Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts

Tuesday, July 14, 2015

Wonder: Getting Past Greece, the Euro, Varoufakis, Travie McCoy and My Best Friends (BFFs)


It's a beautiful word. Maybe not as beautiful a word as White or Bird (It's a Wonderful Day... it's all right, go ahead and listen), but one should always be in wonder at the world -- if only because we DO NOT KNOW.

Events of recent weeks have left some - not many, and certainly not all - bewildered, confused, and wondering what is next to come. Life in Greece has become complicated because of their commitment to debt, and that is the only reason. Not politics, not currency, but only debt has enslaved the peoples of the southern European archipelago, and only because they continue to accept it as a constant, as a commitment, a purpose, an underlying principle of existence.

Long ago, in the days of Aristotle, Plato, Pythagoras and Socrates, Greece became the cradle of Western civilization and democracy. Culture flourished with fresh ideas. Freedom of speech, freedom of identity, freedom of thought found roots, grew, and prospered.

The secret of happiness is freedom. The secret of freedom is courage.

-- Thucydides

Today, as the European Central Bank (ECB) and the IMF divvy up the remnants of a once-great culture and country, there is no secret, no happiness, no freedom. The Greeks are slaves to money, to the Euro, to the US dollar, and that condition will not change because the Greeks themselves - and all of Europe - have lost their ways, their wills, their collective courage. The 20th and 21st centuries have been witness to the willful slavery of entire populations, a kind of "Stockholm Syndrome", in which vast swaths of people are overwhelmed by money, power, greed, corruption and debauchery. It has happened before - in Rome, in London, Berlin, Tokyo - but never before has it happened as quietly and easily as today.

Without will, people have nothing. The people of Greece have no will. Even their "courageous" vote to reject the demands of their creditors a week ago was directed, will-less and rhetorical. As we have seen since then, voting meant exactly nothing, as it always has, when the choices are bad, or worse. Greece chose "bad." By decree of the technocrats and debt-holders of the EU, they are to receive "worse."

Greece Matters.

Greece matters because it is our fate, our shared existence, our future. Anyone believing that "it can't happen here," or "Greece is contained" is a dunderhead, a dolt, a fool, or a psychopath bent on escapism. The woes of Greece will visit every shore. First Europe, then South America, Australia and New Zealand, Asia, and eventually, North America. Canadians may be spared the worst of it, especially those in the hinterlands, but come it must, devour assets it must, devalue life it must. Greece is coming home to you, and me, and yours.

Not wanting to sound depressing or disheartening, but only realistic, this prose offers comfort to those who take heed. Not all is evil. There is good in the world. Life in the United States of America, for instance, has neve been more prosperous, full and enjoyable. If not for odious debt, the USA would be paradise on earth. But it is the odious debt, all $18 trillion on the official books and the countless billions in loose, unfunded liabilities such as Social Security and Medicare, that threatens with slavery of the masses. The rich will escape, virtually unharmed, The middle class will be skimmed, as always, without protection. The poor will suffer.

Central banks, which control the capital, have offered solutions. BUY STOCKS. WITH BOTH HANDS. Since March of 2009, Money Daily has been right to some degree, but wrong on a large account, decrying stocks as risky, unsound, unfair, unfulfilling, and dangerous.

Stocks, verily, the riskiest of them all, have never been more wildly valued, but they also have never been more protected than today. An article by John Hussman, here, spells out the current conditions for investment opportunities in lurid detail. While Greece may, and likely, will, get a haircut proportional to that of former Finance Minister Yanis Varoufakis (a complete sellout and traitor to the people of Greece), the remainder of the world does not have to suffer a similar fate.

One only has to play along with the monetary authorities and the central banks for a time, and then... release. Such an investment strategy will require a heavy doses of discipline, and certain timing, which is why most will not even try, and many of those who do will try and fail, and fail, and fail.

The lucky, the daring, the living, and the brave will survive, and prosper, but only if they act boldly, with the conviction in their heart that all is fleeting, money is worthless, and hard assets are still worth having. The single most important asset one can hold, now, and generally, throughout history, is LAND. Real Estate. It's called that because it is REAL and it is an ESTATE asset. The only liability to owning real estate is taxation, which is why the choice of purchase should be well considered, and, beyond living quarters, consist of raw acreage.

Silver and gold one can hold in one's hand, but they cannot produce a single carrot, potato, bean or spinach.

It would also be wise to have good friendships, and to nurture them, cherish them, and honor them. Good friendships will outlast all manners of currency or money, bring more joy and happiness than blood relationships, and sponsor more spiritual wealth than all the gold that even King Midas could conjure.

Good friendship is why I write, why I live, why I try to spread some wisdom, if there is any to be spread.

I have three friends. Two are dogs. The other... I leave to the imagination of the reader.

Go now. Buy stocks, and prosper. Even better, play options or bet on horses. Use massive leverage if it is available. If you lose, you can blame me, because I don't actually care. I will only be here a short while. Besides, there are countless methods for recovery. The central bankers have made it as easy as a day at the beach.

I urge everyone to become self-sufficient. Some solar power and a garden are requisite to peace and happiness.

Thursday, July 11, 2013

Dovish Bernanke Speaks, Market Goes Full Retard, to Record Highs

Free market and Austrian economists beware!

There is a dangerous monster afoot, who by merely speaking a few words can alter global markets to whatever whim he so desires.

On Wednesday, shortly after the market closed, this monster, this unsightly beast, one Benjamin Shalom (we kid you not) Bernanke, Chairman of the United States Federal Reserve Bank (an international cartel), spoke in Cambridge, Massachusetts, and intoned, in part, that the 7.6% unemployment rate "overstated" the health of the labor market.

Translated into Fed-speak - which is all that matters to equity markets these days - what he meant was that there was no need for investors to panic. The Federal reserve has every intention of keeping monetary policy incredibly loose, so that even if the Fed dials back its $85 billion-a-month bond purchasing program a little, they do not believe that the US or global economy is strong enough to survive without stimulative measures.

The result was a strong gap-up at the open on Thursday and an all-day party for Wall Street bulls with the S%P 500 and the Dow Industrials closing at all-time highs. Bears were once again crushed and the rookie Dow Theorists who surmised that the dip from a few weeks ago was a sure-fire reversal into a bear market (we here at MD did not confirm any such theoretical reversal, though indications were close) were once again proven not only wrong but absolutely clueless when it comes to Dow Theory.

Markets have now been completely voided of any validity to fundamental valuation. All that remains is intonations from the beast of the Fed and his minions, sending markets any which way they choose. These are markets distorted completely out of focus from reality, in 1984-esque fashion, where bad news (Bernanke is correct, 7.6% unemployment is, in itself, a gross distortion of reality - stripping out part-time, temporary and distressed and discouraged workers, unemployment is closer to 20%) is good because the Fed will continue to supply unlimited liquidity.

In the end, be it five days, five weeks, five months, five years or longer, the stimulus will save nothing. Sovereign economies will end in shambles (some, like Greece, Portugal, Cyprus and Ireland already are), but for now, all anybody with as much as half a brain left after all the brain-washing by the media and immoral rounds of bailouts, bail-ins, rescues and refinances can do is play along, go along or go one's own way, the latter of which is highly refreshing and the only proper course of action.

Five years into the global currency melt-down, carnage is everywhere, the rich are even richer, the middle class on the endangered species list and the bottom tier nothing more than debt slaves for life.

This is not your father's America. It is not even the America you grew up into, if you are more than 30 years of age. This is an abomination, a monstrosity of complexity, a leviathan more frightening than even Thomas Hobbes could have dreamt.

Happy sailing, oh rudderless ones!

Dow 15,460.92, +169.26 (1.11%)
NASDAQ 3,578.30, +57.55 (1.63%)
S&P 500 1,675.02, +22.40 (1.36%)
NYSE Composite 9,493.21, +152.52 (1.63%)
NASDAQ Volume 1,680,093,125
NYSE Volume 3,796,463,500
Combined NYSE & NASDAQ Advance - Decline: 5246-1307
Combined NYSE & NASDAQ New highs - New lows: 772-21 (abominal!)
WTI crude oil: 104.91, -1.61
Gold: 1,279.90, +32.50
Silver: 19.96, +0.791

Thursday, June 6, 2013

Terrific Turnaround Thursday Presages Friday's Key Jobs Report

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tuesday, November 27, 2012

Washington Gets Back to Work (Kinda); Stocks Slump Despite (Kinda) Positive Data

Tuesday began with a flurry of good news.

