Profiteering Politicians, Slick Money Managers Make Hay on Possible COVID-19 Vaccine Headlines

Two headlines:

JCPenney says it will close about 240 stores after filing for bankruptcy

Moderna says test results for possible COVID19 vaccine 'positive'

Only one mattered. Moderna's positive spin over fairly insignificant early stage trials for a vaccine against COVID-19 sent stocks into orbit. Actually, sending stocks skyward was more the work of the Federal Reserve's relentless currency printing press, running full speed since late March. The Fed has created so much liquidity - for nothing, out of thin air - that there's a global glut, just like oil, and it has to find somewhere to go, and that place is usually in risk assets, like stocks, because, well, it's just extra money.

It's kind of like this: Suppose you went to the race track with some friends and hit a superfecta for $15,000. You'd probably splurge over a night on the town, treating your friends to dinner at a great restaurant and endless drinks at some club. In other words, you'd basically just blow some of it because it was an unexpectedly large sum of dough.

Getting back to the cover story from Moderna, never mind that the company has been working with the National Institute of Allergy and Infectious Diseases (NIAD), headed by Dr. Anthony Fauci, since January, or that Moncef Slaoui resigned from Moderna's board of directors just last week when he was tapped by the Trump administration to head up Operation Warp Speed, the president's fast-track search for a COVID-19 vaccine.

Slaoui is reportedly going to divest all of his stock options for 156,000 shares of Moderna, which shot up nearly 20% (MRNA, 80.00, +13.31 (+19.96%) At close: May 18 4:00PM EDT) on the news.

Coincidence? Perhaps. Insider trading? Definitely, though nobody wants to talk about that.

Between the Fed's meddling and the White House's understanding of the situation (surely, anybody who is anybody in Washington, DC was aware that this news would break Monday morning), the whole COVID-19 racket is beginning to look like another major scandal to be piled atop all the other government scandals over the past 40 years. Nobody will be charged with anything. Nobody will go to jail. There probably won't even be an investigation, and, even if there is, it will reveal nothing. Business as usual for the rich and infamous in DC and on Wall Street.

Apparently, it wasn't enough to enrich politicians and send stocks to the moon. The Federal Meddlers made sure that the massive gains in gold and silver were squelched, quickly, and with undue force.

Gold was cruising along around $1762, up $20 just prior to the opening of the NYMEX (8:15 EDT). Over the course of the day, it reversed and fell, finally closing in New York at $1732, down $10 on the day.

Since it is so wickedly undervalued, it stood to reason that silver fared a little better, up nearly a dollar just before the NYMEX open, at $17.50. It was hammered back down to $16.97 at the close. Still a gain, but hardly of the magnitude that was building before the maligners became involved.

Money Daily has said this before, multiple times, in many ways: the elitist politicians and Wall Street insiders are among the most corrupt connivers in history. The levels of dishonesty, self-dealing, and bad faith practices are at extremes and they commit their financial and societal crimes in full view, without remorse. We're all just along for the show.

This show should have been cancelled long ago.

Let's not forget, unemployment, with more than 36 million out of work, is well over 20% and second quarter GDP is expected to post a 42 percent decline, numbers not seen since the Great Depression.

At the Close, Monday, May 18, 2020:
Dow: 24,597.37, +911.95 (+3.85%)
NASDAQ: 9,234.83, +220.27 (+2.44%)
S&P 500: 2,953.91, +90.21 (+3.15%)
NYSE: 11,402.23, +454.91 (+4.16%)

S&P Close at All-Time High; January Barometer and 2014 Now a 'Go'

Apologies are in order for the excitement generated by Monday's selloff. We have been fooled again.

By .02 cents, the S&P set a record high close; the NASDAQ is at 13 1/2 year highs and the Dow is closing in on all-time highs, again, something it did no fewer than 50 times in 2013.

The markets will not relent in their ever-higher pursuit until the Fed substantially reduces its QE regimen.

That's all one needs to know, for now, and until it's too late. Investors will likely be afforded plenty of time to "get out of Dodge" when the trend reverses. Until then, buy the dips, buy the all-time highs, buy, buy, buy stocks and look for Treasuries to head lower, with support for the 10-year note in the 2.63% area. Give it a few weeks time, like after the non-event which will be the raising of the US debt ceiling to close to $20 trillion in early February.

