CRASH

Let's call a spade a spade.

This market is all but wiped out, as is the US economy. We'll be lucky if we're not invaded by a foreign power.

We've had a president in office for the past 6 1/2 years - and for the most part, a compliant Congress of his party - who's done everything in his power to dismantle the social fabric and the constitution and spend and borrow every last dime of our nation's wealth.

The policies of George W. Bush and the lack of regulation and oversight of the administration and congress have put the nation on the precipice of capitulation. Our financial system is about to implode under the weight of bad loans made right under the eyes of our elected and non-elected officials. The former and current Secretaries of the Treasury and Chairmen of the Fed, Alan Greenspan and Bernanke, are the main delinquents. The current holders of those offices should be immediately relieved of their duties and the president should be impeached. They have failed us miserably and probably engaged in criminal activity. At least in the President, Vice President and Attorney General's case, we are sure that they did.

Those who do not agree should take account. Our bridges and roads are crumbling, we spend billions a month in a war effort that has produced no tangible result except death and destruction, and now our financial institutions are under siege.

If that's not enough, maybe you'd prefer to wait until some of the banks fail or we go to war with Iran or the president declares martial law. Maybe then you'll wake up from your stupidity-induced stupor and see what liberals and progressives have been screaming about.

Or maybe you're content watching and believing in whatever lies they tell you on FOX News. In that case, go ahead and stick your head in the sand. The real intellectual forces of this country have no use for you and your kind.

Dow 13,270.68 -387.18; NASDAQ 2,556.49 -56.49; S&P 500 1,453.09 -44.40; NYSE Composite 9,449.31 -296.89

The Dow Jones Industrial Average lost 380 points today. That's one hefty loss. The other indices followed and it's very likely that the losses would have been larger had not the PPT (Plunge Protection Team, aka the President's Working Group on Financial Markets) been stepping in to stem losses.

Meanwhile, Mr. Bush is heading out of town for a 3 week vacation, but he made sure to mention, before he left, that taxes on corporations should be lowered. After all, Bush made the tax system safe for millionaires and billionaires, why not multi-national corporations who have little to no allegiance to the United States of America?

More ill-advised policy. Just what we need.

Market internals were not as bad as one would expect. Declining issues outpaced advancers by a 15-6 margin. There were 197 new highs, but 606 new lows.

Oil futures closed down 56 cents, to $71.59. Gold and silver were absolutely shattered, with gold off $13.50 and silver down 47 cents. A buying opportunity.

By the way, if you think today was bad, it was only the 2nd worst day of the year, and there's more downside ahead - a lot more.

The Dow, S&P and NASDAQ are all still positive for the year, but one gets the felling that it's a temporary condition. The Dow closed 2006 at 12,463. We're getting closer.

Stocks Rebound From Greenspan's China Gambit

Shares of US equities rebounded on Friday ahead of the Memorial Day weekend, apparently shrugging off suggestions from former Fed chairman Alan Greenspan, who opined that China stocks were overvalued and needed "correcting." Well, that's his opinion and China is China, not the USA. Stocks in the US are still the "gold" standard by which all other markets are measured, as the US is seen by most as having the most stable and mature markets. Risk is spread out among multiple millions and billions of shares on many stocks, adding to the appeal.

Adios, Mr. Greenspan. Have a nice retirement.

Dow 13,507.28 +66.15; NASDAQ 2,557.19 +19.27; S&P 500 1,515.73 +8.22; NYSE Composite 9,876.11 +63.60

All major indices were up smartly on the day, with the NASDAQ once again getting the best percentage gain (0.76%). Techs truly rule in this environment and many companies have been growing by leaps and bounds since the meltdown of 2000.

Stocks overall were led by a better than 2-1 margin of advancing issues over decliners.

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However, there were only 167 new highs and 98 new lows, the closest those two measures have been to each other in quite a while - well over a month. The lack of new highs - down significantly from the 400+ a week ago - may be due to profit-taking. There's no sin in taking profits on a stock that has made new highs and the end of May, in the midst of a long, long bull market is certainly not beyond reasonable trading etiquette.

While stock traders were having a solid day, so too the players on the oil bourses, who pumped the price of crude up another $1.02 to $65.20. Gas prices are at an all-time high in the US - that's not news to anybody - and after this holiday weekend, something has to be done to ameliorate the heavy price consumers are paying. The gluttony of the oil companies still threatens to derail the entire US economy, though, sadly, the Congress and the president have not shown leadership on the issue of protecting the public well-being.

Gold and silver gained marginally, but are still at multi-month lows.

For the week, the Dow fell by 49 points, the NASDAQ was down 1 point and change, the S&P 500 lost 7 points. Better days are just ahead as the S&P hints towards an all-time high.

Thanks, Mr. Greenspan!