First, over in Bizzarro-world(aka Europe), EU ministers were glad-handing and slapping each other's backs for another successful bailout of Greece (really, is this the third, fourth or fifth? Who's counting?), then, at 8:30 am ET, durable goods orders came in better than expected.

At 9:00 am ET, the September Case-Shiller Housing Index showed another in a series of positive gains for housing. Better yet, consumer confidence hit a four-and-a-half-year high, reported at 10:00 am ET.

So, why were the markets in such a sour mood, why did they end lower, and why were they not even lower than where they finished?

Ah, grasshopper, so many questions...

First, that somewhat refreshing zero print on durables was, in fact, pretty ugly, once one ventured to peek under the hood. As Zero Hedge reports, a continued collapse in durable goods new orders virtually guarantees that we're already in a recession, fiscal cliff or not (more on that canard later).

The Case-Shiller data, which showed the average price of a home purchase up by 3.6% nationally, has to be faded a little, only because housing is not stocks, and, even though home-buying is a relevant statistic, it matters little in the broader scheme of things, especially when the banks are keeping massive numbers of homes off the market in what's known as "foreclosure stuffing." Those in the know, really, really do know.

As far as the consumer confidence number, well, anybody who allows themselves to be branded a consumer for purposes of a survey can't be all that bright, after all.

In the case of the nth installment of the Greek bailout, there were scant details, the IMF hasn't signed off on it yet, the "deal" has to be approved by each member (17) country, so, the Euro sold off, anathema to US markets.

And then, about 2:30 pm ET, US lawmakers (that's a joke, son) emerged from talks over the fiscal cliff (that's not a pun, son) and did what everyone thought they'd do, since their track record is so plain and clear on this point: point fingers at the other side for not playing fairly.

Senate majority leader Harry Reid: "...little progress with Republicans..."

Senate minority leader Mitch McConnell: "...some difficulty turning off the campaign..."

Is it any surprise to anybody that working out a deal in DC was going to be a difficult, if not impossible, issue? After all, this whole "fiscal cliff" miasma started more than a year ago when the two sides failed to reach conciliatory postures on increasing the debt limit, and that puny increase of roughly $1.2 trillion is about to run out.

So, with no deal even remotely being discussed, the Titans of Wall Street started selling in earnest and continued selling into the close. They will probably still be selling when the opening bell rings on Wednesday and maybe even beyond that, because depending on Washington politicians to reach a concord on any matter of even insignificant importance is like getting cats and frogs to behave well together. It's just not going to happen.

Further, indispensable reading from the Wall Street Journal comes in the form of an editorial by Chris Cox and Bill Archer - respectively, former chairman of the House Republican Policy Committee and the Securities and Exchange Commission and former chairman of the House Ways & Means Committee - explaining why the fiscal cliff of $600 billion is merely a puff of smoke compared to the conflagration that is the real unfunded liabilities of Medicare and Social Security, refreshingly written in language even a protesting Wal-Mart worker could comprehend.

The saga continues to unfold tomorrow. Oh, by the way, so many people did their holiday shopping on Thanksgiving, Black Friday, Small Business Saturday and online on Cyber Monday this year, and, considering that since Turkey Day was so early this year that there's an extra week in the holiday shopping season, retail sales are going to be very slow for the one, two, three, four next weeks, until the last Saturday before Christmas (the 25th is a Tuesday), so, Happy Holidays! Free houses, Greek bailouts, durable goods and fiscal cliff-diving for everyone... including consumers!

Dow 12,878.13, -89.24 (0.69%)
Nasdaq 2,967.79, -8.99 (0.30%)
S&P 500 1,398.94, -7.35 (0.52%)
10-Yr Bond 1.65% -0.02
NYSE Volume 3,294,930,000
Nasdaq Volume 1,762,521,750
Combined NYSE & NASDAQ Advance - Decline: 2462-3041
Combined NYSE & NASDAQ New highs - New lows: 154-40
WTI crude oil: 87.18, -0.56
Gold: 1,742.30, -7.30
Silver: 33.98, -0.156

Monday, November 26, 2012

Early Case of Holiday Blahs for Equities

Trading was sluggish and mostly to the downside in the morning session - likely on quick profit-taking from the Black Friday rally - but capital was re-allocated in the afternoon, as stocks rallied into the close.

Concerns over resolution to US fiscal issues and Europe's finalizing yet another round of financing for Greece kept stocks in the red for almost the entire day, except for the NASDAQ, which was boosted largely on trades in Apple (AAPL), which was up more than three percent on the day.

There was little in the way of economic data or corporate news to move markets, as trading volumes were at low levels.

Simply put, there wasn't even a left-over turkey leg to Friday's rally as traders were quick to pul the sell lever with so many issues overhanging the markets.

The Dow, down as much as 109 points before noon, rallied to close near the best level of the day, which, of course, means nothing.

Things should get more interesting as news of talks between Republicans and Democrats on the "fiscal cliff" issue begin to circulate throughout the week.

Dow 12,967.37, -42.31 (0.33%)
Nasdaq 2,976.78, +9.93 (0.33%)
S&P 500 1,406.29, -2.86 (0.20%)
NYSE Composite 8,197.48, -28.02(0.34%)
NYSE Volume 2,833,759,250
Nasdaq Volume 1,559,037,750
Combined NYSE & NASDAQ Advance - Decline: 2636-2880
Combined NYSE & NASDAQ New highs - New lows: 124-40
WTI crude oil: 87.74, -0.54
Gold: 1,749.60, -1.80
Silver: 34.14, +0.021

Thursday, November 8, 2012

Stocks Get Whacked Again; Dow Down 100+; Support on Major Indices Breached

Make no doubt about it, there's real fear on Wall Street.

For the second day in a row, stocks spent the day wallowing in negative territory, amid fears of the fiscal cliff - higher taxes, imposed budget cuts, more - the souring condition of the European Union, notably Greece and, yes, Germany, post-election hand wringing, and generally overpriced stocks in a market that is supposed to be buoyed by unlimited bond purchases by the Federal Reserve.

Word to the Street: It's not working.

Stock market participants who were brave enough to bid stocks up at the open (aka, suckers) were immediately punished for thinking that after the worst down day in a year on the Dow, stocks were ready to rebound, as all the major averages got a brief boost at the open but fell back into the red shortly after the first half hour of trading.

Trading volumes were brisk and stocks continued to gyrate lower, finally ending with a rush to finish at the lows of the day right at the closing bell, hardly an encouraging sign for those who believe this recent pull-back was nothing but blues for Mr. Romney's loss in the presidential sweepstakes.

All of the major indices closed below their 200-day moving averages, the first time this has happened since the end of May, beginning of June, when investors were worried that the Fed would not extend its easing measures (they did, of course).

In the current environment, traders are more or less on their own. Many funds have closed their books for the year and are taking on losses as sharp-nosed hedge fund managers skewer the slow-footed and long-term types with shorting and controlled demolitions of individual stocks and groups. High beta stocks, which posted the greatest gains over the past 10 months, are being hammered relentlessly as profit-taking has become more akin to skinning tomatoes, a slippery job at best and a troublesome trade at worst.

There are scant buyers, though the "semi-invisible" hand of the Plunge Protection Team (PPT) may actually be keeping stocks from falling directly into the East River or beyond.

Foreign markets have been hard hit as well, with almost all Asian, European and Latin American markets feeling the pinch the past two days.

In Europe, the truly laughable situation that the ECB finds itself in is truly one for he history books, as Greece steps closer to civil war after voting once again for austerity measures and another round of cash from the monetary authorities in Brussels and Germany. Thing are relatively quiet in the other Southern European detor nations, though Spanish bond yields are beginning to rise, frightening everybody from Angela Merkel - who wants more time (sorry, honey, you've had enough) - to Mario Draghi, who has expressed openly that the lone bright spot in the EU - Germany - is beginning to lose its luster.

Thankfully for most traders, tomorrow is Friday, making the end of what will likely go down as one of the worst weeks of the year, with the Dow down more than 400 points thus far, and the issues presented to the market anything but resolved.

