Weak Jobs Number; Worst In Six Years Rattles Market

At the end of the day, the weakest jobs number since 2010 didn't deter stock traders much, though the damage was more severe earlier in the session, another carbon copy of the previous two, with a deep drop at the open, followed by relentless pumping towards the positive.

While Friday's effort left much to be desired, it has now become all-too-obvious that there is no such thing as a fair and open market in US stocks, especially in the face of negative economic data. The federal government and agents of the Fed are adamant about painting a rosy picture of the economy, even though the metrics - especially manufacturing and non-farm payrolls this week - are using a strikingly different palette.

The 38,000 new jobs created in May, as reported by the BLS, was miles below the consensus estimate of 164,000 and gives the Fed much more thinking material as concerns a rate hike, which now appears to be off the table for June, at the very least.

What the number suggests is that despite all the howls from the president, his advisors and others on TV, the economy is in a precarious state, not one in which overheating is even a remote possibility. This would be no time to raise interest rates.

While stocks held their own during a tumultuous week, Friday saw gold and silver rally back, perhaps an indication that all is really not well in the kingdom of Obama.

On The Week:
Dow: -66.16, (-0.37%)
S&P 500: +0.07 (0.00)
NASDAQ: +9.01 (+0.18)

For the Day:
S&P 500: 2,099.13, -6.13 (0.29%)
Dow: 17,807.06, -31.50 (0.18%)
NASDAQ: 4,942.52, -28.85 (0.58%)

Crude Oil 48.90 -0.55% Gold 1,246.50 +2.80% EUR/USD 1.1366 0.00% 10-Yr Bond 1.70 -5.91% Corn 418.25 +0.72% Copper 2.12 +2.42% Silver 16.44 +2.59% Natural Gas 2.76 -0.54% Russell 2000 1,164.14 -0.55% VIX 13.47 -1.17% BATS 1000 20,677.17 0.00% GBP/USD 1.4515 0.00% USD/JPY 106.5450 0.00%

Fed Keeps QE at Full Throttle, Stocks, Markets Still Unhappy; ADP Misses

In September, when everybody thought the Fed was going to announce a scaling-back of their $85 billion-a-month bond buying bonanza, stocks rallied when they did nothing.

Today, when the Fed did exactly what the market expected, keeping the bond buying going full force with no mention of "tapering," stocks sold off, extending a decline that started in slow motion shortly after the opening bell.

It's probably asking too much to try and comprehend exactly what the algos or stock pickers were reading in the FOMC tea leaves, because a commitment by the Fed to continue easy money policies is exactly the best reason for equities to rise. Chalk it up to profit-taking by the slickest of the slick, on an old, "buy the rumor, sell the news" scenario.

As we've stated recently, stocks should continue to rise through the end of the year and beyond, being that there are now some unwritten rules in the market that say stocks can't decline during the Christmas season, there must be a "Santa Claus Rally" and a "New Year Rally."

So, despite this little blip of a disturbance in the force, investors should be good to go unless something really awful happens, like the economy suddenly shows unequivocal signs of strengthening.

OK, OK, stop the laughter. we all know that the economy is stuck in neutral since the Fed programs of QE and ZIRP are only beneficial to the top 1% of earners, those people you and I will never get to know personally, and that the government is going to do everything in its powers to see to it that the economy stumbles along at about 1.5-2.0% GDP growth, just enough to keep the recession dogs off the porch.

Investors and markets will digest today's losses and decide, around midnight tonight, that tomorrow morning would be a great time to add to their positions or open new ones in some of the more speculative, momentum stocks. That's really the mantra and it doesn't get any simpler.

In case nobody noticed, the October ADP jobs report showed that employment continued its gradual slowdown, adding just 130,000 net new private sector jobs - and revised September's 166,000 gain down to 145,000 - all blamed conveniently on the 16-day government shutdown earlier this month. Never mind that these are PRIVATE sector jobs and government is in the PUBLIC sector. Whatever scapegoat is available, that's the one that gets the blame.

As this missive is being prepared for publication, the president is pleading with less-than-enthusiastic supporters that the Affordable Care Act (ACA, or, ObamaCare) is going to work and actually good for America, despite all indications to the contrary.

You have officially entered the bizarro-zone and there is no escape if you keep watching the teevee.

Buy stocks. Can't miss.

Dow 15,618.76, -61.59 (0.39%)
Nasdaq 3,930.62, -21.72 (0.55%)
S&P 500 1,763.31, -8.64 (0.49%)
10-Yr Bond 2.53%, +0.02
NYSE Volume 3,486,428,250
Nasdaq Volume 1,795,014,125
Combined NYSE & NASDAQ Advance - Decline: 1596-4053
Combined NYSE & NASDAQ New highs - New lows: 487-42
WTI crude oil: 96.77, -1.43
Gold: 1,349.30, +3.80
Silver: 22.98, +0.491
Corn: 430.25, -1.75 (new 52-week low)

OK, Back to Work, Slaves! S&P Hits All-Time High

Grateful that the shutdown is behind us, President Disingenuous could help but take a victory lap with a press conference this morning (Why is he always late? Very annoying.) reminding all the faithful citizens that those overpaid, barely-stressed government workers are patriot and essential. Funny, we thought they furloughed the non-essential ones. And, yes, they're all getting paid for the two weeks they didn't work.

Oh, well.

People better get straight with this and quick. The debt limit was NOT increased, it was SUSPENDED, the President now having authority to issue as much debt as he pleases, unless congress disapproves via a joint resolution - which the president would veto - and the congress would need a 2/3rds majority to override, which, with the current makeup on congress, is all but impossible.

So, essentially, there is no debt limit any more, thanks to provisions in the bill supported by Mitch McConnell (that's right, numbskulls, there's no Red team or Blue team, just one team) and signed into law by the supine congress on Wednesday, October 16, 2013.

That explains why the president, when asked last night if we'll be doing this all over again in three months, quickly turned on his heels while heading for the exit after his presser, and replied simply, "No."

This also explains quite a bit about how things actually operate in the capitol. They scare us to bejeezus, and then, in the dead of the night, right before their artificial deadline, when everybody is zoned out from boredom or anxiety, throw in language that subverts and changes the way they do business.

From here on out, the president can just run the tab up as high as he likes, and congress won't make a peep about it, because, as they'll surely tell us, they can't muster the votes to override a veto. Essentially, the United States no longer has a debt limit or debt ceiling, call it what you like. It has been suspended.

Read the actual bill: http://www.cnn.com/interactive/2013/10/politics/senate-shutdown-deal/index.html

Nice job, for government work.

PS: We're screwed.

On the other hand, we all might take this advice: Why I Stopped Worrying and Learned to Love the Currency Collapse

Dow 15,371.65, -2.18 (0.01%)
Nasdaq 3,863.15, +23.71 (0.62%)
S&P 500 1,733.15, +11.61 (0.67%)
10-Yr Bond 2.59%, -0.08
NYSE Volume 3,433,423,500
Nasdaq Volume 1,931,481,625
Combined NYSE & NASDAQ Advance - Decline: 4282-1351
Combined NYSE & NASDAQ New highs - New lows: 554-41
WTI crude oil: 100.67, -1.62
Gold: 1,323.00, +40.70
Silver: 21.95, +0.582
Corn: 443.00, +0.25

Government Shutdown Day 8: Overcoming Fears and Tears

Are average Americans ready for the fight of their lives, one which could, quite literally be for their lives?

Surely, many are unprepared. Most have little or no savings, don't have basic survival skills, wouldn't know a dandelion (good food) from a jimson (poisonous) and many rely heavily on the federal government as their lifeline.

THE WELFARE STATE OF THE USA IS ABOUT TO END.

Read that again, you disability recipients, welfare check hoarders, farm subsidy leeches, overpaid government employees, social security dependents, corporate tax cheaters, food stamps suckers, members of the House of Representatives, Senators and Mr. President.

Friends, Romans, countrymen, lend me your ears. I come not to bury Obama, but to praise him.

Clear out the biases already developed over his illegitimacy, stupidity, narcissism, etc., for a moment and hear me out. Mr. President is doing the best thing that we, holders of gold and silver with stores of guns, ammo and food, could have ever hoped for by refusing to negotiate over either the shutdown or the debt ceiling, holding the strawman Obamacare over everyone's heads.

Isn't a severe downsizing of the US government and destruction of the Federal Reserve what we have longed for these past five, six years? Obama is bringing it to us, albeit in a haphazard manner, although one might suspect that such earth-shaking events don't happen neatly, anyway.

By refusing to negotiate on anything, in addition to having unblinking adversaries in the House of Representatives (our beloved Tea Partiers), the president, with an assist from congress, has already partially shut down the government and has paved the way for a no-win condition over the debt ceiling. The genii in the White House (aka Jack Lew and his buddies) and at the Fed have no doubt already figured out the next moves. When the debt ceiling debate fails to produce a responsible result, the government will begin to prioritize spending, paying off creditors first (interest on the debt), and probably Social Security and military pay (not necessarily in that order) next, and so on down the line.