JC Penny (JCP) announced after the bell that it will close 33 stores and eliminate 2000 jobs as part of their strategic initiative. Good strategy, downsizing. Five of the stores are located in Wisconsin and three are in Pennsylvania. There should be some pretty good sales soon at these store closing locations, but, consumers are advised to pay cash, a la Target. What's not to like?

DOW 16,481.94, +108.08 (+0.66%)
NASDAQ 4,214.88, +31.87 (+0.76%)
S&P 1,848.38, +9.50 (+0.52%)
10-Yr Note 98.74, +0.44 (+0.45%) Yield: 2.90%
NASDAQ Volume 1.96 Bil
NYSE Volume 3.71 Bil
Combined NYSE & NASDAQ Advance - Decline: 3687-1953
Combined NYSE & NASDAQ New highs - New lows: 490-31
WTI crude oil: 94.17, +1.58
Gold: 1,238.30, -7.10
Silver: 20.13, -0.148
Corn: 425.75, -5.75

Merry Christmas from Struggling Retail Sector, Darlene Love Baby Please Come Home

Today, somebody suggested a few ways to "run a few big retailers into bankruptcy."

Don't worry, they don't need any help. They are doing a smash-up job of it all by themselves. JCP will be the first to go; I have a choice parking spot already picked out for the "EVERYTHING MUST GO, CLOSING OUR DOORS, ALL SALES FINAL" going out of business sale at JC Pennys at the local mall (I need some new pants). But, just to be safe, don't bet the house on JCP taking down any banks. Goldman Sucks already has the real estate under many JCP stores locked and loaded.

Actually, Blockbuster already started the trend. There's a huge yellow sign on the Blockbuster near me. Can't miss it. Too bad nobody wants DVDs at anything over $2-4. There are some ebay sellers ready to swoop down and purchase all their remaining inventory for actual pennies on the dollar. 2014 will see numerous large bankruptcies, led by retailers, IMO.

Now, when these retailers start dropping like flies, the media will crow that it's because of the success of the internet (Obamacare web site not included). Net result is moar deflation... err, I mean, disinflation.

And Old Yellen will, as quietly as possible, probably by surreptitious means, increase QE to well over $100k per month, maybe buying up something like securitized student loans gone bad (video out soon).

The government will no longer want the shirts off your backs, because the shirts - sewn in Southeast Asian sweatshops by brown and yellow people who do not matter - aren't worth anything.

Usually, I'm not big on making predictions, as they're difficult to get right and most people will maim you more on your errors, rather than praise your correct calls, but I do believe bankruptcies are in order for 2014 in the retail sector, at least, and spreading to other consumer discretionary companies, maybe a couple of REITs or large mall owners (could be one and the same). More layoffs, more welfare, more SNAP, more phony government statistics, more lame excuses, more liberal apologists, and, as usual, the banks will profiteer like never before.

America has this coming, because it has ignored, squandered and/or pillaged the true wealth of the country - its land, its labor, its accumulated wealth and its populace - to save its fraudulent banking and political system.

As for the markets, the annual year-end ramping continued in Tuesday's short session.

In keeping with the spirit of the season, here's a treat from the David Letterman Show: Darlene Love singing, "Christmas, Baby Please Come Home." If this doesn't bring a tear to your eye, well, then you're either the Grinch or another old Scrooge.



Merry Christmas, and may we all survive the coming New Year!

-- Fearless Rick

DOW 16,357.55, +62.94 (+0.39%)
NASDAQ 4,155.42, +6.51 (+0.16%)
S&P 1,833.32, +5.33 (+0.29%)
10-Yr Note 98.03, -0.11 (-0.11%) Yield: 2.98%
NASDAQ Volume 763.66 Mil
NYSE Volume 1.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3550-2028
Combined NYSE & NASDAQ New highs - New lows: 587-41
WTI crude oil: 99.15, +0.24
Gold: 1,203.60, +6.60
Silver: 19.48, +0.071
Corn: 434.75, +0.50

Day-Long Ramp Job

Today's action is precisely what was referenced in yesterday's post.