It's been said many times that the market hates uncertainty, and that's all they've got in front of them presently. Worse yet, the underlying conditions set by global central bankers are proving more destructive and costly than anyone could possibly have imagined (except for a few select bloggers and out-of-the-mainstream market watchers). The favored positions of bailing out banks, major companies and sovereign nations with increased easing of monetary policy and near-zero interest rates has created an environment with no escape hatch.

The hands of the central bankers are tied, and with them, all appendages of the trading community. If there was ever a time to book profits (what's left of them), it's now, or rather, it was Tuesday. Since the massive ramp job in anticipation of a Romney victory, stocks have been beaten and battered to a point at which the Dow now sports a gain of less than 600 points on the year, roughly a five percent move from the close of 12217.56 on December 30, 2011.

The NASDAQ being the hardest-hit in the recent downtrend, had the most to give up and is still holding onto a gain of nearly 300 points, having begun the year off the close at 2605.15 at the end of last year. Starting the year at 1257, the S&P 500 is still holding onto a 120-point gain, just less than 10% higher on the year, which, in normal times, would be considered excellent, but those gains seem to be eroding faster than the confidence that the Democrats and Republicans in Washington can find an ultimate solution (they can't; they're broke themselves).

New highs have been subsumed by new lows, 91-185, the second straight day in which the lows have registered a win. It, however, this is just the beginning of a correction of seven to fifteen percent, there's further to fall, something many on wall Street don't want to think about until maybe Monday, when all hell may break loose.

There's still one more day to get through this week and all pretense has been removed. There's a general fear about being in the market at all presently and the last man standing is not the preferred position, nor is the act of catching a falling knife, currently the only places left on the market floor.

From a chartists' perspective, the move lower was nearly overdue, but the timing could not have been more predictable after the major indices made new highs in early October, fall back, and failed to achieve those same levels later in the month, at which point began the eventual fall-out. The bull market which began in March of 2009 is now getting a little long in the tooth, at 44 months, and it could be all she wrote as third quarter results were messy to horrifying and Wall Street's dirty little secret - that stocks are not growing their earnings - is beginning to get out.

Tomorrow could see a bit of a snap-back, dead cat bounce, but all indications are that more pain is ahead and that period could extend through the remainder of 2012 and into next year.

There were winners, ominous ones at that: gold and silver.

Dow 12,811.32, -121.41 (0.94%)
NASDAQ 2,895.58, -41.71 (1.42%)
S&P 500 1,377.51, -17.02 (1.22%)
NYSE Composite 8,050.83, -87.98 (1.08%)
NASDAQ Volume 1,876,133,130
NYSE Volume 3,759,670,250
Combined NYSE & NASDAQ Advance - Decline: 1462-4062
Combined NYSE & NASDAQ New highs - New lows: 185-91
WTI crude oil: 85.09, +0.65
Gold: 1,726.00, +12.00
Silver: 32.24, +0.579

Wednesday, November 7, 2012

Obama Wins; Stock Market Sinks on Tax Hike, Fiscal Cliff Fears, Europe

Tuesday was an early night in terms of presidential politics as President Barack Obama was elected overwhelmingly to a second term, whipping Republican challenger in almost every battleground state and winning the popular vote handily.

With the vote in Florida still being tallied (anybody surprised?), the Sunshine State turned out to be mostly inconsequential as the president swept the key states of Virginia, Ohio, Wisconsin, Iowa, Pennsylvania (which never really was in play), New Hampshire, Colorado and Nevada. Romney's sole win in the so-called "swing states" was in North Carolina, a state which Obama took by a narrow 0.3% in 2008.

Once the midwest states of Wisconsin, Iowa and Ohio were declared for Obama, the race was over, but it wasn't until after midnight in the East that Mitt Romney gave his concession speech and later, President Obama gave a ripping, rhetorical speech extolling the virtues of freedom of choice, tolerance and working together toward shared goals and the great creation of our founders, the United States of America, individual states bound together by social compact.

In the House and Senate races, the makeup of congress remained largely the same, with Republicans dominating the House and Democrats strengthening their grip on the senate, winning key races in Virginia, Florida, and, especially, Massachusetts, where Elizabeth Warren, the fiery consumer rights advocate, took the seat away from Republican incumbent Scott Brown, in a major setback for big banks.

Warren, who worked on TARP and other reforms in Washington, especially the implementation of a consumer protection division at the Federal Reserve, will likely end up on the Senate banking Committee, possibly winning the chairmanship.

Another critical Senate race was won in Connecticut by Christopher Murphy, who defeated Linda McMahon, who wrestling millionaire who spent $100 million on her own campaign.

Jon Tester retained his Senate seat from Montana in a close race with Republican challenger Denny Rehberg, keeping the balance of power firmly in their control with 55 seats, along with one independent, Bernie Sanders of Vermont. The Democrats likely gained another ally when former governor, independent Angus King of Maine, won an open Senate seat that had been held by Republican Olympia Snowe. King has not indicated which party he would caucus with, though most believe it will be with Democrats. King won on the simple idea of making filibusters less of an effective measure in killing legislation, believing that excessive filibustering by Senate Republicans had blocked almost all significant legislation over the past four years.

There was little change in the House, as Reublicans retained control with 232 seats to 191 held by Democrats with a number of vacancies.

It wasn't long before other voices began to be heard, especially those on Wall Street who had been counting on a win by Republican Romney. Before the market opened, futures began a steep decline, though the catalyst may have nad more to do with comments by ECB president Mario Draghi and some dismal production figures from Germany, regarded as a stronghold in the recession-plagued continent.

Shortly after Germany's industrial production was reported to have fallen 1.2% in September, Draghi said that the crisis in Europe was beginning to take its toll on the industrial powerhouse that is the German economy.

Heading into the first post-election session, Dow futures were pointing toward a loss of more than 100 points at the open, and the result was worse, with the 132-point gain from Tuesday wiped out in the opening minute.

Stocks continued their descent until bottoming out just before noon, down 369 points, the biggest decline of the year, though some strengthening took all of the indices off their lows as the day progressed.

Still, the losses were dramatic and especially in the banking sector, where ank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM) and other big bank concerns were off more than five percent. All 10 S&P sectors finished in the red, the S&P could not defend the 1400 level and nearly bounced off its 200-day moving averages, the NASDAQ - aided by Apple's continued decline into bear market territory - broke down below its 200-DMA and the Dow closed below its 200-DMA for the first time since the beginning of June.

In Greece, rioters threw fire bombs at police in anticipation of another vote on austerity measures designed to pave the way for another round of financing from the troika of the IMF, EU and ECB. The vote, scheduled for midnight in Greece (5:00 pm ET), is expected to pass, though the populace has seemingly had enough of policies dictated by outsiders.

For Wall Street, the day presented a perfect storm of disappointment, fears of higher taxes on dividends, tighter regulations of banks, uncertainty over tax and spending policies heading into 2013, and renewed concerns over our trading partners in Europe.

The steep declines may have only been a beginning, however, as no policies have changed, and, actually, the political makeup in Washington remained the same as it had been the day before. The continued gridlock coming from the White House and Capitol Hill may be the most disconcerting factor of all.

Some internal damage was done to markets, with the advance-decline line showing a nearly 5-1 edge for losers and new highs being surpassed by new lows, 94-174.

With none of the important initiatives nearing resolution, there seems to be nowhere for the market to go but down, now that the election is over, earnings season is just about finished and the market must focus on fundamentals and locking in gains for the year. The remainder of 2012 may prove to be quite challenging to investors.

Dow 12,932.73, -312.95 (2.36%)
NASDAQ 2,937.29, -74.64 (2.48%)
S&P 500 1,394.53, -33.86 (2.37%)
NYSE Composite 8,138.80, -173.55 (2.09%)
NASDAQ Volume 4,322,112,500
NYSE Volume 2,059,028,750
Combined NYSE & NASDAQ Advance - Decline: 961-4613
Combined NYSE & NASDAQ New highs - New lows: 94-174
WTI crude oil: 84.44, -4.27
Gold: 1,714.00, -1.00
Silver: 31.66, -0.373

Friday, November 2, 2012

Wall Street Taketh Away: Jobs, Sandy Aftermath Not Pretty

Remember the big ramp-up in stocks yesterday, based upon the new, revised-metholdology ADP October jobs data?