The US federal government can, and will, proceed in this manner for quite some time, slimming down, shutting agencies, cutting budgets by blunt force and actually becoming somewhat fiscally responsible. During this period, there will be considerable chaos, available to be exploited by none other than those of us smart enough to do so. Price discovery, for everything from real estate to peaches, will be a matter of making the best deal available, and many of us are adept at deal-making. Government employees may be furloughed, laid off or permanently disenfranchised, their pensions slashed, and other government programs (can you spell FARM SUBSIDIES?) will have to be eliminated in order to cut wasteful spending and/or increase revenue.

At the same time, the government will become more and more dysfunctional, having lost its most basic trapping of power, the consent of the governed, in many places, particularly large urban centers and deep rural communities. If martial law becomes the norm, how long and how well will that be enforced in a country chock-full of gun-toting, liberty-loving individualistic patriots and their new-to-the-party brethren?

There will be chaos. But eventually, there will be peace and a new understanding that the federal government is powerless over the needs of individual states, and even counties and other municipalities. A new form of feudalism or tribalism may be the result, but the bottom line is that the federal government will be a shadow of its former self, individuals and communities will forge new leaderships, apart and away from government, which will (and in many cases, already is) be viewed as not the solution, but the problem.

People will become more self-reliant, industrious and unburdened by regulations and authority. A new America will emerge, one that is less-centralized, more progressive (I know that's a dirty word to some), less encumbered by regulation and overall, more free, and freedom is what America is all about.

Let's get behind our president. NO NEGOTIATIONS. Keep chanting. Keep the government closed. Begin the process of downsizing and prioritizing spending. Stop borrowing. How will the Fed issue new debt-money if the Treasury can't borrow? There will be progress against the Federal Reserve, but not victory, until we rise up and smite them, refuse their fiat and return to a gold standard or gold/silver standard.

Real money. And all because the politicians played a game of chicken which neither can win.

We all have reasons to doubt or criticize the president, but, maybe, just maybe, he's willing to risk his reputation and his life in order to be the transformational figure he promised. I know it's a stretch, but maybe he's a wickedly wise politician and playing the banksters for all they're worth, willing to shut down the government and destroy the economy in order to save it all. What comes out the other side is largely up to him, but also well within our grasp.

THIS is OUR MOMENT. Carpe Diem!

Both Obama and House Speaker Boehner took to the podium today and made courtesy remarks, but still haven't met. Short-attention span theater continues. The markets began to worry in earnest, the major indices closing at the lows of the session. The A-D line continued to deteriorate, with losers outpacing gainers by a 9-2 margin and new lows exceeded new highs for the first time since mid-August.

The market is beginning to roll over. The phony leaders are running out of time. The world won't end, but the obtrusive, invasive, bloated, absurd federal government is creaking, cracking and about to fall over.

Good times, indeed.

Dow 14,776.53, -159.71 (1.07%)
Nasdaq 3,694.83, -75.54 (2.00%)
S&P 500 1,655.45, -20.67 (1.23%)
10-Yr Bond 2.64% 0.00
NYSE Volume 3,546,719,000
Nasdaq Volume 2,037,821,875
Combined NYSE & NASDAQ Advance - Decline: 1085-4474
Combined NYSE & NASDAQ New highs - New lows: 95-101
WTI crude oil: 103.49, +0.46
Gold: 1,324.60, 0.50
Silver: 22.44, +0.057
Corn: 441.75, -7.50

Stocks End Worst Month Since May 2012; Odds on Syria Strike; Despite Kerry Rhetoric, Still no Proof

We end the month of August on an oddly-down note, since Secretary of State John Kerry made an impassioned speech about the need to punish the Assad regime in Syria for alleged chemical strikes against its own people, but still did not offer any substantive proof that those loyal to the embattled president of Syria were responsible for the attacks.

Odd, it was, that stocks did not rally in patriotic fervor over going to war, insofar as any action the president may take against Syria is entirely without authorization from congress and decidedly unconstitutional. But, in the politics of the new American dictatorship under president Obama, such trifles as the War Powers Act and the constitution - to say nothing of the American public's 91% disapproval of any action being taken against Syria - count for nil when the stakes are so politically high.

Thus, we present the odds for the timing of missile strikes - "tailored" ones, using the president's own vernacular:
Friday (prior to 12:00 pm EDT): 7-5
Saturday: even
Sunday: 4-1
Monday: 7-1
No strike: 40-1

Stocks ended the most brutal month since May of 2012, spurred to the downside first, by talk of tapering by the Fed and general fear, second, by talk of military action from the Obama administration. The time for talk being essentially over, it is expected that Damascus will be in flames shortly, the Fed will nip about $10-15 billion off its monthly bond-buying binge by the end of September and stocks will continue their trajectory to the downside.

On the day, the Russell 2000 and Dow Transports were mashed fairly substantially, and, despite some fierce tape-painting in the final five minutes of trading (about 40 Dow points), stocks finished the week with their third loss in the past five sessions.

For the week - in which the Dow closed lower for the fourth straight week (first time this year) - the Dow Industrials were down 200.20 points, the NASDAQ shed 67.92 and the S&P 500 was nipped for 30.53 points, a pretty severe decline.

Microsoft (MSFT) was the only Dow component to finish positive for the month.

Now we await the weekend's entertainment: College Football and Bombing Syria.

What could be better?

Dow 14,810.31, -30.64 (0.21%)
NASDAQ 3,589.87, -30.43 (0.84%)
S&P 500 1,632.97, -5.20 (0.32%)
NYSE Composite 9,270.70, -45.12 (0.48%)
NASDAQ Volume 1,229,340,500
NYSE Volume 3,001,316,500
Combined NYSE & NASDAQ Advance - Decline: 1822-4668
Combined NYSE & NASDAQ New highs - New lows: 55-73
WTI crude oil: 107.65, -1.15
Gold: 1,396.10, -16.80
Silver: 23.46, -0.627

Hard Times for America and the World; Harder Choices for Americans

Today, we stand at an important crossroad of history.

The United States is about to make one of the greatest strategic blunders of all time, even after lessons should have been learned from military misadventures in Afghanistan and Iraq.

With support from congressmen and congresswomen from both sides of the aisle, the current administration is preparing to plunge the United States into another Middle East military conflict, centered on the civil war - that is none of our business and serves no national interest - in Syria.

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.

-- Ernest Hemingway

Recently-appointed Secretary of State, John Kerry, kicked off the relentless banging of war drums late Monday afternoon, with a press conference, highlighting America's "undeniable" evidence that the regime of Bashir Assad had used chemical warfare against its own citizens last week.

Kerry, one of the richest politicians in the world thanks to his marriage to Heinz heiress, Teresa Heinz in 1995, spoke of "additional intelligence" which would indicate that Assad was behind the chemical attack that killed hundreds in a Damascus suburb. Estimates had ranged to over 1000, but recent estimates fall between 150 and 355, which is the number of deaths quoted by Doctors without Borders.

Kerry said that this additional evidence would be released in coming days. In the meantime, the US has expressed concern that UN inspectors have not been given unfettered access to the attack site, which is contrary to published reports that the Assad government is complying with UN requests.

Additionally, Kerry made a comment, supposedly directed at Russia, but ostensibly aimed at anyone who believes the chemical attack was a "false flag" engineered by CIA or other undercover agents under direction from the United States, in order to heat up the situation and foment conditions for war in Syria.

Kerry said, "Anyone who can claim that an attack of this staggering scale can be contrived or fabricated needs to check their conscience and their own moral compass." However, Assad has repeatedly and steadfastly denied that his government was behind the attack. Besides, Assad has been seen as winning the civil war against home-grown rebels and outside agitators from the Muslim Brotherhood and groups associated with Al Queda, so there was no direct benefit for the use of chemical warfare, especially since President Obama said months ago that such use would "cross a red line."

In Kerry's "moral compass" statement, in response to words from the Kremlin that the situation mirrored that in Iraq, centered around non-existent weapons of mass destruction (WMDs) that led the US into war 10 years ago, lies the seed of disingenuousness.

In more genteel times, such as prior to 2001, such comments would not even be given an airing, but, since 9/11, and even before, the scenario has been set. Russian leader, Vladimir Putin, knows exactly which button to push in order to riase the ire of the US, and he is pushing them. As far as "strong evidence suggesting" (a term Kerry, and compatriots like Donald Rumsfeld, Dick Cheney and Colin Powell like to use) is concerned, there's a recurring pattern emerging out of Washington DC, starting with the Gulf of Tonkin incident which plunged us into the Vietnam War, to the events of 9/11/2001, around which skeptics still abound, to the Iraq invasion based upon what is now called "flawed intelligence," to the present condition in Syria.

It seems like every time the economy is in trouble (read on, there's more of that to come) or the US needs to exploit the resources of a weaker nation (Egypt and Libya come immediately and recently to mind), there's some "event" that brings out the president, the Secretary of State, various members of congress, especially war-mongers John McCain and Lindsay Graham rattling the sabers like medieval warlords.

The US is once again on the same path, with the media lapping it up and spitting it out to the trusting American public. These are truly the hardest of times, and the hardest of decisions face the American public just ahead. Will they continue to support these elected leaders who act more like psychopathic killers than men and women of judgement and compassion, or will Americans stand up and resist, though protests in the recent past have gone for naught because the media has been purchased in whole by the banking-political cartel and will not give protests their proper airing.

