PPT Rallies Market

Since there's no other salient explanation for today's rise on the Dow, I will be the first to indict the President's Working Group on Financial Markets (a/k/a The Plunge Protection Team or PPT) for boosting stocks after Friday's shock waves sent investors scurrying for cover.

The Bush administration has a vested interest in keeping the illusion of a healthy economy alive. Their buddy, John McCain, is going to have to have something upon which to hang his hat, and most Americans respond well to positive economic conditions.

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Of course, anybody with at least half a brain knows that the US economy is in dire straits. Today's laggards - as they have been through much of the past 10 months of declines - were the financials, and, we have a new leader. JP Morgan Chase (JPM), on no discernible news, took a major dive this afternoon, dipping as much as 3 1/2 points (9%) before recovering about a point into the close (-2.58, 37.51).

I would be reticent if I did not mention that this was one of the three strong sells (via puts) I recommended on June 4 to subscribers to the Fearless Stocks & Options Advisory Newsletter. The other two recommendations are also doing just fine, but you'll have to pony up $49.95 for that information (a steal if you're serious about options).

Were I an investor in JPM, I would be bailing right now, if not sooner. Of course, since I'm not so stupid as to invest in the work of bankers - a clueless lot of overstuffed shirts if ever there was one - I own no shares of any bank, brokerage or financial institution, and probably never will.

But JPM is worth watching over the next few months. Something is definitely not right there, and considering the recent performance of banking interests, there could be another round of imploding assets involving financial issues. Morgan has not been hard hit until today, and they may be next in line with their hands out to the various sovereign funds like those in Saudi Arabia, the UAE, Kuwait and Taiwan.

On the question of whether the PPT was actively pumping futures and indices today, I would say the evidence is clearly there. The Dow was up sharply at the open, as a stabilizing influence, but stumbled to break-even by 3:00 pm. All of today's gain was made within the final hour of trade. I rest my case.

Dow 12,280.32 +70.51; NASDAQ 2,459.46 -15.10; S&P 500 1,361.76 +1.08; NYSE Composite 9,149.09 -3.42

To get an idea of just how misleading the headline number (Dow up 70!) is, take a look at the internals. Declining issues hammered advancers by a nearly 2-1 margin, 4121-2114. New lows expanded their edge over new highs, 371-114. That's the widest margin in about a month, if not more.

The markets could rally for the next few days or the balance of the week, though I don't think that's in the cards. This market is marked for declines, and steep ones, with the Dow currently hovering less than 500 points above the January and March lows and off nearly 2000 points from the October '07 highs.

Only the concerted will of market insiders and the PPT can save the stock market from incessant mark-downs over the next 2-4 months. They will do everything they can, short of imposing price controls on gasoline, to keep markets from melting down prior to November. Naturally, a summertime collapse with a snap-back weeks-long rally leading up to the elections would suit the slimy Republican propaganda machine just fine, and that's what is staring us dead in the face.

Oil actually eased a bit on Monday, losing $4.19, to $134.35. Gold eased 90 cents to $898.10. Silver lost 22 cents to close at $17.21 the ounce.

Volume on the equity markets was moderate.

NYSE Volume 1,349,556,000
NASDAQ Volume 2,116,800,000

CPI Shows Inflation, Fed Lowers Growth Forecast, PPT Pumps Stocks

A somewhat expected rise in the Consumer Price Index (CPI) roiled investors prior to the opening bell and stocks drifted in negative ranges in early trading. The reading of a rise of 0.4% in January (4.8% annualized) spooked even the most ardent supporters of Fed and administration policies.

By noon, the Plunge Protection Team had seen enough selling to convince them to pump stocks higher and in a 20 minute span, the Dow Jones Industrials gained 120 points and the other indices followed into positive territory.

As the day wore on, the market meddlers of the PPT goosed stocks even more, pushing them to the highs of the day, up more than 125 points, shortly before 3:00 pm.

The obvious manipulation by the PPT (aka President's Working Group on Financial Markets) were in response to more somber news via the January FOMC meeting minutes in which the Fed lowered its 2008 growth forecast from a range of 1.8-2.5% in November to 1.3-2% in January.

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The Fed and their agents in the PPT are fooling nobody. The economy is clearly headed for - if not already in - a recession, and stocks remain grossly overvalued relative to aggregate earnings. But, it is an important election year, and the purveyors of power simply cannot stomach the idea that their reign of terror over the American public is at an end.

Nothing short of miracles (Mike Huckabee, anyone?) will salvage the US economy and the Fed is in desperate straits. The pure futility of lowering interest rates to an unsustainable 3% or lower is beginning to manifest itself in higher prices for everything from gas to bread to appliances.

Under its current framework, the Fed is on a path of destruction of the US dollar and with it will go any last vestige of respect and confidence in equity markets. Of course, the Fed continues a tradition of hampering real growth by denying that excesses need to be liquidated, instead relying on market massages and wrong-headed rate cuts.

The real culprit is the absolute seizure of credit markets, especially at money center banks. Merger and acquisition activity is going in reverse, with many deals having been canceled, and until the Fed and the banks take responsibility for their follies over the past seven years by liquidating themselves, the economy will slowly and surely continue to deteriorate.

Dow 12,427.26 +90.04; NASDAQ 2,327.10 +20.90; S&P 500 1,360.03 +11.25; NYSE Composite 9,073.96 +50.92

Advancing issues outpaced decliners, 3752-2614, though new lows continued to overwhelm new highs, 257-99. With the exception of two days in December 2007, new lows have had the edge over new highs since October 31, approaching four months.

If there is any indicator that the economy is in trouble, it is the continuing readings of new lows over new highs. The stock market is clearly struggling for every gain, and most of them have been helped along by the PPT. Sooner or later, these phony gains will be eviscerated and stocks will plunge to more sensible, sustainable, reasonable levels. It's widely assumed that without meddling from the PPT, the Dow would already have touched down at the 11,000 mark or lower.

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The more nudging by the Fed and the PPT, the more disastrous will be the inevitable crash. It's coming, and it won't be pretty, though anyone who has been paying attention won't be at all surprised.

As for the rest of the clueless sheeple out there... keep watching and listening to the perma-bulls like Larry Kudlow and flag-wavers like Rush Limbaugh and Sean Hannity and see what good that does you.

The price of crude oil closed at another record high on Wednesday, gaining 73 cents to $100.74. Yes, my friends, George Bush and his Republican administration has succeeded in making $100/barrel oil a reality. (sick bastards)

Gold was up $8.00 to a new record, $937.80. Silver was higher by 25 cents, to $17.76.

NYSE Volume 3,835,300,000
NASDAQ Volume 2,293,634,250

Bernanke, Paulson Speak, Markets Sink

One would suppose, with three-quarters of the Plunge Protection Team (PPT) busy testifying before congress, that there would be nobody at the controls to prevent a market sell-off.

That's precisely what happened - be it coincidence or otherwise - on Thursday, as Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson and SEC Chairman Christopher Cox delivered testimony on the economy to Senate Banking Committee members.

In their remarks, both Bernanke and Paulson both indicated they felt the economy was in a somewhat delicate condition, owing mostly to a continuing credit crisis in which bankers have had difficulty lending to any but the most credit-worthy applicants.

What their remarks did not reveal, though hinted at, was that the bankers themselves were the cause of the precarious credit conditions, by participating in the massive fraud and deception that is now the subprime mortgage and related derivative investment mess.