That is despite a big beat in the non-farm payroll data released prior to Friday's open. The BLS said that the US created 171,000 net new jobs in the month of October, and, initially, the stock jocks loved it, pushing futures higher and sending the Dow Jones Industrials up 57 points at the open.

Trouble was, however, that the positive jobs data had already been priced in, off of the ADP beat. So, sorry, Charlie, no profit for you if you're a dollar short and a day late, as is the case. By 10:00 am, the Dow was flat. It and the other indices crawled lower through out the day, with the losses accelerating in the final two hours of the session.

There were other factors to stocks - and commodities - giving back everything on the final day of trading for the week. Corporate reporting for the third quarter has been seminally sour. Today's miss was by Chevron (CVX), a Dow component, which saw third-quarter net income fall to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.

Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83. Oops! Poor babies, their efforts to skin every last dollar from the pockets of US consumers weren't quite as good as last year. The price of oil is down and headed even lower today.

Somebody send a memo to the CEOs of the energy companies and other Fortune 500 CEOs: there's a global slowdown going on, mostly because you guys have overpriced everything from baby formula to burials, and people simply can't foot the bill any more.

Other than sliding corporate earnings (note: Most major corporations are still massively profitable, just not as profitable as last year, or, in some cases, last quarter, but some, like Sharp and Panasonic are close to bankruptcy, with more to follow), there's a litany of issues facing the global economy, like the fiscal cliff and mountains of debt and unfunded liabilities worldwide (no small matter), the continuing crisis in Europe (still unresolved and getting worse), the uncertainty of the presidential election in the US (hint: Obama's going to win easily, which is another reason Wall Street is unhappy), and this little inconvenient storm called Hurricane Sandy, which still has most of the New Jersey shoreline, Long Island, Staten Island and lower Manhattan still without power and people suffering in cold weather, without fuel, food, and gas lines extending for miles in Jersey and New York, not because there's no gas, but no electricity to power the pumps and stations, many of which remain closed.

Yep, things are not good overall, and, from the looks of things, they're not getting any better. The damages from Sandy will easily exceed those of Katrina. It doesnt take a genius to figure out that a massive storm which wreaked havoc on the most densely-populated area of the country is going to cost more than the laughable estimates of $20 billion that have been bandied about by so-called experts. Try $60 billion or more, maybe in excess of $100 billion, and that number is going to pt a serious dent in fourth quarter GDP.

The current wisdom being foisted upon the supposedly-knowledgeable investing community - that all the destruction from Hurricane Sandy will eventually be a net positive for the economy a la Frederic Bastiat's "broken window" parable - is complete media hogwash put forward by economist goon-whores like Moody's Mark Zandi, Mesirow's Diane Swonk and Deutsche Bank's Joe LaVorgna (yes, the Germans always like to have Italians do their dirty work), and are completely off base.

While NYC Mayor Bloomberg has been catching considerable flak - most of it well-deserved - for pushing ahead with the New York City Marathon this weekend, the long tail of Hurricane Sandy is likely to help push the US economy into recession in the fourth quarter of 2012 and beyond. Unlike Katrina, which concentrated its wrath upon New Orleans and the Southern shores, Sandy hit the highest income folks in the country, and that's not something that's going to be erased from the memory or the bottom line very easily. Just to make sure everybody's on the same page here, expect every fourth quarter profit miss to mention - at least in part - the effects of the hurricane on profits, whether real or imagined. Hurricanes and weather overall make for great scapegoats.

So, this week on Wall Street was more or less a wash. Two days closed, a flat day Wednesday, up Thursday and down Friday. The sharpie day-traders made a huge buck to be sure, but America and the global economy suffered terribly, NY marathon or not.

And, not to forget, Apple's iPad Mini was released for sale globally today. Lines were much shorter than for other Apple product launches, which goes to figure: you introduce a mini-tablet, you get mini-lines.

And, just to rub some salt into already open wounds, another storm is setting up to hit the Northeast next week.

Just what we all need.

Dow 13,093.16, -139.46 (1.05%)
NASDAQ 2,982.13, -37.93 (1.26%)
S&P 500 1,414.20, -13.39 (0.94%)
NYSE Composite 8,234.91, -76.45 (0.92%)
NASDAQ Volume 1,820,933,250
NYSE Volume 3,576,460,250
Combined NYSE & NASDAQ Advance - Decline: 1575-3880
Combined NYSE & NASDAQ New highs - New lows: 211-87
WTI crude oil: 84.86, -2.23
Gold: 1,675.20, -40.30
Silver: 30.86, -1.391

Tuesday, October 16, 2012

Pandit Resigns from CITI; IBM Revenue Miss; Greece Talks Stall; Farm Notes

It was a busy day on Wall Street, with stocks closing at or very near their highs of the day, the two-day rally this week nearly recouping the losses from the prior week on the Dow and S&P, though the NASDAQ, hardest hit last week, has recovered only about 1/2 of its losses.

Stocks got an early boost when Coca-Cola (KO) matched earnings estimates of 50 cents per share and Johnson & Johnson (JNJ) reported third quarter earnings, excluding special items, of $1.25 per share. Analysts, on average, expected $1.21 per share. Both companies are components of the Dow Jones Industrial Average.

Goldman Sachs (GS), the nation's fifth largest bank by assets (though even though hastily granted a commercial bank charter in the midst of the 2008 financial crisis, has yet to open a single retail branch), also beat lowered estimates, citing debt investments and underwriting fees as the main profit drivers.

Industrial production grew by 0.4%, capacity utilization increased slightly from 78.2% to 78.3% in September and the CPI ratcheted up 0.6% in September, due mostly to higher food and fuel costs, which explains why the "official" core rate of an 0.1% increase excludes those necessities. On an annual basis, the September CPI translates into 7.2% inflation, which is probably less than it actually is in the new, Fed-funded world of bizarro-finance.

The big news was the abrupt departure of Citigroup CEO Vikram Pandit and COO John P. Havens, just a day after the company reported third quarter earnings. According to published reports, Citi's board of directors had been plotting Pandit's retirement for months, though Pandit himself said it was soley his decision.

Pandit's departure sent shock waves through executive offices at Fortune 500 companies and elsewhere, as apparently, there are still some BODs that are not rubber-stamping mechanisms.

Stocks got off to a fast start with most of the gains made in the morning, with small additions in the afternoon.

After the bell, IBM reported earnings in line with expectations, but missed on revenue of $24.7 billion, down from $25.8 billion in Q2, setting up for a testy open on Wednesday. Shares of Big Blue were down five points in after hours trading.

The Euro gained sharply against the dollar, boosting US shares even more as the dollar cheapened, but, in news generally sealed off from the US, Greece's talks with the troika fell apart over further austerity measures with negotiators walking out of meetings.

That late-breaking news, combined with the results from IBM and the scoring of tonight's presidential debate will set the tone for the open on Wednesday.

Farm Notes: Did you know that the agribusiness model that the large corporate farms employ (row planting and harvesting) wastes land, water and valuable resources, besides putting harmful chemicals - through the use of pesticides and fertilizers - to produce crops that are significantly less-protein rich than vegetables grown in the average backyard garden?

Also, using intensive gardening methods such as those used for centuries in France and elsewhere, the same amount of vegetables that an agribusiness farm can produce on one acre can be produced on 1/10th or less of an acre with less fertilizer, water and no pesticides.

Gardening, in America and elsewhere, isn't just about a pasttime or a hobby. It's about reclaiming the economy and moral high ground from corporations and the wasteful practices promoted by the Department of Agriculture.

Dow 13,551.78, +127.55 (0.95%)
NASDAQ 3,101.17, +36.99 (1.21%)
S&P 500 1,454.92, +14.79 (1.03%)
NYSE Composite 8,386.47, +92.97 (1.12%)
NASDAQ Volume 1,735,765,375.00
NYSE Volume 3,539,692,250
Combined NYSE & NASDAQ Advance - Decline: 3861-1630
Combined NYSE & NASDAQ New highs - New lows: 278-40
WTI crude oil: 92.09, +0.24
Gold: 1,746.30, +8.70
Silver: 32.96, +0.216

Tuesday, October 9, 2012

Germany's Merkel Jeered in Athens; Liars, Cheaters, Swindlers and Psychopaths

Markets around the globe took a bit of a beating on Tuesday, just as earnings season is about to get underway in the United States.