It is inconceivable in this day and age of an open internet and mass communications that governments be allowed to run roughshod over a country's constitution and its people, but that is precisely the path America is upon, and there seems to be little to apprehend the runaway war machine.

As for the market reaction to the beating war drums - or, maybe more precisely, the market condition aside from them - stocks have taken a severe beating over the first two sessions of the final week of August, with the NASDAQ in freefall, taking its biggest loss of the year on Tuesday, while the Dow, NYSE Composite and S&P 500 continue to plunge well below their 50-day moving averages. Meanwhile, the WTI oil price has spiked to six-month highs, gold and silver have returned to their traditional status as safe havens and are experiencing a bull market, and the recent rise in interest rates has been temporarily reversed.

While it may be easy to blame "war tensions" for the recent price declines, there's much, much more to the story, including whether or not the Federal Reserve will cut back its bond buying program (tapering) in September, the upcoming budget and debt ceiling debates - also in September and October - a potential collapse of the Italian government, a slowdown in housing, continuing high unemployment and the effects of Obamacare on the entire labor and health care complex.

Indications are already in place that the markets are taking a severe turn, possibly signaling an end to the 54-month-long bull run since March 2009. The Dow has lost nearly 900 points this month alone, ending in the red 13 of its last 17 sessions. The advance-decline line continues to deteriorate, today reaching a level of more than 4:1 losers to winners, and new lows slammed new highs yet again, a continuing, troublesome trend.

Weeks and months ahead could well become a turning point for the country, though there's a strong sentiment that the federal government, deeply in bed with the Wall Street bankers and global elite will continue a glide path to insolvency, decimating the middle class from both sides, by the rapacious practices of the upper class ("one percenters") while keeping the dregs of society quelled with bread and circuses (food stamps and football).

America has reached a greater incline on the slippery slope to serfdom and tyranny. This is a dangerous time, and each American must examine his or her conscience and decide which course of action is best for themselves and their families. These will not be easy decisions, but momentous even in singularity. America is being ripped apart by the powers at the top and there may be no reasonable means of stopping the carnage already underway.

Unfolding events in Syria and the wider Middle East, along with the operational side of the federal government may present the nation with veritable breaking points and an irreversible trajectory.

Dow 14,776.13, -170.33 (1.14%)
NASDAQ 3,578.52, -79.05 (2.16%)
S&P 500 1,630.48, -26.30 (1.59%)
NYSE Composite 9,288.11, -144.40 (1.53%)
NASDAQ Volume 1,570,917,625
NYSE Volume 3,629,879,250
Combined NYSE & NASDAQ Advance - Decline: 1236-5415
Combined NYSE & NASDAQ New highs - New lows: 43-106
WTI crude oil: 109.01, +3.09
Gold: 1,420.20, +27.10
Silver: 24.65, +0.641

Stocks Reverse Early Losses, Close Near All-Time Highs

Does it really matter why?

The Dow was down 116 points in early trading (9:45 am ET) after the monthly report on personal income and spending showed a modest (.02%) increase in spending but a 3.6% decline in income, the worst such loss in 20 years.

Futures markets had been pointing to a lower open to the first day of March, and the data exacerbated the condition.

However, stocks began to grind higher, eventually staying positive after turning into the green at noon. The remainder of the session was fairly undramatic, with traders speculating on just when the new all-time highs would be breached.

It's inevitable, no matter how bad the news is.

Meanwhile, the top clowns in Washington - Obama, Boehner, McConnell, Reid and Pelosi (the Fumbling Five) agreed to disagree about the sequester and allowed the cuts to happen, the president taking to the podium to announce the foolishness just before the lunch hour.

The it was off to the golf course for a quick round and afterward, martinis with the "in" crowd.

Ugh. Really, it's that bad.

On the bright side, the number of new 52-week lows has been slowly but steadily rising. Nothing close to parity yet, but it is a trend worth watching. One could make a case that the Dow and S&P might make new all-time highs just in time for a market reversal. After all, the current bull market is entering its 49th week with only one correction of more than 10% (August 2001), and as bulls go, this one's getting a bit long on the hoof.

Additionally, oil finished at its lowest price of the year, hovering just above $90 per barrel. Now, if that trend continues and translates into lower fuel prices, this sequestration idea might just turn out to be OK after all.

At the end of the week, a colleague pointed out this well-researched article which points up the real US debt. And you thought it was just $16.6 trillion.

Dow 14,089.66, +35.17 (0.25%)
NASDAQ 3,169.74, +9.55 (0.30%)
S&P 500 1,518.20, +3.52 (0.23%)
NYSE Composite 8,874.19, +5.48 (0.06%)
NASDAQ Volume 1,869,785,125
NYSE Volume 4,125,383,750
Combined NYSE & NASDAQ Advance - Decline: 3447-2852
Combined NYSE & NASDAQ New highs - New lows: 250-78
WTI crude oil: 90.68, -1.37
Gold: 1,572.30, -5.80
Silver: 28.49, +0.058

Washington Comes Alive Past Last Minute; Fiscal Cliff Averted... for Now; Wall Street Rejoices

Well, Money Daily was right. There was no fiscal cliff deal by midnight, December 31, 2012, but, those wily congress-critters once again outfoxed everyone by playing past the deadline and passing a bill that was, by and large, a deal, though it certainly didn't address any long-term issues, nor did it include any meaningful spending cuts.

Congress and the president - now back in Hawaii, playing golf, presumably - made sure that all the handouts would continue being handed out, extending unemployment benefits and keeping the Bush tax cuts in place for individuals earning less than $400,000 per year ($450,000 for couples), while raising the tax on those making more than that from 35% to 39.6%, which is a pretty big bite.

The "deal" also raised capital gains taxes from 15% to 20%, but only on those earning more than $400,000, a bit of relief for the 99% gang.

Scoring by the Congressional Budget Office and others put the cost of this deal at an increase of some $4 trillion to be added to the national debt over the next ten years. Nice job, boys.

Everybody's taxes will go up, however, because the deal did not extend the 2% tax holiday on Social Security payroll deductions, which was cut from 6.2% to 4.2% last year and will go back up to 6.2% this year. So, if you make $1000 a week, the feds will be taking an extra $20 out of every paycheck.

Foreclosures and short sales will continue to prosper in 2013, as the deal extended the 2007 Mortgage Forgiveness Debt Relief Act, which allows homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount.

Yippie! Our "Free houses for everyone!" motto lives on.

Wall Street was enthralled by the deal, sending stocks rocketing to their biggest gains of the year (Money Daily expects this will be the largest one-day gain for stocks in 2013, so bookmark this page now!).

The major indices made back all of the losses they took in the final ten trading days of 2012, and then some in just the first trading day of the new year.

At issue is how long the rally will last, whether this is just a one-day wonder or whether stocks can still remain the darlings of investors with 4th quarter earnings season on the horizon and the new congress (and same old president) having to deal with sequestration, deficit reduction and a debt limit increase within 60 days.

Since, according to Treasury Secretary Tim Geithner, we've already exceeded the debt limit, the feds will be borrowing from government pension funds to fund the government in the interim. A huge fight is ensured in February, as congress, if the latest fiasco offers any clue, won't want to deal with these issues until late in the game.

For now, though, roll with it. The Federal Reserve has the government's back, standing at the ready to print billions more in greenbacks at the hint of any troublesome developments.

Along with equities, expect everything else to keep getting pricier because there's really no easy way out of the monetary fix we're in. Next week, when life returns somewhat to normal, the angst will reemerge.

BTW: Money Daily was actually correct in predicting that everybody's taxes would go up under any kind of deal. They did. Check your paycheck in coming weeks for proof.

Dow 13,412.55, +308.41 (2.35%)
NASDAQ 3,112.26, +92.75 (3.07%)
S&P 500 1,462.42, +36.23 (2.54%)
NYSE Composite 8,631.18, +187.67 (2.22%)
NASDAQ Volume 2,071,100,625
NYSE Volume 4,634,567,000
Combined NYSE & NASDAQ Advance - Decline: 5798-863 (wOW!)
Combined NYSE & NASDAQ New highs - New lows: 679-21 (WOW! again)
WTI crude oil: 93.12, +1.30
Gold: 1,688.80, +13.00
Silver: 31.01, +0.78

Did Retail Sales Power a Rare Monday Rally?

Retail sales for September, as reported on Monday prior to the opening bell, were up sharply year-over-year and were up 1.1% after a 1.2% rise in August.

So, did the retail sector fuel the rare Monday rally, which was only the third time stocks had shown gains on a Monday in the past 20 weeks?

Well, yes they did, as the Consumer Cyclical space gained 1.11%, the best sector gain of the day. Following were Health Care and Financials, the latter based largely on an earnings beat by Citicroup (C), which beat solidly on revenue as well.

The timing could not have been better for options players as October monthly options settle this week, on Friday, just in time for stocks to head to new highs and savvy options professionals cash in on their bets.

Trading on this Monday was a radical departure from last week's broad decline, with the advance-decline line repairing itself and new highs beating new lows by a 2-1 ratio.

