causes of today's particular collapsing equity valuations were the same that have dominated the markets over the past three weeks and are no nearer resolution than they were at the beginning of the month.

Greece continues to slide into anarchy and chaos, taking the rest of the EU - and the world - along for the careening ride to oblivion, unemployment fears in the US remain high, global growth may be nearing stall-out speed and an inactive congress and Federal Reserve - both eerily quiet - are doing nothing to alleviate any of the political, tax and regulatory issues.

The 156-point loss on the Dow was the second worst since the slide began on May 2nd, beaten only by the 168-pont decline of Friday, May 4th, the day the BLS disappointed everybody with poor April jobs numbers. That such a massive decline would come nearly two weeks later, without a respite rally in between, displays clearly how weak and uncertain markets are at the present juncture.

Through today's close, the Dow has lost a stunning 837 points since the May 1 close; the NADSAQ, with a loss of more than two percent today alone, has been beaten back 246 points since May 2nd, while the S&P 500 has given back just over 100 points since May 1st, finishing just above the technically-insignificant 1300 mark, though emotionally, the number carries great sentiment weight.

Adding to the existing problems were a couple of key economic data points released today. Initial unemployment claims came in flat for the most recent reporting week at 370,000, still stubbornly high. The Philadelphia Fed manufacturing index, which was supposed to ring up a slightly higher reading, to 8.8, from 8.5 in April, was a sorry disappointment when it printed at a devastating -5.8. And the index of leading indicators, which was expected to post a gain of 0.2%, actually fell by 0.1%, all of this adding up to excessive worry and a rush to get out of equities for the safety of bonds.

The 10-year benchmark bond closed at an historic low of 1.702, which is probably a solid number considering the level of deflation that is expected over the coming months. A yield approaching 2% against an environment of low to no growth - or even a recession or worse - is likely to be a pretty good hedging instrument.

JP Morgan Chase's (JPM) continuing drama with its $2 billion portfolio loss has expanded by another billion according to the NY Times, while the FBI and SEC have both opened inquiries into the trade and CEO Jaime Dimon has been called to testify before the Senate Banking Committee on the matter.

Mr. Dimon, whose firm also faces a number of shareholder lawsuits stemming from the trade, continues to maintain the position in the trade, attempting to slowly unwind the derivative bet from hell while counter-parties turn the screws tighter. It would not be a surprise to see eventual losses from this blunderbust approach the $5 or $6 billion figure, wiping out the entire quarter's profit for the bank with the supposed "fortress balance sheet."

Dimon will have to do some fancy tap-dancing when he appears before the Senate inquiry, because the trade, widely known as the "London Whale" was the furthest it could have been from an outright hedge, being a pure speculation trade, exacerbated by piling in deeper as the losses worsened.

On brighter notes, gold and silver did an abrupt about-face, despite the dollar index continuing to rise and the Euro settling nearly flat on Forex markets, while oil slid again, along with wholesale gasoline prices, which will eventually result in further price declines at the pump.

The widely-anticipated Facebook IPO, slated to hit the street Friday morning, priced at $38 per share, at the upper end of the expected range. While Mark Zuckerberg and others will become instant billionaires tomorrow, the timing for such a lucrative cash-out day could not have come at a worst time. Facebook will almost certainly reward early investors, but the story of one good stock will do little to alleviate long-term, long-standing economic issues that have plagued the markets for weeks.

Greek banks are seeing devastating outflows of capital, as are those in Spain. Europe's descent into economic hell has accelerated and the EU ministers and ECB economists have found now way out.

Widespread defaults, from sovereign nations, to banks, to businesses will be at the top of the news for at least the next six to 12 months.

It's been 41 years since then-president Richard M. Nixon closed the gold window and nations have been trading on pure fiat - backed only by promises - ever since. The promises now broken, the era of debt-money is quickly drawing to an unseemly and devastating end.

Real estate, precious metals and cash are all that stand between personal devastation for not millions, but billions of people worldwide. All paper assets, including stocks, bonds, letters of credit and contracts will be blown away by winds of economic chaos and change.

Dow 12,442.49, -156.06 (1.24%)
NASDAQ 2,813.69, -60.35 (2.10%)
S&P 500 1,304.86, -19.94 (1.51%)
NYSE Composite 7,480.75, -112.07 (1.48%)
NASDAQ Volume 1,915,098,500
NYSE Volume 4,597,205,500
Combined NYSE & NASDAQ Advance - Decline: 915-4734
Combined NYSE & NASDAQ New highs - New lows: 31-310 (1-10 on the wrong side; never good)
WTI crude oil: 92.56, -0.25
Gold: 1,574.90, +38.30
Silver: 28.02, +0.82

Down Day All Around as Week Ends; Spain says 'No' to Austerity

Either everybody and their brothers-in-law were taking profits on Friday or there's some kind of disturbance in the Force, because not only were stocks down, but so were oil, gold and silver.

