Showing posts with label NAR. Show all posts
Showing posts with label NAR. Show all posts

Wednesday, March 21, 2012

US Economy an Express Train to Nowhere

Where to begin...

Let's start with housing, which continues to be a complete bugaboo for the friends of the Fed (FOF), meaning governments at all levels, financial institutions, public sector employees (overpaid, irresponsible), welfare and entitlement recipients and anybody who spends beyond their means.

This morning, the NAR released their almost-fully-discredited monthly report on existing home sales, which, despite marvelous weather across most of the country, fell 0.9% in February as compared to January's figures. The NAR was quick to point out that sales rose 8.8% from a year earlier to a seasonally adjusted annual rate of 4.59 million.

Median prices were nearly flat, at $157,100, just 0.1% higher than February 2011.

It wasn't such a disheartening report, overall, but points to the idea that any uptick in activity is usually short-lived and not sustainable. Prices have remained mired in the mud, and, with interest rates on mortgages rising recently, March may have come in like a Lamb, weather-wise, but it may go out like a hungry lion in terms of real estate.

Then there was the brilliantly-timed commentary by Goldman Sachs chief global equity strategist, Peter Oppenheimer, titled "The Long Good Buy" which postulates that "the prospects for future returns in equities relative to bonds are as good as they've been in a generation."

Not to throw much cold water (a bathtub of ice might be more appropriate) on this particular bit of financial wisdom, but Mr. Oppenheimer and his buddies at the giant squid must think the muppets are prime for a fleecing. Stocks have not been at these current levels for more than 3 1/2 years, the major indices have pretty much doubled since the bottom of March '09 and he thinks NOW, today is a good time to buy stocks?

Not to be too pushy or overburdened with facts, but isn't the oldest bit of market timing knowledge to buy low, sell high? Oppenheimer seems to want to stand that time-worn adage on its head, which, considering the extent to which Goldman Sachs will go to defraud the public, the government and even its own clients, is about par for the course. (A video, assessing the relative value of Mr. Oppenheimer's call appears at the end of this post.)

As far as stocks are concerned, they are currently stalled out at high levels and while they floated along in bifurcated fashion through most of today's session, there was some significant selling pressure at the close. It probably means nothing, but if you think a quick selloff in stocks at the end of the day is a sure sign to buy more gold and silver, nobody around these parts is going to do anything to dissuade you from that line of thinking.

As usual, volume was unseen and at levels indicating a lack of interest, sponsorship or near-panic, but we've been over that bridge too many times already. Let it just be said that there are many, many, many fewer individual investors playing stocks than there were five years ago. Some went broke, some profited but are scared to death of the markets, others are merely awaiting a return to normalcy, something that isn't likely to occur until there's a crash, a credit "event", a war or something very ugly to shake the stranglehold of the banksters and politicians to their core.

Doug Casey offers three variations on the definition of a depression, plus some valuable insights in an interview, titled Doug Casey on the Illusion of a Recovery. It's an intelligent read. (Hint: Doug likes gold)

Dow 13,124.62, -45.57 (0.35%)
NASDAQ 3,075.32, +1.17 (0.04%)
S&P 500 1,402.89, -2.63 (0.19%)
NYSE Composite 8,219.33, -21.95 (0.27%)
NASDAQ Volume 1,551,352,875
NYSE Volume 3,534,241,000
Combined BYSE & NASDAQ Advance - Decline: 2776-2764
Combined BYSE & NASDAQ New highs - New lows: 174-32
WTI crude oil: 107.27, +1.20
Gold: 1,650.30, +3.30
Silver: 32.23, +0.39

Monday, February 27, 2012

Dow 13,000. Fail. G20 Wants $2 Trillion Firewall; 1% Tip from a One-Percenter

Today was another in a seemingly-endless series of ridiculously small gains or losses for stocks, but, if one looked at the major indices early in the day, one would have thought any kind of gain or even getting close to unchanged was out of the question.

Stocks sold off right at the open, but suddenly, miraculously, once the Dow bottomed out with a 100-point loss, the entire market reversed and headed higher.

Some of the commentary surrounding the market reversal seem to suggest that it was due to the NAR's release at 10:00 am ET of pending home sales, which witnessed a 2% gain in January. Such commentary should be immediately dismissed as pure rubbish, for a number of reasons, the first being that real estate is such a small sliver of the US economy - and generally divorced from stocks - that the number doesn't move the Dow 120 points. Also, the January gain comes on the back of a 1.9% decline in December, and the warm weather this winter likely threw off all of the NAR's seasonable adjustments.