And what a mess it is. Bank of America report released today suggested that the losses related to subprime mortgages was more than $7.7 trillion globally.

Another money center was hit with unfortunate fallout on Thursday, adding to the market's woes. Swiss financial giant UBS revealed a net loss of 4.4 billion Swiss francs ($4.0 billion dollars, $2.7 billion euros) in 2007, including an $18 billion writedown in damaged securities.

Dow 12,376.98 -175.26; NASDAQ 2,332.54 -41.39; S&P 500 1,348.86 -18.35; NYSE Composite 8,968.41 -105.07

Today's losses nearly matched yesterday's outsized gains, and even though the markets are higher for the week, momentum has clearly swung back to the bears. Declining issues outpaced advancers, 4720-1530, while new lows expanded the gap over new highs, 203-97.

Friday's economic reports include the NY Empire State Index and capacity utilization, though neither will likely weigh more on investors than today's dire and apprehensive assertions by Paulson, Cox and Bernanke.

Volume continues to be on the tepid side, as money largely sits, awaiting a safe entry point or going elsewhere.

Oil gained another $2.19 today, closing at $95.46. For the second day in a row, precious metals barely budged. Gold was up 80 cents to $911.00; silver lost 10 cents to $17,26.

Here's a tip. Buy sugar futures and sell corn futures. It's seven times more efficient to produce ethanol from sugar than from corn. On top of that, Tata Motors (TTM) is financing in a company which has tested and is producing a car that runs on air. That should serve as quite a blow to the oil barons.

NYSE Volume 3,630,146,750
NASDAQ Volume 2,270,238,000

Swimming Upstream with the Plunge Protection Team

Editor's Note: I wrote the following piece on the morning of Friday, Feb. 8, watching with considerable frustration a number of usual, obvious, upward spikes of 70, 50 and 40 points on the Dow, which I usually assign as the work of the Plunge Protection Team. Considering that very few investors and even fewer members of the general public even know of the existence of this group (officially, the President's Working Group on Financial Markets), it is my duty as a proponent of free markets and the Austrian school of economics, to expose them and explain how their interference caused more harm than good.

I have written about them before, and readers can check the tags or labels on this blog for PPT or Plunge Protection Team. It is also advisable to search the same and acquaint oneself with the workings of this group. They are not fictional, but sadly, oh, so real and a better understanding of their role and intentions may bring about some needed changes in our financial markets.

Being neither a zealot nor a fool, I understand that my proposal to the heads of the Federal Reserve, Treasury and other members of the PPT may lead nowhere, but I am hopeful that a robust, open discussion of their actions may lead us all to a better tomorrow.

Coincidentally, shortly after writing this piece, the Dow began an earnest descent. Maybe there is power in thought and force in words. In the end, all we have are faith, hopeful dreams, our good natures and desires.


As I watch the US equity markets gyrate in their long, slow-motion decline to some eventual oblivion, I cannot escape the intransigent maneuverings of the Plunge Protection Team (PPT) in their daily attempts to rescue the markets from their certain swoon.

Their actions are more and more transparent every day. As stocks decline in the somewhat orderly, time-honored tradition of bear markets, the PPT is at odds with the natural forces at work. In effect, they are swimming upstream against a logical, sensible tide of selling. Like salmon returning to their roots, the PPT believes the markets should return to glory days of all-time highs.

They are wrong. They are foolish. They will fail. Their actions speak of desperation, unlike the glorious salmon, which are guided by instinct and propagation, the PPT is swimming blindly into waters neither friendly nor where they are welcome.

A complete, final flushing of the markets is inevitable and preferable to the constant tinkering of these fondlers, who seek to govern what is known and what will be. While they think it right and good to prevent markets from tumbling - lest they incite an already angry public - they do more harm by the day. Their meddling reduces confidence in the fairness of the markets, to say nothing of the massive distortions created by their utterly false intentions.

No good or honest trader is accepting of sharp vertical ascents in the markets. They know what evil hands are at play, goosing the futures, bidding up the blue chips and pampering the investment community with talk of soft landings, strength in the economy and sustainable growth.

Poppycock. Rubbish. Nonsense.

It is time for the PPT, the Fed and Treasury to step back and cease open market operations. Allow the markets to function as they were intended - free and open, without interference - which, in the current environment more than likely means a crash, or at least a long, sustained recession and diminution of equity assets.

It is time for the Fed and their lackey PPTers to stop trying to fix what they themselves have broken, admit defeat and stabilize the situation. Set the federal funds rate at an acceptable 4 1/2-5%, allow the banks that have gorged on risky investments to pay their dues and liquidate their assets and let the American public breathe the clean air of a bottomed-out business cycle.

It would be a refreshing change from the eternal dithering and blathering to which we have become so accustomed. Let those which should fail, fail. Let the market decide. Let the indices fall to where they may, so that companies once again can be accountable and that investments actually start behaving like the fickle instruments of wealth that they are.

Surely, this would be a painful lesson for all, but no less painful than having to endure the uncertainty and unease associated with contrived markets and the grubby molestation of the PPT.

PPT Rallies Markets, Raises False Hopes

I've mentioned the Plunge Protection Team (PPT) on this blog more than just a few times. While some people think that the President's Working Group on Financial Markets is some kind of chimera that I and other tin-hat conspiracy nuts have created out of whole cloth, there's more than enough evidence - including today's mythic 631-point rally - to prove that the PPT does indeed exist and now operates almost in plain sight.

Here are just three articles concerning the PPT from fairly credible sources:

THE TRAGEDY OF THE US STOCKMARKET Part 2 - PPT failing, panic in Washington...

Gold will rise, US Dollar would burn

Plunge Protection Team Now Official

There are many more which can be found using any search engine, but try this Google News search for links to current articles on the PPT.

After the absurd move today, rallying the Dow from a low of 11,644.81 to a high of 12,276.67, there should be no doubt that the US economy is in the midst of a serious crisis. The problem is that 95% of Americans don't know this because they will see the stock market rebounded today. Half will not know that the Dow was down more than 300 points. The other half will see that but simply not care.

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Economic reporters never mention the PPT, and always assign turnaround movements in the middle of market collapses as either bargain hunting, program trading or tied to the price of oil. So, the average Joe or Jane with money in their 401k thinks everything is OK. All the while the US dollar continues to sink into a black hole on the PPT's profligate spending in US equity markets.

All of this PPT-induced buying began at 12:45, when the markets bottomed out for the second straight day and it continued without interruption right through to the close.

Dow 12,270.17 +298.98; NASDAQ 2,316.41 +24.14; S&P 500 1,338.60 +28.10; NYSE Composite 8,805.68 +144.51

I have seen many a strange event on the markets, but today's takes the cake, the ice cream, plate, fork and napkin. Yesterday, I called the market rally the biggest fraud ever perpetrated in financial markets. I was wrong. Today's action takes that prize, hands down.

Let me be clear. Small investors in America are neither sophisticated or very smart. They get the majority of their information from television (CNBC) or paid shills, invest mostly in mutual funds which they barely comprehend and probably spend less than two hours per week analyzing market trends, individual stocks or financial events.