The catalyst for today's decline is unknown, though the first major drop in US markets coincided neatly with German Chancellor Angela Merkel's visit to Athens, Greece, where she was jeered by thousands, including some dressed in Nazi uniforms, brandishing swastika flags, and gave the Heil, Hitler straight-armed salute that signified the reign of terror that Germany inflicted upon Europe some 70 years ago.

Greeks, their children, and others who fell under Nazi influence have not forgotten. There are still many unhealed wounds in Europe stemming from Nazi occupation of most of the continent and the lives lost during the deadliest of wars.

The demonstration by the Greeks was isolated, but still calls to mind the devastation that befell Europe under Adolf Hitler and his hordes of merciless killers. Of course, America's entry into the World War II signaled the beginning of the end of Hitler's reign of terror. Like all psychopaths, he was exposed and defeated, freeing the continent from the grip of fascism.

Seeing the sarcastic rendering of neo-Naziism could prove a heartening reminder that nearly all liars, cheaters, swindlers and psychopaths are eventually brought to some form of justice, either exposing themselves by their own foolish deeds or brought out from the shadows by those who choose to confront them, deny them and defeat them.

It would be refreshing to think that all the liars and cheaters of the world would be found out and demonstrably punished, though reality teaches that that is not the case. From the scandalous likes of mega-bankers to the small-minded, petty fools who concoct flimsy excuses by which to break deals, or the equally stupid types who hear only what they want to hear and make up stories, put words in other people's mouths and are general abusers, these all should be found out and made to pay dearly for their transgressions.

Failing the exposure of frauds and liars, the best the righteous can hold in their hearts is the thought that the prevaricators, manipulators and others of their ilk have to live with themselves, unforgivable and not forgiven. Their puny lives consist of their own little hell, an isolated, brutal existence that stains the soul and darkens the mind. The psychopaths among us cannot love, cannot feel the pain of others but can only inflict it, fool themselves with false pride, believing that they are somehow better, privileged, never at fault and unapologetic. They are sick, depraved and truly despicable human beings.

To these pariahs, the upstanding, the honest, the happy people of the world say, good riddance. Your personal torment is payback enough for your evil transgressions.

As for the markets, some interesting developments in the A-D line, which was 7-2 in favor of the losers and the new highs - new lows indicator, which flipped over to negative, 49-39 on the NASDAQ, though remained in favor of new highs on the NYSE, 97-26, a much narrower gap than in recent days. Paying close attention to both of these indicators may be investing 101, but they are among the most reliable metrics when change is in the wind, and a correction has been and still is, long overdue.

As earnings season heats up, we'll find out whether the market can sustain itself on the wings of Bernanke's put, unlimited MBS bond purchases, ZIRP and other Keynesian-like manipulations.

Dow 13,473.53, -110.12 (0.81%)
NASDAQ 3,065.02, -47.33 (1.52%)
S&P 500 1,441.48, -14.40 (0.99%)
NYSE Composite 8,279.11, -80.02 (0.96%)
NASDAQ Volume 1,646,239,125
NYSE Volume 3,187,523,500
Combined NYSE & NASDAQ Advance - Decline: 1244-4293
Combined NYSE & NASDAQ New highs - New lows: 146-65
WTI crude oil: 92.39, +3.06
Gold: 1,765.00, -10.70
Silver: 33.98, -0.032

Wednesday, September 26, 2012

Another Leg down for Stocks; BTFD or Correction Coming?

As a fllow-up to Tuesday's dip into the red, stocks could not forge into positive territory on Wednesday, as the NASDAQ suffered its first three-day losing streak since August 2nd, and the other major averages fell in unison.

Losses were not deep, but steady throughout the afternoon session, closing near the lows. Topping concerns was renewed tension in Europe where protests in Spain overnight and in Greece during the day turned violent.

In Madrid, youths turned out in large numbers to protest parliament's ongoing forays into austerity and to voice anger of the 50% unemployment rate plaguing Spanish youth. Police beat protesters with batons and scores of arrests occurred.

Greece's protests were union organized, as many as 200,000 people from the largest public and private unions marched through the capitol. The demonstration was largely peaceful until anarchists began throwing molotov cocktails at police and media stations. Police responded with tear gas and pepper spray.

By comparison, markets were less jittery in the US as compared to Europe, where Spanish stocks slid by more than three percent and the majority of developed nations' bourses suffered losses of between 1.5 and 2.5 percent.

Commodities were also hit, with gold down sharply and oil closing below $90 per barrel for the first time in more than two months. Silver, which slipped nearly one percent in early trading, rebounded to finish the day close to unchanged.

Losses in risk assets prompted questioning over whether the Fed's new QEternity policy would be effective in boosting or maintaining asset prices in the near term or whether the global economies might be sinking further into a condition of malaise and ill-investment. Some analysts saw the pull-back as technical in nature; others thought a correction was overdue and about to commence.

That left traders in a quandary over where to move next: either out of stocks and back into bonds, or, to stay invested in equities.

Sadly, most people being sheeple, risk assets such as stocks are likely to remain in favor until a more robust, sustained devaluation takes place. Such a scenario could very well play out within the next two weeks. The third quarter is quickly drawing to a close, though the overall strength or weakness of the US economy cannot be measured accurately by the stock market.

Anecdotally, new home sales failed to meet expectations, another cause for concern on Wall street.

Hey, it's only money.

Dow 13,413.51, -44.04 (0.33%)
NASDAQ 3,093.70, -24.03 (0.77%)
S&P 500 1,433.32, -8.27 (0.57%)
NYSE Composite 8,221.75, -53.03 (0.64%)
NASDAQ Volume 1,725,565,750
NYSE Volume 3,535,526,250
Combined NYSE & NASDAQ Advance - Decline: 2145-3341
Combined NYSE & NASDAQ New highs - New lows: 136-48
WTI crude oil: 89.98, -1.39
Gold: 1,753.60, -12.80
Silver: 33.94, -0.01

Monday, July 23, 2012

Why There Probably Won't Be a Stock Market Crash

With US stocks suffering back-to-back losses of more than 100 points Friday and Monday on the Dow, conventional thinking might be assuming that the market has hit a short term top and they may well be correct.

Others continue to ponder the overall fate of the entire fiat-money global financial system and wondering when it's going to implode, if ever. Many have been waiting since 2008 for a full reset, but policy changes, bailouts, stimulus and interest rate manipulation have managed to keep the carnage contained, at least in the US.

Today in Europe, it was something of a different story, as many national equity exchanges were victims of among the worst losses of the year. Most indices were down more than two percent, with the Greek Athex Composite Share Price Index falling more than seven percent on pronouncement by the IMF in Der Spiegel magazine that the world's fail-safe lender of last resort may not help Greece in any further restructuring or servicing of debt.

Naturally, after the Dow was down 239 points in early trading, IMF officials reversed their opinion, saying that they would indeed be there for the Greeks, just as they have all along. This is now the accepted method of moving markets - by word of mouth, rumor and denial - and part of the reason why the economic collapse has more resembled a train wreck in slow motion.

Along those lines, a couple of columns by the estimablePaul Craig Roberts and Nomi Prins have received a great deal of attention as they examine the libor-rigging scandal and how that effectively kept banks and governments in collusion from complete collapse.

In the first article, from July 14,
The Real Libor Scandal, Roberts and Prins assert that the banks which "fixed" the libor rate were the main beneficiaries in something of a quid pro quo for the assistance they received from various governments and central banks:
Indicative of greater deceit and a larger scandal than simply borrowing from one another at lower rates, banks gained far more from the rise in the prices, or higher evaluations of floating rate financial instruments (such as CDOs), that resulted from lower Libor rates. As prices of debt instruments all tend to move in the same direction, and in the opposite direction from interest rates (low interest rates mean high bond prices, and vice versa), the effect of lower Libor rates is to prop up the prices of bonds, asset-backed financial instruments, and other “securities.” The end result is that the banks’ balance sheets look healthier than they really are.

Governments were also beneficiaries of a lower libor, as they could sell their bonds at rates below inflation while still maintaining enormous budget deficits:
In other words, we would argue that the bailed-out banks in the US and UK are returning the favor that they received from the bailouts and from the Fed and Bank of England’s low rate policy by rigging government bond prices, thus propping up a government bond market that would otherwise, one would think, be driven down by the abundance of new debt and monetization of this debt, or some part of it.

