Investors, worried over an imminent government shutdown, got another jolt of reality when it was reported that a 7.4 earthquake struck Japan just after 10:00 am EDT.
The quake struck in pretty much the same region as last month's 9.0 earthquake, but geologists quickly downgraded the temblor to 7.1 and eased fears over another tsunami, measuring this one at a mere one meter (roughly three feet). This most recent quake hit in what was the middle of the night in Japan, so reports were rather sketchy, though it appeared that damage had been minimal.
With the waning of that alarm, investors quickly got back to work buying stocks, bringing the major indices back to nearly break-even at the close.
Word out of Washington was still dire, suggesting that Republicans would force Democrats into a no-win situation without resolution of their differences and cause a government shutdown on Friday night, April 8, at midnight. While most Republicans and Democrats alike would prefer to work out the narrow $7 billion worth of difference on the current budget, the House Republicans, led by first-term Tea Partiers, seem intent on standing fast to ridiculous ideological riders that would defund Planned Parenthood and public support for PBS and NPR, and it appears that these freshman legislators are going to get what they cheered yesterday, an indefinite shutdown of non-essential government services, since the Obama administration and the Senate Democrats say they have negotiated in good faith and enough is enough.
Just a little more than a day is left to work out a compromise, though a meeting today between House leader John Boehner, senate leader Harry Reid and President Obama produced nothing other than a promise that the same leaders would meet again at 7:00 pm tonight.
In another grandstanding move, House Republicans pushed through a one-week funding bill that would provide paychecks for the military, though President Obama has promised a veto should the measure reach his desk. This is how the Republicans are holding the process captive, by using American servicemen and women as props in their political debate. This level of audacity and below-the-belt maneuvering is reserved to the worst politicians on the planet, though the House newcomers seem perfectly content to drive the country to the brink of insolvency.
Wall Street took it in stride, but the eventual fallout from shutting the government down for an extended period could have long-lasting consequences the newbie Republicans can hardly imagine.
Dow 12,409.49, -17.26 (0.14%)
NASDAQ 2,796.14, -3.68 (0.13%)
S&P 500 1,333.51, -2.03 (0.15%)
NYSE Composite 8,489.33, -18.90 (0.22%)
Even though the major indices finished in the red, there was a pronounced number of losers over winners, with declining issues beating back advancing ones, 4092-2427. The NASDAQ finished with 115 new highs and 24 new lows, while the NYSE saw 154 new highs and just 4 new lows. Volume, despite the drop and rally in the morning, was still very much on the light side.
NASDAQ Volume 1,811,538,125.00
NYSE Volume 4,322,927,000
The day's events did nothing to slow the rise in the price of oil, however, as WTI crude futures rose to $110.30, up another $1.47 on the day, as word that Libyan rebels were being pushed back by forces loyal to embattled leader Moammar Gadhafi.
Gold made another new closing high, but only by an 80 cent gain, to $1,459.30. Silver tacked on 17 cents, to $39.55, another 31-year high.
With a looming government shutdown less than 36 hours away, markets are more than likely to remain somewhat stable, though a prolonged battle by the political leadership might be more than the fragile economy can handle. Sadly, the amount in question is tiny compared to the intellectual vacuity of the Tea Party Republicans.
Showing posts with label Japan. Show all posts
Showing posts with label Japan. Show all posts
Thursday, April 7, 2011
Tuesday, April 5, 2011
Markets Struggle Through Late-Session Sell-Off; Metals Soar
Disappointed that government leaders met and failed to reach agreement on a compromise plan that would keep the government from shutting down later this week, investors mostly headed for the hills late in the day.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
Tuesday, March 29, 2011
While Japan Melts Down, US Stocks Melt Up
Though many doubted the thrust and wisdom of the Federal Reserve's QE2 and ZIRP efforts, the Fed can now claim some success.
That success, however, is limited to one's perception. If higher commodity, food and energy prices, a completely collapsed housing market and a stock market rally in which almost nobody participates is one's idea of success, then a big hand for Chairman Bernanke and his merry band of idiots otherwise known as the Board of Governors of the Fed.
It was reported yesterday in this space that trading volume had sunk to its lowest level of the year. Today's numbers were a mirror image, marking the two slowest trading days of the year, for sure, and possibly the lowest two-day total volume since sometime in 2009.
So much for the so-called wealth effect we hear so much about. The only investors actually trading are the Primary Dealers with their virtually-free POMO money. It's almost as though the markets have lost the confidence of the individual investor forever. Surely, those with pension funds tied to the market must be seeing better returns, but how long they will last is anyone's guess, though it's fair to say that as long as the Fed continues to throw $100 billion or more into the fray, stocks will keep rising. It's been about the easiest trade ever.
There isn't much more to say about today's gains other than they completely disregarded the situation at the Fukushima Daiichi nuclear plant in Japan, which is now almost completely out of control, as one reactor appears to have melted through its containment vessel.
The wild-eyed buyers of today also paid no heed to the S&P/Case-Shiller 20-city index, which confirmed that housing has entered the double-dip phase, falling for the sixth consecutive month. Of course, that would assume that one believes the first dip ever ended.
And everybody simply looked the other way when the Conference Board showed its index of consumer confidence fell to 63.4 this month, from a revised 72.0 in February.
Apparently, we mere mortals simply don't understand the stock market, where news is always bullish, no matter how bad it is. Supposedly, a comet obliterating all of Europe would be cause for a 1000-point rally according to the current metrics.
Whatever is going on down on the trading floors and at the desks of the biggest brokerages, it simply doesn't jibe with reality, but that's what we've got, a rogue market on its very own illogical trajectory.
Dow 12,279.01, +81.13 (0.67%)
NASDAQ 2,756.89, +26.21 (0.96%)
S&P 500 1,319.44, +9.25 (0.71%)
NYSE Composite 8,345.38, +48.86 (0.59%)
Advancers led decliners, 4381-2145. The NASDAQ reported 114 new highs and 27 new lows. On the NYSE, there were 117 new highs and 12 new lows.
NASDAQ Volume 1,610,826,875
NYSE Volume 3,856,315,250
Commodities were mixed, with oil up 81 cents on the front-end WTI contract, to $104.79. Gold slipped $3.70, to $1,416.20 and silver fell 10 cents, to $36.99 per ounce.
This represents one of the more confusing markets in history. Bad news simply will not move stocks to the downside, and any downward move is met with a rally in short order, wiping away any and all losses in a matter or days, or hours.
Hardly mentioned is the upcoming non-farm payroll data courtesy of the BLS on April 1, this Friday, though prior to that, on Wednesday, ADP will report their proprietary survey of private sector employment. That little nugget will be released at 8:15 am, EDT, though it's generally not a market mover, being widely discredited as being unreliable.
This is fun for somebody, but who that might be remains a mystery.
That success, however, is limited to one's perception. If higher commodity, food and energy prices, a completely collapsed housing market and a stock market rally in which almost nobody participates is one's idea of success, then a big hand for Chairman Bernanke and his merry band of idiots otherwise known as the Board of Governors of the Fed.
It was reported yesterday in this space that trading volume had sunk to its lowest level of the year. Today's numbers were a mirror image, marking the two slowest trading days of the year, for sure, and possibly the lowest two-day total volume since sometime in 2009.
So much for the so-called wealth effect we hear so much about. The only investors actually trading are the Primary Dealers with their virtually-free POMO money. It's almost as though the markets have lost the confidence of the individual investor forever. Surely, those with pension funds tied to the market must be seeing better returns, but how long they will last is anyone's guess, though it's fair to say that as long as the Fed continues to throw $100 billion or more into the fray, stocks will keep rising. It's been about the easiest trade ever.
There isn't much more to say about today's gains other than they completely disregarded the situation at the Fukushima Daiichi nuclear plant in Japan, which is now almost completely out of control, as one reactor appears to have melted through its containment vessel.
The wild-eyed buyers of today also paid no heed to the S&P/Case-Shiller 20-city index, which confirmed that housing has entered the double-dip phase, falling for the sixth consecutive month. Of course, that would assume that one believes the first dip ever ended.
And everybody simply looked the other way when the Conference Board showed its index of consumer confidence fell to 63.4 this month, from a revised 72.0 in February.
Apparently, we mere mortals simply don't understand the stock market, where news is always bullish, no matter how bad it is. Supposedly, a comet obliterating all of Europe would be cause for a 1000-point rally according to the current metrics.
Whatever is going on down on the trading floors and at the desks of the biggest brokerages, it simply doesn't jibe with reality, but that's what we've got, a rogue market on its very own illogical trajectory.
Dow 12,279.01, +81.13 (0.67%)
NASDAQ 2,756.89, +26.21 (0.96%)
S&P 500 1,319.44, +9.25 (0.71%)
NYSE Composite 8,345.38, +48.86 (0.59%)
Advancers led decliners, 4381-2145. The NASDAQ reported 114 new highs and 27 new lows. On the NYSE, there were 117 new highs and 12 new lows.
NASDAQ Volume 1,610,826,875
NYSE Volume 3,856,315,250
Commodities were mixed, with oil up 81 cents on the front-end WTI contract, to $104.79. Gold slipped $3.70, to $1,416.20 and silver fell 10 cents, to $36.99 per ounce.
This represents one of the more confusing markets in history. Bad news simply will not move stocks to the downside, and any downward move is met with a rally in short order, wiping away any and all losses in a matter or days, or hours.
Hardly mentioned is the upcoming non-farm payroll data courtesy of the BLS on April 1, this Friday, though prior to that, on Wednesday, ADP will report their proprietary survey of private sector employment. That little nugget will be released at 8:15 am, EDT, though it's generally not a market mover, being widely discredited as being unreliable.
This is fun for somebody, but who that might be remains a mystery.
Monday, March 28, 2011
Late Selling Sends Indices to Losses
Make no mistake about it, something was up when all the major indices did an abrupt about-face in the final half hour of trading.
There was no earth-shattering news, no announcements, nothing, except some of the big players pulling their bids to see what would happen on what turned out to be the lowest volume day of the year.
It didn't take long for the results to be seen: immediate capitulation. There is absolutely no faith in stocks, in this market, in the US economy or the global economy. Everything has been gliding along on top of bank bailout, trillions of dollars in liquidity injections and stimulus, and yet, the economy is still weak, possibly about to roll over into the second phase of the depression, without the backstop of global money-printing by central banks.
Today was a test run. The test revealed what everybody with at least half a functioning cerebral cortex already knew: we're screwed. Once the Fed stops its daily injection of liquidity through POMO and other behind-the-scenes operations, the market crashes. It's exactly why the Fed would not allow Bank of America to increase its dividend from the absurd (.01) to the ridiculous (.02) last week. They're a victim, about to be sucked under by bad debt, never written down properly and put-backs by the various parties to whom they sold the toxic MBS in the first place.
The death of Bank of America will not be a pretty sight, but it is overdue by some two years and is eventually unavoidable. The only question remaining is exactly when the plug is finally pulled and that is something nobody can predict with confidence.
What was truly remarkable about today's 30-minute nuke test was the overall number of decliners as compared to advancers. The ratio was far out of the range expected in such a small decline. Losers led gainers, 3843-2674.