On the other hand, Americans still trust their federal government which is a major mistake. Here's a short list of non-credible functions, offices and people in the highest positions of power in the United States:

• The president and his administration and cabinet


• Congress: both houses are equally inept and unworthy of trust


• The Federal Reserve, the Chairman (Ben Bernanke) and the Board of Governors


• Treasury Secretary Henry Paulson


• Mainstream Media, especially ABC, NBC, CBS, FOX (lapdogs of the government)


• The SEC


• CEOs of any major corporation and all of the Dow companies

Thus, the not-so-clandestine operatives of the PPT get to manipulate markets without impunity, resulting in erratic and unexplainable movements like today. This inspires hope in the little people, even though that hope is based on nothing more than a government printing press spitting out $100 bills as fast as it can and operatives in the stock markets buying everything in sight with both hands.

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Market internals show just exactly how ridiculous today's 300-point gain on the Dow really is. Volume was the highest in a long time, surpassing yesterday's highest of 2008. That makes sense, since the PPT had to buy a lot of stocks while people were busy selling them and then covering their short positions as the fraudulent rise overwhelmed everything.

Advancers finally got a leg up on decliners, 4234-2198, but new lows were again dramatically ahead of new highs, 864-60.

Oil slipped by $2.22 to $86.99. Gold closed at $883.10, -7.20, while silver fell by 14 cents to $15.97.

Unless there's any doubt, nobody should be trading stocks unless they have a solid understanding of economics and the workings of the PPT, as the former is fundamental and the latter is a market dynamic which cannot be understated.

Stocks will eventually fall again, retracing the lows of today and yesterday. Within months, if not weeks, the indices should be well below today's levels, though due to the activity of the PPT, the timing of the collapse is difficult to discern.

If you are long stocks or call options, you should not be playing in this market. It's a very dangerous playground and some of the kids carry knives. If you're short or in puts - the advisable position - keep your stops fairly tight and a sharp eye on radical movements like today's. 600-point gains can drastically alter your profits.

NYSE Volume 6,765,203,000
NASDAQ Volume 3,585,647,750

Bernanke Blinks; Big One Forestalled

With markets tanking worldwide on Monday, the calls came in from central banks and economists around the world to Ben Bernanke to rush his rate cuts to the market to avoid a catastrophe.

By Monday night, the Federal Reserve Chairman had made up his mind and folded like a cheap suit, but the markets wouldn't know until around 8:30 am ET. Prior to that, here's what was flashing on trading screens:

06:47 am : S&P futures vs fair value: -57.3. NASDAQ futures vs fair value: -70.8.

06:47 am : FTSE...5586.70...+8.50...+0.2%. DAX...6729.26...-60.73...-0.9%.

06:47 am : Nikkei...12573.05...-752.89...-5.7%. Hang Seng...21757.63...-2061.23...-8.7%.

With the announcement of an emergency cut to the federal funds rate of 75 basis points (0.75%), the markets refused to go along. At the opening bell, the NASDAQ was down 114 points, the Dow fell 450 minutes after the open and at 9:33, the S&P was down 31 points.

From there, stocks took a u-turn, thanks to underhanded funding from the Plunge Protection Team (PPT) which immediately knocked 200 points off the Dow's losses. As the day progressed, the "invisible hand" of the PPT continued to pump money into stocks, nearly erasing the losses entirely.

Trading was highly suspect throughout the session. Volume was explosive in the first hour, then dawdled and dwindled, even though the totals were on the high end. In general terms, the Fed and Treasury pulled off one of the more dramatic and obvious frauds in stock market history.

Dow 11,971.19 -128.11; NASDAQ 2,292.27 -47.75; S&P 500 1,310.50 -14.69; NYSE Composite 8,661.18 -133.68

Even the press was involved in the fraud. In this story from Reuters, headlined on Yahoo Finance at 10:56 am as Wall St. cuts losses in half on bargain hunting, though the Reuters headline actually read, Market falls on recession worries.

From the article:

But by midmorning, major indexes had halved their losses, as investors snapped up beaten-down retailers, home builders and financial services companies after the Federal Reserve cut interest rates by 75 basis points in a surprise intermeeting decision.

That statement is almost certainly untrue and Reuters would be unable to provide proof if required. The story was later pulled from the list of available headlines. Nobody was buying stocks except agents of the Federal Reserve and the Treasury through their proxies at Goldman Sachs, Bear Stearns, Lehman Brothers and Merrill Lynch. This was typical Plunge Protection Team work, stopping the markets from a total washout, which was almost certain to occur, despite the Fed's desperate emergency rate cut of 75 basis points prior to the opening bell.

Stock manipulation was evident throughout the session, with the Dow closing to within 7 points of break-even just after 3:30 before selling off with gusto, losing over 120 points in the final 30 minutes.

While the Fed pumped $10 billion into the markets through their typical open market repurchasing (repo) activity, there was probably another $30-50 billion in secret, "underground" funds through the PPT, which is kept off-the-books and will likely never be revealed except to the inside players who manipulate the market with magic liquidity, flooding the world with fake capital and doing irreversible damage to the US dollar.

The point is that the markets are being falsely pumped to the upside and have been for years. There's likely an overhang of more than a trillion dollars worth of bogus liquidity that's been priced into stocks over the past 8-10 years. The number might actually be larger, and I am using a trillion as a conservative estimate.

Real damage is done to markets when manipulated by secretive bodies such as the PPT. Since equity prices are primarily perceived value, investors are subjected to stock prices that are an illusion. US stocks on average are probably worth 20-30% less than present values due to these distortions.

While the newspapers and internet reports will praise the Fed's "quick thinking" the truth is that stocks will continue to decline. Truly wise investors know that this market - and most other world markets - is teetering on the brink of collapse, and only clandestine operations saved it from total destruction.

The internals were telling. Declining issues pummeled advancers by 4064-2385, but the reading of new lows was literally the highest number I have ever seen. There were 2070 new lows to only 69 new highs. Nearly one in three stocks hit 52-week lows on Tuesday. Clearly, the market averted meltdown... for now.

Oil traded 72 cents lower, closing at $89.85. Gold was up $7.90 to close at $889.80. Silver gained just 2 cents to $16.04.

The view from this outpost is that investors should expect more severe losses over the next 3-6 months. The Fed's magic won't work indefinitely on a global financial system that's essentially broken.

NYSE Volume 6,256,598,000
Nasdaq Volume 3,109,516,000

Crash Averted by PPT

The absolute garbage coming from the Federal Reserve in the form of jawboning, daily repurchase agreements and soon-to-be-announced round of rate cuts, have distorted and perverted the US equity markets to a point at which there should be no investor confidence whatsoever.

With the markets down significantly all day, the Fed and Treasury, under the guise of the Plunge Protection Team (PPT, or, more specifically, the President's Working Group on Financial Markets) sent stocks soaring off their lows and nearly into positive territory. The most egregious escapade was on the Dow, which went from being down 190 points at 2:15 to UNCHANGED at 3:15. Right around 3:10 ET, the index went absolutely parabolic, gaining 70 points in under four minutes.

There are no brokerages, investors or arbitrageurs on the planet who could have accomplished such a monumental market-moving feat other than the PPT, working in concert with the nation's largest brokerages, Merrill Lynch (more about them later), Goldman Sachs, et. al.

The fraud perpetrated upon the people of the United States is one which purports that our financial markets are safe and secure, when in fact they are propped up daily by infusions of cash from the Federal Reserve and brokerages working in concert.