Just for the record, it was another brutally low volume day in equities and very light on economic data. Sure enough, however, our friends in Europe attempted to make things interesting as Spanish Prime Minister Mariano Rajoy defied his EU overlords in Brussels by setting a softer budget target than originally agreed upon.

The targeted budget deficit for 2012 was supposed to be no larger than 4.4 percent of GDP, but Rajoy targeted a deficit that will amount to 5.8 percent of assumed GDP.

Of course, the numbers game is a nebulous one, especially considering Spain's unemployment rate hovering around 20% nationwide.

As EU leaders prepared for a summit beginning Saturday in Brussels, they were greeted by hundreds of union protesters railing against austerity. Similar protest were held in Greece and Spain. Across Spain, students protested cuts to education budgets and the demonstrators clashed with police in Barcelona.

The Spanish demonstrations were large, estimated in the tens of thousands.

Back here on planet America, there were no protests of any size to speak of, though it seemed like everyone was more in a mood to forget about money and budgets and just go home for the weekend.

Dow 12,977.57, -2.73 (0.02%)
NASDAQ 2,976.19, -12.78 (0.43%)
S&P 500 1,369.63, -4.46 (0.32%)
NYSE Composite 8,125.17, -49.94 (0.61%)
NASDAQ Volume 1,754,632,875
NYSE Volume 3,346,330,500
Combined NYSE & NASDAQ Advance - Decline: 1748-3844
Combined NYSE & NASDAQ New highs - New lows: 185-42 (beginning of convergence?)
WTI crude oil: 106.70, -2.14
Gold: 1,709.80, -12.40
Silver: 34.52, -1.14

Dow Finally Closes Above 13,000 as Silver Breaks Out

Fueled by ever-larger injections of liquidity from the world's central banks, US equity markets have been disconnected from economic reality for some time, but today's shrug of the shoulders to two key economic reports has to make old-time "investors" wondering if hard numbers actually mean anything anymore.

Prior to the open, the Commerce Department released durable order data for January, which showed a 4.0% decline over the prior month. (Shrug shoulders if you trade stocks)

At 10:00 am, S&P/Case-Shiller data on home prices came in with a loud thud, matching the durable number at -4.0% for December. The widely watched index of home prices has now exceeded the post-crash lows and is at its lowest level since February, 2003, a 33.8% drop from the peak. If there is a recovery in housing, it certainly is well-hidden.

Despite the negativity of stubborn reality, stocks managed to post small gains across the board, with the Dow Jones Industrials closing above 13,000 for the first time since May, 2008. (cue fanfare here)

So, now that everybody can pop the champagne and don their "Dow 13,000" beanies, what's next?

Just in case you've tired of the constancy of the stock market, hovering around Dow 13,000 for more than a week in a very slow-moving, retarded kind of way on abysmally-low volume, take heart! Things are about to get a whole lot more interesting beginning Wednesday.

That's the day the ECB unleases its latest attempt to advance liquidity and goose markets (and inflation) with the second installment of the LTRO (Long Term Refinancing Operation), in which European banks will be offered up to EUR500 billion in three-year loans at the bargain-basement price of 1% (how appropriate!).

Back in December, the ECB did the same thing, and EUR489 billion was snatched up by some 523 institutions, though much of the money was eventually parked right back at the ECB, earning a measly 0.25%, resulting in small, albeit manageable losses for many of Europe's largest banks. To the banks, the 0.75% negative carry seemed a good enough deal to have funds on hand should the crisis deepen or a rogue trader muck up the balance sheet.

Ideally, the ECB would like the funding banks to snatch up more of that juicy sovereign debt that continues to float around in the Eurozone like so much flotsam and jetsam, but the LTRO also carries something of a stench of its own, via the equity markets, where the takers of the nearly-free money are cast under a dubious light.

No matter the particular cases for individual banks, tomorrow's "funding" should be making headlines about the time US stock markets ring their bells of jubilation.

Also tomorrow, America's central banker, Ben Bernanke, chairman of the Federal Reserve, will be before congress, making his required testimony before the House Finance Committee. Since the chairman's stuttering mouthfuls usually carry significant weight for the financial markets, he might make some news, though probably not, being the conscientious type who only prefers to move markets the old fashioned way, by getting the printing presses rolling full boar in the basement at the Fed.

Thursday and Friday feature a full meeting of EU ministers, with the $2 Trillion "firewall" topping the agenda.

Now, to the casual observer, these events may not evoke much excitement, but financial market players will be glued to their tubes, pads or whatever electronic means they have of staying abreast of developments and there just may be some fireworks. Of course, there may not, as these bulwarks of capitalism are about as open-minded and free-speaking as corpses in straightjackets.

On the other hand, any kind of adventurous talk or under-over funding take-up could move markets substantially, which is just what some traders would like to experience, rather than the Chinese water torture of the past seven or so sessions.

Meanwhile, what equity traders hate to admit, is that silver has been outperforming just about every other asset class in the known universe, up 30% on the year and breaking through resistance today on a powerful move forward.

In an interview with King World News, chartist Dan Norcini notes that silver has breached resistance at $35.50 and broken above the 50-day moving average. Today's 4% move higher was largely due to shorts having to cover their positions. Norcini says shorts are panicked and the next resistance level is around $40/ounce.

In the below video, Jon Najarian of Options Monster explains how the big players are looking for a breakout in silver. Enjoy.

Dow 13,005.27, +23.76 (0.18%)
NASDAQ 2,986.76, +20.60 (0.69%)
S&P 500 1,372.18, +4.59 (0.34%)
NYSE Composite 8,171.84, +28.29 (0.35%)
NASDAQ Volume 1,755,641,125
NYSE Volume 3,487,070,500
Combined NYSE & NASDAQ Advance - Decline: 2805-2796
Combined NYSE & NASDAQ New highs - New lows: 253-21
WTI crude oil: 106.55, -2.05
Gold: 1,788.40, +13.50
Silver: 37.14, +1.62

Greek Debt Prison; Real Estate's Bogus Stats and Obama's Phantom Recovery

Let's Just Pretend.

That's what Wall Street, the EU and the central bankers of the world want you to do. Pretend.

Pretend there is a way out for Greece. Pretend that the US economy is growing, that the debtsof all nations will eventually be paid off through the magic of "growth," that your future, and that of your kids' will be secure.

None of it is true. The headlines from the likes of Reuters, Bloomberg and Dow Jones only parrot what the elite bankers and corrupt governments feed them. Journalism died during the Bush administration of the 2000s. The rule of law is being killed every day by the likes of the AG settlement, the non-prosecution of anybody involved in the mortgage/robo-signing/foreclosure scams and the constitution has been marginalized by congress and presidential orders.

What makes it even more frightful is that it seems to worsen every day. No statistics can be trusted and the words coming from the mouths of politicians ring hollow and void.

Take just a few of today's news items for instance. President Obama - to great fanfare - proposed new tax rates for businesses in the US. Never mind that they have less chance than Lindsay Lohan giving up drinking of ever being signed into law. Sure, they sound good (if by good you mean that the government is somehow entitled to the ridiculous amount of 28% of you company's net profits), but they will be twisted and broken and flailed about by a congress that knows nothing better than obfuscation, ridicule and deceit.

Then take a look at the January's existing home sales figures released by the NAR. Again, the trumpets blared that real estate is recovering, with the month's sales up 4.2% from December to an unadjusted 4.57 million, annualized (why do they annualize these figures in an age in which numbers can be recorded and crunched in an instant? It's easier to FAKE them that way.). Never mind that distressed properties boosted the number materially or that the rate of deals falling through continues to rise or that mortgage applications fell again this week.

But wait a minute. Last month's number was 4.61 million... Well, that was revised down to 4.38 million. So, that gain in December actually turned out to be a decline. Next month, the NAR can revise the January number down too, so that February shows a gain. It's a con. A shell game. And the American public is the mark.

And then there's the Greek deal, the third bailout for the nation in the past two years. It's not enough that the EU is "loaning" them another $172 billion ($130 billion Euros), but this one comes with various strings attached, such as a special account that requires Greece to pay its creditors before paying its own expenses; a permanent monitoring task force from the European Commission; private investors forced to eat 53.5% of the money they've already loaned (and are not getting back); drastic cuts to pensions, the minimum wage, defense spending, healthcare and public sector jobs; and more.

With these new conditions, Greece, for all intents and purposes, is no longer a sovereign state. Rather, it is a debt-slave, a ward of the European Union. Obviously, centuries of in-breeding among Europe's elite ruling class has taught them well how to subjugate the will of the masses.

But maybe there's hope. Since the signing of the Greek deal on Monday, stocks in Europe have done nothing but decline. There is little faith among professional investors that this arrangement will result in anything more than a temporary reprieve and an ultimate default.

In the US, stocks wandered around for the second straight day, though this time they finally bit the bullet and had to fall. Not by much, but any decline in stocks is a blow to the monied interests and they seem worried about Greece, about the price of gas and about the economy in general. And the volume was again absurdly low, because nobody but the banks, hedge funds and HFTs are playing.

They might even begin to worry that people are sick and tired of being lied to and are beginning to wake up.

Wake up, America. How much longer can these charades continue?

Dow 12,938.67, -27.02 (0.21%)
NASDAQ 2,933.17, -15.40 (0.52%)
S&P 500 1,357.66, -4.55 (0.33%)
NYSE Composite 8,094.39, -21.03 (0.26%)
NASDAQ Volume 1,676,971,875
NYSE Volume 3,608,714,750
Combined NYSE & NASDAQ Advance - Decline: 2032-3589
Combined NYSE & NASDAQ New highs - New lows: 162-24
WTI crude oil: 106.28, +0.03
Gold: 1,771.30, +12.80
Silver: 34.25, -0.18

Dow Runs at 13,000, Relents, as Oil Tops $106/Barrel; Gold, Silver Rocket Higher

On the heels of a three-day weekend and a late-night session of EU finance ministers which apparently (maybe, sort of, kinda) came to a conclusion on funding for the failed state of Greece, the Dow Jones Industrials were poised to exceed 13,000, a number not seen since May of 2008.

While the Eurocrats dithered, wrangled and finally agreed to a very messy agreement to stave off the imminent default of the Republic of Greece, most Americans were sleeping, though the conditions of the Greek people continued to worsen, seemingly by the hour.

Nonetheless, stocks opened with the usual ebullience afforded the opening of a new week of stock profit pursuits and quickly came within a whisker of the magic 13,000 level, before falling quickly backward at 10:00 am, as the Euro plunged.

Undiscouraged, the monkey algos, which amount for more than 70% of all trades, turned around as the Euro resumed gaining value against the US dollar and the Dow eventually broke through the haloed mark, though just briefly, on three different occasions during the session.

Meanwhile, the price of a barrel of WTI crude oil surpassed $105/barrel and just after 2:30, rang up $106. At that, the market had had enough and the day's rally was quickly over, the Dow - and all of the major averages - falling into the red before recovering slightly into the close for a split finish.

While there is still some guarded optimism over the Greek "deal" struck by the EU ministers, there are more than just a few doubters that the country will ever recover from the depression caused by decades of overspending, cheating on taxes (it's a Greek - and exceedingly a global - way of life) and an overhang of debt that would make even mighty Atlas himself shy from the task of holding aloft the birthplace of democracy.

Stock profiteers aside, there's ample reason to believe that Greece's ongoing tragedy will help pull down the rest of the Eurozone, and with it the global economy, fiat money and eventually, governments. The major economies of the world are playing with fire, printing without remorse nor sufficient moral appreciation of what the aftermath of global inflation will bring.

Today's skittish market turnaround may have been the first chapter in what could be "the great unraveling." Too little has been done - here in the US, in Europe, China and Japan - to address the underlying issues of the great recession, with the economists of the world having come up with no answer other than to simply pile more debt on top of the already enormous mountain of unpayable debts built up during the go-go 90s and moribund 2000s.

If there's any wonder why gold and silver took off today like they were launched out of cannons, the chart below may explain why the now-12-year bull run of the precious metals may just be getting started.

Dow 13,000 may be a pretty number and cause for celebration in some board rooms and on certain stock desks, but it has little to do with the overall health of the economy of any nation. Relentless printing of money, backed by "full faith and credit" has become the norm and we will all be the poorer for it in time and the price of oil is merely the tip of the spear that will pierce all the misconceptions and hopeful tones emanating from Wall Street, the City of London, Shanghai and Tokyo.

Dow 12,965.69, +15.82 (0.12%)
NASDAQ 2,948.57, -3.21 (0.11%)
S&P 500 1,362.21, +0.98 (0.07%)
NYSE Composite 8,115.42, +0.91 (0.01%)
NASDAQ Volume 1,815,109,000
NYSE Volume 3,766,193,750
Combined NYSE & NASDAQ Advance - Decline: 2490-3168
Combined NYSE & NASDAQ New highs - New lows: 260-16 (ridiculous)
WTI crude oil: 105.84, +2.60
Gold: 1,758.50, +32.60
Silver: 34.43, +1.21

Numbers Racket: Greece, Euro, Apple, Transports and 100 Dow Points

Let's get real here.

Raise your hand if you think Greece is NOT going to default.

Very well. Maybe the rest of you with hands on hips or in pockets will appreciate the news out of Europe this morning, which somehow managed to pump futures toward a strong positive opening.

What's that? Even though Dow futures were up more than 80 points before former Treasury Secretary Hank (martial law) Paulson appeared on CNBC for the usual softball interview and were up 47 points just seconds before the open, the Dow only managed an initial gain of... hmmmm, less than 20 points.

Eurozone's 17 nations' (non) growth rate for the 4th quarter of 2011 was -0.3, the only countries showing gains in GDP growth being France and Slovakia.

Five countries in europe are already in recession. No surprise here, as Greece, Belgium, the Netherlands, Portugal and Italy have experienced two consecutive quarters of GDP decline. The one country everyone has an eye on is Germany, where output for the quarter fell by 0.2%, because the Germans have been the only country in the region showing any sign of elasticity and ability to weather the financial storms.

However, the rest of the Eurozone is dragging Germany's usually strong industrial sector down with the rest of the continent, a development that could prove disastrous as the EU plods through a troubling 2012.

Stocks took a spanking today in the US after the aforementioned recession news and then the communique out of Brussels from the esteemed EU finance ministers (a Baptist minister, a Catholic priest and an EU finance minister walk into a bar... oh, never mind) reminded the assembled money watchers worldwide that they are experts at procrastination and posturing.

While yesterday's commitment letter from Greek conservative leader Antonis Samaras stated that he would go along with the proposed - and passed by the Greek parliament - austerity measures, the potential future leader of Greece (give him about 6 months before he is bought off and retires, if he even wins the April race for Premier) contained a small caveat, saying he might reconsider, once, of course, the authorities deliver the 130 billion (or maybe it's more like 202 billion) Euros promised by the supra-government of the EU.

What happened today could best be described as controlled demolition. While the Dow was subsumed, hovering from 15 to 35 points in the red, the NASDAQ was wildly positive, though 90% of the gain was due to just one stock, Apple (APPL), which exploded in a number of ways on the day.

First, Apple rocketed to an all-time high of 526.29, but closed the day at the somewhat pedestrian level of 497.67. That's a pretty big round-turn, even for a stock with such a heady valuation. The decline was magnificent, falling 20 points in just the noon hour, and stumbling to a nearly 12-point loss in the remainder of the day. Volume was more than four times the average daily volume (12 million shares) at 53,457,212.

But Apple was just the NASDAQ story. The Dow charted its own path, guided by the Euro-dollar trade. The Euro slumped and finished below the psychotic 131 level, a number which is absolutely meaningless unless you're swapping currencies or considering travel to the doomed continent. But, stocks have followed the Euro-Dollar relationship like clockwork this year. Euro up, US stocks up, with the converse also true. The real value of the ephemeral Euro is all in the mind and to which equally worthless paper currency to which you compare it. If one would be so bold to compare it to some commodity - say, gold - well, a Euro won't buy you a single grain and it's gotten worse throughout its 11+ year life with each turning of the calendar.

So, the Dow set down at the close with its worse loss of 2012, which is not so much a surprise, being that the index (and all the other majors) has overheated in what has been an unusually-warm winter. But the Dow could just not surrender 100 points on the day, despite it being down 125 points at its worst level and down 108 points only one minute prior to the close. Perhaps that number (-100) has meaning to some people, but for the rest of us, -97.33 will just have to do.

What is alarming and scary (like Europe isn't enough of a fear factor) is the action in the Dow Transports, which suffered a two percent decline on the day, easily outstripping the widely-followed indices.(please have a gander at the 1 year chart with the 80% down-spike in November)

Another unpleasant thought concerns the timing of this week's reversal of fortune, just two days prior to options expiry, normally the strongest and upward-tilted week of any month in this Ponzi-like market scheme. Today's volume was also quite strong across all indices.

If stocks aren't making gains just prior to options expiry, then something very wrong is happening behind the scenes. It could be as simple as the market being overbought, or waking up to the awful European reality or the threat of war with Iran which looms larger each passing day.