Probably the utmost reason that the theory concerning the move upward for the Dow being caused by pending home sales should be disregarded is that the bottom and subsequent move higher occurred 15 minutes before the NAR news. The Dow was already nearly 40 points off the bottom by 10:00 am.

No, the turnaround was more than likely the result of pump-priming by a gang of primary dealers, who, in a lightly-traded market, as this is, have more than enough firepower to move stocks in any direction they please, and the current pleasure is being positive, as it almost always is. The idea that the the major brokerages and big banks would like to engender more participation from individual investors, who have lost faith in Wall Street since the financial crash of '08 and haven't returned, is real, and the best way to get investors back in the mood - in the small minds of big bankers - is to manufacture rallies, such as the current one, which is about a 25% move since the start of October.

The trouble for the bankers is multitudinous. Nobody believes in their ways of doing business; there isn't enough disposable income in most households to really consider stocks as investments; there are too many headwinds, like Greece, the rest of Europe, Iran, high gas prices, lingering unemployment and more, and; the market sure looks toppy at this juncture.

Lastly, volumes for the better part of the last two months have been nothing but pathetic. Today was more of the same, so trying to entice individual investors back in is akin to finding volunteers for cliff diving. It looks dangerous, and nobody wants to go first.

To get an idea of how stalled out this market has become, consider that on Friday, February 17, the Dow closed at 12949.87 and today at 12,981.51. That's a move of less than 32 points in five days, and the repeating pattern of being down in the morning only to rally at some unknown time - though also in the A.M. - isn't exactly an inspiring feature.

So, after spending most of the day above the 13,000 mark on the Dow, the cheerleaders at CNBC will have to root again tomorrow, for the seventh day in a row.

Over the weekend, financial representatives of the G20 nations met in Mexico and came up with the notion that Europe needs to erect a $2 trillion financial "firewall" to keep its contagion from spreading. That's all they seem to know how to do, these top-level bureaucrats, spend money to keep Europe's debt conflagration from inflicting collateral damage. Next time you hear the word "firewall" your response should be "stupid," because a firewall, by definition, is purposely set up to keep everything enclosed. In other words, anything inside the firewall will burn to a crisp. The term, and the idea are almost as revolting and ignorant as the much-bantered-about term, "ring-fence."

Now that the globalist elitists have their global economy and things aren't going so well, they want to revert to feudalism. Well, at least, via their ancestry, it's something they actually understand.

And, finally here's a story about a one-percenter, a rich banker, leaving a waitress a - you guessed it - a one percent tip. Talk about callous.

Dow 12,981.51, -1.44 (0.01%)
NASDAQ 2,966.16, +2.41 (0.08%)
S&P 500 1,367.59, +1.85 (0.14%)
NYSE Composite 8,143.56, -8.41 (0.10%)
NASDAQ Volume 1,761,845,125
NYSE Volume 3,492,574,750
Combined NYSE & NASDAQ Advance - Decline: 2682-2894
Combined NYSE & NASDAQ New highs - New lows: 230-25
WTI crude oil: 108.56, -1.21
Gold: 1,774.90, -1.50
Silver: 35.52, +0.19

Wednesday, February 22, 2012

Greek Debt Prison; Real Estate's Bogus Stats and Obama's Phantom Recovery

Let's Just Pretend.

That's what Wall Street, the EU and the central bankers of the world want you to do. Pretend.

Pretend there is a way out for Greece. Pretend that the US economy is growing, that the debtsof all nations will eventually be paid off through the magic of "growth," that your future, and that of your kids' will be secure.

None of it is true. The headlines from the likes of Reuters, Bloomberg and Dow Jones only parrot what the elite bankers and corrupt governments feed them. Journalism died during the Bush administration of the 2000s. The rule of law is being killed every day by the likes of the AG settlement, the non-prosecution of anybody involved in the mortgage/robo-signing/foreclosure scams and the constitution has been marginalized by congress and presidential orders.

What makes it even more frightful is that it seems to worsen every day. No statistics can be trusted and the words coming from the mouths of politicians ring hollow and void.

Take just a few of today's news items for instance. President Obama - to great fanfare - proposed new tax rates for businesses in the US. Never mind that they have less chance than Lindsay Lohan giving up drinking of ever being signed into law. Sure, they sound good (if by good you mean that the government is somehow entitled to the ridiculous amount of 28% of you company's net profits), but they will be twisted and broken and flailed about by a congress that knows nothing better than obfuscation, ridicule and deceit.

Then take a look at the January's existing home sales figures released by the NAR. Again, the trumpets blared that real estate is recovering, with the month's sales up 4.2% from December to an unadjusted 4.57 million, annualized (why do they annualize these figures in an age in which numbers can be recorded and crunched in an instant? It's easier to FAKE them that way.). Never mind that distressed properties boosted the number materially or that the rate of deals falling through continues to rise or that mortgage applications fell again this week.

But wait a minute. Last month's number was 4.61 million... Well, that was revised down to 4.38 million. So, that gain in December actually turned out to be a decline. Next month, the NAR can revise the January number down too, so that February shows a gain. It's a con. A shell game. And the American public is the mark.

And then there's the Greek deal, the third bailout for the nation in the past two years. It's not enough that the EU is "loaning" them another $172 billion ($130 billion Euros), but this one comes with various strings attached, such as a special account that requires Greece to pay its creditors before paying its own expenses; a permanent monitoring task force from the European Commission; private investors forced to eat 53.5% of the money they've already loaned (and are not getting back); drastic cuts to pensions, the minimum wage, defense spending, healthcare and public sector jobs; and more.

With these new conditions, Greece, for all intents and purposes, is no longer a sovereign state. Rather, it is a debt-slave, a ward of the European Union. Obviously, centuries of in-breeding among Europe's elite ruling class has taught them well how to subjugate the will of the masses.

But maybe there's hope. Since the signing of the Greek deal on Monday, stocks in Europe have done nothing but decline. There is little faith among professional investors that this arrangement will result in anything more than a temporary reprieve and an ultimate default.

In the US, stocks wandered around for the second straight day, though this time they finally bit the bullet and had to fall. Not by much, but any decline in stocks is a blow to the monied interests and they seem worried about Greece, about the price of gas and about the economy in general. And the volume was again absurdly low, because nobody but the banks, hedge funds and HFTs are playing.

They might even begin to worry that people are sick and tired of being lied to and are beginning to wake up.

Wake up, America. How much longer can these charades continue?

Dow 12,938.67, -27.02 (0.21%)
NASDAQ 2,933.17, -15.40 (0.52%)
S&P 500 1,357.66, -4.55 (0.33%)
NYSE Composite 8,094.39, -21.03 (0.26%)
NASDAQ Volume 1,676,971,875
NYSE Volume 3,608,714,750
Combined NYSE & NASDAQ Advance - Decline: 2032-3589
Combined NYSE & NASDAQ New highs - New lows: 162-24
WTI crude oil: 106.28, +0.03
Gold: 1,771.30, +12.80
Silver: 34.25, -0.18

Friday, December 23, 2011

Merry Christmas Traders, Winners, Losers and Sitters

Stocks extended the Santa Claus Rally on the last trading day before Christmas, as there was light trading and not a peep out of Europe, which seems to have settled down after the ECB generously granted about $639 billion in loans to over 500 banks in the region. Additionally, many European stock exchanges and all US stock exchanges will be closed On Monday, in observance of Christmas (which actually falls on Sunday).

A couple of sets of economic data were released prior to Friday's open. Durable Goods Orders showed a 3.8% gain in November, but the number was drastically reduced when transportation was excluded, knocking the gain down to a disappointing 0.3%. Also troubling was the lowered capital spending by businesses, which was down for the second month in a row.

Personal income and personal spending showed gains of 0.1%, both disappointments.

According to the Commerce Dept. new home sales for November were up 1.6%, to an annualized rate of 315,000, an all-time low, coming after last year's dismal showing of 323,000 new homes sold. The small gain pushed the number of new homes on the market to an all time low as home builders have found few takers and even fewer who could qualify for mortgages.

In conjunction with the existing home sales from the National Association of Realtors (NAR) that came out on Wednesday, the housing market continues to show the damage done by the 2008 financial collapse and the now-five-year-long housing bust. The NAR also revised their existing home sales figures from 2007 to 2010 down 14.3%, citing errors in the collection of data, including double listings, a decline in for sale by owners and house flipping.

November sales rose 4% from the previous month and 12.2% from a year ago, though the figures are now much lower than what was previously expected. With the revisions, the NAR acknowledged that the housing slump has been longer and deeper than previously thought.

And, in Washington, the Republican House backed down and decided ot pass the stupid two-month extension of the social security contribution reduction. Good Grief!

Merry Christmas and good night.

Dow 12,294.00, +124.35 (1.02%)
NASDAQ 2,618.64, +19.19 (0.74%)
S&P 500 1,265.33, +11.33 (0.90%)
NYSE Composite 7,518.66, +57.91 (0.78%)
NASDAQ Volume 970,584,500
NYSE Volume 2,226,056,500
Combined NYSE & NASDAQ Advance - Decline: 3491-2108
Combined NYSE & NASDAQ New highs - New lows: 193-42
WTI crude oil: 99.68, +0.15
Gold: 1,606.00, -4.60
Silver: 29.08, +0.04

Tuesday, March 23, 2010

Stocks Climb to Fresh Highs; Housing Still Slumping

I'll begin where I left off yesterday. My final words were:

"Wall Street will continue to trade in what it knows best: equities. And until there comes an alternative, they will continue to rise."

I have now no doubt attained the status of a genius, but I cannot explain the explosiveness of today's venture into equity-land, but I'll attempt to make some sense of it.

Stocks, without alternatives, will no doubt provide positive returns. Since there are few alternatives in today's environment - real estate is a mess, bond returns are paltry, art is illiquid, over-priced and risky - all the money is going into stocks.

Partially to blame for Wall Street's current bubbly stock markets is the near-complete meltdown in the mortgage securitization market. It's a two-pronged attack that has virtually frozen the market for what just 5 years ago was the whitest-hot money machine in the world.

First, Fannie Mae and Freddie Mac have already announced that they would be prepaying a large number of soured loans. In other words, investors will be paid a lump sum - the remaining principal - on loans delinquent by more than 120 days, decimating their long-term value and consistent cash flow. Once these and other quasi-federal agencies own the loans, they're combing through them, looking for discrepancies and hammering the banks that issued them. One such instance is a recently-filed lawsuit by the Federal Home Loan Bank of San Francisco, seeking $5.4 billion from the usual suspects including Deutsche Bank; Bear Stearns; Countrywide Securities, a division of Countrywide Financial (now Bank of America); Credit Suisse Securities; and Merrill Lynch (also Bank of America).

So, where's the money? And, where's it going? Simply put, there must be a lot of mortgage investors out there sitting on large chunks of cash, because Fannie and Freddie have no doubt begun the process of prepayment. Stuck in the middle are the large banks which originated the mortgage melee in the first place, having first to pay back investors and then, sweat out the heat from the G-men scouring the bad loans for errors, omissions or outright fraud.

It doesn't require a huge leap of faith to believe that both the investors who have been made whole (Here's a dirty little secret, though: those investors, including the banks servicing the loans, don't get hurt from day 1 when a mortgagor defaults if it's a Fannie or Freddie loan. The agencies make the payments) and the banks, each looking for places to make money might dip a toe into equities. The banks would no doubt be the more aggressive and the parties with more money to move, which makes the recent rally all that more suspect.

Loads of liquidity are thus fueling the stock market rally, and, as usual, the Fed is sitting on its hands, watching the bubble inflate. With the NASDAQ already back to the level before the economic collapse of 2008 and the Dow and S&P fast approaching theirs, shouldn't the Fed be raising interest rates to slow down the rampant speculation?

You'd think so, but the Fed is in a box. Any rate hike - even a tiny 25 basis points - would kill the stock rally. Worse, it would likely touch off discussions of the broader economy and the unseemly truth that jobs aren't being created, banks aren't lending and most consumers are still stretched pretty thin. Even worse, all of the recently-issued government debt would begin to cost more to service. The Fed is quite literally dammed if they do and dammed if they don't, but the Wall Street money-grabbers are having a field day.

The sorriest part of the story is going to be the ending, other than the idea that most small investors haven't fully participated in the most recent money party. They are still too scared of the markets after the horrifying events of 2008.

Major banks and brokerages are now in nearly-complete control of the stock markets, so they're not trustworthy. Most of the current financial commentary resides somewhere below the ethereal, along the lines of, "this or that stock is up; it must be a good buy."

The oldest adage on the Street is to buy low and sell high. Since the Dow was languishing around 6600 a year ago and today its closing in on 11,000, even a third-grader would know that now is not the optimum time to buy stocks.

During the housing boom, the attitude filling the balloon was that housing prices would always go up. We know how wrong that was. Now, it appears that stocks will continue to rise. I remain on the bearish side of that statement, awaiting the eventual collapse. We have gone too far, too fast.

Dow 10,888.83, +102.94 (0.95%)
NASDAQ 2,415.24, +19.84 (0.83%)
S&P 500 1,174.17, +8.36 (0.72%)
NYSE Composite 7,478.76, +59.74 (0.81%

Advancers pounded decliners, 4550-1942. New highs exploded to 757, to just 73 new lows. Volume was actually good, especially on the NASDAQ.

NYSE Volume 4,955,676,500
NASDAQ Volume 2,305,962,750

Oil drifted 31 cents higher, to $81.91. Gold also was up $4.20, to $1,103.50. Silver gained 9 cents, to $17.01. All three commodities remain stuck in a range they've maintained for close to 9 months.

The National Association of Realtors (NAR) announced that existing home sales slipped 0.6% nationally for the month of February, but that inventory of unsold homes rose 9.5%, the largest jump in 20 years. The increase is due to banks finally releasing some of their foreclosure inventory onto the market and the overall lack of qualified buyers.

The sales rate improved in the Northeast and Midwest, but fell in the South and West, which has generally been the story for the past two years.

Better? That's a no.

Tuesday, December 22, 2009

Another New NASDAQ Top; S&P Follows; Dow Lags

Anyone who thinks that technology companies aren't leading the market should just take a look at a comparison 1-year chart of the three major indices. Not only did the NASDAQ suffer a smaller decline (by about 5%), it has outperformed the Dow by 20% and the S&P by almost the same amount. Thus, it was no surprise that the tech-heavy index broke out further to new 14-month highs for the second straight day. The S&P followed along to a new 2009 and 14-month high as well, while the Dow gained, but is still 36 points below the closing top of 10,501.05 on December 14, that being just more than a week ago, the Dow stocks can be excused for their lack of enthusiasm, though not for long.

Today was also another day in which the US dollar rose and so did stocks. It appears that the overt efforts of central bankers to break down the dollar carry trade has been successful. Just a few weeks ago, the Dollar Index had broken down to long-term lows below 74.50. Today, when the stock markets were finished with their funny business, the index stood close to 78.30, a nifty 4.8% move in just over three weeks, which is a powerful rally for a currency. A look at the "Dixie" chart reveals that the move was predictable. with a triple bottom at 18-month resistance in the 74.25-74.45 area. The lows of 2008 - in the 72 range - now appear to be well in the past, a very positive sign that a strong US recovery is well underway.

That stocks have begun to trend higher on days of dollar strength is another very positive development and is actually the normal way US equity and currency markets usually operate. The risk trade of the recent past - at least we believe it to be unwinding - may have been a useful tool in economic revival, whether planned or unplanned. The cheap currency allowed nearly risk-free investment in hammered down US stocks, spurring economic growth from the inside out. If there's any validity to supply side economics - the jury's still out on that one - money should begin flowing (trickling, as they say) to Main Street any day now, in the form of a less-strident consumer, job creation and capital flows to small business. We can hardly restrain our excitement!

The one item that supply siders always fail to mention is that for all their praise and devotion to the "Reaganomic doctrine" are the outsize federal deficits which accompany their economic boom. The Reagan years were marred by the same lower levels of government receipts as today's, though this time the borrowing by Treasury has been much higher, for a longer period and aided by the Federal Reserve through their policy of quantitative easing. Digging the federal government out of a $12 billion (and growing) hole is going to take some time and the resultant higher stealth tax rates (read: Medicare, Social Security and marginal increases to the wealthiest Americans) are likely to be a burden for years to come. Or, the government could just keep on spending and borrowing, which seems to be the preferred practice in congress, as it not only keeps the economy floating along on a mountain of debt, it works wonders for re-election campaigns.