Dow 12,197.88, -22.71 (0.19%)
NASDAQ 2,730.68, -12.38 (0.45%)
S&P 500 1,310.19, -3.61 (0.27%)
NYSE Composite 8,296.52, -25.26 (0.30%)
On the NASDAQ, there were 109 new highs and 22 new lows. There were 114 new highs and 16 new lows on the NYSE. Be prepared for these numbers to converge again and possibly roll over. The falls from the February 18 highs were truncated when buyers stepped in at support levels over the last two weeks. Capitulation never occurred and the market correction of 10-15% turned out to be only a 4-6% decline. Resumption of the correction could have begun late today, but look for any tell-tale signs in the A-D line (like today) and of course volume and the new high-new low readings.
NASDAQ Volume 1,687,059,000
NYSE Volume 3,583,604,000
Crude oil dipped again today, as the ground conditions in Libya seem to be improving, meaning that NATO air strikes have taken their toll on the rogue government's advances and the rebels are gaining an upper hand. WTI crude fell $1.42, to $103.98. Relief at the gas pump would be welcome, but the Middle east situation is still largely unresolved and volatile. Expect crude to trade around $100 per barrel for the foreseeable future with gas prices in the US hovering in the $3.40-3.80 range through the Spring. Summer could witness a complete reversal due to easing tensions and slack demand.
Gold finished slightly lower, losing $6.30, to $1,419.90. Silver gained 4 cents, holding at $37.09.
There are key releases of economic data this week, beginning with the S&P/Case-Shiller 10 and 20-city indices on Tuesday and the BLS non-farm payroll data on Friday. Of course, Thursday is the end of month and first quarter, so portfolio realignment should cause more volatility and another spike in the VIX is more probable this week than over the past two when it was pounded down by Fed liquidity.
Reality is taking a firm footing here and around the world. The containment of the Fukushima Daiichi nuclear disaster is far from over and needs to be handled much more diligently than it has been to this point. It is not under control still and needs to be handled as a global threat because it is.
The news coming out of Japan on all matters related to the nuclear plant that has become now nothing more than a toxic, nuclear dump site leeching radioactive isotopes into the air, into ground water and the ocean. This should have been completely handled at least a week ago. It is now closing in on three weeks since the quake and the situation is still worsening despite what may be reported by major news sources.
There was no earth-shattering news, no announcements, nothing, except some of the big players pulling their bids to see what would happen on what turned out to be the lowest volume day of the year.
It didn't take long for the results to be seen: immediate capitulation. There is absolutely no faith in stocks, in this market, in the US economy or the global economy. Everything has been gliding along on top of bank bailout, trillions of dollars in liquidity injections and stimulus, and yet, the economy is still weak, possibly about to roll over into the second phase of the depression, without the backstop of global money-printing by central banks.
Today was a test run. The test revealed what everybody with at least half a functioning cerebral cortex already knew: we're screwed. Once the Fed stops its daily injection of liquidity through POMO and other behind-the-scenes operations, the market crashes. It's exactly why the Fed would not allow Bank of America to increase its dividend from the absurd (.01) to the ridiculous (.02) last week. They're a victim, about to be sucked under by bad debt, never written down properly and put-backs by the various parties to whom they sold the toxic MBS in the first place.
The death of Bank of America will not be a pretty sight, but it is overdue by some two years and is eventually unavoidable. The only question remaining is exactly when the plug is finally pulled and that is something nobody can predict with confidence.
What was truly remarkable about today's 30-minute nuke test was the overall number of decliners as compared to advancers. The ratio was far out of the range expected in such a small decline. Losers led gainers, 3843-2674.
Dow 12,197.88, -22.71 (0.19%)
NASDAQ 2,730.68, -12.38 (0.45%)
S&P 500 1,310.19, -3.61 (0.27%)
NYSE Composite 8,296.52, -25.26 (0.30%)
On the NASDAQ, there were 109 new highs and 22 new lows. There were 114 new highs and 16 new lows on the NYSE. Be prepared for these numbers to converge again and possibly roll over. The falls from the February 18 highs were truncated when buyers stepped in at support levels over the last two weeks. Capitulation never occurred and the market correction of 10-15% turned out to be only a 4-6% decline. Resumption of the correction could have begun late today, but look for any tell-tale signs in the A-D line (like today) and of course volume and the new high-new low readings.
NASDAQ Volume 1,687,059,000
NYSE Volume 3,583,604,000
Crude oil dipped again today, as the ground conditions in Libya seem to be improving, meaning that NATO air strikes have taken their toll on the rogue government's advances and the rebels are gaining an upper hand. WTI crude fell $1.42, to $103.98. Relief at the gas pump would be welcome, but the Middle east situation is still largely unresolved and volatile. Expect crude to trade around $100 per barrel for the foreseeable future with gas prices in the US hovering in the $3.40-3.80 range through the Spring. Summer could witness a complete reversal due to easing tensions and slack demand.
Gold finished slightly lower, losing $6.30, to $1,419.90. Silver gained 4 cents, holding at $37.09.
There are key releases of economic data this week, beginning with the S&P/Case-Shiller 10 and 20-city indices on Tuesday and the BLS non-farm payroll data on Friday. Of course, Thursday is the end of month and first quarter, so portfolio realignment should cause more volatility and another spike in the VIX is more probable this week than over the past two when it was pounded down by Fed liquidity.
Reality is taking a firm footing here and around the world. The containment of the Fukushima Daiichi nuclear disaster is far from over and needs to be handled much more diligently than it has been to this point. It is not under control still and needs to be handled as a global threat because it is.
The news coming out of Japan on all matters related to the nuclear plant that has become now nothing more than a toxic, nuclear dump site leeching radioactive isotopes into the air, into ground water and the ocean. This should have been completely handled at least a week ago. It is now closing in on three weeks since the quake and the situation is still worsening despite what may be reported by major news sources.
Friday, March 25, 2011
A Great Week for Stocks. Not So Good for People
Stocks were off to a slow start on Friday, but got a boost around 10:20 am EDT which lasted until shortly after noon, at which point profit-takers took over and remained in charge to the closing bell.
Overall, it was a banner week for stocks, based entirely on nothing in particular and mostly ignoring the horrendous news - both financial and international - that kept flowing every day.
For instance, the situation in Libya is nowhere near stabilizing and, given the steadfastness of Muhammar Gadaffi to remain in power, may escalate into a wider conflict. Yemen, Syria and Bahrain are still in the throes of wild civil unrest. Conditions at the nuclear reactor facilities in Japan have worsened by the day, and are nowhere near being resolved.
Portugal's government is all but dissolved and the Irish bailout is falling apart. Most of Europe is facing much the same situation as prevails in the US, no recovery and no signs of improvement. Additionally, leading political figures either don't seem to know what to do or simply don't want to do anything to better the lot of their citizenry.
Investors apparently are taking this all in stride, were it not for the fact that said investors are actually computer algorithms running at warp speed for the various banks and hedge funds who are clipping retail investors every chance they get.
The major indices were up four out of five days, the only down day being Tuesday, and it was a minor decline. The Dow finished ahead 262 points, or about 2.2%. The NASDAQ tacked on a cool 100 points, or nearly 4%. The S&P was up by 37 points, almost 3%, and the NYSE gained 205 points, or 2.5%.
Life was less good for residents of Libya, who are under military siege, and Japan, many of whom are homeless, while Tokyo residents are concerned about irradiated drinking water, already told by their authorities that the levels of iodine in some of that water is unsafe for infants and babies (and probably not too good for adults). Th remainder of the civilized world only had to put up with rising prices for gas or petrol, although life in South America and Central America remains relatively peaceful compared to the rest.
Dow 12,220.59, +50.03 (0.41%)
NASDAQ 2,743.06, +6.64 (0.24%)
S&P 500 1,313.80, +4.14 (0.32%)
NYSE Composite 8,321.78, +10.17 (0.12%)
Advancing issues bettered decliners by a score of 3980-2536. New highs on the NASDAQ totaled 143, to 21 new lows. On the NYSE, there were 243 new highs and just 8 new lows, which was not surprising, since volume was at levels not worth even watching, a sign that participation levels are a fraction of what they used to be, before the 2008 crash and the onset of completely rigged, centrally-planned, manipulated markets designed to keep the global Ponzi scheme of central bankers looking like it cannot fail.
NASDAQ Volume 1,771,109,000.00
NYSE Volume 3,934,565,000
WTI crude oil was flat, losing 20 cents, to $105.40. Gold and silver received their customary Friday smack-down, with gold losing $8.70, to $1,426.20 and silver down 33 cents, to $37.05.
Considering events, it was a banner week for the New World Order (NWO), in which everything you see or hear in the mainstream media is fake, phony and otherwise watered-down to prevent people from understanding just how dire global finances really are.
Have a great weekend and if body parts begin to glow in the dark, you can thank our leaders for keeping us safe from runaway, uncontrolled nuclear accidents.
Overall, it was a banner week for stocks, based entirely on nothing in particular and mostly ignoring the horrendous news - both financial and international - that kept flowing every day.
For instance, the situation in Libya is nowhere near stabilizing and, given the steadfastness of Muhammar Gadaffi to remain in power, may escalate into a wider conflict. Yemen, Syria and Bahrain are still in the throes of wild civil unrest. Conditions at the nuclear reactor facilities in Japan have worsened by the day, and are nowhere near being resolved.
Portugal's government is all but dissolved and the Irish bailout is falling apart. Most of Europe is facing much the same situation as prevails in the US, no recovery and no signs of improvement. Additionally, leading political figures either don't seem to know what to do or simply don't want to do anything to better the lot of their citizenry.
Investors apparently are taking this all in stride, were it not for the fact that said investors are actually computer algorithms running at warp speed for the various banks and hedge funds who are clipping retail investors every chance they get.
The major indices were up four out of five days, the only down day being Tuesday, and it was a minor decline. The Dow finished ahead 262 points, or about 2.2%. The NASDAQ tacked on a cool 100 points, or nearly 4%. The S&P was up by 37 points, almost 3%, and the NYSE gained 205 points, or 2.5%.
Life was less good for residents of Libya, who are under military siege, and Japan, many of whom are homeless, while Tokyo residents are concerned about irradiated drinking water, already told by their authorities that the levels of iodine in some of that water is unsafe for infants and babies (and probably not too good for adults). Th remainder of the civilized world only had to put up with rising prices for gas or petrol, although life in South America and Central America remains relatively peaceful compared to the rest.
Dow 12,220.59, +50.03 (0.41%)
NASDAQ 2,743.06, +6.64 (0.24%)
S&P 500 1,313.80, +4.14 (0.32%)
NYSE Composite 8,321.78, +10.17 (0.12%)
Advancing issues bettered decliners by a score of 3980-2536. New highs on the NASDAQ totaled 143, to 21 new lows. On the NYSE, there were 243 new highs and just 8 new lows, which was not surprising, since volume was at levels not worth even watching, a sign that participation levels are a fraction of what they used to be, before the 2008 crash and the onset of completely rigged, centrally-planned, manipulated markets designed to keep the global Ponzi scheme of central bankers looking like it cannot fail.
NASDAQ Volume 1,771,109,000.00
NYSE Volume 3,934,565,000
WTI crude oil was flat, losing 20 cents, to $105.40. Gold and silver received their customary Friday smack-down, with gold losing $8.70, to $1,426.20 and silver down 33 cents, to $37.05.
