Us markets barely shrugged when Japan's nuclear reactors exploded, Egypt's government was overthrown, Ireland and Portugal needed bailouts and the entire nation of Libya was turned upside down in a violent civil war.
But it was something not destructive, threatening or otherwise physically damaging - a downgrade of the economic outlook from neutral to negative for the United States from ratings agency Standard & Poors (S&P) - that caught everyone's attention on Wall Street and in Washington.
The agency - the very same one which rated hundreds of mortgage-backed securities (MBS) as AAA when they clearly were not - verified what practically everyone on the planet already knew: that the USA was spending well beyond its means and that the federal government needs to fix its financial affairs in short order.
While shying away from actually downgrading the rating, the outlook downgrade comes as a kind of warning to politicians on both sides of the aisle. S&P is concerned that long-term high deficits could lead to dire consequences if not reined in soon. Concerned that Democrats and Republicans will be unable to come to terms with glaring deficits and reach a spending and revenue compromise, S&P said, "The negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years."
An actual ratings cut could impact the government spending and borrowing programs in a nyriad of ways, making new and old debt alike more expensive to service due to higher interest rates.
Of course, the United States is not just any country. It still enjoys the best rating possible AAA on long term debt and A-1+ on short term borrowings. Nonetheless, Wall Street stood up and took notice, with across-the-board selling right from the opening bell.
The Dow was down as much as 247 points early on, but managed to pull itself higher in the afternoon, shaving off 2/5ths of the decline.
Dow 12,201.59, -140.24 (1.14%)
NASDAQ 2,735.38, -29.27 (1.06%)
S&P 500 1,305.14, -14.54 (1.10%)
NYSE Composite 8,277.11, -123.20 (1.47%)
Declining issues soared over gainers, 5219-1370. New lows exceeded new highs on the NASDAQ, 50-42, and rolled over on the NYSE as well, with 30 new lows and just 22 new highs. Volume was not impressive, though overall breadth was somewhat stunning, with all sectors ending in the red, led by energy, capital goods, basic materials and financials.
The lack of volume is more ominous than it may appear at first glance, significant in that not all investors took this warning seriously and continue to not only hold stocks, but were buying in the afternoon. With the Fed's QE2 program drawing to a close in just two months time, a tough fight for certain in Washington over raising the debt ceiling and the 2012 budget and an economy still not flourishing a full two years after the banking crisis, there are more than enough potential causes for a rapid - and lasting - decline in stocks.
NASDAQ Volume 1,817,444,625
NYSE Volume 5,013,312,500
Besides the potential S&P downgrade, corporate earnings thus far have been short on results. Bank of America's miss on Friday was widely overlooked, but today after the bell, Texas Instruments (TI) also missed, and revised 2nd quarter estimates. Before the bell tomorrow, Goldman Sachs (GS) is due to announce their results for the first quarter, which, if all goes according to plan for the company that supposes to be doing "God's work," then this downdraft will be quickly forgotten and a new era of prosperity proclaimed.
That's another bet on which we're not taking sides.
Once again, commodities and the consumer were the winners of the day as crude oil slipped $2.54, to $107.12 at the NYMEX close, while gold flirted with the $1500 mark, closing the day at $1,492.90, a gain of $6.90. Silver continued to set new 31-year highs, finishing at 42.96, on a gain of 39 cents, though it was well above the $43 mark through most of the day.
In what had to be the least-appreciated news item of the day, Saudi Arabia cut its oil production by 800,000 barrels a day due to - get this - oversupply.
Now, if only somebody can explain to the millions of drivers worldwide just how that supply-demand dynamic works again maybe we can eliminate some of the obvious gouging that's gone on over the past two months. If the Saudis are cutting production due to oversupply, then oil should be more like $40 a barrel, not over $100, and gas should be a heck of a lot closer to $2.00 a gallon than it is to $4.00.
Trust nobody. It's obvious that our own government could care less about the general welfare of its own people. And for those who paid their income taxes today, too bad, because you just threw your money right down the memory hole.
What's in store from here is anybody's guess, but you can count on a number of things: the politicians will continue to bicker and fight like little girls and accomplish next to nothing; the bankers will continue to evade prosecution for their frauds and receive bigger bonuses; and the American people - sheep that they are - will not protest but will still want their iPads, food stamps and football.
Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts
Monday, April 18, 2011
Thursday, April 14, 2011
Fade the Banks: BofA, JP Morgan, Citi, Goldman Sachs Under Scrutiny
We found significant deficiencies that represent not only unsafe and unsound practices, but a breakdown in way customers are treated...
That was the statement made by acting Comptroller of the Currency John Walsh in regards to the Consent Order directed at the nation's sixteen largest banks, issued by his and other regulatory agencies yesterday.
Initial reaction was that the ruling was more a wrist-slapping by the regulators, but Walsh came out in its defense, as did others, such as FDIC's Sheila Bair.
The order includes provisions for the banks to undertake a complete review of their foreclosure practices and rectify any errors that may have affected consumers negatively. Additionally, the banks are instructed to pursue a “comprehensive, independent review” of their foreclosures from 2009 and 2010, institute a system for a single contact person for each foreclosure or mortgage modification action. The agencies - which include the Federal Reserve and the Office of Thrift Supervision - will closely monitor the banks' progress, look more closely at their practices and determine appropriate fines for each firm.
These actions, apart from the voluminous litigation already begun and sure to follow, plus the conclusion of 50 state attorneys general is likely to cost the banks a good deal of time, effort and money. When all is said and done, revealing their openly fraudulent practices and procedures will have two major effects: 1) they will not be so prone to play fast and loose with mortgage money, and 2) housing loans will become even more difficult to get.
On the surface these outcomes may be more of a detriment to recovery in the housing market, but homes will at least become more affordable. Making it difficult to qualify for a loan, the cost of residential housing will fall accordingly until some balance is achieved in the market. After that, homeowners can begin going after tax assessments and "fair value" assessments which are now likely more than 40% too high in many hard-impacted communities.
While the process will be riddled with starts and stops, the long-range outcome should be more affordable housing for lower and middle class people, without onerous tax implications. we may be turning a corner after all.
One other note of interest in terms of bank-hating worldwide was Senator Carl Levin's well-directed attack on Goldman Sachs today:
The Senator says he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought collateralized debt obligations without knowing the firm was betting they would fall in value.
Levin believes that not only did Goldman Sachs' executives delude their clients and break their fiduciary trust, but also lied to congress when brought in front of the Financial Inquiry panel.
Heck, as our link confirms, even FoxNews is pushing this agenda forward, but it remains to be seen if Attorney General Eric Holder will come out of hiding and actually pursue prosecution. If not, maybe it's time to indict the AG himself, because Levin and other members of congress have rightly identified Goldman Sachs and their brethren in the "big banking" world as the criminals who caused the financial meltdown of 2008 and sank the economy.
Watch Senator Levin tear into Goldman Sachs' Daniel Sparks:
Wall Street's reaction to this background noise was all-too-typical behavior by the very same banks that have grown in size over the past 2 1/2 years: they turned a perfectly plausible market downturn into marginal gains. The Dow was down 107 points before the pimps and pumpers jacked it up to a 14 point gain by the closing bell.
As expected, in the face of bad news, the financial gamblers could only cover their tracks, put on happy faces and say "all is well." Perhaps these thieves will be singing another tune when a few of them are perp-walked from their ivory towers in full view of the public which has grown to hate them and all they stand for.
All we've seen from the likes of the biggest banks in America is denial of wrongdoing, obfuscation, outright lying, and complete, unabashed manipulation of all markets they touch - bonds, equities and commodities - not to mention the under-the-table mortgage securitization, CDO and debt swap markets.
They are the most ruthless criminals on the planet, completely without conscience, and hopefully, lawmakers are beginning to catch on to their evil ways. Corners must be turned; equity and law must prevail.
Dow 12,285.15, +14.16 (0.12%)
NASDAQ 2,760.22, -1.30 (0.05%)
S&P 500 1,314.52, +0.11 (0.01%)
NYSE Composite 8,374.16, +6.85 (0.08%)
Not to belabor the obviously-fragile nature of the markets, advancing issues outdid decliners oddly enough, 3611-2838. However, new lows overtook new highs on the NASDAQ, 50-49, but new highs remained stubbornly ahead of new lows on the NYSE, 53-23, though the margin has shrunk considerably over the past few session. Volume remained purely a function of lack of interest.
NASDAQ Volume 1,728,764,375
NYSE Volume 4,249,863,500
Perhaps in response to the continuing turmoil, or maybe because the "Sultans of Swap" were too busy shedding documents to keep a handle on them, commodities took another robust turn positive. Crude oil gained another $1.00 during the NYMEX session, to close at $108.11, but gold and silver took home the trophies. Gold rocketed to another in a series of all-time highs, gaining $16.80, to $1,472.40 and silver exploded up $1.43, to $41.66, though both were higher in foreign markets, with gold at $1475.70 and silver romping higher at $42.14 per ounce.
Perhaps, more than turning corners, financial markets are meeting their eventual end, with paper currencies under attack from the growing howls of the general public worldwide, unhappy with rising prices and stagnant wages, governments with too much power and not enough nerve, honesty or will to do right.
These explosive moves in the precious metals are not to be taken lightly. The global Ponzi scheme of fiat money is being put to a severe test and is failing badly, today's activity just another warm-up for the real fireworks coming when the US congress considers whether or not to raise the debt ceiling, something they've done 174 times before.
From the ominous sounds emanating from the Tea Party wing in the House of Representatives, these could be the final days not only for the dollar as a reserve currency, but for every form of money not backed by some tangible asset, of which gold and silver are the obvious choices.
After the bell, Google announced its results for the first quarter of 2011, and from the looks of how it was trading after hours, investors were none too pleased that they missed their earnings per share estimate by three cents.
Even though Google topped revenue expectations, the stock was down nearly 30 points in the after-hours, a decline of more than five per cent.
That does not bode well for tomorrow's opening, which of course will have as an added bonus, the earnings release of the bank everyone loves to hate, Bank of America. Friday ought to be a doozy of a day.
Monday, April 11, 2011
No Euphoria Over Budget Deal, Earnings
One might have expected some kind of reaction from the stock market after Friday night's final hour deal to keep the government running, or even from advance interest in the deluge of upcoming corporate earnings reports, but, despite an early session push higher, stocks drifted lower and lower throughout the session.
The Dow jumped out of the gate to an early high, up 62 points, but gave all expect one paltry point back as the day progressed.
While the theory may be that the government was supposed to remain open and in business, so no, the stock market would not react, the reality is that since the major indices bumped headlong into resistance on Wednesday, there's been nothing but retreat and even a robust earnings season (which is unlikely) may not be able to shake the markets from their sideways-down direction.
On the day, the Dow Jones Industrials, the smallest index by numbers (30 stocks), though the largest by measure, was the only one to post a gain in any of the past three sessions, and even that was somewhat of an aberration caused by heavy buying of Alcoa at the close.
As it was, Alcoa (AA), the world's largest aluminum manufacturer, and traditionally the first company in the Dow to report, was off 15 cents at the close (17.77) and was trading marginally higher (+0.06) in after-hours trading. The company reported earnings of 28 cents per share, a penny above estimates, but revenue short of expectations by almost two per cent.
Dow 12,381.11, +1.06 (0.01%)
NASDAQ 2,771.51, -8.91 (0.32%)
S&P 500 1,324.46, -3.71 (0.28%)
NYSE Composite 8,445.77, -38.17 (0.45%)
Even though stocks finished with small movement, declining issues danced all over advancers, 4471-2165, a ratio of more than 2:1. New highs on the NASDAQ totaled a mere 59, with 32hitting new lows. On the NYSE, new highs led the way, 108-16, over new lows. Volume, on the first day of the week, was encouraging, as it was not horrible, though still just barely with a pulse.
NASDAQ Volume 2,039,947,625
NYSE Volume 3,841,427,750
Thanks to some large positions being taken off, notably by Goldman Sachs, the oil rally came to an abrupt halt on Monday. WTI crude futures fell $2.85, to $109.92 and were down even more after the NYMEX close. Gold dropped $6.00, to $1,468.10, while silver managed to remain flat, at $40.61.
With the budget deal due to be singed and passed sometime this week, investors will be focusing squarely on quarterly reports over the next few weeks, and prospects are said to be good, with the vast majority of companies meeting or beating Wall Street expectations.
The Dow jumped out of the gate to an early high, up 62 points, but gave all expect one paltry point back as the day progressed.
While the theory may be that the government was supposed to remain open and in business, so no, the stock market would not react, the reality is that since the major indices bumped headlong into resistance on Wednesday, there's been nothing but retreat and even a robust earnings season (which is unlikely) may not be able to shake the markets from their sideways-down direction.
On the day, the Dow Jones Industrials, the smallest index by numbers (30 stocks), though the largest by measure, was the only one to post a gain in any of the past three sessions, and even that was somewhat of an aberration caused by heavy buying of Alcoa at the close.
As it was, Alcoa (AA), the world's largest aluminum manufacturer, and traditionally the first company in the Dow to report, was off 15 cents at the close (17.77) and was trading marginally higher (+0.06) in after-hours trading. The company reported earnings of 28 cents per share, a penny above estimates, but revenue short of expectations by almost two per cent.
Dow 12,381.11, +1.06 (0.01%)
NASDAQ 2,771.51, -8.91 (0.32%)
S&P 500 1,324.46, -3.71 (0.28%)
NYSE Composite 8,445.77, -38.17 (0.45%)
Even though stocks finished with small movement, declining issues danced all over advancers, 4471-2165, a ratio of more than 2:1. New highs on the NASDAQ totaled a mere 59, with 32hitting new lows. On the NYSE, new highs led the way, 108-16, over new lows. Volume, on the first day of the week, was encouraging, as it was not horrible, though still just barely with a pulse.
NASDAQ Volume 2,039,947,625
NYSE Volume 3,841,427,750
Thanks to some large positions being taken off, notably by Goldman Sachs, the oil rally came to an abrupt halt on Monday. WTI crude futures fell $2.85, to $109.92 and were down even more after the NYMEX close. Gold dropped $6.00, to $1,468.10, while silver managed to remain flat, at $40.61.
With the budget deal due to be singed and passed sometime this week, investors will be focusing squarely on quarterly reports over the next few weeks, and prospects are said to be good, with the vast majority of companies meeting or beating Wall Street expectations.
Friday, December 3, 2010
Major Payroll Miss Slows Rally
Truly, the headline should have been worse, but the efforts of our beloved Federal Reserve, relentlessly supplying free cash flow to the entire banking and finance system through QE2, turned what, in ordinary times, should have been a major drop in the indices into a small gain. Obviously, these are not ordinary times, as the Fed's policies and government inabilities have completely distorted equity and bond markets, though, bonds, admittedly, are a little less affected.
The culprit in this case was a woeful reading from the BLS on November non-farm payrolls. Expected to come in at 150,000 new jobs, the miss was massive, registering at only a gain of 39,000 for the month. The unemployment rate was also hiked to 9.8%. A miss of this magnitude should have caused a major sell-off of something along the lines of 200 points on the Dow, but the smiley-face, feel-good "recovery" posture foisted upon an unsuspecting public by the charlatans who call themselves the "financial media" on CNBC and elsewhere, in perfect Orwellian doublespeak, turned this negative into a positive, suggesting that the lack of jobs in America is a good sign that the Bush tax cuts, QE2 and unemployment insurance will be extended.
Suddenly, like magic, the fact that there's only one job for every five applicants in America - during the height of the holiday season, no less - is a very good thing indeed! On the other side of the coin, since most everything emanating from our nation's capitol and Wall Street are complete fabrications and half-truths, at best, perhaps the doltish politicians running the circus thought a little depression might be good for what ails us.
Washington is so completely corrupt and bankrupt it's appalling, even to below-average fifth graders, who are likely to be able to see right through the politics of fraud. Nothing matters to these people except stock prices and elections. Half of the Southern states are starved for funds, as are most of the Northeastern ones along with California, but that's not anything that concerns them. They'll mindlessly dawdle over minutia like 3% tax cuts instead of actually handling matters of national importance. Thank goodness for Wikileaks and the internet, for displaying the true level of corruption and ineptitude that has brought the country to its knees.
Dow 11,382.09, +19.68 (0.17%)
NASDAQ 2,591.46, +12.11 (0.47%)
S&P 500 1,224.71, +3.18 (0.26%)
NYSE Composite 7,751.58, +39.33 (0.51%)
Amazingly, advancing issues outnumbered decliners by a substantial margin, 4029-2364. New highs again beat back new lows, 497-39, entirely similar to the past two days. Yes, siree! The same stocks, being endlessly pumped to infinity. The best news is that volume was down, meaning Goldman Sachs probably turned off one of its Cray XE6's for the weekend.
NASDAQ Volume 1,836,885,000
NYSE Volume 4,307,858,000
Oil futures reached a 2010 high, up $1.19, to $89.19. Precious metals and grains were also sharply higher. Gold ramped up $16.90, to $1,406.20; silver gained 70 cents, to $29.27. The silver and gold bugs would like to applaud Fed Chairman Bernanke for making them rich beyond their wildest dreams. The best part is that his failed policies will continue for many more months and be copied by our counterparts in the Eurozone, meaning the prices today will look like chickenfeed in a few years.
Of course, along with the precious metals go other commodities, like food and oil, so while the hoarders of gold and silver will be wealthy, they'll eventually have to hock that shiny stuff for gasoline, a loaf of bread and cans of tuna. At least they'll be able to get around and eat. The remainder of the immobilized masses will be starving to death.
We are deserving of all this, however, for electing spineless politicians and allowing the corruption and wantonness to go unchecked for so long. In another time, the wall of congress would be ringing with gunfire and bankers hung from the nearest lampposts, but the American public has been dumbed-down, satiated and nourished with the fruits of food stamps disguised as debit cards.
There will be no revolution, no wide public outcry. We will suffer quietly until the best of us all are gone and our children reduced to slaves. Bread and circuses is what we want and exactly what we will get.