Only some late day selling by honest market participants kept the markets from a complete recovery into positive territory. That the Dow finished the day anywhere near positive is an affront to every educated trader on the planet. I take these matters personally, since it is my money (and others) being toyed with by the Fed.

The unmitigated actions by the Fed of late have become so pronounced and obvious to seasoned market watchers as to be laughable, were it not for the fact that they are pumping billions of dollars into the markets to avoid a complete and utter capitulation of the equity markets. With the worldwide credit markets already in a state of seizure, the Fed and Treasury actions are a desperate propping up by a bunch who are effectively destroying the value of the US Dollar every day. They deserve nothing less than a monumental market crash followed by ouster from office and criminal proceedings.

It's sick. It should stop, but it won't. We're under a fascist regime, so all lies are allowed, even big ones that affect the lives of every man woman and child in the country and millions more who haven't even been born.

Dow 13,675.25 -0.98; NASDAQ 2,774.76 -24.50; S&P 500 1,515.88 Down 3.71; NYSE Composite 10,009.30 -31.69

Despite the outright rigging by the Fed, PPT, Goldman, etc., stocks sagged again on Wednesday as the overhang of the mortgage malaise continues to haunt any company even remotely associated with the housing industry.

Merrill Lynch, one closely aligned by the weight of their mortgage portfolio, got the ball rolling downhill before the markets opened, offering a third quarter report that the officers of the company wish had been chewed up by a friendly dog.

Merrill (MER) lost so much money this quarter it won't fit on the screen. They were pounded most of the day and according to reports, investors were withdrawing money from Merrill trading accounts as quickly as they could.

As sickening as the corrupt Fed intervention into today's (and every day's) market was, declines outnumbered advances 2 to 1 and new lows distanced themselves from new highs, 353-161. It's a very sick market which should have closed at or near the intraday lows.

Oil was up another $1.83 to $87.10, gold gained $2.50 to $765.60, and silver slipped 6 cents to $13.59

But, really, how did the Dow lose less than a point? The US economy is virtually on its knees. That's without a doubt, despite what the president, Ben Bernanke, Hank Paulson, or any other paid shill tells you.

NYSE Volume 3,803,483,500
NASDAQ Volume 2,739,684,250

Stocks continue win streak

The Dow Jones Industrials closed on Tuesday at its highest point since August 8, though it is still 210 points below that level and a full 552 off the all-time high. On the first day back from the Labor Day weekend, the message was clear: there's room on the upside as well as the downside.

The Dow closed positively for the second day in a row, though follow-through beyond that is questionable. The Dow has not put together 3 winning sessions since that August 8 date, when the index closed at 13,657.86, and that number would need to be exceeded to re-confirm the bull market. Failing that, we would be in the early stages of a confirmed bear market.

Those of us willing to go out on a limb would suggest that we've already begun the bear, instead of being caught in the clutches of a nasty "correction", which was, in fact, cut off at the 10% declination by the Fed and the PPT, or Goldman Sachs, Lehman Brothers and the rest of that gang of thieving, conniving bankers and brokers.

While the Fed, the Treasury, the government, the big banks and brokerages, the financial press and that weird guy down the street with the funky hat don't want the general public to be alarmed that the stock market has turned bearish or that there's even a "correction", the matter seems somewhat already settled by scores of traders who are steering clients clear of US stocks and have been for the last three weeks.

Dow 13,448.86 +91.12; NASDAQ 2,630.24 +33.88; S&P 500 1,489.42 +15.43; NYSE Composite 9,698.68 +101.40

So, the sheeple investor is being led by the nose to a serious shearing, if not an outright, bloody slaughter. Those daring to dip a toe into the long side of the trade are willing to buy the absolute lie that the Fed and the banks can manage the destruction of trillions of dollars of investments without the US economy suffering so much as a hiccup. It's the blind faith of fools which is leading this market higher, without the benefit of any fundamental chart confirmation.

Buy if you like, but cooler heads are staying on vacation for the foreseeable future.

Volume on the markets today was better than it has been for most of the past three weeks, but hardly what anyone would call "heavy."

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Advancing issues were better than decliners by about a 5-2 ratio, and new highs outdid new lows (for the second day in a row), 164-101, though that margin is hardly convincing.

The Dow actually punctured upside resistance late in the day on Tuesday, but quickly retreated 40 points into the close.

Oil was up another $1.04 to close at $75.08, while gold added $9.60 to $691.50 and silver was up 22 cents to close at $12.45.

The peculiarity of the commodity surge is that it should not occur in a vacuum as this current manifestation is. The correlation between stocks, oil and metals is as broken as the credit markets. Albeit, life goes on, until, at least, the next calamity.

Keep an eagle eye on Dow 13,657. If that number is not exceeded, more downside can be expected in short order. Getting beyond that will take a herculean effort, or, failing that, extreme measures of manipulation by covert insiders.

The Fed blinks; PPT's perfect timing

After yesterday's 300-point moon shot into the close, today's 50 basis point decrease of the discount rate propelled stocks another 200 points higher on the Dow. That's 500 points in just about an hour! Nice going.

Unfortunately, it's mostly forth, but one must understand the machinations of the manipulative class. The PPT (Plunge Protection Team) bought up shares yesterday at just the right time, didn't they? Even better, there was a load of activity on some option calls which expired today on companies such as ExxonMobil (XOM), Lehman Brothers (LEH), Citigroup (C), American International (AIG), Merrill Lynch (MER), Bear Stearns (BSC) and Countrywide (CFC). The real players in this market sold stocks this morning and cashed out options for fat one-day profits.

Goody for them. However, the rest of the poor suckers out there aren't privy to the same inside info, and will probably suffer losses later on, as the credit fiasco spreads.

The little bonus from the Fed this morning came after Japan's Nikkei lost 874 points overnight (5.42%) and European markets were still struggling. It's a temporary measure, a stop gap. Stocks will get hit further next week.

Dow 13,079.08 +233.30; NASDAQ 2,505.03 +53.96; S&P 500 1,445.94 +34.67; NYSE Composite 9,314.99 +227.89

Hypnotized investors bought up shares like the sheep they are,

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being led unwittingly to slaughter. American investors have to be the least sophisticated moneyed bunch on the planet. They have been played like so many banjos.

Advancing issues outdid decliners by a 4-1 margin, but we're not out of the woods yet. There were still 296 new lows to 123 new highs.

Oil was up another 98 cents to $71.98. Gold and silver also got a boost. Gold was higher by $8.80; silver added 31 cents.

It was such a great show.

Who caught the falling knife?

The burning question on my mind - and that of many astute investors, brokers and analysts, I'm sure - is who stepped in to the morass today and actually bought stocks when the Dow was down as much as 340 points at mid-day and off 300 points as late in the day as 3:15 pm.?

It would have to have been a magnificent leap of faith for so many investors to begin snapping up bargains at the same time. Maybe there was a case of mass psychosis on Wall and Broad that sent brokers,trancelike, to their trading machines to begin punching in buy orders.

No, readers, there can be no doubt that this spectacular rally was nothing more than the work of the mysterious Plunge Protection Team, better known as the PPT or the President's Working Group on Financial Markets, established by executive order by Ronald Reagan following the crash of 1987, and in operation - in some form or another - ever since.