Considering events, it was a banner week for the New World Order (NWO), in which everything you see or hear in the mainstream media is fake, phony and otherwise watered-down to prevent people from understanding just how dire global finances really are.
Have a great weekend and if body parts begin to glow in the dark, you can thank our leaders for keeping us safe from runaway, uncontrolled nuclear accidents.
Thursday, March 24, 2011
Extra Radiation Must Be Bullish For Stocks
All manner of radioactive isotopes continue to leak out of all six nuclear reactors at the Fukushima Daiichi plant on the Eastern coast of Japan. Radiation has been detected in sea water, fresh water, in the air and on land. Here's a nice summary of the effects a few of these "heavy" elements on human health.
Half a world away, Libya is being bombed to smithereens.
The coalition doing the bombing is falling apart.
New and existing homes sales are at 30 year lows.
New unemployment claims came in at 382,000, which is 5,000 fewer than the week before. Funny thing about those new unemployment claims, other than the fact that they're fairly benign numbers, is that when the economy isn't creating jobs and we're still stuck in a depression, people just hang on to the jobs they have. Businesses can only let go of so many people, so the natural tendency is for fewer and fewer people to quit, be fired or laid off. Thus, numbers like we've been getting the past few weeks only indicate that there are fewer people collecting benefits, not that new jobs are actually being created.
New jobs! You're such a kidder.
Durable orders for February were down 0.9%. The expectation was for a gain of 1.1%. Ooopsie!
All good, according to Wall Street. Party on.
I am the walrus.
Coo-coo-ka-choo.
Dow 12,170.56, +84.54 (0.70%)
NASDAQ 2,736.42, +38.12 (1.41%)
S&P 500 1,309.66, +12.12 (0.93%)
NYSE Composite 8,311.61, +62.78 (0.76%)
As expected advancing issues exceeded decliners, 4273-2196. Global economic conditions are so good, in fact, that there were 110 new highs on the NASDAQ and just 22 new lows. On the NYSE, 135 companies set new highs while only 13 hit new lows. Volume actually picked up a bit after two days of sleep-walking. Don't want to miss the rally, for Pete's sake.
NASDAQ Volume 1,901,250,250
NYSE Volume 4,358,651,500
Meanwhile, oil traded on the NYMEX, that light, sweet stuff called West Texas Intermediate, backed off a whole 15 cents a barrel, to $105.60. The new normal for a gallon of gas in the USA is now $3.55, according to AAA.
According to our sources at Kitco, gold is currently down $8.10, at $1430.50 per ounce, but that price does not reflect that the yellow money made a new all-time high today of $1449.10. Silver is being quoted at $37.19, down 23 cents. But silver also made a move to a fresh 31-year-high, slightly above $38 per ounce.
So, who's right? Normally, gold and silver only gain in times of undue global stress, as a store of value and a hedge against collapsing currencies and/or inflation risk.
Stocks go up in times of robust economic activity, normally, or whenever the Fed pumps enormous amounts of fresh capital into markets, as they've been doing for the better part of the past 2 1/2 years.
The dollar index fell .183, to 75.69, a horrifically low figure, indicating the US is not the safe haven it used to be in which to park money.
There's your answer. If the dollar index continues to fall, reaching unprecedented lows, which it is currently approaching, US stocks, denominated in dollars, have to gain just to keep up. Commodities may swing either way, but the precious metals and oil should rise as the dollar weakens, so both stock players and gold bugs are right to keep pushing prices higher. Only one of them will be the eventual winner, however, and, while we are pretty sure which that will be, we're not telling.
Half a world away, Libya is being bombed to smithereens.
The coalition doing the bombing is falling apart.
New and existing homes sales are at 30 year lows.
New unemployment claims came in at 382,000, which is 5,000 fewer than the week before. Funny thing about those new unemployment claims, other than the fact that they're fairly benign numbers, is that when the economy isn't creating jobs and we're still stuck in a depression, people just hang on to the jobs they have. Businesses can only let go of so many people, so the natural tendency is for fewer and fewer people to quit, be fired or laid off. Thus, numbers like we've been getting the past few weeks only indicate that there are fewer people collecting benefits, not that new jobs are actually being created.
New jobs! You're such a kidder.
Durable orders for February were down 0.9%. The expectation was for a gain of 1.1%. Ooopsie!
All good, according to Wall Street. Party on.
I am the walrus.
Coo-coo-ka-choo.
Dow 12,170.56, +84.54 (0.70%)
NASDAQ 2,736.42, +38.12 (1.41%)
S&P 500 1,309.66, +12.12 (0.93%)
NYSE Composite 8,311.61, +62.78 (0.76%)
As expected advancing issues exceeded decliners, 4273-2196. Global economic conditions are so good, in fact, that there were 110 new highs on the NASDAQ and just 22 new lows. On the NYSE, 135 companies set new highs while only 13 hit new lows. Volume actually picked up a bit after two days of sleep-walking. Don't want to miss the rally, for Pete's sake.
NASDAQ Volume 1,901,250,250
NYSE Volume 4,358,651,500
Meanwhile, oil traded on the NYMEX, that light, sweet stuff called West Texas Intermediate, backed off a whole 15 cents a barrel, to $105.60. The new normal for a gallon of gas in the USA is now $3.55, according to AAA.
According to our sources at Kitco, gold is currently down $8.10, at $1430.50 per ounce, but that price does not reflect that the yellow money made a new all-time high today of $1449.10. Silver is being quoted at $37.19, down 23 cents. But silver also made a move to a fresh 31-year-high, slightly above $38 per ounce.
So, who's right? Normally, gold and silver only gain in times of undue global stress, as a store of value and a hedge against collapsing currencies and/or inflation risk.
Stocks go up in times of robust economic activity, normally, or whenever the Fed pumps enormous amounts of fresh capital into markets, as they've been doing for the better part of the past 2 1/2 years.
The dollar index fell .183, to 75.69, a horrifically low figure, indicating the US is not the safe haven it used to be in which to park money.
There's your answer. If the dollar index continues to fall, reaching unprecedented lows, which it is currently approaching, US stocks, denominated in dollars, have to gain just to keep up. Commodities may swing either way, but the precious metals and oil should rise as the dollar weakens, so both stock players and gold bugs are right to keep pushing prices higher. Only one of them will be the eventual winner, however, and, while we are pretty sure which that will be, we're not telling.
Wednesday, March 23, 2011
WAKE UP, PEOPLE! THE GLOBE IS GOING NUCLEAR!
Not to sound alarmist, but anybody who believes the mainstream media is giving us the truth about what's really happening on the ground, in the air and in the water around the Fukushima plant in Japan, might just as well stick one's head in the sand and hope for the best.
Conditions at the the plant continue to worsen, despite the best efforts of brave individuals trying to keep the entire Eastern coast of Japan from turning into a nuclear wasteland and the media isn't even trying to cover it.
But why listen to me. Here are a few choice links of interest to anyone who doesn't want to grow a third ear or die from thyroid cancer when it could be avoided:
For starters, here' a story about of Australia about how 128 elderly patients were left to die in a hospital six miles from the nuclear plant.
Oh, well, too bad for them, huh? We're here in America, so none of this is affecting any of us, right?
Well, take a look at this map of the dispersion from the disabled plant:
Did that get your attention? Sure, maybe the radiation levels aren't anything to get excited about, but do you trust our dysfunctional media to actually deliver the truth? And why did FOX get their main reporter, Sheppard Smith, out of Japan and CNN do the same with Anderson Cooper, LAST WEEK?
Just ask yourself, how long will it take the "authorities" to put this nuclear disaster to rest? Well, it's been ten days, boys and girls, and we're nowhere close to fixing what's going to become known - I have no doubt about this at all - as the worst disaster - man-made or otherwise - of all time.
Now, maybe the fact that food imports from Japan have been banned, do you feel safer? Oh, and there's more, like black smoke and how Tokyo drinking water now contains iodine-131 at levels unsafe for infants. In case you're wondering how much is too much for adults, the recommended safe level is below 300 becquerels per liter. The water tested in Toyko recorded levels of 190-210 becquerel per liter.
So, why do I bother? The national media gives much more coverage to the stupidity of our
engagement in Libya. Wonder why? The old adage in TV news reporting is, "if it bleeds, it leads," meaning that guys getting shot and killed and bombs blowing up buildings is far more engaging to the dumbed-down populace of the United States (and a lot of the rest of the world) than pictures of steam coming out of blown up nuclear facilities.
Well, maybe that's enough for today. Wouldn't want anyone to get upset or panic. After all, our media and our government have proven, since 9-11, to be worthless, so why should it be any different in Japan? Just go along in your haze of cognitive dissonance, and maybe buy some stocks.
Oh, the Portugese parliament is likely going to dissolve soon, either due to radiation or votes, whichever comes first, I suppose.
So, yes, we should be buying stocks on all this bullish news, some of which is actually being reported.
Dow 12,086.02, +67.39 (0.56%)
NASDAQ 2,698.30, +14.43 (0.54%)
S&P 500 1,297.54, +3.77 (0.29%)
NYSE Composite 8,248.83, +20.42 (0.25%)
Stocks started out negative but ground higher all day. Thank the computers and the algos that do the majority of the trading these days. Advancers slithered by decliners, 3540-2917. On the NASDAQ there were 72 new highs and 42 new lows; the NYSE showed 91 new highs and 18 new lows. Volume was only marginally better than yesterday's which was worse than pathetic. Get ready for a wicked decline some time soon. It may look like a crash, because it just could be one.
NASDAQ Volume 1,715,377,875
NYSE Volume 4,313,727,000
At least those trading in commodities knew what they were doing. Oil was up 78 cents, to $105.75. Gold gained $10.40, to $1,438.00, and silver shot up 93 cents, to $37.20, another new 31-year high. The gold and silver bugs know what's up. If things get any worse, they'll become overnight million-and-billionaires.
Good luck to you still holding any paper assets. They're about to be burned, along with the rest of the fuel rods at Fuk - U - Shima.
Edit: Just had to add that ABC and CBS each began their nightly news broadcasts with nearly 10 minutes of breathless coverage on the death of Elizabeth Taylor. NBC led with Libya, but did report on the drinking water supplies being tainted in Tokyo. Priorities, people, priorities.
Conditions at the the plant continue to worsen, despite the best efforts of brave individuals trying to keep the entire Eastern coast of Japan from turning into a nuclear wasteland and the media isn't even trying to cover it.
But why listen to me. Here are a few choice links of interest to anyone who doesn't want to grow a third ear or die from thyroid cancer when it could be avoided:
For starters, here' a story about of Australia about how 128 elderly patients were left to die in a hospital six miles from the nuclear plant.
Oh, well, too bad for them, huh? We're here in America, so none of this is affecting any of us, right?
Well, take a look at this map of the dispersion from the disabled plant:
Did that get your attention? Sure, maybe the radiation levels aren't anything to get excited about, but do you trust our dysfunctional media to actually deliver the truth? And why did FOX get their main reporter, Sheppard Smith, out of Japan and CNN do the same with Anderson Cooper, LAST WEEK?