Ponder these words, lest you fall into the trap of the status quo:
The culprit in this case was a woeful reading from the BLS on November non-farm payrolls. Expected to come in at 150,000 new jobs, the miss was massive, registering at only a gain of 39,000 for the month. The unemployment rate was also hiked to 9.8%. A miss of this magnitude should have caused a major sell-off of something along the lines of 200 points on the Dow, but the smiley-face, feel-good "recovery" posture foisted upon an unsuspecting public by the charlatans who call themselves the "financial media" on CNBC and elsewhere, in perfect Orwellian doublespeak, turned this negative into a positive, suggesting that the lack of jobs in America is a good sign that the Bush tax cuts, QE2 and unemployment insurance will be extended.
Suddenly, like magic, the fact that there's only one job for every five applicants in America - during the height of the holiday season, no less - is a very good thing indeed! On the other side of the coin, since most everything emanating from our nation's capitol and Wall Street are complete fabrications and half-truths, at best, perhaps the doltish politicians running the circus thought a little depression might be good for what ails us.
Washington is so completely corrupt and bankrupt it's appalling, even to below-average fifth graders, who are likely to be able to see right through the politics of fraud. Nothing matters to these people except stock prices and elections. Half of the Southern states are starved for funds, as are most of the Northeastern ones along with California, but that's not anything that concerns them. They'll mindlessly dawdle over minutia like 3% tax cuts instead of actually handling matters of national importance. Thank goodness for Wikileaks and the internet, for displaying the true level of corruption and ineptitude that has brought the country to its knees.
Dow 11,382.09, +19.68 (0.17%)
NASDAQ 2,591.46, +12.11 (0.47%)
S&P 500 1,224.71, +3.18 (0.26%)
NYSE Composite 7,751.58, +39.33 (0.51%)
Amazingly, advancing issues outnumbered decliners by a substantial margin, 4029-2364. New highs again beat back new lows, 497-39, entirely similar to the past two days. Yes, siree! The same stocks, being endlessly pumped to infinity. The best news is that volume was down, meaning Goldman Sachs probably turned off one of its Cray XE6's for the weekend.
NASDAQ Volume 1,836,885,000
NYSE Volume 4,307,858,000
Oil futures reached a 2010 high, up $1.19, to $89.19. Precious metals and grains were also sharply higher. Gold ramped up $16.90, to $1,406.20; silver gained 70 cents, to $29.27. The silver and gold bugs would like to applaud Fed Chairman Bernanke for making them rich beyond their wildest dreams. The best part is that his failed policies will continue for many more months and be copied by our counterparts in the Eurozone, meaning the prices today will look like chickenfeed in a few years.
Of course, along with the precious metals go other commodities, like food and oil, so while the hoarders of gold and silver will be wealthy, they'll eventually have to hock that shiny stuff for gasoline, a loaf of bread and cans of tuna. At least they'll be able to get around and eat. The remainder of the immobilized masses will be starving to death.
We are deserving of all this, however, for electing spineless politicians and allowing the corruption and wantonness to go unchecked for so long. In another time, the wall of congress would be ringing with gunfire and bankers hung from the nearest lampposts, but the American public has been dumbed-down, satiated and nourished with the fruits of food stamps disguised as debit cards.
There will be no revolution, no wide public outcry. We will suffer quietly until the best of us all are gone and our children reduced to slaves. Bread and circuses is what we want and exactly what we will get.
Ponder these words, lest you fall into the trap of the status quo:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.-- Thomas Jefferson
Wednesday, November 24, 2010
The Greatest Scam on Earth Run by Tyrants, Thieves and Traitors
If one didn't know any better, one might come to the conclusion - after viewing market activity on the NYSE and NASDAQ for a few days - that the markets are somehow rigged to never give correct signals and to never follow the same pattern as the day before.
And so it is with our markets, constantly being churned by the big players who will use CNBC as their foil to gin up any kind of story that fits the desired narrative of the day. Yesterday, Ireland's bailout, a flare-up in tensions on the North-South Korea border and raids on hedge funds by the FBI (no, CNBC barely mentions that dirty bit of business), sent stocks down for the day, with the Dow surrendering 142 points.
Today, based solely on improved numbers from the greasy BLS stack of initial unemployment claims (407,000 for the week, a short week at that and sure to be revised higher as they do 90% of the time) stocks gapped up as though yesterday's event occurred in a vacuum or were never really a big deal after all. What gap ups or downs at the open do is trap traders in overnight positions. Only the deft day-trading sharpies at Merrill, Goldman Sachs, et. al., are able to slide seamlessly in and out of stocks without mishap. Individual investors have the deck stacked entirely against them, suffering from limited knowledge, and, as the FBI raids confirm, widespread use of illegal inside information.
Trading in US stocks has become such an open scam that it's laughable to even think of investing in any listed companies. The markets have become completely the province of sophisticated high-rollers who daily prey on the wealth of those invested in mutual funds, 401K plans or individual stocks.
No further proof is needed. It's so blatant and obvious, just compare the trading yesterday and today (scroll down for yesterday's final numbers), and you can see for yourself that the Wall Street mob is running a game more crooked than any three-card monty would ever aspire to be.
In case you're unconvinced, consider that "traders" today completely ignored a 28% drop in new home sales year-over-year and a 3.3% decline in durable goods orders from the previous month.
The closing numbers for the two days are virtually a mirror image with only the plus and minus signs the only differential. What was down yesterday was up today, and the same thing happens over and over and over, until, of course, the big money wants to take it all radically higher or lower and then they induce panic or a two month rally, like the one we just had, lasting from September through the end of October.
A recent government report implied that 20% of Americans are mentally ill, but the number of suckers stuck in retirement plans and mutual funds that are invested in stocks suggests that the number should be much higher, because one would have to be out of their mind to invest in what is nothing more than a rigged carnival game, complete with the same bells at the open and close that one would hear at a casino when the slot machines hit a jackpot.
Except in the case of Wall Street the jackpot is only for the privileged few.
Dow 11,187.28, +150.91 (1.37%)
NASDAQ 2,543.12, +48.17 (1.93%)
S&P 500 1,198.35, +17.62 (1.49%)
NYSE Composite 7,579.26, +108.49 (1.45%)
Advancing issues ramped up well beyond decliners, 5191-1273. New Highs topped new lows, 329-53. Volume was at its lowest level in weeks, which the absolute moronic explanation would be due to the impending holiday, though it really is only more evidence of fraud.
NASDAQ Volume 1,648,491,625
NYSE Volume 3,743,356,250
Another big surprise was the rise in the price of oil, which is tied to gasoline prices at the pump, which shot up $2.61, to $83.86, just before one of the busiest driving periods of the year. Again, big surprise.
Gold fell $3.90, to $1372.60. Silver added six cents, to finish at $27.57. One can clearly see more evidence of fraud on a day that the dollar is up sharply and oil sets off on its own. The normal relationship is for oil to lessen in price when the dollar strengthens and increase when the dollar falls. It's what we've come to expect, though one should suppose that with the now-permanently rigged markets, the only relationship that matters is the big money trying to take more from unprotected individuals.
The FBI raids are a unique feature of the completed control market. Those being raided are the low-hanging fruit. We're tantalized by Goldman Sachs being mentioned as part of the probe, though we know they are exempt. No truly big players will ever receive as much as a subpoena, as the government needs those guys to keep funding their illicit raiding and fining procedures.
And that's all it's about. The government isn't squeezing enough money out of ordinary taxpayers - that well's run dry - so they go after the low hanging fruit that is the hedge fund industry.
Will the fraud and abuse ever end? Absolutely, but the price paid will be either buckets of blood from patriots willing to stand against the oppressive, fascist government-finance coalition, or the lives and livelihoods of millions of Americans and their children and grandchildren, a longer, more devastating prospect.
One need not look for this writer in the bread lines or poverty camps. He'll gladly die for what's right than live a lie, without a future. The frauds must be exposed and the guilty tried, jailed and made to make restitution for the billions stolen from ordinary Americans. That day may never come, but if it does, it will be none too soon.
Be thankful for what we have today, but bear in mind that we are being denied much more, as long as we remain in the grip of tyrants, thieves and traitors.
And so it is with our markets, constantly being churned by the big players who will use CNBC as their foil to gin up any kind of story that fits the desired narrative of the day. Yesterday, Ireland's bailout, a flare-up in tensions on the North-South Korea border and raids on hedge funds by the FBI (no, CNBC barely mentions that dirty bit of business), sent stocks down for the day, with the Dow surrendering 142 points.
Today, based solely on improved numbers from the greasy BLS stack of initial unemployment claims (407,000 for the week, a short week at that and sure to be revised higher as they do 90% of the time) stocks gapped up as though yesterday's event occurred in a vacuum or were never really a big deal after all. What gap ups or downs at the open do is trap traders in overnight positions. Only the deft day-trading sharpies at Merrill, Goldman Sachs, et. al., are able to slide seamlessly in and out of stocks without mishap. Individual investors have the deck stacked entirely against them, suffering from limited knowledge, and, as the FBI raids confirm, widespread use of illegal inside information.
Trading in US stocks has become such an open scam that it's laughable to even think of investing in any listed companies. The markets have become completely the province of sophisticated high-rollers who daily prey on the wealth of those invested in mutual funds, 401K plans or individual stocks.
No further proof is needed. It's so blatant and obvious, just compare the trading yesterday and today (scroll down for yesterday's final numbers), and you can see for yourself that the Wall Street mob is running a game more crooked than any three-card monty would ever aspire to be.
In case you're unconvinced, consider that "traders" today completely ignored a 28% drop in new home sales year-over-year and a 3.3% decline in durable goods orders from the previous month.
The closing numbers for the two days are virtually a mirror image with only the plus and minus signs the only differential. What was down yesterday was up today, and the same thing happens over and over and over, until, of course, the big money wants to take it all radically higher or lower and then they induce panic or a two month rally, like the one we just had, lasting from September through the end of October.
A recent government report implied that 20% of Americans are mentally ill, but the number of suckers stuck in retirement plans and mutual funds that are invested in stocks suggests that the number should be much higher, because one would have to be out of their mind to invest in what is nothing more than a rigged carnival game, complete with the same bells at the open and close that one would hear at a casino when the slot machines hit a jackpot.
Except in the case of Wall Street the jackpot is only for the privileged few.
Dow 11,187.28, +150.91 (1.37%)
NASDAQ 2,543.12, +48.17 (1.93%)
S&P 500 1,198.35, +17.62 (1.49%)
NYSE Composite 7,579.26, +108.49 (1.45%)
Advancing issues ramped up well beyond decliners, 5191-1273. New Highs topped new lows, 329-53. Volume was at its lowest level in weeks, which the absolute moronic explanation would be due to the impending holiday, though it really is only more evidence of fraud.
NASDAQ Volume 1,648,491,625
NYSE Volume 3,743,356,250
Another big surprise was the rise in the price of oil, which is tied to gasoline prices at the pump, which shot up $2.61, to $83.86, just before one of the busiest driving periods of the year. Again, big surprise.
Gold fell $3.90, to $1372.60. Silver added six cents, to finish at $27.57. One can clearly see more evidence of fraud on a day that the dollar is up sharply and oil sets off on its own. The normal relationship is for oil to lessen in price when the dollar strengthens and increase when the dollar falls. It's what we've come to expect, though one should suppose that with the now-permanently rigged markets, the only relationship that matters is the big money trying to take more from unprotected individuals.
The FBI raids are a unique feature of the completed control market. Those being raided are the low-hanging fruit. We're tantalized by Goldman Sachs being mentioned as part of the probe, though we know they are exempt. No truly big players will ever receive as much as a subpoena, as the government needs those guys to keep funding their illicit raiding and fining procedures.
And that's all it's about. The government isn't squeezing enough money out of ordinary taxpayers - that well's run dry - so they go after the low hanging fruit that is the hedge fund industry.
Will the fraud and abuse ever end? Absolutely, but the price paid will be either buckets of blood from patriots willing to stand against the oppressive, fascist government-finance coalition, or the lives and livelihoods of millions of Americans and their children and grandchildren, a longer, more devastating prospect.
One need not look for this writer in the bread lines or poverty camps. He'll gladly die for what's right than live a lie, without a future. The frauds must be exposed and the guilty tried, jailed and made to make restitution for the billions stolen from ordinary Americans. That day may never come, but if it does, it will be none too soon.
Be thankful for what we have today, but bear in mind that we are being denied much more, as long as we remain in the grip of tyrants, thieves and traitors.
Monday, August 16, 2010
Equities Remain Stuck in Liquidity Trap
What would you do if you threw a party and nobody showed up?
Well, that's how brokers on Wall Street must be feeling, because there's a serious lack of trading going on these days. For well over a week now, stocks have been stuck within the deafening silence of a liquidity trap, bought about by an overwhelming amount of distrust, absence of investable capital and uncertainty about the future.
Individual investors - and, to a growing degree, some fund managers - have found safety and serenity in the simplicity of cash. Others have opted for money market returns of less than one percent, still more have waded into the refreshing bond waters or ventured into gold or other commodities.
Stocks, for better or worse, have fallen out of favor in the aftermath of the 08-09 meltdown, aided by government programs which were designed to spur demand but instead have only created one-off events, like the cash for clunkers fiasco or the failed stimulus that gave $8000 tax breaks to home owners.
Sure, the people who took advantage of government largesse got their new cars or their new homes, more than likely at inflated prices (we'll know for sure in another 12-18 months), but there was no appreciable overall gain in new buyers. Maybe most folks just like keeping what they have, secure in the fact that - especially in the case of cars - it's paid for or, with a house, knowing what it's roughly worth.
Still others are stuck with properties at inflated values. Recent home-buyers of 2003-2007 vintage are nearly universally upside-down, stuck with payments on outrageous mortgages while the value of their real estate continues a precipitous decline.
In this disheveled state of affairs, the last thing on people's minds is putting more money into the stock market, either by buying individual stocks, mutual funds or increasing the funding of their 401k plan. The average American has gotten the message loud and clear: save and save more. Non-essential purchases are being put on hold more often and investment decisions are based upon more immediate needs rather than with a long-term perspective. Besides, there's a real feeling that Wall Street is rotten and crooked and that stocks, as they have gone nowhere for the past ten years, look more and more like losing propositions.
Trading volumes on the major exchanges have been in a prolonged decline, and even for August, the recent volumes speak of something more sinister and pernicious than simply everybody being on vacation. There's no excitement or impetus for stocks to rise, and Monday's trade was more than likely bolstered by a fresh infusion of cash from the banks and brokerages. The Dow dipped 70 points right at the open before a sudden reversal just minutes into the session.
Once the averages found a more suitable footing, they just churned in a narrow range of about 50 points on the Dow before another minor blip downward and another round of funding from the "masters of the universe" at Goldman Sachs, JP Morgan and Merrill Lynch, BofA's trading arm.
This is a very serious condition which is not going to be solved without another blood-letting in stocks. The absence of confidence has spread all the way from Main Street to Washington to the canyons of Wall Street and now it's locked in place. Until somebody proves that stocks are safe and the economy is really on a rebound (impossible), the direction will be down, down and then down some more. Today's minor gains are overshadowed by the paucity of trading.
Dow 10,302.01, -1.14 (0.01%)
NASDAQ 2,181.87, +8.39 (0.39%)
S&P 500 1,079.38, +0.13 (0.01%)
NYSE Composite 6,871.58, +10.54 (0.15%)
Advancing issues took command over decliners, 3980-2440. There were 311 new highs and 223 new lows, but nobody is really bothering to keep score. Volume reached a new low on Monday, below the abysmal numbers from the previous Monday, which was off-the-charts ugly. People simply aren't interested in stocks right now, and for many good reasons.
NASDAQ Volume 1,636,439,375
NYSE Volume 3,569,886,750
Oil was down again, losing 15 cents, to $75.24, but gold gained $9.60, to $1,224.50. Silver was also up, better by 32 cents, to $18.42.
There was some small economic data, including the NY Fed's Empire Manufacturing Index, which came in with a reading of 7.10 for August after a 5.8 posting in July. The index is stuck at extreme low levels, indicating very modest growth, if any, with falling prices and negative future outlooks. It's not a pretty picture and New York is one of the better-performing areas of the country.
Prior to the open Tuesday, a number of important economic indicators will be released, including July PPI, housing starts and building permits. The numbers are expected to be flat or even down from June, which is just the kind of news Wall Street does not need at this juncture.
The true picture being painted by this low-volume regime is one bereft of confidence and capital. Like just about everything else in the current climate, it is unsustainable for more than a very short period of time, one which will be coming to an abrupt end shortly.
Well, that's how brokers on Wall Street must be feeling, because there's a serious lack of trading going on these days. For well over a week now, stocks have been stuck within the deafening silence of a liquidity trap, bought about by an overwhelming amount of distrust, absence of investable capital and uncertainty about the future.
Individual investors - and, to a growing degree, some fund managers - have found safety and serenity in the simplicity of cash. Others have opted for money market returns of less than one percent, still more have waded into the refreshing bond waters or ventured into gold or other commodities.
Stocks, for better or worse, have fallen out of favor in the aftermath of the 08-09 meltdown, aided by government programs which were designed to spur demand but instead have only created one-off events, like the cash for clunkers fiasco or the failed stimulus that gave $8000 tax breaks to home owners.
Sure, the people who took advantage of government largesse got their new cars or their new homes, more than likely at inflated prices (we'll know for sure in another 12-18 months), but there was no appreciable overall gain in new buyers. Maybe most folks just like keeping what they have, secure in the fact that - especially in the case of cars - it's paid for or, with a house, knowing what it's roughly worth.
Still others are stuck with properties at inflated values. Recent home-buyers of 2003-2007 vintage are nearly universally upside-down, stuck with payments on outrageous mortgages while the value of their real estate continues a precipitous decline.
In this disheveled state of affairs, the last thing on people's minds is putting more money into the stock market, either by buying individual stocks, mutual funds or increasing the funding of their 401k plan. The average American has gotten the message loud and clear: save and save more. Non-essential purchases are being put on hold more often and investment decisions are based upon more immediate needs rather than with a long-term perspective. Besides, there's a real feeling that Wall Street is rotten and crooked and that stocks, as they have gone nowhere for the past ten years, look more and more like losing propositions.
