Stocks Fail on Stormy Tuesday; The Misinformation Age

Well, it's not Monday, but it is the first day of the workweek, so stocks must go down. And they did, with the exception of the NASDAQ, which went from the worst-performing index to the best in a matter of 40 minutes - from roughly 2:00 pm to 2:40 pm EDT, going from a loss of 10 points to a gain of 15.

The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.

So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.

Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.

Welcome to the age of heightened misinformation.

There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.

Two studies of children consuming organic and conventional diets did find lower levels of pesticide residues in the urine of children on organic diets, though the significance of these findings on child health is unclear, noted the researchers.

I'll take lower levels of pesticides in my urine for $400, Alex.

Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?

Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.

Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.

Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.

Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.

Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.

Just to refresh one's memory, here's a nifty video of why we're where we are.



Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97

It's Not as Good as They're Saying; Lows-Highs Flip

To anyone who follows capital markets and the world of high finance closely, the material deficiencies in the US and global "growth" stories are glaring and have been for many months. While the financial press - CNBC, the Wall Street Journal, Bloomberg - and the spokespeople for the various central governments around the world continue to feed the public the "recovery" fable, the facts, now beginning to see the light of day, contend that the global economy is still, two-and-a-half years after the grand cascading crash of 2008, in precarious straits.

Five separate stories sealed the fate for global markets today, beginning with China's announcement late Wednesday night (in America) that their trade balance was negative for the month of February.

About the same time, RealtyTrac delivered news that foreclosures had come to nearly a halt in the United States, with their numbers for February dropping 14 percent from the previous month and a 27 percent decrease from February 2010. Normally, that would be good news, but in the current environment of illegal and unethical actions by large, foreclosing banks, it meant that the mess that began in October, 2010 with the robo-signing scandal, was keeping banks from courthouses and clogging up the real estate market in a worsening manner.

Prior to the market opening, two more news items spooked the investment community. First, Moody's downgraded Spain's debt (about time for that!) to Aa2 and then, at 8:30 am on the East coast, the double whammy of new unemployment claims (397,000) and the US trade deficit, which expanded to -$46.3 billion in January.

Then, in mid-afternoon, as if the market had not received enough bad news, a story out of Saudi Arabia said that protesters had been fired upon by government troops.

That final bit of news sent the major indices - which had recovered somewhat off the day's lows - down once more, and stocks finished the session breaking into new depths.

The Dow and S&P broke through various levels of support, with the Dow finishing under the 12,000 mark for the first time in two months and the S&P crashing through it's 55-DMA. The NASDAQ and NYSE Composite each suffered similar pain.

It's becoming plain and clear to everybody living in the real world - not the fantasy land of fund managers, politicians and central bankers - that things are not going so well. Housing is an absolute catastrophe, global trade is grinding down due to higher imput costs and soaring energy prices, Europe is a full-blown basket case on the brink of dissolving, and US stocks are so wickedly overvalued that the path of least resistance is to sell them all, hurriedly, on the first sign of negative news, and there certainly was plenty of that to go around today.

Dow 11,984.61, -228.48 (1.87%)
NASDAQ 2,701.02, -50.70 (1.84%)
S&P 500 1,295.11, -24.91 (1.89%)
NYSE Composite 8,200.07, -179.37 (2.14%)

Declining issues led advancers, 5501-1072, a ratio of better than 5:1. New highs on the NASDAQ were just 33, overtaken by 68 new lows. On the NYSE, just 27 new highs and 31 new lows. This is a critical juncture for the markets, because if the number of new lows remain higher than new highs on a daily basis for long, say, six to eight trading days, it would confirm a hard change of direction, which has been in the cards since the double-engulfing session last Tuesday.

Volume was elevated as is the usual case when sellers outnumber buyers.

NASDAQ Volume 2,374,073,000
NYSE Volume 5,320,324,500

Commodities also took it on the chin, though in not such a dramatic fashion as stocks. Crude oil futures on the NYMEX fell $1.68, to $102.70, due to massive oversupply in the US of unrefined crude. Gold slipped $17.10, but remained below the psychologically-important $1400 level, ending the day at $1,412.50. Silver also was sold off, losing $98 cents, to finish at $35.07, though it should be noted that on days of hard reversals, a lot of precious metals are liquidated by speculators to cover margin calls.

A final note should not be ignored. Bill Gross' PIMCO, the world's largest fixed income family of funds, has slashed its holdings of Treasuries to ZERO. This news, first reported by the avant garde financial blog, zerohedge.com, holds unknown, but potentially damaging conditions. Gross and PIMCO have more or less registered a vote of "no confidence" on the policies of the US government and the Federal Reserve Corporation.