Just ask yourself, how long will it take the "authorities" to put this nuclear disaster to rest? Well, it's been ten days, boys and girls, and we're nowhere close to fixing what's going to become known - I have no doubt about this at all - as the worst disaster - man-made or otherwise - of all time.
Now, maybe the fact that food imports from Japan have been banned, do you feel safer? Oh, and there's more, like black smoke and how Tokyo drinking water now contains iodine-131 at levels unsafe for infants. In case you're wondering how much is too much for adults, the recommended safe level is below 300 becquerels per liter. The water tested in Toyko recorded levels of 190-210 becquerel per liter.
So, why do I bother? The national media gives much more coverage to the stupidity of our
Well, maybe that's enough for today. Wouldn't want anyone to get upset or panic. After all, our media and our government have proven, since 9-11, to be worthless, so why should it be any different in Japan? Just go along in your haze of cognitive dissonance, and maybe buy some stocks.
Oh, the Portugese parliament is likely going to dissolve soon, either due to radiation or votes, whichever comes first, I suppose.
So, yes, we should be buying stocks on all this bullish news, some of which is actually being reported.
Dow 12,086.02, +67.39 (0.56%)
NASDAQ 2,698.30, +14.43 (0.54%)
S&P 500 1,297.54, +3.77 (0.29%)
NYSE Composite 8,248.83, +20.42 (0.25%)
Stocks started out negative but ground higher all day. Thank the computers and the algos that do the majority of the trading these days. Advancers slithered by decliners, 3540-2917. On the NASDAQ there were 72 new highs and 42 new lows; the NYSE showed 91 new highs and 18 new lows. Volume was only marginally better than yesterday's which was worse than pathetic. Get ready for a wicked decline some time soon. It may look like a crash, because it just could be one.
NASDAQ Volume 1,715,377,875
NYSE Volume 4,313,727,000
At least those trading in commodities knew what they were doing. Oil was up 78 cents, to $105.75. Gold gained $10.40, to $1,438.00, and silver shot up 93 cents, to $37.20, another new 31-year high. The gold and silver bugs know what's up. If things get any worse, they'll become overnight million-and-billionaires.
Good luck to you still holding any paper assets. They're about to be burned, along with the rest of the fuel rods at Fuk - U - Shima.
Edit: Just had to add that ABC and CBS each began their nightly news broadcasts with nearly 10 minutes of breathless coverage on the death of Elizabeth Taylor. NBC led with Libya, but did report on the drinking water supplies being tainted in Tokyo. Priorities, people, priorities.
Tuesday, March 22, 2011
A Day Without Disaster
Thankfully, Tuesday is almost over with and there haven't been any grave disasters, though the ones that have been hovering over the globe for the past few weeks are still far from resolved.
It seems to make some sense that markets would just wallow around until the damaged nuclear reactors in Japan are finally shut down, whenever that may happen, Colonel Qadaffi is defeated or found dead in Libya and the level of unrest settles down in various countries in Northern Africa and the Middle East.
That's exactly what went on today. There seemed to be no reason to either buy or sell equities and the major indices traded in narrow ranges all session long.
Naturally, conditions in the hot spots around the world could get better or worse, and nobody is really sure of anything at this juncture, especially when officials in Japan continue to stage a weird kind of kabuki theater in the way they report the situation at the damaged Fukushima nuclear plant, where four reactors have experienced some kind of explosion, accident, fire or other condition as an indirect result of the 9.0 earthquake that rattled the island nation on March 11.
That the reactors are spewing radioactive gasses and material is not disputed, but how much of which particular isotopes are going where and when has not been even remotely reported. All we know is that the radiation levels are higher than they were a week ago in various areas around the site and that the spread has become nearly global in nature, though slight in terms of actual threats to human health.
That's not really very reassuring since the problems persist and any increased exposure to any kind of radiation is potentially a health hazard.
Meanwhile, the US response, in conjunction with a bevy of nations, to the blood-letting in Libya has been met with considerable criticism and even our own representatives are speaking in tongues, with the president, congress and the military all putting out their own spin, none of it making a whole lot of sense.
More than likely, these issues will remain in some kind of focus for the coming weeks, if not months, and there will be other unexpected events in the interim. The best advice would be to expect the unexpected at this juncture, because nothing is for certain and situations are still, as they say, fluid.
Dow 12,018.63, -17.90 (0.15%)
NASDAQ 2,683.87, -8.22 (0.31%)
S&P 500 1,293.77, -4.61 (0.36%)
NYSE Composite 8,228.41, -27.95 (0.34%)
Declining issues dominated winners, 3743-2718. There were 72 new highs and 33 new lows on the NASDAQ; on the NYSE 109 new highs and just 8 new lows. Volume was miserably low. This was, if not the slowest trading day of the year, among the three or four worst. There's simply too much event risk associated to equities in the current cycle.
NASDAQ Volume 1,671,905,000
NYSE Volume 3,995,960,500
Oil finished at an even $104.00, up another $1.67 due to unresolved Middle East issues. Gold managed a squeeze out a gain of $2.30, closing at $1,427.60 in New York, within 1% of its all-time high. Silver gained nicely, adding 27 cents per ounce, to $36.27, the third-highest point in the last 31 years and just pennies away from the nominal high of $36.60, reached just two weeks ago, on March 7.
The longer it takes for Japan's nuclear reactor problems to be resolved, the longer stocks will remain bogged down, stuck in a range between the highs of February 18 and recent lows. Radiation leaks and potential melt-downs are nothing to joke about, and the condition of those plants is such that it could easily become a much more severe problem before it is eventually resolved.
There's already a panic quietly building world-wide, even though the reported radiation levels have been in an "acceptable" range. However, the longer the reactors leak radiation, the lower the tolerance of acceptance becomes. That situation remains highly volatile and potentially upsetting on a global basis, not only to investors but to the health of people.
It seems to make some sense that markets would just wallow around until the damaged nuclear reactors in Japan are finally shut down, whenever that may happen, Colonel Qadaffi is defeated or found dead in Libya and the level of unrest settles down in various countries in Northern Africa and the Middle East.
That's exactly what went on today. There seemed to be no reason to either buy or sell equities and the major indices traded in narrow ranges all session long.
Naturally, conditions in the hot spots around the world could get better or worse, and nobody is really sure of anything at this juncture, especially when officials in Japan continue to stage a weird kind of kabuki theater in the way they report the situation at the damaged Fukushima nuclear plant, where four reactors have experienced some kind of explosion, accident, fire or other condition as an indirect result of the 9.0 earthquake that rattled the island nation on March 11.
That the reactors are spewing radioactive gasses and material is not disputed, but how much of which particular isotopes are going where and when has not been even remotely reported. All we know is that the radiation levels are higher than they were a week ago in various areas around the site and that the spread has become nearly global in nature, though slight in terms of actual threats to human health.
That's not really very reassuring since the problems persist and any increased exposure to any kind of radiation is potentially a health hazard.
Meanwhile, the US response, in conjunction with a bevy of nations, to the blood-letting in Libya has been met with considerable criticism and even our own representatives are speaking in tongues, with the president, congress and the military all putting out their own spin, none of it making a whole lot of sense.
More than likely, these issues will remain in some kind of focus for the coming weeks, if not months, and there will be other unexpected events in the interim. The best advice would be to expect the unexpected at this juncture, because nothing is for certain and situations are still, as they say, fluid.
Dow 12,018.63, -17.90 (0.15%)
NASDAQ 2,683.87, -8.22 (0.31%)
S&P 500 1,293.77, -4.61 (0.36%)
NYSE Composite 8,228.41, -27.95 (0.34%)
Declining issues dominated winners, 3743-2718. There were 72 new highs and 33 new lows on the NASDAQ; on the NYSE 109 new highs and just 8 new lows. Volume was miserably low. This was, if not the slowest trading day of the year, among the three or four worst. There's simply too much event risk associated to equities in the current cycle.
NASDAQ Volume 1,671,905,000
NYSE Volume 3,995,960,500
Oil finished at an even $104.00, up another $1.67 due to unresolved Middle East issues. Gold managed a squeeze out a gain of $2.30, closing at $1,427.60 in New York, within 1% of its all-time high. Silver gained nicely, adding 27 cents per ounce, to $36.27, the third-highest point in the last 31 years and just pennies away from the nominal high of $36.60, reached just two weeks ago, on March 7.
The longer it takes for Japan's nuclear reactor problems to be resolved, the longer stocks will remain bogged down, stuck in a range between the highs of February 18 and recent lows. Radiation leaks and potential melt-downs are nothing to joke about, and the condition of those plants is such that it could easily become a much more severe problem before it is eventually resolved.
There's already a panic quietly building world-wide, even though the reported radiation levels have been in an "acceptable" range. However, the longer the reactors leak radiation, the lower the tolerance of acceptance becomes. That situation remains highly volatile and potentially upsetting on a global basis, not only to investors but to the health of people.
Monday, March 21, 2011
Meltdown in Japan, Melt-up in US Stocks
Absurdity has found a new home: the US equity markets.
Somebody wake me up when the nightmare is over, because I cannot find any good reason to buy stocks right now, so, I must be dreaming.
War planes fly over Libya and Israeli jets take out a Hammas stronghold in Gaza. So, that's the good news, right? R-r-r-r-i-g-h-t. The Japanese government is lying to its people about radioactivity levels. That must be the bad news. And AT&T is going to gobble up T-Mobile, so we'll have one fewer cell phone provider. Does anyone recall the day that AT&T was broken up because its business constituted a monopoly?
Don't worry, the hologram of Eric Holder will do nothing. Anti-trust? In trust we trust, I guess.
The following numbers mean nothing. It's all just a paper moon.
Dow 12,036.53, +178.01 (1.50%)
NASDAQ 2,692.09, +48.42 (1.83%)
S&P 500 1,298.38, +19.18 (1.50%)
NYSE Composite 8,256.36, +139.96 (1.72%)
Advancing issues absolutely slaughtered decliners, 5182-1379. Stocks shot up at the open and stayed afloat all day. NASDAQ registered 90 new highs and 30 new lows. The NYSE had 129 new highs and just 9 new lows. Pathetic. Volume was in an abyss, especially on the NASDAQ.
NASDAQ Volume 1,766,817,250
NYSE Volume 5,027,389,500
WTI hit $102.33 a barrel on the NYMEX, up $1.26 on the day. Gold soared $10.30, to $1,426.40. Silver was up 94 cents to an even $36.00. Both are approaching recent multi-year or record highs. But everything is just fine. Notice how the news media shifted focus away from Japan and towards Libya. Well, guns and rockets and missiles launched from warships is much more entertaining than those invisible radioactive isotopes being spewed continuously into the air and the sea in Japan. So, bang, bang, bang. It's good TV.
We have entered an age in our culture in which nothing really makes much sense any more. Spend $200,000 for your kid's education so he or she can get a $35,000 a year job and have to pay back a mountain of debt. Blow up a country for its oil. Don't report on uncontrolled radioactivity that will kill thousands, maybe hundreds of thousands, maybe more. Buy stocks because some broker who knows less about economics and money than you do told you it was a good deal. Sit back and relax, watch TV. This is March Madness, after all, and we're not talking basketball.
BTW: According to the Supreme Court, the Fed will have to release documents relating to loans taken out by banks from the discount window in April and May, 2008, before the stock market crash.