Trading volumes on the major exchanges have been in a prolonged decline, and even for August, the recent volumes speak of something more sinister and pernicious than simply everybody being on vacation. There's no excitement or impetus for stocks to rise, and Monday's trade was more than likely bolstered by a fresh infusion of cash from the banks and brokerages. The Dow dipped 70 points right at the open before a sudden reversal just minutes into the session.
Once the averages found a more suitable footing, they just churned in a narrow range of about 50 points on the Dow before another minor blip downward and another round of funding from the "masters of the universe" at Goldman Sachs, JP Morgan and Merrill Lynch, BofA's trading arm.
This is a very serious condition which is not going to be solved without another blood-letting in stocks. The absence of confidence has spread all the way from Main Street to Washington to the canyons of Wall Street and now it's locked in place. Until somebody proves that stocks are safe and the economy is really on a rebound (impossible), the direction will be down, down and then down some more. Today's minor gains are overshadowed by the paucity of trading.
Dow 10,302.01, -1.14 (0.01%)
NASDAQ 2,181.87, +8.39 (0.39%)
S&P 500 1,079.38, +0.13 (0.01%)
NYSE Composite 6,871.58, +10.54 (0.15%)
Advancing issues took command over decliners, 3980-2440. There were 311 new highs and 223 new lows, but nobody is really bothering to keep score. Volume reached a new low on Monday, below the abysmal numbers from the previous Monday, which was off-the-charts ugly. People simply aren't interested in stocks right now, and for many good reasons.
NASDAQ Volume 1,636,439,375
NYSE Volume 3,569,886,750
Oil was down again, losing 15 cents, to $75.24, but gold gained $9.60, to $1,224.50. Silver was also up, better by 32 cents, to $18.42.
There was some small economic data, including the NY Fed's Empire Manufacturing Index, which came in with a reading of 7.10 for August after a 5.8 posting in July. The index is stuck at extreme low levels, indicating very modest growth, if any, with falling prices and negative future outlooks. It's not a pretty picture and New York is one of the better-performing areas of the country.
Prior to the open Tuesday, a number of important economic indicators will be released, including July PPI, housing starts and building permits. The numbers are expected to be flat or even down from June, which is just the kind of news Wall Street does not need at this juncture.
The true picture being painted by this low-volume regime is one bereft of confidence and capital. Like just about everything else in the current climate, it is unsustainable for more than a very short period of time, one which will be coming to an abrupt end shortly.
Tuesday, July 20, 2010
Clueless? You're Not Alone on Turnaround Tuesday
From the most grizzled veterans to the baby-faced nubians, nobody was able to put any kind of story or spin on the dramatic turnaround stocks made Tuesday.
After IBM and Texas Instruments both reported revenue misses for the second quarter Monday after the close, Goldman Sachs continued the trend with an earnings report that had traders scrambling for the exits before the market had even opened. When stocks did begin trading, they fell off a cliff, with the Dow down by more than 145 points within the first 15 minutes.
Stabilizing in the red, all indices were trading lower, but gained strength throughout the morning and accelerated into the afternoon session. As 2:00 pm approached, stocks had staged a stunning reversal on nothing but momentum. By the close, all of the major indices sported solid gains, keeping hopes alive that this earnings season would offer some value and momentum for the second half of the year.
Even though IBM ended lower for the day (-3.24, 126.55, -2.50%), it had pared losses substantially, after it had opened with a loss of more than 5%. Goldman Sachs, on the other hand, possibly the true catalyst behind the entire market rally, ended the day higher (+3.23, 148.91, +2.22%) after initially trading down by more than 3 1/2 points from its previous close.
Dow 10,229.96, +75.53 (0.74%)
NASDAQ 2,222.49, +24.26 (1.10%)
S&P 500 1,083.48, +12.23 (1.14%)
NYSE Composite 6,820.04, +80.40 (1.19%)
Headline numbers were supported by strong internals, with advancing issues beating back decliners, 4846-1552. New highs remained atop new lows, 214-136, though once again the disturbing trend in the NASDAQ - more new lows than highs, 67-26 - appeared for the second straight day. Volume was light, but much better than Monday's dismal showing.
NASDAQ Volume 1,944,221,875
NYSE Volume 5,323,317,000
Crude oil closed out the August futures contract up 90 cents, at $77.44, the highest price in a month. Gold rallied for a gain of $9.80, to $1,191.50. Silver added 15 cents, to $17.68.
After the bell, Yahoo! and Apple reported, with Yahoo missing on revenue though beating consensus bottom line EPS by a penny at 15 cents per share. Apple beat on almost all metrics, including gross revenue and earnings per share, setting up a potentially powerful open for tech shares on Wednesday.
After IBM and Texas Instruments both reported revenue misses for the second quarter Monday after the close, Goldman Sachs continued the trend with an earnings report that had traders scrambling for the exits before the market had even opened. When stocks did begin trading, they fell off a cliff, with the Dow down by more than 145 points within the first 15 minutes.
Stabilizing in the red, all indices were trading lower, but gained strength throughout the morning and accelerated into the afternoon session. As 2:00 pm approached, stocks had staged a stunning reversal on nothing but momentum. By the close, all of the major indices sported solid gains, keeping hopes alive that this earnings season would offer some value and momentum for the second half of the year.
Even though IBM ended lower for the day (-3.24, 126.55, -2.50%), it had pared losses substantially, after it had opened with a loss of more than 5%. Goldman Sachs, on the other hand, possibly the true catalyst behind the entire market rally, ended the day higher (+3.23, 148.91, +2.22%) after initially trading down by more than 3 1/2 points from its previous close.
Dow 10,229.96, +75.53 (0.74%)
NASDAQ 2,222.49, +24.26 (1.10%)
S&P 500 1,083.48, +12.23 (1.14%)
NYSE Composite 6,820.04, +80.40 (1.19%)
Headline numbers were supported by strong internals, with advancing issues beating back decliners, 4846-1552. New highs remained atop new lows, 214-136, though once again the disturbing trend in the NASDAQ - more new lows than highs, 67-26 - appeared for the second straight day. Volume was light, but much better than Monday's dismal showing.
NASDAQ Volume 1,944,221,875
NYSE Volume 5,323,317,000
Crude oil closed out the August futures contract up 90 cents, at $77.44, the highest price in a month. Gold rallied for a gain of $9.80, to $1,191.50. Silver added 15 cents, to $17.68.
After the bell, Yahoo! and Apple reported, with Yahoo missing on revenue though beating consensus bottom line EPS by a penny at 15 cents per share. Apple beat on almost all metrics, including gross revenue and earnings per share, setting up a potentially powerful open for tech shares on Wednesday.
Wednesday, July 7, 2010
... And Now, the Rally That Was... a Real Phony
Viewing the market over the past two trading sessions, a comparison to an olympic athlete might be apropos, say, that of a high-jumper, like Dwight Stones back in the day, sailing over the bar at 7'1", but then failing at the next height, and again, until finally getting his steps and takeoff and velocity all right on the third attempt, at which point he flies into Olympic history.
That's what the market appears to have done, after failing badly on Tuesday, finally getting the commitment and the volume and the lack of bad economic data points and the short sellers all lined up in the proper order to propel the Dow back over the 10,000 bar, taking the antecedent indices along for the joyful ride.
With the level of short interest in the marketplace, there's no doubt that the push higher in the final minutes of trading on Monday continued into Tuesday on the backs of the shorts, who, like it or not, have been having their way for the past two months running. Anybody getting squeezed here was either in too late or was already well in the money and made profits when they covered their bets. Worse yet, many of the same players who profited today on the upticks were the same people making hay on the way down. It's just the way Wall Street works these days, now that the buy and hold investment strategy (the one which our fathers and grandfathers used to make money slowly and honorably) have been relegated to the dustbin of market history in favor of "quant" trading and electronic push-button charting and graphing which the investment houses are now all shoving down our throats.
Sure, you can trade right from your iphone, computer or other electronic instrument, as though it's a race to see who squeeze the last few pennies on execution, but is that any way to treat your money? Not really, though the masters of the universe running the funds and brokerages are generally using OPM (other people's money), so who cares? And that's why today's rally pushed higher and higher. The money masters flicked the switch at the open in the US, abruptly turning around all of the European markets - which were suffering severe declines until late in their respective trading days - and sending US stocks soaring.
One can only be amused by the cheerleading nature of the financial press, despite mountains of data that not only suggest, but verify, that the "recovery" was something of a chimera, and that global markets are still fundamentally unsound. Reading a headline like, "European bank stress tests and U.S. retail sales lift the Dow" gives one reason to probe deeper, as we come to find out that the stress tests to be performed on European banks haven't actually been started, but that a few details about what they may entail were released. Also, we find out that the esteemed group known as the International Council of Shopping Centers reported same store sales in the ICSC-Goldman Sachs (hmm, those guys again) weekly index, which is "constructed using sales-weighted geometric average growth rates to preserve long-term consistency and is statistically benchmarked to a broad-based monthly retail industry sales aggregate" (in other words, it's bull-$^%#), was up 3.9% year-over-year, the best level since May.
Well, that being only two months ago, why did the market go straight down then? Also, one may recall that retail sakes a year ago were pretty dismal, so, being up nearly 4% is not even back to what anyone would consider "good," though it apparently works for the fraudsters and con men who populate the equity trading markets.
And, by the way, that ICSC-Goldman Sachs index excludes restaurants and vehicle sales, which, unless you have consumers who neither eat nor drive, seems to be an important element in tracking retail sales performance. They have plenty of other modifiers with which they can interpret the data seemingly any way they like, such as the "Piser Method, which was popular in the early 1930s." I guess they tried lying to people back in the Great Depression, too, and we all know how well that worked out.
One should not overlook - though everybody trading stocks apparently did today - that vacancies at large malls in the top 80 U.S. markets rose to 9 percent in the second quarter and open-air center is now at 10.9%, that data coming from the same web site as the cheery same-store sales index.
So, the market cleared the bar of 10,000, but only until maybe tomorrow, when initial unemployment claims for the most recent week are released. Maybe the government can fudge those numbers a bit, as they've been downright depressing lately. Of course, this rally could go on for another few weeks, especially since earnings begin flowing to the street in short order, and, of course, options expire on Friday of next week. Getting the picture yet?
The real kicker to the whole "rally" story is what happened to Family Dollar (FDO) after it released its earning report. Quarterly profit jumped 19%, but earnings guidance disappointed as the CEO said consumers remained wary. No surprise there, but the stock lost 8% on the day, down 3.18 to 36.26. And you thought retailers were doing well.
Dow 10,018.28, +274.66 (2.82%)
NASDAQ 2,159.47, +65.59 (3.13%)
S&P 500 1,060.27, +32.21 (3.13%)
NYSE Composite 6,685.78, +199.66 (3.08%)
Internals told a mixed story. Advancers eviscerated decliners, 5351-1212, but new lows led new highs, 205-121. Volume was at average levels for the second straight session, another indication that this was more a relief rally or a knee-jerk reaction to oversold conditions, or a combination with short-covering mixed in for good measure.
NASDAQ Volume 2,190,606,000
NYSE Volume 5,861,473,500
Crude oil for August delivery rose $2.06, after falling for six consecutive sessions, to $74.07. Gold snapped back to life, gaining $3.80, to $1,198.60, with silver adding 15 cents, to close at $17.98.
Considering that financial and energy stocks (including, notoriously, BP) - the two most beaten down groups over the past few weeks were the rally leaders, one shouldn't put too much trust in this one-day wonder rally, as it appears to be contain more bark than bite, more reflection than reality, and no fundamentally good reason to have happened at all except for a one-day dearth of economic reporting.
That's what the market appears to have done, after failing badly on Tuesday, finally getting the commitment and the volume and the lack of bad economic data points and the short sellers all lined up in the proper order to propel the Dow back over the 10,000 bar, taking the antecedent indices along for the joyful ride.
With the level of short interest in the marketplace, there's no doubt that the push higher in the final minutes of trading on Monday continued into Tuesday on the backs of the shorts, who, like it or not, have been having their way for the past two months running. Anybody getting squeezed here was either in too late or was already well in the money and made profits when they covered their bets. Worse yet, many of the same players who profited today on the upticks were the same people making hay on the way down. It's just the way Wall Street works these days, now that the buy and hold investment strategy (the one which our fathers and grandfathers used to make money slowly and honorably) have been relegated to the dustbin of market history in favor of "quant" trading and electronic push-button charting and graphing which the investment houses are now all shoving down our throats.
Sure, you can trade right from your iphone, computer or other electronic instrument, as though it's a race to see who squeeze the last few pennies on execution, but is that any way to treat your money? Not really, though the masters of the universe running the funds and brokerages are generally using OPM (other people's money), so who cares? And that's why today's rally pushed higher and higher. The money masters flicked the switch at the open in the US, abruptly turning around all of the European markets - which were suffering severe declines until late in their respective trading days - and sending US stocks soaring.
One can only be amused by the cheerleading nature of the financial press, despite mountains of data that not only suggest, but verify, that the "recovery" was something of a chimera, and that global markets are still fundamentally unsound. Reading a headline like, "European bank stress tests and U.S. retail sales lift the Dow" gives one reason to probe deeper, as we come to find out that the stress tests to be performed on European banks haven't actually been started, but that a few details about what they may entail were released. Also, we find out that the esteemed group known as the International Council of Shopping Centers reported same store sales in the ICSC-Goldman Sachs (hmm, those guys again) weekly index, which is "constructed using sales-weighted geometric average growth rates to preserve long-term consistency and is statistically benchmarked to a broad-based monthly retail industry sales aggregate" (in other words, it's bull-$^%#), was up 3.9% year-over-year, the best level since May.
Well, that being only two months ago, why did the market go straight down then? Also, one may recall that retail sakes a year ago were pretty dismal, so, being up nearly 4% is not even back to what anyone would consider "good," though it apparently works for the fraudsters and con men who populate the equity trading markets.
And, by the way, that ICSC-Goldman Sachs index excludes restaurants and vehicle sales, which, unless you have consumers who neither eat nor drive, seems to be an important element in tracking retail sales performance. They have plenty of other modifiers with which they can interpret the data seemingly any way they like, such as the "Piser Method, which was popular in the early 1930s." I guess they tried lying to people back in the Great Depression, too, and we all know how well that worked out.
One should not overlook - though everybody trading stocks apparently did today - that vacancies at large malls in the top 80 U.S. markets rose to 9 percent in the second quarter and open-air center is now at 10.9%, that data coming from the same web site as the cheery same-store sales index.
So, the market cleared the bar of 10,000, but only until maybe tomorrow, when initial unemployment claims for the most recent week are released. Maybe the government can fudge those numbers a bit, as they've been downright depressing lately. Of course, this rally could go on for another few weeks, especially since earnings begin flowing to the street in short order, and, of course, options expire on Friday of next week. Getting the picture yet?
The real kicker to the whole "rally" story is what happened to Family Dollar (FDO) after it released its earning report. Quarterly profit jumped 19%, but earnings guidance disappointed as the CEO said consumers remained wary. No surprise there, but the stock lost 8% on the day, down 3.18 to 36.26. And you thought retailers were doing well.
Dow 10,018.28, +274.66 (2.82%)
NASDAQ 2,159.47, +65.59 (3.13%)
S&P 500 1,060.27, +32.21 (3.13%)
NYSE Composite 6,685.78, +199.66 (3.08%)
Internals told a mixed story. Advancers eviscerated decliners, 5351-1212, but new lows led new highs, 205-121. Volume was at average levels for the second straight session, another indication that this was more a relief rally or a knee-jerk reaction to oversold conditions, or a combination with short-covering mixed in for good measure.
NASDAQ Volume 2,190,606,000
NYSE Volume 5,861,473,500
Crude oil for August delivery rose $2.06, after falling for six consecutive sessions, to $74.07. Gold snapped back to life, gaining $3.80, to $1,198.60, with silver adding 15 cents, to close at $17.98.
Considering that financial and energy stocks (including, notoriously, BP) - the two most beaten down groups over the past few weeks were the rally leaders, one shouldn't put too much trust in this one-day wonder rally, as it appears to be contain more bark than bite, more reflection than reality, and no fundamentally good reason to have happened at all except for a one-day dearth of economic reporting.
Thursday, June 10, 2010
Sucker Rally, Part Two: Rally 'Round BP
Whatever yesterday's steep sell-off was about, today's gap-up rally was about making up lost ground, in a hurry.
The Dow Jones Industrials gapped up at the open - once again shutting out all but the insider firms - 150 points, and by 10:00 am, it was up nearly 250. This kind of quick-start rally doesn't occur in a vacuum, so most of the clueless analysts attributed the rise to explosive numbers coming out of China, saying that exports increased at a rate of 48.5% year-over-year.
Suffice it to say that nobody wanted to mention that a year ago, exports were at an absolute nadir, Chinese officials were doing their best to control riotous laid-off workers and that global trading conditions were abysmal. Some comparisons, especially those which favor the bullish case, are almost always kept out of view, as was the case today.
Concerns over the sudden revitalization of stock-buying fervor were put on the back burner for the day, allowing investors to bask in the glow of at least some temporary relief to what has been a relentless decline since the beginning of May, and that's why bear market rallies are never useful barometers of market health. This one, like all others, will be soon forgotten, for it is only speculative and quite possibly just a trading phenomenon, likely linked to options expiration only a week away.
Besides the obvious rallying around poor, misunderstood British Petroleum (BP), financial stocks also rallies, perhaps on suspicion that congressional debate on financial regulation seems to be going the way the bankers would like, toward a watered-down bill that is nothing more than cosmetic, allowing the political class to find some cover heading into the fall election cycle.
The pols have their hands in the banks' pockets and vice versa, so don't expect anything hard-hitting to come of "FinReg," despite the inclusion of Senator Blanche Lincoln's controversial derivatives proposal, which threatens to drive as much as 30% of large bank profits overseas. The bill is in the hands of the conference committee, chaired by Barney Frank, which will reconcile differences between the Senate and House versions.
So, was this the mother of all sucker rallies, or does this mark the end of the month-long decline in equities and the beginning of a new bull run?
The jury's still out, but consider, if you will, the key numbers that will tell the story in coming days. On Friday, June 4, after the non farms payroll report showed little progress in private sector employment, stocks sank to a closing low of 9931.97 on the Dow and 1064.88 on the S&P. The follow-on sell-off Monday, June 7, saw the Dow close below the previous interim low (February 8), finishing at 9816.49. The S&P likewise closed below its previous low, ending the day at 1050.47.
Bottom pierced, any chartist with rudimentary skills would have promoted the idea that further downside risk was being telegraphed. Then came Tuesday's sharp rally, Wednesday's failed rally and today's super rally, on low volume, and on suspect news from - of all places - China. To believe that strength in Chinese markets somehow translates to good news for US firms requires a requisite leap of faith, when the obvious truth was that this rally was really all about saving the prospects of BP, the incomes of one out of seven British pensioners, and keeping the world awash in crude oil (both figuratively and, in the Gulf, literally).
For the bulls, their new targets are 11,205.03 on the Dow and 1217.28 on the S&P, somewhat of a stretch from where stocks have currently settled. Even from today's lofty closing values, a rally of 11% would be needed to return to the previous highs, whereas a decline of just 3.5% would send the two main indices back below their recently-achieved bottoms.
Sideways trading leaves us in a state of suspended animation, though investors will be mulling the news from the BP oil gusher and Europe's deteriorating debt condition over the next four weeks prior to earnings season, which could be a bellwether or a Waterloo, depending on results. Chances still seem to favor the bearish case, with much of this week's trading being perceived as mere "noise."
Dow 10,172.53, +273.28 (2.76%)
NASDAQ 2,218.71, +59.86 (2.77%)
S&P 500 1,086.84, +31.15 (2.95%)
NYSE Composite 6,783.53, +223.82 (3.41%)
As expected on such a huge upside move, advancers dominated decliners, 5550-1011, though new lows maintained their edge over new highs, 120-104. That, and low volume, are very telling signals to where the market is intended.
NYSE Volume 5,718,455,000.00
NASDAQ Volume 2,023,046,625.00
Oil gained again today, picking up $1.07, to $75.45. Gold fell for the second straight day, down $7.70, to $1,220.80, with silver up 18 cents, to $18.34. Confusing variations in the commodity space lends credence to the directionless market theory and to a resumption of the bearish case in short order.
Goldman Sachs (GS) was under pressure again today as the SEC began examining another mortgage investment for potential fraud - Hudson Mezzanine - and was hit with a $1 billion lawsuit from Basis Capital, an Australian hedge fund that invested in Timberwolf, an MBS that Goldman sold in 2007. The troubles just keep mounting on the investment bank everyone loves to hate.
The Dow Jones Industrials gapped up at the open - once again shutting out all but the insider firms - 150 points, and by 10:00 am, it was up nearly 250. This kind of quick-start rally doesn't occur in a vacuum, so most of the clueless analysts attributed the rise to explosive numbers coming out of China, saying that exports increased at a rate of 48.5% year-over-year.
Suffice it to say that nobody wanted to mention that a year ago, exports were at an absolute nadir, Chinese officials were doing their best to control riotous laid-off workers and that global trading conditions were abysmal. Some comparisons, especially those which favor the bullish case, are almost always kept out of view, as was the case today.
Concerns over the sudden revitalization of stock-buying fervor were put on the back burner for the day, allowing investors to bask in the glow of at least some temporary relief to what has been a relentless decline since the beginning of May, and that's why bear market rallies are never useful barometers of market health. This one, like all others, will be soon forgotten, for it is only speculative and quite possibly just a trading phenomenon, likely linked to options expiration only a week away.
Besides the obvious rallying around poor, misunderstood British Petroleum (BP), financial stocks also rallies, perhaps on suspicion that congressional debate on financial regulation seems to be going the way the bankers would like, toward a watered-down bill that is nothing more than cosmetic, allowing the political class to find some cover heading into the fall election cycle.
The pols have their hands in the banks' pockets and vice versa, so don't expect anything hard-hitting to come of "FinReg," despite the inclusion of Senator Blanche Lincoln's controversial derivatives proposal, which threatens to drive as much as 30% of large bank profits overseas. The bill is in the hands of the conference committee, chaired by Barney Frank, which will reconcile differences between the Senate and House versions.
So, was this the mother of all sucker rallies, or does this mark the end of the month-long decline in equities and the beginning of a new bull run?
The jury's still out, but consider, if you will, the key numbers that will tell the story in coming days. On Friday, June 4, after the non farms payroll report showed little progress in private sector employment, stocks sank to a closing low of 9931.97 on the Dow and 1064.88 on the S&P. The follow-on sell-off Monday, June 7, saw the Dow close below the previous interim low (February 8), finishing at 9816.49. The S&P likewise closed below its previous low, ending the day at 1050.47.
Bottom pierced, any chartist with rudimentary skills would have promoted the idea that further downside risk was being telegraphed. Then came Tuesday's sharp rally, Wednesday's failed rally and today's super rally, on low volume, and on suspect news from - of all places - China. To believe that strength in Chinese markets somehow translates to good news for US firms requires a requisite leap of faith, when the obvious truth was that this rally was really all about saving the prospects of BP, the incomes of one out of seven British pensioners, and keeping the world awash in crude oil (both figuratively and, in the Gulf, literally).
For the bulls, their new targets are 11,205.03 on the Dow and 1217.28 on the S&P, somewhat of a stretch from where stocks have currently settled. Even from today's lofty closing values, a rally of 11% would be needed to return to the previous highs, whereas a decline of just 3.5% would send the two main indices back below their recently-achieved bottoms.
Sideways trading leaves us in a state of suspended animation, though investors will be mulling the news from the BP oil gusher and Europe's deteriorating debt condition over the next four weeks prior to earnings season, which could be a bellwether or a Waterloo, depending on results. Chances still seem to favor the bearish case, with much of this week's trading being perceived as mere "noise."
Dow 10,172.53, +273.28 (2.76%)
NASDAQ 2,218.71, +59.86 (2.77%)
S&P 500 1,086.84, +31.15 (2.95%)
NYSE Composite 6,783.53, +223.82 (3.41%)
As expected on such a huge upside move, advancers dominated decliners, 5550-1011, though new lows maintained their edge over new highs, 120-104. That, and low volume, are very telling signals to where the market is intended.
NYSE Volume 5,718,455,000.00
NASDAQ Volume 2,023,046,625.00
Oil gained again today, picking up $1.07, to $75.45. Gold fell for the second straight day, down $7.70, to $1,220.80, with silver up 18 cents, to $18.34. Confusing variations in the commodity space lends credence to the directionless market theory and to a resumption of the bearish case in short order.
Goldman Sachs (GS) was under pressure again today as the SEC began examining another mortgage investment for potential fraud - Hudson Mezzanine - and was hit with a $1 billion lawsuit from Basis Capital, an Australian hedge fund that invested in Timberwolf, an MBS that Goldman sold in 2007. The troubles just keep mounting on the investment bank everyone loves to hate.
Tuesday, May 4, 2010
Recovery Fake Out: America Becoming Zombie Nation
Television has a mesmerizing effect on people. It offers the uncanny ability to either engross the viewer or put them to sleep. On that latter point, just ask the hosts of late-night shows, like Jay Leno, who do their audience counts within the first fifteen minutes of the show because after that, Americans are nodding off "en masse."
TV is a kind of drug for the modern masses. Viewers tend to believe just about anything they see or hear on the tube, so when the major networks and their cable outlets keep chirping that the US economy is on the road to recovery, people automatically go along. After all, who wants to believe that the recent economic crisis - that actually had its roots in the late 90s - isn't already over? Nobody wants to be the party-pooper. We all need to get moving toward a brighter future. Right?
Well, some of us aren't convinced, especially since we've seen little evidence that the government or Wall Street has done anything to prevent another global economic meltdown like the one we witnessed in the fall of 2008, and since $8-12 trillion worth of extended benefits to the Wall Street zombie financial firms and another nearly $1 trillion in excess government spending (most of which went to near-bankrupt state treasuries), has produced no new jobs and few tangible results that look even remotely like a growing economy.
No, the troika of Wall Street, Washington and the well-kept, neat-and-tidy media non-investigators have pulled the wool over America's eyes again. And why not? As a nation, gullible Americans keep trusting governments, investment advisors and media pundits who say things are "getting better" even when we see no evidence of such in our personal lives. Have you or your spouse or any of your friends gotten a raise lately? Are firms fighting over the services of you or your buddies? Are you turning down lots of job offers? Are malls and strip centers opening new stores? Are restaurants and small businesses expanding? Are local, state and federal governments concerned more about dealing with tax-receipt surpluses or bone-crushing deficits?
Are prices going up so fast you can't seem to keep up? (Don't answer that yet.) Or are they somewhat stable in most areas? Food and fuel prices have remained fairly constant for over a year now.
Truth of the matter - sorry to keep harping on this, but nobody seems to get it - is that the downturn hasn't ended. In fact, it may be in a debt-induced state of near-term denial. Sure, Wall Street and stocks in general have recovered magnificently, but they did so on the back of billions of dollars worth of government no-interest loans (bailouts) and trillions worth of guarantees. It's what they do. They were given money and told to invest and spend. It wasn't that difficult of a task.
Right now, though, doubt is creeping back into the formula. Stocks may have reached an emotional and intellectual peak, a point at which neither enthusiasm nor analysis would lead an astute investor to buy. Then there's Goldman Sach, Greece and the rest of Europe to worry about, to say nothing of that growing oil slick in the Gulf of Mexico.
Of course, behind the scenes are millions of unsold homes in bank inventories, more foreclosures soon to come down the pike and those 8 million unemployed people on extended, extended benefits who still can't find reasonable work.
We also cannot leave out the Treasury and the Fed...
According to a new missive from Agora Financial (I neither support or decry their positions, and I am in no way affiliated with them), the US Treasury has already borrowed money from these sources:
All they're saying is that your pension plans may soon be obliterated by either a massive crash, debt explosion or spiraling inflation. The smart money is on the first two. Inflation is still a decade away. It simply cannot occur within the framework of a struggling economy with high unemployment (the government's own U6 reading is at 17%).
After Monday's wild ride upside, Tuesday was a real bummer, bringing Greece and most of Europe back into focus. Globablly, markets were hammered and the US was not spared by PPT intervention, late-breaking "good" news or any of the usual clandestine tricks. This one looks like the real deal. Unless Friday's April jobs report is a real hummer, stocks and the economy will continue down, probably slumping through the remainder of the second quarter, into the third.
Dow 10,926.77, -225.06 (2.02%)
NASDAQ 2,424.25, -74.49 (2.98%)
S&P 500 1,173.60, -28.66 (2.38%)
NYSE Composite 7,337.25, -205.87 (2.73%
The tone of today's decline was stark. declining issues overwhelmed advancers, 5611-1013. New highs eked out a small advantage over new lows, the smallest margin in many months, 169-98. That's a scary notion: that there may be more daily new lows than new highs some time soon. We had become so accustomed to seeing a huge gap there, but that particular metric, if it turns over, could be forecasting a major downturn. Volume was magnificent, close to the highest levels of the year, another ominous sign.
NYSE Volume 7,379,542,500.00
NASDAQ Volume 2,869,652,750.00
Oil was sent lower by speculators spooked by a weaker Euro, dropping $3.45, to $82.74. Gold trended lower for a second straight day, down $14.10, to $1,168.60, while silver took a spanking, losing $1.00, to $17.82.
This is not a pretty picture. despite $trillions of stimulus worldwide, massive bailouts and extraordinary measures by governments around the planet, nothing has been able to keep the global economy from continuing to contract. The recent upturn in GDP is mostly a chimera, short-lived and over-hyped. Nobody went bust except the bottom of the market: families, individuals and small businesses. All of the big firms were saved and are now operating as zombies. They have no real life of their own. All their numbers are crooked or cooked or both and the mood - not just in America, but globally - is dour.
We're at a critical turning point, and if there's no "sell in may and go away," a "June Swoon" is almost certain.
TV is a kind of drug for the modern masses. Viewers tend to believe just about anything they see or hear on the tube, so when the major networks and their cable outlets keep chirping that the US economy is on the road to recovery, people automatically go along. After all, who wants to believe that the recent economic crisis - that actually had its roots in the late 90s - isn't already over? Nobody wants to be the party-pooper. We all need to get moving toward a brighter future. Right?
Well, some of us aren't convinced, especially since we've seen little evidence that the government or Wall Street has done anything to prevent another global economic meltdown like the one we witnessed in the fall of 2008, and since $8-12 trillion worth of extended benefits to the Wall Street zombie financial firms and another nearly $1 trillion in excess government spending (most of which went to near-bankrupt state treasuries), has produced no new jobs and few tangible results that look even remotely like a growing economy.
No, the troika of Wall Street, Washington and the well-kept, neat-and-tidy media non-investigators have pulled the wool over America's eyes again. And why not? As a nation, gullible Americans keep trusting governments, investment advisors and media pundits who say things are "getting better" even when we see no evidence of such in our personal lives. Have you or your spouse or any of your friends gotten a raise lately? Are firms fighting over the services of you or your buddies? Are you turning down lots of job offers? Are malls and strip centers opening new stores? Are restaurants and small businesses expanding? Are local, state and federal governments concerned more about dealing with tax-receipt surpluses or bone-crushing deficits?
Are prices going up so fast you can't seem to keep up? (Don't answer that yet.) Or are they somewhat stable in most areas? Food and fuel prices have remained fairly constant for over a year now.
Truth of the matter - sorry to keep harping on this, but nobody seems to get it - is that the downturn hasn't ended. In fact, it may be in a debt-induced state of near-term denial. Sure, Wall Street and stocks in general have recovered magnificently, but they did so on the back of billions of dollars worth of government no-interest loans (bailouts) and trillions worth of guarantees. It's what they do. They were given money and told to invest and spend. It wasn't that difficult of a task.
Right now, though, doubt is creeping back into the formula. Stocks may have reached an emotional and intellectual peak, a point at which neither enthusiasm nor analysis would lead an astute investor to buy. Then there's Goldman Sach, Greece and the rest of Europe to worry about, to say nothing of that growing oil slick in the Gulf of Mexico.
Of course, behind the scenes are millions of unsold homes in bank inventories, more foreclosures soon to come down the pike and those 8 million unemployed people on extended, extended benefits who still can't find reasonable work.
We also cannot leave out the Treasury and the Fed...
According to a new missive from Agora Financial (I neither support or decry their positions, and I am in no way affiliated with them), the US Treasury has already borrowed money from these sources:
Little Luxembourg, no bigger than Rhode Island, gave us $104.2 billion. Russia has us on the hook for another $120 billion. Brazil, nearly $140 billion. Secretive banks in the Caribbean, nearly $190 billion...
Those thugs that run Iran, Iraq, Libya, Nigeria, Indonesia, and Venezuela? So far — along with a half-dozen other oil-producing nations — they've got us dangling for another $191 billion in I.O.U.s.
Great Britain just loaned us $214 billion. D.C. borrowed $523 billion from bankrupt state governments. And, as if the bank bailouts weren't bad enough, we're in hock another $630 billion to Wall Street financial firms and other buyers.
Japan owns a $712 billion slice of America. China owns a staggering $776 billion call on our capital. And guess who tops the list? The Fed itself, which uses dollars they print to buy up $4.785 TRILLION of their own debt, just to keep the prosperity illusion alive.
All they're saying is that your pension plans may soon be obliterated by either a massive crash, debt explosion or spiraling inflation. The smart money is on the first two. Inflation is still a decade away. It simply cannot occur within the framework of a struggling economy with high unemployment (the government's own U6 reading is at 17%).
After Monday's wild ride upside, Tuesday was a real bummer, bringing Greece and most of Europe back into focus. Globablly, markets were hammered and the US was not spared by PPT intervention, late-breaking "good" news or any of the usual clandestine tricks. This one looks like the real deal. Unless Friday's April jobs report is a real hummer, stocks and the economy will continue down, probably slumping through the remainder of the second quarter, into the third.
Dow 10,926.77, -225.06 (2.02%)
NASDAQ 2,424.25, -74.49 (2.98%)
S&P 500 1,173.60, -28.66 (2.38%)
NYSE Composite 7,337.25, -205.87 (2.73%
The tone of today's decline was stark. declining issues overwhelmed advancers, 5611-1013. New highs eked out a small advantage over new lows, the smallest margin in many months, 169-98. That's a scary notion: that there may be more daily new lows than new highs some time soon. We had become so accustomed to seeing a huge gap there, but that particular metric, if it turns over, could be forecasting a major downturn. Volume was magnificent, close to the highest levels of the year, another ominous sign.
NYSE Volume 7,379,542,500.00
NASDAQ Volume 2,869,652,750.00
Oil was sent lower by speculators spooked by a weaker Euro, dropping $3.45, to $82.74. Gold trended lower for a second straight day, down $14.10, to $1,168.60, while silver took a spanking, losing $1.00, to $17.82.
This is not a pretty picture. despite $trillions of stimulus worldwide, massive bailouts and extraordinary measures by governments around the planet, nothing has been able to keep the global economy from continuing to contract. The recent upturn in GDP is mostly a chimera, short-lived and over-hyped. Nobody went bust except the bottom of the market: families, individuals and small businesses. All of the big firms were saved and are now operating as zombies. They have no real life of their own. All their numbers are crooked or cooked or both and the mood - not just in America, but globally - is dour.
We're at a critical turning point, and if there's no "sell in may and go away," a "June Swoon" is almost certain.
Friday, April 30, 2010
Markets Go Boom... and Bust
What happened of significance that stocks would sell of so drastically on Friday?
Was it the DOJ announcing that a criminal probe of Goldman Sach's was underway (And that the G-Men were looking at issues other than the ABACUS deal noted in the SEC charges.)? Shares of Goldman Sachs (GS) fell 15.04, to 145.20, a decline of 9.4%, during Friday's session.
That might be a good start for a general market decline.
Or maybe that oil spill in the Gulf of Mexico is causing more than average general ill-will to be directed at multi-national corporations who pollute, don't pay taxes and cause monstrous disasters such as is unfolding in the marshes along the Louisiana coastline?
What about Greece... and Portugal... and Spain... and Italy? Is the debt bomb exploding over Europe destined to visit mainland America? Finance ministers are meeting over the weekend in hopes of hammering out a bailout for the destitute Greeks (they won't).
Could it be that the Senate finally getting around to debating - after weeks of Republican stonewalling at the behest of the nation's largest financial firms - senator Dodd's financial regulation legislation that has, as one of its many tentacles, authority to liquidate firms that it deems insolvent (Bank of America, Wells Fargo and Citigroup come to mind) and a slew of other amendments which would make the kind of cowboy financial engineering that typified the sub-prime era difficult to repeat.
All of those are good starting points for argument, but there are two likely causes which intersect with all other issues. First quarter GDP was reported to be measured at 3.2%, annualized. That is after 4th quarter '09 coming in at 5.6%. Investors with even fifth grade educations can do the math: the economy is slowing again and that brings to the forefront the words everybody dreads: "double dip."
The second cause is likely more mechanical than analytical. Stocks have been hovering around multi-year highs. People with large stakes and large profits probably figured that today was a good day to sell, just like Wednesday was. The reason Wall Street more resembles a casino than an investment market is because the big money, the people calling the shots and pulling the levers are all gamblers at heart. And, as gambling operations generally produce few winners but lots of losers, the winners are likely getting out of town.
From an emotional chart perspective, one look at a two year Dow chart reveals that the index is bumping into the bottom of the pre-Lehman resistance of September '08. Since little has been done to correct the abuses of the time or restore credibility and liquidity to credit markets, it only stands to reason that there will be no move through that Dow resistance level from 11,200 to 11,750.
Flagging Friday finishes are always troubling, but today's should be marked with multiple red flags. The global economic model, based largely upon central banking, fractional reserve requirements, fiat currencies already heavily in debt (read: insolvent) and currently devolving into nation-gobbling monstrosities, is severely broken and thus, sliced, diced, ad whipsawed according to the prevailing tone.
Economies, from you next-door neighbor to the county seat, to states and nations, are tettering on a balance beam built on public good will and creditworthiness and there isn't much of either of those in quantity at the present time. One could purport that economic circumstances today are worse than they were in 2008. Massive borrowing and easy money policies have not stemmed the tide of deflation that continues to waffle through every aspect of civilization.
One area which experienced strong gains on Friday was commodities, especially gold. With uncertain times comes a need to hold something material and money flowed into tangible assets today in a scared trade. More evidence of widespread deflation came from the bond pits, where the 10-year treasury dipped to 3.65% yield today. Interest rates simply have nowhere to go but down in a slumping, or even stagnating, economy.
Dow 11,008.61, -158.71 (1.42%)
NASDAQ 2,461.19, -50.73 (2.02%)
S&P 500 1,186.68, -20.10 (1.67%)
NYSE Composite 7,474.40, -114.89 (1.51%
There were 4904 losing stocks to 1669 winners. 547 new highs dwarfed a mere 41 new lows. Volume was significant as it has been most of the past 8 trading days. Money is moving, from stocks to commodities, fixed income and cash, a perfect brew for a further deflationary spiral, which never really stopped moving, but was only slowed by monetary moves by the Fed and other central banks.
NYSE Volume 6,859,333,000.00
NASDAQ Volume 2,689,440,250.00
Crude oil rallied 98 cents, to $86.15. Gold built another $11.70 on top of recent gains, finishing the week at $1,180.10, a 2010 high. Silver also rose 6 cents, to $18.61.
There's a world of hurt gaining momentum out there, and you can bet your last Kentucky Derby (tomorrow), mint julep dollar that the famous schemers and weasels of Wall Street are going to be left holding the most recent bag of pain. No, that taks has been assigned, as usual, to the middle class, the little guy, the working class.
Isn't it time to stop believing in the fairy tales of high finance and posturing politicians?
Was it the DOJ announcing that a criminal probe of Goldman Sach's was underway (And that the G-Men were looking at issues other than the ABACUS deal noted in the SEC charges.)? Shares of Goldman Sachs (GS) fell 15.04, to 145.20, a decline of 9.4%, during Friday's session.
That might be a good start for a general market decline.
Or maybe that oil spill in the Gulf of Mexico is causing more than average general ill-will to be directed at multi-national corporations who pollute, don't pay taxes and cause monstrous disasters such as is unfolding in the marshes along the Louisiana coastline?
What about Greece... and Portugal... and Spain... and Italy? Is the debt bomb exploding over Europe destined to visit mainland America? Finance ministers are meeting over the weekend in hopes of hammering out a bailout for the destitute Greeks (they won't).
Could it be that the Senate finally getting around to debating - after weeks of Republican stonewalling at the behest of the nation's largest financial firms - senator Dodd's financial regulation legislation that has, as one of its many tentacles, authority to liquidate firms that it deems insolvent (Bank of America, Wells Fargo and Citigroup come to mind) and a slew of other amendments which would make the kind of cowboy financial engineering that typified the sub-prime era difficult to repeat.
All of those are good starting points for argument, but there are two likely causes which intersect with all other issues. First quarter GDP was reported to be measured at 3.2%, annualized. That is after 4th quarter '09 coming in at 5.6%. Investors with even fifth grade educations can do the math: the economy is slowing again and that brings to the forefront the words everybody dreads: "double dip."
The second cause is likely more mechanical than analytical. Stocks have been hovering around multi-year highs. People with large stakes and large profits probably figured that today was a good day to sell, just like Wednesday was. The reason Wall Street more resembles a casino than an investment market is because the big money, the people calling the shots and pulling the levers are all gamblers at heart. And, as gambling operations generally produce few winners but lots of losers, the winners are likely getting out of town.
From an emotional chart perspective, one look at a two year Dow chart reveals that the index is bumping into the bottom of the pre-Lehman resistance of September '08. Since little has been done to correct the abuses of the time or restore credibility and liquidity to credit markets, it only stands to reason that there will be no move through that Dow resistance level from 11,200 to 11,750.
Flagging Friday finishes are always troubling, but today's should be marked with multiple red flags. The global economic model, based largely upon central banking, fractional reserve requirements, fiat currencies already heavily in debt (read: insolvent) and currently devolving into nation-gobbling monstrosities, is severely broken and thus, sliced, diced, ad whipsawed according to the prevailing tone.
Economies, from you next-door neighbor to the county seat, to states and nations, are tettering on a balance beam built on public good will and creditworthiness and there isn't much of either of those in quantity at the present time. One could purport that economic circumstances today are worse than they were in 2008. Massive borrowing and easy money policies have not stemmed the tide of deflation that continues to waffle through every aspect of civilization.
One area which experienced strong gains on Friday was commodities, especially gold. With uncertain times comes a need to hold something material and money flowed into tangible assets today in a scared trade. More evidence of widespread deflation came from the bond pits, where the 10-year treasury dipped to 3.65% yield today. Interest rates simply have nowhere to go but down in a slumping, or even stagnating, economy.
Dow 11,008.61, -158.71 (1.42%)
NASDAQ 2,461.19, -50.73 (2.02%)
S&P 500 1,186.68, -20.10 (1.67%)
NYSE Composite 7,474.40, -114.89 (1.51%
There were 4904 losing stocks to 1669 winners. 547 new highs dwarfed a mere 41 new lows. Volume was significant as it has been most of the past 8 trading days. Money is moving, from stocks to commodities, fixed income and cash, a perfect brew for a further deflationary spiral, which never really stopped moving, but was only slowed by monetary moves by the Fed and other central banks.
NYSE Volume 6,859,333,000.00
NASDAQ Volume 2,689,440,250.00
Crude oil rallied 98 cents, to $86.15. Gold built another $11.70 on top of recent gains, finishing the week at $1,180.10, a 2010 high. Silver also rose 6 cents, to $18.61.
There's a world of hurt gaining momentum out there, and you can bet your last Kentucky Derby (tomorrow), mint julep dollar that the famous schemers and weasels of Wall Street are going to be left holding the most recent bag of pain. No, that taks has been assigned, as usual, to the middle class, the little guy, the working class.
Isn't it time to stop believing in the fairy tales of high finance and posturing politicians?
Tuesday, April 27, 2010
Goldman Execs Grilled; Market Stumbles as Greek Tragedy Unfolds
Aeschylus or Sophocles could not have written such a story as is unfolding in the finances of the nation of Greece and the Senate hearings on Goldman Sachs. It is as though the Gods themselves have delivered their wrath upon the wealthy, the greedy and the high-and-mighty of society.
On Capitol Hill, Senator Levin opened the current round of hearings in the Senate Permanent Subcommittee on Investigations by outlining the purported abuses by Goldman Sachs which helped lead the US real estate market and the general economy into what some are calling the "Great Recession" of 2008.
As the day and the questioning wore on, Goldman Sachs executives squirmed and cajoled and grimaced through arguments designed to clear them of even the appearance of impropriety in their mortgage securitization dealings and subsequent profiteering off the collapse of such investment vehicles. The polished and evidently well-trained Goldman executives kept a sombre tone as they alternately denied wrongdoing and admitted "mistakes" in the handling of their own and clients' money as the real estate market ballooned, popped and dropped from 2006 through 2008.
The questioning focused on a key point: whether Goldman Sachs was purposely betting it's own money against the very investments it had sold to clients. The firm admits losing money as the market cascaded lower, but then making more by buying credit default swaps which eventually paid off as the CDO market crashed. Goldman executives have steadfastly denied making trades at odds with those of their clients, though the argument is paper-thin and the Senate investigation has unearthed scores of examples exactly the opposite. Goldman calls their investments in credit default swaps pure hedging, but the tide certainly seems to be working against them, both in the hearing room and in the court of public opinion.
A continent away, Greek bond yields soared to over 18% on 2-year notes, as S&P cut its rating to junk status. Greece continues to struggle through one of its worst fiscal and monetary crises of the modern age, with government pay, pensions and entitlements pushing the government close to default. Today's development come in the wake of weeks of negotiations by the IMF and EU on a bailout package for the southern European nation.
There seems to be little doubt that Greece will default in part or in total, with Portugal, Italy and Spain next in line for the pain of financial armageddon. What worries officials in other European nations is the fate of the European Union itself and the ten-year experiment with the unified currency, the Euro.
Reaction was mostly aligned to the Greek story, though the Goldman Sachs hearings were riveting attention as well. Stocks in Europe suffered huge losses in all of its equity markets, with values of the major nation indices falling anywhere from 2% to nearly 4%. France's CAC 40 fell the most, down 3.82% on the day.
In the Americas, a similar story, with major indices piling on losses. The Canadian markets fared best of all, losing just more than 1 percent.
US stock losses come fast on the heels of an 8-week buying splurge despite signs everywhere that the global economy and sovereign debt issues were coming to a head. Even though it's the height of earnings season in the US, nothing could stem the stampede of sellers which descended on Wall Street. Stocks fell by their largest one-day amounts in months, on heavy volume, signaling that the worst may be yet to come.
Dow 10,991.99, -213.04 (1.90%)
NASDAQ 2,471.47, -51.48 (2.04%)
S&P 500 1,183.71, -28.34 (2.34%)
NYSE Composite 7,463.09, -214.56 (2.79%)
Declining issues overwhelmed advancers, 5396-1220, a better-than 4:1 ratio. The number of new highs was shaved down to 407, with 51 stocks recording new lows.
NYSE Volume 8,348,664,500.00
NASDAQ Volume 2,766,927,750.00
Commodity prices were mixed, due to differences in their utility. Crude oil, which is consumed worldwide, fell $1.76, to $82.44, mostly on fears of reduced demand. Gold, primarily a store of wealth or a hedge against currencies, was higher by $8.10, finishing at $1,161.70. Silver, however, which carries investment qualities and industrial functions, dropped 22 cents, to $18.12.
Elsewhere, consumer confidence in April galloped ahead to 57.9, from a March reading of 52.3, though the encouraging number was largely ignored. The Case-Shiller 20-City Real Estate index rose a disappointing 0.64% year-over-year for the month of February, stirring speculation that the US residential real estate market may be months - if not years - from recovery, with the potential for another 15% downturn still on the horizon.
All is not well in our financial world. Titans are being brought under the whip, nations may fail, social unrest may reach a fever pitch by the time our next federal elections roll around in November. With the usually-slow months of summer approaching, stocks seem unstable investments, at best.
Cash, equivalents, Treasuries and other highly-liquid assets are being preferred for the moment.
Making matters even more convoluted, on Monday, Republicans in the Senate blocked debate on Senator Dodds' Financial Reform legislation by a 57-40 vote. 60 votes are needed to bring the bill to the Senate floor. Another test vote failed on Monday, with Republicans grandstanding, saying dishonestly that the bill would reach deep “into every nook and cranny of American business.”
Bring on the sirens and the wailing.
On Capitol Hill, Senator Levin opened the current round of hearings in the Senate Permanent Subcommittee on Investigations by outlining the purported abuses by Goldman Sachs which helped lead the US real estate market and the general economy into what some are calling the "Great Recession" of 2008.
As the day and the questioning wore on, Goldman Sachs executives squirmed and cajoled and grimaced through arguments designed to clear them of even the appearance of impropriety in their mortgage securitization dealings and subsequent profiteering off the collapse of such investment vehicles. The polished and evidently well-trained Goldman executives kept a sombre tone as they alternately denied wrongdoing and admitted "mistakes" in the handling of their own and clients' money as the real estate market ballooned, popped and dropped from 2006 through 2008.
The questioning focused on a key point: whether Goldman Sachs was purposely betting it's own money against the very investments it had sold to clients. The firm admits losing money as the market cascaded lower, but then making more by buying credit default swaps which eventually paid off as the CDO market crashed. Goldman executives have steadfastly denied making trades at odds with those of their clients, though the argument is paper-thin and the Senate investigation has unearthed scores of examples exactly the opposite. Goldman calls their investments in credit default swaps pure hedging, but the tide certainly seems to be working against them, both in the hearing room and in the court of public opinion.
A continent away, Greek bond yields soared to over 18% on 2-year notes, as S&P cut its rating to junk status. Greece continues to struggle through one of its worst fiscal and monetary crises of the modern age, with government pay, pensions and entitlements pushing the government close to default. Today's development come in the wake of weeks of negotiations by the IMF and EU on a bailout package for the southern European nation.
There seems to be little doubt that Greece will default in part or in total, with Portugal, Italy and Spain next in line for the pain of financial armageddon. What worries officials in other European nations is the fate of the European Union itself and the ten-year experiment with the unified currency, the Euro.
Reaction was mostly aligned to the Greek story, though the Goldman Sachs hearings were riveting attention as well. Stocks in Europe suffered huge losses in all of its equity markets, with values of the major nation indices falling anywhere from 2% to nearly 4%. France's CAC 40 fell the most, down 3.82% on the day.
In the Americas, a similar story, with major indices piling on losses. The Canadian markets fared best of all, losing just more than 1 percent.
US stock losses come fast on the heels of an 8-week buying splurge despite signs everywhere that the global economy and sovereign debt issues were coming to a head. Even though it's the height of earnings season in the US, nothing could stem the stampede of sellers which descended on Wall Street. Stocks fell by their largest one-day amounts in months, on heavy volume, signaling that the worst may be yet to come.
Dow 10,991.99, -213.04 (1.90%)
NASDAQ 2,471.47, -51.48 (2.04%)
S&P 500 1,183.71, -28.34 (2.34%)
NYSE Composite 7,463.09, -214.56 (2.79%)
Declining issues overwhelmed advancers, 5396-1220, a better-than 4:1 ratio. The number of new highs was shaved down to 407, with 51 stocks recording new lows.
NYSE Volume 8,348,664,500.00
NASDAQ Volume 2,766,927,750.00
Commodity prices were mixed, due to differences in their utility. Crude oil, which is consumed worldwide, fell $1.76, to $82.44, mostly on fears of reduced demand. Gold, primarily a store of wealth or a hedge against currencies, was higher by $8.10, finishing at $1,161.70. Silver, however, which carries investment qualities and industrial functions, dropped 22 cents, to $18.12.
Elsewhere, consumer confidence in April galloped ahead to 57.9, from a March reading of 52.3, though the encouraging number was largely ignored. The Case-Shiller 20-City Real Estate index rose a disappointing 0.64% year-over-year for the month of February, stirring speculation that the US residential real estate market may be months - if not years - from recovery, with the potential for another 15% downturn still on the horizon.
All is not well in our financial world. Titans are being brought under the whip, nations may fail, social unrest may reach a fever pitch by the time our next federal elections roll around in November. With the usually-slow months of summer approaching, stocks seem unstable investments, at best.
Cash, equivalents, Treasuries and other highly-liquid assets are being preferred for the moment.
Making matters even more convoluted, on Monday, Republicans in the Senate blocked debate on Senator Dodds' Financial Reform legislation by a 57-40 vote. 60 votes are needed to bring the bill to the Senate floor. Another test vote failed on Monday, with Republicans grandstanding, saying dishonestly that the bill would reach deep “into every nook and cranny of American business.”
Bring on the sirens and the wailing.
Friday, April 23, 2010
No Doubt About It: The Banks Stole Your Money
So much for my triple-top theory.
With the Dow putting on gains to close out the week - finishing at new highs for the 8th consecutive week - the world's most watched index is now at 18-month highs, leaving the memories of Lehman Bros., TARP and the painful housing crisis far behind in the memory hole.
But while stocks and traders are rejoicing over their riches, they fail to see, or even understand, the devastation caused by kicking 2 million families out of their homes or 8 million (probably more) out of jobs. Wall Street pros have stars on their foreheads and in their eyes. They obviously do not share the same values as most middle-class Americans.