With stocks hammered down repeatedly over the past two weeks, the highs of February 18 look like specs on the horizon and the truth about the real conditions in the global and US markets is finally coming out. The cataclysm begun by the Wall Street banks in 2003-2006 and accelerated by then-Treasury Secretary's $700 billion holdup of the US mint in October, 2008, has many more acts still to be played out.

The rush for the exits began a week ago and the passageway out is beginning to get quite crowded.

Not Mixing Metaphors: The US Ship of State is Rudderless

In less than a week, a couple of hundred people (maybe less) scattered around the country in data centers will decide who wins elections for the US House and Senate and other important elections, state-wide and local.

Do you think that's an absurd proposition made up by somebody overusing Zanax or other mind-altering drugs? Perhaps you haven't been keeping abreast of developments via the Brad Blog, Verified Voting or Bev Harris' Black Box Voting.

These and other web sites - no, you'll find nothing about actual vote manipulation anywhere in the mainstream media (MSM) or even on Fox News (who only make hollow claims that ACORN or other "liberal" groups are effecting voter fraud) - have been detailing our fully-rigged elections systems since the fiasco of 2000 in Florida. Or have you forgotten that George W. Bush was never elected, but rather, appointed to the Presidency by the Supreme Court in 2000 and that the 2004 election was largely stolen?

OK, take whatever meds you need to make you believe that all is well in our great union, but I'm here to tell you - again - that the country is being run by a criminal gang masquerading as politicians, funded by the gangsters of Wall Street, otherwise known as "banksters", who have defrauded millions of Americans over and over again through fraudulent mortgages, fraudulent assignments of mortgages (I personally own one of these), baseless foreclosures, phony mortgage-backed securities (MBS) which were sold around the globe, but also to pension funds to which YOU may be contributing.

I used to say the wheels are off, but it's worse than that now. The ship of state is floundering in a seas of fraud without a rudder. Consider our fates when abject morons such as Sharon Angle may actually defeat senator Harry Reid in Nevada, when a total business failure such as Carly Fiorina may defeat senator Barbara Boxer in California. Not that I'm a fan of either Boxer or Reid - they are integral parts of the rampant criminality of Washington, DC - but their proposed replacements are nightmares.

As a nation, we are well on our way to complete and total ruination at the hands of an oligarchy run out of control. Massive criminality is no longer prosecuted; indeed, it is likely praised behind closed doors. The government's preferred choice of action is to settle with criminals, taking money in lieu of prison terms, as in the case of Countrywide CEO Angelo Mozilo.

In normal times, deals like this would be categorized as bribes, but today the are SOP (standard Operating Procedure). In fact, our federal Attorney General, Eric Holder, hasn't led a sucessful prosecution of anybody involved in banking or the BP oil well explosion in the nearly two years be's been in office. The man just doesn't do his job and should be impeached, that is, if anyone can find him (he's nearly invisible).

To qualify that the US is off-course and headed for the rocks of desperation, depression and dissolution, a few headlines and stories should be required reading for today:

Run, Turkey, Run - PIMCO chief Bill Gross calls the Fed a Ponzi scheme

No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem - William K. Black rips Larry Summers and calls President Obama a fraud.

Halliburton Knew About Bad Cement Job Before the Spill - Mother Jones reports that the company that former VP Dick Cheney once was CEO of, has been hiding the truth, again. Making matters worse, the company is now headquartered in Dubai, so even if we could locate Mr. Holder, the chances of prosecuting this rogue company are nil.

And of course, this: Leave Vera Baker Alone. She Did Not Have An Affair With Obama. - the internal US security apparatus may have the president by the short hairs. Nothing surprises us any more.

Not enough? We have witches running for Congress, a proposal to legalize marijuana in California being beaten back by the liquor lobby, other candidates who dress up in NAZI garb, others who invoke the Taliban when speaking of their opponent, and enough crazies running for office - like Carl Paladino, who threatened to "take out" a reporter - to make the original cast of One Flew Over the Kukoo's Nest appear completely normal.

On top of that, computers execute over 70% of all trades on Wall Street without any human intervention, and Joseph Murin, former head of Ginnie Mae, losing all credibility in this CNBC video, by first saying that now is the best time to buy a home and that the robo-signing scandal is "not about fraud, this is about process inadequacy." Incidentally, guest host Ken Langone's posturing that people are moving out of their foreclosed-upon homes into cheaper apartments and renting out the homes, is 100% pure falsehood.

How the markets responded to this crush of madness was the usual miasma of mix-up: The NASDAQ, S&P and NYSE were up, the Dow down, all marginally. Volume was normal, meaning, lousy.

Dow 11,113.95, -12.33 (0.11%)
NASDAQ 2,507.37, +4.11 (0.16%)
S&P 500 1,183.78, +1.33 (0.11%)
NYSE Composite 7,504.85, +23.98 (0.32%)
NASDAQ Volume 1,910,478,375
NYSE Volume 4,771,915,500

As such, there were 3152 advancing issues, 3205 decliners. New highs beat new lows, 413-58.