They knew. But they wouldn't tell you.
Somebody wake me up when the nightmare is over, because I cannot find any good reason to buy stocks right now, so, I must be dreaming.
War planes fly over Libya and Israeli jets take out a Hammas stronghold in Gaza. So, that's the good news, right? R-r-r-r-i-g-h-t. The Japanese government is lying to its people about radioactivity levels. That must be the bad news. And AT&T is going to gobble up T-Mobile, so we'll have one fewer cell phone provider. Does anyone recall the day that AT&T was broken up because its business constituted a monopoly?
Don't worry, the hologram of Eric Holder will do nothing. Anti-trust? In trust we trust, I guess.
The following numbers mean nothing. It's all just a paper moon.
Dow 12,036.53, +178.01 (1.50%)
NASDAQ 2,692.09, +48.42 (1.83%)
S&P 500 1,298.38, +19.18 (1.50%)
NYSE Composite 8,256.36, +139.96 (1.72%)
Advancing issues absolutely slaughtered decliners, 5182-1379. Stocks shot up at the open and stayed afloat all day. NASDAQ registered 90 new highs and 30 new lows. The NYSE had 129 new highs and just 9 new lows. Pathetic. Volume was in an abyss, especially on the NASDAQ.
NASDAQ Volume 1,766,817,250
NYSE Volume 5,027,389,500
WTI hit $102.33 a barrel on the NYMEX, up $1.26 on the day. Gold soared $10.30, to $1,426.40. Silver was up 94 cents to an even $36.00. Both are approaching recent multi-year or record highs. But everything is just fine. Notice how the news media shifted focus away from Japan and towards Libya. Well, guns and rockets and missiles launched from warships is much more entertaining than those invisible radioactive isotopes being spewed continuously into the air and the sea in Japan. So, bang, bang, bang. It's good TV.
We have entered an age in our culture in which nothing really makes much sense any more. Spend $200,000 for your kid's education so he or she can get a $35,000 a year job and have to pay back a mountain of debt. Blow up a country for its oil. Don't report on uncontrolled radioactivity that will kill thousands, maybe hundreds of thousands, maybe more. Buy stocks because some broker who knows less about economics and money than you do told you it was a good deal. Sit back and relax, watch TV. This is March Madness, after all, and we're not talking basketball.
BTW: According to the Supreme Court, the Fed will have to release documents relating to loans taken out by banks from the discount window in April and May, 2008, before the stock market crash.
They knew. But they wouldn't tell you.
Thursday, March 17, 2011
The Expected Snap-Back Rally Occurs Right on Time
As mentioned in this space yesterday,
Well, today was it. If there's one thing the self-appointed Masters of the Universe on Wall Street and in Washington absolutely cannot tolerate, it is human events spinning beyond their ability to control them, because their power declines under such circumstances, and their sole response is to turn up the algos on their stock-buying computers and send equity prices ever further into the stratosphere of the absurd.
Today's mammoth run-up was well conceived and not derailed by any further bad news coming out of Japan, though what to do about those rebellious peasants in the Middle East still remains a problem for our sweet, elite masters. For a microcosmic view of it all, note how stocks and oil advanced smartly, with gold lagging and silver falling even more.
The elitist snobs will tolerate gold, even hoard it in times of panic, but they hate silver, because if gold is the metal of kings and monarchs, silver is the coin of gentlemen and lower rabble. The great wazoos and muckety-mucks will have nothing to do with it, which is why it continues to be supressed at every opportunity, by now, an open secret.
We'll maintain that silver is still the best investment for the current condition, despite its wild swings. Eventually, as we saw in the latter half of 2010, it will stay with and surpass gold in percentage gain.
In the meantime, the Bank of Japan (BOJ) will meet with their effete counterparts in the G7 to receive approval for intervention in their rapidly-appreciating currency. In other words, with money inflows to Japan, the Yen is becoming stronger, making more capital available for eventual reconstruction efforts, while at the same time boosting the price of its exports, which is considered a negative for the globalist agenda. The Bank of Japan will seek to buy up Yen, squeezing some of the liquidity out of it and stabilizing it against other floating currencies.
It's a bit of a complex condition, causing money flow disruptions and imbalances. In the meantime, the US dollar continues to depreciate, falling to a 4-month low, dipping just below the 76 mark at 75.995 on the dollar index.
Dow 11,774.59, +161.29 (1.39%)
NASDAQ 2,636.05, +19.23 (0.73%)
S&P 500 1,273.72, +16.84 (1.34%)
NYSE Composite 8,064.86, +134.99 (1.70%)
Despite the big headline numbers, the internals were less convincing that today's rally was anything more than money-tossing, as advancing issues beat decliners, 4438-2072, though new lows retained their edge over new highs on the NASDAQ, 56-35, for the sixth consecutive session. On the NYSE, it was nearly a dead heat, with 30 new highs and 28 new lows. Over the past six session, the advantage has gone to either side an equal three times apiece.
Volume was once-again telling. Though it was slightly elevated, it by no means was in a range indicative of an all-in rally. As mentioned previously, these kinds of things are normally sharp and short, especially in the light of tomorrow's quadruple witching day for options. There was plenty of arbitrage to go around for the sharpies.
NASDAQ Volume 2,011,827,250.00
NYSE Volume 4,743,120,500
Renewed tensions in the Middle East (and, no doubt, the insatiable urge to screw motorists with high gas prices) caused a run-up in crude, which elevated $3.42, to $101.42, on the NYMEX.
Gold gathered some momentum, gaining $8.10, to $1,404.20, but silver shed 21 cents, to $34.26, a price still close to recent 31-year highs.
With all the focus on the nuclear crisis in Japan, some revealing economic figures were released over the past two days. The PPI was up a whopping 1.6% in February, with the CPI chiming in with a gain of 0.5%. Inflation, that thing Ben Bernanke says is under control, temporary and not a problem (well, maybe not for him), isn't on its way here, it has arrived.
New housing starts were at some horrible four-decade low, with building proceeding at an annualized rate of 479,000 units. Industrial production fell 0.1% in February and capacity utilization dropped to 76.3% These kinds of numbers really gives one confidence that the liars in Washington have once again dropped the ball on the economy, all along telling us that we're "recovering."
In the wild new world normal, "recovery" is tantamount to Charlie Sheen's "winning" - an innocuous word, significant of absolutely nothing.
A decline in US stock markets will only trigger more printing, more inflation and an even more unbalanced global economy, one that was already teetering on the brink of disaster, even before the Japan debacle. However, such an inordinate infusion of capital may cause a snapback rally at any time. If such occurs, it will be easy to spot, as it will be sharp and large. The other characteristic of such an event is that it will have a relatively short duration - an afternoon, a day, a session and part of another, at most.
Well, today was it. If there's one thing the self-appointed Masters of the Universe on Wall Street and in Washington absolutely cannot tolerate, it is human events spinning beyond their ability to control them, because their power declines under such circumstances, and their sole response is to turn up the algos on their stock-buying computers and send equity prices ever further into the stratosphere of the absurd.
Today's mammoth run-up was well conceived and not derailed by any further bad news coming out of Japan, though what to do about those rebellious peasants in the Middle East still remains a problem for our sweet, elite masters. For a microcosmic view of it all, note how stocks and oil advanced smartly, with gold lagging and silver falling even more.
The elitist snobs will tolerate gold, even hoard it in times of panic, but they hate silver, because if gold is the metal of kings and monarchs, silver is the coin of gentlemen and lower rabble. The great wazoos and muckety-mucks will have nothing to do with it, which is why it continues to be supressed at every opportunity, by now, an open secret.
We'll maintain that silver is still the best investment for the current condition, despite its wild swings. Eventually, as we saw in the latter half of 2010, it will stay with and surpass gold in percentage gain.
In the meantime, the Bank of Japan (BOJ) will meet with their effete counterparts in the G7 to receive approval for intervention in their rapidly-appreciating currency. In other words, with money inflows to Japan, the Yen is becoming stronger, making more capital available for eventual reconstruction efforts, while at the same time boosting the price of its exports, which is considered a negative for the globalist agenda. The Bank of Japan will seek to buy up Yen, squeezing some of the liquidity out of it and stabilizing it against other floating currencies.
It's a bit of a complex condition, causing money flow disruptions and imbalances. In the meantime, the US dollar continues to depreciate, falling to a 4-month low, dipping just below the 76 mark at 75.995 on the dollar index.
Dow 11,774.59, +161.29 (1.39%)
NASDAQ 2,636.05, +19.23 (0.73%)
S&P 500 1,273.72, +16.84 (1.34%)
NYSE Composite 8,064.86, +134.99 (1.70%)
Despite the big headline numbers, the internals were less convincing that today's rally was anything more than money-tossing, as advancing issues beat decliners, 4438-2072, though new lows retained their edge over new highs on the NASDAQ, 56-35, for the sixth consecutive session. On the NYSE, it was nearly a dead heat, with 30 new highs and 28 new lows. Over the past six session, the advantage has gone to either side an equal three times apiece.
Volume was once-again telling. Though it was slightly elevated, it by no means was in a range indicative of an all-in rally. As mentioned previously, these kinds of things are normally sharp and short, especially in the light of tomorrow's quadruple witching day for options. There was plenty of arbitrage to go around for the sharpies.
NASDAQ Volume 2,011,827,250.00
NYSE Volume 4,743,120,500
Renewed tensions in the Middle East (and, no doubt, the insatiable urge to screw motorists with high gas prices) caused a run-up in crude, which elevated $3.42, to $101.42, on the NYMEX.
Gold gathered some momentum, gaining $8.10, to $1,404.20, but silver shed 21 cents, to $34.26, a price still close to recent 31-year highs.
With all the focus on the nuclear crisis in Japan, some revealing economic figures were released over the past two days. The PPI was up a whopping 1.6% in February, with the CPI chiming in with a gain of 0.5%. Inflation, that thing Ben Bernanke says is under control, temporary and not a problem (well, maybe not for him), isn't on its way here, it has arrived.
New housing starts were at some horrible four-decade low, with building proceeding at an annualized rate of 479,000 units. Industrial production fell 0.1% in February and capacity utilization dropped to 76.3% These kinds of numbers really gives one confidence that the liars in Washington have once again dropped the ball on the economy, all along telling us that we're "recovering."
In the wild new world normal, "recovery" is tantamount to Charlie Sheen's "winning" - an innocuous word, significant of absolutely nothing.
Tuesday, March 15, 2011
Optimism Can Be Good or Bad
Americans are an optimistic lot. Nothing wrong with that, as long as some of the optimistic sentiment is grounded in reality. There's a big difference between wishing and hoping for some desired result that may not have a good chance of happening and confidence based on experience and factual data.
Overnight, conditions in Japan took a turn for the worse as another reactor at the damaged Fukushima Daiichi nuclear facility about 100 miles North of Tokyo suffered an explosion. Japanese officials tried to appear calm, but the fear and panic on their faces was not easy to hide. Reactor #2 at the plant incurred a violent explosion that reportedly damaged part of the containment vessel which holds the unstable rods of highly-charged uranium.