There's absolutely no telling where or when the market (forget individual stocks, that's another story) is going to move. At the close yesterday was a vast selloff, normally indicating trouble ahead, but, if you sold at the close yesterday, you were shut out this morning unless you wanted back in at a much higher price because the market gapped up tremendously at the open and stayed right up there for the remainder of the session, closing just about where it opened.

This kind of activity may be meaningless to the casual investor, but it's death to day-traders, options players and short-term speculators unless you're on the inside and know the game plan. It's all pre-arranged, pre-planned and if you're not on the short list, you're, well... screwed. Royally. On. A. Big. Stick.

Just look at what happened to JC Penny yesterday. Entering the close of trading, word goes out that CIT has cut their lines of credit and the stock gets hit for about 10% in just a five-minute span, right before the close.

Word has it that Goldman Sachs (yeah, those guys) had recently arranged financing for the troubled retail chain, to the tune of about $2.25 billion, with JCP putting up its real estate - which is extensive - as collateral. So, when word comes that CIT has pulled their lines of credit, hastening the path to bankruptcy court, one can assume that the great Lloyd Blankfein and the criminal John Thain (CEO of CIT, formerly of BOfA's Merrill Lynch and before that, head of the NY stock exchange) must have had lunch at some point over the past few months and arranged the untidy undoing of JC Penny.

Today, via the same source, the NY Post, comes word that the CIT story was a complete fabrication and that JC Penny is still receiving shipments and has ample cash on hand.

Either way this plays out, true story or not, per CIT, somebody lost a lot of money yesterday, and, somebody made a bunch today as the stock recovered most of the losses.

Best guess is that Thain and Blankfein and their firms (or their off-shore accounts) were the main beneficiaries of this bit of dis-or-mis-information. How anybody can trade in this environment is a question for the ages or sages. It's a sick-o world out there in the land of high-finance.

Tomorrow's non-farm payroll report comes out at 8:30 am EDT, prior to the opening bell. As we used to say in high school, BFD. Look it up.

Dow 15,628.02, +128.48 (0.83%)
NASDAQ 3,675.74, +49.37 (1.36%)
S&P 500 1,706.87, +21.14 (1.25%)
NYSE Composite 9,673.39, +114.56 (1.20%)
NASDAQ Volume 1,835,171,500
NYSE Volume 4,175,730,750
Combined NYSE & NASDAQ Advance - Decline: 4375-2251
Combined NYSE & NASDAQ New highs - New lows: 698-89
WTI crude oil: 107.89, +2.86
Gold: 1,311.20, -1.80
Silver: 19.62, -0.004

Epic Fail: Marissa Mayer, Ron Johnson, Tim Cook and the Cult of Mediocrity

Since writing about the stock market is so damn boring these days - yeah, the Dow closed at another record high today, marginally so, though the S&P and NASDAQ couldn't quite keep up - let's take a look at some of the people who think they are shaping our collective futures.

I'm (yes, shifting to first person singular for a change) speaking here about the wannabe executives who have been boosted by people bigger than themselves - one, in particular, Steve Jobs, was actually bigger than life - and we have a triumvirate of massive failures, waiting to happen, astride some of the biggest corporate structures in America.

Marissa Mayer, the recently-installed CEO of Yahoo! (YHOO), has been catching the most attention of late, first, for her dictum that Yahoo! home-workers must begin to come into the office, and just today, on word that the redoubtable Ms. Mayer is now personally reviewing every potential new hire at the Silicon Valley firm she heads.

What a nice way to tell the HR department to F-- off! Seriously, Yahoo! employs something like 11,000 people, so, can one expect Marissa to personally interview every new employee? There's a solution to this little time-consumption mess she's created for herself, and it's called a hiring freeze. Expect one soon.

On the same matter, Ms. Mayer, is said to be leaning more towards employees who've earned degrees from prestigious universities, rather than on merit (an old-fashioned idea that people who've actually accomplished something are valuable), in order to create the correct "culture."