JP Morgan and HSBC Bank are being sued in federal court for manipulating the silver market [PDF]. Got coin? Silver exploded to the upside today, gaining 45 cents to $24.01. Gold was up $19.10 on last print, to $1344.10. Crude oil futures on the NYMEX closed up 24 cents, at $82.18. Note that above $80 per barrel is now the new normal, as is $3.00/gallon gas in many locales.

It's a mess, and come Tuesday, it's only going to get messier as we're likely to have a lame-duck congress followed by a completely stalemated one, with Republicans controlling the House and Democrats with a narrow (unable to override vetoes) majority in the Senate. Dr. Utopia will still reside in the White House, and, at a time when the nation needs leadership in the very worst way, we will have none.

Tomorrow, the initial estimate of third quarter GDP will be announced at 8:30 am ET.

Good luck with that!

No POMO, Stocks Down; B of A Putbacks Slam Stocks

Playing the market has become so simple. If the Fed supplies liquidity, buy. If they don't sell, but you should do those things a day ahead of time, and, of course, there are no guarantees, as computers running complex algorithms control 70-80% of the trading and the other 20-30% is handled by crooks, swindlers, fast-buck operators and con men.

Today's slide was exacerbated by problems for America's favorite deceitful banking interest, Bank of America, as reports emerged that various parties, from PIMCO to the NY Fed's Maiden Lane entity, are seeking putbacks against the company for many of the bogus MBS it has floated over the years. In a nutshell, now that 20% or more of the loans in various mortgage-backed securities are non-performing and the bank can't keep up with foreclosures and reselling of properties, the investors want their money back.

A consortium has hinted at a lawsuit in a letter to the bank, with more lawsuits surely to follow from parties as diverse as class-actions on behalf of defrauded homeowners to state AGs from across the country in a smorgasbord of civil and criminal actions. BofA has turned from a lending bank to a punching bag overnight, though the process has taken years and was mostly self-inflicted. Of course, BofA is not alone, though they may be singled out for the bulk of the abuse. JP Morgan Chase, Wells Fargo and Citigroup have similar issues that will be called out in due time.

The hour of the banks final reckoning is upon us, finally, and the criminals are circling the wagons. Within days, we should see executives lawyering up, though Attorney General Eric Holder remains ominously silent and disgraced. Our federal Attorney General should be immediately forced to step down for he has allowed a criminal enterprise to flourish within the banking community without even the hint of an investigation or subpoena.

Dow 10,978.62, -165.07 (1.48%)
NASDAQ 2,436.95, -43.71 (1.76%)
S&P 500 1,165.90, -18.81 (1.59%)
NYSE Composite 7,423.65, -147.45 (1.95%)

Losers finished well ahead of gainers, 5335-1164. New highs came down quite a bit, but still led new lows, 253-30. Obviously, there was some bottom fishing going on, as the new lows number should have been at least double what it was. Of course, considering the abundance of reporting and statistical issues facing the markets, all figures must be viewed with extreme cynicism and skepticism. Volume was quite strong, not to the bulls liking, indicating that this downdraft might be just the first of an October surprise swoon which almost everybody - except the genius analysts on CNBC - has expected.

NASDAQ Volume 2,256,866,500
NYSE Volume 6,293,440,000

Equities were joined by many commodities in the sell-off. Crude Oil for November delivery fell $3.59, to $79.49, a nearly 4.5% loss. Gold was smacked back to reality with a $36.10 loss, to $1,336.00. Silver responded in kind, losing 63 cents, to $23.78.

The banks are walking face-first into a tsunami of lawsuits. High-powered class action lawyers are looking into the potential for a nationwide class action in which the major banks - JP Morgan Chase, Bank of America Wells Fargo and Citigroup - would be defendants.

This Bloomberg story details the sordid side of MERS, named in lawsuits across the country. MERS (Mortgage elctronic Registry System) is a computerized registry which avoids filing mortgage assignments in county offices. It was founded, funded and maintained by a consortium of major lending institutions as well as government entities, Fannie Mae and Freddy Mac.

Another story, this one from Salon, citing numerous sources, including University of Utah Law Professor Christopher Peterson in the Summer 2010 University of Cincnnati Law Review. Peterson isolates MERS and puts it squarrely at the root of the entire mortgage miasma, dating back to its roots in 1995. The company and its practices are largely behind the entire securitization process, which, according to Peterson, obliterates chain of title and among other rights, standing in foreclosure actions.

Fraudclosure continues. Here's Barry Ritholz and Chris Whalen on Larry Kudlow's show Monday night discussing various scenarios on how the situation will be resolved: