Showing posts with label Jeremy Grantham. Show all posts
Showing posts with label Jeremy Grantham. Show all posts

Thursday, November 11, 2010

Grantham Calls Fed Manipulator; Cisco Cramps Tech

Many of us in the business of watching and reporting on the markets and money make light of CNBC - and for good reason - but sometimes, as in Maria Bartiroma's interview below with Jeremy Grantham, they bring to light some of the more terrifying aspects of our world, such as, as Grantham sates, without prodding, "the Fed has spent most of the last fifteen, twenty years manipulating the stock market."

Wow! Now, if anybody has taken issue with my frequent claims that US stock markets are manipulated, I urge them to take it up with Sir Grantham, one of the world's brightest and most influential economic minds. Since my views - often called radical or conspiratorial - mirror his, then maybe it's time people begin paying just a little more attention to the dangers we face now, in the near term and in our long-term future.

Please, please, please, watch the video, at least the first ten minutes. We should all be protesting against the Fed and the do-nothing congress. Sadly, most of America is either too misinformed by our compromised mainstream media, or completely uninformed, or too busy trying to make ends meet in an economic climate that is crushing the middle and lower classes, to do anything.

Keeping up on the recurrent theme of "oligarchies versus the people," protests in Germany have driven police forces close to their breaking point. The German people are fed up with government and media lies. Americans would be well-advised to keep up with events in Europe as a precursor to what will - when it's already too late - eventually happen here.

German people in unprecedented rebellion against government: 1000 injured in protests in nuclear protests: police at breaking point

As for the markets, the crooks were in early today, snatching up shares as the market opened at session lows. This is surely a sign of manipulation, as trapped sellers were forced out of stocks while the organized crime gang quietly bought at reduced prices. The NASDAQ, as a case n point, was down 44 points within the first seven minutes, but gradually gained ground all day.

The poor open was due largely to Cisco (CSCO), which reported earnings after the close on Wednesday, and had a generally good quarter, but CEO John Chambers drastically cut forecasts which sent the stock to 17-month lows, closing down 16% for the day at 20.52. The volume - 10 times normal - accounted for much of the high volume figure on the NASDAQ. It was an absolute tech bloodbath and Chambers' remarks a full repudiation of the markets and all discussion of US economic recovery.

The closing prices marked the third down day out of the past four, a condition not seen since August. Stocks are on track to post their first weekly loss in nine weeks, though with the first of many injections of liquidity by the Fed beginning tomorrow, nobody really can tell if stocks are headed lower or if the Fed intervention will save the day and the week.

The Fed's QE is such a mammoth distortion ($105 billion through December 9 just for openers) that it's difficult to tell traders that stocks are overvalued, some wildly so. It will have to be played out according to the whims and whirring of the computer algos which direct most (upwards of 70%) of the trading. The grand experiment begins in earnest tomorrow with a $6 billion injection of phony money, created at the press of a button at the Federal Reserve.

Dow 11,283.10, -73.94 (0.65%)
NASDAQ 2,555.52, -23.26 (0.90%)
S&P 500 1,213.54, -5.17 (0.42%)
NYSE Composite 7,723.24, -24.22 (0.31%)

Declining issues hammered advancers, 4191-2217, though it could have been much worse. Decliners led advancers by a margin greater than 3:1 in the early going before the machines caught onto the inherent buying opportunity. The gap between new highs and new lows continued to narrow, with 349 new highs and 73 new lows. Volume was poor on the NYSE, but, as mentioned above, higher on the NASDAQ due to the outlandish trading in Cisco.

NASDAQ Volume 2,467,640,250
NYSE Volume 4,389,113,000

Oil closed completely flat at $87.81, but the precious metals got back to their appreciative ways. Gold printed at $1409.90, a gain of $6.50, while silver posted a solid 62 cent gain, to $27.76. There is no holding back silver at this point. A price of $30 by year's end is almost baked in, with most experts in the market viewing $45-50 as a target for 2011. It's possibly the most misunderstood commodity on the planet and still trades at an enormous discount to gold, far outside historical norms of 15-17 times.

Today being Veteran's Day, bond markets were closed, so there may have been more of a focus on equities than normal. That said, if you haven't already done so, treat a veteran kindly today or remember those who have served and gone on to greener pastures. They sacrificed for the sake of their fellow man, a calling of which there is no higher honor.