There's something a little disturbing about Ms. Mayer's approach to business and culture, in a way that's kind of creepy. While she told all the home-workers to make tracks back to the office or leave the employ of Yahoo!, she herself had a nursery installed near her office, so she could keep an eye on her newborn son, a benefit the former home-working-mothers do not enjoy.

Two words for Ms. Mayer: elitist. bitch.

Mayer's main claims to fame include graduating from Stanford and being the 20th employee hired by Google founders, Sergey Brin and Larry Page. Nice placement. Yahoo! stock has risen about 40% since Mayer took over as CEO, but there's little evidence to suggest Mayer has had any positive impact on the company. The site has had some redesign lately, though nothing radically different, and it still suffers from poor infrastructure and an assortment of glitches.

If Yahoo! disappeared from the internet tomorrow, it would not be missed. There are plenty of other websites which do what Yahoo! does, yet better, though, admittedly, with less organization. The internet would surely survive without Yahoo! and there would be a great talent pool of unemployed brainy types seeking more challenging employment in the valley.

Let's talk next about Tim Cook, the immediate successor to the late Steve Jobs, founder of Apple (AAPL), which, at the time of his death, was considered the greatest corporation operating in the world. Just before his death in October, 2011, Jobs, knowing he had only a few months left to live, handed over the reins to his corporate empire to Tim Cook.

Jobs, never to be mistaken as a person with great people skills, groomed Cook in his own ways, though he could certainly have not imparted his genius for inventiveness and style, nor his uncanny business acumen. For the first year under Cook, the stock soared, likely on the impetus that Jobs had left in his wake. A year out, however, Apple stock began to nosedive, and continues to falter. Apple hasn't had any new devices since the iPad Mini, and they're losing share in the smart phone wars to Samsung and other competitors.

Cook, like Mayer, happened to be in the right place at the right time, will surely be well compensated for failure, and will lead Apple back to the depths of despair the company suffered when Jobs was kicked out and replaced by John Skully. The innovation and no-nonsense management style of Jobs is long gone. Other consumer electronics firms are running circles around the once-innovative Apple.

While this is not entirely Cook's fault - one cannot be blamed just for being numb and uninspired - he'll be along for the ride... and the fall.

Third in our review of 21st century anti-heroes is another Apple wunderkind, Ron Johnson, who took over JC Penny (JCP) after being hailed as the grand designer of Apple's wonderfully-simple, yet practical stores.

Again, Johnson's story is more myth than meat. While he was head of the retail division, he also had Jobs inspecting and critically appraising every aspect of his work and also had Mickey Drexler as an advisor. Drexler, formerly of the Gap, Inc. and famously, the inventor of J. Crew, is widely and rightfully regarded as a retail genius.

In November, 2011, Johnson got the job as CEO of JCP off his glowing resume and plenty of hype. Wall Street types were peeing themselves over the thought of a person so gloriously-self-proclaimed-as-revolutionary taking over the reins at the failing mass merchandiser. Initially, the stock got a huge bump, trading as high as 43/share on the promise that Johnson would turn the company around.

The results have been nothing short of horrifying, mostly to holders of JCP stock. The hoped-for turnaround has produced nothing but a string of quarterly losses that have brought the share price down to $15, slicing it by nearly two-thirds from the heady, halcyon days of Johnson's visionary resurrection.

To his credit, Johnson has taken some responsibility, expressing in the most recent quarterly conference call that some of his strategy has not worked out very well. The company is teetering on the brink of bankruptcy, and, if it goes under, will not be missed. Like Yahoo!, there are plenty of competitors in the retail space.

It's a symptom of our misdirected times that Wall Street failures are initially hailed as heroes. They've done little to achieve their notoriety, and, arguably, are learning on the job. They are not genii in their own rights and never will be, only people who are bright followers and poor leaders. It's not their fault that they're doomed to failure, though it is sometimes fun to watch them squirm under the bright glare of public scrutiny.

If only there were a mechanism like the stock market for politicians... but, I'm entering dream-land now.

The moral of this story is that genius cannot be replaced and those chosen to walk in the footpaths of such will be handsomely paid and praised, but that garden path soon becomes adorned mostly with thorns.