The markets responded both in China and the US today after former Fed Chairman Alan Greenspan issued a general warning about the overvaluation of stocks on China's exchanges on Wednesday. As expected, the fallout was felt on the Shanghai B-index of stocks demoninated in foreign currencies, which fell 8%, in Europe and on US exchanges.

Greenspan's comments coincided with a warning from Chinese government officials about the risks of investing in equities. As usual, investors were spooked by people who should have nothing to say and no influence over markets. Sadly, loudmouth outdated louts and know-nothing government squawkers are part and parcel of the risks of investing. They've been intruding and manipulating in open markets for centuries and their influence seems only to be growing.

Dow 13,441.13 -84.52; NASDAQ 2,537.92 -39.13; S&P 500 1,507.51 -14.77; NYSE Composite 9,812.51 -101.15

Other news included a 16% jump in new home sales for April along with an 11% drop in median prices from March to April. The year-over-year decline in median price of 10.9% was the biggest such decline in 37 years. The housing market is deflating - and quickly - while screaming "buyer's market" to potential home owners and speculators.

Sporadic reports also surfaced in newspapers and on the web pointing out what most Americans already know. Food prices are running very high, especially for quality meat, fruit and vegetables.

Besides food, high gas prices continue to eat away at Americans' wallets, though oil for July delivery fell $1.59 to $64.18. That price is still $4 to $5 higher than it can be before drivers can hope to see any noticeable impact at the gas pump.

Declining issues overwhelmed advancers by a 7-2 margin and the number of new highs was 222 - the lowest number in more than a month. 105 issues recorded new lows.

The metals took another dive on Thursday. Gold was down $9.30 to $653.30 while silver lost 19 cents to close at $12.92.

Stock prices are influenced by all kinds of data, noise, news and reportage. The mouthings of unofficial spokesmen, such as Alan Greenspan, should fall under the noise category. He has no more clue about the direction of markets, or, more pointedly, their valuation, than any b-grade stock broker. His irregular incantations and bemoanings ought to be ignored.

Greenspan Talks Off Rally With China Drop

Just when you thought everything was going swimmingly, somebody is sure to come along and throw salt into the pool. Today it was the old curmudgeon himself, former Fed Chairman Alan Greenspan, saying that there was trouble in China's stock markets, which have risen by as much as 90% in the past year.

The last time Mr. Mumbles muttered about China, it sparked a global selloff in stocks and a more than 400 point decline on the Dow. That was back on February 27. Today's mouthings sparked a spate of selling, wiping out gains made in the morning. The Dow had been up 70 points and the S&P was poised to set a record closing high, but after 1:30, the selling became vigorous and both indices ended in the red.

Dow 13,525.65 -14.30; NASDAQ 2,577.05 -10.97; S&P 500 1,522.28 -1.84; NYSE Composite 9,913.66 +12.70

What's troubling about Greenspan's comments are that they are coming from the mouth of a person with no official standing. Greenspan is retired and in his 80s, a time normally reserved for people to relax and enjoy what remains of their lives. Maybe he takes pleasure in moving markets - a likely explanation, since he did it so readily as Fed Chairman for so long.

The other problem is that China's markets have nothing to do with US markets. One can make a slew of arguments that they are somehow intertwined with the rest of the global economy, but they're not. Stock market exchanges are places where people are investing and betting on movements of individual issues.

The rise and fall of markets has something to do with the economic health of host nations, but barely. They have more to do with the perceived value of stocks and indices. Markets are moved by economic forces, not the other way around. Greenspan, and anyone who pays attention to his screed, make the mistake that stock markets are essential mechanisms of economies. They are not.

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China's stock markets are, by most measures, overvalued, much as ours were in 2000. The markets will make the corrections on their own. The economy of China - and certainly that of the US - will not collapse if the market drops 20%. Some rich people will lose money, likely to some other rich people who will take it.

Greenspan should just keep his comments to himself. Even better, people would be well advised to ignore what he says. In his lifetime, he's been dead wrong on issues often enough to make doubting his word a wise choice.

Whatever effect Greenspan had on the markets, they weren't widespread. Declining issues beat advancers by roughly a 3-2 margin. New highs numbered 483 to a mere 71 new lows. Obviously, not everyone was listening, though the after-effect, tomorrow and Friday, made be more severe.

What probably made traders shudder even more was the continued rise in the price of oil. The new July contracts came out today and even though US stockpiles continued to build steadily into the summer driving season. Despite rising stockpiles of gas and improved delivery from refineries, the price of crude still shook higher by 27 cents to $65.51 per barrel.

In other commodities, gold and silver both gained marginally, but remain stuck in a year-long rut.

Thursday's markets ought to be interesting, if only to see if Greenspan's mouth can move China's markets. If there's a selloff in China tomorrow or Friday, be prepared for a broad decline in European and US markets as well. It's uncalled for, but nobody ever made money by not paying attention, either.