Oddly enough, the market wins either way in the currently-convoluted presidential debate regime that is market psychology. With retail and stocks doing well, one would envisage an Obama victory on November 6, anathema to the markets, but, good numbers are good numbers, so, stock traders went along for the ride.

Sticking with the current thinking, even if retail sales had been poor, stocks would probably have risen anyway, because the poor numbers would indicate a Romney victory, which the market is said to love.

In either case, stocks win, even on a day when commodities were hit hard across the board, especially in the precious metals segment, as gold and silver were pounded lower right from the opening of trading.

That seems to be the game plan, at least for today, by the central bank stock market cartel controlling markets worldwide. Buy riskier assets and sell off those things that are proven to be a reliable store of value.

It's working, as stocks are within 5-8% of all time highs on the S&P and the Dow. It's a very interesting time for both political junkies and market watchers, but should get even more intense during the week and after options expiry on Friday. There's still unfinished business in Europe, mostly regarding Greece and Spain, and a shock from the land of the socialists could easily upset any balancing act currently taking place in the markets.

Most of the attention is focused on Tuesday night's presidential debate, the current wisdom saying that another poor performance by president Obama would practically hand the election over to Mitt Romney, the Republican challenger, making the event must-see TV for all, despite the thinly-veiled sarcasm in that statement.

The debates are largely political porn, with many voters having already made up their minds. If Obama purposely throws Tuesday's debate, as he did the first one, it would give Romney an edge, so, considering how the media whores need to keep the American public on the edge of their seats right up until - and beyond - election day, count on the President to deliver some serious body blows Tuesday night, followed by a negative market reaction Wednesday.

With the election just three weeks away, expect the rhetoric and noise to rise to a crescendo in coming weeks. Along with it could be a climactic rise in stocks, with the Dow touching off new all-time highs and the S&P hot on its heels, or, a dramatic turndown heading into the big fiasco that is election day in America.

Dow 13,424.23, +95.38 (0.72%)
NASDAQ 3,064.18, +20.07 (0.66%)
S&P 500 1,440.13, +11.54 (0.81%)
NYSE Composite 8,296.97, +69.89 (0.85%)
NASDAQ Volume 1,536,536,250
NYSE Volume 3,257,196,000
Combined NYSE & NASDAQ Advance - Decline: 3596-1897
Combined NYSE & NASDAQ New highs - New lows: 133-65
WTI crude oil: 91.85, -0.01
Gold: 1,737.60, -22.10
Silver: 32.74, -0.926

Reliability, Persistence and Consistency; NFP Number Disagreeable to All

Irony.

It slices to the heart like a butcher's knife through a sheave of pork... or chicken, appropriate, for the occasional sarcastic remark, refrained from by those with more sense than the norm.

Today's post, Reliability, Persistence and Consistency, was supposed to have been written yesterday. So much for prescience and the timeliness of a message not delivered.

As the matter may be, the trio go together well. While consistency may or may not inspire a reliable nature, so too persistence can be the godfather of both. In the end, the verbiage required for an adequate discussion of the value of virtuousness is far too great to be expensed on a Friday afternoon. Better to leave things unsaid than say them wrongly, even as the wrongs of others may force the hand into parody, mirth or an occasional lilting melodrama.

As for the markets, so much nothing about nothing much. The greatly-anticipated non-farm payroll report for September left much to be desired on both the bullish and bearish sides of the equation. The actual number of 114,000 net job gain was so close to all official and unofficial estimates as to be nothing more than a hiccup, though traders made the best of it, sending stocks rocketing at the open and trading them down throughout the session and into the close.

A great deal has been and will be made of the unemployment rate flopping to 7.8%. It's pure rubbish, concocted from flimsy data with maximum massage President Oblahblah will feel a s rush of relief. Since FDR, no president has won re-election with an official unemployment rate over 8.0 percent. It's a winning number for a second term. What utter nonsense, because, if the truth be known, the comparison to FDR is apt, so the chances are good that Obama could be re-elected with an unemployment rate of 10 or 15 percent, such is the economic condition of the nation.

May decimal point profits and losses were made by those who find day-trading a pleasurable occupation. For the rest of us, it didn't really matter, much like Wednesday night's Presidential Debate, an over-flouted fiasco of sound that greatly interfered with the finale of the baseball season, which, notably, was without great tension and tumult, except, of course, for fans of the Oakland Athletics. Somewhere, everywhere, lovers of the little guy were crying tears of joy for smallball.

The weekend beckons. Be not afraid nor tired from the pressures of the week just commenced. It is past, and the future always holds promise. Take a break. Reflect. Enjoy life rather than cursing your lot. The weekend will last but a short time. In the grand pantheon of history, your life matters little as well. Don't even think about it. Monday will come sooner than most of us will like.

Dow 13,610.15, +34.79(0.26%)
NASDAQ 3,136.19, -13.27 (0.42%)
S&P 500 1,460.93, -0.47 (0.03%)
NYSE Composite 8,384.07, +7.73(0.09%)
NASDAQ Volume 1,611,767,130
NYSE Volume 3,177,711,250
Combined NYSE & NASDAQ Advance - Decline: 2837-2618
Combined NYSE & NASDAQ New highs - New lows: 468-40 (really)
WTI crude oil: 89.88, -1.83
Gold: 1,780.80, -15.70
Silver: 34.57, -0.529

Markets Take a Breather, But Issues Remain Unresolved

US markets took a bit of a breather on Monday as news flow from Europe was more a trickle rather than a deluge and the only data that moved US indices was factory orders for April, which came in below forecast at -0.6% on expectations of a move lower of -0.3%. March was revised lower - from -1.9% to -2.1% - which made the current numbers look better by comparison.

After opening briefly to the upside, stocks quickly turned red, even before the first half hour of trading, a signal that the more experienced traders were still trimming their risk exposure, but stocks stabilized, traded in a narrow range, bottomed between noon and 2:00 pm before rallying fairly strongly into the close.

If today was something resembling a dead cat bounce, the kitty remained room temperature, and the bounce was more of a flopping over on one side, that being the upside on the NASDAQ. Essentially, following the worst decline of the year this past Friday, traders might actually be encouraged with a session in which the Dow fell by less than 20 points and the NASDAQ actually ended slightly higher with the S&P unchanged. In the current environment, that kind of performance is about the best one could hope to see.

The somnabulent tone of trading did not prevent another negative read on the advance-decline line nor a persistent gap between new highs and new lows, both of which continue to indicate worsening conditions.

It was a lackluster session on average volume in a wait-and-see scenario. Elections in Greece are the main focus of global markets, with the nation going to the polls on June 17 to try and elect a new government after the previous round could not produce a ruling coalition.

Hope is that the Greek people will do the right thing, which, to the technocratic base of european politics, would be to form a government that favors remaining in the Eurozone and swallowing the bitter pill of austerity, though even the most ardent supporters of the unified currency will concede that the continent faces further problems and keeping the union intact is only a first step.

While Greek voters may indeed vote for a continuation of the current ruinous policies, there is a heightened awareness that the tide of populism in Athens could produce a more radical government that eventually rejects the euro and favors a return to the drachma as the nation's official currency. Such an outcome would likely produce massive dislocations of capital not only in Europe, but worldwide.

Another topic of discussion on the street is one of whether or not the Federal Reserve will signal or engage in another round of QE, which would provide temporary relief to markets, though, as has been seen with the previous two rounds, it would probably amount to nothing more than a sugar coating over economic conditions that are unstable at best and deflationary and point to recession at worst.

The FOMC is set to meet again on June 19 and 20 with a press conference with FED chairman Ben Bernanke and a summary of Economic Projections following the policy decision, Prior to that, Bernanke is set to testify before the Congressional Joint Economic Committee on Thursday of this week and the calendar is full of other Fed speakers who might give a clue to the next move by the nation's central bankers.

Speculation is rising that the Fed will be forced into a position favoring more easing, since without it, stocks and the general economy don't appear to have enough momentum to continue growing on their own. The same logic applies to Europe, where the message is to bail out, loan and print as much as is needed to keep the titanic economy from listing and sinking.

The main problem is that the issues that contributed to the crisis - now nearly four years old - have still not been resolved, the main point being the necessary deflation of the global credit bubble, which has not occurred. Instead policy has pointed to even more credit creation, prompting the need for more and more of the same policies that will not provide a long term solution. The entire vicious cycle is spelled out in some detail by Charles Hughes Smith on his Of Two Minds blog, an essential read for those not quite equipped to handle the myriad details of credit, collateral and derivatives.

Basically, Smith opines that the problems of the crisis have remained unfixed and continuation of current policies only are buying time before an ultimate collapse. Along similar lines, investor George Soros recently quipped that Europe has only three months in which to get its act together, a time frame that coincides almost neatly with the upcoming US elections in November. Should Europe stumble, fall, crash and burn within the near term, the tide will almost certainly turn against president Obama and toward Republican candidate Mitt (Adolph) Romney.

That seems to be the preferred strategy of the clandestine rulers of US politics, as any further slippage into the abyss of global depression could then be blamed on Mr. Romney's predecessor, just has Obama, even three-and-a-half years into his term of office, continues to lay blame on former president Bush.

The truth is that each president has had his own set of blunders and misfortune, and not all of the economic distress can be placed upon their shoulders. Congressional dithering and inaction and the global banking cartel are responsible for at least two thirds of the malaise, if not all of it.