The modus operandi is unmistakable. Once the PPT gears into action, stocks climb at dizzying speed and generally in non-stop fashion, just like today. It is also usually the case - as today - that the US markets will run counter to the trends set in the rest of the world's equity index. Today, markets in Europe were roiled, in their worst day in four years while the US markets staged a "miraculous recovery."

Dow 12,845.78 -15.69; NASDAQ 2,451.07 -7.76; S&P 500 1,411.27 +4.57; NYSE Composite 9,087.10 -1.94

Are US stocks so special, or our traders so astute, that they saw such tremendous buying opportunities that they would erase 300 points in losses on the Dow in a matter of 45 minutes? No. Never. The entire afternoon was a charade, designed to keep the public in the dark and avoid an all-out panic.

And they probably accomplished their mission. Americans are so gullible and, may I say, ignorant, as a group. We'll swallow any cockamamie story that is fed to us. We believe that FOX News is actually a news network, or that the Bush administration knew nothing about the 9/11 attacks until they actually took place.

The vast glut of American investors will certainly swallow this miracle rally story. Most of them are too concerned with making sure the tires on their Escalade are shiny or that their Blackberry is the newest model with the most gadgets to care much about the value of their retirement portfolio.

Seriously, what other people, as a group, would allow nameless people to manage an account which will be responsible for their financial well-being years from now? Americans will buy the phony story f today's markets.

You shouldn't. I don't. The global financial system has been brought to its knees and there is no easy way out. A stock market crash is inevitable, or, at best, with a helping hand of the PPT, a long, slow, tortuous decline. You don't have a choice in the matter. The powers that be, behind closed doors, will decide how it's going to play out.

Personally, if I'm going to lose a limb, I'd rather it be cut off with a single blow rather than a thousand small cuts and gnaws over a long period of time. The PPT obviously are fans of Chinese water torture.

Regardless of the intrigue by the PPT, the markets still took a pretty good beating and a lot of people lost more money today. Declining issues held sway over advancers by a 9-5 margin and new lows swamped new highs by a shocking 1475 to 47. To put that number in perspective, nearly one out of every four stocks listed on the NYSE and NASDAQ combined made a 52-week low TODAY!

Rally my arse! Stocks do not just turn corner and head the other way in the midst of a total collapse. Said collapse is still on track. Don't buy the hype.

To get an idea of how seriously close we are to witnessing the total collapse of world economies, check the oil futures today, which sold off as low as $70.10, settling with a loss of $2.33 to end the day at $71.00, on concerns that current and future economic conditions would foment a decline in demand for petroleum products such as gasoline, automotive fuel, petrol, call it what you will. These intrepid plungers don't scare easily, but judging by today's futures prices, they're more than just a little shaken up.

Quite possibly the strangest trading of the day - and the past few weeks, for that matter - has to be in gold. The shiny stuff fell by $21.70 to $658.00. Silver played along, dropping $1.06 to $11.50. For silver, it was a 9% decline in one day. The metals markets are supposed to be somewhat less volatile than that, besides the fact that they should be going up as stocks go down. They surely didn't today and haven't been of late.

The answer to why gold and silver sold off is simple. Everything that isn't cash is being sold to raise liquid funds, metals not excluded.

"Gold's slide into negative territory took an a new and decidedly ominous dimension on Thursday, as price support after price support gave way in the wake of mounting massive liquidations from all quarters," said Jon Nadler, an analyst at Kitco Bullion Dealers, in emailed comments.

"A wide range of commodities were being badly sideswiped in the frenzied quest to raise cash in order to mitigate stock losses by individual and institutional investors alike," Nadler said. "This was a very ugly day across the board."

We'll take his word for it.

The Fix Is In

As investors - and guys who wear pinstripe suits but really haven't a clue - nervously watched the Dow Jones Industrials plummet by another 200 points this morning, the intrepid manipulators from the Federal Reserve Bank (working, no doubt, in concert with the Plunge Protection Team) pumped two injections of "liquidity" into the markets in the morning and added a smaller boost in the afternoon.

In other words, the Fed bought stocks from brokers who, as part of the so-called "repo" deal, agreed to deposit the funds in Federally-insured member banks.

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Thus, a mammoth crash and thud was averted.

When the fed buys stocks, they aren't just fishing nor fiddling. Today's double dose was a total of $34 billion, designed to keep order in the face of an imminent sell-off. Late in the session, with the markets still down smartly, the Fed added another $3 billion.

Apparently, it worked, because the markets failed to melt down as many feared they would. However, these measures are little more than band-aids in a market that is hemorrhaging on multiple fronts.

Due to the blow-up of sub-prime mortgage loans, note holders find themselves stuck with much worthless paper. The spill-over into derivative, insurance, M&A and other credit markets has been stoking fears of financial calamity.

Without a doubt, this is a big mess that's not going to end soon or resolve in a pretty way. Billions of dollars are going to be lost, credit markets will become frighteningly tight and even the Fed's money won't be enough to secure liquidity and order in the equity markets. What's especially frightening about the situation is that the Fed was forced to take such extraordinary measures to shore up markets.

The "repo" swaps are not new. They've been used during other stressful periods, such as in the winter after 9/11, but their effect is marginal. The announcement that the Fed is taking the action is actually much more of a salve on the nerves of traders than the actual money making trades.

Dow 13,239.54 -31.14; NASDAQ 2,544.89 -11.60; S&P 500 1,453.64 +0.55; NYSE Composite 9,435.04 -14.27

The downside of such action, however, is that the Fed eventually has to balance its own books, and buying up stocks in a sliding market - catching the proverbial falling knife - is poor investment strategy, to say the least. When the Fed unloads these stocks, often at a loss, it creates a glut on the market and costs the Fed money. Of course, the Fed can just print up more, and they do, making all those dollars in your pockets worth a little less.

Again, it's nothing more than a stop-gap measure and far from a solution. The real solution would be to allow the market to take its own course, and let the losers lose and the winners win. For all the talk of "free markets" by Fed governors and other high government officials, they certainly act like they have little to no faith in what they preach.

The crash is upon us. With the Fed's help, it will be worse than it has to be. Tighten your belts, we're headed for recession-land.

Market internals allow for a much better understanding of what really happened on Wall Street this Friday. Declining issues rolled over advancers by a 9-5 margin. New lows swamped new highs, 736-82. Even with the Fed's helping hand, there were plenty of casualties on the day.

Oil continued to slip, down 12 cents to $71.47, but still far from it's bottom, which is just a matter of time. Gold perked up $8.80 to $681.60; silver rose 17 cents to $12.87. These are still screaming buys and now would be a good time to stock up.

The coming weeks and months hold still more intrigue and downside. The bulk of the sub-prime loans which are subject to repricing and therefore, default, have yet to do so. October through next March will bear witness to an avalanche of mortgage defaults and a share of bank and financial concern failings.

Cash is king for now, especially if it's in Euros or gold.

CRASH

Let's call a spade a spade.

This market is all but wiped out, as is the US economy. We'll be lucky if we're not invaded by a foreign power.

We've had a president in office for the past 6 1/2 years - and for the most part, a compliant Congress of his party - who's done everything in his power to dismantle the social fabric and the constitution and spend and borrow every last dime of our nation's wealth.