Then again, it could just be that the low level of market participation has the major traders now drooling over each other's lunches. US stocks have been on a tear since October and the time and sentiment are ripe for a nasty correction.

A clue could come the day the Dow closes with a loss of more than 100 points, though that might prove to be a day too late and many billions of dollars short. Today's near-100-point loss should provide more than enough caution to everyone.

Keep a close eye on gold, and especially, silver, which has underperformed for the past two weeks. Any sustained gains in the precious metals should serve notice that there's something big brewing.

Dow 12,780.95, -97.33 (0.76%)
NASDAQ 2,915.83, -16.00 (0.55%)
S&P 500 1,343.23, -7.27 (0.54%)
NYSE Composite 7,998.65, -30.97 (0.39%)
NASDAQ Volume 2,036,710,750
NYSE Volume 4,045,495,750
Combined NYSE & NASDAQ Advance - Decline: 2267-
Combined NYSE & NASDAQ New highs - New lows: 264-23
WTI crude oil: 101.80, +1.06
Gold: 1,728.10, +10.40
Silver: 33.41, +0.06

Greece Passes Austerity Measures; Obama Budget Goes to Congress; Apple Closes Above 500

Any angst over Greece's passing of their mandatory austerity measures was quickly dispelled by the markets on Monday. Most European bourses finished the day solidly in the green, and US markets followed suit, posting gains which pretty much eviscerated Friday's fear-induced declines.

Even though the austerity in Greece is a death-knell for the country and widespread rioting took place in the capitol of Athens and elsewhere, the globalist elements of the EU, ECB and IMF viewed the vote as a positive referendum on the overall health of the Euro system.

Realistically, Greece will never be able to repay its debts nor will it be able to accommodate all of the cuts to social welfare programs and government employment, but the parliament did what was most expeditious to secure financing from its feudal masters in Germany and keep the game going.

The scheme - from the view of the IMF, ECB and Angela Merkel - seems to be to keep Greece functioning as a neo-slave-state to keep the Euro from collapsing, and, thus far, it seems to be working. A disorderly default by the Greeks might just be the catalyst that destroys whatever unity is left in the EuroZone, an outcome the supra-governmental EU leaders will fight bitterly with truckloads of money (it doesn't matter how much, they'll just print more) and the current kind of kabuki theatre that is disguised as "austerity" for the free-spending Greeks.

Their fear is that Greece's demise could foment similar outcomes in Portugal, Ireland and elsewhere, particularly Spain and Italy, and the continental currency experiment of the Euro would come crashing down upon their collective heads. Problematic as it may be, the monetarists in Brussels are committed to spending whatever it takes to keep the EuroZone intact by relentless money printing and worry about the consequences of widespread poverty, inflation, social unrest and ultimately, a continent-wide depression, later. We wish them luck, mostly because they'll need it, as desperate as the situation has become.

Here in the States, President Obama submitted his 2013 budget to congress, where it was deemed by many (mostly Republicans seeking to unseat the president this fall) as dead on arrival. Obama's 3.8 Trillion monstrosity would reduce military outlays while hiking outlays to infrastructure projects and features higher taxes for the wealthy and a $1.33 trillion deficit, marking the fourth straight year that the federal budget deficit would top one trillion dollars, despite an Obama campaign promise from 2008 to cut the deficit in half by the end of his first term.

Investors shrugged off the details and went about their task of re-inflating the corporate sector, sending stock prices close to their highest levels of 2012, though volume on the NYSE was the lowest for a non-Holiday session in over a decade.

Oil closed above $100 per barrel, despite US gas consumption being historically weak and Apple (AAPL) closing above 500 per share for the first time in its history. Apple is currently the largest company in the world by market cap, surpassing oil giant ExxonMobil for the top spot.

The major indices followed their now-routine pattern of a gap-up open followed by a mid-morning decline and rally and a flat-lining finish.

Dow 12,874.04, +72.81 (0.57%)
NASDAQ 2,931.39, +27.51 (0.95%)
S&P 500 1,351.77, +9.13 (0.68%)
NYSE Composite 8,056.25, +64.22 (0.80%)
NASDAQ Volume 1,613,612,250
NYSE Volume 3,462,219,000
Combined NYSE & NASDAQ Advance - Decline: 4236-1411
Combined NYSE & NASDAQ New highs - New lows: 262-12 (par-tay!)
WTI crude oil: 100.91, +2.24
Gold: 1,724.90, -0.40
Silver: 33.72, +0.12

Greece: Deal or No Deal; Booking Profits Today

Finally, after four days of running essentially in place, stocks took a morning downturn and turned it into an all-day event, as US indices suffered their worst loss of 2012.

The catalyst for the day-long decline was none other than Greece, where the deal struck on new austerity measures just yesterday quickly became unglued as the leader of the LAOS party, Giorgios Karatzaferis, said publicly that his 16-seat faction (of Greece's 300-member parliament) would vote against the planned austerity measures this Sunday.

The departure of the small faction caused a major uproar in financial markets, which see the defection as a major blow to the overall refinancing plan put in place by the EU, ECB and IMF (the "troika"). Globalist financial leaders have demanded that the Greek government sign onto the strict austerity measures before taking further steps to ease the crisis in Greece with another round of bailout funds before the deadline for Greece to repay roughly $14 billion occurs on March 20.

Additionally, as many as five cabinet ministers of the newly-formed Greek coalition government have reportedly resigned, signaling even further defections from the nation-destroying plan to keep Greece afloat and the Archbishop of Athens - and leader of the Orthodox church - sent a letter to Prime Minister Lucas Papademos warning of a "social explosion" of poverty, homelessness and rioting should the country continue on its current, destructive path.

Even today, protesters hurled gas bombs and rocks at Greek police in and around the capitol as the nation enters a dangerous, deadly phase of its struggle for sovereignty.

The bottom line is that Greece can and probably should extract itself from the EU and begin - as soon as humanly possible - converting from the disabled Euro currency back to the drachma. The levels of debt are far too onerous for Greece to ever repay without severe costs in lives and livelihoods, and the rising passions of the people may dictate to the government and the gloablist EU statists the correct course for the country, lest it fall to the desires of those clamoring for continued support from the ECB, which thus far have produced only a worsening situation.

A disorderly default by Greece would open the door to similar situations in Portugal and especially Ireland, where debt slavery is becoming a way of life and the citizens of the Emerald Isle find themselves chained to the wishes of their banker overlords. Extrication from the EuroZone and the Euro currency is now being seen as a path toward self-sufficiency and national unity in countries with severe debt issues, including Spain, Italy and Belgium.

Dissolution of the European Union and destruction of the Euro currency caused by domino-like defections is an end-game that the globalists and supra-governing mechanisms of the EU cannot even begin to comprehend and that is why almost all European stock markets - along with US markets - ended the day deep in the red.

The losses today in the Dow, NASDAQ and S&P 500 were a sudden shift from the plodding gains of recent days and may be signaling a shift in global economic expectations. Today was surely a day in which some short-term traders ran for cover, as US Treasury bonds improved, pushing yields lower.

A move lower in oil, gold and silver, as the US dollar rose in value is probably a temporary condition, at least for the metals, but any continued move lower by the Euro - which took a sudden downturn on today's news - would more than likely contribute to a run on equities as the correlation trade between the US dollar, the Euro and risk assets continues to suggest.

With the turn of the new year, the Euro has strengthened, but the destruction today should serve as a warning to investors and speculators that the recent strength is hardly sustainable. Imagining a Euro at 1.20 to the dollar, or even at par, could turn out to be the worst nightmare for many hedge funds and even long-term investors.

US stocks have reached a point of no return - at or near multi-year highs - and the concept of a euro-fomented retreat is not only palpable, but probable at this juncture.

Investors worldwide will be holding their collective breaths this weekend in anticipation of the Sunday vote by Greece's parliament and the response from the European financial authorities. While complete resolution is a distant hope, some clarity should come to markets by Monday, though the projected outcomes are radically different.

Plenty of profits were booked today, and, if the Greek situation continues to devolve into chaos, many more traders and investors will be heading for the sidelines. The markets - indeed, all of Europe and most of the world - are headed toward a climatic conclusion or convulsion in the days and weeks ahead. Should the Greeks decide to reject austerity and the burdens of continued debt, all bets are off.

Dow 12,801.23, -89.23 (0.69%)
NASDAQ 2,903.88, -23.35 (0.80%)
S&P 500 1,342.64, -9.31 (0.69%)
NYSE Composite 7,992.05, -89.20 (1.10%)
NASDAQ Volume 1,786,934,125
NYSE Volume 3,798,787,500
Combined NYSE & NASDAQ Advance - Decline: 1420-4233
Combined NYSE & NASDAQ New highs - New lows: 144-21
WTI crude oil: 98.67, -1.17
Gold: 1,725.30, -15.90
Silver: 33.60, 0.31

Stocks lower as Europe Weighs Heavily on Risk Assets

Stocks simply stalled out today as the euphoria over a new year continued to wear thin and the realities of Europe took center place in the minds of investors, traders, cheaters, liars and assorted money moguls.