In a follow up to the first article, The Libor Scandal In Full Perspective Roberts expands upon the concept of ever-lower interest rates on government bonds into a full-blown indictment of government in collusion with the libor-fixing insolvent banks on charges of fraud:
As the Federal Reserve and the Bank of England are themselves fixing interest rates at historic lows in order to mask the insolvency of their respective banking systems, they naturally do not object that the banks themselves contribute to the success of this policy by fixing the LIbor rate and by selling massive amounts of interest rate swaps, a way of shorting interest rates and driving them down or preventing them from rising.

Roberts goes even further, demonizing Robert Rubin, whose actions to dismantle regulations in the US such as the Glass-Steagle Act put into motion over-leverage by the banks which resulted in the 2008 crisis and continue to this day:
As villainous as they might be, Barclays bank chief executive Bob Diamond, Jamie Dimon of JP Morgan, and Lloyd Blankfein of Goldman Sachs are not the main villains. The main villains are former Treasury Secretary and Goldman Sachs chairman Robert Rubin, who pushed Congress for the repeal of the Glass-Steagall Act, and the sponsors of the Gramm-Leach-Bliley bill, which repealed the Glass-Steagall Act. Glass-Steagall was put in place in 1933 in order to prevent the kind of financial excesses that produced the current ongoing financial crisis.

The articles are both "must read" material which outline the persistent fraud necessary to keep the fiat money crisis from imploding completely, with scenarios for its eventual collapse, not from within, but from outside.

As the stock markets are kept afloat at higher-than-usual levels by manipulators within the around the system, so too, the bond markets are manipulated, often by the very same people.

With powerful institutions plotting and defrauding the public on both sides of all trades, there's little wonder that every time there's an event which causes even a hint of panic, the authorities rush in to save the day, and with it, the global economic system from the carnage which eventually will engulf it all.

Dow 12,721.46, -101.11 (0.79%)
NASDAQ 2,890.15, -35.15 (1.20%)
S&P 500 1,350.52, -12.14 (0.89%)
NYSE Composite 7,670.54, -89.05 (1.15%)
NASDAQ Volume 1,586,828,750
NYSE Volume 3,576,762,250
Combined NYSE & NASDAQ Advance - Decline: 1242-4363
Combined NYSE & NASDAQ New highs - New lows: 113-202 (reversal)
WTI crude oil: 88.14, -3.69
Gold: 1,577.40, -5.40
Silver: 27.04, -0.26

Monday, June 25, 2012

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tuesday, June 19, 2012

Positive Rumors Drive Speculative Bets Higher

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

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

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

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

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

We shall stay tuned.

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

Monday, June 18, 2012

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

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

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

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

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

Godspeed, Dan Dorfman. Rest in peace.

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

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

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

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

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

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

Monday, June 11, 2012

Spanish Bank Bailout Has Bad Odor; Week Ahead Looks Fascinating

Following last week's magnificent vapor rally on the lightest volume of the year, the new week started off gangbusters with news of a $125 billion (100 billion euros) bailout of insolvent Spanish banks sending US equity futures up on a sugar high prior to the opening bell.

Asia rallied strongly on the same news, followed by significant upside on the European exchanges. However, once Wall Street got a whiff of the real stench coming from Europe (Spain's bailout is hardly anything to cheer about; the loans from either the ESM or EFSF are uncertain and have not been approved by the German parliament, which is a must; Greece's elections loom on Saturday), it didn't take long for the best minds, algos and short sellers on Wall Street to sell the rally and start taking profits from last week's big run.

The Dow was up 96 points in a flash, but by 10:00 am EDT was already under the unchanged line, dragging down the other major indices with it. Stocks took a breather during the middle of the session, but, after 2:00 pm, it was pretty much all downhill, as investors went scurrying for cover in defensive stocks and treasuries.

Fear of the impending and eventual full retard global financial collapse were once again front and center, and, with good reason.

Whatever the euphoria over endless money printing out of thin air, be it by the US Federal Reserve, the ECB, China or any other nation, it appears that most people with sense have come to ignore it, at least, and abhor it, at worst. This same story has been playing since the fall of 2008 - throwing more debt at bad debt - and, since the Spanish banks were about the only suckers buying the debt of the Spanish government, recapitalizing them was just another in a long, futile line of can-kicking efforts, far from a real solution to the global crisis caused by long-term issuance of excessive debt.

The centrally-planned, central bank model of piling more bad debt upon already bad debt is coming to a furious conclusion and there seems to be nothing to prevent a complete reset of the world's capital structure. Hard line Keynesians continue to pretend that there's a way to avoid a catastrophic global meltdown, but the reality is that very little has been done thus far, and it's probably now too late to change tactics.

What has passed muster in the past now seems old hat, the results already known, that more bailouts and printing of money will not suffice; old, tried and true methods such as default, bankruptcy, selling off of remaining assets and new management of failed institutions - be they financial or governmental in nature - are the only prescriptions that will cure the ailing patient that is the global financial system.

There is already a great deal of talk circulating about subordination, of soured notes and bonds taking a back seat to newer issues. Spain's stock market, up nearly 6% early on, ended the day in the red and in tatters, the Spanish benchmark 10-year note yielding above 6.5%, a danger area. Greece's 10-year has already achieved escape velocity, with a yield of more than 28%, probably not even ample considering the risk. The Euro finished below 1.25 to the dollar, which is still 20-30% too high, crude was pounded down to eight-month lows, and a quadruple-witching day awaits markets on Friday.

It's either ironic or appropriate that rich and poor dads alike will have one more day in the sun on Father's Day, June 17, upon which day Greeks vote once again to try to form a government in an ungovernable situation. By this time next Monday, there may well have been a 500-point decline on the Dow, with Europe slitting apart at the seams, US and other developed nations exhibiting no growth and Italy waiting in the wings to be the next major casualty.

This week promises to be one of the most interesting - from a macro perspective - though, with more than $800 billion being pulled out of equities in the two years following the May 2010 "flash crash," there may not be anyone left around the trading floor to turn off the lights.

The entire mess has been the product of government gone fiscally wild and banks more than willing to take on excessive, often foolish risk over the years and into today. There comes a reckoning, and that day will arrive eventually, without fanfare or pretense. Then the planet will tremble as great swaths of wealth are obliterated by the same system that made the unrealistic promise of endless growth on a finite planet.

Volume was once again horrifyingly absent, breadth was extremely negative and new lows crept up on new highs after a brief reversal last week.

Dow 12,411.23, -142.97 (1.14%)
NASDAQ 2,809.73, -48.69 (1.70%)
S&P 500 1,308.93, -16.73 (1.26%)
NYSE Composite 7,459.29, -94.49 (1.25%)
NASDAQ Volume 1,477,944,250
NYSE Volume 3,383,333,500
Combined NYSE & NASDAQ Advance - Decline: 1206-4401
Combined NYSE & NASDAQ New highs - New lows: 144-94
WTI crude oil: 82.70, -1.40
Gold: 1,596.80, +5.40
Silver: 28.62, +0.15

Friday, June 8, 2012

Week's Events Point to Global Collapse; Max Keiser Speaks Out on Germany Bank Downgrade, Global Economy

Editor's Note: This was a particularly trying and nervous week for the markets, as political and economic tensions seemed to escalate on daily basis. From China's interest rate easing to the downgrade of Germany's banks to the rising wave of racism and bias, the swirl of history seemed to take on an unusually pungent aroma, one which permeated all levels of discussion and event horizons.

I am horrified at my own - and that of Max Keiser and many other non-mainstream journalists - prognosis for the future of the global financial system, which is being rendered apart by self-created forces which have taken on unforeseen lives of their own. A complete crash could occur almost at any time without warning, with a ferocity that would make 2008-09 look like a leisurely stroll. With all my heart, I wish my predictions turn out to be 100% incorrect, though continuing and recent developments point in the opposite direction.

Of course, the elitist coalition of bankers and sovereign leaders will continue to apply bandages and tourniquets as needed, even though they must know that a mortal wound cannot be patched, that wound being the complete insolvency of the world's largest banks, begun in 2008 and proceeding this week to completely engulf all of Spain's mightiest financial institutions.