The policies of George W. Bush and the lack of regulation and oversight of the administration and congress have put the nation on the precipice of capitulation. Our financial system is about to implode under the weight of bad loans made right under the eyes of our elected and non-elected officials. The former and current Secretaries of the Treasury and Chairmen of the Fed, Alan Greenspan and Bernanke, are the main delinquents. The current holders of those offices should be immediately relieved of their duties and the president should be impeached. They have failed us miserably and probably engaged in criminal activity. At least in the President, Vice President and Attorney General's case, we are sure that they did.

Those who do not agree should take account. Our bridges and roads are crumbling, we spend billions a month in a war effort that has produced no tangible result except death and destruction, and now our financial institutions are under siege.

If that's not enough, maybe you'd prefer to wait until some of the banks fail or we go to war with Iran or the president declares martial law. Maybe then you'll wake up from your stupidity-induced stupor and see what liberals and progressives have been screaming about.

Or maybe you're content watching and believing in whatever lies they tell you on FOX News. In that case, go ahead and stick your head in the sand. The real intellectual forces of this country have no use for you and your kind.

Dow 13,270.68 -387.18; NASDAQ 2,556.49 -56.49; S&P 500 1,453.09 -44.40; NYSE Composite 9,449.31 -296.89

The Dow Jones Industrial Average lost 380 points today. That's one hefty loss. The other indices followed and it's very likely that the losses would have been larger had not the PPT (Plunge Protection Team, aka the President's Working Group on Financial Markets) been stepping in to stem losses.

Meanwhile, Mr. Bush is heading out of town for a 3 week vacation, but he made sure to mention, before he left, that taxes on corporations should be lowered. After all, Bush made the tax system safe for millionaires and billionaires, why not multi-national corporations who have little to no allegiance to the United States of America?

More ill-advised policy. Just what we need.

Market internals were not as bad as one would expect. Declining issues outpaced advancers by a 15-6 margin. There were 197 new highs, but 606 new lows.

Oil futures closed down 56 cents, to $71.59. Gold and silver were absolutely shattered, with gold off $13.50 and silver down 47 cents. A buying opportunity.

By the way, if you think today was bad, it was only the 2nd worst day of the year, and there's more downside ahead - a lot more.

The Dow, S&P and NASDAQ are all still positive for the year, but one gets the felling that it's a temporary condition. The Dow closed 2006 at 12,463. We're getting closer.

More Manipulation in Stocks

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

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

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

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

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

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

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

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

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

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

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

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

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

The PPT Plans to Save the Nation

They did it again.

It wasn't as dramatic as yesterday's 200-point move in 35 minutes, but there it was again, our guardians of the economy, the guiding hand of the Treasury, Federal Reserve, SEC and the Commodity Futures Trading Commission, acting in concert, pumped the Dow Jones Industrial Average another 120 points between 3:00 and 3:30 pm. They then allowed the market to readjust and close with another 100-point gain.

This time they took the NASDAQ along for the ride and left the S&P and the poor sister NYSE Composite behind; up, but by a lesser percentage than their favored 30 Dow stocks. The tally today was 25 gainers and just five losers within the Dow component stocks. Nice. Healthy. Bullscoot.

Dow 13,463.33 +100.96; NASDAQ 2,575.98 +22.11; S&P 500 1,472.20 +6.39; NYSE Composite 9,619.33 +46.28

The market internals were somewhat improved today, with advancers actually outdoing decliners by better than a 3-2 margin. New lows continued to lead new highs, however, 417-133. The markets are coming back toward equilibrium, but it's not going to last - the underlying forces of the sub-prime meltdown are simply too powerful.

Oil traded 33 cents to the upside, closing at $76.86. Gold and silver were up marginally, with silver right at $13.00 per ounce.

There are compelling reasons to buy into the metals, though those markets seem to be as manipulated - lower - as the Dow Jones. With Rupert Murdoch set to take the reins at the Wall Street Journal - a sad day for us all - the FOX is actually going to be in the hen house.

Make no mistake, the powers that be are in no mood to allow the Dow and other indices to drift lower. That said, it needs to be pointed out that the chances of making new highs are also quite remote. The credit markets are busting and the worst is still to come, right about time for a nice little election in the US, so the blame can be laid at the feet of the party soon to be (or already) in charge. History will be rewritten. It is every day, and it's all absolutely rubbish.

Dow Funny Business

Realistically, a 152-point rise on the Dow will divert most people's attention away from the systemic economic problems faced by the US economy and the cynical pumping of selected stocks by the PPT (Plunge Protection Team, Working Group on Financial Markets).

Anyone paying a little closer attention (like me) would notice that the Dow outperformed the NASDAQ and NYSE Composite by nearly a full percentage point on the day and dragged the S&P 500 up 0.72% due to the overlap between the indices.

Dow 13,362.37 +150.38 (1.14%); NASDAQ 2,553.87 +7.60 (0.30%); S&P 500 1,465.81 +10.54 (0.72%); NYSE Composite 9,572.87 +18.37 (0.19%)

Also, only two of the 30 Dow stocks finished in the red. Contrast that to the broader market, where declining issues led the way over advancers, 3748-2602, or roughly 3-2. Hmmm... a 28-2 upside trouncing by Dow stocks, but a 3-2 downside whipping for the overall market? Somebody's toying with us.

Surely. Absolutely. Without a doubt.

There were 861 new lows to just 95 new highs. So, where's the happy pill? The US equity market is about as phony as a Tennessee 3-dollar-bill. Maybe worse. A quick study of the Dow chart for Wednesday, August 1, tells the real story.

The Dow zig-zagged across the flatline until about 3:30, when the Dow was down about 50 points. Since the manipulators could not stomach another down day (make that 5 up and 6 down since the most recent record-high close), they pumped it a full 200 points in the final 35 minutes of trading. Nice! But not really. There are serious problems, as evidenced by the numbers just presented and the late day rally was designed to keep the stock market and our failing economy off the evening news and front pages of newspapers.

Speaking of newspapers, one should begin to be vary wary of anything emanating from the Dow Jones newswire, now that mogul Murdoch has his claws firmly entrenched. The deal was supposedly struck yesterday - or the day before - and it's just another knife into the already-exposed hide of American journalistic integrity. Forget that. You now simply cannot believe anything you read, anywhere. It's all subject to spin and headline writers, wrappers and margin noters. US media is a near-total sham. (Trust me. I at least try to give your the truth.)

While the markets were toying with our psyches, pressure on oil prices eased, losing $1.68 on the day, to close at $76.53. Thank goodness. And you can call off the gold rush. It was down $3.40 to $675.90. Silver dipped 6 cents to $12.96. Those minimal drops may be just small enough to pique some buying interest. Considering the coming banking fiasco, I'd be buying the metals here. A year from now, it could look like a very prudent move. Besides, there really isn't much downside risk in either gold or silver at these levels. You may not make a killing, but you shouldn't lose any value to inflation either.

Credit Crunch

The continuing downfall of Wall Street's fanatical credit ponzi scheme is unmistakable. The housing sector implosion is spreading like wildfire, into corporate junk bonds, credit cards (have you gotten your "notice" yet? The one that says your interest rate is going up?), and mainstream mortgage lending.

The plain fact is that we're on the verge of a complete economic meltdown - caused by loose credit and regulatory policies - that not even the Secretary of the Treasury and his cohorts in the Working Group on Financial Markets (aka, the PPT, Plunge Protection Team) are powerless to stop it.