The rally which began on March 10, 2009 has now reached extraordinary status. It is a full 12 1/2 months old, and the percentage gains off the bottom are simply spectacular.
Let's Recap:
The following are the March 9, 2009 lows, then today's closing prices, followed by the percentage gains.
Dow... 6,547.05 ... 11,204.28 ... +71,13%
S&P 500... 676.53 ... 1,217.28 ... +79.93
NASDAQ... 1,268.64 ... 2,530.15 ... +99.44
NYSE Comp. ... 4,226.31 ... 7,701.61 ... +82.23
There you have it. All anyone had to really do to turn $10,000 into roughly $18,000 over the course of the past 13 months was to buy all the stocks in any index and let it ride. For the rich and powerful, such as the lead traders at Goldman Sachs, the trick was to turn $1 billion or $10 billion into $1.8 billion or $18 billion. Being even more sophisticated, they probably had returns which far outstripped those of the entire indices.
Is there any wonder how the biggest frauds and thieves eve to walk the face of the earth (the leaders of Citigroup, Bank of America, Goldman Sachs, et. al.) were all able to pay back the government's (read: taxpayers) TARP money within a year's time?
Not only did the financial calamity which took the stock market down in the Fall of 2008 through the Winter of 2009 appear to be contrived and driven by the same people who created it, so too the "miraculous" recovery of stocks overall, and their very own firms, to boot.
On March 9, 2009, Bank of America (BAC) closed at 3.74. Citigroup (C) finished the session at 1.05; Goldman Sachs (GS), 73.28; Morgan Stanley (MS), 16.34; JP Morgan Chase (JPM), 15.79; Wells Fargo (WFC), 9.89 (actually closed at 8.06 on March 5).
Today, Bank of America finished the session at 18.43; Citigroup, 4.86; Goldman Sachs, 157.40; Morgan Stanley, 31.94; JP Morgan Chase, 44.94; and Wells Fargo, 33.48.
These are the five largest private sector financial institutions in the country. They've all done exceedingly well over the past 13 months, mostly at the expense of foreclosed-upon homeowners, people strung out on credit cards carrying rates that used to be called usury and millions of unemployed workers who lost their jobs because these bankers and traders convinced most of corporate America that the sky was falling. That the crisis occurred at the very end of the Bush administration's reign of terror was no coincidence. It was easily the greatest crime of all time.
All of these firms ruthlessly cut their dividend payouts to shreds at the height of the crisis and are still paying out less than 1% each. Citigroup pays no dividend. Goldman Sachs is the most generous, at 0.90%, at a time in which they paid their employees 43% of profits. These guys never learned to share.
Wall Street has changed dramatically from the days in which prices were quoted in eighths and sixteenths. Today's "titans" need billions of dollars to fill up their coffers in the highly rigged game of liar's poker. As a market observer - and sometimes participant - of over 35 years, I can safely say I have never seen a crash nor a rally quite as spectacular as the ones witnessed over the past 19 months. And, as the saying goes, "if it looks to good to be true, it probably isn't."
I don't know where this rally will end, or how, but it will, I imagine. Maybe it won't. Maybe the "masters of the universe" will keep stocks on a permanent upward slope in order to capture even more of the world's money supply. After all, government's just keep printing the stuff, so the bankers and frauds have to use up more of it, don't they?
I've been out of this market since December of 2009 and won't venture back in until I see some of these companies' CEOs in leg irons, which means I've probably already made my last investment in equities. I consider the current regime of manipulators and skimmers to be nothing better than common crooks. Having already stolen much of America's private wealth, they're no doubt scheming to steal the rest. At the risk of sounding like a curmudgeon, I'll keep the reporting in this same vein.
Wall Street is the biggest fraud most of us will ever see. enjoy it while it lasts.
Dow 11,204.28 69.99 (0.63%)
NASDAQ 2,530.15 11.08 (0.44%)
S&P 500 1,217.28 8.61 (0.71%)
NYSE Compos 7,701.61 58.78 (0.77%)
Advancers led decliners by a wide margin, 4406-2097. So too, new highs, all 1130 of them, crushed the 68 new lows. Volume was slimmed down from the levels earlier in the week.
NYSE Volume 5,888,237,000.00
NASDAQ Volume 2,434,851,250.00
Oil gained $1.42, to $85.12. Gold gained $10.80, to $1,153.10. Silver was higher by 18 cents, finishing at $18.19.
Everything went up today except your paycheck. Seriously, working has become the toil of suckers. If the "retirement investments" aren't wiped out by the frauds of finance, the taxman will take whatever else there is.
Good grief. Good luck.
With the Dow putting on gains to close out the week - finishing at new highs for the 8th consecutive week - the world's most watched index is now at 18-month highs, leaving the memories of Lehman Bros., TARP and the painful housing crisis far behind in the memory hole.
But while stocks and traders are rejoicing over their riches, they fail to see, or even understand, the devastation caused by kicking 2 million families out of their homes or 8 million (probably more) out of jobs. Wall Street pros have stars on their foreheads and in their eyes. They obviously do not share the same values as most middle-class Americans.
The rally which began on March 10, 2009 has now reached extraordinary status. It is a full 12 1/2 months old, and the percentage gains off the bottom are simply spectacular.
Let's Recap:
The following are the March 9, 2009 lows, then today's closing prices, followed by the percentage gains.
Dow... 6,547.05 ... 11,204.28 ... +71,13%
S&P 500... 676.53 ... 1,217.28 ... +79.93
NASDAQ... 1,268.64 ... 2,530.15 ... +99.44
NYSE Comp. ... 4,226.31 ... 7,701.61 ... +82.23
There you have it. All anyone had to really do to turn $10,000 into roughly $18,000 over the course of the past 13 months was to buy all the stocks in any index and let it ride. For the rich and powerful, such as the lead traders at Goldman Sachs, the trick was to turn $1 billion or $10 billion into $1.8 billion or $18 billion. Being even more sophisticated, they probably had returns which far outstripped those of the entire indices.
Is there any wonder how the biggest frauds and thieves eve to walk the face of the earth (the leaders of Citigroup, Bank of America, Goldman Sachs, et. al.) were all able to pay back the government's (read: taxpayers) TARP money within a year's time?
Not only did the financial calamity which took the stock market down in the Fall of 2008 through the Winter of 2009 appear to be contrived and driven by the same people who created it, so too the "miraculous" recovery of stocks overall, and their very own firms, to boot.
On March 9, 2009, Bank of America (BAC) closed at 3.74. Citigroup (C) finished the session at 1.05; Goldman Sachs (GS), 73.28; Morgan Stanley (MS), 16.34; JP Morgan Chase (JPM), 15.79; Wells Fargo (WFC), 9.89 (actually closed at 8.06 on March 5).
Today, Bank of America finished the session at 18.43; Citigroup, 4.86; Goldman Sachs, 157.40; Morgan Stanley, 31.94; JP Morgan Chase, 44.94; and Wells Fargo, 33.48.
These are the five largest private sector financial institutions in the country. They've all done exceedingly well over the past 13 months, mostly at the expense of foreclosed-upon homeowners, people strung out on credit cards carrying rates that used to be called usury and millions of unemployed workers who lost their jobs because these bankers and traders convinced most of corporate America that the sky was falling. That the crisis occurred at the very end of the Bush administration's reign of terror was no coincidence. It was easily the greatest crime of all time.
All of these firms ruthlessly cut their dividend payouts to shreds at the height of the crisis and are still paying out less than 1% each. Citigroup pays no dividend. Goldman Sachs is the most generous, at 0.90%, at a time in which they paid their employees 43% of profits. These guys never learned to share.
Wall Street has changed dramatically from the days in which prices were quoted in eighths and sixteenths. Today's "titans" need billions of dollars to fill up their coffers in the highly rigged game of liar's poker. As a market observer - and sometimes participant - of over 35 years, I can safely say I have never seen a crash nor a rally quite as spectacular as the ones witnessed over the past 19 months. And, as the saying goes, "if it looks to good to be true, it probably isn't."
I don't know where this rally will end, or how, but it will, I imagine. Maybe it won't. Maybe the "masters of the universe" will keep stocks on a permanent upward slope in order to capture even more of the world's money supply. After all, government's just keep printing the stuff, so the bankers and frauds have to use up more of it, don't they?
I've been out of this market since December of 2009 and won't venture back in until I see some of these companies' CEOs in leg irons, which means I've probably already made my last investment in equities. I consider the current regime of manipulators and skimmers to be nothing better than common crooks. Having already stolen much of America's private wealth, they're no doubt scheming to steal the rest. At the risk of sounding like a curmudgeon, I'll keep the reporting in this same vein.
Wall Street is the biggest fraud most of us will ever see. enjoy it while it lasts.
Dow 11,204.28 69.99 (0.63%)
NASDAQ 2,530.15 11.08 (0.44%)
S&P 500 1,217.28 8.61 (0.71%)
NYSE Compos 7,701.61 58.78 (0.77%)
Advancers led decliners by a wide margin, 4406-2097. So too, new highs, all 1130 of them, crushed the 68 new lows. Volume was slimmed down from the levels earlier in the week.
NYSE Volume 5,888,237,000.00
NASDAQ Volume 2,434,851,250.00
Oil gained $1.42, to $85.12. Gold gained $10.80, to $1,153.10. Silver was higher by 18 cents, finishing at $18.19.
Everything went up today except your paycheck. Seriously, working has become the toil of suckers. If the "retirement investments" aren't wiped out by the frauds of finance, the taxman will take whatever else there is.
Good grief. Good luck.
Thursday, April 22, 2010
When Will the Music Stop, the Fraud End?
Following yesterday's post about Goldman Sachs, Greece and the intra-day triple top on the Dow, my midday work routine was broken by a screaming message from the ether: "Dow down 100 points in early trading!"
Being ever skeptical of my prognosticating prowess, I triple-clicked over to Yahoo! Finance (seriously, who puts an exclamation point after their corporate name? Wal-Mart!, Cisco!, Paris Hilton!) to confirm that stocks had already begun their ascent from the morning's depths. Surely, the short-covering and naked buying by all the Goldman traders was underway. By the time the market had closed, my best suspicions were confirmed, with the Dow finishing on the green side of the ledger, along with the S&P and a nifty gain on the NAZ.
Today's rally, as part of the endless rally that has become Wall Street in the post-crisis, pre-Goldman-settlement era, is about as plausible as 2007 California real estate prices. It's all part of the game, which, to my mind, only Robert Prechter (Elliott Wave) has figured out. Well, and me. Goldman moves the market, no doubt about it. They've been doing it since 1988 with ample assistance from the Plunge Protection Team and tacit approval from the upper crusters in DC.
Stocks can only go down when the powers that be wish them to do so. So it is written in the Book of Sachs. Fundamentals don't matter, p/e doesn't matter, all that matters is where the herd will head for feeding, following the hidden hand signals from the leader of the pack, clandestinely dictating market direction via sham trades, public bogus recommendations (remember Goldman's call for $200/barrel oil?) and equally dubious upgrades and downgrades.
Dow 11,134.29, +9.37 (0.08%)
NASDAQ 2,519.07, +14.46 (0.58%)
S&P 500 1,208.67, +2.74 (0.23%)
NYSE Composite 7,642.83, -1.84 (0.02%)
Advancing issues beat back decliners, 4085-2402, while new highs registered 867, to just 59 new lows. My occasional warning to ignore the new highs-lows divergence until at least June, as last year's fall and rise will produce a considerable amount of skew in those figures. Volume was again trending toward the upper end, which is reasonable considering the amount of trading that had to be undertaken to move the whole market higher.
NYSE Volume 6,682,984,000.00
NASDAQ Volume 2,727,952,500.00
What probably scared investors even more than bad news on the Greece front, and rightfully so, was the weekly initial unemployment claims figures issued at 8:30 am. Those came in at 456,000, below last week's unsightly 480,000, but still too high most most realists to stomach. Those figures must come down to around 300,000 weekly before anyone will speak "recovery" again.
But the chances of the unemployment figures falling soon seem slim, especially since congress passed an $18 billion extension last week that proffers "99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out."
Yikes! That's two years worth of unemployment checks, or an average of just under $33,500 over the 99-week span, which is more than some people make actually working for a living. The government seems to be suggesting a longer-term unemployment lag than even most economists. Remember, employment is a lagging indicator, currently 9 months behind the official "end" of the recession.
Of course, Wall Street would rather most Americans believe the economy is continuing to improve, even while you're collecting unemployment checks and waiting for the bank to foreclose on your home. According to the elitists in our nation's capitol, it's all good.
Next they'll be selling us bridges... to nowhere, no doubt.
The underground economy is thriving on welfare, food stamps, unemployment and SS checks on a certain road to ruin.
Being ever skeptical of my prognosticating prowess, I triple-clicked over to Yahoo! Finance (seriously, who puts an exclamation point after their corporate name? Wal-Mart!, Cisco!, Paris Hilton!) to confirm that stocks had already begun their ascent from the morning's depths. Surely, the short-covering and naked buying by all the Goldman traders was underway. By the time the market had closed, my best suspicions were confirmed, with the Dow finishing on the green side of the ledger, along with the S&P and a nifty gain on the NAZ.
Today's rally, as part of the endless rally that has become Wall Street in the post-crisis, pre-Goldman-settlement era, is about as plausible as 2007 California real estate prices. It's all part of the game, which, to my mind, only Robert Prechter (Elliott Wave) has figured out. Well, and me. Goldman moves the market, no doubt about it. They've been doing it since 1988 with ample assistance from the Plunge Protection Team and tacit approval from the upper crusters in DC.
Stocks can only go down when the powers that be wish them to do so. So it is written in the Book of Sachs. Fundamentals don't matter, p/e doesn't matter, all that matters is where the herd will head for feeding, following the hidden hand signals from the leader of the pack, clandestinely dictating market direction via sham trades, public bogus recommendations (remember Goldman's call for $200/barrel oil?) and equally dubious upgrades and downgrades.
Dow 11,134.29, +9.37 (0.08%)
NASDAQ 2,519.07, +14.46 (0.58%)
S&P 500 1,208.67, +2.74 (0.23%)
NYSE Composite 7,642.83, -1.84 (0.02%)
Advancing issues beat back decliners, 4085-2402, while new highs registered 867, to just 59 new lows. My occasional warning to ignore the new highs-lows divergence until at least June, as last year's fall and rise will produce a considerable amount of skew in those figures. Volume was again trending toward the upper end, which is reasonable considering the amount of trading that had to be undertaken to move the whole market higher.
NYSE Volume 6,682,984,000.00
NASDAQ Volume 2,727,952,500.00
What probably scared investors even more than bad news on the Greece front, and rightfully so, was the weekly initial unemployment claims figures issued at 8:30 am. Those came in at 456,000, below last week's unsightly 480,000, but still too high most most realists to stomach. Those figures must come down to around 300,000 weekly before anyone will speak "recovery" again.
But the chances of the unemployment figures falling soon seem slim, especially since congress passed an $18 billion extension last week that proffers "99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out."
Yikes! That's two years worth of unemployment checks, or an average of just under $33,500 over the 99-week span, which is more than some people make actually working for a living. The government seems to be suggesting a longer-term unemployment lag than even most economists. Remember, employment is a lagging indicator, currently 9 months behind the official "end" of the recession.
Of course, Wall Street would rather most Americans believe the economy is continuing to improve, even while you're collecting unemployment checks and waiting for the bank to foreclose on your home. According to the elitists in our nation's capitol, it's all good.
Next they'll be selling us bridges... to nowhere, no doubt.
The underground economy is thriving on welfare, food stamps, unemployment and SS checks on a certain road to ruin.
Wednesday, April 21, 2010
Triple Top or More Room to Roam?
Stocks just keep bounding up and down, but mostly up, though the activity since Thursday of last week (April 15) is suggesting that the top may be already set, or set up.
The Dow hit an intra-day high of 11,190.22 on Tuesday, after making stops at 11,189.61 on Thursday (4/15) and 11,186.82 on Friday (4/16). That appears to be the formation of some fairly significant resistance, especially considering today's close of 11,124.92, well below those lofty levels.
It's far too early to tell if that the 11,190 area will actually be the top, though the Transportation Index is signaling somewhat the same signs of waning interest, settling today some 124 points below its own intra-day high from April 15. Of course, more bad news for either Greece or Goldman Sachs will send the stock-pumping moles in the PPT scurrying into action with their billions of dollars of untraceable trades to keep stocks soaring and the public none the wiser.
If one is inclined to listen to financial news via the mainstream media (re: CNBC), the constant howling over "improving conditions", "V-shaped recovery" and similar bombast can be deafening, but make no doubt, dirty little secrets are being kept far from public view.
In that regard, the SC charges against Goldman Sachs are probably more of a decoy than anything else. If something critical were to occur - and break the collusion between the federal government and Wall Street - the Department of Justice would have filed criminal charges. The chances of anything like that actually happening are remote, though those of us who believe that the housing bubble and subsequent crash, bailouts and breakdowns were indeed high crimes remain hopeful.
Beating back the onrushing forces of government and big money at the same time is an uphill fight, one the American people seem ill-inclined to undertake. Tea parties have been largely a ploy of the right wing, do-nothing Republican party, which sees obstruction as a perfectly good alternative to actually legislating on the behalf of the American people.
Those days are long gone, and the folks occupying the high offices in Washington and Wall Street hope they will be soon forgotten as well. Politicians listen only for the sound of crisp bils being peeled off of large wads from well-heeled supporters, like oil companies, pharmas and banking interests. Nobody will go to jail after the banks literally stole billions of dollars in real estate assets through phony documentation, phony appraisals, phony credit reports and phony income statements.
The wizards of Wall Street are truthfully not wizards of high finance at all, but rather, masters of finagling every last dollar out of the pockets of the middle class. To them, working men and women are rabble, peons to be fleeced by their powerful financial acumen and lengthy over-worded documents. The government complies by not regulating and the courts further the fraud by failing to prosecute even when they have good actions with solid arguments in front of them.