As the week drew to a close, US markets garnered further gains on what had to be the lowest trading volume day of the year. (Money Daily does not keep complete records of much, but the daily volume reports at the end of each daily post provide that statistic - though scrolling through five-plus months of posts is a bit of an arduous task late on a Friday afternoon. Trust in the fact that if today was not indeed the lowest volume of the year, it was in the lowest three.)

Zero Hedge ( reports that volume for the week was the slightest of the year, in a week which produced the year's best gains. This kind of rigged result is exactly what's wrong with markets and the economy in general: they aren't functioning. Today's plaster to the upside, accompanied by abysmal volume is manifestation of the banker Ponzi in full bloom, trading amongst each other in a rigged game to the detriment of formerly-free markets.

At some point, the manipulation will come to an end, and likely an abrupt one, fully engineered by Rothchilds and fellow Illuminati types.

A point of reference is the upcoming November US presidential election, which incumbent president, Barack Obama, is purposely throwing, having done his job for his bankster allocators. The first hint that Obama was not fully engaged or committed to winning a second term came in the form of his absurd opposition to the Keystone XL Pipeline. His stance to block the project - which would bring oil from Canada's oil sands to America, but, as of last notice may be headed to China instead - until after the election, baffled all but the mainstream press, who haven't the collective mind power or journalistic will to delve into matters that involve anything more than rehashing the contents of official news releases.

Today's statement that the private sector in America is doing "OK" is the second nail in the defeat of Obama at the polls. Such obvious policy blunders and plainly unfounded statements point to nothing less than self-imposed defeat to the weakest Republican candidacy since Bill Clinton's second term re-election. Mr. Obama is an eloquent, intelligent speaker, but he has failed to ignite any fire of passion in either Democrats or independents. It's a very good bet that handing the presidency to the biggest shill for the 1%, in the person of Mitt Romney, is a reality.

For the week - again, the best of the year on the lightest volume - the Dow gained an ungodly 456 points, this on the heels of the month of May in which the blue chips gave back more than 800 points. Bear in mind that this gain comes as global conditions worsen, with little to no positive data or news.

The same kind of ride-up occurred on the NASDAQ, up 110 points, and the S&P, which registered a gain of 45 points. The whole affair is nothing more than a dog-and-pony show, and one which is not particularly well-staged. The sheeple of the world take it all in without question, that being one of the keys to the problem.

Along with the low volume, the session was characterized by slender breadth and a slight edge for new highs over new lows. Commodities, which began with oil down by more than $2.00 on the current futures price, were relatively flat by day's end.

In line with developments of the past few weeks - and years, for more perspective - the contagion from banking to sovereigns to currencies is accelerating, nearing an extremely dangerous global condition of collapse.

If implosion happens within weeks, it would be no surprise to the growing number of people who view the past four years of currency manipulation and incessant printing with disdain and skepticism. Global elites are desperately clinging to largely Keynesian ideas and potential solutions which have little to nothing to do with solving the epic calamity unfolding in real time.

There's no telling how much longer the global condition can be restrained as events in areas around the world are spiraling out of control at a rate of speed that is nearly impossible to track.
The Nicholas Brothers

Forget about the press reports and news conferences with governmental/political leaders like Obama, Merkel, Draghi, et. al. Issues on the ground are overtaking the ability of the political process to deal with the expanding crisis. The powerful are becoming less so, and eventually will be held responsible, and thus, powerless as populations erupt in wave upon wave of tension, uprising, catastrophe. Greece is just the most visible example, while Syria is already a lost cause due to the inaction or inability of bodies such as NATO or the loosely-aligned Euro-American force majure to act properly - and promptly - to quell the spreading genocide. Spain, Italy and France continue their joint descent into anarchy which will eventually pull all of Europe down with it.

Must see TV: Host of the Keiser Report, Max Keiser, brilliantly lays out the present and near-future in this six-minute segment courtesy of Russia Today.

In keeping with our new-found hobby of digging up rich pieces of joyful Americana from bygone eras, the following clip from the 1942 film, Orchestra Wives, featuring the Glenn Miller band with Tex Beneke performing "I've Got a Gal in Kalamazoo" along with the fast-talking, high-stepping dancing duo, the Nicholas Brothers, the elder Fayard, and Harold.

It's a real piperoo! Enjoy.

On a strictly personal note: Many thanks to the two saints on earth who appeared today as needed. Whatever one's personal beliefs, there is a power in faith that is beyond our small level of comprehension.

Dow 12,554.20, +93.24 (0.75%)
NASDAQ 2,858.42, +27.40 (0.97%)
S&P 500 1,325.66, +10.67 (0.81%)
NYSE Composite 7,553.77, +33.94 (0.45%)
NASDAQ Volume 1,396,691,125
NYSE Volume 3,497,203,500
Combined NYSE & NASDAQ Advance - Decline: 3810-1757
Combined NYSE & NASDAQ New highs - New lows: 111-78
WTI crude oil: 84.10, -0.72
Gold: 1,591.40, +3.40
Silver: 28.47, -0.06

Monday, June 4, 2012

Markets Take a Breather, But Issues Remain Unresolved

US markets took a bit of a breather on Monday as news flow from Europe was more a trickle rather than a deluge and the only data that moved US indices was factory orders for April, which came in below forecast at -0.6% on expectations of a move lower of -0.3%. March was revised lower - from -1.9% to -2.1% - which made the current numbers look better by comparison.

After opening briefly to the upside, stocks quickly turned red, even before the first half hour of trading, a signal that the more experienced traders were still trimming their risk exposure, but stocks stabilized, traded in a narrow range, bottomed between noon and 2:00 pm before rallying fairly strongly into the close.

If today was something resembling a dead cat bounce, the kitty remained room temperature, and the bounce was more of a flopping over on one side, that being the upside on the NASDAQ. Essentially, following the worst decline of the year this past Friday, traders might actually be encouraged with a session in which the Dow fell by less than 20 points and the NASDAQ actually ended slightly higher with the S&P unchanged. In the current environment, that kind of performance is about the best one could hope to see.

The somnabulent tone of trading did not prevent another negative read on the advance-decline line nor a persistent gap between new highs and new lows, both of which continue to indicate worsening conditions.

It was a lackluster session on average volume in a wait-and-see scenario. Elections in Greece are the main focus of global markets, with the nation going to the polls on June 17 to try and elect a new government after the previous round could not produce a ruling coalition.

Hope is that the Greek people will do the right thing, which, to the technocratic base of european politics, would be to form a government that favors remaining in the Eurozone and swallowing the bitter pill of austerity, though even the most ardent supporters of the unified currency will concede that the continent faces further problems and keeping the union intact is only a first step.

While Greek voters may indeed vote for a continuation of the current ruinous policies, there is a heightened awareness that the tide of populism in Athens could produce a more radical government that eventually rejects the euro and favors a return to the drachma as the nation's official currency. Such an outcome would likely produce massive dislocations of capital not only in Europe, but worldwide.

Another topic of discussion on the street is one of whether or not the Federal Reserve will signal or engage in another round of QE, which would provide temporary relief to markets, though, as has been seen with the previous two rounds, it would probably amount to nothing more than a sugar coating over economic conditions that are unstable at best and deflationary and point to recession at worst.

The FOMC is set to meet again on June 19 and 20 with a press conference with FED chairman Ben Bernanke and a summary of Economic Projections following the policy decision, Prior to that, Bernanke is set to testify before the Congressional Joint Economic Committee on Thursday of this week and the calendar is full of other Fed speakers who might give a clue to the next move by the nation's central bankers.

Speculation is rising that the Fed will be forced into a position favoring more easing, since without it, stocks and the general economy don't appear to have enough momentum to continue growing on their own. The same logic applies to Europe, where the message is to bail out, loan and print as much as is needed to keep the titanic economy from listing and sinking.

The main problem is that the issues that contributed to the crisis - now nearly four years old - have still not been resolved, the main point being the necessary deflation of the global credit bubble, which has not occurred. Instead policy has pointed to even more credit creation, prompting the need for more and more of the same policies that will not provide a long term solution. The entire vicious cycle is spelled out in some detail by Charles Hughes Smith on his Of Two Minds blog, an essential read for those not quite equipped to handle the myriad details of credit, collateral and derivatives.