Dow 13,211.99 -146.32; NASDAQ 2,546.27 -37.01; S&P 500 1,455.27 -18.64; NYSE Composite 9,554.50 -68.68

Add to that over-arching concern the idea that the United States has been under the control of a gang of half-cocked thugs who have raided the Treasury, destroyed our military (to say nothing of the irreparable damage done to the nation of Iraq) and broken laws with impunity. The Congress has been unwilling to take the necessary action to remove these treasonous criminals from office and the media has been complicit in undermining the will of the people by simple avoidance of real news.

We're in one heck of a mess and even the titans of Wall Street are afraid. Well they should be. They stood by, taking profits and looking the other way for the past 6 years.

With the markets down another day - make that 6 of the last 10 - the unwinding has only begun. Anyone with any smarts is already 50-60% in cash or other liquid assets (a case of booze does count) or short or buying puts on the CBOE. Playing the downside is the only reasonable way to make money right now.

The damage was evident in our two key metrics: Decliners led advancers, 7-5 and new lows checked in at 657 to 133 new highs.

On top of all of this, oil futures for September delivery were up $1.38 to $78.21, an all-time high. Like salt in the wound, you have to pay more to get nowhere at any speed.

Gold was up $2.30 to $679.30; silver rose 11 cents to $13.02. From the looks of things, it might be the absolute right time to invest in the metals. The markets are a wreck and the books have been cooked.

Impeach or die.

Dead Cat Bounce

Investors shook off last week's monumental declines and searched for bargains amid the wreckage on Monday. All the major indices showed decent gains on relatively strong buying. There was certainly some resolve to Monday's rally, but whether or not it will last is another question altogether.

Dow 13,358.31 +92.84; NASDAQ 2,583.28 +21.04; S&P 500 1,473.91 +14.96; NYSE Composite 9,623.18 +114.95

Make no doubt about it, there's a big, big problem inside the sub-prime mortgage mess and it's leaking over into corporate borrowing and mainstream mortgage lending. The simplistic reassurances of people like Ben Bernanke and Hank Paulson are masking a problem that goes to the heart of the world banking systems.

Money and credit has expanded worldwide at an astonishing rate and there's payback on the way. For a clue, watch merger and acquisition (M&A) activity over the next few weeks and months. It's already slowed down after a rash of big deals earlier in the year. Private capital has gone soft and conservative, and these people know what they're doing - it's their money, after all. CNN Money has a particularly propitious story on stalled funding for some big buyouts.

Over the next month and a half, expect more fallout, because drops like we witnessed last week do not occur in a vacuum. There's more to the story and it's a good bet that the invisible hand of the Plunge protection Team (PPT) was again at work today. Shortly after the markets opened, they took an unhealthy dip, but quickly bounced back to the positive. All of the indices hugged the flatline until just after noon, when all of them took off into positive territory for the remainder of the session, trademark market manipulation by the usual suspects.

As is the fashion of the market manipulators of the secretive Working Group on Financial Markets, they prefer small losses over long periods of time rather than big, spectacular, headline-grabbing declines.

Their unseen actions in the markets cause a sheep-like follow-along response, as evidenced today. Advancing issues gained the upper hand over decliners by a 3-2 ratio, though the new lows were still holding sway in a rather ponderous manner, with 746 bottom-outers to just 93 new highs. That's still out of balance and augurs ill for stocks going forward.

One-day rallies are not a cure-all, and the same conditions that contributed to last week's sell-off still exist. Without the PPT, the markets may very well have finished lower again today. The stated goals of the so-called PPT are:

Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence

Keep an open mind and an open eye on how the markets - and, to a lesser degree, individual stocks - move in relation to events and non-events.

Since most companies have now already reported 2nd quarter earnings, the next six weeks will be a function more of emotion than fact and since the overall mood is still rather dubious about the future, sharp sell-offs may occur out of thin air. More likely are days of small double-digit-Dow losses, followed by some recovery, then the pattern repeating again. As it is, the Dow has traded lower 5 of the last 9 sessions and that measure bears close scrutiny. Should we actually be in a new bear market - which some analysts have suggested - the ratio of up days to down, in addition to the volume and point movements, will be a key divining tool.

Oil priced lower on the NY Mercantile Exchange, losing 19 cents to $76.83. Gold and silver both edged higher and continue to herald a breakout, though that's happened so many times in the past 18 months, nobody's giving it much credence.

Triple Bottom Breakdown

With no impetus to the upside, not even the shadowy Plunge Protection Team (the government's Working Group on Financial Markets headed by Treasury Secretary Hank Paulson) could quell the selling on Wall Street as dissatisfaction with corporate earnings and the implosion of capital markets sent the Dow to another 200+ point loss, hauling down the other major indices with it.

The week, which began with a 92-point gain on the Dow on Monday, turned considerably uglier as earnings reports and bad economic news - primarily from the housing and credit sectors - sent Wall Street into spasms of cynical, unstoppable, selling. The week was one of the worst ever for the Dow, losing 735 points, with losses of more than 200 points on Tuesday and Friday, and a 311-point loss on Thursday.

Dow 13,265.47 -208.10; NASDAQ 2,562.24 -37.10; S&P 500 1,458.95 Down 23.71; NYSE Composite 9,508.23 -146.15

The other major indices - the S&P, NYSE Composite and NASDAQ fared equally poorly in the paroxysm of panic selling. The Dow on Friday confirmed (and broke through support) a triple bottom breakdown at 13,265.47, with similar recent closes on June 7th (13,266.73) and June 12th (13,295.01).

The pertinent questions at this juncture are, 1. How much worse can it get?; 2. Is there an interim support level?; 3. Can the PPT finally staunch the ebb by buying overvalued shares (and will they)?; and, 4. Is there any safe haven for investment dollars?

The quick answers are that it can get much worse, interim support exists in the 12,100-12,300 area, nobody really knows exactly what the PPT can or will do, and as for a safe haven, cash is looking mighty good right now.

There is really no magic bullet to change the outcome of the massive unwinding of a near-decade-long credit and asset binge. Government policies have created a system so fragile and fraught with risks - seen and unseen - that a financial disaster seems to be the most likely occurrence at this juncture.

The obvious truths are that the market was severely overbought (the Dow was up nearly 30% from a year ago at the start of the week), mortgage failures will continue to proliferate due to an complete lack of oversight by regulators, and the contagion from mortgages will likely become systemic, spreading into all manner of credit instruments.

The key consumer is tapped out, the middle class is shrinking and afraid, and the trickle-down economic policies of the past 20 years have created a monstrous economy with a super-rich class, an impoverished middle and a growing, teeming bottom. America has gone from the world's greatest creditor state to the worst debtor nation in a span of just 50 years.

In a few words, we're pretty much screwed and it's beginning to show up in our markets. A good start would be to impeach all the top officials of the current administration and begin imposing some new standards of conduct for banks and other financial institutions to restore confidence in our capital markets.

A change in government isn't going to be a cure-all - far from it - but the numbskull liars currently in charge likely have more of a vested interest in overseeing the destruction of capital rather than the creation of it.

Next week and during the month of August, when the next wave of selling begins in earnest, officials of the NASDAQ and NYSE may consider closing the markets for a week, allowing for some time to contemplate next moves and reassure a frightened public.

This is no time to be giddy. This market has been overstretched - the bull market is something of the order of 57 months old - and in a very, very precarious condition. The US economy is also an extremely sick patient. Extreme actions may be the best medicine.