Shortly after that blast, a fire in reactor #4 was reported to have occurred in the pools holding spent fuel rods, also highly toxic and radioactive. Reactors #2 and #3 had already been damaged by xplosions in the aftermath of the 9.0 earthquake and tsunami which hit the island nation on Friday.
The Japanese stock market, the NIKKEI 225, suffered a substantial loss of nearly 11% before trading was halted. Other Asian markets took losses as well, and European markets were down more than 2% when stocks opened in New York.
The drop on the open was a stark and panic-stricken response to what appeared to be possible meltdown in the #2 reactor and spreading risk of contamination to a large area of Japan. A radius of 20 kilometers (12 miles) was evacuated and another in another area further out - to 30 kilometers - residents were told to stay inside due to increased risk of exposure to radioactive elements in the air.
Most of the news occurred during the night for Americans, so there was a bit of unease at the open. The Dow fell 310 points in the opening minutes of the session, with the other major indices taking similar falls.
But, as it turns out, that was the worst of it for US stocks, which rallied in a diagonal path all day as no new news came from Japan. While traders put their most optimistic attitude front and center, the conditions in Japan are still very much in a state of flux. For now, most of the damage has been contained, but the risk of complete meltdown of any one of the three badly-damaged reactors is still prevalent, which is why the attitude of the American traders and investors may be a bit premature.
Besides the nuclear plant situation, conditions on about a third of the main island remain challenging and desperate. Aid is only now reaching some of the victims, the death toll continues to mount and reconstruction is still weeks and months from even beginning. The scope of the devastation is being underplayed by American media. This is a disaster that will play out over months and years, not days and weeks.
The major indices still suffered substantial losses, though they easily could have been worse. The intra-day drops of the past two days have broken through support areas - areas that will be retested before any hint of a rally occurs.
Dow 11,855.42, -137.74 (1.15%)
NASDAQ 2,667.33, -33.64 (1.25%)
S&P 500 1,281.87, -14.52 (1.12%)
NYSE Composite 8,092.11, -101.85 (1.24%)
Declining issues slaughtered advancers, 5101-1536. There were 23 new highs on the NASDAQ, but those were overshadowed by 134 new lows. On the NYSE, only 29 stocks hit new highs, while 77 made new lows. This was the 4th consecutive day of new lows beating new highs on the NASDAQ and the second in the last four for the NYSE.
From a technical perspective, the high/low readings are beginning to develop into a trend, which, if confirmed by further continuation, will produce one of the strongest directional indicators to be found. The divergence of new highs and new lows normally becomes a long trm trend, lasting anywhere from six months to more than two years as it is a primary trend indicator. While there are no hard and fast rules surrounding that particular metric, any change lasting more than a week in duration should be confirmation of the new direction of the markets, in this case, down.
What is occurring inside the US markets is very much the result of too much money in the system. Today's action in global markets was a liquidity-driven event, as assets of all nature were liquidated in favor of the relative safety of cash. Since the Federal Reserve has been pumping money out at an unprecedented rate, today's sudden drop and subsequent rally has all the characteristics of a flooded market with an unstable or unreliable base.
It's very much the same as an old car that has trouble starting and running. A jump may get the batteries to deliver enough juice to get it rolling, but problems inside the engine cause it to stall out again. Fixes are short-term, before a mechanic says the engine needs a complete overhaul.
That is precisely the situation in US markets. The issues coming from Japan are masking real, structural problems below and the daily new highs vs. new lows on the NASDAQ are flashing warning lights that many are ignoring at the peril of their capital.
Volume was extremely high today as well, another bearish indication.
NASDAQ Volume 2,371,639,000
NYSE Volume 5,944,351,500
What made matters even more convincing that the drops in global markets were driven by a rush for liquidity were evident in commodities. WTI crude oil futures were absolutely hammered, losing $4.01, to $97.18. We can only hope that the world-wide community can see the oil market for what it really is - bloated with excessive supply and wildly overpriced as compared to real economic conditions - and continue selling it off until balance is restored at around the $75-85 per barrel level.
Gold was hit hard as investors raced into cash positions, losing $32.10 on the day, to 1,392.80, but down much more in earlier trading. Silver also took a substantial hit, off $1.72, to $34.12.
Once there is some clarity to Japan's situation, the precious metals should continue their interrupted rally, or, at the worst, outperform stocks in a big way.
There's still far too much uncertainty in the world to be fooling with paper assets unless you're a skilled day-trader who can afford to take occasional large losses. For the rest of us, the safety and security of gold and/or silver are second to none.
Overnight, conditions in Japan took a turn for the worse as another reactor at the damaged Fukushima Daiichi nuclear facility about 100 miles North of Tokyo suffered an explosion. Japanese officials tried to appear calm, but the fear and panic on their faces was not easy to hide. Reactor #2 at the plant incurred a violent explosion that reportedly damaged part of the containment vessel which holds the unstable rods of highly-charged uranium.
Shortly after that blast, a fire in reactor #4 was reported to have occurred in the pools holding spent fuel rods, also highly toxic and radioactive. Reactors #2 and #3 had already been damaged by xplosions in the aftermath of the 9.0 earthquake and tsunami which hit the island nation on Friday.
The Japanese stock market, the NIKKEI 225, suffered a substantial loss of nearly 11% before trading was halted. Other Asian markets took losses as well, and European markets were down more than 2% when stocks opened in New York.
The drop on the open was a stark and panic-stricken response to what appeared to be possible meltdown in the #2 reactor and spreading risk of contamination to a large area of Japan. A radius of 20 kilometers (12 miles) was evacuated and another in another area further out - to 30 kilometers - residents were told to stay inside due to increased risk of exposure to radioactive elements in the air.
Most of the news occurred during the night for Americans, so there was a bit of unease at the open. The Dow fell 310 points in the opening minutes of the session, with the other major indices taking similar falls.
But, as it turns out, that was the worst of it for US stocks, which rallied in a diagonal path all day as no new news came from Japan. While traders put their most optimistic attitude front and center, the conditions in Japan are still very much in a state of flux. For now, most of the damage has been contained, but the risk of complete meltdown of any one of the three badly-damaged reactors is still prevalent, which is why the attitude of the American traders and investors may be a bit premature.
Besides the nuclear plant situation, conditions on about a third of the main island remain challenging and desperate. Aid is only now reaching some of the victims, the death toll continues to mount and reconstruction is still weeks and months from even beginning. The scope of the devastation is being underplayed by American media. This is a disaster that will play out over months and years, not days and weeks.
The major indices still suffered substantial losses, though they easily could have been worse. The intra-day drops of the past two days have broken through support areas - areas that will be retested before any hint of a rally occurs.
Dow 11,855.42, -137.74 (1.15%)
NASDAQ 2,667.33, -33.64 (1.25%)
S&P 500 1,281.87, -14.52 (1.12%)
NYSE Composite 8,092.11, -101.85 (1.24%)
Declining issues slaughtered advancers, 5101-1536. There were 23 new highs on the NASDAQ, but those were overshadowed by 134 new lows. On the NYSE, only 29 stocks hit new highs, while 77 made new lows. This was the 4th consecutive day of new lows beating new highs on the NASDAQ and the second in the last four for the NYSE.
From a technical perspective, the high/low readings are beginning to develop into a trend, which, if confirmed by further continuation, will produce one of the strongest directional indicators to be found. The divergence of new highs and new lows normally becomes a long trm trend, lasting anywhere from six months to more than two years as it is a primary trend indicator. While there are no hard and fast rules surrounding that particular metric, any change lasting more than a week in duration should be confirmation of the new direction of the markets, in this case, down.
What is occurring inside the US markets is very much the result of too much money in the system. Today's action in global markets was a liquidity-driven event, as assets of all nature were liquidated in favor of the relative safety of cash. Since the Federal Reserve has been pumping money out at an unprecedented rate, today's sudden drop and subsequent rally has all the characteristics of a flooded market with an unstable or unreliable base.
It's very much the same as an old car that has trouble starting and running. A jump may get the batteries to deliver enough juice to get it rolling, but problems inside the engine cause it to stall out again. Fixes are short-term, before a mechanic says the engine needs a complete overhaul.
That is precisely the situation in US markets. The issues coming from Japan are masking real, structural problems below and the daily new highs vs. new lows on the NASDAQ are flashing warning lights that many are ignoring at the peril of their capital.
Volume was extremely high today as well, another bearish indication.
NASDAQ Volume 2,371,639,000
NYSE Volume 5,944,351,500
What made matters even more convincing that the drops in global markets were driven by a rush for liquidity were evident in commodities. WTI crude oil futures were absolutely hammered, losing $4.01, to $97.18. We can only hope that the world-wide community can see the oil market for what it really is - bloated with excessive supply and wildly overpriced as compared to real economic conditions - and continue selling it off until balance is restored at around the $75-85 per barrel level.
Gold was hit hard as investors raced into cash positions, losing $32.10 on the day, to 1,392.80, but down much more in earlier trading. Silver also took a substantial hit, off $1.72, to $34.12.
Once there is some clarity to Japan's situation, the precious metals should continue their interrupted rally, or, at the worst, outperform stocks in a big way.
There's still far too much uncertainty in the world to be fooling with paper assets unless you're a skilled day-trader who can afford to take occasional large losses. For the rest of us, the safety and security of gold and/or silver are second to none.
Monday, March 14, 2011
Japan Disaster Dominates Markets
The general perception of the disaster in Japan - caused by a massive 9.0 earthquake and the resultant tsunami - is, as it should be, one that measures the human tragedy above the resultant damage to property and goods. Surely the people whose homes have been either crumpled by the force of the quake or simply washed away by the flooding sea waters face unknown futures.
It is still too early to tell how the government in Japan will deal with the now-homeless residents of the region most-affected, but the initial response has been less-than-heartening. The most glaring examples of ineptitude and unpreparedness have come in the form of communications surrounding the still-unfolding nuclear disaster, the third leg of the crisis and possibly the most severe.
Whether it is unwilling or simply unable to assess the situation at the various reactors that have been damaged, the government's response has been self-contradictory and incorrect at worst or unreliable and confusing at best. What is known is that two reactors at the Fukushima facility have suffered irreparable damage, suffered explosions and possibly begun to partially melt down. Radioactive gasses have been released both on purpose and by accident, though the danger of a full-blown nuclear nightmare still exists, despite many reports to the contrary.
Barring complete and concise factual information, a commodity in quite short supply in the island nation, there is simply no way of knowing exactly the conditions on the ground. As nuclear power events go, this one is still closer to the beginning than the end, though many experts are hopeful that the unstable rods can be quieted with a combination of sea water and boric acid. In any case, reactors #1 and #3 at the facility are kaput, with #2 also reportedly damaged.
An evacuation zone of some 20 kilometers suggests the release of radiation into the atmosphere has already gone well beyond a dangerous level to making the area in a 12-mile radius of the plant temporarily uninhabitable, as is the situation along miles of coastal land subsumed by the tsunami.
Capital and financial markets have done their level best to downplay the short and long term effects of the total disaster, though they too are fishing in a deep and muddied stream of information. There are still too many unknowns to make critical assessments and business decisions. One thing is for certain, that the costs will run much higher than initial estimates of $180 billion. Close to 10% of Japan's population has been directly affected, while the rest of the population has, and will, suffer tangential effects.