Ancillary to the dilemma on the Continent, US companies are weighing the potentialities of a pan-European recession, which the IMF clearly defined today in cutting their global growth estimate from 4% to 3.25% for 2012. In case anyone's interested, that 0.75% cut in growth amounts to a drop off of 18.75% in their estimate. Whether the IMF economists just throw darts at a wall in search of a politically correct "number" or actually have ferreted out the world's economy to the penny, the sense of this announcement is pretty clear. Europe is big enough to plunge the rest of the world into a prolonged recession or, at best, a slow growth regime for the next four to five years, which, on top of the past three years of uncertainty, confusion and doubt, doesn't bode well for the rest of 2012 and beyond.

The IMF also lowered their forecast for the 17 nations comprising the Eurozone, from 1.1% growth in September to -0.5% today. In ordinary terms, the IMF is calling for a mild recession in Europe, though anyone who's been following this tableau of financial terror, knows that a mere 0.5% falloff would be a rather welcome outcome.

The Peterson Institute for International Economics (PIIE) has released their January 2012 Policy Brief[PDF]. The 13-page report, authored by Peter Boone and Simon Johnson details most of the pressing issues facing Europe and the viability of the EU itself.

The authors cite five key measures towards the survivability of the Eurozone:

Five measures are needed to enable the euro area to survive: (1) an immediate program to deal with excessive sovereign debt, (2) far more aggressive plans to reduce budget deficits and make peripheral nations hypercompetitive” in the near future, (3) supportive monetary policy from the ECB, (4) the introduction of mechanisms that credibly achieve long-term fiscal sustainability, and (5) institutional change that reduces the scope for excessive leverage and consequent instability in the financial sector.

Let's dissect these five measures one by one.

1) an immediate program to deal with excessive sovereign debt. Like what, actually paying down debt rather than continually issuing more bonds to avoid reality?

2) far more aggressive plans to reduce budget deficits and make peripheral nations hypercompetitive” in the near future. What would Greece and Italy do to become "hypercompetitive?" Eat faster? Dance more wildly? This is ludicrous.

3) supportive monetary policy from the ECB. Somehow, that just doesn't exactly jibe with "excessive sovereign debt" outlined in #1.

4) the introduction of mechanisms that credibly achieve long-term fiscal sustainability. Can you say "gold standard" and "kill the Euro" in the same sentence?

5) institutional change that reduces the scope for excessive leverage and consequent instability in the financial sector. Banks, governments acting rationally? The authors have clearly headed into an alternate dimension.

The off-the-cuff remarks notwithstanding, Johnson and Boone come to the startling conclusion that Europe's problems are not going to be fixed either easily nor soon, saying, in their conclusion, "Europe’s economy remains, therefore, in a dangerous state."

Well, somebody tell the stock jocks that their portfolios are about to shrink.

Elsewhere, Greece talks to get private investors on board for a voluntary "haircut" have stalled out once again, as there continues to be no deal on restructuring Greece's largely unpayable debt, while on Wall Street volume dried up completely in advance of tomorrow's FOMC non-eventful rate policy announcement and subsequent (ZZZZZZZZZZZZ) press conference.

Yes, it was another bang-up session for US equities. Now might be a good time to escape, like the hordes of other individual investors already have, having absolutely no confidence in markets, the government, or the sustainability of our glorious "recovery."

After the bell, the legacy of Steve Jobs lived on just a little longer as Apple (AAPL) delivered bang-up 4th quarter results, while Yahoo (YHOO) missed revenue and earnings estimates for the umpteenth consecutive time. It's very telling that Yahoo hasn't been acquired by now. Apparently, any interested buyers are content to wait until it simply disappears from the internet.

Dow 12,675.75, -33.07 (0.26%)
NASDAQ 2,786.64, +2.47 (0.09%)
S&P 500 1,314.65, -1.35 (0.10%)
NYSE Composite 7,840.65, -14.87 (0.19%)
NASDAQ Volume 1,659,757,875
NYSE Volume 3,671,223,750
Combined NYSE & NASDAQ Advance - Decline: 3138-2409 (lots of UNCH today)
Combined NYSE & NASDAQ New highs - New lows: 141-24
WTI crude oil: 98.95, -0.63
Gold: 1,664.50, -13.80
Silver: 31.98, -0.30

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

TRoad25

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