The failures these people will beset upon themselves and those around them figure to be of epic proportions, and, in the case of JC Penny and Apple, already have reached what some would consider crisis stage. Companies come and go, but the stupidity of seeking out role models from the rich and connected seems a character flaw that never gets old.

...so, to close out today's chapter of "as the world yearns," this cute little song off the Beatle's Rubber Soul album came to mind. It's relevant on many different levels; recalling so many of the people I used to know but now realize that they too were mere phantoms, apparitions and shadows. This video comes complete with the lyrics, so listen along, read and learn...



Dow 14,450.06, +2.77 (0.02%)
NASDAQ 3,242.32, -10.55 (0.32%)
S&P 500 1,552.48, -3.74 (0.24%)
NYSE Composite 9,059.96, -22.27 (0.25%)
NASDAQ Volume 1,672,772,125
NYSE Volume 3,482,609,250
Combined NYSE & NASDAQ Advance - Decline: 2661-3765
Combined NYSE & NASDAQ New highs - New lows: 387-29
WTI crude oil: 92.54, +0.48
Gold: 1,591.70, +13.70
Silver: 29.17, +0.318

Dow Comes Close to All-Time High, Turns Back

Stocks keep grinding higher, but the all-time high on the Dow Industrials - 14,164.53, set October 7, 2007 - continues to be an elusive target, maybe attainable, but hardly one which anybody believes will hold for long.

The general consensus over the past four weeks or so has been that the market was in need of a pullback, to re-test support, before moving to higher levels.

Today's midday action seemed promising, especially when the Dow shot up more than thirty points in a matter of minutes, breaking out of a dull, smallish range and eventually getting to within just 16 points of the record.

Headwinds were blowing from Washington and elsewhere, however, and the Dow, S&P, NYSE Composite and NASDAQ all lost steam in the final ninety minutes, leaving all in the red on the day, the fade from record territory a disheartening sign to traders.

In the nation's capitol, the Senate failed to approve a measure that would have staved off the sequestration cuts scheduled to kick in at midnight tonight which might have been just enough negativity to keep the markets honest - for a change. Prior to the open, there was disappointment in the second estimate of 4th quarter 2012 GDP, which improved from -0.1 to +0.1, though the restatement was hardly enough to inspire any kind of confidence. Stocks limped through the morning session without much in the way of direction.

A number of stocks also kept the market in check. Following Wednesday's close, JC Penny (JCP) posted another in a series of horrifying quarterly reports, falling nearly 17% on Thursday. The much-ballyhooed turnaround by Apple wunderkind Ron Johnson has failed to materialize, the CEO admitting that he had made mistakes along the way, surely the understatement of the day, though he should be lauded for his honesty, albeit a bit late.

Wal-Mart (WMT), the nation and the world's largest retailer, continues to show signs of struggling, hovering around 70/share as Bloomberg released a story based on minutes from an officers' meeting that said the giant is having trouble keeping stores' shelves stocked with merchandise.

Somehow, there just seems a certain disconnect between the US economy and the US stock markets. Obviously one does not equate directly to the other, but with unemployment around eight percent, an enormous federal deficit, gridlock in Washington and an all-time high in food stamp recipients there seems to be no good reason for stocks to be at all-time highs except for no other reason than the liquidity-driven rally fomented by the Federal Reserve since 2009.

Stocks may or may not reach new highs in short order, though from the looks of things on the ground, it's certainly not cause for celebration by the masses and surely does not seem a sustainable condition.

Any trader worth his or her chops should probably be shoveling in physical silver and gold by the bucketfuls, as both are hovering near five-month lows.

Dow 14,054.49, -20.88 (0.15%)
NASDAQ 3,160.19, -2.07 (0.07%)
S&P 500 1,514.68, -1.31 (0.09%)
NYSE Composite 8,868.72, -6.61 (0.07%)
NASDAQ Volume 1,909,055,500
NYSE Volume 3,801,066,000
Combined NYSE & NASDAQ Advance - Decline: 3204-3212
Combined NYSE & NASDAQ New highs - New lows: 308-46
WTI crude oil: 92.05, -0.71
Gold: 1,578.10, -17.60
Silver: 28.40, -0.548