To a country as small - geographically - as Japan, this disaster is a game-changer. Even in well-protected Tokyo, there's incidental damage to personal property in addition to a high emotional toll, which would be a mistake to underestimate.
Being one of the largest economies in the world, though one of the least stable, Japan will recover and rebuild, but the effort will take years, not months, after the effects have long since dropped off the top of the news. That's why the markets probably will be unsettled to lower for the near term. The issues facing the Japanese people have the potential to have long-reaching effects into the global economy.
As such, stocks were off world-wide with a few exceptions; the Nikkei was down more than 6%.
In New York, the major indices reversed Friday's gains with a gap-down open, plunged through the morning, settled at resistance and gained into the close, though the effort was more day-trading than anything else. Volume was lower even than Friday, bordering on being one of the slowest trading days of the year.
Dow 11,993.16, -51.24 (0.43%)
NASDAQ 2,700.97, -14.64 (0.54%)
S&P 500 1,296.39, -7.89 (0.60%)
NYSE Composite 8,193.96, -54.57 (0.66%)
Losers backed down winners by a pretty healthy degree, 4416-2088. On the NASDAQ, new lows topped new highs for the third straight session, 75-33. Over on the NYSE, new highs narrowly nipped new lows, 37-30. It is advised to keep a close eye on the daily new highs/lows, because the markets are in flux and seeking direction. It's still looking like a 65-70% probability that the markets have already made a turn and the dominant direction for the next six to eighteen months will be lower.
NASDAQ Volume 1,810,942,250
NYSE Volume 4,571,130,500
Commodities were affected by the Japan disaster, though to a much smaller degree. Front end crude oil on the NYMEX spent most of the day under pressure, but ended up with a marginal gain of just 3 cents, at $101.19. Between the reduced demand in Japan and the still-unsettled situation in the Middle East, prices could go either way, but the trend seems to be following global trends lower.
Gold was up $3.10, to $1,424.90, but silver shed 10 cents, to $35.84. Both of the dominant precious metals are trading near record highs, consolidating for another leap forward. Any major global event of consequence will send both gold and silver off like bottle rockets, though with the momentum already built in, no further catalyst is really needed, as the continual, non-stop printing of fiat dollars, yen, yuan and euros is providing more than enough fuel for the PM fire.
Markets don't get much more distorted and unpredictable than when a major natural disaster unfolds. Putting that on top of an already shaky foundation and wasteful stimulus is a witches brew of unknowable mystical monetary force.
It is still too early to tell how the government in Japan will deal with the now-homeless residents of the region most-affected, but the initial response has been less-than-heartening. The most glaring examples of ineptitude and unpreparedness have come in the form of communications surrounding the still-unfolding nuclear disaster, the third leg of the crisis and possibly the most severe.
Whether it is unwilling or simply unable to assess the situation at the various reactors that have been damaged, the government's response has been self-contradictory and incorrect at worst or unreliable and confusing at best. What is known is that two reactors at the Fukushima facility have suffered irreparable damage, suffered explosions and possibly begun to partially melt down. Radioactive gasses have been released both on purpose and by accident, though the danger of a full-blown nuclear nightmare still exists, despite many reports to the contrary.
Barring complete and concise factual information, a commodity in quite short supply in the island nation, there is simply no way of knowing exactly the conditions on the ground. As nuclear power events go, this one is still closer to the beginning than the end, though many experts are hopeful that the unstable rods can be quieted with a combination of sea water and boric acid. In any case, reactors #1 and #3 at the facility are kaput, with #2 also reportedly damaged.
An evacuation zone of some 20 kilometers suggests the release of radiation into the atmosphere has already gone well beyond a dangerous level to making the area in a 12-mile radius of the plant temporarily uninhabitable, as is the situation along miles of coastal land subsumed by the tsunami.
Capital and financial markets have done their level best to downplay the short and long term effects of the total disaster, though they too are fishing in a deep and muddied stream of information. There are still too many unknowns to make critical assessments and business decisions. One thing is for certain, that the costs will run much higher than initial estimates of $180 billion. Close to 10% of Japan's population has been directly affected, while the rest of the population has, and will, suffer tangential effects.
To a country as small - geographically - as Japan, this disaster is a game-changer. Even in well-protected Tokyo, there's incidental damage to personal property in addition to a high emotional toll, which would be a mistake to underestimate.
Being one of the largest economies in the world, though one of the least stable, Japan will recover and rebuild, but the effort will take years, not months, after the effects have long since dropped off the top of the news. That's why the markets probably will be unsettled to lower for the near term. The issues facing the Japanese people have the potential to have long-reaching effects into the global economy.
As such, stocks were off world-wide with a few exceptions; the Nikkei was down more than 6%.
In New York, the major indices reversed Friday's gains with a gap-down open, plunged through the morning, settled at resistance and gained into the close, though the effort was more day-trading than anything else. Volume was lower even than Friday, bordering on being one of the slowest trading days of the year.
Dow 11,993.16, -51.24 (0.43%)
NASDAQ 2,700.97, -14.64 (0.54%)
S&P 500 1,296.39, -7.89 (0.60%)
NYSE Composite 8,193.96, -54.57 (0.66%)
Losers backed down winners by a pretty healthy degree, 4416-2088. On the NASDAQ, new lows topped new highs for the third straight session, 75-33. Over on the NYSE, new highs narrowly nipped new lows, 37-30. It is advised to keep a close eye on the daily new highs/lows, because the markets are in flux and seeking direction. It's still looking like a 65-70% probability that the markets have already made a turn and the dominant direction for the next six to eighteen months will be lower.
NASDAQ Volume 1,810,942,250
NYSE Volume 4,571,130,500
Commodities were affected by the Japan disaster, though to a much smaller degree. Front end crude oil on the NYMEX spent most of the day under pressure, but ended up with a marginal gain of just 3 cents, at $101.19. Between the reduced demand in Japan and the still-unsettled situation in the Middle East, prices could go either way, but the trend seems to be following global trends lower.
Gold was up $3.10, to $1,424.90, but silver shed 10 cents, to $35.84. Both of the dominant precious metals are trading near record highs, consolidating for another leap forward. Any major global event of consequence will send both gold and silver off like bottle rockets, though with the momentum already built in, no further catalyst is really needed, as the continual, non-stop printing of fiat dollars, yen, yuan and euros is providing more than enough fuel for the PM fire.
Markets don't get much more distorted and unpredictable than when a major natural disaster unfolds. Putting that on top of an already shaky foundation and wasteful stimulus is a witches brew of unknowable mystical monetary force.
Friday, March 11, 2011
World Down, Americas Up, Why?; What BTFDYFI Means
The devastation form the largest ever recorded earthquake in Japan is pretty severe. Markets worldwide sold off, all of them, in uniform fashion, except for those in the Western Hemisphere.
Why?
Good question, and the only plausible response available is that the US and Western Hemisphere gains comparative advantage for any other global setbacks that aren't in our immediate physical hemisphere, though it's probably not quite that simple.
The US, Canada, Mexico and South America surely aren't isolated in any manner from Japan. Devastation there will have a negative effect to some degree on global trade. The real difference here is that US markets are not free, not liquid and prone to machinations of madmen like the one who sits as Chairman of the Federal Reserve Corporation (a Delaware corporation). The other markets - in particular the Canadian and Brazilian markets; Mexico was down sharply - are actually in our global proximity and economic sphere of influence, so it is likely that once events in Japan had been digested and recognized as not a huge problem for the US, the marketeers went to work with the zero-interest rate free money on hand and BTFD.
(Those not well-versed in the acronym world of high finance, BTFD stands for Buy The F---ing Dip. BTFDYFI stands for Buy The F---ing Dip You F---ing Idiot.)
And so it is. Stocks ended the week with nice gains on a day that millions of Japanese people have suffered tremendous personal and financial losses. It takes a really cold indifference to human suffering to buy stocks in the face of devastating circumstances. Fortunately, there were not many people doing that; volume on the major exchanges was severely thin. Only the worst of Wall Street - meaning insiders from major banks, brokerages and hedge funds - were in on the dip-buying today. Hopefully, they will be richly rewarded with losses in coming days.
Dow 12,044.09, +59.48 (0.50%)
NASDAQ 2,715.61, +14.59 (0.54%)
S&P 500 1,304.28, +9.17 (0.71%)
NYSE Composite 8,248.53, +48.46 (0.59%)
Gainers turned the tables on losers, 3861-2613. New lows out-polled new highs on the NASDAQ, 71-31, but the result was just the opposite on the NYSE, with 32 new highs and 19 new lows.
NASDAQ Volume 1,825,802,625
NYSE Volume 4,237,853,500
The day was more eventful for commodities. Crude oil on the NYMEX front futures contract fell $1.54, to $101.16, as the Middle East's "day of rage" turned out to be more a stroll through the city square than full-throated protestations. Maybe the Arabs with government grievances should hire a few of the rent-a-thugs from Wisconsin, since they are no longer needed there.
Gold and silver got a boost on rumors that a furtherance of the Fed's easy money policies were in the bag. Gold, after trading lower through the early portions of the New York session, finished with a gain of $9.30, at $1,421.80. Silver, under similar circumstances, shot up 87 cents, to $35.94. The confidence of precious metals holders and traders is extremely high and rising. while there may be occasional setbacks along the way, the only way for the metals to go is higher, probably much higher, doubling or tripling in value from here over the next three to five years, though especially silver, which underperformed gold in the 2000s, but is quickly making up for lost time.
At last, we arrive at the weekend, with the major indices suffering roughly 1% losses for the week. The trend apparently having reversed over the past few weeks, remember that it is your friend.
Enjoy the NCAA conference tournaments this weekend and get ready for some wild action on the courts and in the markets in weeks ahead.
Why?
Good question, and the only plausible response available is that the US and Western Hemisphere gains comparative advantage for any other global setbacks that aren't in our immediate physical hemisphere, though it's probably not quite that simple.
The US, Canada, Mexico and South America surely aren't isolated in any manner from Japan. Devastation there will have a negative effect to some degree on global trade. The real difference here is that US markets are not free, not liquid and prone to machinations of madmen like the one who sits as Chairman of the Federal Reserve Corporation (a Delaware corporation). The other markets - in particular the Canadian and Brazilian markets; Mexico was down sharply - are actually in our global proximity and economic sphere of influence, so it is likely that once events in Japan had been digested and recognized as not a huge problem for the US, the marketeers went to work with the zero-interest rate free money on hand and BTFD.
(Those not well-versed in the acronym world of high finance, BTFD stands for Buy The F---ing Dip. BTFDYFI stands for Buy The F---ing Dip You F---ing Idiot.)
And so it is. Stocks ended the week with nice gains on a day that millions of Japanese people have suffered tremendous personal and financial losses. It takes a really cold indifference to human suffering to buy stocks in the face of devastating circumstances. Fortunately, there were not many people doing that; volume on the major exchanges was severely thin. Only the worst of Wall Street - meaning insiders from major banks, brokerages and hedge funds - were in on the dip-buying today. Hopefully, they will be richly rewarded with losses in coming days.
Dow 12,044.09, +59.48 (0.50%)
NASDAQ 2,715.61, +14.59 (0.54%)
S&P 500 1,304.28, +9.17 (0.71%)
NYSE Composite 8,248.53, +48.46 (0.59%)
Gainers turned the tables on losers, 3861-2613. New lows out-polled new highs on the NASDAQ, 71-31, but the result was just the opposite on the NYSE, with 32 new highs and 19 new lows.