Surprisingly, market internals were not nearly as dismal as yesterday's. Declining issues beat advancers by an 11-5 ratio. There were few bright spots as new lows submerged new highs, 706-85.

Just to make matters even more cheerless, oil futures rose $2.07 to close at $77.02, close to an all-time high. Gold and silver continued to decline, oddly, as market manipulation is running rampant. The precious metals should be showing strength at a time like this. instead they are dropping along with all other asset classes.

Get ready for a long, long downturn, similar to Japan's 20-year deflationary cycle. It's been predicted and the stock market is telegraphing it.

There were a good number of earnings reports issued on the day, none of them of much consequence considering the overall tenor of the markets.

Have a great weekend.

Dark Thursday, Black Friday?

Anyone who was surprised by today's dramatic sell-off simply has not been paying attention. The signs were everywhere: weak second quarter corporate earnings, an outright implosion in the US housing market, sub-prime defaults beginning to leak over into mainstream mortgage loans and corporate lending, a market soaring (the Dow was up 30% in just the past year) over and beyond 50 and 200-day moving averages.

Everything was in place for a selling spree of monumental proportions and on Thursday, it all came to fruition.

Dow 13,473.57 -311.50; NASDAQ 2,599.34 -48.83; S&P 500 1,482.66 -35.43; NYSE Composite 9,654.43 -275.93

The day began badly with ExxonMobil (XOM) announcing - prior to the open - that it had fallen short of analyst expectations for the 2nd quarter. Boo hoo, the largest corporation in the world and the company held widely responsible for causing people so much pain for US motorists only booked $10.26 billion, or $1.83 a share, from $10.36 billion, or $1.72 a share, a year earlier. Analysts were hoping for $1.96 per share. They were sorely disappointed and the stock lost more than 6 % on the day.

At 10:00, with the Dow already down more than 100 points, the Commerce Department provided more proof that the US housing collapse was getting even worse than anticipated. New home sales were down 6.6% to 834,000 units, the biggest percentage drop in 6 months. Sales are 22.3% lower than they were a year ago. Additionally, the median price dropped to $237,900, down 2.2% from a year ago.

As the day progressed, the selling intensified. From noon through 2:30 p.m. the Dow fell by more than 200 points as volume reached historic levels.

So powerful was the downdraft, that even oil traders were scared. Crude, up to $77 earlier, fell through the afternoon, eventually closing down 73 cents at $75.15. Gold dropped another $11, with silver closing 20 cents lower.

The Dow bottomed at 13,335.30, a loss of nearly 450 points. Then, something strange happened, just like yesterday. The Dow jumped nearly 90 points in a matter of minutes. It was either the invisible hand of Maynard Keynes, but more likely the clandestine hand of the Plunge Protection Team (PPT), otherwise known as the working group on financial markets, created by Ronald Reagan to prevent a repeat of the Wall Street meltdown in October 1987.

As usual, the foreign press - in this case the London Telegraph - had the story more than a year ago.

Nevertheless, not even Treasury Secretary Henry Paulson and his able team of financial commandos could stem the tide. By days end, the markets were in tatters, with advancers swamped by declining issues by a ratio of 7-1. New lows hit a number I have heretofore never witnessed - 1110 - to only 104 new highs.

And whatever the interlopers did to spike the market, it broke the feeds to Yahoo Finance and CNN Money. The volume figures on Yahoo Finance were totally knocked out (see the chart at right).

Judging by the late figures, the volume was the highest of the year, surpassing the mark of 4.283 billion shares, set yesterday. The overall Dow drop of 311 points was second only to the China rot on February 27 of this year.

There were over 400 stocks reporting on the day, but the biggest stories belonged to ExxonMobil (XOM), Apple (AAPL, beat estimates, +8.74), 3M (MMM, beat estimates), Black & Decker (BDK, beat estimates on lower profit, lowered guidance, -6.88), Office Depot (ODP, met on lower profits, -1.79) and Dow Chemical (DOW, beat, -2.22).

There will be more tomorrow, as investors digest earnings after hearing the government's preliminary figures for 2nd quarter GDP prior to the market open. The so-called "experts" - who haven't been remotely close lately - are predicting 3.2% growth. After Q1's horrific 0.7% gain, anything short of that number will likely precipitate even more selling.

Make no doubt about it, without the interference from government insiders, today's loss could have easily been 500 or 600 points. This slide certainly isn't over. In fact, it's probably only the beginning of a long, painful unwinding of an equally-long credit binge.

The fear is not in the second quarter results, but in the future, with an interest rate drop now becoming more and more of a distinct possibility as the US lags behind other countries - developed and emerging alike.

Charades, Anyone?

How many times do we have to see this same pattern before we all become complete skeptics?

I pose that question in response to the unusual market movements today which saw all US Equity indices fall sharply at 10:00 am when the
Commerce Dept. reported new home sales fell 3.2% in February. The number of new homes sold in the month was the lowest since June 2000.

At the time, briefing.com (yeah, they're probably in on it) said this:

Even though the data do not mean that the housing market is crashing and will pull the overall economy into recession, the broader perspective shows that housing is still in a correction and will remain a moderate drag on real GDP for several more quarters.

Yes, that's laughable, along with exhibiting very poor grammar skills. "Moderate drag" my behind.

With this quick drop-off (the Dow was down more than 114 points by 11:00 am) in mind, let's take a look at how the indices closed on Monday:

Dow 12,469.07 -11.94; NASDAQ 2,455.63 +6.70; S&P 500 1,437.50 +1.39; NYSE Composite 9,341.36 +2.96

Now, it doesn't take a genius to conclude that something, somewhere, somehow made the majority of traders feel more secure about buying stocks after noon. It's also not a reach - after the Plunge Protection Team, otherwise known as the President's Working Group on Financial Markets has been mentioned with some frequency of late - to believe there are nefarious forces at work, vainly attempting to keep struggling US stock markets afloat.

Manipulating stock markets is not new, nor is it impossible. There are people, corporations and governments which would think it virtuous to rescue the financial markets from imminent collapse. However, continual, systemic pumping of US markets to sustain a bull market that is already bordering on an absurd length of time (53 months), is quite another thing.

It's not like putting a temporary support - akin to Greenspan's famous 1% "emergency" federal funds rate - under the markets to assuage fears; it is more like extended tinkering with the wheels of commerce, which, after a while, look nothing like what they were originally. Piecemeal adjustments eventually lead to situations in which chain reactions cannot be averted, kind of like fixing various parts of an old clock. In the end, something's going to break that can't be fixed, taking down all of the other "little fixes" along the way.

In any case, whatever evil lurked below 12,350.00 on the Dow was negated by the movers of markets. In a real world, as opposed to our current bizzaro-war-on-terror-take-off-your-shoes-at-airports-world, the Dow would be hovering in the 10,800-11,500 range, and people would be really concerned about their investments. But, thanks to the PPT, no worries!

Besides, crude oil for May delivery is only 62.91 (+0.63 today). Gold and silver were also up and hey, Georgetown's in the Final Four. What's to worry? Be happy.

For more on the President's Working Group on Financial Markets, either Google that term or the term Plunge Protection Team or read this interesting article at the link below (fair warning: it's a PDF):
Move Over Adam Smith: The Visible Hand of Uncle Sam