Witness Federal Court Judge Virginia Phillips dismissing 8 separate class actions on the same pretext: that the banks and builders weren't responsible for the calamity which has put millions out of their homes, but that the "economy" or the "recession" was to blame. With judges like Phillips front-running litigation for the bank fraudsters, is there really any reason to believe in democratic principles like justice, fairness, or even due process any more?
The obvious answer is no, and that bodes ill for all of us, present and future. Baby boomers should face facts: our parents were probably the most prosperous generation ever in America, but we are less fortunate, with every excess dollar seemingly earmarked for either utility rate hikes, tax increases or supplements to the wildly out-of-control and under-funded entitlement programs. The baby-boomer generation will be lucky to retire with any kind of benefits, as the Social Security fund is already running current-account deficits. The government will have to either borrow or tax to pay the millions who will be retiring in the next decade, and borrow in enormous sums.
In the meantime, Americans mostly continue to work and try to save, though for many, that has become an increasingly difficult task. Unemployment is expected to remain stubbornly high for at least another three years, with 8% now being hailed as a benchmark, though in reality, the current 9.7% rate is actually closer to 18% when all the conditional arguments are removed from the government's calculations.
Wall Street could care less, though their rapacious greed could turn out to be their own worst enemy. Without a spending public, many of the major enterprises will crumble for lack of new suckers (funding). It cannot happen too soon, for only then will there be a reckoning and justice for all.
Dow 11,124.92, +7.86 (0.07%)
NASDAQ 2,504.61, +4.30 (0.17%)
S&P 500 1,205.93, -1.24 (0.10%)
NYSE Composite 7,644.67, -24.44 (0.32%)
Once again, the indices rendered a split decision, with two up and two down, indicating that a turn is approaching. Advancing issues led decliners, 3534-2957. 767 new highs overshadowed the mere 47 new lows. Volume was back up again, though it's likely due more to position trades than anything else, i.e., keeping the markets on an even keel by manipulating a range of stocks.
NYSE Volume 6,301,928,500
NASDAQ Volume 2,644,937,250
Oil was down, gold and silver, up, all three stuck in trading ranges they have occupies for months. Those prices are deliberately being manipulated to keep order in the global economy. Central banks fear gold because their currencies are backed by nothing but empty promises, and the oil sheiks and oligopolies can maintain production without social unrest at abysmally high prices.
Its a sad world condition, in which the rich now control a larger concentration of wealth than at any other time in history, except for maybe the Middle Ages or the Roman Empire.
The Dow hit an intra-day high of 11,190.22 on Tuesday, after making stops at 11,189.61 on Thursday (4/15) and 11,186.82 on Friday (4/16). That appears to be the formation of some fairly significant resistance, especially considering today's close of 11,124.92, well below those lofty levels.
It's far too early to tell if that the 11,190 area will actually be the top, though the Transportation Index is signaling somewhat the same signs of waning interest, settling today some 124 points below its own intra-day high from April 15. Of course, more bad news for either Greece or Goldman Sachs will send the stock-pumping moles in the PPT scurrying into action with their billions of dollars of untraceable trades to keep stocks soaring and the public none the wiser.
If one is inclined to listen to financial news via the mainstream media (re: CNBC), the constant howling over "improving conditions", "V-shaped recovery" and similar bombast can be deafening, but make no doubt, dirty little secrets are being kept far from public view.
In that regard, the SC charges against Goldman Sachs are probably more of a decoy than anything else. If something critical were to occur - and break the collusion between the federal government and Wall Street - the Department of Justice would have filed criminal charges. The chances of anything like that actually happening are remote, though those of us who believe that the housing bubble and subsequent crash, bailouts and breakdowns were indeed high crimes remain hopeful.
Beating back the onrushing forces of government and big money at the same time is an uphill fight, one the American people seem ill-inclined to undertake. Tea parties have been largely a ploy of the right wing, do-nothing Republican party, which sees obstruction as a perfectly good alternative to actually legislating on the behalf of the American people.
Those days are long gone, and the folks occupying the high offices in Washington and Wall Street hope they will be soon forgotten as well. Politicians listen only for the sound of crisp bils being peeled off of large wads from well-heeled supporters, like oil companies, pharmas and banking interests. Nobody will go to jail after the banks literally stole billions of dollars in real estate assets through phony documentation, phony appraisals, phony credit reports and phony income statements.
The wizards of Wall Street are truthfully not wizards of high finance at all, but rather, masters of finagling every last dollar out of the pockets of the middle class. To them, working men and women are rabble, peons to be fleeced by their powerful financial acumen and lengthy over-worded documents. The government complies by not regulating and the courts further the fraud by failing to prosecute even when they have good actions with solid arguments in front of them.
Witness Federal Court Judge Virginia Phillips dismissing 8 separate class actions on the same pretext: that the banks and builders weren't responsible for the calamity which has put millions out of their homes, but that the "economy" or the "recession" was to blame. With judges like Phillips front-running litigation for the bank fraudsters, is there really any reason to believe in democratic principles like justice, fairness, or even due process any more?
The obvious answer is no, and that bodes ill for all of us, present and future. Baby boomers should face facts: our parents were probably the most prosperous generation ever in America, but we are less fortunate, with every excess dollar seemingly earmarked for either utility rate hikes, tax increases or supplements to the wildly out-of-control and under-funded entitlement programs. The baby-boomer generation will be lucky to retire with any kind of benefits, as the Social Security fund is already running current-account deficits. The government will have to either borrow or tax to pay the millions who will be retiring in the next decade, and borrow in enormous sums.
In the meantime, Americans mostly continue to work and try to save, though for many, that has become an increasingly difficult task. Unemployment is expected to remain stubbornly high for at least another three years, with 8% now being hailed as a benchmark, though in reality, the current 9.7% rate is actually closer to 18% when all the conditional arguments are removed from the government's calculations.
Wall Street could care less, though their rapacious greed could turn out to be their own worst enemy. Without a spending public, many of the major enterprises will crumble for lack of new suckers (funding). It cannot happen too soon, for only then will there be a reckoning and justice for all.
Dow 11,124.92, +7.86 (0.07%)
NASDAQ 2,504.61, +4.30 (0.17%)
S&P 500 1,205.93, -1.24 (0.10%)
NYSE Composite 7,644.67, -24.44 (0.32%)
Once again, the indices rendered a split decision, with two up and two down, indicating that a turn is approaching. Advancing issues led decliners, 3534-2957. 767 new highs overshadowed the mere 47 new lows. Volume was back up again, though it's likely due more to position trades than anything else, i.e., keeping the markets on an even keel by manipulating a range of stocks.
NYSE Volume 6,301,928,500
NASDAQ Volume 2,644,937,250
Oil was down, gold and silver, up, all three stuck in trading ranges they have occupies for months. Those prices are deliberately being manipulated to keep order in the global economy. Central banks fear gold because their currencies are backed by nothing but empty promises, and the oil sheiks and oligopolies can maintain production without social unrest at abysmally high prices.
Its a sad world condition, in which the rich now control a larger concentration of wealth than at any other time in history, except for maybe the Middle Ages or the Roman Empire.
Tuesday, April 20, 2010
Interested Parties: You, Me and AIG Want Goldman Sachs Money
Recent fraud charges brought by the SEC against Goldman Sachs have brought into focus much of what went wrong in the financial meltdown of 2008.
A shorthand view of the cataclysmic months of September and October, 2008, involve the collapse of Lehman Bros., and extenuating circumstances stemming from unpaid bets against CDOs sold by many of the major US banking interests - Goldman, Bank of America (Countrywide), Citigroup, Wells Fargo (Wachovia). Those bets (call it betting against the line or insurance) were in the form of Credit Default Swaps mostly in the hands of AIG, which went bust to the tune of about $180 billion.
The government stepped in and paid off many of the counterparties, including Goldman Sachs, BofA, and many others, most of them getting 100 cents on the dollar.
With fraud being alleged, plaintiff's attorneys literally around the world are looking into suing Goldman on behalf of clients ranging from small towns to large pension funds to AIG itself. An AIG action would cause considerable consternation for Goldman and its CEO, Lloyd Blankfein, to say nothing of potential monetary damages.
Further down the food chain are millions of US homeowners who may have been swindled by unscrupulous mortgage brokers and the banks themselves. Everybody was writing mortgages, and anyone with a pulse was the qualifying criteria. While the big banks may square off for millions and billions of dollars, a deluge of class action and individual suits could overwhelm already burdened court systems across the country.
Homeowners were taken for various rides with interest only loans, balloon loans, Alt-A's and other variable-rate vehicles, the primary fraudulent factors being almost always the same: inflated incomes on top of inflated appraisals. The volume of loans meeting the fraud standards could run as high as 70% of all loans written between 2003 and 2007, when the sub-prime market reached its climax and then began to quickly deflate.
Naturally, these court cases could run on for years, but the potential litigation fees for adept attorneys could be astronomical. Suing anything and anybody related to the the mortgage or securities industry appears to be a growth sector for the economy, with high hopes to recoup either money or real estate as the eventual goal.
With all that as background, Wall Street will likely remain in a relatively cautious mode, especially once earnings season passes in two weeks. Without a catalyst to move stocks higher, the potential for financial disaster rears its ugly head again and could spook many traders who already aren't overwhelmed with love for the workings of Wall Street.
Stocks pushed ahead again on Tuesday, though there wasn't much lift to the effort, especially concerning Dow stocks. Once again, Goldman Sachs' trading desks were likely underpinning the whole market, keeping the coast clear for Blankfein, et. al.. Volume was decidedly lower than the previous two sessions, an indication that some degree of normalcy has returned, though what normal is in these turbulent times is anybody's guess.
Dow 11,117.06, +25.01 (0.23%)
NASDAQ 2,500.31, +20.20 (0.81%)
S&P 500 1,207.17, +9.65 (0.81%)
NYSE Composite 7,669.11, +72.55 (0.96%)
Gainers beat back losers by a healthy margin, 5102-1418. There were 539 new highs to just 29 new lows.
NYSE Volume 5,797,391,000
NASDAQ Volume 2,006,695,375
Commodities rebounded smartly, with oil gaining $2.00, to $83.45. Gold was up $3.40, to $1,138.60, and silver added 9 cents to $17.82.
The SEC-Goldman Sachs saga is still in the prelude. It's almost a certainty that fireworks will develop out of this singular action, leading to more lawsuits using the SEC's action as a basis for argument. Already, an Italian bank is suing Citigroup, alleging misrepresentation on a complex swap arrangement.
Stay tuned. There's more to come.
A shorthand view of the cataclysmic months of September and October, 2008, involve the collapse of Lehman Bros., and extenuating circumstances stemming from unpaid bets against CDOs sold by many of the major US banking interests - Goldman, Bank of America (Countrywide), Citigroup, Wells Fargo (Wachovia). Those bets (call it betting against the line or insurance) were in the form of Credit Default Swaps mostly in the hands of AIG, which went bust to the tune of about $180 billion.
The government stepped in and paid off many of the counterparties, including Goldman Sachs, BofA, and many others, most of them getting 100 cents on the dollar.
With fraud being alleged, plaintiff's attorneys literally around the world are looking into suing Goldman on behalf of clients ranging from small towns to large pension funds to AIG itself. An AIG action would cause considerable consternation for Goldman and its CEO, Lloyd Blankfein, to say nothing of potential monetary damages.
Further down the food chain are millions of US homeowners who may have been swindled by unscrupulous mortgage brokers and the banks themselves. Everybody was writing mortgages, and anyone with a pulse was the qualifying criteria. While the big banks may square off for millions and billions of dollars, a deluge of class action and individual suits could overwhelm already burdened court systems across the country.
Homeowners were taken for various rides with interest only loans, balloon loans, Alt-A's and other variable-rate vehicles, the primary fraudulent factors being almost always the same: inflated incomes on top of inflated appraisals. The volume of loans meeting the fraud standards could run as high as 70% of all loans written between 2003 and 2007, when the sub-prime market reached its climax and then began to quickly deflate.
Naturally, these court cases could run on for years, but the potential litigation fees for adept attorneys could be astronomical. Suing anything and anybody related to the the mortgage or securities industry appears to be a growth sector for the economy, with high hopes to recoup either money or real estate as the eventual goal.
With all that as background, Wall Street will likely remain in a relatively cautious mode, especially once earnings season passes in two weeks. Without a catalyst to move stocks higher, the potential for financial disaster rears its ugly head again and could spook many traders who already aren't overwhelmed with love for the workings of Wall Street.
Stocks pushed ahead again on Tuesday, though there wasn't much lift to the effort, especially concerning Dow stocks. Once again, Goldman Sachs' trading desks were likely underpinning the whole market, keeping the coast clear for Blankfein, et. al.. Volume was decidedly lower than the previous two sessions, an indication that some degree of normalcy has returned, though what normal is in these turbulent times is anybody's guess.
Dow 11,117.06, +25.01 (0.23%)
NASDAQ 2,500.31, +20.20 (0.81%)
S&P 500 1,207.17, +9.65 (0.81%)
NYSE Composite 7,669.11, +72.55 (0.96%)
Gainers beat back losers by a healthy margin, 5102-1418. There were 539 new highs to just 29 new lows.
NYSE Volume 5,797,391,000
NASDAQ Volume 2,006,695,375
Commodities rebounded smartly, with oil gaining $2.00, to $83.45. Gold was up $3.40, to $1,138.60, and silver added 9 cents to $17.82.
The SEC-Goldman Sachs saga is still in the prelude. It's almost a certainty that fireworks will develop out of this singular action, leading to more lawsuits using the SEC's action as a basis for argument. Already, an Italian bank is suing Citigroup, alleging misrepresentation on a complex swap arrangement.
Stay tuned. There's more to come.
Monday, April 19, 2010
Goldman Sachs' Power on Display; Blankfien Should Be Jailed
Make no doubt about it. The only reason stocks gained today was because the traders at Goldman Sachs were boosting prices, especially for their own stock and others in the banking sector.
One must really have to stretch credulity to its most outer limits to believe that actual investors - real people playing with their own money - would have so much as touched financial shares with as many ten-foot poles as one could offer them.
Today's argument was that the SEC decision to bring fraud charges against Goldman Sachs came down to a 3-2 vote, thus, the charges cannot be well-founded. While that may be so, and well and good, the argument is as superfluous as what little hair remains on Goldman CEO Lloyd Blankfein's (left) head. There's something there, surely, but it has no meaning.
Looking at the larger scheme, suppose Goldman Sachs is completely innocent, all the way down the line. They did nothing wrong throughout the period from 2003-2007, in which trillions of dollars were packaged, sold and then vaporized. Suppose that is true.
If that's the case, then why would anyone do business with the most incompetent firm on the planet? They must not have known that housing values should not rise by 15% a year, that loans for mortgages should be closely scrutinized and offered only to potential borrowers with the highest credit standards and ability to pay.
Truly, if the chiefs at the Goldman Sachs roundtable didn't see anything wrong with the deals they were facilitating, packaging and selling, then they must be the greatest buffoons on the planet.
The argument simply doesn't work, unless, of course, you are dealing with what actually may be the greatest gathering of idiots in the history of the world, the American public, who still might buy their story, though even that is doubtful.
Politics comes into play in the SEC, just as in any organization. The two dissenters on the decision to charge the firm with fraud might have been concerned over their futures. Goldman Sachs is an incredibly powerful organization, with tentacles throughout the government and society. Taking them on in the courts is a task not for the meek. The regulators who finally, after nearly two years of dawdling, mustered enough courage to do what is right, will likely become pariahs on Wall Street, as unwelcome as a sell rating by any analyst.
Thus, Goldman's political muscle must be weighed in this light, as well as in any trading while the matter is being litigated. Just as the control freaks at Goldman Sachs made sure today would be a shining moment for capitalism, they will be equally resolute in promoting a massive sell-off should the tide turn against them.
It's a simple argument once one boils out all of the politics and media spin: Goldman Sachs either committed fraud on a grand scale or they are completely incompetent and unfit to handle even the simplest financial transactions.
So it is that as of today, all trading in equities and commodities - Goldman's playgrounds - should be eyed with the highest degree of skepticism possible. The firm controls so much of the markets, to such an extraordinary degree, that they may not only be too big to fail, but too big to even be a fair, honest and practical participant.
Dow 11,092.05, +73.39 (0.67%)
NASDAQ 2,480.11, -1.15 (0.05%)
S&P 500 1,197.52, +5.39 (0.45%)
NYSE Composite 7,596.56, +11.94 (0.16%)
Offering credence to the "control" argument are the indices, today hopelessly out of kilter. While the Dow was up sharply, the NASDAQ was down, and the NYSE Composite barely registering a gain. Further, DECLINING ISSUES LED ADVANCERS, 3774-2621. New highs ebbed lower, to 259, while there were only 48 new lows. Volume was magnificent, especially on the NYSE, because it took a lot of trading to boost specific stocks (ones that were, in reality, being sold off by spooked investors).
NYSE Volume 7,341,836,000
NASDAQ Volume 2,163,046,500
This New York Times article about the loyal Goldman Sachs' employees rallying around their beleaguered company and their head honcho, Mr. Blankfein, speaks not only of the company's incredibly adroit reach into the media, but also of the levels of deceit they will employ to save themselves.
The game is up at Goldman, whether they like to admit it or not. Blankfein, if he pushes back hard enough, may find himself looking out at the world from behind bars, which is probably where he belongs, as do many of his cadre of overstuffed, self-important, greed merchants.
Oil prices fell for a third straight day, probably because the Goldman traders were too busy propping up the stock market. Oil slipped another $1.79, to $81.45. Gold fell $1.10, to $1,135.20. Silver gained 6 cents, to $17.72.
Goldman Sachs is still in control, for now, but if there is any justice remaining in what little is left of our democracy, they won't be for long. We can only hope that they don't blow up the economy for good as their final tribute to greed.
One must really have to stretch credulity to its most outer limits to believe that actual investors - real people playing with their own money - would have so much as touched financial shares with as many ten-foot poles as one could offer them.Today's argument was that the SEC decision to bring fraud charges against Goldman Sachs came down to a 3-2 vote, thus, the charges cannot be well-founded. While that may be so, and well and good, the argument is as superfluous as what little hair remains on Goldman CEO Lloyd Blankfein's (left) head. There's something there, surely, but it has no meaning.