The coming two weeks will be ones of nail-biting and indecision, with a fairly light schedule of news and data flow, all of which seems to in the range from bad to horrifying of late. The Greeks, Bernanke, and to some extent, the parliamentary elections in France on June 10 and 17 should be the major catalysts for market in the near term.

Much of what's already occurred and what will happen is still murky, and, since markets hate uncertainty, the chances for a rally in the near term are quite slim. A continued correction and possible bear market conditions (down 20% or more from recent highs) have become distinct possibilities.

Dow 12,101.46, -17.11 (0.14%)
NASDAQ 2,760.01, +12.53 (0.46%)
S&P 500 1,278.18, +0.14 (0.01%)
NYSE Composite 7,286.74, -5.49 (0.08%)
NASDAQ Volume 1,661,424,125
NYSE Volume 3,922,442,750
Combined NYSE & NASDAQ Advance - Decline: 2564-3054
Combined NYSE & NASDAQ New highs - New lows: 36-293
WTI crude oil: 83.98, +0.75
Gold: 1,613.90, -8.20
Silver: 28.01, -0.51

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

Greece Passes Austerity Measures; Obama Budget Goes to Congress; Apple Closes Above 500

Any angst over Greece's passing of their mandatory austerity measures was quickly dispelled by the markets on Monday. Most European bourses finished the day solidly in the green, and US markets followed suit, posting gains which pretty much eviscerated Friday's fear-induced declines.

Even though the austerity in Greece is a death-knell for the country and widespread rioting took place in the capitol of Athens and elsewhere, the globalist elements of the EU, ECB and IMF viewed the vote as a positive referendum on the overall health of the Euro system.

Realistically, Greece will never be able to repay its debts nor will it be able to accommodate all of the cuts to social welfare programs and government employment, but the parliament did what was most expeditious to secure financing from its feudal masters in Germany and keep the game going.

The scheme - from the view of the IMF, ECB and Angela Merkel - seems to be to keep Greece functioning as a neo-slave-state to keep the Euro from collapsing, and, thus far, it seems to be working. A disorderly default by the Greeks might just be the catalyst that destroys whatever unity is left in the EuroZone, an outcome the supra-governmental EU leaders will fight bitterly with truckloads of money (it doesn't matter how much, they'll just print more) and the current kind of kabuki theatre that is disguised as "austerity" for the free-spending Greeks.

Their fear is that Greece's demise could foment similar outcomes in Portugal, Ireland and elsewhere, particularly Spain and Italy, and the continental currency experiment of the Euro would come crashing down upon their collective heads. Problematic as it may be, the monetarists in Brussels are committed to spending whatever it takes to keep the EuroZone intact by relentless money printing and worry about the consequences of widespread poverty, inflation, social unrest and ultimately, a continent-wide depression, later. We wish them luck, mostly because they'll need it, as desperate as the situation has become.

Here in the States, President Obama submitted his 2013 budget to congress, where it was deemed by many (mostly Republicans seeking to unseat the president this fall) as dead on arrival. Obama's 3.8 Trillion monstrosity would reduce military outlays while hiking outlays to infrastructure projects and features higher taxes for the wealthy and a $1.33 trillion deficit, marking the fourth straight year that the federal budget deficit would top one trillion dollars, despite an Obama campaign promise from 2008 to cut the deficit in half by the end of his first term.

Investors shrugged off the details and went about their task of re-inflating the corporate sector, sending stock prices close to their highest levels of 2012, though volume on the NYSE was the lowest for a non-Holiday session in over a decade.

Oil closed above $100 per barrel, despite US gas consumption being historically weak and Apple (AAPL) closing above 500 per share for the first time in its history. Apple is currently the largest company in the world by market cap, surpassing oil giant ExxonMobil for the top spot.

The major indices followed their now-routine pattern of a gap-up open followed by a mid-morning decline and rally and a flat-lining finish.

Dow 12,874.04, +72.81 (0.57%)
NASDAQ 2,931.39, +27.51 (0.95%)
S&P 500 1,351.77, +9.13 (0.68%)
NYSE Composite 8,056.25, +64.22 (0.80%)
NASDAQ Volume 1,613,612,250
NYSE Volume 3,462,219,000
Combined NYSE & NASDAQ Advance - Decline: 4236-1411
Combined NYSE & NASDAQ New highs - New lows: 262-12 (par-tay!)
WTI crude oil: 100.91, +2.24
Gold: 1,724.90, -0.40
Silver: 33.72, +0.12

Rush for the Exits as 2011 Ends on Sour Note; Markets Flat for 2011; Predictions for 2012

Stocks traded in their usual tight ranges on the final day of trading for 2011, and just about every trader, investor and pundit seems to be in agreement that they year was a difficult one. At the end of the session, a rash of selling sent the major indices near their lows of the day. Volume was insignificant, but the late-day selling was an eye-opener, though possibly not materially a precursor to January, 2012.

Today's Closing Numbers:

Dow 12,217.56, -69.48 (0.57%)
NASDAQ 2,605.15, -8.59 (0.33%)
S&P 500 1,257.60, -5.42 (0.43%)
NYSE Composite 7,477.03, -8.60 (0.11%)
NASDAQ Volume 1,008,177,750
NYSE Volume 2,225,404,500
Combined NYSE & NASDAQ Advance - Decline: 2647-3004
Combined NYSE & NASDAQ New highs - New lows: 178-47
WTI Crude oil: 98.83, 0.82
Gold: 1,566.80, +25.90
Silver: 27.92, +0.60


Of the four major indices, only two - the Dow and S&P 500 - returned positive results for the year.

Here's how 2011 stacked up:

Index	Close 12/31/10	Close 12/30/11	Change
Dow	11577.51	12217.56	+640.05
NASDAQ	2652.87	2605.15	-47.72
S&P 500	1257.64	1,257.60	-0.04
NYSE Comp.	7964.02	7477.03	-486.99

Now, checking back on Money Daily's 2011 predictions, here, here and here, we can summarize the results.

We said the overriding theme would be VALUE. With the emphasis now on dividend-paying stocks, we can give ourselves a half thumbs-up, though the real word for the year, especially the second half, was VOLATILITY.

We mentioned that "US employment situation is not going to get materially better in 2011..." A+ on that call.

Housing: "The expectation is for residential housing prices to drop another 6-10% during the year, with larger decreases in the NorthEast and MidWest." Bingo.

FOREX: "The US dollar will fare well against almost all other competing currencies. Destruction of the world's reserve currency takes time, and a year is just a small part of the breaking tableau." Another spot on analysis.

COMMODITIES

Eventually, price will meet demand, or lack thereof, and some equilibrium found before riots and starvation become the norm. Your best bets for 2011 are still gold and silver, with the latter being the favored instrument as it seeks to re-establish the 15-1 gold-silver ratio. Both should appreciate well in excess of 15%, so $1500 gold should be an easy target and silver may bust right through $40 per ounce in rapid manner.

As far as oil is concerned, apart from the rigged and artificial aspects of how it is traded, crude prices cannot exceed $100 for very long, if they even reach them. Absolute price inflation will crimp demand, and, thus, set the wheel back to "go" again, so don't expect oil prices to skyrocket or decline much at all. Stable prices would be best for all parties (except those selling the stuff, short term), and that's what we may get. There's about a 30% chance oil prices actually fall on slack demand, back under $75, but not much further, though a price around $60 per barrel would go a long way toward global growth, though the supply/demand numbers simply don't add up well for that to be much more than a wing and many prayers.

Despite a serious decline in the latter months of 2011, gold and silver held up well, despite blatant price manipulation by central banks. The call on oil was pretty much correct.

STOCKS:

The following are the predicted trading ranges for the major indices in 2011:
Dow: 9250-12000
NASDAQ: 2100-2750
S&P 500: 875-1300
NYSE Comp: 5650-8100

Not a bad showing, though the predicted lows were never met.

Money Daily also made some comments regarding the bond market, inflation, social trends and politics which were generally in the right direction. They can be found here.

Now, on to predictions for 2012 (very briefly):

Stocks: At the end of 2012, after a protracted decline though to the elections, the markets should get a bounce and end somewhere around:
Dow: 10,700
NASDAQ: 2350
S&P: 1050
NYSE Composite: 6780

Overall, it's going to be another challenging year for stocks, with high unemployment, the collapsing Euro and high tensions in the Middle East among the factors that will keep investor confidence low.

Commodities: Since gold and silver fell off the cliff at the end of 2011, they should rebound smartly and be among the best investments of the year. Oil will continue to fluctuate between $75 and $100, though passage of a bill allowing the Keystone pipeline to be built or a war with Iran (very high probability) could push prices out of that range; lower in the former instance, much higher in the latter.

Bonds are going to remain in their tight ranges, since the Fed has already announced they'd keep the federal funds rate unchanged though 2013.

FOREX: Short the Euro, Long US dollar, Aussie and Canada.