Eventually, the debt will either have to be paid down or repudiated, a term which usually comes along just prior to another nasty utterance, war. Owing oodles of money to the Chinese, it seems almost inevitable that we'll come to blows with our Far East creditors, though likely in a proxy fight in some place like Africa, Afghanistan or some other remote area which neither party really wants. Of course, there is another way. The world currencies could be - in fact, they constantly are - recalibrated to reflect more realistic exchange rates. Besides the US, Europe also has berated the Chinese recently about devaluing the Yuan, mostly to deaf ears. The Chinese know they are now in control of global economic destiny and they're not about to take second best. The best we can hope for is continued prosperity and that our business and political leaders grin and bear it. After all, life in the USA is still pretty top-notch for the majority of folks.

By the way, in case you're confused about the difference between the Yuan and the Renminbi, there isn't one. It's called the Yuan on international circuits, but the term "Renminbi" means "the people's money," so, in China that's how it's known.

Dow 10,464.93, +50.79 (0.49%)
Nasdaq 2,252.67, +15.01 (0.67%)
S&P 500 1,118.02, +3.97 (0.36%)
NYSE Composite 7,184.18, +37.03 (0.52%)

On the day, advancing issues managed to clamber over decliners, 4009-2497. New highs remained ahead of new lows, 459-100, though there have been more new lows appearing by the day, a sign that stocks are beginning to top out rather severely. With the rally on a nine-month run, the past two have hardly been stellar, and making new tops seems to be almost more struggle than it's worth, unless, of course, you're smart enough to be in the right stocks. Volume was slow again, as it should be. There's only one more full session - tomorrow - before Christmas and a three-day break in the action.

NYSE Volume 4,196,486,000
Nasdaq Volume 1,751,327,250

Commodities were mixed as colder weather encouraged buying in the energy complex, with oil up 88 cents, to $74.60. Gold continued to fall, losing $9.30, to $1,086.70. Silver followed along diligently, dropping another 4 cents in value, to $17.00.

Prior to the open, the government released its third and final revision to 3rd quarter GDP, which came in at 2.2%, something of a disappointment, as the prior readings were 3.5% (advance estimate) and 2.8% (second). As it turns out, GDP grew, but by something on the order of 60% less than we were originally told. That the advance estimate was politically-sensitive is likely, but so is this revision, guiding expectations lower in order to deliver better-sounding results when 4th quarter results are announced on January 29, 2010. That appears to be how this administration wishes to play the game, so one should not be too amped up when 4th quarter GDP comes in around 3.0%.

The NAR announced that existing home sales for November stood at an annual rate of 6.54 million units, up 7% from October. Prices are still falling, albeit slower than they have been, down 4.3% from the same month a year earlier.

Wednesday, August 8, 2007

More Manipulation in Stocks

The US equity markets are beginning to take on theater of the absurd qualities, and Wednesday's trading patterns were possibly even more ridiculous than any of the preceding week.

Looking solely at the Dow Jones Industrial Average, here's how the day went. Stocks were higher right out of the gate and continued in an orderly climb until peaking, up 190 points, just prior to 2:30 pm. Then, without warning and without any notable news event, the index retreated to break even at just before 3:30.

A drop of 190 points in an hour? Well, we've seen gains of that magnitude in the same time frame, so why not?

Alarmed, the government meddlers from the PPT (Plunge Protection Team, aka, the President's Working Group on Financial Markets) quickly swung into action, sending the index soaring to a close 153 points higher. Sweet. Brilliant. Bravo. Bulls**t.

This market is now being so openly gamed that the players aren't even trying to disguise their moves. The whole operation is designed to keep the public in the dark and avoid panic selling in the face of a serious credit squeeze and the imminent collapse of certain financial institutions. What we are not seeing behind the scenes - and probably will be covered up neatly in SEC filings (yes, they will lie), are billions of dollars being lost, wasted, fondled and otherwise misused in derivative markets, forex trades, futures and other odd-ball, shadowy "investment" vehicles. We may never know exactly what is occurring.

Dow 13,657.86 +153.56; NASDAQ 2,612.98 +51.38; S&P 500 1,497.49 +20.78; NYSE Composite 9,746.20 +140.13

What we do know, beyond any doubt, is that the markets are being pulled, kicking and screaming, to the upside by agents of the government, acting "in our best interest" on our (formerly) free, open market exchange.

Investors should be at the height of outrage, but this kind of thing has happened before and will happen again. Most casual observers will never even look at a one day chart of the Dow, the NASDAQ or any other index for that matter. Most don't even look at charts of the stocks they own, whether they be in mutual funds or owned individually.

The general public is being taken as fools and rightfully so. They are.

It's barely worth commenting on anything in this rigged market, since fundamentals, reports and sound investment strategies no longer matter. The markets are going to continue to rise until the next election, Democrats and honest investors be dammed. All is well. Look away now.

The spectacular gains of the past three days (465 points on the Dow) are all the more disturbing in the face of the slumping housing market, though the National Association of Realtors (NAR) announced today that median home prices would fall less sharply than previously expected (1.2% instead of 1.4%). Tell that to sellers in Ventura, California or Vero Beach, Florida. The NAR is interested in keeping prices higher, so their credibility should also be called into questioned.

Advancers trounced decliners for a change, by a 9-2 margin, but new lows were again well above new highs, 636-358. The "players" made a lot of money going long today, though they still were unable to lift all of the sinking ships.

Speaking of rigging, oil lost 27 cents in futures trading, closing at $72.15. Gold was up $4.00 and silver added 8 cents to 13.17. There's still time to buy the metals!

Wednesday, July 25, 2007

Rigged Rally

Any doubt that the US stock markets have been, are being or can be manipulated was put to rest today at precisely 3:00 p.m. Eastern time. It was at that moment that the Dow Jones Industrials climbed an extraordinary 50+ points in just over one minute. There was no news, no report issued that would move the market, only the covert actions by groping, free market fondlers. called the 3:00 jump a "technical trade," which is a good substitute for "we don't know," and the Fed's Beige Book was released at 2:00, not 3:00, but maybe it took a while to digest.

In any case, the final result was a healthy gain for the Dow, with the other indices tagging along.

Dow 13,784.50 +67.55; NASDAQ 2,648.17 +8.31; S&P 500 1,518.09 +7.05; NYSE Composite 9,930.36 +20.41

Other than the faux late-day rally, it was really a see-saw session with the markets initially buffeted by stellar earnings reports from Amazon (AMZN) and Boeing (BA), then battered by the National Association of Realtors' (NAR) existing Home Sales for June, which came in well below estimates, suggesting that, considering the current malaise in the housing market, those estimates might want to be a little less optimistic going forward.

It was the worst showing for housing in roughly 4 1/2 years, though that in itself should not have been much of a surprise.

Elsewhere, companies were churning out 2nd quarter earnings reports, and some actually weren't all bad.
  • Xerox (X) beat estimates by a penny, but was pounded lower by 1.10 (nearly 6%).

  • Colgate-Palmolive (CL): Excluding restructuring charges, net income in the most recent quarter was $457.5 million, or 84 cents per share. Analysts expected earnings per share of 84 cents.

  • ConocoPhillips (COP) posted income, excluding extraordinary items, of $4.8 billion, or $2.90 a share, compared with $5.2 billion, or $3.09 a share, during the second quarter of 2006. The results were well above the $2.68 analyst expectations.

  • Freeport-McMoRan Copper & Gold (FCX): On the acquisition of rival Phelps Dodge in March and increased metal pricing, net income after paying preferred dividends rose to $1.10 billion, or $2.62 per share, from $367 million, or $1.74 per share, a year ago. Revenue surged to $5.81 billion from $1.43 billion last year. Analysts surveyed by Thomson Financial were looking for profit of $2.71 per share on revenue of $5.27 billion.
  • GlaxoSmithKline (GSK): Pretax profit was flat at £1.896 billion -- compared with £1.897 billion a year earlier -- and was ahead of analysts' consensus expectations of £1.833 billion. Net profit rose to £1.36 billion from £1.34 billion a year earlier.

  • Apple (AAPL): (After the close) For fiscal 2007 third quarter ended June 30, 2007, posted revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. These results compare to revenue of $4.37 billion and net quarterly profit of $472 million, or $.54 per diluted share, in the year-ago quarter.

The story beyond the headline numbers was in stark contrast. Decliners beat advancing issues by a 3-2 ration, and new lows swamped the market, beating new highs by 630-134 (no, that's not a misprint).

Oil posted huge gains on the NY Mercantile Exchange, with crude up a massive $2.32 to $75.88. So, square those facts and numbers with a nearly 70-point rise on the Dow... really, try it.

Gold was hammered down $11 to $673.80, with silver losing 29 cents to close at $13.15.

More hijinks are in store for certain tomorrow, as new home sales figures for June are released and another 400+ companies roll out earnings reports.