NASDAQ Volume 1,825,802,625
NYSE Volume 4,237,853,500
The day was more eventful for commodities. Crude oil on the NYMEX front futures contract fell $1.54, to $101.16, as the Middle East's "day of rage" turned out to be more a stroll through the city square than full-throated protestations. Maybe the Arabs with government grievances should hire a few of the rent-a-thugs from Wisconsin, since they are no longer needed there.
Gold and silver got a boost on rumors that a furtherance of the Fed's easy money policies were in the bag. Gold, after trading lower through the early portions of the New York session, finished with a gain of $9.30, at $1,421.80. Silver, under similar circumstances, shot up 87 cents, to $35.94. The confidence of precious metals holders and traders is extremely high and rising. while there may be occasional setbacks along the way, the only way for the metals to go is higher, probably much higher, doubling or tripling in value from here over the next three to five years, though especially silver, which underperformed gold in the 2000s, but is quickly making up for lost time.
At last, we arrive at the weekend, with the major indices suffering roughly 1% losses for the week. The trend apparently having reversed over the past few weeks, remember that it is your friend.
Enjoy the NCAA conference tournaments this weekend and get ready for some wild action on the courts and in the markets in weeks ahead.
Thursday, September 16, 2010
Wheels Coming Off Global Economy
Today may have been a watershed day for the demise of the global economy. There were any number of troubling events - most of which were completely overlooked by the computers making trades on US markets - that signal a major event could decouple governments from their economies, people from their money, banks from credits, and on and on...
Take, for instance, the activity in the Forex markets, where the Bank of Japan decided to intervene for the first time in six years, to keep the Yen from appreciating. The intervention actually took place on Wednesday, but it's effects will be far-reaching and continual. All currencies are seeking levels at which they can find comfort in trade - cheap imports, value on exports - but, not everybody can have it their way, obviously. These kinds of things lead to crises, political, economic and sometimes military.
But that's probably not going to get too many people worked up. Maybe the thought of foreclosures on the rise might suffice. The banks are apparently trying to manage the foreclosure process, in other words, slowing it down so that they don't create a glut of homes on the market and cause prices to fall even further.
It's a gamble that isn't likely to work out, however. Prices do what they're supposed to do. Mismanaged properties sell for less. Homes which were overpriced to begin with will find their correct level. Despite what the bankers holding most of the mortgages (Bank of America) believe, Americans are smarter than they think, and with an economy suffering from 20% real unemployment, keeping prices suspended artificially is probably more wishful thinking than prudent planning.
The real estate market has gone through this before, as in the past two years the flood of foreclosures was partially stemmed by various government programs and tax bribes, modifications and work-outs. Home prices fell precipitously, nevertheless. So, as with anything having to do with banks these days, we offer a hearty, "good luck with that!"
How about thinking ahead a bit, like how much you'll be taking in every month when you're retired? The news there isn't very rosy either. Here's a report that offers the sobering conclusion that at the end of 2008 (hey, that was almost two years ago!), public pension funds were experiencing a shortfall of anywhere between $1 Trillion and $4.4 TRILLION! That's a lot of money that people are unlikely to be receiving in their "golden years."
But, that's just the start of it. Of the more than 1700 publicly-traded companies which operate pension plans for employees almost all of them are seriously underfunded. "The assets of corporate pensions relative to their deficits, known as the funded ratio, fell to 70.1% in August..." says a report by the Milliman 100 Pension Funding Index.
And that's without even looking at Social Security or Medicare, both systems hopelessly bankrupt and already bleeding red ink. When baby-boomers begin retiring in droves in the next two to five years, the systems will be beyond repair and likely need major modifications, such as no COLA, raised retirement ages and lower benefits. (Ed. Note: Being 56 myself, this doesn't make me necessarily happy, though my choice to not pay into any kind of pension plan and avoid SS tax at all costs now seems a prudent maneuver.)
OK, had enough? How about chewing on an arcane document of the American Monetary Institute from 2004, delivered by Director Stephen Zarlenga to the British House of Lords, which outlines, among other things, how government issuing money (not the Federal Reserve, a private bank), without the backing of gold or silver, has been the most fruitful.
This shoots major holes in the argument that "gold is money," and a true store of value and all the other clap-trap that have made gold the most speculative, over-priced commodity on the planet. As I and some non-gold-infused friends like to say, "you can't eat a gold bar and you can't buy a candy bar with it", or, "try buying a loaf of bread with a Kruggerand. Ypu've have better luck buying the whole bakery."
So much for the bad news. There was some good news, somewhere, but nobody seemed able to locate it. Nonetheless, the computers trading US stocks (You do know that 70% of all trades are executed without human involvement, don't you?) managed to issue forth another split decision, with the Dow and NASDAQ up, but the S&P and NYSE down, that, in itself, troubling. market divergence is almost always a telling sign that a correction isn't far off. Making matters more complex and compelling, trading volumes were down to absurdly low levels once again, running at a rate 30% below last year.
Dow 10,594.83, +22.10 (0.21%)
NASDAQ 2,303.25, +1.93 (0.08%)
S&P 500 1,124.66, -0.41 (0.04%)
NYSE Composite 7,169.48, -10.31 (0.14%)
In opposition to the benign headline numbers, declining issues pounded advancers, 3419-2260. The number of new highs to new lows remained static and statistically insignificant, at 308-48.
NASDAQ Volume 1,703,297,625
NYSE Volume 3,354,712,000
Crude oil futures were slammed down $1.45, to $74.57, but gold made another all-time high, at $1,271.90. up $5.20. Silver kept climbing in stride, up 20 cents, to $20.74.
Now, if there's anything we should have learned from first, the tech bubble of the late 90s and second, the housing bubble of the 2000s, that when the object of the bubble is advertised heavily on TV - remember Pets.com? How about 125% home equiy loans? - it's usually safe to say the asset is overpriced and due for a fall. It happened with tech stocks. It happened with houses, so it's probably going to happen with gold (and probably silver) because of the rampant number of ads telling us to buy gold, cash in our gold and get gold or cash in some manner. It's a mania, pure and simple. Gold and silver have increased in value by 400% or more over the past decade. When will it end? Nobody really knows, but buying at these nosebleed levels is the stuff of fools. Real estate looks much better, especially if you're assigned to the basic tenet of all investing, "buy low, sell high."
Take, for instance, the activity in the Forex markets, where the Bank of Japan decided to intervene for the first time in six years, to keep the Yen from appreciating. The intervention actually took place on Wednesday, but it's effects will be far-reaching and continual. All currencies are seeking levels at which they can find comfort in trade - cheap imports, value on exports - but, not everybody can have it their way, obviously. These kinds of things lead to crises, political, economic and sometimes military.
But that's probably not going to get too many people worked up. Maybe the thought of foreclosures on the rise might suffice. The banks are apparently trying to manage the foreclosure process, in other words, slowing it down so that they don't create a glut of homes on the market and cause prices to fall even further.
It's a gamble that isn't likely to work out, however. Prices do what they're supposed to do. Mismanaged properties sell for less. Homes which were overpriced to begin with will find their correct level. Despite what the bankers holding most of the mortgages (Bank of America) believe, Americans are smarter than they think, and with an economy suffering from 20% real unemployment, keeping prices suspended artificially is probably more wishful thinking than prudent planning.
The real estate market has gone through this before, as in the past two years the flood of foreclosures was partially stemmed by various government programs and tax bribes, modifications and work-outs. Home prices fell precipitously, nevertheless. So, as with anything having to do with banks these days, we offer a hearty, "good luck with that!"
How about thinking ahead a bit, like how much you'll be taking in every month when you're retired? The news there isn't very rosy either. Here's a report that offers the sobering conclusion that at the end of 2008 (hey, that was almost two years ago!), public pension funds were experiencing a shortfall of anywhere between $1 Trillion and $4.4 TRILLION! That's a lot of money that people are unlikely to be receiving in their "golden years."
But, that's just the start of it. Of the more than 1700 publicly-traded companies which operate pension plans for employees almost all of them are seriously underfunded. "The assets of corporate pensions relative to their deficits, known as the funded ratio, fell to 70.1% in August..." says a report by the Milliman 100 Pension Funding Index.
And that's without even looking at Social Security or Medicare, both systems hopelessly bankrupt and already bleeding red ink. When baby-boomers begin retiring in droves in the next two to five years, the systems will be beyond repair and likely need major modifications, such as no COLA, raised retirement ages and lower benefits. (Ed. Note: Being 56 myself, this doesn't make me necessarily happy, though my choice to not pay into any kind of pension plan and avoid SS tax at all costs now seems a prudent maneuver.)
OK, had enough? How about chewing on an arcane document of the American Monetary Institute from 2004, delivered by Director Stephen Zarlenga to the British House of Lords, which outlines, among other things, how government issuing money (not the Federal Reserve, a private bank), without the backing of gold or silver, has been the most fruitful.
This shoots major holes in the argument that "gold is money," and a true store of value and all the other clap-trap that have made gold the most speculative, over-priced commodity on the planet. As I and some non-gold-infused friends like to say, "you can't eat a gold bar and you can't buy a candy bar with it", or, "try buying a loaf of bread with a Kruggerand. Ypu've have better luck buying the whole bakery."
So much for the bad news. There was some good news, somewhere, but nobody seemed able to locate it. Nonetheless, the computers trading US stocks (You do know that 70% of all trades are executed without human involvement, don't you?) managed to issue forth another split decision, with the Dow and NASDAQ up, but the S&P and NYSE down, that, in itself, troubling. market divergence is almost always a telling sign that a correction isn't far off. Making matters more complex and compelling, trading volumes were down to absurdly low levels once again, running at a rate 30% below last year.
Dow 10,594.83, +22.10 (0.21%)
NASDAQ 2,303.25, +1.93 (0.08%)
S&P 500 1,124.66, -0.41 (0.04%)
NYSE Composite 7,169.48, -10.31 (0.14%)
In opposition to the benign headline numbers, declining issues pounded advancers, 3419-2260. The number of new highs to new lows remained static and statistically insignificant, at 308-48.
NASDAQ Volume 1,703,297,625
NYSE Volume 3,354,712,000
Crude oil futures were slammed down $1.45, to $74.57, but gold made another all-time high, at $1,271.90. up $5.20. Silver kept climbing in stride, up 20 cents, to $20.74.
Now, if there's anything we should have learned from first, the tech bubble of the late 90s and second, the housing bubble of the 2000s, that when the object of the bubble is advertised heavily on TV - remember Pets.com? How about 125% home equiy loans? - it's usually safe to say the asset is overpriced and due for a fall. It happened with tech stocks. It happened with houses, so it's probably going to happen with gold (and probably silver) because of the rampant number of ads telling us to buy gold, cash in our gold and get gold or cash in some manner. It's a mania, pure and simple. Gold and silver have increased in value by 400% or more over the past decade. When will it end? Nobody really knows, but buying at these nosebleed levels is the stuff of fools. Real estate looks much better, especially if you're assigned to the basic tenet of all investing, "buy low, sell high."
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