Politics will keep the economy from gaining very much traction until the election. The plan by the schemers behind the candidates is to keep the economy stumbling along in order to usher in a new Republican era. Whether or not they succeed will depend on a vast sea of changing factors, though the most pressing will still be the economy, followed by Iran, Obama-care and voting right. The Republicans can't win with Newt Gingrich or Mitt Romney. A Ron Paul candidacy could make life a little too interesting for the incumbent and Paul would be a great president, exactly what's needed in the US at this time of perpetual crisis. Paul would change the nature of US foreign policy, reform entitlements and get back to the rule of law.

While it's a near certainty that the Republican party chiefs will do everything in their power to keep him from winning the nomination, he could do it. Otherwise, a third party candidacy by Dr. Paul would ensure an Obama landslide.

Unless Ron Paul is in the race, Obama will win a second term.

That's it. See you in 2012. Happy New Year!

So Much for Europe Being Fixed; US Stocks Dashed over Persistent Fear of Euro Collapse

Let's face it. There's no easy way for europe to fix the mess they've created without a lot of pain, including bank failures, a massive, long-term deflationary depression, government overthrows and the near disintegration of the Euro-zone, those countries which exclusively use the Euro as currency.

After last week's up-and-down Thursday and Friday sessions, marked by trepidation over the ECB's interest rate cut and a demure stance on monetary policy by new ECB head, Mario Draghi, and Friday's euphoric rally on the umpteenth outline of a Euro solution, Monday turned just plain ugly for European bourses and US indices.

Anybody who understands the enormity of debt that's been built up by Europe and the US - not only in the government, but by the banks, financial institutions and households as well - sees no end to the crisis in Europe, and the distinct probability that their problems - being partly those of our own banks and our Federal Reserve - will become ours. The massive overhang of public debt, much of it owing to national pension funds like Social Security, has always been an albatross around the necks of European leaders and now it is quickly becoming one for whoever leads the US (Take your pick from Obama, the banks or the congress. None of them are doing a good job.).

And while Social Security is set to run in the red for another year (this being the first), what are congress and the president fighting over? Whether to cut the Social Security contribution paid by employees and/or add a tax on the wealthy. The fact that the latest boondoggle is being branded as "payroll tax" - a wholly incorrect moniker - tells exactly how deep and severe the US fiscal condition has become.

If the government big-wigs actually came clean on the issue and said they want to cut Social Security contributions so people can afford to buy food, gas and maybe the occasional iPad or plasma TV, the cat would be out of the bag, permanently.

As it stands today, Social Security is DOA. Current beneficiaries can expect payments though the next five years, maybe, but, eventually, there's not enough money going into the system to support the huge numbers of upcoming recipients from the Baby Boom generation, most of whom have less than $40,000 saved for retirement (Hint: that's not enough), and cutting contributions is going in exactly the wrong direction.

On Capitol Hill, most senior congress-people know that Social Security will have to be substantially changed in order to survive and the changes will have to be dramatic measures, like raising the retirement age to 70 or 72, means testing, so that people who don't need it won't get it, and raising the limit of contributions from the current first $106,800 of income to something more realistic, like the first $200,000 of income.

Making high-earners pay more would add more money to the SS coffers at the same time the government is cutting the percentage take from employees. Still, most of the measures even considered by congress and the White House are nothing more than stop-gap measures designed to satiate the masses until the next big election, in November, 2012.

In the meantime, the economy continues to struggle along, unless one is inclined to take their lead from the ruthless bankers on Wall Street and cheat like crazy, paying people off the books, under-reporting income and generally skirting the IRS at every turn. Hey, the big corporations do it, so why not everyone else.

At the bottom of all the financial malaise is the collapse of government, as we've witnessed in the Middle east and North Africa, is now spreading to Europe and Russia, and thanks to people actually taking change of their own lives and their own finances, is quickly gaining ground here in the USA.

There is one way to stem the crisis in the United States. Elect Ron Paul president. The mainstream media is currently dancing around Dr. Paul, whose positions have been consistent and poisonous to the status quo, but there's no doubt mainstream America is listening to the 76-year-old Texan, as he continue to gain ground in Iowa and elsewhere.

Compared to the current leaders, Newt Gingrich and Mitt Romney, a Ron Paul - Michelle Bachmann ticket is sure beginning to look like a winner.

When Americans ask themselves, "which of the Republican candidates are most like us?" the answer becomes obvious.

BTW: Volume was so low today that the markets could have closed at noon and hardly anyone would have noticed. Even fewer would have cared. That's what happens when trust flees markets. People, and money, follow out the door.

The Euro hit a two-month low against the US Dollar, below 1.32. The end of the Euro is coming, and sooner than anyone dares think.

Dow 12,021.39, -162.87 (1.34%)
NASDAQ 2,612.26, -34.59 (1.31%)
S&P 500 1,236.47, -18.72 (1.49%)
NYSE Composite 7,363.49, -139.39 (1.86%)
NASDAQ Volume 1,523,045,375
NYSE Volume 3,421,469,750
Combined NYSE & NASDAQ Advance - Decline: 1272-4386
Combined NYSE & NASDAQ New highs - New lows: 79-120 (flipped to red)
WTI crude oil: 97.77 -1.64 (head back to 80-85 range)
Gold: 1,668.20 -48.60 (deflation signal)
Silver: 31.00, -1.25

No Debt Ceiling Deal Sends Stocks Lower Again

While the plutocrats in Washington dither away valuable time trying to figure out the most politically-expedient way out of their self-imposed debt ceiling crisis, the rest of the world goes on, mostly oblivious to the debacle in the capitol.

Stocks, however, as money substitutes, aren't taking the "no news" as good news. In fact, markets are absolutely terrified, not that the current congress and president will find a solution by the artificial August 2 deadline, but that their efforts will be so futile and pointless that the ratings agencies will lower the US debt/credit rating from its now pristine AAA sovereign status.

While the majority of people neither understand nor care about this delicious little surprise coming down the road like a 60-ton freighter, Wall Street and other governments are frightened out of their boots because a drop in the US rating would add something like $100 billion of cost - in interest - to the annual federal budget, which is already way out of whack.

Whether it be Obama's refusal to put a concise deal on the table, or the Tea Party wing of the Republican party insistence that there be no revenue enhancements in any kind of deal, the result will be the same as it has been for the past 12 years for congress and the presidency: abject failure, and a hike in interest rates.

Without poring over details of how the past three years have played out, we are approaching a seminal moment in the history of the United States of America and in the financial policies post-Bretton Woods. Nixon's closure of the gold window was the first inflection point, at which currencies were no longer backed by gold. The accumulation of nearly $15 trillion in debt and the failure of government to not only foresee the problem, but then to not be able to deal with it, is the second great event.

With just seven days until the government begins defaulting on some debt, markets are skittering about like schoolchildren at recess and there's nobody in his or her right mind who wishes to be exposed to inordinate risk at this point. With each passing day that there is not a deal and signed legislation increasing the debt ceiling, expect markets to recoil in terror. By Friday, we could be witnessing an all-out crash as many participants choose to sit on the side rather than engage in the dizzying dance of death.

The outflows from stocks were seen mostly at the end of the day, when the major indices peaked just after 2:00 pm EDT. From there until the close it was nearly free-fall, with all of the day's tiny gains wiped out in a flurry of near-panic selling.

One hates to beat a dead horse, but this debt ceiling debate is still alive and kicking, barely, and it will dominate financial news until something - anything - is done to rectify the situation. Absolutely nobody is holding their breath waiting for that, however.

Naturally, there were swing trades and day trades made during the session, but nobody is staking out new positions in the most uncertain market of the past two-and-a-half years.

Dow 12,501.30, -91.50 (0.73%)
NASDAQ 2,839.96, -2.84 (0.10%)
S&P 500 1,331.94, -5.49 (0.41%)
NYSE Composite 8,331.67, -25.90 (0.31%)

Declining issues overwhelmed advancers for the second straight day this week, 4096-2434. NASDAQ new highs 29; new lows: 36. NYSE new highs: 44; new lows: 46. Combined totals: 73 new highs, 82 new lows, a slight shift to the negative for that particular indicator. Volume was reliatively light, as expected.

NASDAQ Volume 1,716,556,125
NYSE Volume 3,988,655,750

Crude oil advanced modestly, up 39 cents, to $99.59. Gold racked up another record high, gaining $4.60, to $1,616.80. Silver notched a 38 cent increase, to $40.70.

The S&P/Case-Shiller Home Price index showed marginal gains of one per cent in the month-to-month numbers, but most of the 20 cites surveyed showed declines on a year-over-year basis.

New home sales sunk to 312,000 on an annualized basis in June. Some analysts were calling the number "unexpected," while the home construction industry has been in outright depression for more than three years.

Any further declines will be "expected" and those acting surprised will be executed by a firing squad of Mexican construction workers, as soon as they can be rounded up from immigration detention centers. (That's a joke, folks.)

Predictions 2011, Part 1

Before commencing with the annual predictions of where everything is supposed to go in 2011 - up, down, sideways or otherwise, a quick recap of the market on the first trading day of the new year is in order.

As expected, traders - con men all - made sure 2011 got off to a roaring start, with a gap up at the open sending the Dow Jones Industrials up almost 100 points moments into the session. While the gains were outsized as compared to recent run-ups, trading volume remains a viable concern, both short and long-term. Today's volume, while a 60% improvement over those of the last week, is still averaging a size that were the stock market a real roller coaster, volume couldn't get on the ride due to being too short.

It should also be pointed out that the estimates made here - wholly on anecdotal presumptions - have now been duly christened by some valuable researchers - Smithers & Co. - which notes S&P listed stocks some 73% overvalued as of December 10. With the S&P up another 2.5% since then, this data suggests that the stock market is headed for a crash of epic proportions. Based on measurements that ceased functioning around the time of Ben Bernanke's Jackson Hole speech last summer (where he first mentioned QE2), many stocks could experience declines of 50% or more in coming months.

Naturally, nobody is talking about valuation, since the Fed and Wall Street have famously destroyed all methods of honest price discovery and computers are doing most of the trading these days, but stocks are already wickedly overpriced and heading higher. Notice how silent Bernanke is concerning the markets, with no "irrational exuberance" kind of talk. The Fed is desperate to get the moribund economy off its back and the banks back to health. Destroying the currency through money printing and the markets through wild speculation via HFT computers are the only games in town now, and destined to fail spectacularly.

The daily charts and the massive monetary infusions (a $7.8 billion POMO today) tell the entire story: stocks ramp up in the morning, closing off gains for all but insiders, then meander lazily to an insignificant close. This pattern has been the most prominent over the past four months and continued in grand style today.

Dow 11,670.75, +93.24 (0.81%)
NASDAQ 2,691.52, +38.65 (1.46%)
S&P 500 1,271.87, +14.23 (1.13%)
NYSE Composite 8,043.96, +79.94 (1.00%)

As expected, advancers overwhelmed declining issues, 4948-1661. NASDAQ new highs: 296; new lows: 6. On the NYSE, there were 375 new highs and only 2 new lows. These numbers, if not there already, are at extremes and shorting would normally be child's play were it not for the unusual state of US equity markets, pumped daily with new money. There will be an unwinding, but it may be very slow and gradual, killing one's patience and probably most profits. The best position remains cash and equivalents, gold, silver, rarities, arable land and tools of trades.

The continued low levels of trading indicate that individual investors have not returned to the market and some may stay away permanently. If a large enough segment of those fleeing stocks and bonds is made up of Baby Boomers at or nearing retirement, it could spell doomsday for Wall Street, though with approximately 10,000 Boomers retiring every day, the fresh influx of pension and Social Security monies could induce a good deal of foolish speculation, much of it by retirees not secure enough with their monthly take even though it's more than enough upon which to exist.

NASDAQ Volume 1,809,840,875.00
NYSE Volume 4,730,662,000

The front-end crude contract seems to have hit a wall at $92. Anyone with a functioning brain realizes that pushing gas prices over $4/gallon will kill any recovery or chance of the consumer-led economy doing anything but stalling around as fuel prices steal from all other spending. Still, the verdict on the oil barons is still out and their game will continue. $100 or higher for crude could happen, but it seems only sensible that driving and energy use would be curtailed severely by cash-strapped consumers. Oil finished at $91.55, up just 17 cents on the day.

Gold and silver were sporting nice gains until about 2:00 pm, when they turned radically lower, about the same time the Obama administration announced that 13 select drillers would be allowed to resume deep-water drilling in the Gulf of Mexico, halted in the wake of BP's Deepwater Horizon gusher last year. Gold was last seen down $7.50, at $1414.10. Silver lost 23 cents, to $30.68.

And, for the most absurd trade of the day, Bank of America (BAC) rose 85 cents, to 14.19 (a gain of 6.37%) on news that the bank had agreed to a $4.1 billion settlement with Fannie Mae and Freddie Mac to repurchase soured loans issued by Countrywide (purchased by BofA in 2008) the GSEs had backed.

And, now, on to Fearless Rick's Fabulous Preview of 2011...

Soothsayers of antiquity were revered and honored, but in the crowded world of today, there's no shortage of predictions, prognostications, and outright guesses on what the future will bring.

Most predictors are amateurs, not skilled in the art of actually hanging on a limb, due to fear of being wrong. Fearless Rick knows no such fear, having been wrong so often that it's become a fixture to some degree. What is presented here is not so much a final saying on what, where and when some events may occur, but rather a proximate attempt to use experience and empirical values to arrive at a kind of whole world experience.

The dominating theme of 2011 will be VALUE. The pricing of assets will be challenging due to a continuation of monetary policies which may or may not be alleviated by fiscal controls expected from newly-minted Tea Party Republicans in congress. By Spring, the US government will be approaching the debt ceiling and a battle over whether or not to raise it will begin in some form. The betting is that it will be raised again - out of necessity - but Republicans will issue stern warnings or attempt to tie the vote to more austerity measures. The rhetoric on Capitol Hill will be more raucous than ever, but eventually, the Tea Partiers will be put into line by the status quo centrists who prefer slow death rather than the pain of an operation to actually address the greatest concern of our day, the burgeoning federal debt.

It may be difficult to assume that the world will not end, nor will the existence of the Federal Reserve, in the present year though it will not be without significantly-large challenges. Despite indications from our runaway stock market, the US employment situation is not going to get materially better in 2011. In fact, even using the greatly-flawed BLS figures that get trotted out the beginning of each month, the Obama administration will have no option other than to take its lumps and admit that the economy is just not recovering at all. By June or earlier, the "official" unemployment figure will be over 10%, and shock waves will reverberate throughout the affected areas, mostly the South, Southwest and West, prompting more give-away programs from the administration and certain congressional factions.

Pressure for another stimulus bill will be large, spurred on by liberals who cannot get too much of a free lunch, but will ultimately be small, if passed at all. Stimuli has become a permanent factor in federal government, though, so some free money will certainly flow from the seat of power.

Residential Housing is going to be worse than ever, with prices falling in areas that weren't hard hit the first time around. With banks lending only to the super-clean credit risks there will be a continuing glut of houses on almost every local market. Coupled with interest rates that should moderate, overall activity will be at a snail's pace, similar to what was seen in 2010. Knowledge of local markets may result in windfalls for some, misery for others, especially those in homes with Alt-A or 5/30 or 5/20 mortgages that are resetting in 2011 - a motherload of them by Spring. The expectation is for residential housing prices to drop another 6-10% during the year, with larger decreases in the NorthEast and MidWest.

(TO BE CONTINUED)

Just in the Nick of Time, Politicians Save Economy... Again

As this is being written, the voice of President Barack Obama is monotonously rattling off the bullet points in praise of the $898 Billion (do the numbers even matter anymore?) tax extension and cut package approved by congress over the past few days and signed into law by Mr. Obama today.

Politicians love to make us believe that they are doing some good for the country, for us, for our kids, dogs, cats, parakeets and the rest of the little creatures who inhabit the vast expanse of the United States of America.

Reptiles that they are, congress and the president are making the world a better place for lizards, snakes, turtles, crocodiles and the ever-vigilant alligator. The vultures are ensuring the future for untold generations of crows, sea gulls and other flying creatures who pick through the trash in the parking lots of fast food restaurants, strip malls and shopping centers.

They have once again proven their collective brain-power to be insect-sized, and grateful are the hordes of locust, flies, fleas, mites, beetles, ladybugs, preying mantis, and ants whose job it will be to devour what is left of the continent once we are gone.

The fish are jumping and mammals of all ilk, coyotes and bears, antelope and moose, squirrel and gopher, praise the politicians for their largesse in allowing American humans to keep more of what they earn. Surely now, the great and magnanimous political class will pass some of our money over to the corporate class, for as we keep, so shall we blow. We will spend our extra moneys on iPods and flat-screens, CDs, DVDs, hors d' oeuvres, whirling dervishes and other diversions, all of which will cost more due to the inflationary policies pursued by the Federal Reserve and federal, state and local governments.

We shall spend. They shall spend. Together we shall ensure a present and a future in which nobody suffers any pain of any kind in any manner on any day forever and ever. Hallelujah, amen, they've saved the world again. God rest ye, merry gentleman and ladies, we can celebrate our christmas by shopping with our credit cards, online and off to the malls with you now! Enough reading. It's time to go out and spend, spend, spend.

My goodness! Look at that reaction from Wall Street. We are overwhelmed by its non-existence! With two weeks left to the year's trading, the clarion call apparently wasn't heard in lower Manhattan. Buy! Buy! Buy!

Dow 11,491.91. -7.34 (0.06%)
NASDAQ 2,642.97, +5.66 (0.21%)
S&P 500 1,243.91, +1.04 (0.08%)
NYSE Composite 7,835.31, -4.93 (0.06%)

Volume was strong today due to quadruple options expiration and nothing more. Advancing issued barely managed to beat the "Bah, Humbug" declining stocks, 3588-2905. On the NASDAQ, new highs outnumbered new lows, 211-31. On the NYSE, the tally was 175-22, new highs to lows. Hurrah!

NASDAQ Volume 2,576,992,250
NYSE Volume 5,729,695,500

Oil gained 32 cents, to $88.02. Three cheers. Gas will cost more this holiday season. Gold was allowed to rise a bit by the naked shorting banks, gaining $6.10, to $1375.60. Silver was also given special dispensation, gathering another 42 cents to its inexorable rise, now at $29.15 per troy ounce.