Basically, Smith opines that the problems of the crisis have remained unfixed and continuation of current policies only are buying time before an ultimate collapse. Along similar lines, investor George Soros recently quipped that Europe has only three months in which to get its act together, a time frame that coincides almost neatly with the upcoming US elections in November. Should Europe stumble, fall, crash and burn within the near term, the tide will almost certainly turn against president Obama and toward Republican candidate Mitt (Adolph) Romney.

That seems to be the preferred strategy of the clandestine rulers of US politics, as any further slippage into the abyss of global depression could then be blamed on Mr. Romney's predecessor, just has Obama, even three-and-a-half years into his term of office, continues to lay blame on former president Bush.

The truth is that each president has had his own set of blunders and misfortune, and not all of the economic distress can be placed upon their shoulders. Congressional dithering and inaction and the global banking cartel are responsible for at least two thirds of the malaise, if not all of it.

The coming two weeks will be ones of nail-biting and indecision, with a fairly light schedule of news and data flow, all of which seems to in the range from bad to horrifying of late. The Greeks, Bernanke, and to some extent, the parliamentary elections in France on June 10 and 17 should be the major catalysts for market in the near term.

Much of what's already occurred and what will happen is still murky, and, since markets hate uncertainty, the chances for a rally in the near term are quite slim. A continued correction and possible bear market conditions (down 20% or more from recent highs) have become distinct possibilities.

Dow 12,101.46, -17.11 (0.14%)
NASDAQ 2,760.01, +12.53 (0.46%)
S&P 500 1,278.18, +0.14 (0.01%)
NYSE Composite 7,286.74, -5.49 (0.08%)
NASDAQ Volume 1,661,424,125
NYSE Volume 3,922,442,750
Combined NYSE & NASDAQ Advance - Decline: 2564-3054
Combined NYSE & NASDAQ New highs - New lows: 36-293
WTI crude oil: 83.98, +0.75
Gold: 1,613.90, -8.20
Silver: 28.01, -0.51

Tuesday, May 22, 2012

Stocks Slide Late After More Evidence of Greek Exit from Euro Spooks Markets

The headline really says it all on today's turnaround Tuesday.

With the major averages putting in a nice follow-up to Monday's lift-off, the major indices were set to put in their second winning day in a row. The Dow was sporting a 50-point advance just after 3:00 p EDT when word came out of Greece by former Prime Minister Lucas Papademos, saying that preparations for an exit of Greece from the Euro zone are being considered, and said the scope to renegotiate the ongoing EU and IMF loan program would be "very limited."

That's when a 50-point gain became a 50-point loss in a matter of minutes, though all of the major indices recovered to end the session nearly unchanged.

Overnight, this news will likely sink in a little further and it would be expected that Asian and European market would open tomorrow lower. As word of Papademos' statement spread, the worst victim was the Euro, which fell below 1.27 to the dollar on foreign exchanges.

It is fascinating to watch how this entire Greek drama is being played out, especially in reference to market response. As event have unfolded over the past year to 18 months, market reaction has become one of initial knee-jerking, followed by bouts of disbelief and buying into the dips, though as the situation has turned from bad to worse in Greece, stocks seem more inclined to shrug off any bad news, whereas, earlier, like in September of last year, markets took violent, hefty swings on dispatches from the continent.

What will occur in global markets when the Hellenic state is finally on its own again and officially dismissed from the Eurozone - now a 90% chance according to most euro experts - is anybody's guess, though most investors are girding for the worst case, reminiscent of the Lehman breakdown back in '08, though this time around, there's been plenty of time to prepare.

The other major story of the day concerned Facebook, as the NASDAQ continues attempts at cleaning up the mess that they created. Due to technical issues in their electronic trading system, as of Tuesday morning, some investors still had not received confirmation of their trades and the NASDAQ was talking about raising its own loss provision for bad trades from $3 million to $13 million, as trading desks and market makers toll their losses.

It was also revealed today that Morgan Stanley's analysis arm had downgraded the stock just prior to the IPO, another odd and damaging situation, given that Morgan Stanley (MS) was the lead underwriter on the deal. The firm, by law, is supposed to have a "Chinese wall" between analysts and underwriters, but one has to wonder if the firm was shorting the IPO a la Goldman Sachs. The situation will be investigated, though it's highly doubtful that anything will come of it, in as much as the trades were such a convoluted mess one wonders if officials will ever be able to untangle the mess.

Facebook closed the day at 31.00, a full seven points below Friday's IPO price, with a loss of 3.03 (8.90%). Founder and CEO, Mark Zuckerberg, who was supposed to have bankrolled $18 in paper profits on the public opening of the company, may have to just suffer through life with a measly $15 billion.

Yep, life sure is tough.

Dow 12,502.81, -1.67 (0.01%)
NASDAQ 2,839.08, -8.13 (0.29%)
S&P 500 1,316.63, +0.64 (0.05%)
NYSE Composite 7,532.32, -10.66 (0.14%)
NASDAQ Volume 1,755,814,375.00
NYSE Volume 4,056,273,750
Combined NYSE & NASDAQ Advance - Decline: 2522-3114
Combined NYSE & NASDAQ New highs - New lows: 45-113
WTI crude oil: 91.66, 0.91
Gold: 1,576.60, -12.10
Silver: 28.18, -0.14

Friday, May 18, 2012

Stocks Smashed Again; Facebook Flops on IPO

For three weeks running, it's been the same story: stocks down, and today's malaise was particularly embarrassing to the NASDAQ and to the underwriters of the Facebook (FB - which should stand for Fail Badly) on a Friday that most traders would likely rather forget.

The Dow Jones industrials closed down for the 12th time in the last 13 sessions, while the S&P and NASDAQ recorded their 10th down day in the last 12. All of the major averages finished in the red every day this week an occurrence so unique that barely a broker or trader can recall the last time it happened. Even on major declines, there's usually a day or two of snap-back rallies, but the current condition is such that all confidence is being shattered as events unfold without a whimper of defiance from the usual monied or political oligarchs.

For the week, the Dow lost a cumulative 451 points, easily the worst performance of the year; ditto for the S&P and NASDAQ, which lost, respectively, 52 and 155 points, while the NYSE Composite shed 388, the broadest measure taking the worst percentage loss.

As for the Facebook IPO, which priced Thursday night at a robust $38 per share, finished the day ahead a measly 23 cents, one of the poorest showings ever for a major tech stock right out of the box. The trading, which was supposed to have begun at 11:00 am EDT, didn't open until after 11:30, the culprit being the usual "system glitches." Traders reported throughout the day that they were not receiving confirmations of their orders, the earliest of which had bought in at levels of 41 and 42 dollars per share, and were, thus, stuck at whatever price they placed their orders. It was a complete embarrassment for all parties - the company, the underwriters and the NASDAQ - though it's almost certain that newly-minted billionaire Mark Zuckerberg will lose little sleep over today's fiasco.

All told, the week, and especially the last two days, have been particularly painful for all involved, though gold and silver investors have enjoyed two consecutive days of gains after prolonged weakness. With precious metals beginning to show strength again, the dynamics of a failing global economy based on fiat dollars are showing their true colors.

Over the weekend, members of the G8 will be meeting at Camp David, purportedly to issue some kind of proclamation that all is well, or, ostensibly, to hammer out some new paradigm for global economic salvation. With any luck, they'll all agree to go home and do nothing, something for which they're all well trained.

In European news, the woes for the Southern states continued as Moody's downgraded 16 of the nation's banks and Fitch cut Greece's banks to CCC (big surprise there).

The weekend at hand, two words known well to hoarders of gold and silver: keep stacking.

Dow 12,369.38, -73.11 (0.59%)
NASDAQ 2,778.79, -34.90 (1.24%)
S&P 500 1,295.22, -9.64 (0.74%)
NYSE Composite 7,413.01, -67.42 (0.90%)
NASDAQ Volume 2,571,980,000
NYSE Volume 4,450,551,500
Combined NYSE & NASDAQ Advance - Decline: 1470-4143
Combined NYSE & NASDAQ New highs - New lows: 22-345 (worst since March of '09)
WTI crude oil: 91.48, -1.08
Gold: 1,591.90, +17.00
Silver: 28.72, +0.70