Looking at the larger scheme, suppose Goldman Sachs is completely innocent, all the way down the line. They did nothing wrong throughout the period from 2003-2007, in which trillions of dollars were packaged, sold and then vaporized. Suppose that is true.
If that's the case, then why would anyone do business with the most incompetent firm on the planet? They must not have known that housing values should not rise by 15% a year, that loans for mortgages should be closely scrutinized and offered only to potential borrowers with the highest credit standards and ability to pay.
Truly, if the chiefs at the Goldman Sachs roundtable didn't see anything wrong with the deals they were facilitating, packaging and selling, then they must be the greatest buffoons on the planet.
The argument simply doesn't work, unless, of course, you are dealing with what actually may be the greatest gathering of idiots in the history of the world, the American public, who still might buy their story, though even that is doubtful.
Politics comes into play in the SEC, just as in any organization. The two dissenters on the decision to charge the firm with fraud might have been concerned over their futures. Goldman Sachs is an incredibly powerful organization, with tentacles throughout the government and society. Taking them on in the courts is a task not for the meek. The regulators who finally, after nearly two years of dawdling, mustered enough courage to do what is right, will likely become pariahs on Wall Street, as unwelcome as a sell rating by any analyst.
Thus, Goldman's political muscle must be weighed in this light, as well as in any trading while the matter is being litigated. Just as the control freaks at Goldman Sachs made sure today would be a shining moment for capitalism, they will be equally resolute in promoting a massive sell-off should the tide turn against them.
It's a simple argument once one boils out all of the politics and media spin: Goldman Sachs either committed fraud on a grand scale or they are completely incompetent and unfit to handle even the simplest financial transactions.
So it is that as of today, all trading in equities and commodities - Goldman's playgrounds - should be eyed with the highest degree of skepticism possible. The firm controls so much of the markets, to such an extraordinary degree, that they may not only be too big to fail, but too big to even be a fair, honest and practical participant.
Dow 11,092.05, +73.39 (0.67%)
NASDAQ 2,480.11, -1.15 (0.05%)
S&P 500 1,197.52, +5.39 (0.45%)
NYSE Composite 7,596.56, +11.94 (0.16%)
Offering credence to the "control" argument are the indices, today hopelessly out of kilter. While the Dow was up sharply, the NASDAQ was down, and the NYSE Composite barely registering a gain. Further, DECLINING ISSUES LED ADVANCERS, 3774-2621. New highs ebbed lower, to 259, while there were only 48 new lows. Volume was magnificent, especially on the NYSE, because it took a lot of trading to boost specific stocks (ones that were, in reality, being sold off by spooked investors).
NYSE Volume 7,341,836,000
NASDAQ Volume 2,163,046,500
This New York Times article about the loyal Goldman Sachs' employees rallying around their beleaguered company and their head honcho, Mr. Blankfein, speaks not only of the company's incredibly adroit reach into the media, but also of the levels of deceit they will employ to save themselves.
The game is up at Goldman, whether they like to admit it or not. Blankfein, if he pushes back hard enough, may find himself looking out at the world from behind bars, which is probably where he belongs, as do many of his cadre of overstuffed, self-important, greed merchants.
Oil prices fell for a third straight day, probably because the Goldman traders were too busy propping up the stock market. Oil slipped another $1.79, to $81.45. Gold fell $1.10, to $1,135.20. Silver gained 6 cents, to $17.72.
Goldman Sachs is still in control, for now, but if there is any justice remaining in what little is left of our democracy, they won't be for long. We can only hope that they don't blow up the economy for good as their final tribute to greed.
Friday, April 16, 2010
SEC Sues Goldman Sachs; Is the Tide Turning?
There was only one piece of news today that mattered and it was the enormous disclosure that the SEC has initiated a civil lawsuit against the leading investment bank in America: Goldman Sachs.
The case alleges fraud by Goldman Sachs in the marketing and selling of certain mortgage-backed securities selected by hedge fund Paulson & Co. Investors lost $1 billion, though Paulson, allegedly aided by Goldman Sachs, made bets (credit defaults swaps or CDS) against the securities and made $1 billion by being on the opposite side of the transaction.
Obviously, the SEC has targeted only one instance of alleged fraud in the marketing of mortgage-backed securities which consisted primarily of sub-prime mortgages, though the case may serve as a test for many more lawsuits to follow. What's apparent from the government's position is that Goldman Sachs will be brought under severe scrutiny in the arcane area of collateralized debt obligations (CDOs), at last seeking to pull back the veil of secrecy surrounding the financial instruments which eventually resulted in a massive collapse of the financial industry and the larger economy.
Should the government prevail against Goldman, the implications could be severe. It's not as though Goldman's marketers were the only Wall Street big wheels who were involved in the sale of such securities. Other banks and financial institutions may find themselves on the receiving end of the government's wrath, notably Bank of America, Morgan Stanley and Citigroup, while JP Morgan Chase may receive something of a pass. Bank of America may be culpable after its acquisition of Merrill Lynch in 2008, while Citigroup and Morgan Stanley merged their brokerage units in January, 2009 under the Smith Barney moniker.
With all of this potential litigation weighing in the background, investors scurried out of Goldman Sachs and other financial stocks en masse on Friday. Goldman Sachs (GS) closed at 160.70, down 23.57 points (12.79%). Other financial stocks suffered declines ranging between 5 and 10%, but the broader market was noticeably spooked, sending all the major indices tumbling into the red. As such, investors were granted the perfect opportunity to bail out and head to the sidelines for the time being, though these lawsuits could take years in which to unravel.
It is worth noting that today's tumble nearly wiped out all of the gains for the week. The news could not have come at a worse time, right in the midst of earnings season. The potential for billions of dollars being vaporized is once again front and center as scandalous lawsuits will almost surely put a lid on further advances and may actually serve to focus investors on other less-than-satisfactory economic news.
Dow 11,018.66, -125.91 (1.13%)
NASDAQ 2,481.26, -34.43 (1.37%)
S&P 500 1,192.13, -19.54 (1.61%)
NYSE Composite 7,584.62, -135.04 (1.75%
The extraordinary nature of todays trade was evident in the internals. Declining issues trumped advancers, 4991-1524. New highs slipped back to 464, though there were only 39 new lows. Volume was at the highest level in months, nearly double the normal volume on the NYSE alone.
NYSE Volume 9,108,087,000
NASDAQ Volume 2,878,199,000
The Goldman news spared no markets. Crude oil dropped $2.27, to $83.24. Gold was hammered, losing $23.40, to $1,136.30. Silver was battered down 76 cents, closing at $17.67 per ounce.
One can only wonder about the timing of the SEC suit and its effect on the markets. Was it mere coincidence that stocks had become ridiculously overbought in recent days or was this yet another well-timed assault on the senses by the money moguls?
Only time will tell, but this is certainly not a time to be very confident in buying stocks. Again.
The case alleges fraud by Goldman Sachs in the marketing and selling of certain mortgage-backed securities selected by hedge fund Paulson & Co. Investors lost $1 billion, though Paulson, allegedly aided by Goldman Sachs, made bets (credit defaults swaps or CDS) against the securities and made $1 billion by being on the opposite side of the transaction.
Obviously, the SEC has targeted only one instance of alleged fraud in the marketing of mortgage-backed securities which consisted primarily of sub-prime mortgages, though the case may serve as a test for many more lawsuits to follow. What's apparent from the government's position is that Goldman Sachs will be brought under severe scrutiny in the arcane area of collateralized debt obligations (CDOs), at last seeking to pull back the veil of secrecy surrounding the financial instruments which eventually resulted in a massive collapse of the financial industry and the larger economy.
Should the government prevail against Goldman, the implications could be severe. It's not as though Goldman's marketers were the only Wall Street big wheels who were involved in the sale of such securities. Other banks and financial institutions may find themselves on the receiving end of the government's wrath, notably Bank of America, Morgan Stanley and Citigroup, while JP Morgan Chase may receive something of a pass. Bank of America may be culpable after its acquisition of Merrill Lynch in 2008, while Citigroup and Morgan Stanley merged their brokerage units in January, 2009 under the Smith Barney moniker.
With all of this potential litigation weighing in the background, investors scurried out of Goldman Sachs and other financial stocks en masse on Friday. Goldman Sachs (GS) closed at 160.70, down 23.57 points (12.79%). Other financial stocks suffered declines ranging between 5 and 10%, but the broader market was noticeably spooked, sending all the major indices tumbling into the red. As such, investors were granted the perfect opportunity to bail out and head to the sidelines for the time being, though these lawsuits could take years in which to unravel.
It is worth noting that today's tumble nearly wiped out all of the gains for the week. The news could not have come at a worse time, right in the midst of earnings season. The potential for billions of dollars being vaporized is once again front and center as scandalous lawsuits will almost surely put a lid on further advances and may actually serve to focus investors on other less-than-satisfactory economic news.
Dow 11,018.66, -125.91 (1.13%)
NASDAQ 2,481.26, -34.43 (1.37%)
S&P 500 1,192.13, -19.54 (1.61%)
NYSE Composite 7,584.62, -135.04 (1.75%
The extraordinary nature of todays trade was evident in the internals. Declining issues trumped advancers, 4991-1524. New highs slipped back to 464, though there were only 39 new lows. Volume was at the highest level in months, nearly double the normal volume on the NYSE alone.
NYSE Volume 9,108,087,000
NASDAQ Volume 2,878,199,000
The Goldman news spared no markets. Crude oil dropped $2.27, to $83.24. Gold was hammered, losing $23.40, to $1,136.30. Silver was battered down 76 cents, closing at $17.67 per ounce.
One can only wonder about the timing of the SEC suit and its effect on the markets. Was it mere coincidence that stocks had become ridiculously overbought in recent days or was this yet another well-timed assault on the senses by the money moguls?
Only time will tell, but this is certainly not a time to be very confident in buying stocks. Again.
Thursday, February 25, 2010
Suckers Galore in Classic Pump and Dump
One has to wonder just how much bad news it will take to send stocks down for the count. Just this week, the Conference Board's measure of consumer confidence trundled down ten full points to 46, a level not seen since 1983. New home sales for January fell to 309,000, a figure more reminiscent of 1962 than 2010, and, just this morning, new filings for unemployment insurance claims reached 496,000, the third consecutive weekly rise in that number, signaling that instead of declining, unemployment may actually be on the rise again.
Adding to the difficult situation is word that Goldman Sachs - tops on everyone's most-hated company list - will soon be under investigation by the Federal Reserve (what a laugh!) for trading in Credit Default Swaps (CDS) related to the nation of Greece. The Fed would like to know if Goldman traders have been betting on a default of Greece's debt, and, anybody who knows the language of Wall Street would have to conclude that the Goldman traders are all over it.
Not that profiting from another country's missteps or outright demise is in any way illegal or unethical - though some may argue that the practice would be immoral - Goldman Sachs may be just the next victim lined up for the dog-and-pony show currently underway in congress. Once the congressional clowns are done with smearing Toyota, they might want to take aim at one of their country's own. Goldman Sachs makes a perfect whipping boy for the incompetent congress. Since they can't pass meaningful legislation, they have resorted to mealy-mouthed denunciations of the business community. The act takes some of the spotlight off their inept attempts at legislating and/or governing.
However, Wall Street being the biggest and most-corrupt casino on the planet, more bad news may only produce sideways trading. Perhaps half of California slipping into the Pacific might garner some support from the bulls, though such an event would likely be viewed with insidious sarcasm on Wall Street, something along the lines of, "well, there one more problem we'll not have to concern ourselves with any more."
On the day that the Dow was down 187 points by midday - a normal reaction - the index ends the session down just over 50 points - an abnormal trade. The question of whether US stocks are manipulated has already been answered over and over again, so since there's little point in beating a horse that's already dead, we can safely assume that the US economy is about to implode once again, and the insiders in DC and on Wall Street already know it. They're just waiting for the optimal moment - when they have as many suckers as possible fully invested in stocks - to sell everything and run for the hills, sending the markets into another spasmodic paroxysm of panic-induced crashing.
While my interpretation of market movements and political foreplay may sound to some like the last days of Cicero, it's about the best I a able to muster considering the abysmal trappings to which we are currently bound. The banking and credit system is broken and more prone to penalize borrowers than help them, real estate is a bad bet for anything other than arable land and the political process has largely ground to a complete halt. Nothing short of a major war is going to solve the debt problems of the developed world, especially Europe, Japan and the United States, a prospect which I do not wish to see, nor do I espouse. Wars only solve nations' problems - and not very well - at the expense of the lives of the general public.
However, as much as I'd like to wax positive on the current condition, I see only gloom and doom ahead for those who are not adequately prepared. Personally, I've divested all of my holdings in anything speculative and am completely in cash and productive investments: tools and seeds, for today; machines and vegetables, tomorrow.
Dow 10,321.03, -53.13 (0.51%)
NASDAQ 2,234.22, -1.68 (0.08%)
S&P 500 1,102.93, -2.31 (0.21%)
NYSE Composite 7,013.45, -17.22 (0.24%)
Not unexpectedly, declining issues beat advancers, though not by nearly the 3-1 margin seen earlier in the day, 3458-2969. New highs stood at 225. There were 45 new lows. Volume was at its best level of the week, owing, in part, to the incredibly heavy lifting done by those who eviscerated nearly 140 points from the downside.
NYSE Volume 5,247,205,000
NASDAQ Volume 2,268,341,000
Commodities were mixed again, though today was oil's day for decline. Crude was off $1.70, to $78.30. Gold gained $11.20, to $1,108.40, on rumors that the government of China was planning to buy up the remaining reserves of the IMF. Silver dipped 2 cents, to $15.94.
Tomorrow, being the final day of trading for the week and the month, ought to offer even more ammo for interested parties. The government issues the second estimate of 4th quarter '09 GDP, existing home sales for January are offered and the Chicago PMI and U of Michigan final February consumer sentiment gauge are all on tap.
10,400 is the magic number on the Dow. Closing above that would be the third straight weekly positive finish. For the year, the Dow's record for weekly closes stands at 2 up and 4 down.
Adding to the difficult situation is word that Goldman Sachs - tops on everyone's most-hated company list - will soon be under investigation by the Federal Reserve (what a laugh!) for trading in Credit Default Swaps (CDS) related to the nation of Greece. The Fed would like to know if Goldman traders have been betting on a default of Greece's debt, and, anybody who knows the language of Wall Street would have to conclude that the Goldman traders are all over it.
Obviously, using these instruments in a way that intentionally destabilizes a company or a country is counterproductive. - Fed Chairman Ben Bernanke
Not that profiting from another country's missteps or outright demise is in any way illegal or unethical - though some may argue that the practice would be immoral - Goldman Sachs may be just the next victim lined up for the dog-and-pony show currently underway in congress. Once the congressional clowns are done with smearing Toyota, they might want to take aim at one of their country's own. Goldman Sachs makes a perfect whipping boy for the incompetent congress. Since they can't pass meaningful legislation, they have resorted to mealy-mouthed denunciations of the business community. The act takes some of the spotlight off their inept attempts at legislating and/or governing.
However, Wall Street being the biggest and most-corrupt casino on the planet, more bad news may only produce sideways trading. Perhaps half of California slipping into the Pacific might garner some support from the bulls, though such an event would likely be viewed with insidious sarcasm on Wall Street, something along the lines of, "well, there one more problem we'll not have to concern ourselves with any more."
On the day that the Dow was down 187 points by midday - a normal reaction - the index ends the session down just over 50 points - an abnormal trade. The question of whether US stocks are manipulated has already been answered over and over again, so since there's little point in beating a horse that's already dead, we can safely assume that the US economy is about to implode once again, and the insiders in DC and on Wall Street already know it. They're just waiting for the optimal moment - when they have as many suckers as possible fully invested in stocks - to sell everything and run for the hills, sending the markets into another spasmodic paroxysm of panic-induced crashing.
While my interpretation of market movements and political foreplay may sound to some like the last days of Cicero, it's about the best I a able to muster considering the abysmal trappings to which we are currently bound. The banking and credit system is broken and more prone to penalize borrowers than help them, real estate is a bad bet for anything other than arable land and the political process has largely ground to a complete halt. Nothing short of a major war is going to solve the debt problems of the developed world, especially Europe, Japan and the United States, a prospect which I do not wish to see, nor do I espouse. Wars only solve nations' problems - and not very well - at the expense of the lives of the general public.
However, as much as I'd like to wax positive on the current condition, I see only gloom and doom ahead for those who are not adequately prepared. Personally, I've divested all of my holdings in anything speculative and am completely in cash and productive investments: tools and seeds, for today; machines and vegetables, tomorrow.
Dow 10,321.03, -53.13 (0.51%)
NASDAQ 2,234.22, -1.68 (0.08%)
S&P 500 1,102.93, -2.31 (0.21%)
NYSE Composite 7,013.45, -17.22 (0.24%)
Not unexpectedly, declining issues beat advancers, though not by nearly the 3-1 margin seen earlier in the day, 3458-2969. New highs stood at 225. There were 45 new lows. Volume was at its best level of the week, owing, in part, to the incredibly heavy lifting done by those who eviscerated nearly 140 points from the downside.
NYSE Volume 5,247,205,000
NASDAQ Volume 2,268,341,000
Commodities were mixed again, though today was oil's day for decline. Crude was off $1.70, to $78.30. Gold gained $11.20, to $1,108.40, on rumors that the government of China was planning to buy up the remaining reserves of the IMF. Silver dipped 2 cents, to $15.94.
Tomorrow, being the final day of trading for the week and the month, ought to offer even more ammo for interested parties. The government issues the second estimate of 4th quarter '09 GDP, existing home sales for January are offered and the Chicago PMI and U of Michigan final February consumer sentiment gauge are all on tap.
10,400 is the magic number on the Dow. Closing above that would be the third straight weekly positive finish. For the year, the Dow's record for weekly closes stands at 2 up and 4 down.
Subscribe to:
Posts (Atom)
Posts