The lining, silver or otherwise, was that the republicans in congress, generally, would not pass a $1.2 Trillion omnibus spending bill proposed by outgoing Democritters, opting instead for a continuing resolution to tide the government over for a few more months. The next congress will get down to business come January, and they have promised to make cuts in spending.

Some of us also believe in flying unicorns that excrete hundred dollar bills.

Obama Defies Banks with Pocket Veto

You know it's a slow news day when all there is to report on is what didn't happen, and that would be President Obama not signing HR 3808, the Recognition of Notarizations Act, which would have forced federal and state courts to recognize notary signatures - including digital signatures - from other states, and was widely seen as an attempt by the banking lobby to do an end run around the "robo-signing" foreclosure mess they've created by having bank and processing firms' employees sign off on enormous rafts of affidavits without reading them.

In the midst of a foreclosure moratorium by Ally Bank, JP Morgan Chase and Bank of America, the timing of the passage of the bill raised eyebrows and brought forth derision from homeowner advocates.

The bill was passed by the House and Senate and presented to Obama on September 30. The bill had failed to pass the senate on two previous occasions, but spurred on by last-minute wrangling by senators Pat Leahey (D-VT) and Jeff Sessions (R-AL) the measure passed the senate without debate on a voice vote by unanimous consent. No record of the vote in either house was recorded, so the criminal congress, which gets much of its funding from the criminal enterprise known as the Too Big To Fail Banks, gets a free pass on this one with plenty of plausible deniability.

Though the bill was unlikely to ease the pain of the banks as they wade through hundreds of thousands of foreclosures, many of which will now be contested since their paperwork has been exposed as faulty at best and outright fraudulent at worst, the President opted to send the bill back to the congress, citing, in Press Secretary Robert Gibbs' words, "unintended consequences," obviously referring to the foreclosure scandal that's been accelerating over the past two to three weeks.

That was big news for homeowners in foreclosure in the 23 states that are defined as "judicial" foreclosure states, who will likely be allowed to remain in their homes without having to pay their mortgage nor be hounded by the servicing banks for up to a year or longer, according to sources such as Business Week.

Originally downplayed by the banks, the extent of the fraud - with much of the underlying paperwork in the affidavits referring to title and ownership, and thus, standing in foreclosure at fault, attorneys general from a handful of states have already called on the banks to halt foreclosures. Ohio AG, Richard Cordray, has already started a lawsuit against Ally Bank (formerly GMAC) and is close to suing Bank of America and JP Morgan Chase.

Late Wednesday, US Attorney General Eric Holder, after being prompted by House Speaker Nancy Pelosi and other prominent Democrats, has ordered an investigation into foreclosure practices under the auspices of the financial fraud enforcement task force, formed last year in the aftermath of the market meltdown, TARP and the associated issues stemming from the original subprime crisis in 2008.

All of this didn't move markets much at all, though both JP Morgan Chase (JPM) and Bank of America (BAC) were lower at session's end.

For the most part, traders were patiently awaiting the release of the September Non-Farm Payroll report from the Bureau of Labor Statistics, due out Friday morning at 8:30 am ET. Consensus estimates are for a gain of 60,000 jobs between the private and public sectors. On Wednesday, ADP reported a September loss of 39,000 private sector jobs in their monthly survey.

Dow 10,948.58, -19.07 (0.17%)
NASDAQ 2,383.67, +3.01 (0.13%)
S&P 500 1,158.06, -1.91 (0.16%)
NYSE Composite 7,425.01, -23.32 (0.31%)
NASDAQ Volume 1,856,212,625
NYSE Volume 4,056,364,500

Declining issues held a small edge over advancers, 3114-2568. New highs led new lows, 423-37. Volume was anemic, the worst in two weeks, and the past two weeks haven't been particularly strong. Equities have been hovering around their highs for most of the week, so the jobs report Friday may provide some direction to this listless market, though it would be no surprise to see it just languish within a tight range until after the midterm elections on November 2nd, which also coincides with a FOMC meeting at which the Fed is widely assumed to announce some new QE plan, thrusting billions of dollars into the moribund credit system.

After weeks of rallying higher, commodities performed an abrupt change of direction on Thursday, with crude oil futures hammered $1.56 lower, to $81.67 at the close on the NYMEX. The latest print for gold was at $1333.60, down $15.50, though it traded as high as $1365 on the day. Silver also took a header, losing 69 cents, to $22.50.

Chartists and fundamental analysis predicted some kind of easing in the precious metals especially, as they have been on an historic tear since the middle of August without so much as a 3% pullback. Oil also had escaped its longtime range between $70 and $80, though the move above the high end might be nothing more than naked speculation as supply-demand dynamics do not support higher prices. Mostly, the move up in oil was tied to the decline of the US dollar, which has fallen 14% in the past three months against other major currencies.

Not bad for a slow news day.

Markets Slump on Abysmal Volume; Politics Plays the Market

Let's face it. The financial meltdown that occurred in the Fall of 2008 damaged Wall Street far beyond anyone's imagination. Whether the crisis was real, contrived or a true panic, the number of participants since then - and the fruitless bailouts that followed - have diminished greatly. While everyone wanted to believe that more players would show up after the Labor Day holiday, the expected rush of traders simply failed to materialize this Tuesday, a stark reminder of the lack of confidence spreading across US markets.

The continuing low-volume regime should surprise nobody. After shrinking from 4-6 per cent in August, the "marketeers" last week managed a roughly 4% rebound in just the first three days of September. Investors are not foolish people generally, and they can sense when something is not right. The consensus among individual investors is that the market is completely rigged in favor of the big brokerages, hedge funds and other not-so-visible participants and have thus departed, some for good.

There's also the question of overall liquidity which has affected the velocity or volume of trade. Smaller firms and individuals are strapped for cash, in addition to being wary of the market, and simply cannot play. This has been the resounding theme since mid-summer, and appears to be actually getting worse as the November elections near.

Indices and averages are being hoisted and levered down by the same parties in an attempt to lure in more suckers (investors), but nobody seems to want to play this game any more. It's pretty obvious that politics are going to play a huge role in the direction of stocks over the next few months, so, despite the market being an unsound place for money, there are two definite directional plays that could be made rather simply.

First, the powers that be are nearly certain to desire an end to the reign of Democrats. President Obama and his cohorts in congress haven't made many friends on Wall Street, so the big money is courting Republicans in the Fall. The first trade is to go short from now until the elections, with the best time to get out right at the end of October. After that, go long, presaging Republican victories in the House and maybe even taking a majority in the senate.

These moves have nothing to do with fundamentals, only with the perception Wall Street wishes to make. They and their Republican lackeys want the economy on its knees heading into November, showing the Democrats to be weak and ineffective, and they have the perfect vehicle with which to accomplish their goal, the thinly-traded, but highly-watched stock market. The Dow should fall below 9500 at some point in the next two months (should be there already), and then immediately after Republican wins on November 2, rally back above the magical 10,000 mark, probably going as high as 10,700 or thereabout.

Sad but probably true, the stock market is no longer a secure platform for trading stocks, but more a political vehicle of the controlling elite. Today's sorry volume figures - and all those of the past four weeks - give credence to this approach.

Stocks spent the entire day trading in a narrow range in the red, finishing at the lows of the day, indicating not only a lack of participation, but a lack of confidence. Not surprising, since the best the Obama administration can do these days to spur the economy is suggest another $50 billion be spent on roads, bridges and airport runways. While that's great for the concrete makers and construction workers, it has no meaning in the lives of average Americans who don't shovel, grind or gird.

Obama also outlined an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment and a $100 billion extension of business tax credits for R&D and, as usual, absolutely nothing for small businesses, those with between one and ten employees, which are the backbone of the economy and entrepreneurship. The federal government would better serve the people by just handing out checks to everyone or doing nothing rather than trotting out the old "infrastructure" canard. It's been done and accomplished nothing already, so another crack at it is merely more grandstanding by a president and advisors without clues. Tax breaks for big business also won't serve to stimulate growth in the economy or create jobs.

Dow 10,340.69, -107.24 (1.03%)
NASDAQ 2,208.89, -24.86 (1.11%)
S&P 500 1,091.84, -12.67 (1.15%)
NYSE Composite 6,959.94, -95.09 (1.35%)

Declining issues took the measure of advancers, 4366-1388, though new highs remained to the high side of new lows, 259-50, though these figures are likely being influenced significantly to the upside by the number of stocks recently delisted (a big secret) and the usual pumping up of otherwise losing issues. As explained earlier, volume continued to be absurdly low, to a point that is increasingly difficult to describe.

NASDAQ Volume 1,566,149,625
NYSE Volume 3,036,956,000

Oil was down again, losing 51 cents, to $74.09. Gold traded in record territory, up $8.10, to $1,257.30 at the close, while silver slipped a little after an impressive weeks-long run, dropping just three cents, to $19.88.

Trading was so thin and reaction to Obama's new proposals so negative, it left many wondering just how long the economy can hold on without another significant decline in not only stocks, but in the overall quality of life. Being that we're only in the second or third inning of this particular baseball analogy, there are sure to be more foul balls than home runs in coming months and years. The market could spin out of control at any time, though the small number of players left on the field might prevent a real slide from happening with the ferocity witnessed in 2008 and 2009.